S20

Menu

+91 7069 646028

Get Free Consultation:

7069646028

Menu

Tag: Ahmedabad

Posted on by admin-s20

How To Become A Tax Expert

Every person who dreams to earn millions faces taxes, companies plan elaborately to handle…

Read More

Every person who dreams to earn millions faces taxes, companies plan elaborately to handle taxes, a common person goes through millions of web pages to understand taxes, but even after all of this, Tax is an elusive topic. For some taxes are a necessary evil for others a sign of equal treatment, but what is important is understanding taxes. These are the reasons why being a tax expert is so sought after.

Having the skills to understand an elusive topic like taxes, can take you to higher places in life. From small businesses to large MNCs, everybody is filing taxes. As a tax expert, your role will be to hold your client’s hands and teach them to maneuver the “tax world”.

You will also play a middle man role between tax authorities and your client when they prepare their tax papers. Being proficient in the tax laws of your country is essential to succeeding in this role. You will be studying lots of calculations, various rules and regulations, and the various schemes the country offers to taxpayers. Your primary task will be to measure taxes, inform your client of rules and regulations and coordinate with tax authorities.

Like any other profession, becoming a tax expert is not the result of reading a few blogs, but a quest for understanding. You will have to pursue professional courses from a recognized University along with nurturing a few key skills that we shall discuss later.

Courses To Swear By!

Ideally after your higher secondary your quest to become a tax expert starts. You will have to complete your undergraduate first and then pursue a post-graduation in taxation. There is a second path too that can be pursued after graduation. Let us have a closer look at what you should be doing;

  • Under Graduation
    Once you have completed your higher secondary, look for undergraduate programs related to taxation. Finding a bachelor’s course that offers specialization in taxation might be difficult. You can go for other related fields that you will need to become a successful tax expert, like taxation courses in Ahmedabad.

    Pursuing your bachelor’s from a reputed institute is also preferable. Choose carefully the institute to pursue a bachelor’s degree, as it will be the base to you becoming a good tax expert. Exposure and quality are the important factors while choosing an institute and not an advertisement.
  • Post Graduation
    The ideal choice after graduation is to pursue post-graduation. In this step, you set yourself for success as a tax expert. Your post-graduation should be in taxation. It will give you all the information you need on how the tax world functions. Keep in mind to get as much exposure to the real-world scenario as possible. An internship under a tax expert will set you up perfectly for your tax expert journey. Again, a reputed institute is advisable, but exposure and quality of education are key factors.
  • Chartered Accountant
    If you want to become a tax expert. Chartered accountancy course is most preferable course in India. The course includes in-depth knowledge of direct as well as indirect taxation. The course offers you to become expert in the field of taxation.

    There is also compulsory internship requirement.  You have to undergo with 3 yeas training under qualified chartered accountant so that you will get the practical exposure to the taxation and accounting. If you are not getting the work related to taxation in the internship you can also prefer to join taxation course in Ahmedabad.

Additional Skills To Add On!

So you have the required qualifications, but without skills, you will not be able to find employers. Let us see some essential skills that a tax expert must possess to become successful.

  1. Leadership
    As a tax expert, you will be in charge of the entire taxes of a huge MNC or a billionaire client. You must have the leadership skills to maneuver challenges and issues that your clients face during their filing of taxes. You might also be required to lead other departments and guide them through the process of tax filings. Thus, a tax expert who can lead from the front and find solutions to problems is bound to succeed.
  2. Up to Date
    The Legislature is always alive coming up with new tax regimes to better fit the society. A tax expert must have the skills to keep up to date with all these changes. A habit of reading newspapers, participating in discussions, seminars, etc. are a few ways to develop these skills. The client is only as aware as the tax expert handling them. Being up to date is crucial for a tax expert to make sure their clients can steer clear of fines and sanctions.
  3. Technical expertise and exposure
    As a tax expert, if you have early exposure to the tax world you will benefit a lot. An internship or a project that you were a part of during your education can help build the expertise needed to succeed. The world of taxes can get complicated with different sectors of the market subject to variable tax regulations. Technical proficiency is a must to understand and find out faulty metrics and partially informed tax filings. Having said that, there are many elite coaching institutes that provide taxation training in Ahmedabad that you could benefit from. Consider checking them out. 

Conclusion

Taxes are a tool deployed by the government to support the development of the country. As a tax expert, you have to make sure that your client pays their taxes without any hassle. You will essentially be the bridge between the government and the client. People might say that taxes are unnecessary, but you must know better. You will also have to be clear and educative with clients and help them better understand the tax regime. A tax expert must be abreast of all the changes in the tax regimes. They must also have the proficiency to deal with mishaps and the composure to work with teams. At the end of the day, a tax expert has to be the one who can see right through the elusiveness of the “Tax World”

Posted on by admin-s20

Learn Commerce structures IV: Public Limited Company

An organization that functions as a single entity formed and owned by shareholders is…

Read More

An organization that functions as a single entity formed and owned by shareholders is called a Public Limited Company. It constitutes a company that can freely sell its shares in a public domain and all its decisions are governed by strict rules and regulations.

In the Indian Republic, a Public Limited Company is the largest method of doing business available under the law. Often a group of people who have a great business idea, register for a Public Limited Company and generate capital by offering shares that can be bought by the public. In the present economic scenario, Public Limited Company is very profitable and thus gaining further education in Public Limited Companies after BCom course in Ahmedabad, proves beneficial.

What is a Public Limited Company?

A Public Limited Company in layman’s terms is a company formed and by the people and makes profits for the people. Thus, a company that is registered as a Public Limited Company cannot and will not have a specific owner. This makes sure that a one-head monopoly is avoided in the company.

Let us take an example of a famous Public Limited Company in India, The State Bank of India. Founded in 1955, as an amalgamation of the three princely state banks in British rule, The State Bank of India is one of the most prominent examples of a Public Limited Company. All the shares of the State Bank of India are listed on the National Stock Exchange and the Bombay Stock Exchange for sale to the public.

There is no owner of the State Bank of India and all the profit generated is paid to employees and shareholders as dividends. The presence of the State Bank of India makes sure that the banking sector is free of monopoly by a mogul or one single private bank.

Who is the owner of a public limited company?

The most distinctive aspect of a Public Limited Company is its ownership. In a private company, the owner is either a parent organization or a group of people who founded the company.

