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Section 124 of the Income-tax Act, 2025 – Deduction for NPS and Government-Notified Pension Schemes

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Section 124 of the Income-tax Act, 2025 (effective from 1 April 2026) replaces the provisions that were earlier covered under Section 80CCD of the Income-tax Act, 1961. It provides tax deductions for both employer and employee contributions to notified pension schemes such as the National Pension System (NPS).

🏢 Employer Contribution Deduction

If your employer contributes to your NPS account, you can claim a deduction for the contribution made by the employer up to:

Employer Type Maximum Deduction
Central Government / State Government 14% of Salary
Other Employers (Private Sector) 10% of Salary
Taxpayers opting for the new tax regime under Section 202(1) 14% of Salary

“Salary” for this purpose includes Dearness Allowance (if it forms part of retirement benefits) but excludes other allowances and perquisites.

👤 Employee’s Own Contribution

An individual can claim a deduction of up to ₹50,000 for contributions made to their own NPS account during the financial year. This deduction is over and above the deductions available under Section 123.

📌 Example 1 – Private Sector Employee

Assume:

• Basic Salary + DA = ₹10,00,000
• Employer NPS Contribution = ₹1,00,000 (10%)
• Employee NPS Contribution = ₹50,000

Deduction available:

Particulars Amount
Employer Contribution Deduction ₹1,00,000
Employee Contribution Deduction ₹50,000
Total Deduction under Section 124 ₹1,50,000

📌 Example 2 – Government Employee

Assume:

• Salary = ₹12,00,000
• Employer Contribution = 14% = ₹1,68,000
• Employee Contribution = ₹50,000

Deduction available:

Particulars Amount
Employer Contribution ₹1,68,000
Employee Contribution ₹50,000
Total Deduction ₹2,18,000

👶 Contribution to Minor’s NPS Account

A parent or guardian contributing to a notified pension account of a minor can claim a deduction. However, the combined deduction for self-contribution and contribution to the minor’s account cannot exceed ₹50,000.

⚠️ Important Conditions

  1. No double deduction is allowed. If an amount has already been claimed under Section 124, it cannot be claimed again under Section 123.
  2. Amounts used to purchase an annuity in the same tax year are not treated as received for taxation purposes.
  3. Special provisions have been introduced for the Unified Pension Scheme (UPS) and taxation of withdrawals on retirement or superannuation.

🚀 Quick Summary

Benefit Deduction Limit
Employer Contribution (Govt Employer) Up to 14% of Salary
Employer Contribution (Private Employer) Up to 10% of Salary
Employer Contribution (New Tax Regime under Section 202(1)) Up to 14% of Salary
Employee’s Own Contribution Up to ₹50,000
Minor’s Pension Account Contribution Included within ₹50,000 limit

GST Registration: How to Respond to Deficiency Notices from GST Authorities

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Applying for GST registration is an important step for every business in India. However, many applicants receive notices from GST officers due to incorrect information, missing documents, or mismatches in the application. These notices are generally issued to seek clarification before approving the registration.
The good news is that such notices can usually be resolved easily by submitting the correct clarification and supporting documents within the prescribed time limit.

❓ Why Do Tax Authorities Issue GST Registration Notices?

During the GST registration verification process, officers examine the details and documents submitted by the applicant. If any discrepancy is found, a clarification notice may be issued.

Some common reasons include:
• Incorrect jurisdiction details
• PAN mismatch or use of an invalid PAN
• Mismatch between promoter details and PAN/Aadhaar records
• Incorrect Company Identification Number (CIN)
• Uploading blurred, outdated, or incomplete documents
• Entering wrong business information
• Address proof issues
• Missing consent letter or ownership proof
• Errors while filling the application form

In several cases, applicants also receive notices when the uploaded documents do not properly match the details entered in the GST portal.

📑 Common Types of GST Registration Notices

The GST department uses different forms for various notices. Some of the commonly used notices are:

Notice/Form Purpose Time Limit to Respond
REG-03 Clarification required during GST registration or amendment 7 working days
REG-17 Notice for cancellation of GST registration 7 working days
REG-23 Clarification regarding revocation of cancellation 7 working days

Failure to respond within the prescribed time may result in rejection or cancellation of GST registration.

