Accounting Financial

Provident Fund Compliances for International Workers

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Provident fund compliances for international workers involve adherence to the rules and regulations related to retirement savings plans or provident funds in both the home and host countries. Each country may have its laws and regulations governing provident funds. International workers need to be aware of and comply with the rules of the country where they are employed.

Social Security Agreements (SSAs) or Totalization Agreements between countries can have an impact on provident fund contributions and benefits for international workers. These agreements often address issues such as the coordination of social security systems and the portability of benefits to migrant workers, on a reciprocal basis.

Social Security Agreements (SSAs) generally cover several key provisions to facilitate coordination between the social security systems of two countries. The four important provisions are commonly found in SSAs and play a significant role in ensuring fairness and efficiency for individuals working across borders.

Let’s walk through a simplified example to understand these four provisions, and how a Social Security Agreement (SSA) works. In this example, we’ll consider two fictional countries, Country A and Country B, and an individual who works in both countries during their career.

Assumptions:

The individual is a citizen of Country A.

The individual is employed in both Country A and Country B at different points in their career.

The individual contributes to the social security systems of both countries during his working life.

Scenario:

Determining Applicable Social Security System:

The SSA between Country A and Country B contains rules to determine which country’s social security system applies to the individual based on factors such as residency, type of work, and other criteria.

Detachment Rules:

The individual is temporarily posted to work in Country B. The SSA includes detachment rules specifying that, during the period of the posting, the individual and their employer will contribute to the social security system of Country A.

Totalization of Contributions:

Throughout the individual’s career, they contribute to the social security systems of both Country A and Country B. The SSA allows for the totalization or combining of these contributions to determine eligibility for benefits.

Elimination of Double Contributions:

The SSA ensures that the individual is not required to pay social security contributions in both countries simultaneously. Contributions are made to the social security system of the country where the individual is working at any given time.

Portability of Benefits:

The individual accumulates social security benefits in both Country A and Country B. The SSA allows for the portability of these benefits, meaning the individual can receive payments even if they reside in a country other than the one where they made their contributions.

Equal Treatment:

The SSA includes provisions for equal treatment, ensuring that the individual is treated fairly and without discrimination in terms of social security benefits in both countries.

Who is an International Worker?

“International Worker” can encompass both Indian workers employed abroad or foreign nationals.

  • An Indian employee works or is planning to work in a foreign country with which India has entered into a social security agreement. In such cases, employees may be eligible to avail of benefits under the social security program of both India and the host country, based on the terms outlined in the bilateral social security agreement.
  • If an employee, other than an Indian employee and holding a passport other than an Indian passport, is working for an establishment in India to which the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (EPF & MP Act, 1952) applies.

Compliance Requirements in Case of an International Worker under EPF & MP Act, 1952

  1. Need to identify the International Worker as per para 83 of the employee’s provident fund scheme 1952 (https://gmgvellore.files.wordpress.com/2016/04/epf-intl-worker-notification-01-10-2008.pdf)
  1. Certificate of Coverage
    A Certificate of Coverage issued by the social security authorities of one country to confirm that a worker is covered by the social security system of that country. This document is then used to exempt the worker from social security contributions in another country.
    For example, if an employee is sent on a temporary assignment to work in another country, a Certificate of Coverage might be issued by the home country’s social security authorities to confirm that the employee continues to be covered by the home country’s social security system during the assignment. This can help prevent the employee from having to make social security contributions in both the home and host countries.
  1. Contribution to the provident fund in respect of all International Workers

Contribution to the provident fund shall be calculated on full salary payable to international workers. The meaning of Basic wages is the same as given in the Act for international workers, the only difference being that the wage ceiling doesn’t apply to International Workers.

UAN – Meaning, Importance, and Benefits

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UAN stands for Universal Account Number. It is a unique identifier assigned to every employee contributing to the Employees’ Provident Fund (EPF) in India. The UAN remains constant throughout an employee’s career, regardless of changes in employment or location. The UAN system was introduced to simplify the management of EPF accounts and provide employees with easier access to their Provident Fund (PF) details.

Procedure to obtain UAN

Joining a New Employment:

When an employee joins a new organization, the employer is responsible for generating and providing the UAN.

Provide KYC Documents:

Employees need to provide necessary KYC documents to their employer, including their Aadhaar card, PAN card, bank account details, and other required information.

Employer Registration:

The employer registers the employee with the EPFO and generates a UAN for the employee through the Employer’s PF portal.

Linking UAN to PF Account:

The employer links the UAN to the employee’s PF account. This involves the creation of a Member Identification Number (PF account number) linked to the UAN.

Receiving UAN and PF Details:

The employer provides the employee with the UAN and PF details. This information is typically included in the offer letter or the joining kit provided to the new employee.

Activation of UAN:

Once the employee receives the UAN, they need to activate it. The activation can be done through the UAN portal or the mobile app provided by the EPFO.

