Your Friendly Tax Consultant in Delhi

It is that time of the year to file your income tax returns. Income tax return filing in Delhi has never been so easy. There are two options for doing this;

• Go to the income tax site directly and file your tax returns.

• Find a Professional that specializes in filing tax returns and seek its help.

In our view, the first option is trickier because on the income tax site, you won’t find answers to many of your questions. If you are a new tax- payer, you will have trouble figuring out the right format.

However, a chartered accountant will help you in various ways. He will prepare all your tax documents, and also advise you about refunds if any. Some CAs are also experts in NRI Return filing in India, so if you have relocated to India recently, you will find tax filing a seamless exercise.

Filing of income tax returns on time is not just mandatory, but you can avoid many future headaches also.

If you fail to submit your returns on time, you will be penalized by the Income Tax department. As an employee or an entrepreneur, you can’t afford to spend too much time managing this problem. At this point, you would need an expert.

If you are living in West Delhi, you may like to contact experts in ITR filing in Janakpuri. Reaching these experts is very easy thanks to expert connectivity.

A competent ITR filing firm typically offers the following services;

• Obtaining Permanent Account Number

• Linking PAN with your Aadhar Number

• Preparation of tax returns

• Calculation of tax refunds, if any

• Consulting on Tax savings investments to reduce tax burden

• Your IT filing expert can also represent you in tax disputes, thereby saving your time.

• Informs you beforehand of your income tax deadline.

Please note having PAN number is mandatory for all those who receive income in their bank accounts. You would need this number while communicating with the income tax department.

The government has also made it mandatory to link your PAN and Aadhar number. While this process is quite simple, we would still urge you to take help of a qualified ITR filing expert.

If you have ever filed a tax return on your own, and have received a notice from the authorities, your CA can assist you better in filing responses and related communications with the Income Tax Department.  

Avoid all your tax hassles by contacting Manish Anil Gupta & Co. Chartered Accountants today.  You can also reach https://www.manishanilgupta.com/income-tax-return-services. Located in District Centre, Janakpuri, Delhi, this firm has helped several individuals, companies and businesses in income tax related matters. 

Why is Filing Income Tax Return Important?

Have you ever wondered why does an individual file his Income Tax Return? Simply, people earn some income during a particular year and generally make couple of investments in various schemes and undertake several expenses related to their business or profession. On such income earned by the individuals, they need to pay some amount of tax to the government. Hence, in order to declare the income and make such payment of tax, the Income Tax Return is filed.

However, it’s not that you can file the Income Tax Return only if you have to pay taxes. You can voluntarily file it, rather, you should voluntarily file it as there are numerous benefits attached to the same. Let's have a look at the conversation between Arun, Tax Consultant (Fictional Character) and Rohit, a businessman (Fictional Character) to have a better understanding on the basics and importance of filing ITR.

 Rohit:      Arun, what is an ITR?

 Arun:   Income Tax Return, i.e. ITR, is a form that a person has to submit to the Income Tax Department. It contains information about a person’s income and the taxes to be paid on it during the year. Information fed in ITR should pertain to a particular financial year, i.e. beginning on 1^st April and closing on 31^st March of the following year.

 Rohit:   Okay, who all individuals need to file ITR?

 Arun:   Rohit, firstly you need to know who is referred to as an individual as per the Income Tax Act. Individual refers to the natural human being, whether male or female, minor or major. An individual's gross total income comprises wages, salaries, dividends, interest, business income, and any other income he earns throughout the year.

 It is obligatory to file income tax returns for all resident individuals of India whose total income is above Rs. 2.5 lakh after eligible deductions and are below 60 years of age. Individuals of the age of 60 and 80 or above are required to file their ITR if their net income is more than Rs. 3 lakhs and Rs. 5 lakhs, respectively. Individuals having income below the basic exemption limit are not required to file ITR by law.

Rohit:  Oh! Is filing ITR important only for declaring income to the Income Tax Department or there are some other benefits too.

Arun:  The filing of income tax return is not only for the purpose of declaring earnings to the Income Tax Department and paying taxes, but it allows you to avail other benefits too, that can be advantageous for you in the short and long-term.

 Rohit:  All right! Can you sum up some advantages of filing ITR?

 Arun:  Sure Rohit!