Unlike private companies, a Public Limited Company is purely founded and owned by the public. Thus, a Public Limited Company will not have an owner but rather it will have shareholders. The management of a Public Limited Company is looked after by a Board of Directors (we shall discuss this in the features of a Public Limited Company).

What are the features of a public limited company?

Let us try to analyze the features of a Public Limited Company to gain better knowledge;

Legal Existence: A company that is registered as a Public Limited Company shall have separate legal existence from the members who own the company. This means that if a group of people come together and create a Public Limited Company then once the company is formed, it gains a separate identity. All legal documents like GST invoice, court notices shall be issued in the name of the company and not the owners or the management.

Capital: A Public Limited Company has to collect capital for its expenses and procuring its raw materials. Most Public Limited Companies collect capital by selling shares to buyers in the public domain. When you buy a share in a Public Limited Company, you own a certain percentage of the company. The capital generated by selling public shares is called the share capital.

Shareholders: A Public Limited Company is owned by shareholders. This means that no person can claim the company as their own private company. But shareholders cannot take part in the management decisions of the company. Their sole role is to elect the managerial committee often the Board of Directors that looks after the major business decisions of the company.

When a company is indebted and is liquidated, the shareholders do not have to pay the creditors of the company. Rather they have to pay only the face value of their shares. For example, say you hold a thousand shares in a company each worth ten rupees. If the company goes bankrupt, you will have to only pay the face value of the shares that is; ten thousand rupees.

Board of Directors: Almost all companies today, public or private, establish a board of directors to look after major business decisions of the company. The difference here is, the board of directors in a Public Limited Company are selected by the shareholders and they represent these shareholders during meetings with other companies. The decisions taken by the Board of Directors use a majority rule and this ensures unity in the management.

What are the merits of a public limited company?

Public Limited Companies are often the largest companies in a business. Let us analyze a few of the merits of a Public Limited Company;

Leadership: As stated earlier, Public Limited Companies have a board of directors. This ensures that the company is led by a consensus rather than the whims of a single leader. The main advantage of having a board of directors is that these directors are selected from the shareholders and by the shareholders.

Large Capital: One of the largest advantages of a Public Limited Company is that they can generate huge capital investments. By selling their shares in the public, Public Limited Companies generate a huge capital for their expenses. Once the Initial Public Offering (IPO) is over and the share capital has been generated, Public Limited companies can release bonds and debentures through the stock market to generate additional capital. Thus, Public Limited Companies that have a strong performance can generate greater capital over time.

Financials: Public Limited Companies are strictly governed by rules and regulations. Thus, they are required to publish their financial records every year. Unlike private companies, Public Limited Companies have to make sure that their investors know the financial happenings and position of the company. This adds an element of safety to Public Limited Companies and helps them in attracting potential investors.

Limited Liability: Shareholders in a Public Limited Company are protected from incurring the company’s losses. What this means is that shareholders have to pay only the face value of the shares they hold in a company if it goes bankrupt. This facet also makes sure that Public Limited Companies are separate entities on their own and can also be sued on their own without the involvement of the shareholders.

What are the demerits of a public limited company?

Though there are many advantages to a Public Limited Company, there are few disadvantages too that we need to discuss;

Public Books: On the one hand publishing financial records every year, helps Public Limited Company attract investors but at the same, this also means that their competition knows everything about them. Since the company has gone public, the competition can easily analyze their finance books and see the loss and profit that the company is experiencing. This aspect poses great difficulty to Public Limited Companies.

Greedy Shareholders: Often the public has no interest in the working of the company. Investors today want to make an easy buck and this means that they do not pay any attention to the detailed plans a company lays down to expand. Greedy Shareholders take no part in developing these plans and often prove detrimental to the company’s plan.

Takeover: Unlike private companies, Public Limited Companies are prone to takeovers since the board of directors is selected by shareholders. A hostile party may buy a huge number of stocks in the company and gain a significant voice in the board of directors. This means that a hostile party can gain ruling command in a company and derail the existing chain of command.

Is there any specific member requirement in a Public limited company?

A company that wants to register itself as a Public Limited Company has to have a minimum of seven members. The maximum limit for the number of members in a Public Limited Company does not exist, unlike Private companies that can have a maximum of two hundred members only.

This gives an advantage to the Public Limited Companies as they can have a huge number of members. Specific employee requirements can further dwell in deeper after commerce courses in Ahmedabad.

What are the requirements for Public Limited Company registration?

In today’s time, the Government of India has made registering Public Limited Companies easier as compared to earlier times. According to the Ministry of Corporate Affairs, there are three mandatory requirements that a company has to fulfill to register itself as a Public Limited Company;

  • The company must have a minimum of seven share holders.
  • The company must have a minimum of seven share holders 
  • The company must introduce minimum share capital of Rs 5 Lacs
  • All sections of the company should have a direct impact on its compliances.

What are the documents required for registration?

There are two sets of documents required for registration, one set for the directors and shareholders and the other set for registering the company office;

Directors/ Shareholders

  • Copy of PAN Card
  • Aadhar Card
  • Address Proof (Bank Statement, Mobile bill, Telephone bill)
  • Authorization Form

Registered Office

  • Ownership Proof (Electricity Bill, sale deed, copy of index II, Tax Bill, etc)
  • Utility Bill (Gas Bill, Electricity Bill)
  • NOC

What is the process of registering a Public Limited Company?

The process involved in registering a Public Limited Company is;

  • Identify Seven Shareholders and Three directors (Minimum numbers you may have more)
  • Obtain a Director Identification Number (DIN): Every director of the company must have a DIN allotted to them by the Ministry of Corporate Affairs.
  • Obtain a Digital Signature Certificate for Promoter and Directors: This legally allows the promoters to promote the company and recognizes the directors of the company. It also allows the authorities to authenticate the documents being filed.
  • Identify location and capital of the company
  • Company name application: The company should apply to the Registrar of Companies, to reserve a unique name for themselves.
  • Preparation and submission of the Registration documents to the ROC: Registration documents like Memorandum of Association and Articles of Association have to be prepared and submitted to the ROC.
  • Issuing of the Certificate of Incorporation and allocation of the Corporate Identification Number by the ROC
  • Filing commencement of Business: The company cannot start its business until the directors have filed a declaration stating that all shareholders have paid the share money within 180 days of incorporation.

