Fortowl

Are you someone who is planning to start a new business or someone who is running an existing business?
Business registrations that you should be aware of

1. Legal Setup
2. GST registration
3. Trademark registration
4. Shop & Establishment registration
5. MSME registration

To take your business to the next level, all these registrations must be taken.

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Are you someone who pays house rent❓

If you are a salaried or self employed person you can claim income tax on the rent you pay

This is how the calculation works
It's based on 3 conditions
1️⃣ The actual HRA that the employer pays us
2️⃣ Deduct 10% of our basic salary from the rent we pay
3️⃣ 50% of our basic salary, Out of the three, whichever amounts to the least will be the amount on which we can claim income tax.

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What are the benefits of taking MSME Registration

If you take this registration, you an avail
🔷Collateral free loan with low interest rate
🔷Capital subsidy schemes are available
🔷There will also be discounts on trademark, patent registration and ISO registration

So if you are yet to get this registration, Take it at the earliest.

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On instances where you have lost goods that you have bought for your business while transporting it or if it was stolen, damaged or if you give it out as free samples, you will not be eligible for input tax credit.
According to GST act,
Stolen goods, Damaged goods and Goods that are being given out as free samples won't be eligible for input tax credit

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When you go to a hotel or a shop, Have you noticed a board that says Composition Tax Payer?
What does this board signify?
Composition Tax Payer means they are not eligible to give Tax Invoice.

So when you purchase something from a composition tax payer, always note whether they are collecting tax from you.
If they are collecting tax from you, inform the authorities at the earliest since they are not eligible to collect tax or issue invoice.

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It's a big dream of every common man to own a house of their own. Just like that, it's a dream of every business owner to have their own office. But, after constructing a new office, the GST that we paid for it won't be eligible for credit.

When a building is constructed and is intended for resale by a construction company or builder or promoter, they can avail GST credit related to the construction.

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Are you someone with a GST registration❓
If yes, an important thing that you should know is that your GST number should be mentioned in your name board.

Apart from this, your GST certificate should be displayed in a prominent place in your office/business where it is visible to all.

If this is not followed, you will be liable to pay a penalty of up to ₹25,000

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Are you someone who is planning to reward your employees who were pivotal in your business growth by giving them gifts?

If so, Note that you will not be getting input tax credit for this.
According to GST rules, input tax credit won't be available for the gifts that we give to the employees for free

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Do you or your employees travel for business needs?

Different expenses that come with this like air fare, bus fare, train fare, accommodation charges etc are eligible for GST credit. So while getting these bills, make sure that you get the GST bill by providing your GST details.

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Reduced rate of interest

Do you wish to take home loan at a reduced rate of Do you wish to take home loan at a reduced rate of interest?
If yes, Then keep a female member in your family as the co-applicant for the loan. Here by, you will get a reduced interest rate + both the applicants will get a deduction of up to 2 lakhs at the time of income tax filing.

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Are you someone with a GST registration❓

Let me tell you 3 expenses that you miss out for taking credit

Being small expenses, we often miss out on these
1️⃣ Telephone Bills
2️⃣ Internet Bills
3️⃣ Bank Charges

Usually small amounts come as credit for these. But when accumulated for a year this can turn into a big amount. So keep a track of it and take inputs correctly

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Do you have a gym membership and a GST registration in your name?

When you're paying your gym membership fee you must be paying GST for it

According to GST laws, the fee that you pay for your gym membership is not eligible for credit

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Are you someone with a GST registration?

Have you taken a Life/Health Insurance for you?
If yes, You'll find that you've paid GST in your policy document
But according to GST laws, Input tax credit won't be available for Health Insurance or Life Insurance

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Are you a beauty conscious person?

Have you done plastic surgery, cosmetic surgery or any other beauty treatments?
If yes, check the bill that you paid for it and you'll find a GST involved in it.
But according to GST act, GST input is not available for beauty treatment, health services, cosmetic/plastic surgeries. So you will not be able to take credit for this.

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If you're planning to buy a car and gets it in the name of your business.. What are the benefits❓

If it's in the name of the business, you will be able to show this expenditure as expense in income tax, as depreciation.
Depreciation will be based on the vehicle's life.

For example : If the car's worth is 20 lakhs and 15% depreciation, then we can show up to Rs 3 lakhs as expense in income tax. So the payable tax amount will be less as the profit is less.

