The taxpayers behind the curtains- Direct and indirect taxation

Direct Tax

The tax levied on a person’s income and wealth which is paid directly to the government is known as a direct tax.

The tax is progressive in nature i.e. it increases with an increase in the income or wealth and vice versa. It is levied according to the paying capacity of a particular person, that is, the amount of tax collected from the rich people is lesser compared to the amount of tax collected from the poor people.

There are several types of Direct Taxes, such as:

·         Income Tax

·         Wealth Tax

·         Property Tax

·         Corporate Tax

·         Import and Export Duties

Indirect Tax

Indirect Tax can be described as tax charged on a person or persons who consume services and goods and is paid indirectly to the government. There are several types of Indirect Taxes, such as:

·         Central Sales Tax

·         VAT (Value Added Tax)

·         Service Tax

·         STT (Security Transaction Tax)

·         Excise Duty

·         Custom Duty

Income Tax

Taxable income refers to total income minus applicable deductions and exemptions. If the taxable amount is above the minimum taxable limit, then tax is payable and is paid as per the different rates that have been announced for each tax slab for that particular financial year.

Corporation Tax

Corporation Tax is paid by companies and businesses on the income earned worldwide in a given financial year.

Wealth Tax

It is taxed at the rate of 1% of the net wealth.

Capital Gains Tax

Capital Gains Tax is usually taxed at two different rates based upon how long the property was owned by the taxpayer. Evidently, Capital Gains Tax is of two types-

·        Short Term Capital Gains Tax

·        Long-Term Capital Gains Tax

Indirect Taxes-

Sales Tax

This kind of tax is charged for the movable goods.

Service Tax

Service tax is applicable to all services provided in India except a specified negative list of services that are exempt. The service provider pays it to the government who in turn collects it from the end user by the provider at the time of provision of the said service.

Mahaveer Singhvi & Associates is a Chartered Accountant's firm. They provide extensive professional services in the areas of Advisory Services, Auditing, Taxation, and Management & Consultancy Services. Find more about them here at http://www.ca-msa.com/

World class auditing services

An audit is a term which refers to an objective examination and evaluation of the financial statements of an organization. This is basically done to make sure that the records correct and accurately represents the transactions which the organization claims. It can either be done internally by employees of the organization or externally by an outside firm.

Again, there are several categories of audits performed some of which are - income audit, system audit, safety audit, compliance audit, etc. However, they are broadly categorised as External Audit and Internal Audit. While the latter focuses on the procedures to ensure that the financial statements of the company are not materially misstated, the Internal Audit looks beyond numbers and focuses on processes, regulations, compliance etc. 

There can arise a condition that, the internal audit function can arguably be called an external audit. But, it is the nature of the internal audit which is to estimate the internal affairs of the company that can easily make a difference. This Internal Audit functionality can only be present in a large organization that has been listed on Stock Exchange and has to include Corporate Governance in its report so that there can be a clear difference. Otherwise, its reporting can easily be same as that of External audit reports. In External Audit reports, the sole purpose is to make the stakeholders aware of the actual financial condition of the company.

An audit firm is one which assesses a company's financial information and determines if the information is accurate and complete. The main work of an audit firm is to provide an accurate and fair figure of the actual financial standing of the company and also to evaluate the different department with the only aim of improved efficiency.

The functionalities of an Audit firm can be listed as:

●     Auditing services: The auditing services can categorically be classified into Statutory Audit, Internal Audit, Tax Audit, Cost Audit etc.

●   Corporate Governance: The corporate governance can be termed as balancing the interests of the many stakeholders in a company which includes shareholders, management, customers, suppliers, financiers, government and the community.

●     Risk Management Services: Auditing firms also undertake risk management services.

Mahaveer Singhvi and associates is a chartered accountant firm to render comprehensive professional services in the field of auditing and taxation with its office situated in Kalaburgi and Mysore. All the other information about the firm can be gathered from the official website http://www.ca-msa.com/

TIPS YOU SHOULD CHECK OUT BEFORE COMPANY INCORPORATION IN INDIA

Company incorporation is a major work to do before setting up finances and discussing markets. First thing first, there is a lot of paperwork and details to be sorted out. A lot of complex legal framework can mess up your good work and sink your company under the water!

There are three major rules that mainly work for the upcoming companies and should be kept in mind!

