To eliminate the duplication or cascading effects of taxes, such as a tax on tax, India introduced GST in July 2017 and repealed many indirect taxes. GST essentially combines a number of indirect taxes into one. In 2021, four years from now, there are a number of difficulties with GST that taxpayers and professionals should be aware of.
SCNs (Show Cause Notices) under GST:
For short-levy, non-levy, short-paid, non-paid, erroneous refund, inappropriate availment, and inaccurate use of input tax credit, demand and recovery can be initiated. The issue of a show-cause notice kicks off all demand and recovery actions under GST. What is a Show Cause Notice (SCN)? What is its significance, and when is it considered to be served? We delve deeper into the GST show-cause notice in this article.
What is the meaning of a show cause notice (SCN)?
A show-cause notice is a formal communication to a person requesting that he or she explain his or her side of the issue raised in the notice. It is usually issued in the event of a breach or misbehaviour on the recipient’s part. A notice must be given telling the assesses of their wrongdoing. Demanding that the person who is liable for tax show cause why the stated amount of tax should not be collected from him.
What is the aim of a show cause notice (SCN)?
It is given to the recipient to permit him to precise his side of the story. The principle of natural justice gives it its potency. Before any action is taken against an individual, he or she has the proper to be heard.
Issuing an SCN – What are the Statutory Provisions?
Section 73-
Determination of tax not paid, underpaid, incorrectly reimbursed, or input reduction wrongfully availed or utilized for any reason aside from fraud or willful fabrication or suppression of facts.
The cut-off date for issuance of a piece 73 SCN is three months before the issuance of an order, and also the deadline for passing order is three years from the day of the month for filing an annual return for the yr that tax wasn’t paid or was underpaid or 3 years from the date of an erroneous refund.
Section 74-
Determination of tax not paid, underpaid, incorrectly refunded, or input tax credit improperly gained or used as a result of fraud, deliberate fabrication, or suppression of facts.
The time limit for issuance of a Section 74 SCN is 6 months prior to the issuance of an order, and the time limit for passing order is 5 years from the due date for filing an annual return for the financial year for which tax was not paid or was underpaid or 5 years from the date of an erroneous refund.
Conclusion
Except for applicability, limitation period, and penalty amount, the provisions of sections 73 and 74 are nearly identical. The provisions have been created in such a way that the taxable person has the option of settling the dispute by paying the tax, interest, and relevant penalty before or after the ruling is issued. It is possible that actions taken under these sections will not always result in the passing of the order. If the order is u/s 74, the taxable person has the opportunity to make payment of dues within thirty days after serving the order to avoid a penalty of 50%.
However, where the ruling is based on Section 73, no such reduction in the penalty amount is permissible. An aggrieved taxable person has the option of filing an application u/s 161 for rectification of an error obvious on the face of the record or filing an appeal u/s 107 to the Appellate Authority within three months. Otherwise, after three months, dues will be available for recovery, and the proper officer will begin the recovery process.
“Customs duty” refers to the tax levied on goods when transported across international borders. The Customs Act and The Customs Tariff Act (CTA), along with various related rules and regulations, serve as an integrated code for imposing tariffs on India’s imports and exports. The goal behind imposing tariffs is to protect each country’s economy, employment, environment, residents, etc.
by restricting the movement of goods in and out of each country, especially prohibited and restricted goods. Every item has a predefined tariff rate that is determined based on a variety of factors, such as where the item was purchased, where it was manufactured, and what it is made of. Also, anything you bring to India for the first time must be declared in accordance with customs regulations. For instance, you need to declare the items purchased in a foreign country and any gifts you acquire outside India.
Types Of Custom Duties
Customs duties are charged almost universally on every good which are imported into a country. These are divided into:
Basic Customs Duty (BCD)
Countervailing Duty (CVD)
Additional Customs Duty or Special CVD
Protective Duty,
Anti-dumping Duty
Integrated tax
Basic Customs Duty
Basic customs duty (hereinafter referred to as BCD) is a tax levied under the Customs Act 1962. Before discussing this customs tax, it is important to note its primary source. The basic customs duties levied on goods originate from Section 12 of the Customs Act, which deals with taxable goods.
Countervailing Duty
Certain goods are subsidies to some extent by a country either produced/manufactured in that country or their exports or sometimes even their transportation. In such a scenario, to put domestic producers on an equal footing with traders in terms of subsidized imports, Section 9 of the CTA empowers the central government to impose anti-subsidy duties on goods.
it is by notification in the Official Gazette. This section applies to goods that are not imported directly from the country or place of their manufacture/production, as well as to goods not in the same condition in which they are exported from the place of manufacture or production. their output. However, the article forbids the imposition of such amounts in excess of subsidies and periods beyond 5 years.
An Additional Customs Duty Or Special CVD
There are goods that are domestically produced or produced that the government levies excise taxes on. To avoid any manifestation of unfairness against domestic producers or domestic producers of goods, section 3 (1) provides for the application of a tax rate equivalent to the excise tax on goods imports of the same type.
Protective Duties
Sections 6 and 7 of the CTA allow the central government to impose protective tariffs on certain imports if it deems it appropriate to protect domestic industry. The procedure for imposing such protection obligations is comprehensive and can be understood in the following ways:
The Customs Commission of India recommends and specifies the level or rate of protective tariffs imposed on certain imports by the central government.
Based on such recommendations, if the government is convinced that such a levy is necessary to protect the domestic industry, the government must impose it by notification in the official gazette. The number of tariffs levied shall not exceed the Commission’s recommendations.