🪜 Step-by-Step Process to Reply to GST Registration Deficiency Notices

🖥️ Step 1: Visit the GST Portal

Go to the official GST portal:
GST Portal

For new applicants:
• Click on “Register Now”
• Choose the “Temporary Reference Number (TRN)” option
• Enter the TRN received during registration

For existing taxpayers:
• Log in using GST credentials

📂 Step 2: Access the Clarification Application

Navigate to:
Services → Registration → Application for Filing Clarifications

This section allows applicants to view and respond to notices issued by GST officers.

🔍 Step 3: Search for the Notice

Applicants can locate the notice using:
• Application Reference Number (ARN), or
• Notice Reference Number

Once located, the notice details and officer queries become visible.

✍️ Step 4: Submit Clarifications

The applicant must respond to each query raised by the GST officer.

Two options are generally available:

Option 1: Modify the Registration Application
If corrections are required in the original application, select “Yes” under modification and update the necessary fields.

Option 2: Submit Clarification Without Modification
If no changes are needed, simply provide explanations against the queries raised and upload supporting documents.

📎 Step 5: Upload Supporting Documents

Applicants may need to upload:
• Address proof
• Electricity bill
• Rent agreement
• Consent letter
• PAN card
• Aadhaar
• Bank proof
• Business incorporation documents

Documents should be:
• Clear and readable
• Updated
• Properly matched with application details

Accepted formats generally include PDF and JPEG files.

✅ Step 6: Verify and Submit the Application

After providing the clarification:
• Select the authorised signatory
• Enter the place name
• Submit the application using:
o DSC (Digital Signature Certificate), or
o EVC (Electronic Verification Code)

Once submitted successfully, an acknowledgement message is generated.

⚠️ Important Precautions to Avoid GST Notices

Businesses can reduce the chances of receiving notices by following certain precautions:
• Ensure PAN and business details match official records
• Use valid and updated documents
• Verify email ID and mobile number carefully
• Cross-check promoter and director details with Aadhaar and PAN databases
• Upload clear scanned copies of documents
• Use the correct business address
• Submit the application within the prescribed timeline

⚙️ Practical Issues Faced by Taxpayers

Many taxpayers face difficulties during GST registration due to:
• Lack of understanding of documentation requirements
• Technical portal issues
• Confusion regarding address proof
• Delays in clarification responses
• Repeated document requests from officers

Discussions on online tax communities also highlight that applicants often receive notices even after uploading the required documents, making careful document preparation extremely important.

🚫 What Happens If You Ignore the Notice?

Ignoring a GST notice can lead to:
• Rejection of GST registration
• Cancellation of existing GST registration
• Delays in business operations
• Inability to issue GST invoices
• Loss of input tax credit benefits

Therefore, businesses should always respond within the prescribed timeline.

📌 Conclusion

GST registration notices for deficiencies are common and usually manageable if addressed properly and on time. Most notices arise due to simple documentation errors, data mismatches, or incomplete applications.
Businesses should carefully review their GST applications, maintain accurate records, and respond promptly to departmental queries to ensure smooth approval of GST registration and avoid future compliance issues.

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.

 

 

 

Form 26AS – Definition and Purpose

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Form 26AS

An essential tax document is Form 26AS. It is an annual statement that is sent to individual taxpayers and linked to their Permanent Account Number (PAN). Below you will find information on this form’s applicability as well as instructions on how to see or download it online.

 

What is Form 26AS?

An annual statement called Form 26AS contains information on the tax credits applied to a taxpayer’s PAN. A taxpayer can obtain this form using their login credentials from the Income Tax Department’s online filing site.

You can refer to it for information on your income (from which taxes have been deducted) and the taxes that have been paid to the government treasury by or on your behalf by the deductor (which could be your company, bank, etc.).

What purpose does it serve?

 

Before submitting their income tax return, taxpayers should compare their actual transactions to the ones listed on their Form 26AS (ITR). Omissions and other filing errors will be much reduced as a result of doing this. An investigation may be conducted if there is a discrepancy between the Form and your submitted income tax returns.

This form also attests to the fact that several organizations have paid taxes on your behalf and placed the funds in the government account.

 

How can it be downloaded?

 

You may get your Form 26AS from the website of the Income Tax Department. You need to already have a user account in order to register on the website.

 

If you do not log in, how can you access the form?