Visit the UAN Portal:

Employees can visit the UAN portal (https://unifiedportal-mem.epfindia.gov.in/memberinterface/) to access various UAN-related services.

Click on the “Activate UAN” Option:

On the UAN portal, employees can click on the “Activate UAN” option.

Enter UAN, Member ID, and Aadhaar/PAN Details:

Employees need to enter their UAN, Member ID (PF account number), and other details such as Aadhaar or PAN.

Verification and Set Password:

After entering the details, employees need to complete the verification process. Once verified, they can set a password for their UAN login.

Login to UAN Portal:

After activation, employees can log in to the UAN portal using their UAN and the password they have set.

Access UAN Services:

Once logged in, employees can access various services on the UAN portal, including checking their PF balance, downloading the passbook, and initiating online services.

Important Points to Note:

If an employee already has a UAN from a previous job, they should provide the existing UAN to the new employer.

This helps in linking the new PF account to the existing UAN and ensures continuity.

Employees should keep their UAN and login credentials secure to maintain the confidentiality of their PF information.

In case of any issues or discrepancies, employees can reach out to their employer or the EPFO for assistance.

If you have forgotten your Universal Account Number (UAN), you can retrieve it through the official UAN portal by following these steps:

Go to the UAN Member Portal: Click on the official UAN Member Portal at https://unifiedportal-mem.epfindia.gov.in/memberinterface/.

Click on “Know Your UAN”: Enter your 10-digit mobile number and captcha.

Generate OTP: Select the “Request OTP” option. An OTP (One-Time Password) will be sent to your registered mobile number linked to the UAN.

Enter OTP: Enter the OTP received on your registered mobile number. This is a security measure to verify your identity.

You will be notified of the UAN.

How to reset the UAN Password on the EPFO Portal

Go to the UAN Member Portal: Click on the official UAN Member Portal at https://unifiedportal-mem.epfindia.gov.in/memberinterface/.

Click on “Forgot Password”: On the login page, click on the “Forgot Password” link.

Enter UAN: You will be prompted to enter your UAN. Input your UAN and the captcha code displayed on the screen.

Generate OTP: Select the “Generate OTP” option. An OTP (One-Time Password) will be sent to your registered mobile number linked to the UAN.

Input the One Time Password: Enter the OTP received on your registered mobile number. This is a security measure to verify your identity.

Verify Details: After entering the OTP, the system may ask you to verify some details, such as your name, date of birth, and gender, to confirm your identity.

Set New Password: Once your identity is verified, you will be prompted to set a new password for your UAN login.

Login with New Password: Use the new password to log in to the UAN portal.

Financial Accounting

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Financial accounting is the process of documenting, assessing, and recording various transactions arising from a company’s operations over time. The Balance sheet, Profit & Loss, and Cash flow statement represent the company’s long-term operating performance.

Financial accounting is the preparation of financial statements that is helpful to measure the financial performance and position of the entity. Financial accounting aims to provide information about financial health to the potential users of financial statements. Financial accounting helps with decision-making for internal as well as external users. It works as a baseline for the potential investor before making any investment decision.

Financial Accounting includes various components that are explained below:

1. General Accounting and Book Keeping: –

Although the terms bookkeeping and accounting may appear identical, they serve various purposes. Bookkeeping involves recording financial transactions, while accounting gives insights into your business’s financial health based on accounting data.

Bookkeeping is more operational and also administrative in nature. Accounting is more subjective. Bookkeeping is regarded to be the foundation of accounting, whereas accounting is a part of finance.

The stages in the bookkeeping process are as follows:

  • Determining the existence of a financial transaction
  • Keeping a record of a financial transaction
  • Setting up a ledger account
  • Preparing a trial balance

Accounting

Accounting is the systematic process of recording, summarizing, analysing, and reporting financial transactions and information of an individual, business, organization, or other entity. It serves as the language of business, providing a clear and structured way to understand the financial health and performance of an entity through the systematic maintenance of books of accounts and access to them as and when required, it also provides various information to the company and its stakeholders such as creditors, banks, tax officials, investors, and suppliers.

The steps of the accounting process are listed below: –

  • Financial transactions identification
  • Keeping track of financial transactions
  • Creating a trial balance
  • Financial Statements Preparation
  • Financial Statement Analysis