The Government is obliged to submit a such notification to Parliament in the form of a bill within six months of the issuance of such notice.
If the government does not comply with the above, or if the bill is not adopted, the notified obligations will no longer apply.
If circumstances make the government believe that the protective duty has exceeded or failed to reach its target, the government can lower or raise the tax level.
Anti-Dumping Duty
The dumping of goods is one of the widespread problems in the trading world. If the exporter exports the item to another country or region at a lower price than usual, it is a dumping practice. To prevent such dumping of imported goods in India, Section 9A of the CTA imposes an anti-dumping tax on goods exported to India for dumping purposes. However, the amount of obligation to be collected must not exceed the dumping margin. Normal value – Export value, as well as the deadline for such collection, must not exceed 5 years (although it may be canceled before the specified deadline).
Integrated Tax
With the introduction of GST in 2017, goods imported into India will be subject to the Integrated Goods and Services Tax (IGST) in addition to BCD. Under the newly amended Section 3 (7) of the CTA, the integrated tax is charged at a rate equal to (but less than 40%) the rate at which the IGST is levied on goods of similar nature shipped in the taxable country.
The value of imported goods. The above taxes are in addition to BCD and, if applicable, additional obligations.
To make tax compliance easier, the taxation department has categorized taxpayers into many groups of supported income and its source. So, you’d like better to file your returns accordingly. ITR-1, also called Sahaj Form, is for somebody with an income of up to Rs.50 lakh.
Aadhaar Card is Mandatory for taxation Return Filing
The tax department has made it mandatory for all taxpayers to link their Aadhaar card with PAN on the tax department website.
Who Is Eligible to File ITR-1 for AY 2021-22?
ITR-1 Form is additionally a simplified one-page form for people having income up to Rs 50 lakh from the subsequent sources:
Income from Salary/Pension
Property Income from a Single House (excluding cases where loss is brought forward from previous years)
Other sources of income (excluding lottery winnings and racehorse earnings)
In the case of clubbed Tax Returns, where a spouse or a minor is included, this might be done as long as their income is proscribed to the above specifications.
Who is unable to file an ITR-1 for the fiscal year 2020-21?
This form is not available to anyone with an annual income of more than Rs 50 lakh.
This form cannot be used by anyone who is a director of a firm or who has ever held unlisted equity shares during the financial year.
Non-residents and residents not ordinarily resident (RNOR) are unable to file returns using ITR-1.
Individuals who received income in the following ways are also unable to file Form ITR-1:
Lottery for more than one house, racehorses, legal gambling, and so on. Capital gains that are taxable (Short term and Long term). Agricultural income of more than Rs. 5,000 in the business and professions. A person who is a resident of India who has assets (including financial interests in any entity) or signing authority in an account outside of India. Sections 90/90A/91 apply to anyone who wants to avoid double taxation or get overseas tax relief.
What is the ITR-1 Form’s structure?
Part A – General Information
Part B – Total Gross Income
Part C – Taxable total income and deductions
Part D – Calculation of Taxes Due Other Information
Part E – Bank account details
Make IT a priority (Details of advance tax and self-assessment tax payments)
TDS-Schedule (information on TDS/TCS)
Verification
What is the procedure for submitting my ITR-1 Form?
You have the option of submitting your ITR-1 Form online or offline.
Offline
Only the people listed below have the option of filing the return on paper.
A person who was 80 years old or older at any point in the preceding year
A person or a HUF with an annual income of less than Rs 5 lakhs and no refund claim on their tax return
The return is provided in tangible paper form for offline returns. When you submit your physical paper return to the IRS, you will receive an acknowledgment from them.
Online/Electronically
By sending the data electronically and then submitting the return’s verification in the form of an ITR-V to the CPC in Bengaluru.
By e-verifying the ITR-V through net banking/aadhaar OTP/EVC and filing the return online.
The acknowledgment will be sent to your registered email address if you submit your ITR-1 form electronically. You can also choose to directly download it from the IRS website. Within 120 days of e-filing, you must sign it and transmit it to the Income Tax Department’s CPC headquarters in Bangalore. You can also e-verify your tax return.
Changes to the ITR-1 for AY 2021-22 that are significant
The ITR form has been updated to include the following changes:
If TDS is deducted under section 194N, the taxpayer is unable to file an ITR-1. If non-filers of the income tax return withdraw cash in excess of Rs.20 lakh, the tax would be deducted at source under section 194N. In other circumstances, when cash withdrawals exceed Rs.1 crore in a financial year, the tax must be deducted.
Under section 194N, there is no opportunity to carry forward TDS. TDS credit under section 194N is only available for the year in which TDS was deducted.
Individuals or HUFs can choose between the old and new tax regimes. If a taxpayer chooses a new tax regime under section 115BAC, he must first file Form 10IE before filing Form 139 (1).
New schedule DI has been added to the ITR forms for the assessment year 2020-21. It permitted taxpayers to deduct expenses incurred during the extended time in the fiscal year 2020-21. In AY 2021-22, the schedule DI is eliminated.
What is the procedure for completing the ITR-1?
Before filling out your ITR-1 form, make sure you have the following documents:
Form 16: This is a document issued by all of your employers for the current fiscal year.
Form 26AS: Make sure the TDS listed on Form 16 is the same as the TDS listed on Part A of your Form 26AS.
Receipts: If you haven’t been able to provide documentation of certain exemptions or deductions (such as HRA allowance or Section 80C or 80D deductions) to your employer in a timely manner, keep these receipts on hand so you can claim them directly on your income tax return.
PAN card
Bank investment certificates: Interest from bank account details – bank passbook or FD certificate.
