AS & ASSOCIATES

OUR VISION

Our firm continuously strives to be the premiera accounting and consultancy firm that provides excellent service to our clients and an excellent quality of life for our associates.

OUR OBJECTIVE

We are committed to creating and sustaining long-term relationships which draw on our experience and expertise to help our clients achieve real success.

EXCELLENT SERVICES

To not just meet but exceed client expectation consistently by imbibing Teamwork, Professionalism, Personalised Service & Specialisation.

OUR PRACTICE AREAS

COMPANY FORMATION

Process of Company formation in India can be illustrated in following steps:

Governed by :

The Incorporation Procedure of a private limited company is governed by the Companies Act, 2013.

The minimum requirements for the Private Limited Company

Minimum 2 Directors
Minimum 2 Shareholders (Directors & Shareholders can be the same)
Minimum paid-up capital of Rs. 1,00,000/-
DIN for both Directors
Digital Signatures for all Directors
Consent from subscriber or director
Proof of Registered Address
NOC from the owner of the premises

The procedure for company registration is divided into the following steps:

Obtain Digital Signatures

One director must apply for the Digital Signature Certificate (DSC), which is necessary to file the company registration documents. For this, only a few scanned documents and details will be required. It is compulsory to obtain DSC for at least one director to sign E-forms relating to incorporation life Form INC-1 and other documents.

Application for DIN in the form DIR-3

Each individual intending to be appointed as director of a company shall make an application for the allotment of Director Identification Number in form DIR-3 to the Central Government in such form and manner and along with such fees as may be prescribed.

Check for company name availability

Select, in order of preference, not less than four suitable names, indicative of the primary company objectives. Ensure that the names chosen do not resemble the name of any other company already registered and also do not violate the provisions of the Emblems and Names (the prevention of improper use) Act, 1950.

Application for Name Availability

Apply to the concerned ROC to ascertain the availability of the company name on the INC-1 form, part of the General Rules and Forms along with a fee. If the proposed name is not available, apply for a new name on the same application the digital signature of the applicant proposing the company has to be attached in the form. MCA has prescribed specific rules that govern the name availability process, so it is advisable to check these guidelines before applying for a company name. Refer Rule-8 of Companies (Incorporation) Rules, 2014.
After the applicant’s proposed company name approval, ROC will issue a Name availability Letter w.r.t. the approval of the availability of a name for the proposed company. The name will be valid for 60 days from the date on which the application for the reservation was made. The applicant can apply for the registration of the new company by filing the required forms INC-1 within six months of the name approval date.

Drafting MOA & AOA

Arrange for the drafting of the Memorandum and Articles of Association by the solicitors, and the vetting and printing of the same by ROC.
Arrange for stamping of the Memorandum and Articles with the appropriate stamp duty.
Get the Memorandum and Articles signed by at least two subscribers in their own hands, their fathers’ names, occupations, and addresses, and finally the number of shares subscribed for. At least one person must witness this document.
Ensure that the Memorandum and Articles document is dated later the date of stamping.
The main objectives should match with the goals shown in e-form INC-1.
The Memorandum should be in the respective forms as prescribed in Tables A, B, C, D and E in Schedule-1 as applicable to a company.
The articles should be in respective forms as prescribed in Table F, G, H, I and J in Schedule-1 as applicable to a company.

Filing various forms in ROC

The following documents are required to be filed with the Registrar of Companies:
The Memorandum of Association (duly stamped) and a duplicate thereof
The Articles of Association (duly stamped) and a copy thereof
The Declaration by Professional in INC-8
An affidavit from the applicant for the Memorandum in Form INC-9
Proof of residence
Proof of identity
The verification of the subscribers’ signatures on Form INC-10
A copy of the letter from the Registrar of Companies stating the availability of the company’s proposed name
The e-Form No. 1 (with prescribed stamps) for the incorporation of a company
The receipt indicating the payment of the prescribed registration and filing fee.

Payment of form fees and stamp duty

After filing the documents on the MCA online portal, the necessary fees must be paid.