 

Additionally, you may access your Form using your bank account’s internet banking service. Only if your PAN is connected to your bank account then this function is accessible. Axis Bank, Bank of India, ICICI Bank, IDBI Bank, Indian Overseas Bank, Kotak Mahindra Bank, State Bank of India, and Union Bank are a few of the banks that provide this service.

 

What has changed in Form 26AS?

 

The new form is now an Annual Information Statement (AIS) instead of an Annual Tax Statement. While the Form 26AS and the AIS are both now accessible through the portal, the old Form will be phased out and replaced by the AIS until the new AIS has been verified and is fully functioning. Only tax deducted at source (TDS) against your PAN, tax collected at source (TCS) against your PAN, details of other taxes paid, and information on income tax refunds were included in the previous form. Part A and Part B make up the new AIS.

Part A of the form contains general information about the taxpayer and the following fields:

  1. Permanent Account Number
  2. Aadhaar ID
  3. Name
  4. Date of Birth/Incorporation
  5. Mobile number
  6. Email ID
  7. Address

It is significant to notice that the new Form includes a space for the taxpayer’s cell phone number and email address, which were not previously recorded. This demonstrates the value of the mobile number and email address in the overall scheme of things, as there will only be one faceless method used for all interactions with the tax authorities.

The following details are in Part B of the form:

  1. Details on tax deductions or source-based collections
  2. Details on certain financial transactions.
  3. Information on tax-related payments

What makes Form 26AS and Form 16 different from one another?

 

While the contains all of a taxpayer’s tax-related actions, Form 16 is a declaration that details the total amount paid to an employee and the tax withheld during the course of a fiscal year.

 

For more details, Get in touch with the experts. 

 

5 Reasons to Hire a Finance Consulting Firm

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Finance-Consulting-Firm

The life of a businessman is not easy. You must manage everything from the small to the large. Financial management is not for everyone. This is where the role of a finance consulting firm comes into the equation. Individuals and small businesses can get help from a finance consulting firm to manage and grow their money and assets. They also help their clients with a variety of responsibilities, including financial data, financial forecasting, and investment advice based on their long and short-term objectives.

Financial consulting firms and financial advisory firms are similar terms. Prior to now, a financial consulting firm could only assist with businesses’ transactional needs. Modern entrepreneurs, on the other hand, demand tailored services to increase their company’s efficiency. As a result, their role was redefined and widened. A finance consulting firm now provides a comprehensive service that assists its clients in achieving financial success in all areas.

What qualities should you seek for in a financial consultant?

  • Negotiation Skills of the Highest Order
  • Communication abilities that are both effective and efficient.
  • As required by law, licensed and registered
  • Financial consulting firms must have extensive knowledge of developing financial strategies for many types of businesses.

What Services does a Finance Consulting Firm Provide?

A finance consulting firm examines the entire picture of a client’s finances, including obligations, assets, expenses, and revenue, to assist clients in identifying their objectives. A finance consulting firm with the appropriate licenses can also handle the investments of its clients.

Here’s Why More Companies are Hiring a Finance Consulting Firm

There is no denying that the workforce is changing as a result of new technology and increasing growth needs. The most notable current trend is that an increasing number of businesses are outsourcing staff and consultants. Here are five reasons why hiring a finance consulting firm is the way of the future.

1. Provides You with a Larger, More Complete Perspective of Business

Hiring a professional from a finance consulting firm may help your company and provide you with added security. The finance consultant arrives with a planned company strategy and also tactics, allowing them to see the full picture of your financial status. As a result, financial plans may be evaluated, reviewed, and modified in response to changing company circumstances. Furthermore, it helps your company become more structured and equipped for the future, as well as any challenges that may develop, with contingency plans in place if necessary.

2. Expert Recommendations

Businesses rely heavily on consultants. They have worked in a variety of industries and have a thorough understanding of business dynamics, expert knowledge, and technological advancements and processes. Financial planning by a competent financial advisory firm also assists in putting all the elements of your financial business together, from budgeting to preparing for business development to handling taxes and insurance needs.

3. Tax Benefit

Certain countries’ tax laws are complex, and even the smallest error might result in severe financial consequences. In addition, as a result of their errors, these business owners must pay hefty fines. All of these issues and their ramifications are known to a financial consulting firm, and they are addressed ahead of time. Launching new companies or offering advice on current tax law changes might help minimize your tax burden.

