startup company registration
02 Feb
startup

Steps for Startup Company registration India 2021

Startups are newly hooked up corporations that can be started out by way of one individual or crew of individuals. They either improve new products/services or make revolutionary changes in the present products/services in something better. India is a treasure of talent. To enhance the Indian financial system and attract gifted entrepreneurs, the authorities take many steps to promote startups. Startup India Scheme is initiated under the management of Prime Minister Narendra Modi.

Types of company registration in India:-

Private Limited Company

A Private Limited Company is a team of shareholders and capital made up of shares. A man or woman who has shares will become the owner of the employer and it can be transferred or sold. Business property are separate from non-public assets. Every shareholder is only accountable for his or her share of the whole capital. They have to keep information such as monetary transactions, meetings, audits, etc.

Partnership

It is an agreement in which there are more than one person is involved. The profits, roles, and responsibilities are divided into the share described in the partnership agreement. In the case of loss, every person is accountable solely. Even private assets can be used to recover the losses.

Limited Liability Partnership

This thinking is introduced in 2009. An LLP functions as a structured enterprise model. It is a separate legal entity and enterprise assets are separate from the partner’s non-public assets. Every companion has defined most liability in accordance to his or her share capital in the Limited Liability Partnership

Sole Proprietorship

In a sole proprietorship, there is only one person’s involvement and accountability for the whole business. He or she has to bear all losses. Even private property can be used to recover the losses. Businesses and owners are now not separate from each other. Any earnings from the business add to the owner’s profits for tax purposes.

Process of Startup Company Registration In India

If you are planning to open a startup company or a new enterprise in India then there are some reputable methods for it. Nowadays, all the documentation method is online. You do no longer need to go to the authorities’ workplace for every manner and query. MCA (Ministry of Corporate Affairs) continues reputable documents of the corporation registration.

To make the system handy and quick, structure ( INC-29 ) introduces. Company registration has merged a few steps such as DIN, Incorporation Application, and Business Name Approval into a single step or process.

Let’s see three predominant steps for Startup registration in India:-

  1. Obtaining DSC( Director Signature Certificate)
  2. Form INC-29 ( Preparation and filling)
  3. Incorporation Certificate

 

STEP 1: DIGITAL SIGNATURE CERTIFICATE (DSC)

There is an indispensable requirement of the Digital Signature Certificate in a Company. This is the first step towards registration. In this, you have to practice for the digital signatures of the directors or DSC. DSC is a legitimate e-signature on the documents and submits online. This is the most secure way and helps you complete the new enterprise registration online. There are some provisions given by using The Information Technology Act, 2000. It emphasizes for use of Digital Signatures and is submitted in electronic structure for documents.  It is to ensure the security and authenticity of the documents filed electronically. All such filings are completed under MCA 21 e-governance program.

It Normally takes 2 days to achieve DSC after submitting the documents.

 STEP 2: INC-29 FORM PREPARING AND FILING

Now the next step towards Startup company registration India is INC- 29 form. This form requires certain documents for its preparation. Below are some documents regarding the INC-29 form which is as follows:-

  • Director’s Identification Number ( DIN number )
  • Name approval
  • Memorandum and Articles of association ( MOA & AOA )
  • Registered office verification
  • Appointment letters and declaration

When you prepare your INC-29 form with the required documents, you have to file the forms for company formation. After that, you can move to the next step.

Now the subsequent step toward Startup registration India is INC- 29 form. This form requires certain documents for its preparation. Below are some files related to the INC-29 form which is as follows:-

  • Director’s Identification Number ( DIN range )
  • Name approval
  • Memorandum and Articles of affiliation ( MOA & AOA )
  • Registered workplace verification
  • Appointment letters and declaration

When you put together your INC-29 structure with the required documents, you have to file the varieties for corporation formation. After that, you can go to the next step.

STEP 3: INCORPORATION CERTIFICATE

After submitting all the documents you will get an Incorporation certificate. It is the legal document concerning to the formation of a company or startup business.

Required  Documents for Company Registration

  • A Passport-sized photograph
  • A copy of PAN Card
  • Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
  • Voter’s ID/Passport
  • Notarized Rental Agreement in English
  • No-objection Certificate from the property owner
  • Utility Bill for the registered address.

Visit Company Registration for extra details and free expert session as to which enterprise registration is suitable for your startup.

02 Mar
GST Returns

E-invoice under GST

The all-powerful GST Council has decided to introduce concept of e-invoicing under GST. This concept has been introduced in order to curb tax evasion which will be implemented in phased manner. The taxable person which falls under a certain threshold will be given a unique number whenever an e-invoice will be generated.