 Some of the benefits of filing income tax return are:

 ITR receipt acts as a very important document

ITR receipt acts as a proof of Income of a person and of payment of taxes. It is much more detailed than Form 16. It contains details of the total income, including details of income from respective sources.

 Ease in claiming tax refunds

 It is very important to note that one can claim a tax refund only if he is filing an income tax return after claiming all the eligible deductions for that financial year. Therefore, if you are a salaried person who is getting salary after deduction of TDS, or if TDS is getting deducted on interest income of your fixed deposits, or TDS is getting deducted in any other way, it is essential to file your ITR to claim a refund of the tax deducted, if any, which is reflected in your Form 26AS.

 Ease in getting loan approvals

 Filing ITR helps individuals when they have to apply for a vehicle loan, house loan, etc. The majority of banks ask for the copy of income tax returns of last couple of years as proof of income statement of a person. This serves as a mandatory document for the loan approval.

 Adjustment of losses of previous years

 Filing ITR on or before the due date enables the individual to carry forward losses to subsequent years, which ultimately get set off against the income of subsequent years. This means deduction of certain losses from the relevant income helps the individual reduce his future income tax liability. This is only possible if one files his ITR.

 Quick processing of VISA

 Many embassies require an individual to furnish copies of his tax returns for the past few years at the time of the application for a visa. These are amongst mandatorily required documents and hence it is always advisable to timely file your ITR.

 Saves from Penalty and Prosecution

 Evasion of taxes and late filing of ITR carry penalties around the world, including India. Therefore, filing income tax returns and doing so on time save an individual from unnecessary difficult situations with the Income Tax Department.

 Rohit:   Oh, so many benefits! See, I want to file my ITRs for all the earlier years for which I have missed so that I can also avail all these benefits. Please let me know the procedure for the same.

 

Arun:   No Rohit, now you cannot file your ITR for earlier years. Now, you can file your return only for last year as a belated return. The due date for filing a belated return is 31^st December following the relevant financial year.

Rohit:  Okay, tell me one more thing Arun, my wife is a homemaker. Does she also need to file the ITR?

 

Arun:   See, if she is earning income from any source and such income during the financial year is more than the basic exemption limit applicable to her, then she has to file the ITR. But, if she is not having any income or her income is less than the basic exemption limit, then it is not mandatory for her to file the return. However, as I mentioned, it would be beneficial for her if she voluntarily files the same.

 

Rohit:   Okay Arun, please let me know, what are the documents required to file ITR?

 

Arun:   Rohit, generally, the following documents are required to file an income tax return:

• PAN Card

• Aadhaar Number

• Income Tax Login credentials

• Bank Statement

• Investment proof for claiming deductions

• TDS certificates (Form 16 or 16A)

• Records of Sale or Purchase of Assets/Investments

• Proof of payment of insurance premium, PPF, purchase of NSCs, Mutual funds, donations etc.

 Rohit:   What is e-verification of ITR, and how is an ITR e-verified?

 Arun:    An ITR is e-verified through an e-verification code. Electronic Verification Code (EVC) is a code sent to the registered mobile number of the tax filers while filing their returns online. It helps to verify the identity of the tax filers. An EVC can be generated through the e-filing portal of Income Tax Department.

After successful e-verification of ITR, a taxpayer is not required to send physical ITR-V to Bangalore for further processing. Your ITR can be verified electronically through any of the following means:

• Via Aadhaar OTP

• Via net banking

• Via EVC on the Income Tax website

• DSC

Rohit:   Are any proofs required to be attached while filing the ITR?

 Arun:   No, taxpayers are not required to attach any documents while filing an income tax return. However, the taxpayers should keep it carefully to provide to the department if needed in case of scrutiny or any assessment.

 Rohit:   What are the due dates of filing ITR?

 Arun:   Since, you are an individual, let me tell you the due date applicable to you. The last date of filing Income Tax Return is generally 31st July following the relevant financial year. However, for financial year 2020-21, CBDT has extended the due date to file the Income Tax Return of the Individual Taxpayer to 30^th September, 2021.

 

Rohit:  Okay Arun, now I have understood the basics of ITR filing. Any other point you want to add?