A financial consulting firm can also assist you in lowering your tax obligation by launching new investments for long-term benefits, and tax efficiency, or counselling you on the most recent major reforms.

4. Saves Time

An entrepreneur does not have enough time to analyse each matter carefully. The finance consulting firm is adept at identifying the company’s soft spots, allowing you to devote your time and attention to those aspects of the organization that require it.

As a result, hiring a financial consulting firm is preferable. They are a collection of professionals who can help you manage your financial portfolio properly. This also allows you to focus your time and efforts to more profitable and productive endeavours if you are not burdened with this onerous duty.

5. Stress Relief

A competent financial consultant may relieve a lot of burden from your mind, and your business can profit from the consulting firm’s high financial literacy. You may now relax since you are in the hands of an investing specialist who is handling a wide variety of issues and obstacles that you would otherwise have to deal with on your own. This also leaves more time to keep a watchful eye on the markets.

Why choose us?

In order to maximise productivity in the crucial spin-out areas of your company, Komplytek provides integrated services and adaptable solutions that are smart by design. For finance & accounting, compliance & regulatory, and other operations portfolios, we provide a “One Stop Solution.”

 

4 Essential Benefits of GST for Small Businesses & Start-ups

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Benefits of GST for Small Businesses

Benefits of GST for Small Businesses

In India, GST was implemented to simplify the tax assessment process. To make the compliance process easier, GST was formed with the tagline “One Country, One Tax System.” In this blog, we will look at a few of the key elements of the Goods and Services Tax implementation process for new firms in India.

A Quick Overview of Goods and Services Tax

A value-added tax is the Goods and Services Tax. It covers all stages along the supply chain, right from the manufacturer to the final consumer. As a result, the tax will be borne by the end customer, as the final person/entity in the supply chain. India’s indirect tax structure has been made simpler by the Goods and Services Tax. Both the federal and state governments are subject to the tax framework. It will also replace India’s present many levels of complex taxes.

Here are Four Benefits of GST for Small Businesses and Start-Ups

GST will be a single tax covering all major indirect taxes. As per an evaluation of the GST’s impact on start-ups, they will likely profit.

 1. The widespread use of online registration

Other taxes, such as Excise Duty, VAT, Services Tax, Sales Tax, and so on, have been absorbed by GST. As a result, the main benefits are fewer tax filings and uniform formats. This saves a lot of time and paperwork. Although many states have different registration needs, the process is the same: it is done online and verified. Due to the ability to manage the majority of uploads online and with digital signatures, the GST registration also reduces the amount of manual paperwork.

2. Access to a single national market throughout India

It has major advantages for small firms. Most firms were required, under the previous tax system, to maintain substantial distribution and logistics networks since these networks were built to satisfy the requirements of state level tax reduction. Under the new approach, corporate requirements will drive distribution and logistics networks, allowing smaller firms an equal opportunity to compete with larger ones. For smaller firms looking to increase their national footprint with little expense, this single market throughout India will be a huge benefit.

3. It prevents taxation from cascading

Tax cascading is no longer an issue owing to the GST, which was formed to bring all major indirect taxes under one roof. For small firms, this means greater immediate savings. All indirect taxes were rolled into one with the Goods and Service Tax. In simple terms, the cascading effect was Tax on Tax, and the ITC (input tax credit) was introduced as a great benefit to firms to mitigate this.

4. Increasing the GST Registration barrier for Small Firms

Given that the registration limit is Rs. 40 lakhs, many small firms, mainly start-ups, are free from paying the GST. As a part of benefits of GST for Small businesses it offers a lower tax rate for small firms with a turnover of between 50 lakhs and 1.5 crore, notwithstanding the fact that it is optional. This is refer to as the composition plan under the GST. This will also reduce the tax burden on startup firms.

The GST has helped several sectors of the Indian economy. The benefits of the Goods and Service Tax also vary based on the sort of business you run.

Komplytek is a well-known GST consultant providing services to clients spread across industries and geographies. We provide our clients with entire Goods and Service Tax solutions, such as:

  • Obtaining a Goods and Services Tax registration
  • Preparing and filing GST returns on a monthly or quarterly basis.
  • Providing advice on a variety of subjects
  • Preparation and filing of Goods and Service Tax refund applications, as well as follow-up
  • Preparation and submission of yearly tax return

For Assistance in Managing your Small Business Accounting.