Conclusion

Public Limited Companies allows making sure that major sectors like banking, finance stay free of the monopoly of huge private industries. Thus, learning about Public Limited Companies after BCom courses in Ahmedabad proves very beneficial in the longer run. It can help create and build Public Limited Companies that can go on to become leaders in their respective businesses.

Part – iii – Learn Commerce Structures III: Private Limited Company
Part – ii – Learn Commerce Structures II: Proprietorship Firm
Part – i – Learn Commerce Structures: All About Partnership Firms

Posted on by admin-s20

Learn Commerce Structures III: Private Limited Company

Introduction  A Private Limited Company is quite a proven and effective business model. It…

Read More

Introduction 

A Private Limited Company is quite a proven and effective business model. It involves private ownership, with a limited number of shareholders(a maximum of 200). These are small but successful business entities and are comparatively easy to achieve targets, for young entrepreneurs, after the BCom course. 

Although it’s somewhat open to all options, individuals from Commerce courses happen to make better jobs here, mostly due to additional Educational orientations to similar subjects, something other stream novices to this sector, are deprived of.

What Is A Private Limited Company? 

As the name suggests, a Private Limited Company is a privately held business entity. It offers limited liability or legal protection to its shareholders. It is an intermediate business stature, shareholders in between a partnership and a collectively owned business company. 

A maximum of 200 shareholders can be a part of this institution. According to the definition, the shares of these companies are not publicly sold in Stock Exchange markets and can only be sold to the stakeholders in the business, implying a ground-level limitation in the liquidation of such a company.

Who’s The Owner Of A Private Limited Company?

Private limited companies are owned by one or more individuals (human or corporate), known as “members”. The company’s “shareholders” are those, who’s memberships are limited by shares, while “guarantors”  are those limited by guarantees. Beyond the technical terms, members of a company are often referred to as partners.

The companies are majorly owned and managed by the same set of people, where the ones managing the functioning of the system are called Directors, and the ones assisting them are called Secretaries. Together, the executive branch of a company is known as company officers.

What Are The Features Of A Private Limited Company?

A private limited company has the following features:

  • Membership: As per the provisions of the Companies Act 2013, from a minimum of two to a maximum of 200 members, is what a private limited company is allowed to comprise of.
  • Limited liability: The liability of the members is limited to the number of shares directly held in their name.
  • Perpetual succession: Even in case of death, insolvency or bankruptcy of any of its members, the company continues to exist in the eyes of the law, thereby offering ways of forever existence.
  • Register of members: This database is not mandatory for a private limited company to maintain, unlike any public limited company.
  • Directors requirement: The company is required to have a minimum of two directors, and then it can remain operational.
  • Paid-up capital: A private limited company must hold a minimum capital worth rupees one Lac, or such higher amounts, prescribed from time to time.
  • Prospectus: A private limited company is not required to issue a prospectus either, again, an absolute must in case of any public limited company. 
  • Minimum subscription: There are no such limits on this ground and the company is free to start a business immediately after its formation.

Name: The company must use the word private limited company at the end of its name.

What Are The Merits Of A Private Limited Company?

A private limited company has the following advantages

  • Flexible Investment: No minimum capital threshold is required for registration.
  • Separate legal identity: A private limited company is a separate legal identity in the court of law and doesn’t hold overlapping assets and liabilities with the directors.
  • Free and easy transfer of shares: Shares of the company are transferable by a shareholder to any other person and it is particularly hazel free.
  • FDI allowed: In a private limited company, 100% foreign direct investment is permissible in certain segments.

What Are The Demerits Of A Private Limited Company?

A private limited company has the following disadvantages:

  • Publicity restrictions: It arrests the transferability of shares by its articles.
  • No place in the stock market: Shares of these companies are not entitled to be sold in the Stock Exchange markets.

Is There Any Specific Employer Requirement In A Private Limited Company?

There is no such mandatory requirement, to appoint employees in a private limited company. Though informal, graduates from Commerce Courses, are likely to prioritize, in the selection processes.

What Are The Requirements For Private Limited Company Registration?

A private limited company has the following requirements for registration::

  • A minimum of two adult persons are required to act as Directors of the company
  • Minimum of 2 Directors and can have a maximum of 2015 directors.
  • One of the directors of a private limited company has to be an Indian Citizen and Indian Resident.
  • The other director(s) can be a Foreign National.
  • Two persons are required to act as a shareholder of a company

What Are The Documents Required For Registration?

The documents required for a private limited company are:

  • ID proof: PAN card and passports of Indian and foreign directors, respectively
  • Address proofs: Ration card or Aadhar card or driver’s license or voter ID
  • Residence proofs: Bank Statement or electricity bill of the premise
  • Notarized rental agreement
  • NOC from the property owner
  • A copy of the sale deed or property deed (for an owned property)
  • Digital signature of any one director

What Is The Process Of Registering A Private Limited Company?

Once a name for the company is finalized, the following steps have to be carried out by the applicant: 

Step 1: Apply for DSC (Digital Signature Certificate).
Step 2: Apply for the DIN (Director Identification Number)
Step 3: Apply for the name availability.
Step 4: File the EMoa and EAOA with registration form to register the private limited company
Step 5: Apply for the PAN and TAN of the company
Step 6: Certificate of incorporation will be issued by RoC with PAN and TAN
Step 7: Open a current bank account on the company name

Conclusion

Merits and Demerits are the two sides of the same coin, likewise, for a private limited company. It is the most prevalent and recognized business entity, in the current date. This is majorly due to the higher degree of freedom, that it offers in setting it up and functioning.

There’s no time gap between these two, and that’s an incredible opportunity to encourage start-ups. After BCom. Courses, thousands of young minds sketch business plans, not always relevant or effective in the public domain. Whereas the private window offers a more homely than a professional working space, warming up young interns to gear up quickly.

Massive Private Limited Companies have prospered beyond extents, inspiring millions to execute their expertise. Some of these include Flipkart, Ola, Snapdeal, etc. It’s important to have directional thinking and appropriate strategies,  to suit the ideas.

Part – iv- Learn Commerce structures IV: Public Limited Company
Part – ii – Learn Commerce Structures II: Proprietorship Firm
Part – i – Learn Commerce Structures: All About Partnership Firms

Posted on by admin-s20

Learn Commerce Structures II: Proprietorship Firm

A Proprietorship Firm or Sole Proprietorship is the simplest form of business that can…

Read More

A Proprietorship Firm or Sole Proprietorship is the simplest form of business that can be. It is one-man business ownership, where the owner is the business and is not a separate legal entity. Being a separate legal entity comes with government regulations which Sole proprietorship is exempt from. These do not even need to be registered. Most small businesses start as sole proprietorships and go on to expand later.

