Category: Blog

How to apply for TDS Refund?

TDS is deducted by the client at the time of payments and is deposited with the Income Tax Department as tax deducted on behalf of the person/entity to whom the payment is being made.

Most of the service providers do not object to TDS deductions, as it is allowed to be claimed as a credit after filing the Income Tax return. The only condition to this is that the balance amount after filing the income tax return is required be to taxable and TDS refundable.

Let us now understand the Procedure for applying for TDS Refund

TDS Refund is not a preformat based application. A taxpayer becomes eligible for TDS refund once s/he files his income tax return and in that, they should be able to detail out the calculation of his payable income tax and also the total TDS which is been deducted over the period for which income tax return is filed.

Once the books are updated and the above details are refurbished, any accounting software will automatically reflect the refundable amount of TDS and the same will be refunded in a certain period of time.

On filing the income tax return, when a tax payer mentions about any dues in the form of TDS refund, the income tax officer takes time to sanction the refund. However, the refund comes with an additional interest of 6% per annum in the cases where payable refund is more than 10% of the total tax payable in the same financial year.

An intimation is sent to the tax payer under section 143(1) with the refund with the details of the computation of interest. The tax payer can connect with the income tax officer in case of dissatisfaction with the interest paid.

Previously some cases were noticed where some agencies asked the taxpayers for their bank details on approval of income tax refunds. Such cases were reported as scam and the Income Tax department alarmed the tax payers to not indulge into such emails or phone calls. The Income Tax department maintains that once a refund is approved, it is automatically credited to the provided bank details.

Some of the discrepancies occur due to the mistakes in return filing, the bank account closure, a wrong branch or may be typo error in your IFSC details etc., are the only reasons for delay.

Learn how to check the TDS Refund Status?

One can easily check the TDS refund status online with the help of the PAN number and the year for which the return is sought. Banks like SBI also provide status of TDS refund thru email and a toll free number.

Other significant points regarding TDS Refund include:

  • 1. You need to file income tax return to assess the refund.
  • 2. You can expect a TDS refund as soon as you file your ITR.
  • 3. Deductions made as TDS reflect in Form 16 and 16A.
  • 4. Consolidated TDS deductions reflect in Form 26AS.
  • 5. Incase, you fear that deducted TDS amount can surpass the taxable amount that year, s/he can file Form 13 in advance for Nil/Lower Deduction of TDS.

Further more, you can get in touch with us to understand the TDS Refund status and also for other Taxation related and Accounting related services. Feel free to connect to us at, info@gapeseedconsulting.com or call +91-9599444630

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Save Tax through the following Tax Exemptions

Did you know that it is possible to save your income tax out flow by far a large amount?

Do you want to know about Tax Planning through Tax Exemptions?

Did you know that we can help you with this year’s Tax Filing? Are you wondering about redeeming some of the previous year’s tax which you filed and weren’t aware of exemptions.

Then this is the post for you. Read further to understand how you can save tax through following tax exemptions. All this is possible legally under the Indian Income Tax Act which allows certain deductions which can be claimed to save tax at the time of filing of Income Tax Return by all classes of taxpayers . All you need to do is a proper tax planning which would allow certain deductions from your gross total income and income tax would be levied on the balance income as per the income tax slabs. Here are certain year-end tax tips to get smarter with tax management.