Get in touch with Komplytek today!

6 Types of Business Management Consultants

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Business Management Consultants

Relying on the professional guidance, support, recommendations, and knowledge of an outsourced business management consultant may help your firm expand, decrease expenses, and enhance profit margins. A company becomes more productive and efficient in a worldwide network of businesses.

These advantages may be attained through integrating and streamlining operations and strategic efforts in new ways. In addition, introducing innovative solutions to frequent and unusual business trouble areas, a business management consultant will help your company reach its full potential by giving crucial insights and information. This can help a business of any size, scale, or kind achieve and fulfil all of its strategic, long-term aims.

Types of Business Management Consultant:

1. Financial consultant

Any business wants to make the greatest financial choice, but there are many variables to consider. A financial advice consultant can assist with corporate finance, transaction services, restructuring, risk management, and litigation, among other things. A financial adviser may also help you in tax planning, manage your cash flow, and find low-risk, high-return investment possibilities.

2. Business Management Consultants in Strategy and Management

These companies or people have a thorough grasp of your market and are familiar with industry best practices. They may assist you in expanding your market presence, expanding your product offerings, reorganising your organisation for efficiency and cost savings, increasing your firm’s capabilities, or even buying out another company.

3. Business Management Consultant for Risk and Compliance Management

Excessive rules, regulations, standards, and ethics may be required of a consultant firm at times. A risk and compliance business expert helps to avoid fraud, abuse, and discrimination, as well as penalties and litigation. They may set up or assess a compliance programme, assist in the identification of corporate or industry-specific risks, and/or integrate new rules and practices.

4. A legal advisor

Larger organisations normally have their own in-house attorneys or hire a legal firm on a contract basis. But many medium-sized and small enterprises do not require a full-time consultant.

When a lawyer is brought in for whatever reason, it is their role to make sure the organisation is informed of all laws and give a plan for moving forward. To provide the best information to their clients, they must conduct extensive research, pay close attention, and gain experience.

5. HR Consultant

Effective employee management ensures a company’s long-term success. An HR consultant is employed when a firm is facing problems with aspects of human resources such as training and development, employee satisfaction, dispute resolution, and employee benefits and pensions. An HR consultant will also check to see whether your policies and procedures are in line with any laws or regulations. They will also effectively execute HR policies, check whether training sessions are necessary, and know how to boost employee satisfaction.

6. Operations consultant

Supply chain management, process management, procurement, and outsourcing are some of the topics that an operations business management consultant will help with. They search for ways to boost productivity, reduce expenses, and also enhance quality. When the economy is in a slump, a management change or the introduction of new technology is critical. Therefore hiring a business management consultant is the best option.

Why should you choose us?

The best business management consultant may assist its customers in areas like finance, human resources, compliance processes, and strategy development. A wide range of public and private enterprises hire a business management consultant to improve 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 assist businesses in improving their performance by providing professional advice on how to overcome obstacles and expand. We also offer integrated services and solutions to help finance, accounting, and compliance operations by improving control efficacy visibility and assuring fast corrective actions. Our major goal is to create safe and easy-to-use accounting and compliance management programs for our clients.

8 Essential Benefits of GST

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GST-Tax

Following the introduction of the Goods and Services Tax (GST), the government was flooded with input on the tax’s benefits and drawbacks. The GST is a national value-added tax (VAT) that is imposed on the production, purchase, and delivery of goods and services.

It removes major indirect taxes imposed on products and services by state and federal governments. The Goods & Service Tax is substantial tax reform in India and in this post, we’ll look at the positives of GST taxation.

Benefits of GST

1. Business Ease

The Goods & Service Tax introduces the notion of a single national market. It deters states from engaging in harmful rivalry. It has now become beneficial to run a business across state lines.

2. Tax Documentation and Filing Made Easy

Entrepreneurs have benefited from the GST. Because there are no various taxes to deal with, compliance and documentation have become much easier. Filing a return, paying taxes, and obtaining a refund have all become much simpler.

