Taxation

Important Tax and Compliance Tasks for Business Owners

When you operate your business, you may overlook several tax and compliance-related activities. Below mentioned is a list of tasks that you should be aware of when managing your business.

Regardless of how impressive someone’s product or service is, acquiring consumers is never simple. As an entrepreneur, you must devise a variety of tactics to run your company. It is reasonable that you might ignore the tax and compliance aspects of running a business in the thick of all of this. Nevertheless, it comes as no surprise that one should not overlook this aspect of running their business.

What is the significance of tax and compliance?

Tax and compliance have never been more vital as the focus on governance and regulation inside businesses grows. Failure with respect to tax regulations can result in not only financial consequences (and perhaps a rise in the tax rate), but also a major economic risk, since it may harm the reputation of the business and its owner with the authorities and the general public.

List of Important Tax & Compliance Tasks

As a result, this article talks about certain tax and compliance issues that every entrepreneur should be fully cognizant of. The basic tax and compliance that are needed to be followed are listed below:-

1. Registration and Filing of GST

The Goods and Services Tax (GST) is already in effect and applies to all Indian enterprises. If someone provides a service or sell a product, they must charge GST on it. The GST rates differ depending on the sector. The need to file GST returns is also determined by the type of business someone operates. Despite the situation, businesses must register for GST and file GST returns by the dates set by the Indian government.

According to the current rules, the mentioned entities are required to register with GST:-

• Individuals/companies enrolled for tax services under the pre-GST regime (VAT, excise, service tax, etc.)
• Non-resident taxable individual
• Suppliers of goods and services from other states
• Individuals required deducting TDS and TCS under GST.
• A person or company that provides online information, database access, and/or retrieval services from outside the state to an individual or company in India.
• Any Taxpayer on the side
• An individual or company that sells products through an e-commerce aggregator.
• Distributors of input services
• Individuals selling on behalf of another, whether as principal or as an agent
• All e-commerce aggregators who enable supply via their platform.
• Any other individual or entity as informed by the federal and/or state governments.

2. Filing of business tax returns

You manage a business to generate a profit, which is your company’s income. You must submit business income tax returns and pay tax on the income as well. Businesses must pay advance tax too every quarter. As an entrepreneur, one must ensure that the money generated by their company is documented by filing income tax returns.

3. Filing of ROC Returns

All the businesses registered under the Companies Act, 2013 or the previous Companies Act 1956^[1] must file annual returns with the (ROC) Registrar of Companies. Such ROC returns are essentially returns of the company’s accounts, which include the balance sheet, profit and loss statement, yearly return, and compliance certificate.

The RoC demands these files to investigate the company’s financial situation. As part of your annual compliance, you must file the following forms:-

• Form 23 AC – You must provide information about the company’s balance sheet in this section & file it with the RoC within 30 days after holding the board meeting.

• Form 20B or Form 21A – They are annual return forms that should be filed with the RoC electronically within 30 days of the AGM (annual general meeting)

• Form 66 – If your annual paid-up share capital is between 10 lakhs to 50 crores, then you must file a compliance certificate in form 66.

4. TDS Return Filing

When a company makes a payment, it deducts tax from the payment amount. This can refer to staff salary, consulting fees, or payments made for any work done by the company. TDS must be deducted from the payment at the appropriate TDS rates. This deducted TDS must be submitted with the government, and TDS returns must be filed too.

5. Maintaining books of account in order for the business to run smoothly

A company’s books of accounts must be kept up to date. Bookkeeping is beneficial not only to the business owner, but it is also necessary by the tax department and investors occasionally. You must keep track of your earnings & expenditures in order to keep your finances in order. These are a few of the tax and compliance responsibilities that every company must complete. As a result, whether you are a developing company, a startup, or a large corporation, you must always stay on top of your internal bookkeeping processes.

Conclusion

The activities listed above are some of the most critical tax and compliance responsibilities that a company cannot afford to overlook. Hope you finish everything on time and remain within the rules. Contact Enterslice if you require assistance or professional advice on addressing your tax and compliance responsibilities. We have a group of legal professionals and experts who may help you manage and arrange your taxes properly.

Read our article:A Brief on Advance Tax Payment, Liability and its related Rules