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  • Is there any cooling period for the existing auditors after the expiry of their term?

    An individual auditor who has completed his term of five years shall not be eligible for re-appointment as auditor in the company for five years from the completion term of five years.

    An auditor firm who has completed their two terms of five years shall not be eligible for re-appointment as auditor in the company for next five years from the completion of 10 year.

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  • What is the tenure of an auditor? What is the tenure of the first auditor?

    An individual can serve as an auditor for a term of five consecutive years. A firm can serve two terms of five consecutive years each, i.e., a total of 10 years as an auditor.

    Every company shall, at the first annual general meeting, appoint an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting.

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  • Who appoints the first auditor?

    As per Section 139(6) of Companies Act 2013, first auditor will be appointed by the board of directors of company within 30 days of incorporation of company. If the board fails to appoint the first auditor, an extra ordinary general meeting will be called by the board to appoint the first auditor within 90 days from the receipt of the information from the board of directors.

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  • What is the applicability of internal audit?

    Applicability of internal audit is as follows:

    • Listed company: Always applicable
    • Unlisted public company: Where any of the below conditions is satisfied:
      • Paid up share capital >= INR 500 million during the preceding financial year
      • Turnover (income) >= INR 2 billion during the preceding financial year
      • Outstanding loans or borrowings from banks or public financial institutions exceeding INR 1 billion or more at any point of time during the preceding financial year
      • Outstanding deposits >= INR 250 million at any point of time during the preceding financial year
    • Private company: Where any of the below conditions is satisfied:
      • Turnover >= INR 2 billion during the preceding financial year
      • Outstanding loans or borrowings from banks or public financial institutions exceeding INR 1 billion or more at any point of time during the preceding financial year

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  • How long will the directors be liable for the offences occurred during his tenure?

    A director shall be liable for the offences / non-compliances occurred during his tenure even after his resignation and disassociation with the company.

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  • What is the duration for preserving the books of account?

    The books of account shall be preserved by the company for eight financial years preceding the financial year. However, there are certain registers and documents which are required to be kept permanently.

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  • What are the modes available for the company to maintain the books of account?

    The company may maintain books of account in either physical or electronic form. In case the books of account are maintained electronically, the back-up of the books of account and other books and papers of the company shall be kept in servers physically located in India on a periodic basis.

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  • Is it mandatory to appoint Company Secretary in an Indian subsidiary?

    Any company having a paid-up share capital of Indian INR 50 million or above is required appoint a whole-time Company Secretary.

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  • What are the implications of establishment of PE (Permanent Establishment) in India, on the expats?

    The assignees would be denied the benefit of short stay exemption under tax treaty as their salary expenditure would be deemed as deduction claimed by the foreign entity. Thus, the salary income earned by expats would become taxable in India.

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  • Is issue of prospectus mandatory in case of LLP in India?

    No, issue of prospectus is not mandatory in case of Limited Liability Partnership (LLP) in India.

    For more information, click here.

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  • Who needs to apply for Permanent Account Number (PAN)?

    PAN is to be obtained by following persons:  

    1. Every person if his total income or the total income of any other person in respect of which he is assessable during the previous year exceeds the maximum amount which is not chargeable to tax. 
    2. A charitable trust who is required to furnish return under Section 139(4A)
    3. Every person who is carrying on any business or profession whose total sale, turnover, or gross receipts are or is likely to exceed five lakh rupees in any previous year
    4. Every person who intends to enter into specified financial transactions in which quoting of PAN is mandatory
    5. Every non-individual resident persons and person associated with them if the financial transaction entered into by such non-individual resident persons during a financial year exceeds Rs. 2,50,000. A person not covered in any of the above can voluntarily apply for PAN.

    A person not covered in any of the above can voluntarily apply for PAN

    For more information, click here 

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  • What Is Permanent Account Number (PAN)?

    PAN stands for Permanent Account Number and is a ten-digit unique alphanumeric number issued by the Income Tax Department.

    For more information, click here

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  • What is income tax return (ITR)?

    ITR stands for Income Tax Return. It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income are communicated to the Income-tax Department. It also allows carry -forward of loss and claim refund from income tax department.

    For more information, click here

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  • What are the prescribed forms of return under the income tax law?

    Different forms of returns of income are prescribed for filing of returns for different Status and Nature of income. These forms can be downloaded from www.incometaxIndia.gov.in

    For more information, click here.

     

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  • What are the common compliances under Indirect taxes in India?

    From 1st July 2017, indirect taxes such as service tax, VAT would be subsumed by Goods and Service tax (GST) which is a comprehensive levy on manufacture, sale, and consumption of goods and services. Major compliances are as follows:

    • GST Registration Number:  It is 15-digit identification that is allotted to taxpayer based on PAN and state of the applicant.

    • Returns:  Under GST, generally, a person is required to file 3 monthly returns and an annual return.

     

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  • What are the major direct taxes in India?

    Major direct taxes in India are:

    1. Income Tax
    2. Wealth Tax
    3. Corporation Tax

    For more information, click here 

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  • What are the major indirect taxes in India?

    Major indirect taxes in India are:

    1. Central Goods & Services Tax (CGST)
    2. State Goods & Services Tax (SGST) 
    3. Integrated Goods & Services Tax (IGST) 
    4. Customs Duty

    For more information, click here 

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  • Who is obligated to pay GST under the GST administration?

    The following categories of persons are liable to pay GST:

     

    1. Persons registered under GST and making taxable supplies under GST

    2. Persons registered under GST required to make payment of tax under the reverse charge mechanism

        
    3. E-commerce operators registered under the GST and through whom certain categories of notified supplies are made

        
    4. Persons registered under GST and required to deduct tax (TDS)

    5. E-commerce operators registered under GST and required to collect tax (TCS)

     For more information, click here

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  • What are the major advantages of IGST model?

    The major advantages of IGST model are

    • Maintenance of uninterrupted ITC chain on inter-State transactions
    • No upfront payment of tax or substantial blockage of funds for the inter-state supplier or recipient
    • No refund claim in exporting State, as ITC is used up while paying the tax
    • Self-monitoring model
    • Model takes ‘Business to Business’ as well as ‘Business to Consumer’ transactions into account

    For more information, click here 

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  • What are the taxes that organizations pay in India?

    Taxability in India:

    1. Company: Tax incidence of a company depends on the residential status of the company i.e., whether the company has been incorporated in India or its place of effective management lies in India
    2. Firm/LLP: Tax incidence of a Limited Liability Partnership (LLP) depends on the residential status of the LLP,i.e., whether the control and management of its affairs are situated wholly or partially in India

    For more information, click here 

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