A brief understanding about Indirect taxes

An indirect tax is a tax that is paid to the government by one entity in the supply chain, but it is passed on to the consumer as part of the price of a good or service. The consumer is ultimately paying the tax by paying more for the product.

An indirect tax may increase the price of a good to raise the price of the products for the consumers. Examples would be fuel, liquor, and cigarette taxes. An excise duty on motor cars is paid in the first instance by the manufacturer of the cars; ultimately, the manufacturer transfers the burden of this duty to the buyer of the car in the form of a higher price.

A brief understanding about Indirect taxes

The most common example if an indirect tax is import duties. The duty is paid by the importer of a good at the time it enters the country. If the importer goes on to resell the good to a consumer, the cost of the duty in effect is hidden in the price that the consumer pays. The consumer is likely to be unaware of this, but he will nonetheless be indirectly paying the import duty.

Essentially, any tax or fees imposed by the government at the manufacturing or production level is an indirect tax.

What are the features of Indirect tax?

Indirect taxation is policy commonly used to generate tax revenue. Indirect tax is so called as it is paid indirectly by the final consumer of goods and services while paying for purchase of goods or for enjoying services. It is broadly based since it is applied to everyone in the society whether rich or poor.

What is excise duty?

Excise duty is a governmental tax meant for producers and manufacturers on certain goods.

Manufacturers are considered to be:

• ·        Entities that manufacture goods themselves.
• ·        Entities that outsource manufacturing, but manufacturing takes place from their name

To cover these costs, manufacturer adds them to cost of goods sold, where the buyer ends up paying for these costs. Thus, it is considered to be an indirect tax.

Advantages

They are convenient to both the tax-payer and the State. The tax-payers do not feel the burden much, partly because an indirect tax is paid in small amounts and partly because it is paid only when making purchases. But the convenience is even greater due to the fact that the tax is "price-coated". Indirect taxes can be spread over a wide range. Very heavy direct taxation at just one point may produce harmful effects on social and economic life. As indirect taxes can be spread widely, they are more beneficial and suitable.

Mahaveer Singhvi and Associates provides wide range of services. For more details, do visit our website at http://www.ca-msa.com/

WHAT IS INCORPORATION?

Incorporation is the legal process used to form a corporate entity or company. A corporation is a separate legal entity from its owners, with its own rights and obligations. Corporations can be created in nearly all countries in the world and are usually identified as such by the use of terms such as "Inc." or "Limited" in their names.

Creation and Organization of Corporations

Incorporation involves drafting legal documents called "Articles of Incorporation" that list the primary purpose of the business, its name and its location, and the number of shares and class of stock being issued, if any. Incorporation also involves jurisdiction-specific registration information and fees.

Why one needs to incorporate their business?

Once you incorporate your business, you will help your organization to develop by creating a line, which will determine who has the rights to make the final decisions.

Furthermore, when a person incorporates his business, he is making a brand new entity, which assist in creating the line which separates the personal finances and the business finances. When you finally incorporate your business, all of the employees in your company will have protection in case something catastrophic happens regarding your financial situation.

Through company incorporation involving a pty limited company, one produce stocks which investors can buy hoping that the stock’s value will get bigger and in the meantime one would accomplish company success. The company incorporation will let the investors buy and sell stocks leaving the investment responsibility in the possession of stock investors.

Advantages of Incorporation

Incorporation has many advantages for a business and its owners, including protection of the owner's assets, because the company is liable for its own debts. It includes easy transfer of the business ownership to another party through the sale of shares.

·    Protect Your Personal Assets: Incorporating your business is one of the best ways you can protect your personal assets. A corporation can own property, carry on business and incur liabilities

·  Have Easier Access to Capital: Raising capital is generally easier for a corporation, since a corporation can issue shares of stock. This may make it easier for your business to grow and develop. In most cases, banks would rather lend money to corporations than to unincorporated business ventures. Corporations generally have access to more alternative sources of capital through which they can pay off their debts.

·   Enhance Your Business’ Credibility: The benefits of incorporating go beyond finances. In a sense, having “Inc.” or “Corp.” after your business name conveys permanence, credibility, and stability, and communicates your commitment to the ongoing success of your business venture.

MAHAVEER SINGHVI & ASSOCIATES provide wide range of services. For more details, visit our website at http://www.ca-msa.com/

How demonetization will affect loans and investments

The scraping of the Rs. 1000 and Rs. 500 notes on November 8^th 2016 has lead to widespread confusion among the masses. This demonetization has gained a highly polarizing response. Apart from the ones with hoards of black money, how has this move affected common people with investments and loans to pay off? Here are some insights on the issues.

Mutual funds

Mutual Funds are deemed to be beneficial in the long run. The scraping of the notes will lead to banks reducing the interest rates for fixed deposits. Thus we will see a gradual shift towards Mutual Funds, which offers a much better returns. With interest rates falling, debt mutual funds are expected to do well in this economy, and this trend will continue for a while. Also with stock markets rapidly falling due to demonetization, you can invest in god equity mutual funds are low prices, and reap benefits in the future.

