Corporate and Tax Advisory
Corporate and Tax Advisory
We provide services to improve the business performance and add value to the operations of our clients.
We can take care of your corporate tax compliance work allowing you to focus on your core business. We can prepare and submit tax computations quickly and accurately. For Multinational organisations requiring a co-ordinated, cross-border service, we provide a compliance service which enables you to retain control of your Global tax compliance issues, risks and opportunities.
We are also able to offer you tax advisory services driven by your core business objectives. We can help you at a strategic business planning level to understand the effect your business strategies may have on your tax profile.
Our relationship-based service focuses on removing real or potential barriers and tax risks, so client objectives are achieved efficiently and seamlessly.
We handle an efficient team to concentrate onspecialized areas of Taxation:
Capital Gains Tax
In order to compute capital gains, expenditure incurred in relation to the sale or transfer as well as the cost of acquisition and improvement of the capital asset are reduced from the full value of the consideration arising on the transfer of the capital asset.
In case an employee transfers shares, warrants or debentures under a gift, or an irrevocable trust, which were allotted to him under an Employee Stock Option Plan (“ESOP”), that meets certain guidelines laid down by the Government, the fair market value on the date of transfer is regarded as the full value of consideration.
Where the sale consideration for transfer of land or building (or both) is less than the value adopted or assessed for levy of stamp duty in respect of such transfer, then the value so adopted as assessed for stamp duty purposes shall be deemed to be the sale consideration for computing the capital gains. However, if the taxpayer disputes the value so adopted, the Revenue Officer may refer the matter to the valuation officer under the Act. If the valuation officer revises the stamp duty value, the capital gains shall be computed with reference to the revised value provided such revised value is lower than the stamp duty value.
The cost of acquisition for certain modes of acquisition (gifts, inheritance, etc) is generally the cost of acquisition to the previous owner(s).
Cost of acquisition of bonus shares is considered as nil.
In the case of the long-term capital assets, if the capital asset was acquired prior to 1 April 1981, cost of acquisition would be substituted by the fair market value as on 1 April 1981 and the indexation would be available with reference to the value as on 1 April 1981.
LTCG tax and its impact on your investments.
- A long-term capital gains tax of 10% is applicable to Equity investments for returns exceeding Rs. 1 lakh in a Financial Year.
- This is applicable only from March 31, 2018. Additionally, gains accrued till January 31st, 2018 will be grandfathered, which basically means that gains made up until that point will be exempt from LTCG.
Special provision for non-residents
Capital gain arising to a non-resident on transfer of shares and debentures of an Indian company acquired for foreign currency is computed in the following manner:
- Convert the full value of consideration, in the original currency of acquisition of shares or debentures, using the exchange rate on the date of transfer.
- Convert the cost of acquisition in the original currency of acquisition of the shares or debentures at the exchange rate on the date of acquisition of shares.
- Convert the expense incurred in connection with the transfer, in the original currency of acquisition of the shares or debentures at the exchange rate on the date of incurring the expense.
- Reduce the cost of acquisition and expense incurred in connection with the transfer, as computed above, from the full value of consideration, to arrive at the capital gains in foreign currency.
- Convert such capital gain calculated in foreign currency, into Indian rupees, using the exchange rate on the date of transfer.
GST is a huge reform for indirect taxation in India. GST will simplify indirect taxation, reduce complexities, and remove the cascading effect. Experts believe that it will have a huge impact on businesses both big and small, and change the way the economy functions.
It is important to understand the basics of GST, important terminologies and concepts, and how this might affect your business in the long run.
GST will subsume all of the current indirect taxes. Plus, by bringing in a unified taxation system, across the country, it will ensure that there is no more arbitrariness in tax rates.
GST is levied each stage in the supply chain, where a transaction takes place.
This is the process of addition to the value of a product/ service at each stage of its production, exclusive of initial costs. Under GST, the tax is levied only on the value added.
Unlike the current indirect taxes, GST will be collected at the point of consumption. The taxing authority with appropriate jurisdiction in the place where the goods/ services are finally consumed will collect the tax.
For example: Let’s say that cotton garments are being shipped from Karnataka to Maharashtra. Karnataka is the producer state and Maharashtra is the consumer state. Tax revenue under GST will go to Maharashtra.
Let’s understand how this will impact imports and exports. Exports are not taxable, because the place of consumption is outside India. Imports are taxable, because the place of consumption is in India.
The tax on imported goods will therefore be just the same as domestically-produced goods. Thus, the export industry will become more competitive when compared to its international peers. Also, domestic goods will be protected by making imports at par with domestic goods.
What is SGST, CGST and IGST?
Suppose goods worth INR 10,000 are sold by manufacturer A in Maharashtra to Dealer B in Maharashtra. B resells them to trader C in Rajasthan for INR 17,500. Trader C finally sells to end user D in Rajasthan for INR 30,000.
Suppose CGST= 9%, SGST=9%. Then, IGST= 9+9=18%
Since A is selling this to B in Maharashtra itself, it is an in-tra-state sale and both CGST and SGST will apply, at the rate of 9% each.
B (Maharashtra) is selling to C (Rajasthan). Since it is an inter- state sale, IGST at the rate of 18% will apply.
C (Rajasthan) is selling to D also in Rajasthan. Once again it is an intra-state sale and both CGST and SGST will apply, at the rate of 9% each.
*** Any IGST credit will first be applied to set off IGST then CGST. Balance will be applied to setoff SGST.
Since, GST is a consumption based tax, i.e., the state where the goods were consumed will collect GST. By that logic, Maharashtra (where goods were sold) should not get any taxes.
Rajasthan and Central both should have got (30,000 * 9%) = 2,700 each instead of only 2,250.