When financing a new startup business, you can choose from personal investment, family, friends, angel investors, venture capital, bank loans, Small Business Administration (SBA), or bootstrapping. All options have their own uprising and disadvantages. It is good to look at all available options, which are available, and select the best option.
So, here’s a small comparison between purchasing debentures and issuing shares as a means to raise funds.
There are 3 kinds of investor funding in a start-up:
Equity
Loans
Convertible debt
Equity: How It Works
In this way, the investor gets a stake in your company when you invest in your company. Equity remains the most popular form of capital due to its long-term nature. Set a specific valuation on the company and get a percentage of the company’s stock based on the amount provided by the investor.
This option is ideal for companies that take a long time to start generating revenue. Internet companies and e-commerce companies take time to liquidate, but in such cases, it is advisable to opt for stock issuance as it can avoid debt for a longer period of time. Equity is the cheapest thing you can put up for sale if you need a significant amount of cash to sustain your growth before you start making a profit. It is also the most preferred option for those who do not have collateral to pledge in their name.
Loans need to provide something as collateral to mitigate the risk of financial institutions. Also, some companies need huge capital to get up and running, and in such cases, even bootstraps don’t work, and as a result, some stock to achieve their goals. I have to spend.
Equity also tends to help industries with the potential for exponential growth. While the idea of a local coffee shop may not be able to attract many capital buyers, new ventures related to the expansion of the field of robotics may attract many investors.
Debentures
Debentures are corporate or government bonds that are not secured by assets. All forms of debentures are bonds, but not all bonds are debentures. Fixed bonds can be their own class and can be identified by collateral associated with bonds. Since the collateral is not back, the structuring of bonds will be more dangerous than secure debt expenses. However, debt securities will reduce risks than preferred shares by advanced liquidation. Debt securities are intentional shares if bankruptcy or liquidation occurs as debt securities. There are two major types of debentures:
Convertible debentures
Non-convertible debentures
All debentures follow the standard structuring process and have a common function. First, a trust indenture is designed with the reliability between the issuing company and the trust of investors. Next, the coupon rate is determined. In other words, the Company pays for the debenture holder or investors. This rate can be defined as floating and relies on the creditworthiness of the company and the creditworthiness of bonds. Cautions usually increase interest payments as a protection debt to compensate for part of collateral risk.
Each debenture agreement also describes the repayment in the case of liquidation in detail. Debenture holders are paid in front of the preferred shareholder but can be subordinate to other types of debt such as senior loans. If funds are permitted, the training holder can receive the complete repayment of annexes to a bond that is interested in interest. Each liquidation is different, which affects the final expense of the debenture holder.
Advantages Of Using A Debentures
Debentures are classified as creditors and therefore receive refund privileges.
Director received reinsurance and financial protection.
Perhaps a way to develop business for a long time with low fixed costs
Debentures holders must be repaid before dividends can be paid to shareholders.
Social properties do not increase and therefore, participation is the same. The debts form a form of debt financing and thus provide a tax cost.
Assets are not diluted in society.
A Debentures provides a disciplinary effect because interest payments are independent of the interest amount.
Disadvantages Of Using A Debenture
Inflexibility to pay the debenture holder
If the debenture is secured, the company may not have the freedom to sell certain assets.
Debenture holders cannot vote or participate in profits.
Not a good investment choice in times of low inflation
Special Considerations
A primary consideration for selecting between preference shares and debentures depends on risk. Preference shareholders are usually promised dividends and certain liquidation rights. However, shares still trade publicly on an exchange with a value largely determined by the market.
A debenture can be less risky than preference shares but will also typically have a lower expected return. With a debenture, the owner is promised full repayment of the principal investment plus interest over a particular period. Debentures also are higher on the seniority ranking for reimbursement if a company must liquidate.
Section 80D could be a facility introduced within the taxation Act to permit taxpayers to say a deduction for medical premiums paid. Claiming a deduction under this section reduces the tax burden of people by allowing a claim of deduction for up to Rs. 25,000 annually for medical payments. Section 80D Deduction is claimed on eligible medical premiums bought by the individual, spouse, and dependent children.
Eligibility Criteria
Deduction under section 80D is often availed by all taxpayers for creating remittances of any premium or mediclaim policy availed within the name of:
The taxpayer himself
The spouse of the taxpayer
Dependent children of the taxpayer
Parents of the taxpayer
Non-dependent Children
Insurance payments for non-dependent children don’t qualify as a deduction under this section, though the youngsters are entitled to avail of the deduction from their total income.
Group Health Policies
Group health policies are generally excluded from the ambit of Section 80D, except if the taxpayer has an independent insurance policy added to the group health policy.
Multiple Health Insurance Policies
Taxpayers are allowed to say tax exemptions for multiple insurance policies by ensuring the satisfaction of the stipulated eligibility conditions and therefore the consistent remittance of premiums for the present insurance policies.
Treatments Availed Abroad
Treatments availed abroad by the taxpayers are claimed as a deduction if endorsement from the respective insurance entity is accessible. However, the commercial enterprise from which the policy is availed should be registered with the Insurance administrative unit of India.
Mode Of Money Payment
Deductions for medical insurance premiums are claimed exclusively if the supposed amount of payment to the service was remitted using online banking, cheque draft, debit/credit cards, or other online mediums. However, installments remitted for any preventive health check-ups are often remitted through cash.