Bank FD

If you are someone who has parked a majority of your money in Bank FDs then you have bad news. Bank FD rates are expected to go down, since many people are flocking to deposit their money in denominations of Rs 500 and Rs 1000 in the banks. Since Banks are getting a heavy cash inflow due to deposits, they do not have to depend on interest rates from loans, thus they can afford to reduce interest rates on FDs. If you fall in a higher tax bracket, then investing in tax free bonds, which gives you 6% returns with no lock-in period is your best bet, since the interest you earn through this is not taxed, unlike FDs.

Car loans and home loans

These are all set to fall. Again, since people are queuing up to deposit their money in their savings accounts, these make up the low cost deposits. Hence, banks can afford to give out loans at significantly lower rates. If you are planning on buying a new car or a home, this would be a great time.

If you are confused about how this demonetization will affect your taxes and billings this year, you can contact us for expert services. Our professional CAs at Mahaveer and Singhvi Associates will ensure that your money matters are handled with care. Please contact our website at http://www.ca-msa.com/

Why you need a professional CA?

           A Chartered Accountant is a professional who has finished the Chartered Accountants Program and has been inducted as a professional. This professional course requires immense dedication and hard work also with a minimum three years of article ship where the prospective CA learns under the mentor-ship of a credible Chartered Accountant.

          The primary job of a chartered accountant is to provide a credible accountancy services by overseeing all the financial operations of an organization. The training and immense experience before their professional induction helps prove their mettle in solving real world problems.

          Chartered Accountants work closely with your company to ensure that your accounting is top notch, and that your tax requirements are met. These services are immensely valuable for smaller businesses, which does not have a dedicated accounts department. A CA will help you make sense of all your accounts and will help file taxes and keep your records straight.

          Even with a dedicated accounts department in place, having a CA on hand will help iron out any discrepancies and confusions. Hiring such a consultant will ensure that your business is running on the right track without having to worry about the gritty details.

          At Mahaveer Singhvi & Associates we offer viable accounting solutions for our clients. For more information about our services, do visit our website at http://www.ca-msa.com/services.html

Why it’s important to spend time on your accounts

          For small business owners, it is quite easy to allocate time to different aspects of the business, including daily accounting. This will ensure that they have a complete knowledge of their accounts. However, as the business grows, it becomes increasingly hard to keep a check on your accounting. This is where it becomes imperative to hire a good accounts team/ professional to take care of your books.

       However, this does not mean you can completely absolve your responsibilities of looking into your accounts. It is important to regularly look into your accounts and have a healthy control over it, will help you assess you current business financial situation and will allow you to make decisions on the fly, before it is too late.

          Investing in a good accounting system is highly recommended. This will not only easy your accounting process, but will also give you a comprehensive view of your finances. This will enable you to have a greater stability over your finances. Keeping accurate check of your invoices and bills will also help you during your audits as well.

          At Mahaveer Singhvi and Associates, we offer quality CA services, and we ensure that your accounting is in order. For more information about our services, do visit our website at http://www.ca-msa.com/

Why you need an expert financial planner?

   Having a financial experts to help you with your investments is a good option for anyone who is interested to make secure investments. This will ensure a professional, expert touch in helping you make educated choices when it comes to investing your money.

·        A professional will make it easy to choose funds and will help you with the investing process. They will also help with portfolio re-balancing and managing cost & fees as well.

·        A professional will also help with asset allocation and relocation thus ensuring low risk factors.

·        A financial planner should also help with making important decisions as well, such as job switching, children’s career choices and other such personal choices, which will affect your finances.

·        The expert will also help converting more savings into safe investing thus being able to handle volatile assets much better. This will also allow you to strike a size-able balance between savings, investing and thus securing your financial balance.

·        In most cases, the financial planner is expected to choose a good investment fund for their clients.

Having a good financial planner will also enable you to keep your financials in order, thus making it much easier when filing your taxes once a year. At Mahaveer and Singhvi Associates, we provide viable CA services for our clients. 

Brace yourselves for a new Monetary Policy Committee

The finance bill, bill, which was recently passed in the Lok Sabha is awaiting passage in Rajya Sabha. The government has decided to set up a six member Monetary Policy Committee (MPC) after the passage of Finance Bill, 2016. This committee will comprise of three independent directors and three members nominated by the government. This committee will be responsible for fixing benchmark interest rates of the Reserve Bank of India (RBI) and look into inflation targets.

The three members from the Reserve Bank will be the RBI Governor, Deputy Governor and Executive Director. The three others who will be nominated form the Government’s side will be via selection and voting. This move has been taken to distribute the powers of decision making with respect to setting up interest rates. Currently this power solely lies with the RBI Governor. However, a collective decision among a group of competent academics will ensure optimal growth and will leave little margin for error.

The members of the MPC will continue for a tenure of four years and will not be eligible for reappointment. The committee is expected to meet at least four times a year, some times more if deemed necessary. When this is established, the RBI will be responsible for publishing the Monetary Policy Report every six months.  For More details please visit our website at http://www.ca-msa.com