IMPORTANT INFORMATION

INCOME TAX

Taxes in India can be categorized as direct and indirect taxes. Direct tax is a tax you pay on your income directly to the government. Indirect tax is a tax that somebody else collects on your behalf and pays to the government. This tax is, in turn, passed down to the government. Every person needs to file his income tax return every year and disclose his income to Government and pay tax on taxable income out of total income earned by a person during the year. Every year Government of India specifies the tax slab and income tax rated in its financial budget. Every person need to file his return in accordance with the provisions set up by the Government. For the individuals, proprietors, partners, persons not required to get books audited under income tax act’s provisions and salary earners, income tax return filing due date is 31st July of every year and for the assesse whose accounts are required to get their books of Accounts audited are required to file their Income Tax Return before 30 Sept. Every return filer should file return before that date and avoid late penalty levied by the Government.

GST

All manufacturers, sellers, service providers, exporters, etc. need to get their GST Registration in India. All kinds of business startups need to get GST registration in the following cases:

When the aggregate turnover for Sale of Goods is more than INR 40 lakhs, or INR 20 lakhs in Special category states. (w.e.f. 01.04.2019)
When the aggregate turnover for providing services is more than INR 20 lakhs
If the business supplies goods intra-state.
When the business sells goods or provides services online.
When the business held tax registration under the previous tax regime.

In addition to the above criteria, various other criteria has been provided under the GST Act, establishing the criteria for GST registration. GST registration must be obtained within 30 days of business incorporation, otherwise, the business will be subject to heavy penalties. Every registered person under GST is required to file monthly GST return for the sales and purchase activities carried out in business. Late fees would be charged in default of filing GST return.

TDS

Every person and business entity makes payment for the services they have received from service provider. On every such payment they need to deduct TDS and deposit to the Government as per the prescribed percentage. Every person to whom the TDS provisions are applicable required to file TDS return quarterly and shall make TDS payment monthly.

PTEC-PTRC

Profession Tax is payable by the every income earners. Proprietors and employers need to obtain such registration and required to file return annually / monthly.

START UP

A startup typically means a company that is in the first stage of its operations. A startup is a young company that is just beginning to develop. Startups are usually small and initially financed and operated by a handful of founders or one individual. These companies offer a product or service that is not currently being offered elsewhere in the market, or that the founders believe is being offered in an inferior manner.

REGISTRATIONS REQUIRED FOR START UP

A. Business Registration for startup:

The first thing that is required to start a new business or startup is getting the business registered. There are many business structures from which you can choose the best one for you. The various kinds of business structures in India are as follows:

Private Limited Company
Public Limited Company
One Person Company
Limited Liability Partnership
Partnership Firm
Sole Proprietorship
NGO/Trust
Nidhi Company

A new business must get incorporated in any of these business structures as per the scale of its operations, capital invested, number of members, and the risk associated with the business. The features, pros and cons of each business structure are different and the entrepreneur must consult a business expert to know which structure will suit its requirements.

B. Startup India Registration:

When the business comes under the definition of a startup as per the DIPP Notification, it can get its Startup India registration done. A business registered as a Private Limited Company under the Companies Act, 2013, as a Partnership Firm under Section 59 of the Partnership Act, 1932 or as a Limited Liability Partnership under the Limited Liability Partnership Act, 2008 can get Startup India Registration if it fulfills the following criteria:

It has not been more than 10 years from the date of business registration.
The annual turnover of the entity for any financial year since its registration has not exceeded Rs. 100 crores.
The business is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential for employment generation or wealth creation.

C. MSME registration:

MSME Registration can be obtained by micro, small and medium enterprises in India to enjoy various subsidies and benefits in terms of loans, taxation, and other schemes. There are multiple benefits laid down by the MSMED Act for micro, small and medium enterprises for their machinery and raw material which can be purchased at a subsidized rate.

D. Udyog Aadhar Registration:

Udyog Aadhaar Registration is the new initiative of the Government to support small-scale businesses. Indeed the process of Udyog Aadhaar Registration has come as a replacement to the SSI Registration or/and MSME Registration. Once, Udyog Aadhaar registration is obtained for a business, it can enjoy various subsidies and schemes specially provided by the Government for helping small businesses in India.

LICENSES REQUIRED FOR STARTUP

Apart from the above registrations there are certain licenses required to be obtained for specific kinds of startups such as shops & establishments, food business, Import Export business, Financial institutions etc. which are as follows:

A. Shop And Establishment License for startup Registration:

Every state has its own Shop and Establishment Act which provides for the rules to be followed by every shop and establishment running its business in the state. The Act also provides for shop and establishment license or trade license. A business that comes under the definition of shop and establishment must obtain the Shop and Establishment Certificate without fail to avoid penalty and fine.

B. Import Export Code Registration:

All importers who wish to import or export of goods / services from India need to have a valid IE Code. IE Code must be mentioned in all relevant customs documents. Bankers would require you to have valid IEC registration for making payments abroad. To obtain Import Export Code, it is mandatory to have a PAN and a current Account in a bank. Apart from this certain businesses for non-banking financial institutions or fin-tech companies NBFC registration is required while for multimedia broadcasting platforms Broadcasting licenses are required to be obtained.

C. GST Registration:

All manufacturers, sellers, service providers, exporters, etc. need to get their GST Registration in India. All kinds of business startups need to get GST registration in the following cases:

When the aggregate turnover for Sale of Goods is more than INR 40 lakhs, or INR 20 lakhs in Special category states. (w.e.f. 01.04.2019)
When the aggregate turnover for providing services is more than INR 20 lakhs
If the business supplies goods intra-state.
When the business sells goods or provides services online.
When the business held tax registration under the previous tax regime.