 

Arun:   So, Rohit, let me summarize why you should timely file your ITR. You must file your return and pay due taxes to the government to be a responsible citizen of India. Also, if you are liable to file ITR, then in order to save yourself from any penalty proceedings to be initiated against you, you must file your return within due date. In case you are not liable to file ITR, then also you should file your return to avail the benefits that I mentioned earlier.

 

Rohit:  All right Arun! Thank you so much for clarifying my doubts…

 

Note: The due dates mentioned in the article are according to the Income Tax Act, 1961. However,    these are subject to change as per the notifications and circulars issued by CBDT from time to time.

 

Authored by CA Rahul Pareva, assisted by Kriti Agrawal

For any queries or suggestions, email at info@manishanilgupta.com

 About the Author and Firm

 CA Rahul Pareva possesses experience in litigation and advisory matters. He has been representing various clients before Tax Authorities. He is associated with Manish Anil Gupta & Co., CA in District Centre. MAG is renowned tax and *audit firm in Delhi* where clients complexities are transformed into solutions

 Disclaimer!

 This article is meant purely for knowledge and educational purposes. It contains only general information and references to legal content. It is not legal advice, and should not be treated as such..

Source: https://www.manishanilgupta.com/blog-details/why-is-filing-income-tax-return-important

 

Your One-Stop Solution for All Accounting Needs

If you are a Delhi-based businessman, you need professional help in managing your accounts, income tax returns, etc. In addition, you would also need an expert to guide you on various GST-related matters. Non-Resident Indians would also need experienced accountants to help them in NRI return filing in India.

With business booming in the country, many people; are considering starting their own businesses. For this you need someone who knows trademark registration in Delhi in detail.

Let’s understand the concepts of trademark, GST, etc. in some detail.

GST

If you conduct any business and are registered with the GST, you need to file your tax return. This return has to be filed on GSTR 9.

Filing your GST return is tricky because you need to record all transactions with suppliers and receivables. It is mandatory to file these returns quarterly or on a half-yearly basis. If you don’t follow this process, you are likely to pay a penalty or face some other punishment.

Traders and other businesses located in Janakpuri, Rajouri Garden, etc. can contact firms dealing in accounting services in west Delhi to manage their GST issues.

Please note that there are various forms of GSTR9. These are;

• GSTR 9A- This is applicable to businesses under the composition scheme.

• GSTR 9B- If you run e-commerce, you are liable to pay your tax return under GSTR 9B.

• GSTR 9C- This scheme is applicable to businesses who have a turnover of more than 2 crores. These firms must be subject to reconciliation, and the required document has to be certified by a chartered accountant.

Some businesses are exempt from filing GST. To know whether you fall into this category, please contact an accounting professional.

Trademark Registration

If you want to register your trademark, you need to follow a few basic steps. These are;

• Finding whether your desired trademark is available or not at the time of its registration.

• You need to file the required documents and wait for any objections.

• If there are any objections, you need an expert to draft your replies.

• Getting your trademark certificate.

A good accountant also helps Non-Resident Indians file their tax returns.  All NRIs whose annual income in India exceeds Rs. 2.5 lakhs in a financial year have to file their returns.

You can manage all tax related issues by calling Manish Anil Gupta Chartered Accountants & Co. today. Their website is https://www.manishanilgupta.com/income-tax-return-services

Guidelines Of Roc Filing

ROC is the short form for Registrar of Companies. It is an agency formed in 2013 under the aegis of the Ministry of Corporate Affairs which deals with the administration and implementation of the Companies Act, 1956 and Companies Act, 2013.

 There are 22 ROCs across all major states in India, some states like Tamil Nadu and Maharashtra having more than one Registrar of Companies (ROC). The primary role of ROCs is registering companies and Limited Liability Partnerships present in the states under their respective jurisdictions. It also makes sure that the LLPs comply with the requirements under the Companies Act, 2013.

All companies registered under the Companies Act, 2013 are bound to inform the ROC about any changes in the office such as a change in address, memorandum of association etc. and also file forms about things like the appointment of a new auditor, reports of the Annual General Meeting etc.

 Here are the important guidelines to be followed while filing of these forms:

• Copies of documents: Documents like board resolutions and financial statements should be properly signed with the company’s seal. These documents are to be scanned and uploaded along with the ROC forms.