Since the owner and the business are the same entity, in this case, the profits and losses incurred by the business are directly incurred by the owner. This has both positive and negative aspects of the business and its owner. To learn more about Proprietorship Firms, after B.Com course in Ahmedabad is a good choice.

What Makes A Sole Proprietorship?

  • No Separate Identities: Since the business and the owner are the same, the owner becomes responsible for all transactions and activities carried out by the business.
  • The Risk Factor: The profits and losses of the business are directly associated with the owner. This means all losses are incurred from the personal wealth of the owner while all profits go to their personal wealth as well.
  • Legal Formalities: Since no law governs sole proprietorship, there are no procedures to follow when establishing, expanding or closing a Proprietorship Firm. 
  • Liability: Since the business equates to the owner, there is an unlimited financial liability for the owner. The debts and liabilities of the business automatically fall on the owner.
  • Owner and Business Life-cycle: The events and occurrences in the life of the owner will directly impact the running of the business. An accident, death, imprisonment, etc. will all affect the business operations directly.

Proprietorship Firm Is Not A One Person Company

  • Legality Of The Business: Unlike a proprietorship firm which is not a legal entity, a One Person Company is a legal entity that is separate from the owner. It is defined and regulated under the Companies Act 2013. Enrolling in the after Commerce course in Ahmedabad will prove helpful in learning more about what makes Sole Proprietorship a unique and also largely preferred business choice for a lot of people. 
  • Liabilities: The liabilities of the business do not directly fall on the owner in the case of a One Person company. The owner has a limited liability towards the only shareholder of his company (Which practically is himself, but not so legally).
  • Succession: Succession in a Proprietorship Firm depends on declaring a legal nominee. The continuity of the business stays uncompromised only if the nominee is declared in a will. The death of the (only) company member will otherwise simply disrupt the business.
  • Tax Returns: If the annual turnover crosses the legally specified limit, sole proprietorships need to get their accounts audited. A-One Person Company on the other hand has to file annual returns just like a private limited company. 
  • Change In Nature: An increase in turnover of a One Person Company can lead to it becoming a Private or Public Limited Company. For a Sole Proprietorship, regardless of the profits earned, its status remains as a Sole Proprietorship.

Advantages Of A Sole Proprietorship

  • Complete Control: Since the owner is directly liable for everything, at all steps and stages of the business, the owner has the complete power to decide on matters.
  • Confidentiality: Financial data and documents are not required to be published by Sole Proprietorships which maintains the confidentiality of procedures and operations. 
  • Sense Of Achievement: Since the owner is answerable to own self only, all good decisions, advances, and business expansions bring great satisfaction to the self of the owner.

The Advantages Are Only One Side Of The Coin: Disadvantages Of Sole Proprietorship

  • Unlimited Liability: The aspect of complete control means all losses are solely incurred by the owner. The liabilities continue from the business to the owner. A failing business can take with it the personal wealth of the owner.
  • Uncertain Lifecycle: The life cycle of a Proprietorship Firm depends directly on the outlook and life events of the owner. A debilitated attitude or the happening of an event with a negative impact can leave the business in the lurch.
  • Limits to Managerial Abilities: Since the owner is the business, and no other people are a part of it, tasks like managerial work become difficult to pull off for a single person. 
  • Limited Capital: Since there is only so much that an individual can invest from their personal wealth into a business, these businesses also need money to expand. Unfortunately, banks are not actively willing to lend to proprietorships.

The commerce course in Ahmedabad is a great learning opportunity for those planning to venture into the business world. A Sole Proprietorship is often the beginning of what ends up becoming big and beloved brands, products and service providers. Starting on one’s own is always a better idea, a better learning experience. 

Part – iv- Learn Commerce structures IV: Public Limited Company
Part – iii – Learn Commerce Structures III: Private Limited Company
Part – i – Learn Commerce Structures: All About Partnership Firms

Posted on by admin-s20

Knowledge Series For Commerce Students: Know Your Home Loan

Home Loans cater to your needs or possibly a renovation, construction, or additional repairs…

Read More

Home Loans cater to your needs or possibly a renovation, construction, or additional repairs to your humble abode. It is affiliated with a plethora of facets that the borrower needs to take into consideration before he/she can finally attempt to avail of such a loan.

How Much Of A Loan Amount Are You Eligible To Avail?
The predominant requirement is the eligibility of the borrower in the repayment of the loan that would determine the tenure, interest rates, and down payments attached to the loan amount. Your surplus income will drive the lender to figure out the actual amount of loan that you are eligible for.

So, your total assets, total liabilities, and the apparent stability of income play a pivotal role in gaining the lender’s trust. At the end of the day, a bank needs to ensure that your financial stability will not pose any problem for them in the repayment of the loan amount.

Additional Charges And Figures That You Need To Be Aware Of
Statistically, the bank assumes that as much as 50% of your income would suffice for your loan repayment, furthermore, the desired tenure, as well as pegged interest rate, will also impact the decision of assessing the amount of loan.

The majority of lenders expect around 10 to 20 per cent of the amount of home’s purchase in the form of a down payment on your part, and the remaining portion of the loan is eventually financed by the lender.

Now, this aggregate amount of loan encompasses certain charges, for instance, registration, transfer, stamp duty etc. You may be eligible for a larger amount but it does not necessarily mean that you have to get that much amount financed, even a significantly smaller amount can also be availed which directly relies on your requirement.

It is advisable, however, that keeping the ratio of down payment relatively higher than the ratio of loan amount so that the ultimate cost of interest payable can be mitigated and be kept at the desired level.

The Necessity Of A Co-Applicant
Additionally, having a co-applicant is an indispensable requirement to fulfil, so if you are the only owner of the property under scrutiny, then, in this case, an immediate sibling or any other family member can be anointed as a co-applicant.

What Specific Documents You Will Require For The Loan?
The documentation process is another integral and intrinsic phase where a checklist of specified documents is handed out by the bank which is to be filled accurately to steer clear of future ramifications.

Your unique identity proof, proof of residence, form 16/Income tax returns and recent salary slips which has to be decidedly authenticated by your employer and has to be self-attested.