  • House Rent Allowance (HRA): It is the best tax saving tool which a taxpayer can use. Under this you can save upto 50% of your salary if you are staying in a metropolitan city like Mumbai, Delhi, Chennai or Kolkata else 40% if you reside in non-metro. Apart from this if actual rent paid is lower than 10% of your basic salary received then there is no exemption. Be aware that you cannot claim any exemption under this section if you love in your own home or of you are not paying rent to anyone.
  • Medical Reimbursement: If your employers provide you medical reimbursement facility for your medical expenses you can get tax exemption. No income tax on medical reimbursement is levied up to Rs. 15000 provided all bills for the same are produced by the employee to the employee. This also includes premiums that your company might be paying for your health insurance schemes and on treatments of any critical diseases. It is to be noted that no income tax on medical reimbursement is levied upto Rs. 15000, the amount received as medical allowance would be fully taxable.
  • Deductions on Section 80C, 80CCC: Under Section 80C a deduction of Rs.1,50,000 can be claimed from the total income you earn. In simple terms you can save up to Rs. 1,50,000 from your total taxable income under this section. Please note this deduction is allowed to an individual or a HUF. Under Section 80CCC it provides deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer. The plan must be for receiving pension from a fund referred to in Section 10(23AAB).
  • Leave Travel Allowance (LTA): It is the most common element of compensation which the employers use to remunerate employees due to the tax benefits attached to it. An LTA is the remuneration paid by an employer for Employee’s travel in the country, when s/he is on leave with the family or alone. LTA amount is tax free. Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt. Please note that The total cost of the holidays is not covered, only the travelling cost is covered.
  • Spend more: Increasing expenses, such as paying off bills or other debts or paying out bonuses to employees, it will help increase your deduction for the current year. If you’ve delayed major purchases for your business, you should go ahead and buy it. Not only can you find great deals as businesses try to clear out inventory, you’ll have more deductions. In general capital improvements and new equipment should be capitalized and depreciated over 5, 7 or 10 year period.To know more about tax planning, tax exemptions and to get smarter with tax management for this financial year, drop us a line here and we will be happy to provide you our Tax planning services .  You can also write us at info@gapeseedconsulting.com  or, call us for Tax Advice at, +91-9599444639.

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The Evolving Role of Internal Audit in Growing Companies

Without any doubts, today’s organizations face a global economic crisis of historical proportions. In response to that, management, board of directors and leaders throughout the organization are taking fresh look at virtually all aspects of the business to assess how to enhance productivity, processes and systems, yet still stay “in control.” They are starting, and very likely will continue, to think and respond differently as they determine how to operate their businesses successfully and maintain plans for long-term growth in today’s unique business environment.

As the mandate and role of internal audit continue to evolve, managements are increasingly counting on internal audit functions in their efforts for managing fraud risks and keeping organisations protected. Increasingly, the internal audit function is not to monitor and detect but also to investigate fraud incidences when they arise. The role of internal audit in fraud risk management by way of preventing, detecting and investigating fraud has amplified as a result of economic uncertainty and increased focus of certain organisation’s management on fraud risks.

Internal auditors traditionally look beyond financial risks and statements to consider wider issues such as the organisation’s reputation, growth, impact on the environment etc. The fundamental function of an internal audit team are Assurance, Assessment and Recommendations, Oversight, Advisory Services.

The changing role of Internal Audit

Internal auditing professionals not only must understand these challenges and their organization’s key objectives, but also ensure that amid the many organization wide changes taking place on almost a daily basis, key controls and processes are adequately addressing these changes and the new risks that emerge, and are functioning as intended. Internal audit plays a critical role in helping companies successfully “manage the change” by providing assurances that with every new process, procedure and initiative, any significant new risks that emerge are identified, monitored and managed effectively, so that the enterprise is protected on an on-going basis and to a level that satisfies management and the board.

An effective audit planning process that focuses on organisational strategic imperatives and key business risks will identify an appropriate blend of advisory and assurance reviews. The updating of the audit plan can no longer be an annual process. The audit plan must be refreshed regularly (e.g., quarterly) and with triggering events. Leading functions are developing a ‘3 + 9’ plan — a three month frozen window and nine month fluid plan. For those that do not, the risk of unpreparedness, of being too slow to react to the changing risk environment or market events is simply too great, leaving organisations perplexed to react to events, some of which include:

  • Transactions (mergers, acquisitions, carve-outs or divestiture)
  • New product launch or retirement
  • New market entry
  • Patent expiry
  • Litigation

Mandate for Internal Audit

    • Strategic and valued advisor:The Internal Audit function serves as a subject-matter resource to business management around strategic initiatives, challenges and changes in the organisation. The function has the people, knowledge and experiences to effectively provide this level of service.
    • Business insight: In addition to covering the ‘basics,’ the Internal Audit function is designed to provide high-quality, relevant business insight as an integral part of its activities. Business insight is not a by-product, but an explicit outcome from the function’s activities.
    • Control and compliance monitoring structure:Internal Audit functions should be focused on evaluating the design and the effectiveness of internal controls in the areas outlined, in their charter or mandate. This also includes focusing on compliance with key regulations and policies.

Also, internal audit must think expansively when seeking ways to add value to the organization. Too often, we find internal audit functions stop short of making recommendations that could create value for the organization for fear of overstepping their place. However, “consulting” is part of the Institute of Internal Auditors’ definition of internal auditing, and we believe that appropriately empowering this function provides management with greater opportunities to create value without compromising independence.