Amount Of Deduction
An individual paying the insurance premiums for himself, spouse, or dependent children is allowed a deduction for an amount that may extend up to a maximum of Rs.25,000. If the assessee may be an old person then the most amount of deduction available is Rs.50,000. a private paying insurance premium for fogeys is additionally allowed a deduction for a maximum amount of Rs.25,000. just in case parents are senior citizens, then the allowable deduction would be Rs.50,000. allow us to understand the provisions of this section readily within the tabular format as narrated below:
Particulars
Details of Deductions Available
Total Deduction
Premium paid for a self, spouse, or
dependent children
The taxpayer is allowed to avail of a tax deduction of Rs. 25,000.
Rs. 25,000
Premium paid for a self, spouse, or
dependent children and parents for
For the taxpayer, spouse, and children, a maximum deduction of Rs.25,000 can be availed.
Additionally, Rs.25,000 will be allowed for parents.
Rs. 50,000
Premium paid for a self, spouse or
dependent children and senior citizen
parents for
For the taxpayer, spouse, and children, a maximum deduction of Rs.25,000 can be availed.
Additionally, Rs.50,000 will be allowed for parents who are senior citizens.
Rs. 75,000
Premium paid for self (being a senior
citizen), spouse or dependent children
and senior citizen parents
For the taxpayer, spouse, and children, a maximum deduction of Rs.50,000 can be availed in case the taxpayer is a senior citizen.
Additionally, Rs.50,000 will be allowed for parents who are senior citizens.
Rs. 1,00,000
Features Of Section 80D Deduction
To say deduction under section 80D, any mode of payment of premium is suitably provided the payment is routed through a bank. However, premium payment in cash isn’t allowable as a deduction under section 80D.
The deductible available under Section 80D exceeds the deductible available at INR 1,50,000 under Section 80C
An additional deduction of INR 5,000 is accessible on account of expenses for a health check-up. It includes a health check-up of all the dependent members.
Deduction under section 80D is obtainable on medical expenditure incurred by an assessee (Individual / HUF) on the health of super senior citizens (above 80 years of age) and senior citizens (between 60 and 79 years of age) provided no amount has been paid to effect or to stay operative insurance on the health of the person. The deduction available for medical expenditure is subject to the general limit of deduction under section 80D.
Benefits Of Health Insurance Under Section 80D
An insurance policy may be a shield that protects the taxpayer and family from any loss at the time of hospitalization during a medical emergency. The insurer bears the treatment cost and ensures that the assessee avails of the simplest medical assistance. the advantages of insurance are listed below:
Cashless Hospitalization
An insurance policy offers a cashless hospitalization facility at various multi-specialty hospitals nationwide, which offers individual cashless treatment. These impaneled hospitals are mentioned as network hospitals of the insurance firm.
Ambulance Charges
The ambulance expenses incurred just in case the assessee comes across an unfortunate event sort of a medical emergency are covered by an insurance policy. Generally, these policies cover the whole or a share of the ambulance expense.
Domiciliary Expenses
Apart from the treatment, the assessee may sometimes be asked to avail of a domiciliary treatment like physiotherapy treatment. The insurance policy also covers the price incurred for domiciliary treatments, subject to the policy norms.
Pre-Existing Disease
An insurance policy also provides coverage for certain pre-existing conditions. It also implies that the policy additionally covers expenses incurred for the treatment of a disease that existed before buying the policy. A waiting period of two to 4 years could also be applicable just in case the assessee is affected by pre-existing diseases.
Pre And Post Hospitalization
Apart from hospitalization and ambulance expenses, several other expenses occur when an individual comes across a medical emergency. An insurance policy takes care of those expenses. It covers both pre and post-hospitalization expenses for a particular period of your time. This duration is mentioned within the policy wording.
Permissible Deductions
Under Section 80D of the Tax Act, a private can claim a deduction for the subsequent medical expenses incurred during the financial year:
Medical premiums are paid by the taxpayer through any mode of payment aside from cash.
Expenses incurred under any Central Government health schemes.
The sum is paid on account of preventive health checkups.
Medical expenses incurred for the health of a senior or super grownup who could be a dependant member belonging to the family of the taxpayer.
More than 7,200 start-ups came up just in India within the year 2018. This big number is enough to justify the rationale for growing LLP companies and their registrations. Not just, even before hu 2018, there was a rise of 55% within the LLP registration. A serious number of start-ups prefer to opt for indebtedness Partnerships due to their benefits for the small- scale businesses.
What exactly is LLP?
LLP stands for indebtedness Partnership, which came into action under the financial obligation Partnership Act, 2008. As per the terms, LLP is largely a partnership during which the partners who are involved have limited liabilities. The partners have the liberty and adaptability to arrange themselves and their companies internally. one of its major benefits is that the Partners aren’t accountable for the actions and misconduct of every other.
Features and Benefits of LLP:
• There is not any concept of Minimum Capital Contribution.
• Partners and LLP are two separate things and even have separate entities legally.
• The benefits and features of LLP are utilized by any start-up or organization without being restricted just to a specific class of execs.
• The LLP can easily be formed and has low costs.
• The partners of the corporation aren’t liable for each other’s actions.
• As compared to other forms of companies and businesses, LLPs have limited and fewer restrictions. Disadvantages of LLP:
• The only disadvantage is that cash can’t be raised through LLPs.
• Also, within the case of massive Pvt. Ltd. Companies, investors, and larger ventures partner with them, but it doesn’t happen in the case of LLP.
Difference between financial obligation Partnerships, Traditional Partnership Firms, and companies:
In the case of a financial obligation Partnership, there are not any limits for the partners and also the partners also are not to blame for misconducting each other. The LLP has less number of regulations and restrictions.