But generally, in most cases, collateral security is also warranted such as insurance policies, units of mutual funds or any other significant investment. In most cases, the designated property is purposefully mortgaged in favour of the lender in the form of security until the loan has been repaid in its entirety.

Should You Secure Your Home Loan With An Insurance Policy?
It is vehemently advisable to secure insurance in favour of the home loan so that the liability does not fall on anyone else, but you alone will be secured enough to repay it. Now there are two prominent plans which are prevalent in today’s scenario, i.e. pure term insurance and the other one is a Mortgage insurance plan.

Now the loan amount should be equivalent to the insurance amount. As far as the premium is concerned, then a single premium, as well as regular premiums, will be the coveted choice. However, it is not mandatory to avail of insurance cover but a sense of self-assurance is generated by availing of such service.

Disbursement Of Loan
The documentation process is the precursor of the disbursement of the loan. The magnitude of the loan amount is solely scrutinised based on the documentary proof and that entails the procurement of a sanction letter from the bank which explicitly states the final amount of loan, duration, and applicable interest rate etc.

So in a nutshell, when the loan has finally been confirmed from the bank, it is commonly referred to as disbursement of the loan after getting through entire technical and legal or valuation activities and handover the cheque or demand draft in favour of seller after successful execution of sale deed and mortgage deed of the house.

Types Of Interest Rates
Rates of home loan can be distinct in the form of fixed or flexible. Calculation of EMI varies as per the various financial institutions/banks from where your loan has been sanctioned. Underlying additional charges also apply in tandem with the payment of the EMI such as processing fee which is generally about 0.5 to 1% of the loan amount. Now, repayment in the form of EMI begins right after the month when the loan has been disbursed.

Repayment Through ECS
Electronic Clearing System (ECS) is one of the avenues through which the repayment of the loan can be done, which involves direct payment of the loan amount from your salary account on a specific date of the repayment.

If you are eligible to pay higher EMI, then it will certainly benefit you since it acts as a long-term advance. Clearing the obligated amount faster will alleviate and relieve your mental stress easily.

Pre-Closure
The borrower always has this option at his disposal to pre-close his/her loan way ahead of the specified duration. However if the interest on your loan is of floating nature, then you will not be bound to pay additional charges, whereas if it is of a fixed nature, then certain charges may be applicable.

Every financer or lender should explicitly state in their statement the total interest as well as the principal amount payable at the very beginning of the financial year. This will eventually serve as a propellent factor to the department of accounts regarding your proof of investment for necessary tax deductions.

This phenomenon will serve you to reap tax benefits at the end of the year. It is prudent to pick the lender that renders the lowest EMIs option which can mean that you are paying a significantly lesser amount of money in the form of repayments as compared to other applicants from any other financial institution.

How Your Grievances Can Be Addressed
There may be incidences that a borrower may not be satisfied with the services rendered by the bank or some other pertaining relevant problem might occur.

So in that case, you can mention your grievance specifically in writing delineating the factors that displeased you, which needs to be addressed at the concerned branch and if however, the bank does not resolve or overlooks your concern then you have the option at your disposal to lodge your complaint with the ombudsman.

Income Tax Benefit of Housing Loan
Interest payment for housing loan is deductible under the head income from house property. The maximum limit is Rs. 2 Lacs p.a. u/s. 24(b). Moreover, we can also get benefit u/s. 80C of income tax for the principal repayment of housing loan with maximum limit of Rs. 1.50 Lacs. The stamp duty and registration charges paid at the time of registration of sale deed is also deductible u/s 80C of Income Tax Act, 1961.

Posted on by admin-s20

Learn Commerce Structures: All About Partnership Firms

When you start a business or a venture one has to make decisions. And…

Read More

When you start a business or a venture one has to make decisions. And business is a whole new process of setting a company or a firm that is just like a newborn baby. A baby has to be taken care of and has to be taught everything and also needs spoon-feeding. A new venture requires a whole lot of effort and partnership is the most major part of it. 

A partnership is a part of a new venture and you as an individual have to decide whether you want to do solo business or you want a helping hand. So, today we will learn about a partnership, different features of partnerships, and different types of partnerships.

If you are a person who wants to start a new venture after B.com course in Ahmedabad. The partnership will be the most important aspect of it. And here you will get to know partnership and how a partnership works? And what is a partnership? And some of its key features.

A partnership is part of a business or a new venture. Also, a partnership is considered to be a kind of business. In this kind of business, minimum of two partners decide to come together for a new venture and share responsibilities as decided by them. In a partnership, there is a formal agreement that takes place between two or more people and they are the co-owners. And in this agreement, all have shared as mutually decided in profits as well as losses. Also, there is no solo decision; the majority of all the partners have to agree to the decision.

In India, all functions and aspects of partnership works or are administered under ‘The Indian Partnership Act 1932’. This law specifies and explains that a partnership is an association between two or more individuals or organizations who have agreed to be co-owners of a venture and they have to share the profits and loss as mutually decided. Also, the share of profits that have been generated from a business should be done under the supervision of the members or on the behalf of other members.

Features Of Partnership

Now that we have understood what a partnership looks like, let’s look at some features that constitute this type of arrangement.

  1. Partners Agreement: In a company or an organization the association of two or more partners is the most important aspect. When you as an individual decide to do a partnership for your new venture all the partner’s agreements will be the prior thing to do. An agreement is the basis of an association between two or more individuals. This is a type of agreement that is always written. Also, some people do an oral agreement evenhandedly. But it is preferable to do a written agreement. Also, it is always that all partners have a copy of their written agreement. The agreement should also be norarised and prescribed stamp duty has to be paid on the same. We have also registered our firm with the registrar of the firm.
  2. Two or more two people: In a new venture it is always suggested that there should be a partnership of two people which have a common goal. In an enterprise, for a partnership, at least two people should be there. Whereas there can be more than two people depending upon what is your goal. 
  3. Sharing of profit: When two people form an association for a common goal so it is a rule that they have to share the profit or loss that is being processed by the company. The partners have to share the profit as well as loss as mutually decided.
  4. Profit Motive: It is very important that when you and your partners start a business that business should be profitable and have a gaining motive.
  5. Correlated Business: In a partnership both the partners are the co-owners as well as an agent of their firm. Any act performed by a partner will affect the other partners and the company. So, this point acts as a test of partners and their partnership.
  6. Limitless Liabilities: Every partner in a partnership has limitless liabilities.  All the partners are jointly and severally liable for all the losses caused by  the firm.