At Gapeseed Consulting we work with your organization, virtually of any size to assist you with your internal audit activities. We believe the Internal Audits are now required to find different ways to increase shareholder value and increase the attractiveness of the company to investors, senior executives, especially the risk officers and advisors on board.

Internal Audits are required for all set of businesses which are emerging as progressive business units, our Internal auditors partner and build relationships with the client business in order to keep a finger on the pulse of the organization and thereby act as your growth partners.

To know more about our Internal Auditing services click here or get in touch with our team at, ranu@gapeseedconsulting.com

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Simple Tips to Design a Salary Structure for an Employee

Having an absolute salary structure makes it easier to manage your salary expenditure. Not to mention, it can help you retain your current employees, as well as make your recruiting, hiring and promoting efforts more focused and easier to execute.

If you’re considering creating a salary structure, here are a few tips to help you get started.

Benchmark jobs

It should start from here, you need to know the value of each position you offer in your organization. Know the market, know your competition and see what others are paying for similar jobs. There are a variety available salary survey sources that can provide you with data related to salary information for various positions and different industries. You could easily know about benchmark jobs, but this mostly works out for jobs in which duties and responsibilities are generally defined. Once you have identified the benchmark jobs you can compare the market rate according to your budget, you could use statistical procedures to plan it up. Or you can simple get in touch with our HR department.

Consider company’s competitive position

The competitive position of company is its overall salary level compared to market average when compared with the benchmark jobs. This helps you answer if the salary rates for your employees currently above, below or comparable to the rates of your competitors. You should decide what competitive position suits best to your company. Some other things which could be solved by doing this could be if you need to pay at a higher-than- market level so to retain your current employees? Pay according to the market level which attracts better quality candidates or pay according to your budget.

Set-up compensable leverage

Compensable leverage refers to how much more or less salary rate increases in your company, overall, compared to the market rate increase for higher-paid positions in the organizational hierarchy. See this for an example, when employees are promoted to a higher position within the organization, will they receive an increase in salary rate that is similar to, greater than or less than the rate increase provided, on average, in the market. It’s important to determine the desired compensable leverage for your company. This will allow you strike a balance between providing attractive salary increases to employees for promotional opportunities and maintaining an affordable salary practice.

Develop a salary structure

Now that you have the data from the market and your internal and external resources together using this information, you can develop the salary structure for your company. You should also decide if you want to offer a specific salary range – with a minimum and maximum rate – for each position, or if you want to create pay grades in which multiple positions with similar market rates are grouped together within the same range.

Get your current employees up to par

Once you have established a salary structure, possibly with pay grades, then you’ll want to look at your current employees’ salary rates compared to the range to see if anyone is being paid below the minimum rate or above the maximum rate. This involves determining whether the salary rates of any employees should be adjusted to achieve market alignment to have competitive position as created through the structure. If an employee is being paid below the range minimum, it’s recommended that you increase the salary rate, either immediately or incrementally over time, until it hits the minimum rate. If an employee is being paid above the range maximum then it’s recommended that you suspend the person’s next salary increase until market movement warrants an adjustment.

Sometimes these practices are acceptable if the positions in question have a significantly greater or less of strategic importance to an organization than it has to competitors. You’ll want to do a systematic analysis of all of these things mentioned in above steps. This will help you have a good basis for creating your salary structure.

If you would like to get your organization’s salary structure in place feel free to drop us an email at info@gapeseedconsulting.com or you can also call us +91-9599444630 else drop us a line here.

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International Taxation Consultancy

Once you have set your business and are on the stages of expanding it many of the entrepreneurs wonder whether they should make foreign investments or operations or not.  When it comes to an international market operation things get a bit complicated as it creates a variety of structures at the same time you need to select the right tax advisor that has competency in that particular commercial area. The boundaries of international taxation has been increasing this is where the international taxation consultancy is require who can tackle all the compliances related to international taxation.

We at Gapeseed Consulting provide all required services which give all the solutions related to International Taxation Consultancy, we can help you understand your tax situation; you must first work out whether you are an Indian resident for tax purposes. Indian residents are generally taxed on their worldwide income from all sources. Foreign residents are generally taxed only on their Indian-sourced income, such as money they earn working in India.