•  Specific requirements of each form: There are form specific requirements for the filing of ROC forms, regarding particular data and documents to be uploaded. The company should keep these in mind while filing.

•  Uploading digital signature: All the forms are to be submitted online and should be digitally signed by the company’s directors. Some forms also require to be signed by a Chartered Accountant, Company Secretary, or Cost Accountant.

•  Filing of annual accounts: This requires the submission of the annual ROC form AOC-4 within 30 days of the Annual General Meeting. The company should also provide the auditors’ reports, reports of the board of directors, balance sheets and details of profit and loss.

•  Payment of fees: Payment of fees for filing the forms has to be done online. This completes the procedure of filing ROC forms. In case of delays in the filing, the company has to pay an additional fee along with the normal fees.

•  Penalties in case of failure: In case the company omits to file the forms, the director or any employee responsible for filing of the forms may be liable for penalty as stated in the Companies Act, 2013.

 Although there are various ROC filing services in Delhi(should be deleted), you can contact Manish Anil Gupta & Co., one of the best CA in the WestDelhi, for your company registration and related regulatory compliances in Delhi. 

Is Indian Share Market Overvalued? Exploring Possible Alternatives for Investors!

Introduction

 

When there are talks about intriguing topics, the future surely qualifies as one. The uncertainties and lack of facts about it makes a human mind delve deep into the ambiguity. The current scenario of the Markets touching an all-time high and the massive surge of participants makes us ponder the question, what is the stock market's future? Is the market overvalued? Is there a bubble?

This article will try to ease your anxiousness with some facts plus historical data, including judgements of the current trends and personal opinions. We will begin with the concept of valuations and the techniques involved, leading to possible future scenarios and how you as an investor can benefit from them.

 

Let's begin!

 

What is Overvaluation?

 

Valuing a stock is a lot different than it seems from valuing the stock market itself. An investor can perform Fundamental Analysis to value a stock by measuring its intrinsic value based on relative economic, financial and quantitative factors, but we cannot say the same for the market itself. Due to the large scale implications of every financial decision in the country and macroeconomic factors, the metrics differ for the market.

But every seasoned investor knows that there's more to analysing stocks than just looking at valuations metrics, and it is far more essential to invest in a good business than a cheap stock. We can say the same about the stock market.

 

Let’s first look at some of the frequently used metrics of market valuations used around the globe and try to understand their credibility and relevance in our scenario:

 

• The Buffett Indicator

 

The Buffett Indicator is the Market Capitalisation to GDP ratio, which is named after one of the most influential investors of all time, Warren Buffett, called this ratio 'The best single measure of where valuations stand at any given moment'. This indicator works by dividing the collective value of a country’s stock market by the nation’s GDP, assessing how expensive or cheap the aggregate stock market is at a given point in time. The current valuations according to this metric are hovering around 104-105% historically, which used to remain around 80% of GDP. To give you a clear idea only time such valuations (over 100%) happened was in FY08.

 

• P/E Ratio

 

Another closely watched metric for market valuations after the Buffet Indicator is the Price to Earnings Ratio (P/E Ratio).

 

It tends to show what the market is willing to pay today for a stock based on its past or future earnings. A high P/E Ratio reflects overvaluation, and guess what? Indian markets, along with global markets, are witnessing a raised P/E for the past few years. The Nifty Index P/E is trailed around 20 times which historically used to be 17 times at best, and the current figure is 25.39 as of today.

 

So what do we make of it? That the market seems to be overvalued? Well, it's not entirely true.

 

Experts point out that the buffet indicator is widely followed and works well in efficient economies like the US, but India has its unique characteristics. India's GDP does not capture many activities that are either informal in nature (including contributions by housewives) or are out of formal channel due to the unaccounted nature of transactions. If one includes this portion, then the denominator will rise. Also, in India, many PSUs and private companies (including startups) are not listed, and hence the numerator is also depressed.

 

Hence it is believed that the Buffett indicator is less useful for an economy like India with a substantial proportion of GDP being from unorganised and SME sectors and is outside of listed space.

 

As for the high and ambiguous P/E Ratio, Let me clarify that the P/E ratio is not a fact; it is an estimation. The Earnings denominator considers the past and the future earnings (which are estimated). Some might argue about the credibility of past earnings, but one massive problem exists in that also, the year 2020. The earnings had gone down drastically in 2020, causing the ratio to move up. Hence, consideration of the last 12-18 months earnings is not a good move.