These features are the most important for the person who wants to start a partnership. After commerce course in Ahmedabad, an individual must have learned about the features of a partnership and how it works.

Types Of Partnerships

Partnerships are divided into different categories depending upon the state and at which part of the world business operates. Here we will talk about three common types of partnerships.

  • General Partnership: This type of partnership comprises two or more two people who have formed an association to run a business. In this type of partnership, every partner has an equal right and every partner can exercise their rights. Every partner has the right to control business and also participate in every activity like decision making, management activities, etc. Not only the rights, but there is equal sharing of responsibilities as well as liabilities. Any type of loss, profit, or liability every partner will be held responsible for the same. Even if one partner is sued, the rest of the partners are held accountable. The court or the creditor will hold the partner’s assets. So, people usually don’t opt for this type of partnership.
  • Limited Partnership: In this partnership, includes each of the final and restricted partners. the final partner has unlimited liability, manages the business, and also the alternative restricted partners. restricted partners have restricted management over the business (limited to his investment). they’re not related to the everyday operations of the firm. In most cases, the restricted partners solely invest and take a profit share. they do not have any interest in taking part in the management or higher cognitive process. This group action means that they are doing not have the correct to compensate the partnership losses from their revenue enhancement come back
  • Limited Liability Partnership: In an LLP partnership all the partners have limited liability. Each partner is guarded against alternative partners’ legal and monetary mistakes. A Limited Liability Partnership is similar to a Limited Liability Company (LLC) but different from Limited Partnership and a general partnership. We have to register LLC to registrar of companies under LLP Act to start the same.
  • Partnership At-Will: Partnership at Will can be defined as a partnership where no clause has been mentioned about the expiration date of the partnership. Under Section 7 of The Indian Partnership Act 1932, Two clauses have to be fulfilled for Partnership At Will
  1. The partnership agreement should not have any fixed expiration date.
  2. No particular determination of the partnership should be mentioned.

Therefore, if the duration of the partnership has been mentioned in the agreement that will not be considered Partnership At Will. Also, If the firm has initially fixed an expiration date but continues or is operational after the given date then that is considered Partnership At Will.The technicalities of Partnership can only be learned from a good institute. Like the commerce course in Ahmedabad offered by H.L College of Commerce.

Advantages of Partnership

  • In a partnership, there is an easy formation that can be done through an oral or written agreement
  • In a new venture, there is a large use of resources instead of  being a sole proprietor you can be share and contribute the capital
  • There is flexibility where you can make any changes ad required to achieve the motive
  • All the loss and profits are equally shared and burden so no one individual is a loss or profit
  • A partnership firm has a combination of new skills because there is the advantage of knowledge, skill, talents and experience.

Disadvantages Of Partnership

  • There is a limited amount of capital
  • There are unlimited liabilities
  • There is difficulty in transferring shares because the funds can only be transferred once the agreement is done
  • A partnership business could face dissolution just in case of death, economic condition or mental or physical sickness of active partners
  • A partnership has limited business sizes and it barely has its existence of the law so there is a less public faith
  • In a partnership, some dispute can occur in terms of authority and the profit so this create problems between the partners and for the business
  • With a lack of prompt decision the partner’s square measure needed to make consequences before creating any call within the partnership business.All the partner ought to move to debate the matter of business. therefore this takes a very long time to form a call and conjointly delays it
  • There is a risk of implied authority that the two active partners are the decision-makers of the business, but there is no certainty if the partner is deciding for the betterment of the business. There is a risk whether the partner is deciding for his or her benefits

Conclusion

A partnership is the best way to do business. As it creates opportunities for any two or more individuals and this brings the best out of it. Two or more minds with creative and mind-blowing ideas give outstanding performance and results. The partnership is a benefit for those who have a proper written agreement because that will help in doing a proper and well-structured business with equal responsibilities and liabilities.

Part – iv- Learn Commerce structures IV: Public Limited Company
Part – iii – Learn Commerce Structures III: Private Limited Company
Part – ii – Learn Commerce Structures II: Proprietorship Firm

Posted on by admin-s20

All About Depreciation Bookkeeping

Finances are an inherent part of our everyday lives and on an everyday basis…

Read More

Finances are an inherent part of our everyday lives and on an everyday basis – we do come across the processes of depreciation, appreciation and other related processes in different forms. These processes may sound complicated to comprehend, but once we understand them and the outline of their functioning, we may conclude that they are actually simple and extremely essential.

Before we delve deeper into the processes of depreciation, we must go through the concept of bookkeeping. Bookkeeping is the backbone of a stable and well running business, as it involves keeping records of the financial affairs of the business. This process must be done judiciously with care and concern, as if it is taken lightly, it may circumstance in financial muddles and other such confusion. 
The skill of bookkeeping is not easily learnt, and engaging in official and professional training for the same is beneficial – both for the individual and her respective business. To further understand the concept of bookkeeping as a whole, an individual can consider enrolling in a tally class in Ahmedabad.

What Is Depreciation?

Before we understand the process of depreciation as a whole, we need to don the economic eyeglasses and understand the concept of a fixed asset – as depreciation revolves wholly and solely around this concept. 

A fixed asset is most often defined as a long-term asset used by a company/firm that holds a lasting period for over a year. These assets include land, big machines etc. – and depreciation involves constant decreasing of a specific/recorded cost on this very asset.

For instance, let us say that a firm purchases a steel grinding machine with a cost of Rs 400,000 and the expected working period of this specific machine is eight years, then it can be said that the firm depreciates the asset held under this process of depreciation at the cost of Rs 50,000 per year. 

Thus, we can infer, from the given example, that it is the cost of the depreciation asset divided by the number of years the asset is put into use, which is considered as a certain ‘depreciative cost’ every year. (From the given example, we can infer that the asset is divided by eight years as the machine is used for eight years). 

The principles and nuances of depreciation can be levied on every other fixed asset except land, as land is a particular asset whose value only appreciates with time and usage. The above description is a brief overview of depreciation, and further insight into depreciation can be gained in a tally computer course, to be considered in Ahmadabad, which the individual must consider attending.