Together, rule number 8, 9, and 36 are the important ones which describe all the major procedures for incorporation of the company and its subsequent naming. Here are a few salient points about these procedures:-

●       The first rules state the name of the company should not be “undesirable “to the work or against the main members of the company.                                                                                                      The name of the company which is not in sync with the principal objects of the company by simple conjunction of association. The name is vague. Or it may produce a false impression on its clients and mistakenly refer to other products or services.

●       The name which is intended or likely to produce a misleading impression regarding the scope or scale of its activities which would be beyond the resources at its disposal cannot be chosen.

●       If the company changes its services, then the name of the company needn’t be changed.

●       If the company is named after a particular person or relative, then it must be done so with the consent of the person and the board

●       The details for incorporation of a company in India can be uploaded in an e-form. Errors can be rectified in 15 days. Else the registrar provides another 15 days for rechecking and corrected submission.

●       The name of the company cannot be similar to any other company providing the same kind of goods and services.

●       The kind of legal framework required for the incorporation of the company should be dealt with a lawyer.

●       The board of trustees in any forming company should be allowed to know all the regulations that are being stipulated in the forming contract.

Of course, there are companies like Mahaveer and Singhvi Associates- (http://www.ca-msa.com/) which can help you iron out and sort out all kinds of details that become a huge jumble while forming a company. After all, even with recent laws easing up the situation, company incorporation is a tough task and companies like this are needed for you to guide the way!

ALL YOU NEED TO KNOW ABOUT INDIRECT TAXATION SERVICES

The taxes levied by the government form a pool of resources to be used for the collective benefit of the public. The taxation is an exercise in the collective solution of individual problems. The state takes upon itself the duty of solving the problems of the underprivileged and need finance for this purpose. The government can mobilize resources by imposing taxes on the privileged ones. A tax may be defined as a "pecuniary burden laid upon individuals or property owners to support the government, a payment exacted by legislative authority.

Excise duties on the production of commodities, sales tax, service tax and customs duty, tax on rail or bus fare are some examples of indirect taxes. Excise Duty The tax imposed by the government on the manufacturer or producer on the production of some items is called excise duty. Inputs free of duty: Exporting units need raw materials without payment of customs/excise duty, to enable them to compete for exporting Custom duty is a form of indirect tax. Standard English dictionary defines the term "custom" as duties imposed on imported or less commonly exported goods.

The multi-structured-layered indirect tax imposed on both at the Central and State level in India which is extremely complex and dynamic in nature. Further, frequent changes in the legislation/ judicial pronouncements and the proposed change Goods and Service Tax (GST) regime make the analysis of a business structure from an indirect tax perspective all the more imperative. 

Indirect tax affects all the aspect of a company. They have impact on all the fields inside a company from raw materials cost to shareholders and for that to stay ahead in competition we need expert advice or consultation on how to handle these taxes to stay ahead in competition and avoid too much of cascading tax in the manufactured cost of our product. www.ca-msa.com is one of the recommended sites that would help you to achieve this and giving you more details on indirect taxation. 

Services they provide vary in different fields like from Registration under Central Excise, Customs, Service Tax, Import Export Code & VAT, Accounting, and Preparation & Assistance on filing of periodic returns, Handling of Assessment Procedure, conducting audit under relevant statutes, Assistance in moving courts on legal issues arising out of assessment/appeal, Assisting in maintenance of various records for statutory compliance etc.

TIPS TO ENSURE PROPER BUSINESS TAXATION

Running and handling your business is a tricky thing as it is, and then comes the complicated legal tangle of various business taxation reports. How much tax should you pay, inclusive of profits, cost calculation and transport is a muddle that only a financial guru can help you with. Of course, in the recent days, there are a plethora of good companies which can audit your business and solve all problems related to business taxation.  

Mahaveer and Singhvi Associates- http://www.ca-msa.com/ are a good chartered accountant firm which can help you calculate the proper amount of tax as required by the government and help you plan your tax returns carefully. They will also be able to suggest a better way to reduce the taxation levied on your business.

Here are a few tips given by many popular websites on how to handle business taxation issues:-

1. Consolidate your Business structure

There are certain business structures that could beneficial to you in a financial point of view. These structures will provide you with some protection from the liabilities of your company and they help reduce taxation for any particular asset. So plan and segregate your business wisely.

2. Payroll and taxes

It is not a matter of joke to figure out the salaries of all employees working under you and also figuring out the state and central taxes being deducted from them. Also, there may be many kinds of hidden taxes levied in different directions. It is best to use a good reputed firm to figure out the exact distribution and payment of their taxes.