2. Finalization of Accounts and Reporting

  • Record of financial transactions: Recording of financial transactions is the basic objective of accounting. It covers all the financial aspects that help to identify the financial condition of the business.
  • Adjusting Entries: Before finalization of accounts, some adjustments entries are required to be made like for accrued expenses, prepaid expenses, depreciation, provisions if any, and other entries that may not have been recorded in the regular course of business. These adjustment entries help to ensure that the financial data adheres to the accrual accounting principle.
  • Closing Entries: Closing entries means shifting accounting data from a temporary account to a permanent account like from an income statement to a balance sheet. At the end of the accounting period, temporary accounts like revenue and expense accounts are closed and their balance is transferred to retained earnings accounts.
  • Preparation of Financial Statements: The next step is to prepare the financial statements that include the Income statement, Balance sheet, cash flow, notes to accounts, and other reports. The income statement shows the revenue, expenses, and net loss/profit for the period. The balance sheet provides information about the assets, liabilities, and equity at the end of the period. Cash flow statements present the company’s cash inflow and outflow during the period.
  • Auditing (if required): If any entity is required for an external audit, the external auditor verifies and analyses the financial statements and expresses an opinion on whether the financial statements are free from material misstatement and represent a true and fair opinion.
  • Financial Position: The main object of accounting is to record the financial transactions systematically and ascertain the financial position of the business based on management information regarding profit and loss, balance sheet, cash flow, past data, and by analysing trends.
  • Decision Making: Accounting provides valuable financial information that helps managers, executives, investors, and other stakeholders make informed choices that can impact the company’s performance, growth, and overall success.
  • Filing and Distribution: After verification and analysis of the financial statements, these are required to be filed with the relevant authorities such as tax authorities or any other regulatory bodies. These statements are also shared with shareholders, investors and other stakeholders.

3. Accounts Reconciliation

This is a process to reconcile two accounts that help to confirm the accuracy and consistency. Reconciliation is helpful to identify the discrepancies or errors between two accounts that might have occurred during data recording or processing.  The primary types of accounts reconciliation include bank reconciliation and general ledger reconciliation.

Bank Reconciliation

Bank Reconciliation is a process of matching the balance between a company’s bank statement and its accounting records. The difference can arise due to the reasons like timing differences, outstanding cheques, deposits in transit, bank fees, or errors.

General Ledger Reconciliation

 It is a process of ensuring that the balances and transactions recorded in the company’s general ledger are accurate and consistent with other supporting documentation, such as sub-ledgers, bank statements, invoices, receipts, and other financial records.

4.  Closing Process

The closing process in accounting refers to the steps taken at the end of the accounting period to finalize the financial records and prepare the accounts for the next period. The primary objective of the closing process is to transfer the balances of temporary accounts to permanent accounts and reset the temporary accounts to zero for the new accounting period.

This process includes the following steps:

  • Identify Temporary Accounts: Temporary accounts include all income statement accounts such as revenues and expenses.
  • Close Revenue Accounts: The first step is to close the revenue accounts. The total revenue earned during the period is transferred to the income summary account.
  • Close Expense Accounts: In this, the total expenses incurred during the period are transferred to the income summary account.
  • Calculate Net Income or Loss: After closing the revenue and expenses accounts, the income summary account’s balance reflects the net income or net loss for the period.
  • Close Income Summary Account: The balance in the income summary account is now moved to the retained earnings account. The income summary account is closed by debiting it for a net loss or crediting it for a net income.
  • Verify The Closing Entries: It is crucial to verify that the closing entries have been accurately recorded to ensure the temporary accounts are reset to zero and the balances are transferred correctly.
  • Prepare Post Closing Trial balance: After the closing entries have been made, a post-closing trial balance is prepared. This trial balance includes only permanent accounts with their updated balances after the closing process. All the temporary accounts should be closed at zero balances.

5.  Fixed Asset Accounting

Fixed Asset Accounting is a crucial aspect of a company’s financial management. Properly managing fixed assets ensures accurate financial reporting, helps optimize asset usage, and facilitates decision-making regarding asset acquisitions and dispositions. Fixed Assets accounting includes the following steps:

  • Asset Classification: Fixed Assets can be categorized into different groups based on their nature, use, and materiality. It Can be classified into common groups like Property, Plant and Equipment, Vehicles, Other Equipment, etc.
  • Valuation: Determining the initial cost of the asset like purchase price and other costs directly attributable to bringing the asset into use.
  • Depreciation: Choosing an appropriate depreciation method and calculating the depreciation periodically. Different methods can be used to calculate depreciation like the Straight-Line method, Written Down value method.
  • Record Keeping: Maintaining proper records of all fixed assets transactions, including acquisitions, disposals, and any other changes in the asset value.

6.  Inter-Company Accounting: It refers to the processes and procedures that a company uses to manage financial transactions and relationships between its various subsidiaries, divisions, or entities that are part of the same corporate group. It involves the transfer of goods, services, or money between different subsidiaries, divisions, or branches of the same parent company. Inter-company accounting is essential for several reasons:

  • Consolidated Financial Statements: Inter-company accounting is important for preparing consolidated financial statements that present the financial position, results of operations, and cash flows of the entire corporate group as a single economic entity.
  • Eliminating Inter-Company Transactions: During the consolidated process, the inter-company transactions are eliminated to avoid double-counting.
  • Reconciliation: Periodic reconciliation is essential to ensure that the inter-company balances are consistent and discrepancies are identified and resolved promptly.
  • Transfer Pricing Documentation: Inter-company transactions involve the transfer of goods, services, or intellectual property between different entities within the same group. Proper inter-company accounting ensures that transfer prices are set at arm’s length.
  • Compliance and Reporting: Inter-company transactions may be subject to specific tax regulations and transfer pricing guidelines in different jurisdictions. Companies must comply with these regulations and report inter-company transactions accurately in tax filings.

