Challenges faced in e-assessment

With the advent of e-assessment concept in the domain of tax evaluation, things have taken a toll on the conventional tax assessment practices. With day-by-day advancing technology and a cooperative audience, the success of e-assessment does not seem far-fetched. While the progress has been commendable, in order to drive this concept, challenges thrown by the set procedures need to be addressed simultaneously. Some of the challenges are stated as under:

• Perceiving the right technology: Government’s information technology (IT) infrastructure will determine the accomplishment of e-assessment idea. Specifically, the ability to handle data traffic in terms of size as well as volume would be critical. If we look at the past experiences, government servers have often crashed when they experienced high volumes of data traffic, especially closer to filing deadlines. The government cannot afford such similar crashes considering the sensitive nature of assessment operation. Hence, the requirement of a robust IT infrastructure cannot be undervalued.
• Eliminating legal loopholes: From a legal outlook, a bona-fide service of notice is a prerequisite in constituting a valid assessment proceeding. Despite necessary amendments being inculcated in the income-tax law to credit e-mail communication as a valid mode of service, there are times where notices are uploaded on the portal but a parallel e-mail is not directed to the taxpayer. Oddities like these could pave the way to litigation and potentially render the proceedings void. For mitigating such situations, either IT systems must be streamlined to ensure that emails are automatically sent, without exception, as and when notices get uploaded or the law must be amended to emphatically state that uploading a notice on the online portal includes a valid communication service.
• Attaining procedural perfections: While practice leads to perfection, revolutionary plans do not generally provide a large incubation cushion. Therefore, from a methodological perspective, government needs an ‘ace’ before the bets are called. For instance, the current system does not have any provision for granting adjournments. In case of submission taxpayer seeking more time, the portal neither accepts nor rejects the request, leading to uncertainty in the mind of the taxpayer regarding the next date for filing of submission.
• A genuine collaboration: Though not a major threat at the initial stages, this could be a crucial lever in determining the success or failure of this initiative. On-boarding the appropriate abilities with a viable sector, domain proficiency as well as ensuring mechanisms to expedite collaborative working conscientiously would be the segment for the government to concentrate on as it moves into the progressive stages of implementation.

Over the past few years, IT department has taken a lot of steps to go digital. E-filing of income tax returns (ITR), payment of taxes online, processing of tax deduction at source (TDS) electronically, provision of facilities for filing forms electronically, submitting online grievances, online tracking of refunds and matching of credits are a few measures amongst numerous others undertaken to eminently establish a technologically driven IT department. The initiatives taken by the government aim to ensure ease in compliance of IT rules and effective management of the data. The initiatives taken by the government project their intentions loud and clear that India is all set for improving its tax administration services by making the tax system as simple and tech-enabled.
For detailed information on introduction, impact and latest changes in e-assessment, kindly visit Introduction of e-assessment

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Introduction of e-assessment

In the era of age-old beliefs, online assessment is a step towards an advanced tomorrow. While the transformation from conventional practices is inevitable, introduction of e-assessment concept will impact the entire procedure and make assessments more taxpayer-friendly and transparent.

Concept of e-assessment was introduced earlier in 2016 on a pilot basis and further extended it to 102 cities in 2017. With the experience gained so far as per the statistics Finance Minister Arun Jaitley mentioned in his Budget speech for 2018-19 to extend the domain of e-assessment across the country. Greater efficiency and transparency can be achieved by widening the scope of e-assessment to reduce interface between the Income Tax Department (“Department”) and tax payers. Requisite amendments in the Income Tax Act (“Act”) to be made by the government thereby, facilitating the process of systematic and lucid online assessment.