Criteria for Applicability of E-Invoicing

On 13th December, 2019, CBIC has issued several notifications and made some changes in the procedure of issuing invoices by some registered person. The key changes are:

  1. The e-invoicing will be available from 1st January, 2020 on a voluntary basis. It will be implemented in a phased manner by GSTN.
  2. The generation of E-invoice will be mandatory from 1st April, 2020 for businesses having turnover of Rs. 100 crore or more.
  3. The Quick Response (QR) code will be mandatory from 1st April, 2020 for B2C invoices issued by suppliers having aggregate turnover in a financial year exceeding Rs. 500 Crore

How to generate E-Invoice

From 1st January, 2020, the following portals shall be used for the purpose of preparation of e-invoices:

Benefits of E-Invoice

E-invoice resolves and plugs a major gap in data reconciliation under GST to reduce mismatch errors. E-invoicing will surely help the taxpayers to reduce compliances related to uploading of invoices. Tax authorities will have the access of all transactions as transactions will take place in real-time basis since e-invoice will have to be compulsorily generated through the GST portal. It will help in automation of the tax return filing process as all the relevant details of the invoices would be auto-populated and it will provide faster availability of input tax credit.

 

01 Mar
Income Tax Return

Decoding the New Tax Regime of Section 115BAC introduced in Union Budget 2020

The Finance Minister Smt. Nirmala Sitharaman has presented her 2nd Budget on 1st February, 2020.A new optional personal tax scheme has been proposed vide a newly inserted section i.e., 115BAC for the Individuals and HUF.

From the assessment year 2021-22 (FY 2020-21), individual and HUF tax payers have an option to opt for taxation under the section 115BAC of the Act provided they decide to forego the specified deductions and exemptions.

The option to pay tax at lower rates shall be available only if the total income of assessee is computed without claiming following exemptions or deductions:

  1. a) Leave Travel concession [Section 10(5)]
  2. b) House Rent Allowance [Section 10(13A)]
  3. c) Official and personal allowances (other than those as may be prescribed) [Section 10(14)]
  4. d) Allowances to MPs/MLAs [Section 10(17)]
  5. e) Allowances for income of minor [Section 10(32)]
  6. f) Deduction for units established in Special Economic Zones (SEZ) [Section 10AA];
  7. g) Standard Deduction [Section 16(ia)]
  8. h) Entertainment Allowance [Section 16((ii)]
  9. i) Professional Tax [Section 16(iii)]
  10. j) Interest on housing loan [Section 24(b)]
  11. k) Additional depreciation in respect of new plant and machinery [Section 32(1)(iia)];
  12. l) Deduction for investment in new plant and machinery in notified backward areas [Section 32AD];
  13. m) Deduction in respect of tea, coffee or rubber business [Section 33AB];
  14. n) Deduction in respect of business consisting of prospecting or extraction or production of petroleum or natural gas in India [Section 33ABA];
  15. o) Deduction for donation made to approved scientific research association, university college or other institutes for doing scientific research which may or may not be related to business [Section 35(1)(ii)];
  16. p) Deduction for payment made to an Indian company for doing scientific research which may or may not be related to business [Section 35(1)(iia)];
  17. q) Deduction for donation made to university, college, or other institution for doing research in social science or statistical research [Section 35(1)(iii)];
  18. r) Deduction for donation made for or expenditure on scientific research [Section 35(2AA)];
  19. s) Deduction in respect of capital expenditure incurred in respect of certain specified businesses, i.e., cold chain facility, warehousing facility, etc. [Section 35AD];
  20. t) Deduction for expenditure on agriculture extension project [Section 35CCC];
  21. u) Deduction for family Pension [Section 57(iia)]
  22. v) Deduction in respect of certain incomes other than specified under Section 80JJAA, 80CCD(2) and deduction under section 80LA for Unit located in IFSC [Part C of Chapter VI-A].

 

Watch our Video on Detailed Analysis of Section 115 BAC and its effects on Individuals and HUF:

Additionally, in case the assessee has business income, this option shall be exercised on or before the due date for furnishing the returns of income. Once the assessee has exercised the option for any previous year, it cannot be subsequently withdrawn for the same or any other previous year. The option once exercised for any previous year can be withdrawn only once in subsequent previous year (other than the year in which it was exercised) and thereafter, he shall never be eligible to exercise this option again except where such person ceases to have any business income.

However, if assessee does not have business income, the option must be exercised along with the return of income for every previous year. If an assessee, after opting for Section 115BAC, claims any of prescribed deduction or allowance in any previous year, then the option to pay tax at concessional rate shall become invalid for that year.

The Finance Minister in her speech highlighted that the new regime will help the tax payers in reducing their tax burden. Following is our analysis on the new regime in comparison to the existing tax scheme as introduced in the Bill: –

Nature of deduction available in the current tax regime Breakeven point When it is beneficial to opt for the new regime of Section 115BAC?
     
No deduction is allowable – Always
Deduction allowable under Section 80C 8,50,000 Income in excess of Breakeven
Deduction allowable under:

– Sections 80C

– Section 80D

 12,25,000 Income in excess of Breakeven
Deduction allowable under:

– Sections 80C

– Section 80D

– Section 16 (Standard Deduction)

 15,00,000 Never
Deduction allowable under:

– Sections 80C

– Section 80D

– Section 16 (Standard Deduction)

– Section 24 (Interest on housing loan)

 – Never

Disclaimer: This information is updated till 13 February 2020.