Some of the services we offer are:

Transfer pricing planning and documentation:

Tax authorities are everywhere and are always eager to get revenue, not only that but they are imposing new, stricter transfer-pricing documentation requirements on companies – and sharply escalating audits and inspections – with significant penalties for non-compliance.

Meanwhile, as you expand your operations to compete on an international scale, your cross-border transactions – sales of goods, provisions of services, licensing of intellectual property, lending of funds, etc. – will continue to grow in frequency and complexity.

At Gapeseed Consulting we understand the increasing globalisation, faced with increasingly burdensome compliance globally. In many businesses a new sense of urgency about maintaining effective and consistent transfer pricing documentation across all tax jurisdictions in which they do business.

Dispute Resolution:

Our international taxation consultancy tax dispute resolution network assists taxpayers in this emerging area. We can work with you to efficiently manage, and favourably resolve tax audits and disputes throughout the world. We have tax specialists to assist our clients in virtually every area of dispute. We combine deep technical understanding, local knowledge and strong relationships with government officials, tax litigation experience, and a global perspective to provide you with best of the services.

Advance pricing agreement:

We can help your company to obtain advance pricing agreement covering a broad range of intercompany transactions. We have our professionals who hail from industry, and with foreign governments—including senior-level positions in governmental agencies responsible for administering advance pricing agreement.

We can work with you to develop strategies at both the global and local level, and guide you through the process of requesting advance pricing agreement to help you ensure successful outcomes.

Intellectual property valuation:

Our experienced team of IP and intangible asset valuers apply commercial valuation principles and adopt a range of complex valuation methodologies to produce robust analysis to assist in negotiations, decision making, legal disputes and investment analysis.

We have in-depth sector experience across a broad range of industries and are therefore familiar with working alongside marketing, sales, technical and research staff to gain a deep insight into the subject IP.

Our services include:

Valuing a brand or other IP in relation to a potential sale or licensing agreement. Considering the value of brand, technology or other assets in the context of a contribution to a joint venture or alliance. Valuing IP / intangible assets for financial reporting purposes under international, US and UK accounting standards. Providing independent valuations of IP for commercial disputes or expert witness reports. Assessing the market value of IP/intangible assets for tax purposes.

If you would like to know more about our international taxation consultancy for your businesses you can drop us a line here or, call +91-9599444639/+91-9599444630

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Online Tax Filing

The forms for the (ITR) Income Tax Return for Financial Year 2015-2016 i.e. Assessment Year 2016-2017) have been released by the Income Tax Department. These are applicable for your income tax
return for income earned from 1st April 2015 to 31st March 2016.

If you’re looking forward to get some assistance on filing your Income Tax Return Gapeseed Consulting can help you with knowing different ITR Forms and filing the same. You could read more on our website here.

To figure out which ITR you need, read below to know more.

ITR-1

The following people need this return form whose total icome for the assessment year 2015-2016 include

  • Income from Salary/Pension
  • Income from One House Property
  • Income from Other Sources which does not include Winning from Lottery and Income from Race Horses

Who cannot use this Return Form

If you own any asset for any financial interest or have an account located outside India you cannot use this return form also if you have exempt income which is more than Rs. 5,000, you cannot use ITR-1.

ITR-2A

This tax return form can be used under the given condition:

  • Income from salary and has more than one house property but does not have any capital gains.
  • People with long term capital gains securities on which transaction tax is paid.
  • NRIs if they do not have any foreign assets.

If you fall under any of the category below you cannot file through ITR 2A

  • If income is from capital gains
  • Income from Business
  • If you have claim of relief/deduction under section 90, 90A or 91
  • If you have any asset which lies outside India.
  • If you have an earning source outside India.

ITR-2

If you lie under the category of Hindu undivided family you need to file your tax by filling up ITR-2 under the following circumstances:

  • If the Income is from Salary/Pension
  • Income earned from house property
  • Income from Capital Gains
  • Income from Other Sources which includes winnings from Lottery and income from Race Horses.

The Return Form should not be used by an individual whose total income for the assessment year 2015-16 includes Income from Business or Profession or if you receive remuneration as a Partner in a Partnership Firm or LLP. If you lie among anyone if the following categories you need to declare these types of incomes under ITR-3, ITR 4 or ITR-4S.