While within the case of a Traditional Partnership, the partners are completely answerable for each other’s acts. And, within the case of companies, there are lots of rules and regulations which must be followed completely by all the members. As such, the LLP is becoming a more robust option for those who are new within the field and business. Penalties under the LLP Act: As simple as the LLP act seems, there are still some cases where Individuals and also organizations if found guilty of misusing and disregarding the principles of the LLP Act, are going to be responsible for Punishments and fines.
Some of the Offences under the LLP Act can be:
• Not maintaining the foundations and agreements made under this act.
• Using the words ‘LLP’ or ‘Limited Liability Partnership’ in improper ways.
• Punishable in the case of the Contravention of designated partners, Liabilities of Designated Partners, and changing the names of the designated partners.
Any person found guilty of the above-mentioned or others is punishable under Section 74 of General penalties made under the LLP Act, 2008
Register your LLP Company now
Under Section 74, General Penalties are made and described for the LLP Act, not having any specific offences normally. The individual found guilty under this Act shall be prone to a fine of a minimum of Rs. 10,000 extending up to a sum of 5 Lacs, betting on the offence and punishment. just in case the defaults are continued, 50 rupees are charged every day thereafter. As such, the Penalties so introduced under Section 74 of the LLP Act are monetary and zilch more.
If any false documents within the name of the company or individuals are submitted, including return statements, incorporation of the corporate, knowingly the individual is also liable and guilty of the subsequent punishments:
• Imprisonment of up to 2 years.
• A fine that will extend up to 5 lacs and a minimum of 1 lakh. All of the offenses are compounded by the Registrar.
All the applications of the offence are going to be compounded and submitted in Form-31. As such, there are not any major offences or punishments involved under the liability Partnership, which might easily be incorporated by following certain conditions and you’re good to travel for your business and obtain it growing.
Conclusion:
India ranks 3rd within the world just in case of start-up growth, and quite 50% growth within the industry, it’s the Golden Time for all the new businesses and corporations to flourish and set their feet into the competition. Also, with the introduction of the liability Partnership Act, 2008, it’s become even easier for all the young minds to urge started on what they’ve dreamed of, without concern about filing taxes, audits and minimum amounts to induce their business registered and running.
Ever since the Prime Minister of the country, Narendra Modi, launched the Start-up India program, there has been an out-of-this-world surge in the number of startups arising. With tax exemptions,
benefits, and help provided by the govt, more and more people are creating a corporation of their own. the foremost fascinating thing is that a majority of the startups calve founders and owners, which speaks volumes about the incredible creative minds that India has. Since they failed to have the backing of the govt. earlier and had to try to do everything on their own, not many of us got into it with all our hearts.
However, ever since the program started, people are now brave knowing that the govt. will back them within the process and hence are springing up with new ideas. People do have ideas but many of them haven’t any clue about starting an organization or the way to convert that concept into a business venture. People don’t have thought about a way to register their company as a startup.
Moreover, some people don’t even know if their company falls into the category of a startup or not. Keeping all such things in mind, we’ve got created a blog post to assist you in this regard by explaining the eligibility criteria to be called a startup and also the procedure to register your company jointly. Before going deep into the dynamics of the eligibility and procedure, allow us to understand what exactly a startup is.
What is a startup?
A startup could be a business managed by the gathering of those that solve a controversy. Such companies acquire formation when the founders find some negatives within the existing system they need been working in and will solve the problems by creating a brand new company of their own. Apart from this, a startup may inherit existence when the founder(s) include a potentially great idea.
The services such startups provide are the services they think currently exist of inferior quality or don’t exist in the slightest degree. The biggest advantage of a startup is that it improves employment within the country because it is the direct result of more and more companies springing up. With the chance of increased job opportunities, the Indian government has tried to assist young companies to grow and thrive within the Indian market. The Startup India initiative helps you to innovate and improve economic sustainable development. Now that you just have a more robust idea about what a startup is and what Startup India talks about, allow us to cross-check what all companies qualify as a Startup in India.
The startup eligibility criteria
What causes you to be a startup under the Startup India program?
The firm should be a non-public Ld. or an indebtedness partnership The company remains a startup for the primary ten years, post the date of registration. In the recent past, the Indian government changed that to 10 years from 7 years to provide opportunities and tax exemptions for the businesses for an extended run
The company remains a startup if the turnover annually doesn’t cross the Rs 100 crore mark in any of the ten years. Once the corporate cross the mark, it does not remain eligible to be called a startup. The mark of Rs 100 crore to has been improved by the Indian government in the recent past from Rs 25 crore The firm should be funded by an Incubation Fund, an Angel Fund, or a non-public Equity Fund A patron guarantee from the Indian Patent and Trademark office is critical The firm must come up with innovative ideas and schemes All the main points regarding the funding must be registered with SEBI (Securities and Exchange Board of India)
Procedure for registering a startup in India
Step 1: Incorporate your business
First things first, you would like to include your business as a personal Ltd. or a financial obligation Partnership or a Partnership firm. you only must follow the traditional procedure that features you filling up a form to urge the registration.
Step 2: Register under Startup India
Now you wish to register your firm or company as a startup within the Startup India scheme of the govt. you only must fill the shape available for you on the Startup India website. you’ve got to fill altogether the main points and upload a particular number of documents in addition.
Step 3: Documents
You would have to upload it in a PDF format only. You need a letter of advice together with the registration form. you’ll get anybody off the subsequent recommendation letters.
A recommendation letter from an incubator known in an exceeding post-graduate college in India is an exceedingly format approved by the DIPP. this is often regarding the innovative nature of the business, OR A recommendation letter from an incubator that the govt. of India funds as a part of any specified scheme to push innovation; OR A letter from any of the Incubators, recognized by the govt. of India, in DIPP format.