ROC verifies the forms and attachments

After the receipt of the forms along with applicable fees, ROC scrutinizes and verifies all the documents and attachments and suggests any changes, if required.

ROC issues the Certificate of Incorporation

If the registrar is satisfied that the company has complied with all the requirements, it will register the company and issue a Certificate of Incorporation. The date mentioned on the certificate is the date of the company’s incorporation.

STARTING BUSINESS

12 Steps to Starting a Business in India

1. Checking the Company Name Availability

2. Acquiring a Director Identification Number (DIN)

3. Acquiring a Digital Signature Certificate

4. Obtaining an Incorporation Certificate

5. Creating a Company Seal for official documentation

6. Stamping of all Company Documents

7. Acquiring a Permanent Account Number (PAN)

8. Acquiring a Tax Account Number (TAN)

9. Obtaining a certificate from the State/Municipal Inspector under the Shops and Establishment Act

10. Applying for GST Registration

11. Obtaining a Profession Tax Certificate from the State Profession Tax Office

12. Completing a National Employees’ Provident Fund Registration

CORPORATE COMPLIANCE

A company which has been incorporated in India must ensure compliance with the Companies Act,2013.

The Companies Act, 2013 regulates appointment, qualification, remuneration, and retirement of directors of the Company.
Aspects such as how to conduct Board Meetings and Shareholders Meetings.
The preparation and presentation of annual accounts and the regular maintenance of books of accounts.

Here are some important compliance’s post incorporation:- 1. Once the incorporation certificate is obtained, a separate legal entity for the company is established. 2. As soon as the company gets its incorporation certificate, within 30 (THIRTY DAYS) days one of the directors must issue the notice for the first board meeting of the company, at least seven days prior to the latter being scheduled for. 3. In the first board meeting, the Company is required to appoint its first auditor within 30 days of incorporation by its board of directors and every Director of the company shall disclose his or her concern or interest of the other Companies in the Form MBP-1. Further, in case of any change in the interest of Director he should disclose the change in the next forthcoming Board meeting also he shall disclose in the annual disclosure to be made in the first board meeting of the financial year. 4. The Company shall, on and from the 15 (fifteenth) day of its incorporation and at all times thereafter, have a Registered office which is capable of receiving and acknowledging all official communications and notices as may be addressed to it. Verification of the registered office is to be filed in Form INC-22 within 30 days of incorporation. 5. It is necessary for the company to have its name board outside its registered office, along with its name, Company’s Identification Number, registered office address, phone number and e-mail id, fax number and website address, if any, stated in it. All the above-mentioned details in point 3 are also required to be printed on the company’s billheads, business letters and on all documents (official) and publications going through the company. 6. It is very important for the company to have a PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) right after its incorporation. Even to open a Bank Account in India these are the basic credentials are required. 7. Issuance of share certificates to the shareholders is also an important requirement, and all details of such issuance of share certificate are required to be maintained and mentioned in the register of allotment. 8. Maintaining and filing of profit and loss account, balance sheet, and annual return every financial year together with an auditor’s report before the due date with the Registrar of Companies is a very vital requirement of the company act which a company has to endeavor. 9. Every company is required to maintain certain Statutory Registers under Section 85, Section 88 etc of the Companies Act, 2013 and required to keep and maintain at its registered office in the prescribed form. In case of any failure in maintaining the statutory register, the company, as well as directors, may be fined and prosecuted. 10. The company is also required to conduct minimum 4 board meetings during the calendar year at stipulated intervals and also ensure that all the minutes of the board meeting are safely retained until the company exists. The minutes of the meeting required to be prepared within fifteen days of the meeting and can be finalized within thirty days of the meeting. 11. Other than the above-mentioned non-negotiable conditions, there are few more instances where a company is required to intimate the registrar of companies. It includes appointments of directors, removal of Director and certain other changes in the prescribed manner. 12. The Companies Act has also inserted the CSR (Corporate Social Responsibility) provisions in the Companies Act, 2013. Now, under provisions contained under the Corporate Social Responsibility, companies are obligated to make the contribution in certain philanthropic activities. Companies must adhere to the CSR criteria and undertake CSR activities in the financial year. 13. The aforesaid compliance requirements only apply to the Companies Act, 2013. In addition to this, further registration is required, depending on business type and turnover, such as Professional Tax, GSTN etc. It is important to note that the responsibility of a company to comply with all rules and regulations provided in the Companies Act is not a one-time thing, but is a continuous affair.