Maharashtra (exporting state) will transfer to the Centre the credit of SGST of INR 900 used in payment of IGST.
The Centre will transfer to Rajasthan (importing state) INR 450 as IGST credit used.
**Note: Custom duties are not part of this tax structure.
When is Tax Levied?
A taxable event such as manufacture, sale and provision of a good has to occur for tax to be collected. Under the current system, each taxable event is subject to multiple taxes such as excise, VAT/ CST and service tax. But under GST, products will no longer have multiple taxes, and will not incur excise duty as well as VAT at different points of time. There will no longer be any difference between goods and services in terms of taxation.
An example of this is when we go out to eat at a restaurant. Earlier, the customer paid both VAT and service tax on a single bill, but after GST there is single tax charged on the bill amount.
This leads us to an important concept in GST – Time, Place, and Value of Supply of goods and services.
One of the most significant service of professional is issuance of certificates to its client required for various purposes under different relevant rules & regulation. Broadly, following types of certificates are being needed by the business houses based upon their constitution under the law, financial arrangement with the financial institution, benefit & deductions to be claimed under statue and periodical compliance of relevant rules & regulation.
Commonly, following types of certificates are needed to carry on business activities in India:
- Certificates on the support of financial books of accounts and annual financial statements
- Certificates on the grounds of statutory records being maintained under Indian Companies Act, 2013 and other applicable laws.
- Certification of statutory liabilities.
- Certification of Fair Values of Shares of Company for the scope of merger/de-merger, Buy Back, Allotment of further shares and transfer of shares from resident to nonresident.
- Certificates for foreign remittance to be made by resident in India to foreign entity outside India u/s 195 of the Income Tax Act, 1961.
- Net worth Certificates needed for the purpose of Bank finances, furnishing of Bank guarantee and issuance of Visa by Embassy.
- Utilization certificates of various grants being discharge by Govt. of India to NGO’s, Statutory Bodies, Autonomous Bodies, and charitable organizations.
- Certificates for claiming various deductions & exemption under various rules & regulation.
- Certification under the Income-Tax laws for various deductions, etc.
- Certification under the Indirect Taxes.
What DAVE FINTECH WEALTH ADVISORS Offers
We have been undertaking certification work assignments beyond different industry sectors such. We have been strongly involved in all type of certification work. We honour ourselves on a practical, ethical and professional access to all certification work issues. Our role is to work in the best interests of our client, giving best opinion, avoiding conflicts of interest and acting with honesty at all times with the profession & tax authority with regard of ethical code of conduct.
What Is TDS?
TDS is one of the technique of collection of taxes in which a person making or crediting payment to someone has to deduct a certain percentage of amount from that amount. TDS is like a prepaid tax which is paid to govt. in advance. TDS amount is deposited by the Deductors to govt. account by the 7th of following month in which such amount is deducted. Since TDS is deposited by the Deductors to govt. accountant on regular interval, it ensures regular inflow of cash resources to the Government.
Who Is Liable To Deduct Tax At Source (TDS)?
Income Tax Act requires specified persons to deduct tax on particular types of payments being made by them.. The following are the specified person who is liable to deduct TDS.
- An Individuals or an H.U.F. is not liable to deduct TDS on such payment except where the individual or H.U.F. is carrying on a business/profession where accounts are enforce to be audited u/s 44AB, in the immediately preceding financial year.
- A person is liable to get its accounts audited u/s 44AB if during the relevant financial year its gross sales, turnover or gross receipts exceeds Rs. 1 crore in case of a business, or Rs. 50 Lacs in case of a profession.
TAX DEDUCTION AND COLLECTION ACCOUNT NUMBER (TAN)
TAN is an alpha numeric 10 digits number. Every person who is accountable to deduct tax at source must obtain TAN no. from the department in form no. 49B within one month from end of the month in which tax was deducted. TAN is needed to be mention on every transaction related to TDS.
Process of TDS Payment:
Relevant tax information is normally available in the balance sheet and
Related schedules, which disclose the aggregate tax provision and aggregate taxes paid by a company. It is also accessible from the profit and loss account, which discloses the current tax charge and deferred tax charge for the relevant year. The notes to the account reveal information regarding accounting policy relating to income tax and deferred taxes, and contingent liability with regards to tax disputes demand against the company. The auditor’s report discloses details of outstanding tax dues. In certain cases, the director’s report discusses the status of ongoing tax litigations/assessments.
A review and analysis of each of the items of the tax informationdisclosed by the financial statements provides the reviewer a fair insight of the tax position of the target concerned. Needless to state, the review and analysis, coupled with intelligent discussion with the management of the targets, would go a long way in obtaining a better perspective in this regard.
The items of tax information available in the financial statements are as follows
- Review of contingent liabilities
- Review of tax provision and tax paid in the balance sheet
- Analysis of deferred tax
- Analysis of effective tax rate
- Review of MAT paid and MAT credit
Today’s business is global. For businesses to grow and compete, they need to develop internationally. Tax and Revenue authorities around the world are getting more sophisticated; they share information, both on taxpayers and in developing tax laws.
Any cross-border transaction involves tax implications at both ends of the transaction as well as each jurisdiction affected by such a transaction. In the context of cross-border taxation, income characterization and jurisdictions play key role in tax implications and by structuring the transaction appropriately, overall tax incidence can be minimized. At DAVE FINTECH, we have the capability as well as experience to understand the transaction from the perspective of India as well as overseas country’s tax laws, so that we efficiently structure the transaction.
Our understanding of tax governance, specialist skills and deep industry knowledge help you to be competitive and compliant. At the heart of this offering are our people. People, who think beyond the present and beyond borders, deliver long lasting value.