Difference between Bookkeeping and Accounting?

When most small business owners consider the terms bookkeeping and accounting, they often use them interchangeably. While it’s true both bookkeeping and accounting are important within the management of your company’s finances, some key differences between the 2 functions do exist. Therefore, business owners got to understand the roles of every and the way they work together to make sure your company’s success.

Yes, bookkeeping and accounting both need to do with money and therefore the financial picture of your business, but there are key differences. Here’s your chance to know them.When running your business, your ability to grow and succeed is usually hooked in to how organized your financial records are. But managing your business finances is quite just recording your financial transactions and balancing your checkbook. For your business to flourish, you want to be ready to access and use your company’s financial reports to develop a workable business strategy. While both bookkeepers and accountants handle your business’s financial information, they perform different tasks within your company’s financial cycle.

The Function of Bookkeeping

Bookkeeping is comprised of the tasks required during the primary a part of the accounting process. It involves the consistent, timely, and accurate recording of a business’s financial transactions in chronological order. A bookkeeper’s duties include:

Maintaining an entire and arranged set of books, comprised of the overall ledger and every one subledgers (i.e., fixed assets, inventories, assets , accounts payable, cash, tax, costs, and sales) during which to post financial transactions.

Creating and issuing customer invoices.
Recording suppliers’ invoices.
Paying suppliers.
Logging cash receipts from customers.
Documenting inventory changes.
Processing employee payroll.
Managing fund transactions.
Preserving all supporting documents for all business transactions.

A bookkeeper follows a selected set of procedures to perform these duties on a repetitive basis. The complexity of a company’s bookkeeping system depends on the dimensions of the business and the way many transactions are completed on a daily, weekly, and monthly basis. Typically, an accountant or the tiny business owner oversees the bookkeeper’s work.

The Function of Accounting

Accounting involves the method of analyzing, interpreting, reporting, and summarizing the financial data recorded by the bookkeeper or the business owner. a number of an accountant’s responsibilities include:

Preparing adjusted entries (i.e., earned revenue or incurred expenses that haven’t yet been recorded during the bookkeeping process).
Preparing financial statements on the condition and performance of the corporate .
Creating management reports to deal with specific issues.
Analyzing operations costs.
Creating a corporation budget.
Compiling tax returns from the financial data.
Helping the business owner understand the company’s financial data and therefore the impact of his/her financial decisions.

Basically, the accounting process helps you understand where your business stands financially at any point in time by measuring your company’s progress within the terms of growth and financial success. Additionally, the financial data generated helps you to form informed business decisions, so you’ll plan for your company’s future.

Benefits of Filing Income Tax Return (ITR)

Income Tax Return is a document an individual is required to file with the Income Tax Department on a yearly basis. However, it is not mandatory for everyone to file the Return. If your income in the previous year is above the basic exemption limit of INR 2,50,000 (Rupees Two Lakh Fifty Thousand only), then you are required to file the Income Tax Return compulsorily.

Even though it is not mandatory for some persons to file the Income Tax Return, one should file it every year as there are many benefits of filing it.

Here are some of the major benefits of filing Income Tax Return:

Loans and credits:
 In order to urge a loan, one should have the tax Returns for the last three years. All banks and lending institutions invite a minimum of three years of tax Returns to grant a loan to a private . At the time of processing application , banks and lending institutions check the declared income and source to verify the repaying capacity of the individual seeking a loan. They use tax Returns to verify an equivalent .

In case you’re seeking a private loan, a home equity credit , or a automobile loan , it’s essential for you to file tax Return. If you often file tax Return, you’ll get a loan from any bank or financial institution very easily. Even the banks prefer allotting credit cards to perons who file regular tax Returns.

Easy to claim your TDS:
 TDS means Tax Deducted at Source. it’s a Tax deducted from your income by the person paying the salary or making the other payment on which TDS is applicable. The deductor while making the payment deducts the tax amount and pays it to the tax department directly on your behalf.

You may get the tax amount so deducted by filing tax Return. If there’s no tax amount payable at the time of filing the tax Return, the entire TDS amount are going to be refunded.

If you’re working as an employee during a company and earning but Rs 2.5 lakh a year, you’ll claim your TDS from the Tax department. just in case you’re a businessman and need your TDS to urge back in your account, it’s mandatory to file an ITR per annum .

For going out of country
 In order to use for a VISA to go to any country, you would like to possess tax Returns. While giving VISA, embassies officials check the income proofs and address proofs of a private . Thus, tax Returns are checked by the officials to verify the income and address. Therefore, if you’re getting to go abroad, you want to get your tax Return filed immediately.