A letter of funding not but 20% in equity, by an Incubation Fund, Private Equity Fund, Angel Fund, Accelerator, Private Equity Fund, registered with SEBI that endorses the innovative nature of business; OR A recommendation later by the Central or any authorities of India; OR A patent filed and published within the Journal of Indian office in areas affiliated with the character of the business being promoted. Registration or Incorporation Certificate You have to upload the incorporation certificate of your company or the registration certificate for a partnership company.
First, you will need to form your NFT, to form an NFT of your artwork, you will need to settle on an NFT platform and a payment wallet, the latter of which you’ll have to use to pay fees – and get any reward if your NFT is sold successfully. There are plenty of online platforms you’ll use to form and sell an NFT.
OpenSea, Raible, SuperRare, Nifty Gateway, Foundation, VIV3, BakerySwap, Axie Marketplace, and NFT ShowRoom are some of the most popular NFT auction platforms. See our guide to NFT marketplaces for a comparison of a number of the foremost popular options.
There are lots of NFT payment platforms too, with Coinbase, MetaMask, Torus, Portis, WalletConnect, MyEtherWallet, and Fortmatic a number of the most effective known. For illustrative purposes, we’ll show the method involved in making and selling an NFT using the NFT platform Rarible and therefore the cryptocurrency payment platform MetaMask. Note that these two platforms are chosen purely to indicate how the method works, and it does not imply we’re saying they’re the simplest service to use.
You could think about employing any of the platforms mentioned above, and plenty more besides, and in most cases, you’ll follow an identical process. We recommend checking the fees involved as closely as possible before choosing (we’ll come to the fees later).
01. Buy some cryptocurrency to fund your wallet
All of the above-mentioned NFT auction platforms will require payment in advance to ‘mint’ an NFT, which is the process of converting your artwork into a non-fungible token. that you simply can sell. In most cases, payment must be made in cryptocurrency,
which implies that before you have got an opportunity of earning any cryptocurrency by selling an NFT of your work, You’ll have to go shop for some to hide the fees. Ether (abbreviated as ETH) is the most ordinarily accepted currency since it is the native cryptocurrency of the open-source blockchain platform Ethereum, which is where NFTs first launched. However, some platforms are beginning to accept a range of payment formats and to make NFTs using different blockchains (see our guide to NFT crypto to be told more on which could be best for you).
If you already own some ETH you’ll have to form sure you have got it during a digital wallet, which you’ll have to attach to your chosen NFT platform to create (and receive) payments. If you do not have currency, there are lots of cryptocurrency exchanges out there where you’ll buy ETH or other currencies, but the quickest and easiest option is sometimes to shop for ETH directly together with your digital wallet of choice.
02. Create a digital wallet to get hold of your NFT
To use MetaMask to build a digital wallet, go to its website and click the blue ‘Download’ icon in the top-right corner. As we’re employing a microcomputer, we’ll choose the choice to put in the browser extension, but there’s also a mobile app. You’ll be asked to verify that you simply wish to ‘create a replacement wallet and seed phrase’. Don’t fret an excessive amount about what ‘seed phrase’ means (it’s basically an inventory of words that store blockchain information). Say yes, then it’s simply a matter of agreeing to the terms, creating a password, and making your way through some security measures, then you’ll have your account found.
03. Add some cryptocurrency to your wallet
Once you’ve found your MetaMask wallet or any digital wallet, you will need to feature some ETH thereto. If you do not already own some ETH, you’ll have to shop for some now, so click on the ‘Buy’ button and choose the choice ‘Buy ETH with Wyre’.
You’ll be taken to a screen where you’ll use either Apple Pay or a positive identification to shop for ETH. Note that if you’d rather not spare any money yet, you’ll leave this stage until later; it just requires a touch more faff (you’ll want to test your chosen NFT platform’s fees to grasp what quantity you’ll have to buy). The jargon involved within the cryptocurrency world can make this a part of learning a way to make and sell an NFT quite daunting, but buying currency is really very easy to try.
Just remember that like bitcoin and lots of other cryptocurrencies, the worth of Ether can fluctuate hugely. In 2021 alone, the worth of 1 ETH has gone from under $1,000 to around $4,700 at the time of writing, with many peaks and troughs on the way. It’s perfectly possible for the value of the currency to swing by several many US dollars in only some hours.
04. Connect your wallet to an NFT platform
Most digital wallets add an analogous way. Whichever one you’ve chosen, you will need to attach it to the NFT platform that you’re going to use to sell the NFT. For illustrative purposes, we’re using Rarible, but there are many other NFT platforms to decide on from and therefore the process will generally be kind of like what we outline below.
05. Upload the file you wish to show into an NFT
So now you’ve got a wallet connected with ETH to form payments, and you’re able to know the way to create and sell an NFT. On the Raible site, click the blue ‘Create’ button at the highest right. You’ll then lean options to form one, one-off work, or to sell the identical item multiple times. during this example, we’ll choose ‘Single’. Now you would like to upload the digital file that you just want to form into an NFT.PNG, GIF, WEBP, MP4, and MP3 files up to 30MB in size are accepted by Raible.
06. Founded an auction for your NFT
In the next part of the shape, you will need to decide on a way to sell your NFT artwork. There are three options. ‘Fixed price’ allows you to line a price and sell your NFT instantly (rather just like the ‘Buy it now option on eBay). The ‘Unlimited Auction’ option will allow people to hold on making bids until you accept one. Finally, a ‘Timed auction’ is an auction that only lasts for a collection time. That’s the choice we’ll choose as an example.