ITR-3

This Return Form is to be used by an individual or an Hindu Undivided Family who is a partner in a Partnership Firm or LLP and where income chargeable to income-tax under the head, profits or gains of business or professional does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to or received by them from such firm.

Only this form is to be used in case a partner in the firm does not have any income from the firm by way of interest, salary, etc. and has only exempt income by way of share in the profit of the firm and not Form ITR-2.

If your total income is from Business or Profession under any proprietorship then this Return Form should not be used.

ITR-4S OR SUGAM

This Income tax Return to be filed by individuals, HUF and small business taxpayers having presumptive business income, salary/pension, one house property or income from other sources.

You cannot use this form if the individual has more than one house property, speculative income, agriculture income more than Rs 5000, capital gains.

ITR-4

For individuals and HUFs having income from a proprietory business or profession.

ITR-5

For firms, LLPs, AOPs (Association of persons) and BOIs (Body of Individuals)

ITR-6

For Companies other than companies claiming exemption under section 11 (Income from property held for charitable or religious purposes)

This return has to be filed electronically only.

ITR-7

For persons including companies under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D).

    • Return under section 139(4A) is required to be filed by every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes.
    • Return under section 139(4B) is required to be filed by a political party if the total income without giving effect to the provisions of section 139A exceeds the maximum amount which is not chargeable to income-tax.
    • Return under section 139(4C) is required to be filed by every
      1. scientific research association;
      2. news agency ;
      3. association or institution referred to in section 10(23A);
      4. institution referred to in section 10(23B);
      5. fund or institution or university or other educational institution or any hospital or other medical institution.
    • Return under section 139(4D) is required to be filed by every university, college or other institution, which is not required to furnish return of income or loss under any other provision of this section.

Click here to drop us a line if you have any questions regarding tax filing online.

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Tax Accounting Services for start-ups and small businesses

Tax accounting for start-ups and small businesses has started to be regulated due the increase in number of start ups and small businesses which has scrutinised the regulatory norms this has also brought up many other flaws in the system of other companies.

The change in the environment of tax accounting services has been constantly changing and growing which has brought upto a situation where tax laws have evolved which has rapidly impacted the tax planning as well as the tax preparation. This has made impact on the company’s financial reporting.

At Gapeseed Consulting we offer our client Tax accounting services to start-ups and small businesses. We can help to make changes in the way of tax planning and reporting which helps in increased efficient results at quarter-end and year-end. Apart from this at Gapeseed Consulting we offer other accounting services which can help you manage your taxes and business better like Bookkeeping services where we specialize in budgeting and account reconciliation and will actively balance your books. We offer payroll services as well in which we’ll take the payroll process off your plate and ensure you are always compliant. The services provided by us for tax accounting to start ups and small businesses are as follows.

    • Tax provision outsourcing and support:Many companies continue to struggle with the appropriate amount of internal tax resources to employ. Some companies want to own the entire tax function, while others want an experienced tax firm to be entirely accountable and responsible for their tax needs. Some want a mix of both. For more than two decades, Gapeseed Consulting has developed and delivered the people, process, and technology to provide an integrated, cost-effective approach to operating tax departments. Clients in industries such as life sciences, retail, manufacturing, banking and utilities have realized the benefits of Gapeseed Consulting tax accounting services.
    • Accounting for uncertain tax positions assessments:We help clients minimize the risk of forfeiture and maximize future benefits via a wide range of tax process and operations management solutions. We design, transform, and run intelligent operations that provide comprehensive tax compliance support for corporate and transactional taxes. In addition, we prepare premium tax returns for insurance businesses, assist in VAT filings and associated reconciliations property tax returns, and provide information.
    • Actively Managing Your Tax Department:Our tax department outsourcing services also include managing and assisting with operational matters that arise on a day-to-day basis such as establishing procedures and reporting practices, proactively communicating with company management, maintaining a corporate tax calendar, and assisting with examination support. Gapeseed Consulting establishes effective communication protocols, serves as a tax liaison to external auditors, and responds to tax inquiries from internal business units.
    • Tax Preparation:It can be a tedious task to prepare your own tax return which might even leave you with more doubts. We constantly check and recheck your tax returns our teams plans up the filing either offline or efiling which will help you get your refund back quicker. Combined with our payroll services we can help you with the withdrawal which can help you get more money back and low interest loans. In addition we will help you with a sheet of commonly overlooked deductions to limit the year’s tax liability.
    • Tax Planning: Planning is the key to successfully and legally reducing your tax liability. We go beyond tax compliance and proactively recommend tax saving strategies to maximize your after-tax income. We make it a priority to enhance our mastery of the current tax law, complex tax code, and new tax regulations to help our clients with the latest trends.Businesses and individuals pay the lowest amount of taxes allowable by law because we continually look for ways to minimize your taxes throughout the year, not just at the end of the year.