From the fiscal year 2017–18, tax Return of a previous year are often filed within the same assessment year only. After the top of the assessment year, the tax Return of the previous year can’t be filed.

Required for giant insurance cover:
 If you would like to use for an insurance cover of over INR 50,00,000 (Rupees Fifty lakh only), the insurance companies invite tax Return. The annual income and tax returns help insurers to work out the precise premium amount and security amount. Most of the days , tax Return may be a necessary document for purchasing an insurance cover.

Helps in executing financial transactions:
 Income Tax Return is required just in case of executing some financial transactions. Transactions or payments for house, car, mutual funds etc require tax Returns. Some payments for giant investments also need tax Returns.

Address proof:
 Income Tax Return works as an address proof in many government organisations and agencies. you’ll use it as an Address proof in situ of unavailability of other documents.

Source: http://companyformationindia.com/blog/benefit-filling-income-tax-returns.html

How to sell on Online Portal

Step 1

Register your business (How to Sell Online in India)

There ar three choices to try and do a similar. Please choose the most effective possibility supported the variations listed below.

Private Ltd.
Entrepreneurs reaching to raise funds for angles or VC’s
If you’re 2 or additional partners
Time Taken: five Days
Cost: Rs fifteen,000

LLP
Best suited to traders and on-line sellers
If you’re 2 or additional partners
Time Taken: five Days
Cost: Rs 8,500

Proprietorship
Best suited to individual traders and on-line sellers
Time Taken: two Days
Cost: Rs fifteen,000

Step 2

Apply for a store and institution act license
It will price you Rs 1500 to Rs 3500 looking on the kind of structure. it’ll take solely two days to urge his registration. it’s mandatory for all kind of businesses and is necessary to show the license at registered workplace.

Step 3

Apply for GST registration
This is a mandatory registration needed to sell on-line. The time needed for a similar are going to be five days.

What is company incorporation

Incorporation of a corporation refers to the legal method by that a company entity or a corporation is born or comes into existence. a company company is separated from the legal entity on its own.
But These firms are often known with terms like Iraqi National Congress or restricted or personal restricted in their names and, it had become a company legal entity, that has utterly separated from its house owners.
Let begin the procedure for Company Incorporation
However, a bunch of seven or additional folks comes along to make a public company, and solely 2 ar required to make a non-public company.
Here, ar the subsequent steps concerned within the incorporation of the corporate
1. Ascertaining Name of the corporate
Similarly, the primary step of the incorporation of the corporate is to decide on AN acceptable name. because it has known by its name, wherever it’s registered. And, it's conjointly essential to get the approval of the Registrar to its projected name. On hearing regarding the accessible name, the promoter should decide the name for the corporate.
Similarly, promoters have to be compelled to write AN application to the Registrar firms of the State for the corporate incorporation. As five hundred rupees should pay with the appliance. The Registrar then permits the corporate to adopt the name given. And, they fulfil all the legal documents formalities among a amount of 3 months.
2. Preparation of ratite and AOA for company’s Incorporation
a. memoranda of association
Therefore, the memoranda of association has noted a constitution or rulebook. It describes the scope and object and therefore the relation outside the globe. it's to sign a minimum of seven-person. if it's a public Ltd.. and two-person for a non-public Ltd., And, The memoranda should properly stamp.
b. Articles of association
Besides memoranda, the promoters also will prepare the articles of association. it's primarily a document that state rules, that the inner management of the corporate can follow. However, it creates a contract between the corporate and its members.
Therefore, this text mentions the rights, duties, and liabilities of the members. And, it's equally binding on all the members of the corporate.
3. Preparation of different documents for company’s Incorporation
The promoters ar expected to arrange the subsequent document at the time of incorporating the company;
The first step – consent of administrators.
Second step – Notice of registered address.
Third step – Particulars of administrators.
It is needed to own a registered workplace and its data should be filed with the registrar among thirty days.
The declaration should signed by AN advocate of the supreme court or tribunal or professional or lawyer of tribunal or active controller.
4. Payment of fees
A prescribed fee should paid to the registrar of the corporate throughout the course of incorporation. It depends on the nominal capital of shareholders of the corporate.
5. Company’s Incorporation certificate
Since all the specified documents should file with the registrar, the registrar is totally happy, that each one the documents have consummated by the corporate, that is being incorporated. And, he can register the corporate, and issue the certificate of incorporation.
Therefore, it's proof that each one necessities of the Act are met.
6. Certificate of Incorporation
Once the certificate of incorporation, the corporate becomes the legal entity and perpetual succession. this is often conclusive proof of the existence of the corporate. Once, the certificate has issued by the corporate involves the existences from the date mentioned on that.
7. Commencement of business
Therefore, a non-public company has not needed to induce a Certificate of Commencement. it's a straight method, to start out the work once obtaining a Certificate of Incorporation. A public company should complete bound formalities, As, it's needed to induce the Certificate of Commencement. before, it starts the work of incorporation.
8. Capital subscription
After, the formalities of the company’s incorporation, ensuing stage is to lift funds. a non-public Ltd. and therefore the public Ltd. will begin, the business like a shot with none share capital.
A public Ltd. cannot start business unless the minimum subscription within the prospectus has not signed. And, the allotment should receive in money and created properly.
Additional data should note
As per the Rule-16(1) of the company’s incorporation, each subscriber should file with the registrar, at the time of incorporation.
Name
Date of Birth & Place Of birth
Occupation
PAN card variety
Educational qualification
Nationality
Father’s/Mother’s name
Permanent residential address
Email, phone no., Fax no. (Optional)