 

The points mentioned above indicates that the credibility of the most popular market valuation metrics are in question. Hence, no one can indeed say that the markets are overvalued and expect a crash coming to that itself.

 

India is a stable economy with lots of growth potential, and expecting a bubble will restrict some serious money-making potential.

 

Alternate Approach

 

Investing is always about alternatives. Now that it is clear that the market situation is not as bad as it seems let us shift our focus towards options other than stock markets. If there are concerns about high pricing, bubble situation, speculative action, etc., in the market, the question arises what alternatives do we have?   FD? Bonds? Real Estate?

 

Well, we all know about the devious nature of Fixed Deposits and how they can create a hole in your wealth, courtesy of Inflation. On the other hand, the Real Estate Sector is not as lucrative as it was a long time ago as it has succumbed to Liquidity problems, High valuations, slogged growth, etc. That leaves us with Bond Markets.

 

Bond Markets are also a primary market like the stock market but much more prominent in size and often less talked about, which grabs the attention of investors through the Yield mechanism. But the problem lies in the low return scenario of these markets as they are operating on a belief of low Inflation that will lead to low growth in the upcoming years. In contrast, the Stock Market is sending a completely different signal of High Inflation that leads to high growth of businesses in the future resulting in high returns.

 

One can argue that yield can grow in the future, but there are two types of yield growth in bond markets; First, a Knee Jerk Reaction to move money into bond markets from stock markets which is not likely to happen as this will shake the stock market and no country wants that to happen and second, a slogged growth overtime which again makes the stock market shines like the most lucrative option.

 

There exist no option other than to invest in businesses as they are growing with Inflation. This growth becomes the sole reason why money is and will keep flowing from various other alternatives, including Bond Markets into Stock Market, indicating its growth in the future.

 

What should you do?

 

After all these facts and speculations about the market's future, the question that lingers the most among investors is that what should they do?

 

The first thing every investor needs to do is to stop pricing for perfections all over the world. Rather than believing that central banks can and will provide a stable floor for the market to stand upon, which is nothing but a perception, one should start planning for themselves and prepare accordingly for the worst to happen. Betting on Probable stories rather than Plausible ones makes much more sense, but sadly the reverse analogy is being followed (Take the case of Zomato)

 

Conclusion:

 

So rest assured, here are some key takeaways from my side with the hope of tapping the glorious opportunities which the future is going to throw at us:

 

• Invest in the growth of the middle-class sector

 

If talking about the growth potential in India, the middle-class sector holds the key to its salvation. We are currently in a recovery phase from the devastating impact of covid on our economy. Hence, the earnings are bound to increase with time. So if we are considering the P/E ratio as a growth indicator, a market crash cannot be anticipated as the ratio will come down eventually without that happening.

 

• Staying away from overvalued and super inflated stocks like Titan (high P/E) and sectors (like pharma) of the market can make your investing journey a little safe and sound.

 

• Hedge by buying Cryptocurrency

 

It is of believing that there is a good 10 to 15% population that believes in the Crypto narrative. To remove the uncertainties regarding the future of markets, investing around 20% of your portfolio in Crypto might be a sound hedging strategy. With the evolution and popularisation of Blockchain Technology (technology on which most Crypto operates) and its overtime infusion into mainstream tasks like Banking, Auditing, etc., speculations can be made about growth in this sector.

 

And what if the market crashes?

 

A likely scenario causing the market to crash in future is the Convergence of the Stock Market and the Bond Market talked above but guess what will this crash lead to; the boom in Crypto, which would make your hedge in Crypto successful.

 

Hence Investing in India and believing in its growth potential is the best bet one can make in the future.

 

Authored by Himanshu Sharma and assisted by Bhavy Dhawan

For any clarifications and suggestions reach us at info@manishanilgupta.com

Disclaimer!

This article is meant purely for knowledge and educational purposes. It contains only general information and references to legal content. It is not legal advice, and should not be treated as such.

 Source: https://www.manishanilgupta.com/blog-details/is-indian-share-market-overvalued--exploring-possible-alternatives-for-investors! 