Outsourcing Operations

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Outsourcing Operations

Komplytek believes outsourcing expert operations services can magnify the efficiency and output of your business as outsourcing has become the most prevalent business tool of the 21st Century. With a team of experienced professionals, we can help you in attaining brilliance in your finance, accounting, and compliance operations.

Komplytek provides unmatched quality service, custom-made solutions, and advanced technology without additional investment, security & privacy of your data with reduced overall cost, and faster turnaround time enabling you to focus on your core business activities.

 

1. Billing

Billing refers to the process of generating invoices or statements for goods or services provided by a business or individual to their clients or customers. The billing process is crucial to any business operation as it ensures timely payment for the products or services rendered.

Some key points related to billing are below:

– Invoice Generation: An invoice is a document that contains the specific details of the item sold or services rendered, along with the prices and applicable taxes and rates. It also includes the vendor’s details, payment terms, and methods.

– Billing Software: Billing software is the tool that helps automate invoice generation, keep track of outstanding payments, and provide reporting and analytics related to billing and revenue.

– Billing and Accounting: Billing is closely related to accounting processes, as invoices and payments are recorded in the company’s financial records.

– Compliance and Taxation: Billing should adhere to relevant legal and taxation requirements in the business’s jurisdiction. Invoices often include tax details such as GST charged on goods and services.

 

 2. Accounts Receivable:

Accounts Receivable is a term used in accounting and finance to represent the amount of money owed to a business by its customers or clients for goods sold or services rendered on credit. When a company sells its products or provides services on credit, it generates an account receivable, as the payment for those goods or services is expected to be received in the future.

Have a look at the chart to understand the Accounts Receivable process:

 

 

3. Accounts Payable

 

Accounts payable is a term used in accounting and finance to represent the amount of money a business owes to its suppliers or vendors for goods or services received on credit. When a company receives goods or services on credit and is yet to make the payment, it creates accounts payable to track the outstanding amount.

 

4. Direct/Indirect tax computation and Return Filing:

Direct Tax Computation

Direct taxes are levied directly on individuals on entities and are typically based on their income, profits, or wealth. Direct tax computation includes the following:

– Income Tax Computation

– Corporate Tax Computation

– Capital Gain Tax Computation

– Wealth Tax Computation

– Tax Planning

– Tax Compliance

Indirect Tax Computation

Indirect taxes are taxes that are levied on goods and services at the point of consumption or sale. They are typically passed on to consumers by businesses, resulting in an indirect tax burden. Examples of Indirect taxes include Goods and Service Tax, and Sales Tax. Indirect tax computation services involve helping businesses calculate the amount of indirect tax they need to charge and remit to the government. Indirect Tax computation includes the following:

– VAT/GST Computation

– Sales Tax Computation

– Customs Duties Computation

– Excise Duty Computation

– Tax Compliance

– Tax Optimization.

 

 

 

9 Major Benefits of a Finance Consulting Firm

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finance consulting firm

Individuals and small companies might benefit from the services of a finance consulting firm to help them manage and grow their wealth and assets. They help their clients with a variety of activities, including financial information, forecasts, and investment advice based on their long-term and short-term objectives.

A financial advisor and a financial consultant are interchangeable terms. Previously, the work of a finance consulting firm was restricted to addressing the transactional aspects of firms. Modern business owners, on the other hand, want customized services in order to increase the efficiency of their company. As a result, their functions were expanded and redefined. A finance consulting firm now offer a comprehensive service that helps their clients to achieve financial success in all areas.

It is not simple to make financial decisions, whether you are thinking about short-term requirements like debt reduction or long-term goals like investing. Making sensible choices may lead to increasing wealth and financial security, whilst making the incorrect ones can have major implications.

That is why hiring the services of a financial consulting firm may be quite beneficial. A finance consulting firm works directly with professionals and business owners, providing them with realistic solutions to their problems. The following are some of the advantages of working with a financial consulting firm:

1.Expert knowledge

Consultants are an important aspect of businesses. They have worked with a variety of firms and are well-versed in business trends, industry expertise, and advanced methods and procedures.

2. The Finance consulting firm provides Dynamic service

A finance consulting firm will evaluate your financial statements and advice you with beneficial or negative feedback. They will also provide you with strategies and ideas to assist you in reaching your financial goals.

