< 1 Year old startups here are the 7 Tax Questions to nearly memorize

Early stage startups are usually busy with Bootstrapping, less than 6 months old startups, 99% do not have a proper accounting advisors in place. There could be many reasons for that, but most of the reasons would sound fair enough ‘Can’t afford it, bro’. We all can agree that having a accounts department in the team will help in the management of the company to a large extent. This blog will address, less than 1 Year Old startups here are the 7 tax questions to nearly memorize.

1. What is TDS? When does one need to deduct it?
TDS means Tax Deducted at Source. When any dealer makes any payment to any vendor, the dealer has to deduct the applicable TDS from the original amount in case the tax amount in a financial year crosses Rs 2,500. It’s the responsibility of the dealer to deposit this TDS monthly before the due date against the PAN number of the vendor.

2. How do I deposit the TDS collected to Government?
TDS is paid to Government through the Income Tax department every month
Every quarter TDS returns need to be filed to IT department. Here we need to give the details of every deduction made in that quarter. Details involve the name of the vendor, PAN number, purpose of payment etc.

3. Is it compulsory for my Statutory Auditor to maintain my monthly accounts?
No. Actually, your accountant can not be your auditor.
Anyone can maintain your monthly accounts. In fact, monthly accounts can be maintained by a non-CA as well. But if it is not properly done, it would be difficult to complete statutory audit, which then becomes a cumbersome process.

4. If I take a monthly accounting package what all does this include?

      1. The monthly accounting package comprises of:
      2. Monthly Tax calculations Payments like VAT, Service Tax, TDS and Professional Tax
      3. Quarterly Tax Returns like Service Tax returns and TDS returns
      4. Payroll processing of all employees
      5. Bookkeeping, consolidated monthly balance sheet, and P&L Statement

5. What are the different types of taxes that need to be filed and what are the last date for the filing of taxes and returns?

  • TDS Filing: All the TDS that was deducted in the month has to be deposited to Income Tax Department within 7th day of the next month
  • GST Filing: GST return filing is mandatory for all GST registered entities irrespective of the number of the transaction during the return filing period.
  • Professional Tax Filing: All the Professional Tax deducted from employee’s’ salary has to be deposited to Commercial Tax department within 20th day of the next month
  • TDS Quarterly Returns filing: TDS Quarterly returns have to be filed within following days
    1. Quarter – 1: 31st July
    2. Quarter – 2: 31st October
    3. Quarter – 3: 31st January
    4. Quarter – 4: 30th April
  • Half Yearly Service Tax Returns Filing: Half yearly Service Tax returns have to be filed on following days
    1. 1st Returns filing – 25th October
    2. 2nd Returns Filing – 25th April

6. What does Audit include? When do I need to get it done?
All the revenue and expenses incurred by the company in the financial year is reconciled by the Chartered Accountant and Balance sheet, Profit and Loss Statement and Cash flow statement are prepared. Annual report and Director’s notes are prepared and filed with RoC. Two forms AoC-4 and MGT-7 will be filed with RoC

7. I started my company in january this year, do I need to get the audit done this year itself?

Indian Companies Act-2013 gives a concession to the companies registered on or after January 1. These companies can file the returns for up to 15 months together with the next financial year. Hence Audit is not required for the companies in this year.
For example, if the company is registered after January 1, 2016 and before March 31, 2016, technically the financial year ends on March 31, 2016 and they should have had their company audited before September 30, 2016. However, due to this concession these companies can get their companies’ audited along with the next financial year before September 30, 2017.

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