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FAQ's
GST (Goods and Services Tax)
GST (Goods and Services Tax) is a comprehensive tax levied on the supply of goods and services in India. It has replaced multiple indirect taxes such as VAT, service tax, and excise duty.
Any business with an annual turnover exceeding Rs. 20 lakhs (Rs. 10 lakhs for northeastern and hill states) is required to register for GST. Additionally, specific businesses like e-commerce operators must register regardless of turnover.
GST is divided into three types: CGST (Central GST), SGST (State GST), and IGST (Integrated GST). CGST and SGST are applicable on intra-state transactions, while IGST is applicable on inter-state transactions.
GST returns can be filed online on the GST portal (www.gst.gov.in). Businesses need to file various returns like GSTR-1, GSTR-3B, and annual returns, depending on their activities and turnover.
ITC allows businesses to claim credit for the GST paid on purchases or expenses incurred in the course of business. It can be used to offset GST payable on sales.
Income Tax
The due date for individual taxpayers is typically July 31st of the assessment year. For businesses requiring audit, the due date is usually September 30th.
Any individual with a total income exceeding the basic exemption limit (Rs. 2.5 lakhs for individuals below 60 years, Rs. 3 lakhs for individuals between 60-80 years, and Rs. 5 lakhs for individuals above 80 years) must file an income tax return.
Key documents include Form 16 (for salaried individuals), bank statements, investment proofs, TDS certificates, and details of other income sources.
Form 16 is issued by employers to employees, showing the TDS deducted on salary. Form 16A is issued for TDS deducted on income other than salary, such as interest from fixed deposits.
You can check the status of your income tax refund on the official income tax e-filing website (www.incometaxindiaefiling.gov.in) under the “Refund/Demand Status” tab.
PAN Card
PAN (Permanent Account Number) is a unique ten-digit alphanumeric identifier issued by the Income Tax Department of India to track financial transactions.
You can apply for a PAN card online through the NSDL or UTIITSL websites or offline by submitting the required form and documents to the nearest PAN center.
Key documents include proof of identity (Aadhaar card, voter ID), proof of address (utility bill, passport), and proof of date of birth (birth certificate, school certificate).
You can request corrections or updates online through the NSDL or UTIITSL websites by submitting the necessary documents and paying the applicable fee.
If you lose your PAN card, you can apply for a duplicate PAN card online through the NSDL or UTIITSL websites by providing the required information and documents.
Business Registration
The main types of business entities in India are Sole Proprietorship, Partnership, Limited Liability Partnership (LLP), Private Limited Company, and Public Limited Company.
To register a Private Limited Company, you need to obtain a Digital Signature Certificate (DSC), Director Identification Number (DIN), reserve a unique company name, file the incorporation forms with the Ministry of Corporate Affairs (MCA), and obtain a Certificate of Incorporation.
A Digital Signature Certificate (DSC) is an electronic form of a signature used for filing documents electronically with government authorities. It ensures the security and authenticity of documents.
A Private Limited Company must comply with various requirements, including holding board meetings, maintaining statutory registers, filing annual returns, and financial statements with the MCA, and ensuring timely payment of taxes.
Yes, a foreigner can start a business in India by incorporating a company or setting up a branch/liaison office, subject to compliance with Foreign Direct Investment (FDI) guidelines and other regulatory requirements.
Business Licenses and Permits
The required licenses vary based on the type of business but may include GST registration, Trade License, Shop and Establishment License, Professional Tax registration, and specific industry-related licenses.
A Trade License can be obtained from the local municipal authority by submitting the required application form, documents, and paying the applicable fees.
The Shop and Establishment License is a state-specific license that regulates the working conditions and rights of workers in commercial establishments like shops, offices, and restaurants.
Professional Tax is a state-level tax on professions and employment. If applicable in your state, you must register and pay Professional Tax if you are an employer or self-employed professional.
An IEC is required for importing or exporting goods and services. It can be obtained online through the DGFT (Directorate General of Foreign Trade) website by submitting the necessary application form and documents.
Business Finance and Accounting
The key financial statements include the Balance Sheet, Income Statement (Profit & Loss Account), and Cash Flow Statement. These help in assessing the financial health of the business.
Cash basis accounting records transactions when cash is exchanged, while accrual basis accounting records income and expenses when they are incurred, regardless of cash flow.
Effective cash flow management involves monitoring and forecasting cash inflows and outflows, maintaining adequate reserves, timely invoicing, and managing receivables and payables efficiently.
A business loan is a financial product designed to provide funding for business purposes. To apply, you need to submit a detailed business plan, financial statements, tax returns, and other required documents to the lending institution.
Proper business records help in efficient management, legal compliance, accurate financial reporting, better decision-making, and ease of obtaining finance.