ACCOUNTS OUTSOURCING

Accounting Outsourcing has become a pretty common service specially for small businesses that don’t want to hire and manage an in-house team. Outsourcing can significantly reduce costs while saving management and other complexities like Payroll, etc. Outsourcing is a win-win situation for all the parties involved in it.

However, when you think of outsourcing, the first few names that usually pop-up in your mind are India, Philippines, Thailand,etc or to say more precisely, outsourcing to third-world countries.

But out of all, India stands out as the most-preferred location for businesses to outsource their Accounting and Bookkeeping needs.

Lower Cost & Higher Benefits:

Cost-effectiveness is the first and most important feature of Outsourcing Accounting services to India. Outsourcing can save you both costs as well as hours of your precious time that can be invested in other core business processes. Moreover, the labour costs in India is low but that doesn’t mean that you’ll have to compromise with the quality since India has the highest number of ISO certified companies

Time Zone Advantage:

One of the key advantages of Outsourcing your Accounting needs to India is the Time Zone Advantage. The 12-hour difference between India and the US can offer businesses the opportunity to get their work done earlier. Also, due to the time difference, most of the Outsourcing companies provide 2407 support so that there aren’t any reporting or other complexities.

Avail the benefits of Virtual/ Online Bookkeeping:

With Certified Domain Experts, you can avail the benefits of remote Accounting services if you decide to Outsource to India. These professionals are highly skilled and well-aware with the latest technology trends that can oversee all your Accounting needs from remote locations via cloud software. All you need is to find the right Outsourcing Accounting service provider and let the professionals handle your accounting complexities.

India is the IT hub:

India is famous for the availability of highly skilled IT professionals. And in today’s tech-driven world, Accounting and IT skills go hand in hand. Outsourcing to India means you are signing-up for such a skilled workforce that can both handle your accounting as well as use their technical expertise to use the available financial data and help you make tough business decisions.

Data Security & Confidentiality:

When it comes to financial data, security and confidentiality are two very important aspects that concern business owners when outsourcing their accounting needs. However, as discussed earlier, the availability of skilled and certified accountants in India that can handle cloud-based accounting software with ease. Using cloud software like Xero, Quickbooks Online, etc ensures that your financial data is safe and secure within multi-layers of encryption.

Wide range of Accounting services that can be outsourced to India:

Accounting isn’t just a task it is a collection of a wide range of services. Outsourcing to India means you get to choose the Accounting service that you need for your business. Few of these services can be classified as follows:

Bookkeeping and VAT Returns
Self-Assessment Tax Returns
Year-end and CT Returns
Invoice generation services
Tracking accounts receivables services
Generating accounts receivable reports
Tracking accounts payable services
Trial balances and P&L accounts services
General ledger maintenance services
Payroll outsourcing services

BASIC INFORMATION TAX PLANNING

TAX PLANNING

Taxes can eat into your annual earnings. To counter this, tax planning is a legitimate way of reducing your tax liabilities in any given financial year. It helps you utilise the tax exemptions, deductions, and benefits offered by the authorities in the best possible way to minimise your liability.

The definition of tax planning is quite simple. It is the analysis of one’s financial situation from the tax efficiency point-of-view.

OBJECTIVES OF TAX PLANNING

Tax planning is a focal part of financial planning. It ensures savings on taxes while simultaneously conforming to the legal obligations and requirements of the Income Tax Act, 1961. The primary concept of tax planning is to save money and mitigate one’s tax burden. However, this is not its sole objective.