3. Reduces Tax evasion and corruption

The GST Act improves tax administration by making it more transparent and free of corruption. The government lost money as a result of tax evasion before implementation of Goods & Service Tax. There are no hidden taxes, and this reduces the cost of doing business.

4. GST Removes Tax Cascading Effects

Goods & Service Tax combines the majority of indirect taxes levied across the country, removing the “tax on tax” impact that has plagued the supply chain and driven up end-user costs.

5. Powered by Technology

Because it is technology-driven, the entire registration and filing of returns procedure is speed up. It also guarantees that the process is transparent and that tax collection is in accordance with the law. Filling out the registration form, submitting a refund request, dealing with notifications, and dealing with consumer complaints are all facilitated through the GST Portal.

6. Product That Is More Competitive

The Goods & Service Tax has made manufacturing more competitive by addressing the cascading effect of taxes, interstate taxes, and excessive logistics costs. It has benefitted both entrepreneurs and customers.

7. Regulates poorly organized industries

In the country, the textile and construction industries, for example, are highly unstructured and unregulated. GST has made it easier to manage payments, compliance, and input credit online.

8. GST Scheme of Composition

The composition system provides relief from tax responsibilities for small enterprises. Any taxpayer with a turnover of less than Rs. 1.5 crore is eligible for this plan.

Goods & Service Tax and the “Make in India” initiative

GST is the backbone of this strategy, as it applies to imports and gives a boost to manufacturing by reducing superfluous costs. Another benefit is the removal of commercial roadblocks, which make transactions and the free movement of goods across state lines much easier. By removing the arbitrary taxing system, the GST model has united the Indian market. Manufacturing has benefited greatly from reduced logistical costs, and relief from export taxes and refunds.

Komplytek is a renowned GST consultant in Delhi and the NCR. We offer our customers complete Goods & Service Tax solutions, which comprise all services such as:

  • Acquiring Goods & Service Tax Registration
  • GST returns are generated and filed on a monthly/quarterly basis.
  • Consultancy on a variety of issues
  • Goods & Service Tax refund application preparation and filing, as well as follow-up
  • Annual return preparation and filing
  • Auditing and evaluation of the Goods & Service Tax
  • GST Number Cancellation

 

 

4 Main Financial Statements

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financial-statements

4 Main Financial Statements

Accounting is a term referring to all of a business’s financial transactions. A well-run accounting department have processes and procedures for financial statements, accounting management, and data processing. Accounting department is responsible for the preparation of the financial statements, as well as ensuring that they are accurate and comply with the rules.

However, the actual reason for examining your financial statements is that it provides information about the net profit, financial position and cash flows to management. You’ll use financial statements as a guide to what’s possible if you want to raise funds, develop a new product, build a new office, or make any other move to grow your business.

A Dynamic Report

The majority of organizations prepare a periodic financial statement for investors and shareholders. A financial statement is a dynamic report that contains a wealth of data. This information is available for analysis and application to your company’s goals. Being proactive instead of reactive necessitates a full understanding of each statement.

The financial accounts reflect the impact of business accounting records on the firm. The many sorts of financial statements are not separate from one another but intertwined.

The basic financial statements provide insight into your overall financial viability, so understanding them is vital. We’ll go over the 4 main financial statements and how they can help your company move forward in this post.

1. Balance Sheet

A balance sheet is a financial statement that shows the assets, liabilities, and equity of a business at the end of a fiscal year. Regardless of the size or nature of the firm, the balance sheet is an official document that follows a traditional accounting framework.

The basis for assessing returns for investors and evaluating a company’s financial framework is the balance sheet. In a nutshell, it depicts a company’s financial status at a specific point in time.

On the balance sheet’s left side, you can see the assets. On the right, you’ll see a list of liabilities and equity.

2. Income statement

One of the most essential financial statements for summarizing a company’s financial health over a specific accounting period is the income statement. The income statement gives an overview of an entity’s operational performance over a specific period, as well as statistics on income generated and expenditure incurred.

Income statement helps to calculate net profit. Net profit is the amount money left after subtracting a company’s total expenses from its total revenue for a specific period of time. The profit and loss statement is another term for it.

In addition, income statements provide earnings per share (or “EPS”). This calculation indicates how much money shareholders would get if the firm chose to pay 100% of the period’s net earnings.