Calculation Of Depreciation 

There are multiple methods, using which depreciation can be calculated with both ease and efficiency. Yet, before we engage with the calculation process, there is a certain checklist of factors that we must keep in our mind, which are as follows – 

  1. Life of the asset – The ‘life’ of the asset, or to be more specific, the ‘productive’ life of the asset refers to a certain period beyond which the mentioned asset is not considered useful. The mentioned asset loses its cost – affectivity post this period, and the operation of this very asset cannot be continued judiciously. 
  2. Salvage Value – After the mentioned asset discards its cost-effectivity and is no longer useful for the company, losing its ability to contribute towards the functioning of the operation productively, the firm may consider selling the asset at a lower amount. This ‘lower amount’ is defined as the salvage value of the mentioned asset.
  3. The overall cost of the asset – As we engage with the process of depreciation, it is essential for us to keep in mind, the overall cost/total cost of the asset we are working with. This ‘overall cost’ does not merely include the cost of the asset, but it also includes production/set up expense, transport cost – so on and so forth. 

A further and more thorough understanding of these factors can be obtained in the tally computer course in Ahmedabad. Attending this course can surely prove to be a knowledgeable and enriching experience for the individual who poses interest in the field of accounting, and specifically in the field of bookkeeping. 

Finally, what is depreciation bookkeeping?

Depreciation Bookkeeping

After we thoroughly comprehend the processes of depreciation and make a checklist of certain, specific factors to keep in mind while engaging with this process, we must now move onto the main topic of depreciation bookkeeping, which is, in simpler words, the accounting/recording of the amount of depreciation suffered. 

  1. Straight Line Depreciation Method – It involves the simple placement of a constant rate of depreciation every year, over the life of a fixed asset. This is not merely the easiest, but the most straightforward method of depreciation calculation which can also be classified as the method most commonly and easily used by companies. 

Formula – Annual Depreciation expense = (Asset cost – Residual Value(5% of original cost of asset)) / Useful life of the asset
2. Written Down Value Method: Most of the companies are using the written down value method. The main reason of this depreciation method is that the actual realizable cost of the asset can be derived from this method of depreciation. In this method of depreciation, depreciation on assets is higher in the initial period and lesser in later years. This is because, asset value will be reduced more in the initial years and there after, maintenance cost increases and value of the asset will be decreasing but with a lesser amount.

The above methods of depreciation bookkeeping are just a brief insight into the vast field of accounting, knowledge about which can be furthered if the individual enrolls in the tally course in Ahmedabad. 

Enrolling in the mentioned class is highly recommended, as professional insight into the processes of depreciation and related methods holds great water in the long run, benefitting both the individual and her firm as a whole, ensuring greater stability/smooth financial functioning of the firm, development of better customer relations, and most importantly, complete internal satisfaction to the person running/supervising the finances and the overall working of the firm.

Posted on by admin-s20

All About PAN And TAN For Bcom Students

To collect and manage tax from various incomes, the Income-tax department issues various unique…

Read More

To collect and manage tax from various incomes, the Income-tax department issues various unique identification numbers. While PAN (Permanent account number) is a 10 digit identity number allotted to taxpayers, TAN  is a 10 digit number allocated to Tax deductors.

PAN: Permanent Account Number
PAN is an identification number that is mandated by the Income Tax Department for any individual who carries out financial transactions or pays the income tax.

PAN Card For Students
A PAN card is issued by the NSDL and UTI on behalf of the government, to all the individuals. It is generally adults over the age of 18 who apply for a PAN card. However, a student can also apply for a PAN card.

The government of India has made it mandatory for all the individuals who has taxable income to possess a PAN card, including a PAN card for students as well. Since PAN card is an official document for identity proof in India, it should be used by all income earning individuals and non-individuals.  For students, a PAN card can act as an alternate identity for a school ID card.

Benefits Of Having A PAN Card
A PAN card comes into a student’s life with numerous benefits, keeping all the prospects in mind. Students should apply for a PAN card as early as possible since  it comes with numerous perks like:

  • Proof Of Identity: It will serve as one of the major sources of identification proofs in both governments as well as private institutions. It is one of the Indian documents that is accepted universally. Any student who wishes to go abroad for further studies should apply for a PAN card making the entire journey hassle-free.
  • Applying For Student Loans: A PAN is a must for getting loans from the bank. If a student going through a crisis, wishes to apply for a bank loan for further studies, they should apply for a PAN card first.
  • Life-Long Validity: Once applied, the PAN card doesn’t require any further replacements. This document will link all your lifelong financial transactions through one single identity card.
  • IT Returns Filing: Let’s admit, all of us have to start paying taxes one day, all individuals who are eligible for IT are expected to file for their IT returns. A PAN card is necessary for filing IT returns, hence it would be advisable to get familiar will the IT culture beforehand and be well equipped rather than applying for a PAN card at the heat of the moment.
  • Starting A Business: If you are a young budding entrepreneur who is fascinated by the start-up culture in India, you have to know that to start a company it is mandatory to have a PAN Registered on its name. The earlier you start to learn about taxes and banking, the more beneficial it is, here is the link of a verified tax practitioner course in Ahmedabad that will give you a better perspective about taxes and transactions.

Linking Of PAN With Aadhar
Being a responsible citizen one should link their PAN card with their Aadhaar to help our nation avoid the problem of issuing numerous PAN cards under a single name. Government has mandated to have aadhar card and linking of the same with PAN. No New PAN can be issued without Aadhar card. Even issued PAN has to be linked with Addhar, Your PAN will be cancelled if it will be not linked to Addhar in near future.

How Can One Apply For A PAN Card?

PAN card is issued by the IT Department of India under the supervision of the Central Board of Direct Tax. There are different steps to apply for a PAN card online and offline.

  • For the online process of PAN Card UTIITSL, NSDL is the most authentic platforms for students to apply.
  • If an applicant is from India they should pay Rs.110 as the application fee.
  • A 49A form has to be filled for both online or offline proceeding of the application.
  • One has to carry 2 latest passport size photographs, and a copy of Aadhar Card required as address and identity proofs. If Aadhar card don’t have date of birth then birth proof is required to be attached.
  • TAN: Tax Deduction And Collection Account Number: While filing for Tax deducted at source (TDS) or Tax Collected at Source (TCS), quoting TAN is a prerequisite. As a 10- digit alphanumeric identifier for individuals or entities that deduct or collect tax at source, TAN helps streamlining or collection of tax at source.

Do Students Need TAN?
As TAN Furnishes details about Tax deducted at source and is used for Filing TDS return it is not required by students as they are not. Tax Deductor or TDS return filer.

