TDS ( Tax Deducted at Source)
The concept of TDS was introduced with an aim to collect tax from the very source of income. As per this concept, a person (deductor) who is liable to make payment of specified nature to any other person (deductee) shall deduct tax at source and remit the same into the account of the Central Government. The deductee from whose income tax has been deducted at source would be entitled to get credit of the amount so deducted on the basis of Form 26AS or TDS certificate issued by the deductor.
As the name suggests, it refers to paying a part of your yearly taxes in advance. Advance tax is the income tax payable if your tax liability exceeds Rs 10,000 in a financial year. Advance tax should be paid in the year in which the income is received. Hence, it is also known as the ‘pay-as-you-earn’ scheme.
Advance tax is applicable when an individual has sources of income other than his/her salary. For instance, if one is earning through capital gains, interest on investments, lottery, house property or business, the concept becomes relevant.
Any rebate due fetches you an interest of 0.5 per cent every month, or, six per cent annually, as in the case of an income tax refund. However, if you don’t pay the advance tax on time, you’ll be charged one per cent every month, or, 12 per cent a year.
Import Export Code or IEC is a 10-digit code that a business or a person requires to import or export goods and services. This code is issued by DGFT (Director General of Foreign Trade), Ministry of Commerce and Industries, Government of India. It has lifetime Validity, that is, there is no need to renew it. This code is generated within 5-15 working days after the submission of documents or required corrections are made.
This code has many names, like importer exported code, import-export code, import-export license, import-export number, IE code, IE license, etc. You can issue this code in either your name or under the company’s name. Once issued, it is valid for all its division/units/factories/branches.
Balance Sheet is the financial statement of a company that includes assets, liabilities, equity capital, total debt, etc. at a point in time. The balance sheet includes assets on one side and liabilities on the other. For the balance sheet to reflect the true picture, both heads (liabilities & assets) should tally (Assets = Liabilities + Equity).
Because the balance sheet informs the reader of a company’s financial position as of one moment in time, it allows someone—like a creditor—to see what a company owns as well as what it owes to other parties as of the date indicated in the heading. This is valuable information to the banker who wants to determine whether or not a company qualifies for additional credit or loans. Others who would be interested in the balance sheet include current investors, potential investors, company management, suppliers, some customers, competitors, government agencies, and labor unions.
The Income-tax audit is carried on to ensure that the payer has a fully maintained book of records and accounts, that properly depict the taxpayer’s income. This means that the person in need of ITR audit requires Accounting service, bookkeeping service and also services of maintaining balance sheet and we all know that Audit requires proper CA related services. This service does not limit itself with one single service, in fact, it needs a proper banking service as well. As a GST Suvidha Center Franchise owner, one has the option to provide all these services under one roof and make your earning through it. This was a small example of how owning a GST Franchise can benefit you. There are also other ways and examples which you can get to know after contacting us.
A digital certificate issued by a certificate authority (CA) is known as CA Certification.
This Authority for the digital certificate is a trusted team that operates and distributes security certificates and public codes that are used for secure conversation in a common network. The CA is part of the public key infrastructure (PKI) along with the registration authority (RA) who confirms the data presented by a requester of a digital certificate. If the information is verified as correct, the certificate authority can then issue a certificate. This certificate contains data about the entity to which it has been issued, including it’s a public key and termination period for the certificate as well the entity’s name, communication data and other information linked to the certified entity.
Professional tax is a tax that is levied by the state government and applies to the income you earn through employment. You can often find the deduction for the same on your salary slip each month. Professional tax one source of revenue for the government and is used towards bettering the services for professionals in that state. Thus, it is essential for every employer to deduct professional tax on salary, although there are a few exemptions related to this.
Professional tax in India varies from state to state. The maximum amount of professional tax cannot exceed Rs.2,500 annually.
Profit And Loss Account
The profit and loss (P&L) statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year. The P&L statement is synonymous with the income statement. These records provide information about a company’s ability or inability to generate profit by increasing revenue, reducing costs or both. Some refer to the P&L statement as a statement of profit and loss, income statement, statement of operations, statement of financial results or income, earnings statement or expense statement.
The P&L statement is one of three financial statements every public company issues quarterly and annually, along with the balance sheet and the cash flow statement. It is often the most popular and common financial statement in a business plan as it quickly shows how much profit or loss was generated by a business.
The income statement, like the cash flow statement, shows changes in accounts over a set period. The balance sheet, on the other hand, is a snapshot, showing what the company owns and owes at a single moment. It is important to compare the income statement with the cash flow statement since, under the accrual method of accounting; a company can log revenues and expenses before cash changes hands.
The income statement follows a general form as seen in the example below. It begins with an entry for revenue, known as the top line, and subtracts the costs of doing business, including the cost of goods sold, operating expenses, tax expenses, and interest expenses. The difference, known as the bottom line, is net income, also referred to as profit or earnings. You can find many templates for creating a personal or business P&L statement online for free.
It is important to compare income statements from different accounting periods, as the changes in revenues, operating costs, research, and development spending and net earnings over time are more meaningful than the numbers themselves. For example, a company’s revenues may grow, but its expenses might grow at a faster rate.
There are special accounting rules for trust accounts and a Trust Audit is designed to ensure compliance with accounting rules.
It aims to set out the thought process that should be adopted when considering who, within an audit firm, can or should act as a trustee of a trust which has an investment in an audit client.A Trust Report is asked to be made each financial year by Chartered Professional Accountant to summarize the findings of the Trust Audit. The relevant Professional Standards Regulation Board will provide a list of procedures to be followed to complete the annual Trust Audit. The Accountant will choose a sample of accounts to audit based on the guidelines provided and complete the required procedures on the sample chosen.
Any findings of non-compliance with the regulations laid out by the Professional Standards Regulation Board are reported in the Trust Report. The Trust Report is then sent to the appropriate Professional Standards Regulation Board for the Board to review and act upon if required.
Letter of Undertaking is commonly known as LUT. The Letter of Undertaking (LUT) is guided to be equipped in form GST RFD 11 under rule 96A, whereby the person involved in exporting business claims that he/she would meet all the requirements prescribed under GST while exporting without making IGST payment.
Filing Letter of Undertaking is compulsory to export goods and services without payment of Integrated Taxes. If LUT has not been appointed, the export can only be made through payment of IGST or by furnishing an export bond.
Accounting is the process in which business activities are recorded orderly and systematically to determine the productivity of the business. This account is managed and prepared by the company or team to prepare financial reports, which also helps in the financial growth of the company. They also determine whether a particular investment is feasible in the current market scenario and what is the amount of money that is to be invested. In the case of small businesses and organizations, these functions are handled by an accountant or bookkeeper or at most a certified accountant. But in the case of larger organizations, a team of certified public accountants which is also known as CPA and chartered accountants (CA) along with their teams is the one who handles these transactions and takes care of accounting.
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