This takes us to the most challenging element of the process: choosing on a low pricing point. Sell your NFT too cheaply and also the enormous fees will shut in your profit, possibly even leaving you out of pocket. We’ll set our price at an ambitious 1 ETH (currently US$4,700) and provides people seven days to form bids.
Next, you get a choice to ‘Unlock once purchased’. this provides you with the prospect to supply your eventual buyer with a full, high-resolution version of your art, and/or additional material through secret web content or download link. Below is the most confusing option, titled ‘Choose Collection’. this is often a really technical question about how the blockchain is about up. The alternative here is ‘Rarible’, and we’d advise leaving it like that.
07. Add an outline to sell your NFT
Now you’ll add a title and outline for your listing. to maximize the possibility that your NFT will sell, you must take your time to consider this. You’re then asked to contemplate what percentage of royalties you want to say on any resale of your art within the future.
Again, this can be a balancing act, as the next percentage will net you extra money per sale in the future, but it’ll also deter people from reselling your art in the first place as they’ll be less likely to create a profit for themselves. Finally, there’s an optional field to feature your file’s properties. therewith complete, you’re almost done.
08. Pay the listing fee to advertise your NFT for sale (but beware!)
The final step in learning the way to make and sell an NFT is to click ‘Create Item’, and you’ll be invited to attach together with your wallet to pay the listing fee. If you don’t have sufficient funds in your wallet, don’t worry: you won’t start again. Just click on the wallet icon within the top-right corner of the screen, and you’ll run the choice to feature funds directly within Raible.
Before you do so, one additional word of caution. The listing fee could appear low: in our case, it puzzled out at just $5.91 in US dollars. But this is often only the beginning. Before you’ll be able to go further, you’ll need to conform to an additional fee to truly generate your NFT, which in our case would be the equivalent of $42.99 in ETH. If someone actually buys your NFT, you will have to pay a commission fee on the NFT sale, plus a transaction fee for the transfer of the money from the buyer’s wallet to your own. At the time we tried it, none of this was very evident on Rarible’s website.
We’d like to be ready to explain, clearly and easily, a way to calculate the potential cost of making and selling an NFT, but the confusing nature of blockchain technology, the wild fluctuations in cryptocurrency values, and also the lack of transparency on the platforms themselves make that an impossible task. Really, you’re left having to require the danger and wait and see what quantity you get charged overall if you create a buying deal, and hope that you simply still kick off with a profit.
Section 44AE is covered under the Presumptive Taxation Scheme of Income-tax act, 1961. The presumptive taxation was introduced to grant relief to small businesses or professions from the issue of maintaining books of accounts and getting their accounts audited.
The Presumptive Taxation Scheme includes 3 different Sections – Section 44AD, Section 44AE Section 44ADA.
Any business person acquiring presumptive taxation can declare income at a prescribed rate. they will get complete relief from maintaining books of account and getting their accounts audited.
In this blog, we are visiting to learn the specifics of Section 44AE of the Income-tax act.
The law designed Section 44AE to allow relief to taxpayers. they’ll be people who own less than 10 goods carriages at any time during the previous year. they’ll even be those who are engaged in the business of leasing or plying of such goods carriages.
A person who is engaged in the business of plying, hiring or leasing goods carriages will adopt this scheme. they have to not own quite 10 goods vehicles at any time during the year.
1. A part of the month is calculated as a full or whole month.
2. If the income is on top of the presumptive rate of Rs.1000 (Heavy Vehicles) / Rs.7500 (Other than heavy vehicles), then such income is declared.
3. Heavy goods vehicles are those vehicles that weigh quite 12 thousand Kilograms.
Who Is Not Eligible For Presumptive Taxation Scheme Under Section 44AE?
The one who holds quite ten goods vehicles at any time during the year isn’t eligible and can’t benefit from this scheme.
Calculate presumptive taxation under Section 44AE.
If someone is willing to choose the presumptive taxation scheme of Section 44AE, the income is computed on an estimated basis.
How tax is calculated on a significant goods vehicle?
Tax is calculated at the speed of Rs 1000 / ton of total vehicle weight for each month or a part of the month during which the vehicle is owned by taxpayers.
How Tax Is Calculated On Vehicles Aside From Heavy Goods Vehicles?
Income is going to be calculated at the speed of Rs 7500 for each month or a part of the month during which the product’s vehicles are owned by the taxpayer.
Note: A part of the month is calculated or determined as a full month.
If the income is over the presumptive rate of Rs.1000 (Heavy Vehicles) / Rs.7500 (Other than heavy vehicles), then such income will be declared.
Heavy goods vehicles are those vehicles that weigh over 12 thousand Kilograms.
Can taxpayers claim deductions as per Section 44AE?
In the case of someone choosing the presumptive taxation scheme of Section 44AE, the provisions of deductions won’t apply and income is calculated at a presumptive rate.
For partnership firms: the owners can claim deduction on 2 bases. They are the account of remuneration and Interest paid to partners.
No separate deduction is allowed on the account of depreciation. However, the written down value (WDV) of any asset employed in such business shall be claimed and has been actually allowed.
Maintaining books of accounts:
A person engaged in business/profession needs to maintain books of accounts of his business as per section 44AA.
But, if someone declares income at a presumptive rate, then the supply regarding the upkeep of books of account won’t apply.
1. The business owners needn’t maintain books of accounts under Section 44AA. The business owners needn’t audit their accounts under Section 44AB.
