Find clear, reliable answers to the most common queries regarding direct taxation, corporate auditing, and business incorporation.
Under GST laws in India, service providers must register if aggregate turnover exceeds ₹20 Lakhs (₹10 Lakhs for special category states). For goods suppliers, the threshold limit is ₹40 Lakhs (₹20 Lakhs for special category states), subject to conditions.
A Tax Audit is mandatory under Section 44AB of the Income Tax Act if the total sales, turnover, or gross receipts of a business exceed ₹1 Crore in a financial year. For professionals, the limit is ₹50 Lakhs. Note that the threshold for business transactions conducted digitally can be higher, up to ₹10 Crores under specific cash transaction ceilings.
Key advantages include limited liability protection for shareholders, separate legal entity status, perpetual succession, ease of transferring shares, capability to raise capital from venture funds, and improved institutional credibility.
In a traditional partnership, partners have unlimited personal liability for firm debts. In an LLP, the liability of each partner is limited to their agreed contribution. Additionally, an LLP has perpetual succession and is regulated by the LLP Act, 2008 through the MCA portal.
Standard documents include PAN card, Aadhaar card, Form 16 (for salaried taxpayers), Form 26AS, Annual Information Statement (AIS), bank account statements, interest certificates, and proof of tax-saving investments under Chapter VI-A.
Tax Deducted at Source (TDS) is an indirect tax collection mechanism where the payer deducts a specific percentage of tax at the time of making specified payments like salary, professional fees, contract payments, rent, or commission, and deposits it with the Central Government database.
Yes, a Statutory Audit is mandatory for all companies incorporated under the Companies Act, 2013, regardless of their turnover, capital, or profit/loss status. It must be conducted by an independent practicing Chartered Accountant.
Every active company must file Form AOC-4 (for financial statements) and Form MGT-7/7A (for annual returns) with the Registrar of Companies (ROC) within 30 days and 60 days of holding the Annual General Meeting (AGM) respectively.
DPIIT-registered startups can apply for a 3-year income tax exemption under Section 80-IAC, fast-tracked patent applications, relaxed public procurement norms, easier wind-up parameters, and access to the government fund of funds.
Direct taxes (like Income Tax) are paid directly by the individual or entity on whom they are imposed based on their income/wealth. Indirect taxes (like GST) are levied on goods and services, and the tax liability is passed on to the final consumer.
Udyam Registration is a free portal registration for Micro, Small, and Medium Enterprises based on investment in plant/machinery and turnover criteria. It helps firms get bank credit easily, protection against delayed payments, and lower patent filing fees.
A Virtual CFO provides outsourced, professional-level financial management, cash flow analysis, corporate budgeting support, and strategic advisory services to small and medium enterprises (SMEs) that do not require a full-time in-house Chief Financial Officer.
Form 26AS is an annual tax statement generated by the Income Tax Department. It displays details of tax deducted at source (TDS), tax collected at source (TCS), advance tax paid, self-assessment tax, and high-value transactions matching the taxpayer's PAN database.
E-invoicing is the reporting of B2B invoices to the government Invoice Registration Portal (IRP) to generate an Invoice Reference Number (IRN) and QR code. It is mandatory for businesses with an aggregate turnover exceeding ₹5 Crores in any preceding financial year since 2017-18.
A Project Report is a document detailing the technical, financial, and marketing aspects of a proposed business venture. It contains balance sheet projections, cash flow analysis, and profitability trends required by commercial banks to evaluate loan applications.
Dividends received from domestic companies are taxable in the hands of shareholders at their applicable slab rates. Additionally, companies paying dividends exceeding ₹5,000 must deduct TDS at the rate of 10% under Section 194.
Presumptive taxation allows small business taxpayers (turnover under ₹2 Crores, or ₹3 Crores subject to cash caps) to declare their taxable business income at a flat rate of 8% (or 6% for digital receipts) of their turnover, without needing to maintain books of accounts.
Section 80C allows deductions from total income for investments in instruments like PPF, ELSS mutual funds, National Savings Certificate (NSC), life insurance premium, and principal repayment of housing loans. The maximum aggregate deduction allowed is ₹1.5 Lakhs per financial year.
An Internal Audit is an independent, objective evaluation of a company's internal operations, internal controls, risk management, and governance processes. It is designed to add value, detect internal inefficiencies, and suggest improvements to management.
Under the Companies Act, 2013, books of accounts, vouchers, and records must be preserved for at least 8 financial years immediately preceding the current financial year. Under Income Tax laws, records must generally be kept for 6 years from the end of the relevant assessment year.