22 Feb
Income Tax Return

Income Tax Slab Rate for AY 2021-22

1.Income Tax Slab Rate for AY 2021-22 for Individuals opting for old tax regime:

  • 1. Individual (resident or non-resident), who is of the age of less than 60 years on the last day of the relevant previous year:
Net income range Income-Tax rate
Up to Rs. 2,50,000 Nil
Rs. 2,50,000- Rs. 5,00,000 5%
Rs. 5,00,000- Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

 

  • 2. Resident senior citizen, i.e., every individual, being a resident in India, who is of the age of 60 years or more but less than 80 years at any time during the previous year:
Net income range Income-Tax rate
Up to Rs. 3,00,000 Nil
Rs. 3,00,000 – Rs. 5,00,000 5%
Rs. 5,00,000- Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

 

  • 3. Resident super senior citizen, i.e., every individual, being a resident in India, who is of the age of 80 years or more at any time during the previous year:
 Net income range Income-Tax rate
Up to Rs. 5,00,000 Nil
Rs. 5,00,000- Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

       Plus: –

      Surcharge: – 10% of income tax where total income exceeds Rs. 50,00,000.

15% of income tax where total income exceeds Rs. 1,00,00,000.

25% of income tax where total income exceeds Rs. 2,00,00,000.

37% of income tax where total income exceeds Rs. 5,00,00,000.

Health and Education cess: – 4% of income tax and surcharge.

Note: – A resident individual is entitled for rebate under section 87A if his total income does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or Rs. 12,500, whichever is less.

  1. Income Tax Rates For HUF/AOP/BOI/Any other Artificial Juridical Person under the old tax regime:
Net income range Income-Tax rate
Up to Rs. 2,50,000 Nil
Rs. 2,50,000- Rs. 5,00,000 5%
Rs. 5,00,000- Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

Plus: – 

Surcharge: – 10% of income tax where total income exceeds Rs. 50,00,000.

15% of income tax where total income exceeds Rs. 1,00,00,000.

25% of income tax where total income exceeds Rs. 2,00,00,000.

37% of income tax where total income exceeds Rs. 5,00,00,000.

Health and Education cess: – 4% of income tax and surcharge.

  1. Income tax applicable to Individual and HUF under new optional  tax regime (Section 115BAC).

A new tax regime for Individual and HUF has been proposed by the Finance Bill, 2020 to tax the income of such assessees at lower tax rates if they agree to forego prescribed deductions and exemptions under the Income Tax Act. Special provision for calculating income of assessees opting for this section is prescribed under the said section.

Net income range Any Individual/ HUF
   
Up to Rs. 2,50,000 Nil
From Rs 2,50,001 to Rs 5,00,000 5%
From Rs 5,00,001 to Rs 7,50,000 10%
From Rs 7,50,001 to Rs 10,00,000 15%
From Rs 10,00,001 to Rs 12,50,000 20%
From Rs 12,50,001 to Rs 15,00,000 25%
Above Rs. 15,00,000 30%

Plus: – 

Surcharge: – 10% of income tax where total income exceeds Rs. 50,00,000.

15% of income tax where total income exceeds Rs. 1,00,00,000.

25% of income tax where total income exceeds Rs. 2,00,00,000.

37% of income tax where total income exceeds Rs. 5,00,00,000.

Health and Education cess: – 4% of income tax and surcharge.

  1. Income Tax Rate for Partnership Firm:

A partnership firm (including LLP) is taxable at 30%.

Plus:

Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.

Health and Education cess: 4% of income tax plus surcharge.

  1. Tax Rate for Companies: 
    • 1. Tax rates for domestic companies:
Particulars Tax rates
Company opting for section 115BA* 25%
Company having turnover or gross receipt of up to Rs. 400 crore in the previous year 2017-18* 30%
Company opting for section 115BAA** 22%
Company opting for section 115BAB** 15%
Any other company* 30%
MAT*** 15%
  • 2. Tax rates for foreign companies:

The tax rate for foreign company is 40%.

Plus: – 

Surcharge:-

Company Net income is between Rs. 1Cr. – 10 Cr. Net income exceeds Rs. 10Cr.
Domestic company 7% 12%
Foreign company 2% 5%

Health and Education cess: 4% of income tax plus surcharge.

  1. Income Tax Slab Rate for Co-operative Society:
    • 1. Income tax rates under the old regime: –
Net income range Income-Tax rate
Up to Rs. 10,000 10%
Rs. 10,000 to Rs. 20,000 20%
Above Rs. 20,000 30%

Plus:

Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.

Health and Education cess: 4% of income tax plus surcharge.

  • 2. Income tax applicable to co-operative society under new optional tax regime (Section 115BAC): –

Income of a co-operative society under the new regime is taxable at flat rate of 22% provided it forgoes specified deductions and exemptions and computes its income in accordance with the provisions of the new inserted section.

Plus:

Surcharge:- 10% of income tax.

Health and Education cess: 4% of income tax plus surcharge.

  1. Income Tax Slab Rate for Local Authority:

A local authority is taxable at 30%.

Plus:

Surcharge:- 12% of tax where total income exceeds Rs. 1 crore.

Health and Education cess: 4% of income tax plus surcharge.

 

Disclaimer: This information is updated till 01 February 2020