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Are you someone who hosts parties, events or functions for your clients or employees❓
If so, is there an option of taking input tax credit on the outdoor catering, food and beverage expenses❓
No is the answer❗

But if you're providing canteen or refreshment service to your employees as per Factories Act 1948 or the labour law at your location, input tax credit can be availed

We saw from the previous reels that passenger vehicles wont get input tax credit.
But three types of business owners can avail this credit.
They are
1. Passenger transportation service / Cab or bus rental service
2. Driving schools
3. Automobile retail shops, showrooms or manufacturers

These three categories can take input credit for passenger vehicles

We have seen in one of our previous videos that passenger vehicles wont get GST input credit. Since then, many have asked me which all vehicles come under the passenger vehicle category.
These are the ones..
Two wheeler
Three wheeler / Auto rikshaw
Four wheeler motor cars
Tempo travellers / Bus

A thing to note is that when it comes to Tempo traveller / Bus, it has to be below 13 seats including the driver's seat.

Are you someone who is trying to get a bank loan to start a new business or to expand your existing business❓

If yes, then MSME registration is something you should take as soon as possible!

If you take MSME registration, you can get collateral free loan for low interest rates. Along with this if you have ITR for 3 years, the chances of you getting approval for bank loans are very high.

Why do business owners register their companies as Private Limited or LLP or Public Limited?
The answer is Limited Liability!
From them to protect their personal assets and do business, the three options available in India are Private Limited, Public Limited and LLP. No other categories offer this. This is the reason why everyone prefers Private Limited, Public Limited and LLP.

Will there be income tax when we sell our personal used car?

When there is a gain or profit while selling our personal car there is no need to pay tax as it was used for our personal purposes.

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Are you someone who is trying to get a bank loan to start a new business or to expand your existing business?

If yes, then MSME registration is something you should take as soon as possible!

If you take MSME registration, you can get collateral free loan for low interest rates. Along with this if you have ITR for 3 years, the chances of you getting approval for bank loans are very high.

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Are you someone doing business?
If yes, you are likely to have a doubt whether tax has be paid on the turnover or the profit.
If you're someone dealing with goods and your sales accounts to 10 lakhs.
You used 5 lakhs to get the goods, The salary of your staff costed 2 lakhs and other miscellaneous costed 1 lakhs. If this is the case, then from the 10 lakhs you can deduct the 8 lakhs spent and pay tax just for the remaining 2 lakhs.
The same applies if you're dealing with service as well. Your expenses have to be deducted from your turnover and it will be on this amount that you will be liable to pay income tax.

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Is there income tax for a minor❓
If the minor gets income based on skill or talent, then tax has to be paid based on self assessment. If it is passive income like interest on FD or income based on skill or talent, then it can be clubbed with a parent. It has to be the parent who earns more income. While clubbing the same, the parent will get an exemption of ₹1500. This is limited to a maximum of two children.

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Are you someone who is confused to decide which structure to choose for registering your new business❓
If you are looking for a simple structure or if it is hard for you to maintain too many records, then the two formats suitable for you are Proprietorship & Partnership.
If your prime intention is to brand your Company very well, bring a corporate identity or to scale up your business, then the two formats suitable for you are Private Limited and LLP

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Many have asked me this doubt whether our company name and brand / product name should be the same.
I'll tell you an example. We all know McDonald's and many of us have been there as well. If we look at their bill, it won't be showing the name McDonald's in it. Instead, it shows Connaught Plaza Restaurants Private Limited.
This shows that there is no compulsion that the Company name and Brand name
must be the same. You can choose different names as you wish.

New business owners before registration often ask me whether to register as a Private Limited company or as an LLP. It's a difficult task to give a definite answer for this. But the type of business and how you intend to run it can be factors to decide it. If you don't have the intention of taking a fund externally, I always suggest to go with LLP. The reason is, LLP's annual maintenance cost when compared to Private Limited is very low. Also, if your LLP investment is below 25 lakhs or if your LLP's annual turnover is below 40 lakhs, then there is no compulsion for doing audit. So I suggest LLP more often.

If you are you someone trying to migrate abroad for higher studies,
You'll be needing a net worth certificate for that!
Net worth certificate contains the summary of your parent's assets and liabilities.
Your assets include gold, investments,land, properties, vehicles etc
and liabilities include loans and other payables.
The net of this is what is certified by a chartered accountant.
An important thing to note is that the name on your passport and net worth certificate should be the same
Any mismatch in the names means, there is a high chance that your migration application will be rejected.

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