3. Other c and fees

There are many kinds of tariffs and taxes levied based on the kind of product you are selling to the kind of service you are offering. There are different categories of products that have different rates and concessions. It is necessary for you to know all these concessions and claim the reliefs you can get in a certain time period from the strenuous business taxation.

Thus, business taxation is not an easy matter to get rid of, but with proper caution, care and regularity, you can handle all aspects of your business properly without letting the taxes become a headache. Remember, in the end, death and taxes are inevitable; however, there are companies who can assure that at least one of them doesn’t have a bad ending!

Payroll accounting- Sometimes going conventional is better

Outsourced payroll accounting offers loads of various advantages– for the client, the workers and the organization (of all sizes). This article takes a look at probably the clearest favorable circumstances to expect when you make use of external payroll accounting. We know there are numerous automated options available with companies nowadays however the age old human touch to crucial operations such as payroll makes a huge difference in yearend results.

1. Auditing employee logbooks

Auditing employee logbooks give you a super simple approach to oversee sick leave, nonappearances and extra minutes. In a glance you can perceive to what extent employees are away for, regardless of whether they ought to be working away, what sort of leave they are presently on, how much leave they are qualified for and so on. It makes arranging a considerable measure less demanding.

2. Cost effective

By running with an expert administration, there is incredible potential to spare cash… particularly once you can develop familiarity with your payroll accounting Partner Company. Usually, studies show there are drawbacks by not running with an expert administration which can cause financial losses.

3. Tax updates

You may have missed the most recent tax updates, yet an able payroll accounting partner will enable you by advising you when these updates to arrive.

4. Create Payslips

While payroll accounting services offer some of the advantages given here in this rundown, making payslips is an additional benefit our company provides. Business payroll services enable you to rapidly and effectively create payslips for every one of your workers, and with formats you can make sure that the statutory least measure of data is incorporated.

6. Spare Time

It clearly requires additional investment and additional assets for a business to deal with its finance, however outsourced payroll administration ensures that a company management has time to do the things they are adept at doing and bring them direct monetary value.

7. Included Security

By overseeing finance externally with payroll services, an organization removes the vulnerability that accompanies crucial data being mishandled by staff that may not be expert in these things.

Mahaveer Singhvi & Associates offers a slew of accountancy services to ensure effective payroll accounting methods to keep your payments in good order. For top notch payroll accounting consultancy, visit our website at http://www.ca-msa.com/

Why auditing is a game changer for any business organization

Auditing is a method for assessing the viability of an organization's internal controls. Keeping up an effective system of inward controls is essential for accomplishing an organization's business goals, getting dependable monetary reporting regarding its operations, anticipating extortion and misappropriation of its benefits, and limiting its cost of capital. Both internal and independent auditors add to an organization's audit framework in various important ways.

Business Objectives

Having a successful audit system is vital for an organization since it empowers the company to pursue and achieve its different corporate goals. Business processes require different types of inner control to encourage supervision and checking, prevent and identify sporadic exchanges, measure ongoing performance, and keep up sufficient business records and to advance operational profitability. Internal auditors survey the outline of the internal control and informally propose enhancements, and record any material inconsistencies to empower encourage examination by administration in the event that it is justified in light of the current situation.

Risk of Misstatement

Auditors assess the risk of material misquote in an organization's money related reports. Without a system of internal controls or a review framework, an organization would not have the capacity to make dependable monetary reports for inner or outside purposes. Along these lines, it would not have the capacity to decide how to allocate its assets and would be not able know which of its portions or product offerings are beneficial and which are definitely not. Moreover, it couldn't deal with its issues, as it would not be able to tell the status of its benefits and liabilities and would be rendered undependable in the commercial center because of its failure to reliably deliver its products and ventures in a solid form. In like manner, a financial audit framework is pivotal in averting weakening misquotes in an organization's records and reports.

Misrepresentation Prevention

Internal financial audit serves a critical part for organizations in extortion counteractive action. Repeated audit of an organization's operations and keeping up thorough frameworks of internal controls can avert and identify different types of misrepresentation and other account abnormalities. Review experts aid the plan and alteration of internal control frameworks the reason for which incorporates, in addition to other things, extortion counteractive action. A critical piece of avoidance can be discouragement, and if an organization is known to have a dynamic and steady review framework set up, by notoriety alone it might keep an employee from hatching a plan to dupe the organization.

At Mahaveer Singhvi and Associates, we offer proficient auditing services to help ensure that your accounts are in order, easing filing of annual taxes. For more on our auditing services, visit our website at http://www.ca-msa.com/