However, students should have a brief idea about Taxes as it is not taught in educational institutions and can be quite a tedious task once they start adulting. Understanding taxes can be quite arduous at times, here is a link to one of the best tax courses in Ahmedabad that will help you learn better.

Is PAN Compulsory For A TAN Application?
The Central Board of Direct taxes is considering making PAN mandatory as a requirement for allotting  Tax Deduction Account Numbers (TAN) to companies that deduct tax at source.

Can PAN Replace TAN?
PAN should never be quoted in the field where TAN is required to be quoted. However, a person required to deduct tax under section 194-1A can use PAN in place of TAN as such a person is not required to obtain Tan.

Procedure To Apply For TAN
Just like PAN a person has the choice to apply for TAN either through online or offline methods.

  • One has to fill a TAN Application form 49B to avail a new Tax Deduction and Collection Number.
  • While applying for TAN the applicants are not required to submit any documents, they only have to submit an acknowledgment slip if they apply for a new TAN.

As we grow older Taxes become an essential part of our life, PAN card will become a core part of our identity, due to their lack of knowledge a lot of people get cheated in the beginning process of their tax filings. Here is a link to a taxation training course in Ahmedabad, that will save you on a rainy day.

Posted on by admin-s20

Fixed Asset Accounting

Accounting involves keeping and maintaining the record of a corporation’s financial transactions in a…

Read More

Accounting involves keeping and maintaining the record of a corporation’s financial transactions in a given year. The annals are further used for analysis by the stakeholders, agencies, and tax collection bodies making accountants a crucial wedge in the company’s innards.

Of the concepts an accountant should be well-versed with, the ones of assets and liabilities are the most basal yet indispensable. Here we introduce you to the fundamentals of fixed assets and their accounting.

What Are Fixed Assets?

Fixed assets are the non-liquid physical possessions an organization holds to generate income over the long haul. They are also referred to as capital assets or property, plant, and equipment (PP&Es). 

Fixed assets are not to be done away with in the same accounting year. The list comprehensively includes land, vehicles, office spaces, computers and software licensing, buildings, etc.

The principal criterion for anything to identify as a fixed asset is that it should be held by the company for more than one accounting year. Also, they are tangible and intangible. Long-term bonds and securities don’t make it to the list.

An esoteric aspect of fixed assets is that their book values usually exceed the capitalization limit as set by the organization. However, a company must be careful while setting a cap limit. A too higher or lower value can have far-reaching impacts on its balance sheet.

How? That requires us to delve deeper into the topic. Here is a verified Accounting Certificate Course in Ahmedabad you can take.

Initial Asset Inclusion

It is done at the time of purchase of an asset. 

Now, before adding to its capital stock, a corporation makes the requisite assessments. It compares the total cost incurred on the asset with the gross amount of cash flow it leads to. If the deal seems profitable, it is sealed. 

The initial recordation incorporates the cost of the assets, their transportation and installation amount, testing and preparation fees, taxes, and other such expenditures. Meanwhile, administrative charges, general overhead costs, and expenses not directly enhancing its utility are not recorded here.

When an asset is purchased at its market value, we note its fair value. On the other hand, the interest amount has to be mentioned while documenting for an asset bought on credit. 

The case of an asset being exchanged for another one calls for recording the fair value of the new body. While if it is not possible to assess its cost, the price of the one given up is considered.

Depreciation of Assets

Assets start losing their productivity or we say, they get used up with time. We need to make allowances for this downturn. In accounting, depreciation is apportioning the cost of an asset over its useful life.

Of all the techniques to account for the depreciation of assets, the written down value method is extensively used. As it shows the fair value of the asset at every end of the year. In this method, depreciation is more in the initial year compares to subsequent years. Another method of depreciation is the straight-line method. Here, the accountants are required to subtract the salvage value of the asset from its cost. The resulting difference is then divided by the number of years the company intends to hold the asset for. The figure they arrive at is the yearly monthly depreciation of the asset. In this method, the Depreciation of asset is uniform during the life of the asset.

Companies can choose their modus operandi. However, as per the caveats of the IAS (International Accounting Standards), they are allowed to change it only once. To know more about the IAS and their impact in the field, you can go for this Accounting Course in Ahmedabad as recommended by our experts.

Disposal Of Assets

After a certain point, when assets cease to be profitable, they are to be exscinded. It is usually done when their useful lives come to an end. Sometimes, an unforeseen circumstance (for instance, unexpected obsolescence) forces the company to discard an asset. 

It is however not necessary to throw a valuable possession away when it can be liquidated. The company can exchange the asset for newer ones. Also, they may sell it off. A price higher than the then book value of the asset marks a profit and a lower one points towards a loss.

Whatever the case may be, the loss of a company’s asset shows on its balance sheet. Fresh investments need to be undertaken.

Asset Impairment

Impairment of an asset is where its current carrying value exceeds the gross profits it is estimated to bring in. It is usually the result of unexpected predicaments. 

In simpler words, asset impairment has to do with the chance that fixed capital may not be as economically viable as it is computed to be. Impairment leads to a radical slump in a business’ profits. Asset impairment on the balance sheet is associated with a corresponding loss in the income statement. 

Intangible holdings such as copyrights and trademarks stand higher chances to get impaired. However, under circumstances like unexpected obsolescence, natural calamities, adverse market fluctuations, judgment failures or may be due to some unaccountable reason, fixed assets may undergo the same fate. 

Accountants are supposed to be on the lookout for such incidents. They must warn the stakeholders and the decision-makers of the company’s state of affairs.

Disclosure Of Assets

A corporation does not want every confidential detail to be presented on its annual financial statements. However, certain norms formulated by the national and international bodies need to be followed. An organization has to make the following disclosures about its fixed assets.

  • The carrying value of the assets at the beginning and the end of each accounting year
  • The useful life of the assets
  • Rate of depreciation and the method used to calculate it
  • The effects of acquisitions, disposals, and net foreign exchange on the value of the assets
  • Impacts of revaluation 

To learn about other disclosures, go to the link for this certified Accounting Training in Ahmedabad and stake in your growing accounting expertise.

The Strict Don’ts

While accounting for fixed assets, you need to eliminate the three commonly made mistakes. 

  • Not considering expense costs transportation charges, taxes, and installation amount while recording the purchase of a new asset
  • Disregarding the alteration in the assets’ use while maintaining them
  • Ignoring record-keeping demands relating to insurance