If you would like to know more about our tax accounting services for start-ups and small businesses you can drop us a line here.

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Union Budget 2016-17, Keypoints for Startups

In continuation to our previous blog on what the government has in bag for the startups this blog will take you through what the budget has which can help you make your startup successful.

Overview

With so many startups coming up now and then, the government has now realized that how significantly it can drive our social and economic growth of the nation. This has resulted into coming up with initiatives likes Digital India, Make in India, and Start Up India, Stand Up India.
In the Union Budget 2016-2017 though it has emphasized on different key areas like Agriculture, Rural Development and Infrastructure etc. but it didn’t stand up to the hopes of the entrepreneurs There is uncertainty whether union budget 2016-2017 would truly help India to startup and stand up?

Let’s start with what the government had in for the startups

According to the government notification, an entity will be identified as a startup.

  • A time upto five years from the date of incorporation.
  • The turnover has to be less than 25 crore in the last five financial years.
  • It is working towards innovation, development, deployment, and commercialization of new products, processes, or services driven by technology or intellectual property.

Compliance Regime based on Self-Certification

  • Compliance pertaining to 6 labour & 3 environmental laws will be allowed to be self-certified through the Startup mobile app.
  • No inspections will be carried out under labour laws for a 3 year period.
  • Startups classified as White Category as defined by the Central Pollution Control Board will be allowed self-certification under environmental laws, with only random checks proposed.

Relaxed Norms of Public Procurement for Startups

In order to provide an equal platform to Startups (in the manufacturing sector) vis-à-vis the experienced entrepreneurs/companies in public procurement, Government shall exempt Startups(in the manufacturing sector) from the criteria of “prior experience/turnover” without any relaxation in quality standards or technical parameters. The Startups will also have to demonstrate requisite capability to execute the project as per the requirements and should have their own manufacturing facility in India.

Funding Support through a Fund of Funds

Corpus of INR 10,000 crore: Initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a period 4years (i.e. INR 2,500 crore per year).

“Fund of Funds”: The Fund will be in the nature of Fund of Funds, which means that it will not invest directly into Startups, but shall participate in the capital of SEBI registered Venture Funds.

Credit Guarantee Fund for Startups

Credit Guarantee Fund would help flow of Venture Debt from the formal Banking System.

Corpus of INR 500 crore per year for the next four years: In order to encourage Banks and other Lenders to provide Venture Debts to Startups, Credit guarantee mechanism through National Credit Guarantee Trust Company (NCGTC)/SIDBI is being envisaged with a budgetary Corpus of INR 500 crore per year for the next four years.

Tax Exemption on Capital Gains

The Union Budget 2016-17 gave effect to the proposal made under the Action Plan with tax exemption regard capital gains as follows:

  • Long term capital gains tax exemption: New Section 54EE inserted to provide long term capital gains tax exemption if capital gains proceeds are invested by an eligible tax payer in units of specified fund to be notified by the Central Government, subject to conditions. The maximum investment allowed upto INR 50 lakh.
  • Budget proposes to amend Section 54GB to provide long term capital gains tax exemption arising on account of transfer of a residential property if such capital gains are invested in an eligible startup by way of subscription of share subject to the tax payer holds more than 50% shares and utilizes monies to purchase new asset. Further, the Budget proposes to amend the expression “new asset” to include computers or computer software in case of technology driven startups.

Tax Exemption to Startups for 3 years

The Union Budget 2016-17 gave effect to the proposal made under the Action Plan with regard to tax exemption to Startups for 3 years as follows:

New Section80-IAC inserted in the Income Tax Act, 1961 to provide 100% deduction of the profits and gains derived by an eligible startup from a business involving innovation development, deployment or commercialization of new products, processes or services driven by technology or intellectual property, for 3 consecutive years out of 5 years beginning from the year of incorporation. The said benefit is available to an eligible startup setup before April 2019. However, MAT will apply.