3. Cash flow statement

Cash flow statements show the inflow and outflow of funds. This is critical because a business must have enough cash flow to pay its bills and acquire assets. The cash flow statement illustrates where the money comes from. It also allows you to keep track of how much money comes in and goes out. It is generally used to produce a money projection to plan for the short term.

Operating, investment, and financial operations are all sources of incoming cash for a company. The statement also shows cash inflows, business-related expenses, and investments at any particular time.

4. Statement of retained earnings

The statement of retained earnings includes a specified period and shows the dividends paid to shareholders from earnings as well as the earnings retained by the firm. This is the financial statement being used the least.

The income statement and balance sheet are frequently seen by top management when financial statements are presented internally since they are relatively simple to prepare.

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GST-Definition & 4 Types of Good & Service Tax

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Types of Goods & Services Tax

The Goods and Services Tax (GST) is a tax imposed in India on goods and services or both, and it went into force on July 1, 2017. The tax was created to replace major existing indirect taxes with a single comprehensive tax.

In essence, Goods and Service Tax combines several indirect taxes into a single tax, making tax compliance management easier for service and commodity businesses. Various indirect taxes, such as the central excise tax, service tax, VAT, entertainment tax, etc., were rolled into the GST. This huge development has made it easier to file a tax return without the challenges that were faced in the past.

What is Goods and Service Tax (GST) and how does it work?

Goods and Service Tax is a destination-based tax applicable on all transactions involving the supply of goods and services or both for consideration subject to exceptions thereof. It is a tax paid on the manufacturing and sale of goods and services throughout the nation. It provides a complete and continuous credit chain. Goods and Services Tax is a single domestic indirect tax law that applies to the entire nation.

What impact will the Goods and Services Tax have on the current indirect structure?

The Goods and Services Tax is an effort to break down geographical boundaries and form a single market within the country. The effect, on the other hand, would not be consistent and would vary from one industry to the next. The ordinary citizen will benefit in two ways: firstly, all taxes will be gathered at the point of usage; and secondly, customers will not be compelled to pay a “tax on tax.”

When a supplier’s location and the place where goods/services are supplied are in two separate states, two different union territories, or a state and a union territory, it is categorized as either an interstate supply of goods or an interstate supply of services. All inter-state supplies are subject to IGST, which is the sum of CGST and SGST/UTGST collected by the Centre.

GST is classified into the following categories:

 

1.The State Goods and Services Tax (SGST)

The State Goods and Services Tax is one of the taxes levied by the state government on the exchange of goods and services. It is imposed on the intra-state supply of goods and services, or both. The Sales Tax, Entertainment Tax, VAT, Entry Tax, and other state taxes are all replaced by the SGST, which is imposed by each state’s state government. The state government is entitled to claim earned revenue under this tax.

2.The Integrated Goods and Services Tax (IGST)

The Integrated Goods and Service Tax is levied on interstate goods and services transactions. When a supplier’s location and the area where goods/services are supplied are in two separate states, two different union territories, or a state and a union territory. It is categorized as either interstate supply of goods or interstate supply of services. All inter-state supplies are subject to IGST, which is the sum of CGST and SGST/UTGST collected by the Centre.

3. The Central Goods and Services Tax (CGST)

The Central Goods and Service Tax is charged on transactions of goods and services that take place inside a state. It was implemented by the Central Government to replace major central taxes such as Central Sales Tax, Service Tax, Central Excise Duty and Additional Excise Duty, CVD and Special CVD, etc. The Central Goods and Service Tax is levied and collected by the Central Government.

4. The Union Territory Goods and Services Tax

The purpose of imposing Union Territory Goods and Services Tax on intra-UT supplies of goods and services is to apply a tax collection to give benefits similar to SGST. It applies to Lakshadweep, Daman and Diu, Dadra and Nagar Haveli, Andaman and Nicobar Islands, and Chandigarh, which are all Union Territories.

Komplytek is a renowned consultant in Delhi and the NCR. We offer our customers complete Goods & Service Tax solutions, which comprise all services such as:

  • Acquiring Goods and Service Tax Registration
  • Goods and Service Tax returns are generated and filed on a monthly or quarterly basis.
  • Consultancy on a variety of issues
  • GST refund application preparation and filing, as well as follow-up
  • Annual return preparation and filing
  • Cancellation of Goods and Service Tax Number

 

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