ADVANTAGES OF TAX PLANNING

To minimise litigation: To litigate is to resolve tax disputes with local, federal, state, or foreign tax authorities. There is often friction between tax collectors and taxpayers as the former attempts to extract the maximum amount possible while the latter desires to keep their tax liability to a minimum. Minimising litigation saves the taxpayer from legal liabilities.
To reduce tax liabilities: Every taxpayer wishes to reduce their tax burden and save money for their future. You can reduce your payable tax by arranging your investments within the various benefits offered under the Income Tax Act, 1961. The Act offers many tax planning investment schemes that can significantly reduce your tax liability.
To ensure economic stability: Taxpayers’ money is devoted to the betterment of the country. Effective tax planning and management provide a healthy inflow of white money that results in the sound progress of the economy. This benefits both the citizens and the economy.
To leverage productivity: One of the core tax planning objectives is channelising funds from taxable sources to different income-generating plans. This ensures optimal utilisation of funds for productive causes.

TYPES OF TAX PLANNING

Most people merely perceive tax planning as a process that helps them reduce their tax liabilities. However, it is also about investing in the right securities at the right time to achieve your financial goals.

Following are some of the various methods of tax planning:

Short-range tax planning
Under this method, tax planning is thought of and executed at the end of the fiscal year. Investors resort to this planning in an attempt to search for ways to limit their tax liability legally when the financial year comes to an end. This method does not partake long-term commitments. However, it can still promote substantial tax savings.
Long-term tax planning
This plan is chalked out at the beginning of the fiscal and the taxpayer follows this plan throughout the year. Unlike short-range tax planning, you might not be offered with immediate tax benefits but it can prove useful in the long run.
Permissive tax planning
This method involves planning under various provisions of the Indian taxation laws. Tax planning in India offers several provisions such as deductions, exemptions, contributions, and incentives. For instance, Section 80C of the Income Tax Act, 1961, offers several types of deductions on various tax-saving instruments.
Purposive tax planning
Purposive tax planning involves using tax-saver instruments with a specific purpose in mind. This ensures that you obtain optimal benefits from your investments. This includes accurately selecting the appropriate investments, creating an apt agenda to replace assets (if required), and diversification of business and income assets based on your residential status.

SAVE TAXES PLANNING

Taxpayers are provided with several options to reduce their tax liabilities. Various sections of the Indian income tax law offer tax deductions and exemptions, of which, Section 80C is the most popular tax-saving avenue. For e.g., Deposits in Public Provident Fund , Five Year Bank Deposits, National Savings Certificate , Investment in ELSS schemes.

The best and the most optimum way to save taxes is by laying out a financial plan whenever there is a revision in your income and sticking to it. Also, it is a good habit to make tax-saving investments at the beginning of the year rather than making hasty and often incorrect investment decisions at the last moment. To do this, it is crucial to be aware of all the exemptions and deductions available to you.

Tax saving options under Section 80C

Section 80C, one of the most prevalent sections in the Income Tax Act, 1961, provides provisions to save up to Rs46,800 (assuming the highest slab of income tax i.e. @30% plus education cess 4%) on tax liabilities each year. One of the best tax-saving avenues under Section 80C is investing in an equity-linked savings scheme, more commonly known as ELSS. Such tax planning mutual funds offer the dual benefit of potential capital appreciation and tax-saving. Apart from ELSS funds, you can choose to invest in government schemes such as National Savings Certificate (NSC), Public Provident Funds (PPF), tax-saving FDs, etc. Cumulative investments under these securities can offer deductions up to Rs1.5 lakh.

Also Read: ELSS – Tax Saving Investment Option

Tax saving options under Section 80D

Under this section, taxpayers are offered deductions on the premium paid towards health insurance policies. Under Section 80D, a taxpayer can claim the following amounts as deductions:

Avail up to Rs25,000 on the premium paid towards health insurance for self, children, or spouse
Avail up to Rs50,000 if your parents are also covered under your health insurance plan
If either of your parents belongs to the senior citizen bracket, then a maximum deduction of Rs75,000 is allowed

Tax saving options under Section 80E

Section 80E offers tax deductions on the interest paid for an education loan. These deductions can be claimed for eight years starting from the date of repayment. There is no upper limit on the deductible amount. This means that an assessee can claim the entire amount paid as interest from the taxable income.