E-assessment will revolutionize the age-old assessment procedure of the Department and the approach which they interface with taxpayers and other stakeholders. As per experts, lack of interaction between taxpayer and tax officer would lead to reduced chances of alleged corruption.
Presently, processing of income tax returns (“IT returns”) takes at least a few months. But the path breaking and technology-intensive project approved by the government will transform the Department into a more assessee friendly zone. IT returns will be processed in 24 hours and refunds furnished concurrently. Previously, 99.54% of IT returns were accepted as they were filed.
Resulting in the introduction of such a system direct tax collection for current fiscal exceeded the budgeted target by INR 50,000 crores to INR 12 lakh crores, while the mop-up has been pegged at INR 13.80 lakh crores for the financial year 2019-20. The government had originally budgeted to collect INR 11.50 lakh crores in current financial year from direct taxes, which include corporate tax and personal income tax.

As per the 2019-20 budget estimates, out of the INR 13.80 lakh crores of direct taxes, the government aims to raise INR 7.60 lakh crores from corporate tax as well as INR 6.20 lakh crores from income tax. This is higher than INR 6.71 lakh crores estimated to be collected from corporate tax and INR 5.29 lakh crores from income tax in the current fiscal ending March 2019.

Undertaking online assessments saves taxpayers a lot of time as well as money. Frequently the assessments can be executed in less time; multiple personnel can complete the assessment online within the same stipulated time. No need for specialized human resources, thereby cutting expenses of the taxpayers.

Nobody can judge the idea about whose time has come. In our opinion, the era for e-assessments is here and will stay. While the metamorphosis from age-old archaic practices is inevitable, this change cannot be at the periphery and needs to impact the entire process and make assessments more taxpayer-friendly and transparent. As long as this determination and commitment stays with both the government and taxpayers, the Indian tax ecosystem will be cruising ahead in its journey to autonomous success.

In case of any assistance regarding e-assessment or other compliance related issues, kindly click here

Tax saving investments routes

Tax saving is the strategy by which one saves taxes by using the provisions specified under law. At the time of filing your return, you can seamlessly claim these exemptions and deductions from the income tax department. Such provisions are provided by the government to incentivize savings and investments in the economy. The process of tax saving is completely legal and encouraged by the government. It is a compulsory contribution to state revenue levied by the government on workers income and business profits or added to the cost of some goods, services and transaction. Taxes paid by public are used by the government for carrying out various welfare schemes including employment programs. Under section 80 of Income Tax Act, 1961 (“Act”) there are various deductions a taxpayer can claim from his total income which would bring down his taxable income and thereby reduce his tax outgo.

Every year most of us struggle to save our tax and it might be challenging for the new earners or newly recruited employees as well. Most commonly used option to save income tax is section 80C. According to this section, if an individual or hindu undivided family (HUF) invests in or spends on specified sources, then up to INR 1.5 lakhs of such investment can be claimed as a deduction from gross total income before calculating tax payable on it in financial year. Such deduction made can be claimed only from the income in the financial year in which such investment was made.
Tax saving investment is an essential part of tax planning we do to save our tax and also an activity which every tax payer should undergo. So, here is all the information and analysis we need in order to choose the tax saving investment scheme under section 80C:

1. Public provident fund (PPF): Investment in PPF is the best option under section 80C of Income Tax Act. It is worthiest for the ones who need to keep aside funds for their retirement. It declares to allow the return on par with the inflation generally. Contribution amounting INR 150,000 is allowed under PPF. Rate of interest is determined by Ministry of Finance from time to time. Interest earned is tax-free. The lock-in period for PPF is 15 years. After five years amount can be withdrawn subject to certain conditions. It is amongst the best strategies for tax saving.
2. 5 year bank fixed deposits (FDs): Any term deposit with the tenure of at least 5 years with the scheduled bank also qualifies for the deductions under section 80C and the interest earned on it is taxable. The investment made in FDI cannot be withdrawn in between.
3. Equity Linked Saving Schemes (ELSS): ELSS funds have the shortest mandatory lock-in period of three years among the tax-saving investment options available under section 80C. The investment is made in equity, directing more prominent returns and gives about 15% in the long term. The deduction can be claimed u / s 80C easily. ELSS is an overall financial plan and is perfect to assemble one’s long-term fiscal goals.
4. National Savings Certificate (NSC): The best thing about this instrument is that unlike an insurance policy or a pension plan NSC does not require a multi-year commitment. So, it is a good option for those who don’t have time to study the features of the plan or look up to the promising ELSS funds. It is issued in the post offices. The income tax deduction for this investment can be claimed under section 80C of the Act.
5. Unit Linked Investment Plan (ULIP): ULIP came into focus from last year after the budget introduced tax on long-term capital gains from stocks and equity funds. It is the combination of investment and insurance which is eligible for tax exemption. It covers the return but there are no guaranteed returns.
6. Premium of life insurance: The scheme is covered under section 80 of the Act. The schemes of life insurance help a person to protect itself and its dependents from any risk occurring in future.
7. Senior Citizens Savings Scheme (SCSS): SCSS was already the best tax-saving option for those above 60 years of age, but last year’s budget made it more attractive by offering senior citizens an additional INR 50,000 exemption on interest income. This means that the overall tax exemption for senior citizens above 60 is now INR 3.5 lakhs and for very senior citizens above 80 is INR 5.5 lakhs. Maximum limit for the above mentioned investment is INR 15 Lakhs. The lock-in period of 5 years. The deduction is allowed under section 80C.

Above stated are the investments which provide deductions that can be claimed under section 80C for saving the tax, considering various provisions. The last quarter of every financial year that is January to March is the time when most of us rush to settle our tax saving exercise by submitting the documents to our employers and also making various investments. Doing this we should keep in mind some important points or measures which we should take for exercising the tax saving benefit. The same will be discussed in our next segment.

We have a team of skilled professionals who can help you with making appropriate investment decisions, tax planning, computation and payment of advance taxes, etc. Still confused and have questions regarding Income tax saving or planning, get assistance from our team of experts click here.

Tax saving investments routes

Tax saving is the strategy by which one saves taxes by using the provisions specified under law. At the time of filing your return, you can seamlessly claim these exemptions and deductions from the income tax department. Such provisions are provided by the government to incentivize savings and investments in the economy. The process of tax saving is completely legal and encouraged by the government. It is a compulsory contribution to state revenue levied by the government on workers income and business profits or added to the cost of some goods, services and transaction. Taxes paid by public are used by the government for carrying out various welfare schemes including employment programs. Under section 80 of Income Tax Act, 1961 (“Act”) there are various deductions a taxpayer can claim from his total income which would bring down his taxable income and thereby reduce his tax outgo.

Every year most of us struggle to save our tax and it might be challenging for the new earners or newly recruited employees as well. Most commonly used option to save income tax is section 80C. According to this section, if an individual or hindu undivided family (HUF) invests in or spends on specified sources, then up to INR 1.5 lakhs of such investment can be claimed as a deduction from gross total income before calculating tax payable on it in financial year. Such deduction made can be claimed only from the income in the financial year in which such investment was made.

Tax saving investment is an essential part of tax planning we do to save our tax and also an activity which every tax payer should undergo. So, here is all the information and analysis we need in order to choose the tax saving investment scheme under section 80C:

1. Public provident fund (PPF): Investment in PPF is the best option under section 80C of Income Tax Act.  It is worthiest for the ones who need to keep aside funds for their retirement. It declares to allow the return on par with the inflation generally. Contribution amounting INR 150,000 is allowed under PPF. Rate of interest is determined by Ministry of Finance from time to time. Interest earned is tax-free. The lock-in period for PPF is 15 years. After five years amount can be withdrawn subject to certain conditions. It is amongst the best strategies for tax saving.
2. 5 year bank fixed deposits (FDs): Any term deposit with the tenure of at least 5 years with the scheduled bank also qualifies for the deductions under section 80C and the interest earned on it is taxable. The investment made in FDI cannot be withdrawn in between.
3. Equity Linked Saving Schemes (ELSS): ELSS funds have the shortest mandatory lock-in period of three years among the tax-saving investment options available under section 80C. The investment is made in equity, directing more prominent returns and gives about 15% in the long term. The deduction can be claimed u / s 80C easily. ELSS is an overall financial plan and is perfect to assemble one’s long-term fiscal goals.
4. National Savings Certificate (NSC): The best thing about this instrument is that unlike an insurance policy or a pension plan NSC does not require a multi-year commitment. So, it is a good option for those who don’t have time to study the features of the plan or look up to the promising ELSS funds. It is issued in the post offices. The income tax deduction for this investment can be claimed under section 80C of the Act.
5. Unit Linked Investment Plan (ULIP): ULIP came into focus from last year after the budget introduced tax on long-term capital gains from stocks and equity funds. It is the combination of investment and insurance which is eligible for tax exemption. It covers the return but there are no guaranteed returns.
6. Premium of life insurance: The scheme is covered under section 80 of the Act. The schemes of life insurance help a person to protect itself and its dependents from any risk occurring in future.
7. Senior Citizens Savings Scheme (SCSS): SCSS was already the best tax-saving option for those above 60 years of age, but last year’s budget made it more attractive by offering senior citizens an additional INR 50,000 exemption on interest income. This means that the overall tax exemption for senior citizens above 60 is now INR 3.5 lakhs and for very senior citizens above 80 is INR 5.5 lakhs. Maximum limit for the above mentioned investment is INR 15 Lakhs. The lock-in period of 5 years. The deduction is allowed under section 80C.

Above stated are the investments which provide deductions that can be claimed under section 80C for saving the tax, considering various provisions. The last quarter of every financial year that is January to March is the time when most of us rush to settle our tax saving exercise by submitting the documents to our employers and also making various investments. Doing this we should keep in mind some important points or measures which we should take for exercising the tax saving benefit. The same will be discussed in our next segment.

We have a team of skilled professionals who can help you with making appropriate investment decisions, tax planning, computation and payment of advance taxes, etc. Still confused and have questions regarding Income tax saving or planning, get assistance from our team of experts click here.

Perceiving tax scrutiny

Thousands of income tax returns (“return”) filed are reviewed and filing patterns are monitored by Income Tax department (“Department”) annually. Some scrutiny cases are selected randomly whereas some are chosen deliberately as a result of meeting the pre-set watch criteria, laid down by the Department. Income tax scrutiny notice is sent to a large number of individuals as well as businessmen filing returns by the Department as a part of their routine check and annual supervision. The idea behind this process is to assess that all the filings made by any person are in compliance with all the protocols, norms and regulations laid down by the Department.

Scrutiny assessment
Critical examination of returns by giving reasonable opportunity to the assessee to substantiate the income, losses and expenses furnished as well as deductions and exemptions claimed, in the return in relation to information provided in the evidence. Income tax officer conducts enquiry from assessee and third party as a part of its assessment. Scrutiny assessment is undertaken to ascertain the factual and legal correctness of the claims for deductions, exemptions, etc.

Purpose of scrutiny assessment
Enquiries are conducted by the assessing officer to ensure that following activities are not performed by the assessee:

• Understatement of income as compared to actual
• Computation of excess loss than actual
• Underpayment of tax
• Concealing any material facts, incomes, etc.

Penalties
In case information supplied in the return is incorrect under any circumstances, whether in the form of omissions, inaccuracies, discrepencies, etc. as a result of this examination. Assessing officer is authorized to assess the income in accordance with his best knowledge (termed as best judgement) as well as evidence or facts so derived and as per the provisions under section 143(3) of the Income Tax Act (“Act”). Assessing officer further has the following authorities:

• Charging of requisite additional interest
• Levying penalties as per the set provisions of the Act
• Initiating prosecution proceedings

Types of scrutiny assessments
Following are the types of scrutiny assessments:

1. Manual scrutiny cases
2. Compulsory scrutiny cases

We have a team of professionals possessing desired experience in annual filings of returns or e-TDS returns as well as other compliances, representation, opinion, litigation, conducting independent audit, furnishing reports, assessments and tax planning services.
Our team is also proficient in the areas of accounting and bookkeeping, auditing & assurance, internal audit, tax audit, management audit, statutory audit, income tax, tax planning, direct taxes, service tax, delhi value added tax, sales tax, company formation, business consultation, company registration / incorporation India, corporate compliance, foreign branch / liaison office registration. Get in touch with us for any assistance by clicking here

Source: http://www.newcompanyregistrationindia.com/blog/perceiving-tax-scrutiny/

Ways To Fund Your Small Business

One of the biggest challenges of launching a new business is finding the cash to get things started. Fortunately, there are options besides winning the lottery or receiving a large inheritance, including small business loans, credit cards, bootstrapping with retirement savings, seeking private investment, and crowdfunding.
When it comes to funding, there isn’t a one-size-fits-all approach. Depending on where you’re at in your business, what type of funding you are seeking, and the amount you need, where you’ll look can vary widely. We’ve compiled a list from a variety of places to help you research and narrow down the options that are best for you.
Before we examine the various funding sources, here is some general advice on preparing to finance your business pursuits.

Crowdfunding
Over the last two decades, several crowdfunding sites that allow entrepreneurs opportunity to seek funding for their ideas have sprouted over the internet. In most cases, you only need to create a funding campaign that you can them pitch to family and friends through social media. In most cases, compelling pitches go viral fast thus attracting enormous contributions from individuals across the globe. Note that if you are to make a kill with your funding campaign, make it clear to the contributors how your idea will support the community as an asset.
(Company registration in India)

Angel investors
Angel investment remains one the most realistic and feasible for entrepreneurs that don’t need long term business partners. Family and friends come in handy in identifying a trustworthy angel investor, pump in capital into your small business with the promise of payback of their investment plus interest. However, if your angel investing pitch is to fruition, you need to master your business plan and back your valuations with real projections. Additionally, note that such transparent relationships must be based on trust.

Nonprofit microloans
Kiva is a great example of an outline portal for microloans. If you only need a small amount of money, particularly if you are a minority-owned business operating in a developing nation, working with one of Kiva’s field partners could be a good route.

Governmental grants and loans
Most governments of the world understand the role small businesses play in their economy. These governments thus set up elaborate financing schemes aimed at funding these small outfits. However, only a handful of individuals end up benefiting with such loans and grants either due to ignorance or the bureaucracy in accessing them.

Therefore, as an entrepreneur, you need to spend more time learning of these government loans and grants from your local banks as well as the internet. Note that to beat the lengthy, and often frustrating, process of accessing these funds it is advisable that you work with loans and grants specialists.

Enlist Private Investors
Persuading others to share your dream and back you financially is a popular tactic for obtaining business funding.
Work with legal counsel (and possibly a business mentor) to clarify the roles you are prepared to let individual backers play (or not play) if they agree to provide you with funding. Get it all in writing, and do all you can to set clear realistic expectations.

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Requirements for Private Company?

Company is a a legal entity, allowed by company law in India, it permits a group of people, as shareholders (real owners), to apply to the Registrar of Companies for an independent business entity to be created, which can then focus on pursuing set of business goals and projects, and empowered with legal rights like individuals, such as to sue and be sued, own property, hire employees or loan and borrow money.

Incorporation / Formation of company involve a number of steps. We have tried to simplify the procedure to the maximum extent possible.

Minimum Requirement of a Private Company are as follows:

1. Minimum 2 Shareholders
2. Minimum 2 Directors (The directors and shareholders can be same person)
3. Minimum Authorised Share Capital shall be Rs. 100,000 (INR One Lac)
4. DSC (Digital Signature Certificate) for all the Directors (for applying of DIN)
5. DIN (Director Identification Number) for all the Directors
6. At least 1 of the Directors shall be an Indian Resident

Considering above minimum requirements interested business partners can form Private Company by appointing themselves as Directors as well as shareholders in company registration process. In simple words shareholders and Directors can be same person in company registration process.