Tax Exemption on Investments above Fair Market Value


Purpose: To encourage seed-capital investment in Startups
Investments made by incubators in Startups proposed to be insulated from the rigors of Section 56(2)(viib) of the Income-tax Act, 1961. Any consideration received by Startups for issuance of shares over FMV to incubators, not to be taxed in the hands of the Startup.

Startup India Hub: The govt. would create a single point of contact for the entire Startup ecosystem and enable knowledge exchange and access to funding.

Rolling-out of Mobile App and Portal

The App shall be made available from April 01, 2016 on all leading mobile/smart devices’ platforms to provide the following services:

  • Registering Startups with relevant agencies of the Government
  • Tracking the status of the registration application and anytime downloading of the registration certificate.
  • Filing for compliances
  • Collaborating with various Startup ecosystem partners
  • Applying for various schemes being undertaken under the Startup India Action Plan

Legal Support & Fast-tracking Patent Examination

Startup Intellectual Property Protection (SIPP) scheme will be introduced on a pilot basis for a one year period to facilitate filing of Patents, Trademarks and Designs. The scheme would include:

  • Fast-tracking patent application.
  • Setting up a panel of “Facilitators” who will advise on different Intellectual Property Rights (“IPR”)

Are bate of 80% on patent filing fees vis-à-vis other companies is proposed.

This was a quick synopsis which is useful for the startups or those who are planning to startup. Incase, you seek any further clarity or recommendations on your startup, feel free to write to us at, info@gapeseedconsulting.com

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Tax Accounting Services for start-ups and small businesses

Start Up India Stand Up India Scheme

PROCEDURES and DOCUMENTATION FOR STARTUPS

Basics For Incorporating A Startup

Start Up India Stand Up India Scheme

Now that you have been following our posts for so long, we would like to inform you about the
latest schemes regarding Start-Up India initiated by our government. This information might be of some use to you… On 5th April PM Modi officially launched one of the schemes in Noida. The official portal has been set up. Now it has become even easier for you to get detailed information regarding the Start up India plan. The portal was made live on April 1 2016. You can find all the information regarding the enrolment into the scheme which includes the online application forms, how to apply for loan etc. To simply know the working just navigate to the “Action plan” on the portal. For all latest notifications, you can navigate to “Notification” Section. A pdf file containing the list of incubators can be downloaded by interested applicants. For List of SEBI Registered funds, you can Visit HERE. If you have any queries regarding the “Start-up India Scheme” you can make use of the official Contact Us Page.

The whole world witnessed the launch of an ambitious programme in India on 16th January 2016.
The launch event took place in Vigyan Bhawan, New Delhi. Many of you still might not be clear about the goal, highlights and features of Start-up India programme but through this article you can find all the available information regarding the same. So if you have queries like – What is Start Up India Stand Up India Scheme ? Who can Apply ? How to Apply ? Application Form downloads etc, read the given information for the answers.

The economy of any country depends on its countrymen. Larger the number of employed or working
people, better be the economy. The Indian government has realized that Indians have great
potential when it comes to ideas; all they need is a promising opportunity or maybe a kickstart. Many people dream of starting up their own business, but due to financial or lack of opportunity they are unable to do so; hence Indian govt in the leadership of Mr. Narendra Modi has decided to offer a gift as a nation wise program- “Start Up India”.

Mr. Narendra Modi in his speech acknowledged that Indians have ideas and capability, all the need is a little push.

“Start Up India” is a revolutionary scheme that has been started to help the people who wish to start their own business. These people have ideas and capability. The government decided to give them support to make sure they can implement their ideas and grow. Success of this scheme will eventually make India, a better economy and a strong nation.

Start Up India Scheme – From Job Seekers to Job Creators

Technology is evolving with a pace faster than ever. This has given birth to various new businesses like E-commerce, internet marketing etc. giving a great scope of development in such areas. Those who plan to start new business are eligible to apply. Gapeseed Consulting knows that setting up a business has its own constraints – forming a company, taking approvals, taking care of legal compliances and registration etc. It isn’t a cakewalk for others but it is definitely easy for our clients. We will walk you through all the steps required for your Start-up.

During his speech at the event, Mr. Modi said that they are trying to make the youth Job Creators, rather than Job Seekers. He also said that one’s mindset should not be towards earning money in the initial phase, it should be rather on grabbing and using the opportunities.