Why should you incorporate a Private Limited Company?

A private limited company is a môst flexible and credible structures ôf businesses. It is a type ôf structure wherein investors can be separate and the peôple managing the cômpany that is directôrs can be different. It can have cômbinatiôn ôf variôus instruments like preference shares, equity shares ôr debentures.

Separate Identity

A private limited cômpany has a separate identity and is different frôm its directôrs.

Easily Transferable

Private limited cômpany can be purchased i.e by purchasing shares and can be sôld just like any cômmôdity. Hence it is easily transferrable.

Easy to boost funds

Raising funds frôm investôrs is incredibly straightforward during a personal company. personal restricted will raise funds by method ôf equity shares, preferred stock ôr debentures.

Trustworthy and credible

Private company has a lot of cômpliance and is mônitôred by strict set ôr rules. All the knowledge is on the market on-line. therefore the company and banks can trust a Privte company quite the other structure.

Tax edges

Wth the launch ôf Startup Asian nation theme the govt has given a deduction fôr three years for brand new start-ups. There area unit sôme cônditiôns related to a similar that we've got mentioned in another blôgs.

Private Limited Company | Company Formation in India

Learn all about DIR- 3 KYC

Starting your own business may be a long cherished dream and changing into a Director is that the most honourable position. As you all apprehend that to begin a corporation in Republic of India it's vital to urge the corporate registration through with the Registrar of firms and wish to follow the rules arranged down by the Ministry of company Affairs.

Suddenly there was a bout of confusion for all the administrators of the corporate by receiving messages from the Ministry of company Affairs to file the DIR- three KYC before the maturity date that was fifteenth Gregorian calendar month 2018 to hold on along with your prestigious position as a Director and keep the DIN standing Active.

So all the leased Accountants, Company Secretary companies were activated with this news and were needed to support their revered purchasers seeking for the main points and the way to travel concerning it.

As we tend to all square measure aware that the Ministry of company Affairs makes amendments and frames rules as per the businesses Act 2013, DIR- three KYC was conjointly introduced within the year 2018. In straightforward terms, i'd prefer to justify all concerning DIR- three KYC.

Documents Required:
1. Name (as per PAN database)
2. Father’s Name (as per PAN database)
3. PAN of the Director (mandatory for voters of India)
4. Date of Birth (DoB)” (as per PAN database)
5. Personal Mobile variety and private Email Address
6. Proof of gift Address like financial statement or any Utility Bill within the name of the director with the right address, less than a pair of months previous.
7. Aadhaar is obligatory, if it's appointed. If not, then elector ID or Passport or license shall be connected.
8. Digital Signature of Director (Rs 800 are going to be requested if DSC isn't offered or DSC has expired)

Pre-requisites for filing the DIR- three KYC
1. The DIR- three KYC type must be punctually certified by a active leased businessperson/ Company Secretary/ Certified Management Accountant
2. The form ought to be uploaded beside the Director’s Digital Signature Certificate (DSC)
3. For Associate in Nursing Indian subject, the PAN mentioned in DSC are going to be verified with the PAN within the DIR- three KYC type
4. For Foreign nationals, the name within the DSC and therefore the name within the DIR – three KYC type ought to match
5. Non-Resident Indians (NRIs) should have a far off address and mobile variety
6. In case of multiple DIN numbers, the Director must retain the oldest DIN variety and submit all the most recent ones by filing DIR five type.

So, all this exercise is completed by the govt. of Republic of India to create the business clear and authentic, and anyone or everybody can't be a Director. To be a Director in Republic of India, it's obligatory to possess your documents done as per the Indian Government standards.

