Do Taxpayers in India is Getting any Benefits from the Government?

The income tax department gives out detailed data on tax return filers each year. It has been going on from the assessment year 2012-13, or AY13, onwards. The data for AY1 has been recently published. AY19 dabbles in income earned during the fiscal year 2017-18, or FY18, (i.e. the period between the months of April 2017 and March 2018).

The data provides a number of key insights about the great Indian taxpayer.  You can get the details of the same from the auditors in Chennai. As per the data, only around ₹37,400 crores is generated as far as income from house property in a year (via rents after adjusting for home loan interest and so on) in the entire country, which shows that most of the transactions are still cash-based and outside the paradigm of the tax net. The declared salary income, however, is more than double the size of the declared individual business income, which puts a wrench in the theory about the purview of the salaried middle class.

When it comes to individual income tax, there are different types of income that are taxed. This includes salaried income, the income coming from the house property, business income, and interest income. The individual-declared total income during the AY19 stood at Rs.34.1 trillion. Of this RS 20 trillion, or the bulk of the income was declared by the salaried income. 

The government announced an income tax rebate for the salaried people to be Rs 12,500 under Section 87A of the Income Tax Act. Earlier, the rebate was Rs 2,500. This available rebate is Rs 5 lakh a year.

This spells out zero tax for annual income up to Rs 5 lakh. There is an exemption from income tax on annual income amounting to Rs 2.50 lakh. This exemption can extend up to Rs 3 lakh in the case of senior citizens.

The standard deduction by the government was up to Rs 40,000 to Rs 50,000 and it increased the income tax rebate under Section 87A income-tax Act.

Besides, there is another deduction up to Rs 1.5 lakh under section 80C for investments made in instruments such as Public Provident Fund and the expenses incurred on children's education fees and stamp duty paid for the house registration.

Investment up to Rs 50,000 in the national pension scheme makes for additional tax deduction Section 80CCD(1B) of the Income Tax Act.

However, the income tax slabs were not changed until February's interim budget. There is zero tax on income amounting to Rs 2.5 lakh, beyond this tax rate it is 5 percent on income up to Rs 5 lakh amounting to Rs 12,500.

But with the government providing a rebate of the exact amount, there is no tax payable on income up to Rs 5 lakh. But such assessees are required to file their income tax returns every year. If they don't, the Income Tax Department may send notices for the same.

Twenty percent income tax is levied if the amount comes to Rs 5 lakh but not exceeding Rs 10 lakh a year. Income tax liability may turn out to be Rs 1 lakh in this slab.

An annual income of more than 30 lakhs calls for a 30 percent income tax. Plus, four percent cess on income tax is levied.

Find out about the Financial Statement Audit

A financial statement audit is all about examining the entity's financial statements and helps to accompany the disclosures all with the help of the services of the independent auditor. It results with a report submitted by the auditor, and it offers a fair presentation of the financial statements and other related disclosures. The auditor's report made by the chartered accountants in Chennai and other cities of the country should come with the financial statements when they are given to the intended recipients.

The chief objective of a financial statement audit is that it offers financial credibility to the reported financial position and also according to the performance of a business. The Securities and Exchange Commission says that all the entities that are under public domain must file annual reports with the ones that are audited. Similarly, lenders typically require an audit of the financial statements of any entity, which they have to lend. Suppliers also require audited financial statements before they extend trade credit (though that happens only when the amount of requested credit is a substantial amount. 

Know all about the primary stages of audit here, 

1. Planning and risk assessment. Besides understanding the business and the environment where it operates, they use this information to assess whether the risks involved and how it will affect the financial statements.

2. Internal controls testing. This helps the assessment of the effectiveness of an entity's suite of controls, which helps focus on the areas as per proper authorization, the safeguarding of assets, and also segregating of duties. This involves the array of tests, which is conducted on a sampling of transactions helping it determine the degree of control effectiveness. A higher degree of effectiveness helps the auditors to control some of the audit procedures. If the controls are not very ineffective (there may be a high risk of material misstatement), then the auditors must find out about other procedures to find out more about the financial statements. There are a number of risk assessment questionnaires available that helps with the internal controls testing.

3. Substantive procedures. This involves a broad number of procedures, a glimpse of which are the following,

• Analysis.
• Cash.
• Marketable securities
• Accounts receivable
• Inventory.
• Fixed assets.
• Accounts payable.
• Accrued expenses.
• Debt.
• Revenue.
• Expenses.

An audit made by the auditorsin Chennai and the other places, definitely one of the most expensive examinations of financial statements. The least expensive is said to be a compilation and the next one is a review. Due to its cost, many companies try to downgrade to a review or compilation, though this is only a compilation which you can follow if it is acceptable to one of the report recipients. Publicly held entities are required to get their quarterly financial statements reviewed apart from the annual audit.

The Chief Benefits of Outsourcing Bookkeeping and other Accounting Services

Most people believe that the only good thing about account outsourcing and bookkeeping is cost-saving. But there are other benefits too, they are as follows, 

1. Outsourcing Accounting Helps in the Sustainable Growth of Firms

Account outsourcing and bookkeeping help improve the core competencies. It can save valuable time which will help you focus more on the firm and bringing in more clients, instead of spending your valuable time on training, hiring, reviewing, managing, firing and so on. So, you can lower your costs to a large extent almost 30-50% or even more.

2. You Cut Costs and Gain Big Projects

When you outsource accounting and bookkeeping, you will have a group of experienced accountants and bookkeepers, so you can maximize on the time you have and not lose out on the big projects because you tend to focus on paltry things that take too much of your time.

3. You Only Pay for the Actual Work Done

Pay exactly for the work done and not a penny more for stuff such as payroll taxes, sick leaves, overhead, vacation, managing, training the works, yes, outsourcing accounting and bookkeeping will help increase your profit margin significantly and you will also end up selling more work. All in all, a total win-win situation.

4. You Improve on both Accounts: Productivity and Work Quality

Many accountants are frazzled with too many errors marring their work, things such as delays and reviews are done on the part of the in-house staff and that means a total waste of money. But, when it comes to the outsourced provider, you are able to keep a closer tab on work quality which will lead to greater productivity. It will also ensure a steady stream of profit.

5. You don’t live in the constant fear of losing out on losing staff

Accounting practice owners can feel the pain of losing staff, all of a sudden. If you aren’t quite what you will call a large firm, you cannot afford to keep staff on the buffer. So, what would you do in such a situation? The only way out is to outsourcing accounting firms and bookkeeping services. You assign an expert at the job who will prove to be more reliable and experienced for the job. The team members and managers are constantly at it, reviewing and each other’s work leading to good quality of work. That done, you won’t have to worry unduly about losing a staff suddenly as now you have a larger team at your call who will take care of any such staff attrition, hence your service delivery won’t be affected.

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6. Quality Services Equals Happy Clients

Outsourcing companies work for not one but numerous companies, as they have staff who is a pro at handling services and work for multiple firms. When you outsource quick book accounting, you get charteredaccountants in Chennai or other parts of the country and the best in the business. Thus, you would be able to make your company shine because of a number of right reasons, hence going one up on your competitors.