Do and Don’t for Business Enterprise
- It is a very big and risky task to start a business in this global era and more then that the big and complicated thing is to maintaining the business in competitive world of the business and increasing profitability as well as savings the tax liability.
- To maintain the business with profitability, what can be done by a good business man is very important.
- There are some ways which can be helpful to business enterprise and a vast change can be made by improving it with such important ways and plans.
- The business and profession is the high source of income in all over the world which motives for generating the profit.
- The businessman and professional should plan their business expenses in such a manner as they will allowed to deduct from profits as the profits will be low so as the taxes.
- Depreciation is a big tool for businessman in saving the taxes, however the depreciation should be planned advisedly to make effective.
- Expenses on scientific research or in house research expenditure, preliminary expenses, bad debts are advisable to deduct from the profit of the enterprise.
- Any contribution to employer provident fund and any statutory liability to be paid on or before the due date to claim the deduction and avoid its disallowance.
- A business should get their books of accounts audited if the gross turnover or sales exceed 100 lac rupees in the previous year where in the case of profession; the limit is 25 lac rupees in the previous year under the provision section 44AB of the Income Tax Act.
- A professional is required to prepare and maintain books of accounts if total receipts are more than 150000 rupees in a financial year where in case of business the limit is rupees 10 lacs.
- TDS should be deducted on certain payments like interest, royalty, fees, technical services etc. TDS should be deducted according to the rule and deposited in the income tax account timely to avoid any problem as well as the disallowance as expenditure.
- According to the section 40A (3) of the income tax act, the assessee can pay less than 20000/- rupees to any creditor/contractor or any bill in a single day. Any payment more than 20000/- rupees can be paid by account payee cheque, demand draft, RTGS or any other mode of payment of banks. If payment more than Rs. 20000/- is paid to any party in a single day in cash, such amount is disallowed and treated as income of the business or assessee.
- If payment towards any expenditure at a time is Rs. 5000/- or more, then it is required to fix one rupee revenue stamp on such voucher.
- If we see in the VAT related matters, then there is many things to be considered for the business enterprise.
- The enterprise has to take compulsorily Tax Invoice bill from the purchasing party for VAT purchase to take the credit of the same against VAT sale.
- The enterprise has to issue compulsorily Tax Invoice bill to the selling party having TIN number of the Gujarat for VAT Taxable sale.
- The enterprise can issue Retail Invoice bill to the selling party having no TIN number or Sale outside State.
- The enterprise having CST number is required take Invoice bill mentioning CST 2%.
- It is also required to issue C Form for the purchase against the C Form.If there is any sale against H Form, then purchasing party is required to issue H Form and also the bill for landing the goods.
- VAT payable is required to pay within 22 days of succeeding the month/quarter.
- Monthly filing of the return is mandatory for the party having VAT payable Rs. 60,000/- or more annually.
- The party having the VAT payable less than Rs. 60,000/- is required to file the return quarterly.
- E-filing is mandatory for the party having the CST registration number along with annual turnover 1 crore, where as the party having only VAT registration number can file the return manually. The party after E-filing the return does not require filing the return manually.
- It is required to file the return within 75 days form the end of the month for the party filing the return electronically whereas the time limit for filing the return is 30 days from the end of the month for the party filing the return manually.
- A dealer having turnover exceeding Rs. 1 crore and taxable turnover exceeding Rs. 20 lacs is liable to get his accounts audited within 6 months from the end of the year and submit the same within 30 days of the date of the audit report received.
