A professional ,say, a fresher C.A wishes to start practice and open his own firm. He estimates his Yearly receipts around Rs 900000. Now, a) Will he need to take Service Tax Registration? If yes, when shd he take? Either in very beginning or when total billing crosses some limit! b) Need he compulsorily maintain his books of A/c under any Act or Law? c) If books maintained, Will he be required to get his A/cs audited every Yr? d) Assets he purchase for business shd be on name of business only or these can be on his personal name/ e) If he brings some personal assets for use in Office, how shd he calculate Cost to be recorded if he has not got Invoice for that Asset? f) Will there be some restriction if he pays salary to his brother or other family member if they are also possessing qualifications in related field? g) Will he be required to take TAN as salary being paid to staff is more than their exemption limits? & then deduct TDS from their salaries and file TDS returns?
22 May 2009
U can apply for service tax regn if u are likely to cross the current limit of Rs10lakhs now itself But do remember to file your ST returns in time.As a CA u should know about maintainence of books better than ur clients.U r not exempt from any law and ignorance is no excuse.
22 May 2009
1.Service Tax registration is compulsory when gross receipts exceed 9,00,000/- and the number is to be taken within 30 days of crossing the limit.
2.In the first year, he can at his will maintain books of account but it is not mandatory. But, from second year onwards he will have to maintain books of account u/s 44AA of the Income Tax Act.
3.Since Chartered Accountancy is a specified professional u/s 44AA, he will have to get his accounts audited if the gross receipts exceed 10 lakhs.
4.It can be either of two, since under Income Tax Act, proprietor and proprietorship are one and the same. But care must be taken if the assets are in personal name to ensure that assets are being used for business purpose otherwise the expenses thereon would be disallowed on account of personal use.
5.Cost to be recorred if separate balance sheet is prepared for business purposes is the carrying amount shown in the personal balance sheet.
6.They will be allowed provided sufficient grounds for payment.
7.Requirement to deduct tax and obtain TAN for the same is mandatory for an individual provided in the previous year his accounts are audited u/s 44AB. Since, it is the first year, no need for the same. From second year, you will have to look into the previous year for its applicability.
23 May 2009
Thanks Nitin. Your reply will be of gr8 help but can you pls elaborate a little more regarding 7th point (TAN) & which rule or section says so?
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