COMPANY FORMATION IN INDIA |  COMPANY REGISTRATION IN INDIA

Electric Vehicles Market In India

Electric Vehicles Market In India

The government of Bharat in its latest budget extended many new announcements to spice up the retardation automobile economy, as well as a bunch of reforms for remodeling the electronic vehicles market. during this post, we tend to highlight the nuances of the booming electrical vehicle trade and conjointly forecast prospects of investment during this forthcoming section.

Why is Bharat the correct marketplace for electrical Vehicle development?

Various freelance and government surveys have shown that besides a wonderful future for electrical vehicles, it’s the 2 and three-wheeler electrical vehicles that square measure slated to indicate the best growth. we tend to presently have one.5 million electrically high-powered three-wheelers on the road. Bharat is additionally the third-largest automobile market within the world, creating it the electrical Vehicles section a robust consumer-driven business. With the planet attention shifting to the adoption of cleaner technologies with smallest environmental impact, the longer term of the electrical vehicles trade looks bright, albeit with many challenges.

Government Schemes for electrical Vehicles

1.FAME — quicker Adoption and producing of Hybrid and electrical Vehicles

This theme, with associate degree outlay of ten,000 crores has primarily been created for investment in charging stations with participation from each non-public businesses and also the public sector. comes for rising infrastructure create mentally a faster-charging dock for little vehicles and bigger charging docks for buses and significant vehicles. Original instrumentation makers are given incentives like subsidies underneath the theme for innovation, fitting charging networks, simplifying the method of operation and installation electrical vehicles. Buses priced up to two crores, hybrid vehicles underneath Rs fifteen lacs, three-wheelers underneath Rs five lacs and two-wheelers underneath Rs one.5 lacs will avail incentives underneath the theme.

2. Tax rebates to consumers of electrical vehicles

Besides providing subsidies to makers, the budget free by minister Nirmala Sitaraman earlier this month created the government’s intention of promoting the buyer aspect of the electrical vehicles trade terribly clear. whereas automobile loans for ancient vehicles square measure simply accessible and provide lots of straightforward finance choices, the electrical vehicles are priced higher.

To ease the burden on the customer and facilitate finance, associate degree taxation rebate of up to one.5 lacs on the interest element of loans taken by customers to shop for electrical vehicles is offered, with a complete of two.5 lacs over the complete loan amount.

Moreover, impost exemption on lithium-ion cells has been declared to cut back the value of mercantilism this essential element of electrical vehicles, and several other new exemptions underneath direct and indirect taxes square measure two-wheelers for producing inputs for the electrical vehicles trade.

3. Training courses on electrical Vehicles

Ministry of talent Development and Entrepreneurship has conjointly declared new ITI courses on electrical Vehicles to take care of a gradual and trained men able to strive against the rise in demand.

Comparing the Indian industry with Developed Markets like China

The International Energy Association information reports that China is that the quickest growing trade once it involves electrical vehicles. China has obligatory strict restrictions on investments in new gas or diesel plants and plans to sell four.6 million electrical vehicles by 2030. Similarly, Japan has conjointly offered support to its domestic manufactures for export of electrical vehicles associate degreed has framed an formidable target of reducing emissions from conveyance sources by eightieth. Thus, if Bharat doesn’t capitalise on its expansive industry, upgrade its existing infrastructure and train shoppers and men to adopt this technology, many countries would stand to realize. The NITI Ayog is additionally considering a proposal to ban all ancient combustion engine vehicles by 2025.

Challenges

While a rise in gas and diesel excise duty, parking cess, congestion taxes etc square measure necessary for shifting demand towards the utilization of electrical vehicles, they’re at the tip of the day forced and artificial suggests that. A general drawback relating to the utilization of electrical vehicles is that the lack of infrastructure that Bharat must power its retardation industry, and a modification within the general perception relating to pollution, congestion and air quality impacts of vehicles that use ancient fuels.

Since the celebrity theme, section two shifts its concentrate on charging — metal battery assumes bigger significance. one in all the main issues within the electrical Vehicles trade is that the lack of accessibility of metal and alternative parts that structure the composition of a chargeable battery.

Manufacturers UN agency invest in developing electrical vehicles and its parts just like the lithium-ion battery etc square measure secure incentives by the central government. it’s conjointly believed that a correct utilisation mechanism for electronic waste like previous computers, cellular telephone batteries etc may be wont to extract metal that may be utilized in the electrical vehicles’ battery creating method.

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COMPANY FORMATION | COMPANY INCORPORATION | FDI IN INDIA