3. Tax efficiency

Furthermore, business owners are subject to severe fines as a result of their mistakes. All of these concerns, as well as their ramifications, are known to a financial consulting business, which allows them to be remedied ahead of time. By counselling business owners on the most recent tax law changes, financial consulting firm may help in their tax planning.

4. Reduce Pressure

A finance consulting firm will relieve you a lot of tension. Allow them to streamline the financial process and aid you in making important financial decisions. If you try to handle everything on your own, it might be overwhelming. Financial struggles might have a bad influence on your business health. You must be at ease in order to make wise financial judgments. For company success, these consultants methodically arrange everything. All of the difficulties and challenges those businesses confront will be resolved by these enterprises.

5. Rationality

A finance consulting firm does not have the same emotional attachment to a project as a business owner. Concerns are identified and addressed to business entities, who are then provided realistic solutions.

6. Increasing cash flow

Choose a finance consulting firm if you want to get the best return on your investment. The financial health of a business is determined by a detailed review of its liabilities, taxes, investments, and assets. These companies assist you in making sound financial decisions, resulting in increased cash flow.

7. Cost reduction

You may use the business consulting firm’s services whenever you need them. This is far superior to employing a salaried staff member, which is an expensive proposition for many. A finance consulting firm also assist you in identifying areas where you are overspending and cost-cutting.

8. Time-saving

A businessman does not have enough time to thoroughly investigate each issue. These consultants are adept at identifying the company’s weak spots, allowing you to devote more time to activities that require immediate attention.

9. Profitable Partnership

A finance consulting firm is a long-term investment. Look around for a firm that has affordable prices and focuses on the financial advisory services you require. If your financial adviser helps you to save and/or make more money over time than you pay them, they are well worth the money.

Why should you select  KomplyTek?

Komplytek is a well-known finance consulting firm that specializes in business and audit advisory services. We have a team of highly skilled and educated finance and accounting professionals that have helped a variety of clients improve their business operations. To satisfy your needs without difficulty, the major emphasis is to understand your company model, work strategies, and financial goals before the start of the project.

Our team has a long and illustrious history of implementing, executing, and adhering to financial reporting requirements. Our history enables us to provide both large and small businesses with analytical counsel and solutions. 

If you are looking for a competent and trustworthy finance consulting firm, you will not find a better partner than us. Contact us today to learn more about our service choices and how we can help you.

Document Identification Number (DIN) under GST benefits & structure.

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Document Identification Number

 

A new system for the electronic development of a Document Identification Number (DIN) for all GST-related communications (including emails) to be delivered by the government offices to taxpayers and other interested parties has been implemented by the Central Board of Indirect Taxes and Customs (CBIC). Any document made without a valid GST DIN will be regarded as invalid. On the CBIC portal, taxpayers can confirm the validity of the Document Identification Number (DIN). in GST.

What does a DIN in GST mean?

A 20-digit document identification number serves as the unique identifier for each communication that government entities deliver to taxpayers. The taxpayer can verify the legitimacy of digital communications they receive from the government using this number.

DIN Structure with an example

The DIN’s structure is “CBIC-YYYY MM ZCDR NNNN,” and it includes:

  • YYYY represents the year that the DIN was created.
  • MM stands for the month in which the DIN was generated.
  • Zone Commissionerate Division Range Code, also referred to as ZCDR.
  • NNNN stands for “randomly generated alphanumeric code.”

The Document Identification Number-DIN

The process of levies and collections involves a lot of communication. A business requests a refund when it pays more tax than it needs. If the corporation pays less than the fair value, the government (tax officials) may order the company to pay more. The tax authorities may occasionally find it suspicious when a firm declares its taxable income to be so low. The firm can receive a notice from the tax authorities.

As a result, it is clear that this communication would require a substantial number of papers, including returns, appeals, letters, notifications, orders, and much more. In order to keep track of all documents, DIN requires government tax officers to attach a distinct DIN to each one.

The CBDT debuted its 10-digit DIN on October 1st, 2019. On November 8, 2019, CBIC papers received an extension, and CBIC also introduced its own 20-digit DIN.

The use and advantages of the GST document identification number

 

The taxpayer would profit from the following benefits of a document identification number on any correspondence from the GST department:

  • Transparency in all dealings with the department to prevent receiving fraudulent notices and make it simple to spot them.
  • Establishing an accurate audit trail for each message the department sends. Uphold the taxpayers’ rights.

 

DIN use/application

 

In GST matters where probes are ongoing and arrest warrants or search warrants have been obtained, the document identification number will now be used. This communication’s legitimacy will be verified by the use of a document identification number. By entering this DIN in the “VERIFY CBIC-DIN” box on www.cbic.gov.in, a taxpayer can authenticate the communication’s authenticity. Only if the communication is legitimate will the window report the information.

 

Why is the DI number crucial for taxpayers and businesses to know?