2. If an individual opts for presumptive tax under Section 44AE, then they’re at risk of paying advance tax from the business covered under Section 44AE.
3. And, if someone declares income at a lower rate than the prescribed one, then they have to take care of books of accounts. They audit as per Section 44AA and Section 44AB respectively.
4. Other Provisions of Section 44AE. There are cases where the haulers don’t own a vehicle for an entire month. they may only own it for a selected time.
ITR stands for Income Tax Return. The Income Tax Act of 1961 governs all forms and procedures RTI must follow. An Income Tax Return (IRI) is a form in which a taxpayer submits information about their earned income and applicable taxes to the Income Tax Service. The ministry has announced 7 different forms, i.e. ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6, and ITR 7 so far. Each taxpayer must file their ITR no later than the stated due date. The applicability of ITR forms varies depending on the taxpayer’s source of income, the amount of income earned, and the type of taxpayer such as individual, HUF, corporation, etc.
Why file an ITR?
An Income Tax Return (ITR) is required to be filed in India if any of the conditions mentioned below apply to you:
1. If your gross annual income is above the basic exemption ceiling as set out below
Particulars
Amount
For individuals below 60 years
Rs 2.5 Lakh
For individuals above 60 years but below 80 years
Rs 3.0 Lakh
For individuals above 80 years
Rs 5.0 Lakh
2. If you want to receive an income tax refund from the National Tax Service.
3. Whether you earned or invested in foreign assets during the year.
4. If you want to apply for a visa or a loan
5. Taxpayers are corporations or companies, regardless of profit or loss.
Additionally, you are required to show an ITR even if your income is below the basic exemption ceiling but you meet one of the following conditions:
Have deposited a total amount of more than Rs.1 crore into one or more checking bank accounts; Where
Have incurred a total cost of more than Rs 2 lakh for travelling abroad for yourself or any other person; Where
Has incurred a total expenditure of more than Rs 1 Rs for electricity consumption.
This tax return is for residents whose total income for 2021-22 includes:
Income from salary/pension;
Income from one-house properties (except when losses from the previous year are carried forward). Also
Income from other sources of income (excluding lottery prizes and racehorse income)
Agricultural income up to Rs.5000.
ITR 2
ITR 2 is intended for use by individuals or Hindu undivided families (HUFs), and the total income for 2021-22 includes
Income from salary/pension;
Income from homeownership;
Income from other sources of income (including lottery prizes and racehorse income).
(The total income from the above must be at least 50,00,000 rupees)
For individual directors of the company
If you invest in the unlisted stock at any time during the fiscal year
resident not ordinarily resident (RNOR) and non-resident
Income from capital gains;
Foreign assets / foreign income
Agricultural income of over 5,000 rupees
You can also use this tax return if you want to pool the income of another person, such as your spouse or child, with the income of the assessor, and if that income falls under any of the above
ITR3
The current ITR3 form is used when an individual or an undivided Hindu family earns income from their business or is engaged in a profession. Those with income from the following sources of income are eligible to submit ITR3.
Exercise trade and profession
For individual directors of the company
Investing in unlisted stocks at any time during the fiscal year
Revenue may include income from homeownership, salary/pension, and income from other sources of income
Income of a person as a shareholder of a company.
ITR4
Current ITR4 applies to individuals, HUFs, and partnerships (excluding LLPs) who are residents and whose total income includes:
Business income according to an estimated income schedule based on Section 44AD or 44AE
Section 44ADA Employment Income According to Estimated Income Schedule Based on
Income from salary or pension up to Rs.50lakh
Rs.50 Income from homes (excluding loss carried forward or loss carried forward)
Income from other sources whose income does not exceed 50lakh (excluding lottery and racehorse income)
Please note that individuals who are freelancers who earn from the above sources of income can also choose an estimation scheme if their total income is less than 50 lakh
Estimated income systems based on Sections 44AD, 44AE, and 44ADA exist if an individual or group chooses to withdraw income on an estimated basis. About ownership of commercial vehicles. However, taxpayers are required to submit ITR3 if the business sales exceed 2 crores.
ITR5
ITR 5 is for companies, limited liability partnerships (LLPs), AOPs (Association of Persons), BOIs (Body of Individuals), Artificial Juridical Persons (AJP), deceased estates, managers’ estates, business trusts, and mutual funds.
ITR6
For companies that are not claiming tax exemption under section 11 (income from property held for charitable or religious purposes), this declaration must be submitted electronically.
ITR7
For individuals, including individuals who need to make a declaration under Section 139 (4A) or Section 139 (4B) or Section 139 (4C) or Section 139 (4D) or Section 139 (4E), or Section 139 (4F). ..
The tax return for Section 139 (4A) must be filed by a person who receives income from a trust or other legal obligation held in whole or in part for charitable or religious purposes. If the general receipt exceeds the maximum amount not due to income tax without applying the provisions of Article 139A, the Article 139 (4B) Declaration must be submitted by a political party.
Returns under Section 139 (4C) must be submitted by each person –
Scientific Research association;
News agency;
An association or institution as defined in Section 10 (23A).
Section 10 (23B) Institution referred
A fund or institution or university or other educational institution or hospital or other medical institution.
The statement in Section 139 (4D) must be submitted by a university, university, or other entity that does not need to submit a statement of income or loss under the other provisions of this section.
Statements under Section 139 (4E) must be submitted by a certified accountant who does not need to submit an income statement under the other provisions of this section.
The Declaration of Section 139 (4F) must be submitted by each mutual fund mentioned in Section 115UB. The other provisions of this section do not require the submission of a refund of income or loss.
