#GstandTdsAccountingSoftware

[ceaarcloudrecords]

Tax Collected at Source (TCS) – An Insight

Tax Collected at Source or simply, TCS is a system of mandatory advance collection of tax by a seller of specified goods, from his buyer at the time of receipt of sale consideration or accrual in the books whichever is earlier. TCS has been introduced to curb defaults in payment of income tax just like the concept of TDS, albeit a lot simpler.

 TCS applies to those,

1.         Who deals with the specified set of goods as per section 206 of ITA 1965, and

2.         Bought the specified goods for trading purposes,

 and applies to those

 3.         Sellers who have made a turnover of INR 10 crores or more in the last FY, and

4.         Buyers who have made an aggregate purchase of INR 50 lacs or more in the current FY.

 Now, once the seller falls in the ambit of TCS, he/it shall have to apply for a TAN or Tax deduction or collection Account Number in the Form 49B here. TAN is required to be quoted on TCS returns and challans. Further, failure of applying for TAN shall be attract a penalty of INR 10,000 under section 234E.

 As mentioned earlier, TCS shall be collected at the time of receiving the sale consideration or accrual in the books whichever is earlier and shall be calculated as a % of sale consideration exceeding INR 50 lacs.

 TCS shall be collected on [Taxable amount = sale consideration – INR 50 lacs]. Sale consideration includes GST amount as well.

 There shall also be a surcharge levied additional to the basic TCS based on the legal status of the buyer and the transaction amount.

 Further details are provided in the full article on ceaar.com website under blog section. CEAAR is a tax compliance enabled invoicing and accounting application to enable the companies and professionals to handle the taxes like GST, TDS, TCS and payroll taxes with ease, comfort and confidence. Please visit www.ceaar.com to know more.

 SankeerthanaAyyadevara

Tax Specialist

keerthanaa99@gmail.com

[ceaarcloudrecords]

GST and TDS compliances for small businesses – an awareness drive

Small companies are now faced with two major problems, one is failed compliances, the resultant huge penalty payments and the other is the not able to maintain proper books of accounts. Legal compliances are an integral part of any business. It ensures that the business runs smoothly, avoids penalties or legal actions that hamper operations.

 Small businesses include freelancers, professionals, sole proprietorship firms, partnership firms, and private limited companies. Following are some of the compliance areas:

 ·         Goods and Services Tax (GST): Introduction of GST has brought in many compliance issues for small business which are covered under it. Businesses with an annual turnover of over 40 lakhs are required to get registered under GST. There are lot of procedures like formatted invoices and eWay bills to be issued. Periodic GST returns are required to be filed.

·         Tax Deducted at Source (TDS): Similarly there are frequent changes to income tax law related issues like TDS and Tax Collected at Source. It involves collection, payment and reporting within the stipulated dates periodically.

·         Payroll deductions and taxes: For any businesses to be covered under payroll deductions and taxes, there are different eligibility criteria for each of the components. It includes professional tax, ESI, PF, TDS etc.

·         MCA compliances: Filing of incorporation forms with the MCA like Memorandum of Articles of Association and a common seal of the company. Periodic filing of financial statements with the annual returns and event-based forms, minutes of board meetings with the MCA. Filing of IT Returns and also GST Returns (if applicable).

 Limitations faced by small businesses:

 Trained staff: Small companies are always limited by financial resources, which has a spiralling effect on manpower resources. Small companies cannot hire highly paid qualified resources like chartered accountants and tax consultants. On the other hand, qualified staff does not want to join smaller companies as they feel they will have limited exposure and it will dent their growth prospects. Financial issues are forcing the small businesses tohire low cost untrained employees, who does not completely understand the ever changing compliance scenario.

 Accounting Software Applications: Higher level of compliance can be achieved with the use of expensive accounting software applications like ERPs. ERP software applications involve high cost of installation, implementation, support, maintenance and staff training.

 These companies often gets into this paradoxical situation and always ends up paying huge penalties to relevant authorities. Instead, if they are provided with a simple to use and easy to understand invoicing and accounting software application that guidesand alerts them to take necessary actions and file required reports and returns, they can better manage the risk of failed compliances and huge penalty payments.

 Cloud Records Private Limited,developed a cloud based invoicing and accounting software application to maintain the business records like invoices, vouchers, ledgers and generate required reports as per the guidelines given by various tax authorities governing the small companies. This application is developed in India for Indian companies. Please visit www.ceaar.com to know more.

  Rama Krishna Akkaraju (CEO)

Email: rk@ceaar.com