 

It is common practice to send summons and notices to unofficial email accounts. Implementing a document identifying numbers assures the validity of such notices and shields a taxpayer from pointless annoyance. So, before replying to any notification, it is crucial for a taxpayer to double-check the document identifying number.

 

Taking appropriate action as a result of a notice’s inadequacy, consequences, and lack of a DIN in certain circumstances

 

All correspondence with the taxpayer must have a DIN. Without a document identification number, every communication of this kind is void. To the extent that they were never issued, they are regarded as invalid. A communication could, however, be sent out in certain cases without a document identifying the number. In this case, the taxing authorities are required to provide justification for why the document was issued without a document identification number. On rare occasions, a communication might not contain a document identification number. For example,

  • If a technical fault or other flaw exists in the production of the electronic DIN
  • When an investigation, inquiry, GST DIN Verification, etc. needs to be conducted quickly or urgently, and the authorized official is not present at his normal place of duty (office).

However, any message sent under the aforementioned conditions must be regularized within 15 working days. Taxpayers are urged to be aware that any papers issued by government agencies without a DIN (apart from those issued under the exclusions listed below) would be deemed invalid.

 

The Outcome

 

The aim of the government is to make conducting business easier. It is clear from its assertion that a system without a face would be set up between the assessor and the assessee. The initial step in this approach is DIN.

 

Why should you choose us?

 

The best business management consultant can help clients with matters like finances, GST, human resources, compliance procedures, and strategy formulation. To enhance their operations and performance, a variety of public and private businesses use business management consultants.

Leading business management consulting company Komplytek provides practical solutions to companies in many markets and sectors. We help companies perform better by giving them expert guidance on how to expand and get around challenges. Furthermore, we provide integrated services and solutions that support finance, accounting, and compliance operations by enhancing control efficacy visibility and ensuring prompt corrective actions. For our clients, we put a lot of emphasis on developing secure, user-friendly accounting and also compliance management solutions.

 

 

 

Types of Capital Assets, Capital Gain and Taxe

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Types of capital Gains

A capital gain is any profit made from the sale of an item classified as a capital asset. Capital assets include things like machinery, leasehold rights, patents, trademarks, cars, land, buildings, and real estate. The income category includes the profit that was made on the sale of a capital asset. The tax on capital gains is imposed when an investor sells an investment and makes a profit. It is due for tax in the year in which the investment is sold. Consequently, a tax must be paid on the gain arisen /income earned.

Types of Capital Assets

The following is a list of the two categories of capital assets:

  1. Short-Term

Short-term assets are those that have a holding period of less than 36 months. The period is less than 24 months in the case of immovable property. However, in the case of the sale of securities, shares, UTI Units, Zero Coupon Bonds, and equity-oriented mutual funds, the period for calculation of short-term capital gain is less than 12 months. Such an asset would generate a capital gain upon sale, which would be subject to the relevant short-term capital gains taxes.

  1. Long-Term

A long-term asset is one that has been held for more than 36/24/12 months, as the case may be. The proceeds from the sale of such an asset would constitute long-term capital gains and would be subject to the relevant tax.

  1. Tax implications on the sale of capital assets:

An assesse is liable to pay tax on capital assets when any capital gain arises on the sale of these assets.

Types of Capital Gain Taxes:

 

1. Short-Term:

Short-term capital gain taxes are levied on capital gains from the sale of assets held for a short period.  They shall be included in the assesse’s income and taxable as per the normal tax slab rate if security transaction tax (STT) is not paid. If STT is not paid, it will be taxed at a rate of 15%.

2. Long -Term:

Long-term capital gain taxes are levied on capital gains from the sale of assets held for a longer period (more than 36/24/12 months).  They will be taxed at various rates.

On sale of Equity Shares/Units of equity oriented mutual funds – 10% over and above Rs.1 Lakh

Other than equity shares/ units of equity oriented mutual funds – 20%

If a person in India inherits a property and there is no sale, no capital gains tax is due under the Income Tax Act. However, if the inheritor decides to sell the property, tax will need to be paid on the sale’s earnings.

Why should you choose us?

The best business management consultant can help clients with matters like finances, human resources, compliance procedures, and strategy formulation. A variety of public and private businesses use business management consultants to enhance their operations and performance.

Komplytek is a leading business management consulting firm that offers effective solutions to firms in a variety of industries and regions. We help companies perform better by giving them expert guidance on how to expand and get around challenges. Furthermore, we provide integrated services and solutions that support finance, accounting, and compliance operations by enhancing control efficacy visibility and ensuring prompt corrective actions. For our clients, we also put a lot of emphasis on developing secure, user-friendly accounting and compliance management solutions.

 

 

 

6 Reasons to File Income Tax Return

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Income tax return

The objective of completing your income tax return is not just to disclose your earnings to the Income Tax Department and pay any taxes that are due; it also enables you to take advantage of various benefits that may be useful to you in the near and long term.