Claiming HRA Exemption

Under HRA, taxpayers can avail exemption on the cost incurred to stay in a rented accommodation. The taxpayer is mandated to furnish the rent receipts provided by the landlord. The deduction available is the least of the following amounts:

Actual HRA received; or
50% of basic salary+DA (dearness allowance) for taxpayers living in metro cities; & 40% of (basic salary + DA) for taxpayers residing in non-metro cities; or
Total rent paid less 10% of basic salary + DA

Other Exemptions and Deductions

Apart from the deductions and the exemptions mentioned above, you can save taxes in several different ways. Donations towards charities and qualified organisations are also eligible for tax exemptions.

Under the new tax regime announced with the Union Budget 2020, individuals can opt to pay taxes at reduced rates and redefined income tax slabs by forgoing the various deductions and exemptions.

Income tax planning, if performed under the framework defined by the respective authorities, is an entirely legal and a smart decision. However, you might land yourself in trouble for adopting shady techniques to save taxes. It is the duty and responsibility of every citizen to carry out prudent tax planning. Based on your tax slab, personal choices, and social liabilities, you can choose from distinct tax saver mutual funds and investment avenues offered to you. Good luck!

BASIC INFORMATION OF GOODS AND SERVICES TAX (GST)

GOODS AND SERVICES TAX (GST) IN INDIA

GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.

In other words,Goods and Service Tax is levied on the supply of goods and services. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. GST is a single domestic indirect tax law for the entire country.

Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central GST and State GST are charged. All the inter-state sales are chargeable to the Integrated GST.

Now, let us understand the definition of Goods and Service Tax, as mentioned above, in detail.

Multi-stage

An item goes through multiple change-of-hands along its supply chain: Starting from manufacture until the final sale to the consumer.

Let us consider the following stages:

Purchase of raw materials
Production or manufacture
Warehousing of finished goods
Selling to wholesalers
Sale of the product to the retailers
Selling to the end consumers

Value Addition

A manufacturer who makes biscuits buys flour, sugar and other material. The value of the inputs increases when the sugar and flour are mixed and baked into biscuits.

The manufacturer then sells these biscuits to the warehousing agent who packs large quantities of biscuits in cartons and labels it. This is another addition of value to the biscuits. After this, the warehousing agent sells it to the retailer.

The retailer packages the biscuits in smaller quantities and invests in the marketing of the biscuits, thus increasing its value. GST is levied on these value additions, i.e. the monetary value added at each stage to achieve the final sale to the end customer.

Destination-Based

Consider goods manufactured in Maharashtra and sold to the final consumer in Karnataka. Since the Goods and Service Tax is levied at the point of consumption, the entire tax revenue will go to Karnataka and not Maharashtra.

ADVANTAGES OF GST

GST has mainly removed the cascading effect on the sale of goods and services. Removal of the cascading effect has impacted the cost of goods. Since the GST regime eliminates the tax on tax, the cost of goods decreases.

Also, GST is mainly technologically driven. All the activities like registration, return filing, application for refund and response to notice needs to be done online on the GST portal, which accelerates the processes.

- GST eliminates the cascading effect of tax
- Higher threshold for registration
- Composition scheme for small businesses
- Simple and easy online procedure
- The number of compliances is lesser
- Defined treatment for E-commerce operators
- Improved efficiency of logistics
- Unorganized sector is regulated under GST

COMPONENTS OF GST

There are three taxes applicable under this system: CGST, SGST & IGST.

CGST: It is the tax collected by the Central Government on an intra-state sale (e.g., a transaction happening within Maharashtra)
SGST: It is the tax collected by the state government on an intra-state sale (e.g., a transaction happening within Maharashtra)
IGST: It is a tax collected by the Central Government for an inter-state sale (e.g., Maharashtra to Tamil Nadu)

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