Start Up India Stand Up India Scheme – Action Plan in Detail and How Gapeseed Consulting can do it for you.

  • E- registration has to be done. The application forms for start-up India are made available in
    April 2016.
  • A self-certification system has been launched.
  • A dedicated web portal and mobile app will be developed.
  • Arrangement of self-certificate based compliance.
  • No inspection during the first 3 years.
  • 80 percent reduction in the application fee of start-up patent.
  • Easy exit policy.
  • Inclusion of Credit Guarantee Fund.
  • Relaxation in Income Tax for first three year.
  • Special Arrangement for Female applicants.
  • Introduction of Atal Innovation Mission: Innovation courses will be started for the students.

As per the sources, the online application forms will be launched this month in April 2016. Interested applicants need to provide the required details in the application form. We will help you review you application so as it doesn’t get rejected.

For further queries and to know more about the Start-up India initiative, you can drop us a line here or feel free to send in an email to info@gapeseedconsulting.com

Gapeseed Consulting will be more than happy to help you setting up your own business.

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PROCEDURES and DOCUMENTATION FOR STARTUPS

Now that you have an understanding about the launch procedure and also in ascertaining the best
suitable option for your start-up idea. This post will help you understand the procedure for Formation/Registration/Incorporation of Private and Public Company in India. Also Detailed Documents required for the same can be found here.

Whether you are just starting a business or incorporating a business already in existence, it is helpful to know and understand the formation and ongoing requirements each state places on corporations and limited liability companies. Incorporation / Formation of company involve a number of steps. We have tried to simplify the procedure to the maximum extent possible in the following steps

Step 1: Digital Signature

The basic step to company incorporation is to get DSC made of all directors. The Information
Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in
electronic form in order to ensure the security and authenticity of the documents filed electronically. This is the only secure and authentic way that a document can be submitted electronically. As such, all filings done by the companies under MCA21 e-Governance programme are required to be filed with the use of Digital Signatures by the person authorised to sign the documents. To know the names of Certification Agency (CA) from where DSC can be acquired refer to our Free Guide.

Step 2: Acquire Director Identification Number

INCOME TAX PAN IS MANDATORY, so before applying of DIN a person must have his PAN number.
Details on PAN and DIN must be same. Step by step process to be followed by the applicant can be found in our resource section.

Step 3: Register DSC

Third step is to register DSC of the person authorized to sign E-forms on MCA21 or if you want us to do it for you drop us a line here.

Step 4: Apply for Reservation of Name [S.4(4)]

As per section 4(4) of Companies Act, 2013 read with rule 9 of Companies Incorporation Rules, 2014, application is to be made to registrar for reservation of name. 6 names can be proposed after checking its availability at MCA21 and as per guidelines given in the said rules and the procedures & documents required to be attached to INC – 1 are also available in the resource section.

Step 5: Drafting and Printing of Memorandum and Articles of Association

A public company limited by shares may adopt all or any of the regulations contained in model
articles of association registered along with its memorandum of association. The memorandum and articles shall be in conformity with the provisions of Section 4 and 5 of the Companies Act 2013. Read more here.

Step 6: Filing of Company Incorporation form – eform INC 7, DIR 12 & INC 22

As per Rule-12 of Companies (Incorporation) Rules, 2014, application for incorporation of a private and Public company, with the Registrar, within whose jurisdiction the registered office of the company is proposed to be situated, shall be filed in Form no. INC 7 [Rule 12 to 18] along with Form no. INC.22 for situation of registered office of the Company, (as the case selected in form no. INC 7) and DIR -12. There is a list of documents to be filled for Filing of company incorporation form get in touch with us to know it all.

Step 7: Filing of Commencement of Business – eform INC 21

On registration, a company cannot commence business or exercise any borrowing powers until it
files a declaration by directors in Form INC – 21 to the effect that every subscriber to the
memorandum has paid the value of the shares agreed to be taken by them as specified in section
1(1)(a).

E-form INC.21 is required to be filed with concerned Registrar of Companies for obtaining approval for commencement of Business and exercise of borrowing powers. This E-form is required to be filed by all companies incorporated under Companies Act 2013.

To know about the Procedure for commencement of Business under Companies Act, 2013 check out
our resources.

We hope that this post helped in understanding the procedures and documentations requirement
for your start-up. In case if you have any query about our startup series or services that we offer, please send in an email to info@gapeseedconsulting.com

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