Let us examine the advantages of submitting your income tax return as a professional or business owner.

1.Loss carries forward

Business losses are unavoidable. When calculating your income under the “Profit and Gains of Business and Profession” category, you can deduct the losses you have suffered. You can file an income tax return to carry forward such losses for up to eight consecutive years. You will not be able to utilize this option if your Income Tax Return is not filed. As a result, you can carry forward previous losses to offset future gains in order to lower the amount of taxes due in the following years.

2. Request a loan

Just as people require loans at certain times in their lives, so do businesses. Businesses use loans to expand and improve their operations. As a result, when you apply for a loan at a critical stage in the development of your company, your Income Tax Return is a crucial document that banks will require, among other documents, before determining whether your company is a wise investment for them to grant a sizable sum of money, which you should be able to repay. Therefore, there are several benefits to filing your income tax return on time each year that will help your business.

3. Avoids Penalty and Punishment

In India as well as other countries, there are harsh consequences for tax evasion. Thus, filing your income tax returns on time will spare you from having to deal with the Income Tax Department in uncomfortable ways that will obstruct your capacity to conduct business quietly.

4. Claim Depreciation

Assets that are registered in the business’s or owner’s name may be written off under income tax law. However, the claimed item must be used solely for commercial or professional purposes. If you have not chosen the Presumptive Taxation Scheme, you can determine your total taxable earnings by subtracting all permitted costs and depreciation under Section 32 of the Income Tax Act. By taking full advantage of all deductions, including depreciation, enables you to minimize your taxes.

5. Seeking government tenders

Your income tax returns reflect the financial health and degree of success of your firm. Your ability to obtain government bids is typically associated with the accuracy of the financial records verification. This is done by looking at your annual tax returns for the last several years. The most qualified applicant will have his or her qualifications for project management carefully examined. The same as with firms, professionals seeking contracts should make sure that their company tax returns are submitted on time and accurately.

6. Take advantage of the assuming taxation scheme

Businesses and professionals can use the Presumptive Taxation Scheme under Section 44AD/44ADA of the Income Tax Act to pay tax on only a percentage of their profits, which reduces the financial burden of paying taxes for these taxpayers. This programme is open to professionals making less than Rs 50 lakh and small businesses making Rs. 2 crore or less annually. The businesses only have to pay taxes on 6% or 8% of their revenue. Whereas the professionals only have to pay taxes on 50% of their revenue. Taxpayers can use ITR 4 to file their tax returns and be eligible for this program’s advantages.

 

File your Income Tax before the deadline. Contact the expert https://komplytek.com/

 

 

ITR Filing Deadline for FY 2021–2022 (AY 2022-23)

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Income tax return

 

The income tax return i.e., ITR filing deadline for the fiscal years 2021–2022 and assessment years 2022–2023 is July 31 if you are an earning individual. It is best to file your paperwork as soon as possible to avoid last-minute complications.

For tax return filers’ convenience, the Income-Tax (I-T) Department offers pre-filled forms. However, taxpayers should double-check each field on the pre-filled form and keep any supporting documentation close at hand when submitting the return.

ITR filing deadline 2022: Last day to submit an income tax return for individuals, HUFs, and businesses, including details on late fees.

The 2022 ITR filing deadline is approaching. It is crucial that every taxpayer submits their ITR before the deadline. A fine in the form of a late filing charge is assessed for failure to do so. For the majority of taxpayers, the deadline to submit an ITR for the fiscal year 2021–2022 is July 31. It is important to be aware that various taxpayer classes have varied ITR deadlines or due dates. Continue reading to learn when and where to file income tax returns for various taxpayer categories, as well as what will happen if someone misses the deadline.

For salaried people, the ITR filing deadline 2022

For salaried employees and individuals whose accounts do not need to be audited, the deadline for ITR filing is July 31.

ITR filing last date 2022 for HUF

According to the Income Tax Rules, the last date to file an ITR for Hindu Undivided Families (HUF) whose accounts don’t need to be audited is also July 31.

The due date for ITR filing for taxpayers whose accounts must be audited

Some taxpayers’ accounts require an audit. These taxpayers are given more time to submit their ITRs. Such taxpayers must file their ITRs by October 31, 2022. (Unless extended by the government).

A corporation, a working partner of a firm, an individual, and other entities like a proprietorship, firm, etc. that must have their accounts audited are included among these taxpayers.

The due date for ITRs for taxpayers required to file under Section 92E

When taxpayers engage in overseas transactions within the applicable financial year, Section 92E requires them to file a report. Such taxpayers have until November 30, 2022, to file their ITRs.

What if you failed to submit the return by the deadline?

A delayed return can be filed after the initial return of income filing deadline if the original deadline is missed. The income tax division also stipulates the deadline for submitting the late return. This deadline has been pushed back three months until the conclusion of the assessment year (unless extended by the government).