Is Self-Certification in GSTR-9C Really a Welcome Step?

The Finance Act, 2021, introduced amendments in the CGST Act to do away with the requirement of filing CA certified Reconciliation Statement in GSTR 9C.

As per the amendments, now the taxpayers are not required to get the Reconciliation Statement certified by CA/CWA. Additionally, the taxpayers with turnover of up to Rs. 2 crores have option not to file GSTR 9 (Annual Return). These amendments will be in force w.e.f. 1st August 2021.

Pre the above changes, taxpayers with a turnover of more than Rs. 5 crores were required to file CA/CWA certified Reconciliation Statement in GSTR 9C.

In this article, we attempt to understand the background and analyze the implications of recent changes.

What is GSTR-9?

GSTR-9 is an annual return to be filed by registered taxpayers having turnover more than Rs. 2 Crores in previous financial year. It contains details like outward supplies, tax liability and input tax credit availed, refund claimed and tax paid during the financial year. The due date is 31^st December of the year following the particular financial year.  However, following class of taxpayers do not need to file GSTR-9:

• Casual Taxable Person

• Non-Resident Taxable Person

• Input Service Distributors

• Taxpayer covered under section 51 & 52

What is GSTR-9C?

Every registered person whose aggregate turnover is more than Rs. 5 crores shall furnish a copy of audited financial statement and reconciliation statement in GTSR-9C. It is basically GST Audit. GSTR-9C is a statement of reconciliation between the annual returns in GSTR-9 filed during the year and the figures as per audited financial statements under the provisions of Income Tax Act. Any difference arising is reported here along with the reasons for such difference

Until recently, the Reconciliation Statement was required to be certified. But now it’ll be filed on self-certification basis.

Why were these changes required?

It has been four years since the GST Act came into force. Although there are huge benefits of this new form of taxation, but there is the need to actively work towards simplifying compliances.

Compliance needs to be simplified as it is a costly affair both in terms of cost, time & energy. Already the taxpayers are required to file GSTR-1, GSTR-3B (and others depending on nature of business) on a monthly/quarterly basis. They have to incur significant costs for the same as professional services are required for managing compliance. There was a demand across sectors to make this non-business task less expensive and time-consuming.

When we look at GSTR9 in this context, we can see that changes in this direction have been made. Now only the taxpayers with turnover of above Rs. 2 crores are required to furnish GSTR-9, whereas GSTR-9C is furnished by taxpayers with turnover of above Rs. 5 crores. Recently, the requirement of CA certification on Reconciliation Statement has been removed, making compliance simpler.

The 43rd GST council was held on 28th May 2021 wherein various measures for combating Covid and reviving businesses were discussed. Along with this, the council expressed the need to simplify Annual Filing. It also recommended amending CGST Act to allow the filing of GSTR-9C on Self certification basis, which the notifications have now implemented.

Conclusion:

Although this is a welcome step, its disadvantages also need to be acknowledged. This step is bound to provide compliance level relief to number of taxpayers, however it would increase the risk of intentional as well as unintentional misstatements / errors in the annual filings, calling for increase in departmental scrutiny and hence, increased burden on the enforcement groups.

But on the flip side, it will create a number of opportunities to the litigation professionals as well to handle the scrutiny notices of their clients & represent the latter in front of department. As a result, it will provide more avenues to the professional to showcase their skills & garner more clients.

Hence, it should be noted that most of the taxpayers are not very well versed with the requirements of Annual filings, and professional help for the same is required. We are yet to see whether the merits of the move outweigh the demerits or not to the different stakeholders.

Authored by CA Rahul Pareva, assisted by Vrinda Sharma & Ashish Sharma

For any queries and suggestions, reach us at info@manishanilgupta.com

 About the Author & Firm

CA Rahul Pareva possesses many years of experience in litigation and advisory matters. He has been representing number of clients before Tax Authorities. He is actively involved in advisory related to filing of GSTR-9, how to prepare GSTR-9C and other GST matters in Manish Anil Gupta & Co. Chartered Accountants. MAG is renowned GST Consultants in Delhi where clients complexities are transformed into solutions.

Source:https://www.manishanilgupta.com/blog-details/is-self-certification-in-gstr-9c-really-a-welcome-step