However, there would be a Rs. 5,000 fine assessed for filing returns late. However, the cost is only up to Rs 1,000 if the person’s total income is less than Rs 5 lakh.

What benefits does filing ITR before the deadline offered?

When you submit ITRs on time, you gain a lot of benefits as well as the reputation of being a responsible member of the nation. These advantages include some of the following:

  1. Your chances of obtaining a car loan, a home loan, and other loans increase if you file your income tax returns on time.
  2. You will get your returns as soon as possible if you file your ITR on time.

3.ITRs can be used to prove a person’s address and income, which are both necessary when requesting a loan or visa.

  1. When applying for a visa, the majority of consulates and embassies need you to provide copies of your income tax records for the past two years.
  2. Taxpayers must pay their taxes before they may submit an ITR. In accordance with Section 234A, interest must be paid at a rate of 1% per month starting on the tax payment due date and extending until the payment date. If you submit your tax return on time, you might avoid having to pay extra interest. As a result, your tax burden will increase the longer you put off paying taxes and filing returns.

 

 

From Pan to Crypto: New income tax reforms that take effect on July 1

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Income Tax on Digital Assets

Starting July 1, 2022, a number of changes will take effect that will have an impact on your income tax. In this regard, it is also crucial to keep in mind that July 1, 2022, also marks the beginning of the fiscal year’s second quarter. This includes changes to the laws governing income tax and TDS on cryptocurrency. These are some significant changes in income tax reform that will take effect on July 1, 2022.

TDS on Cryptocurrencies:

In January 2022, Finance Minister Nirmala Sitharaman suggested a 1% tax deducted at source (TDS) on any payment made in exchange for the transfer of virtual digital assets (VDAs), often known as cryptocurrencies and non-fungible tokens (NFTs). The TDS regulation will be in force beginning on Friday, July 01, 2022 for transactions with a value of more than Rs. 10,000.

A 20% tax deduction will be made at the time of transfer of the VDA if the deductee’s (buyers’) PAN is not immediately accessible. If the payer is not one of the people listed and they have not filed their income tax return, TDS will also be withheld at a higher rate of 5 percent (instead of the standard rate of 1 percent).

The PAN-Aadhaar Non-Linkage costs twice as much:

The final day for connecting Aadhaar and PAN was June 30, 2022. In line with CBDT regulations, if a person combines their PAN with Aadhaar between March 31, 2022, and June 30, 2022, they must pay a 500-rupee late fee. However, if someone fails to connect their PAN with their Aadhaar before June 30, 2022, they will be subject to a twofold fine of Rs. 1,000 starting on July 1st, 2022.

For doctors and social media influencers, the new income tax information is as follows:

Rewards received from businesses for sales promotion by doctors and social media influencers will be subject to a 10% tax deduction at source starting July 1, 2022. (TDS). In line with a notice from the Central Board of Direct Taxes (CBDT), the giver of the benefit or perquisite may immediately deduct the tax under Section 194R. However, the taxpayer must confirm the recipient’s possession of any taxable sums.

In line with Section 194R, taxes must be deducted from benefits and perks when their total worth exceeds Rs. 20,000.

Update on Income Tax (IT) Return Filing:

The new income tax regulations now include a new clause that enables taxpayers to file a revised return in the event that their income tax returns contain errors or inaccuracies. Taxpayers now have two years from the conclusion of the applicable assessment year to file an amended return.

Changes in Demat KYC Rules:

To prevent having your demat account frozen, you must complete your KYC before June 30. To update your KYC, you must provide your name, place of residence, PAN, active mobile phone number, active email address, and range of income. But starting on July 1, your demat account will likewise be inactive if you do not do this.

Why choose us?

Komplytek is a leading business advisory and consulting firm that specialises in management consulting. Our areas of expertise include financial operations; payroll management; human resources; payroll management; strategies and development; financial planning; and consulting in data analysis. We also help businesses all over the world with their planning and operational challenges.

By using artificial intelligence, we also provide businesses with more flexibility, wiser judgement, and data-supported options with reduced costs and risks.

By collaborating with a firm to develop development ideas or carry out operations, we greatly increase a company’s value. Additionally, we provide excellent, safe, and customised solutions based on your company’s needs.

Komplytek is a one-of-a-kind company that provides a variety of consulting and outsourcing services to clients worldwide. By outsourcing the finance and compliance functions of the firms to us, we make it convenient for business owners to focus on their essential and core business activities. We are a “One-Stop Solution” for finance and accounting, compliance and regulatory, and other operational portfolios. Our solutions can also be tailored to meet your specific business needs.

Our team comprises of people who have extensive industry knowledge, skills, and experience. This is crucial in addressing any turbulence in the business world and guaranteeing smooth operations. We ensure that we think like you and act as part of your team rather than an outsourcing partner.

To assist our clients, follow the law, we also lower risk by combining the finest strategic approach with cutting-edge technology.