What is the audit? And what is the relationship between accounting and auditing?

The audit is the systematic examination or inspection of various books of accounts by an auditor and then it is followed by physical checking of inventory to ensure that all departments are following a documented system of recording all transactions. It is done to find out the accuracy of the financial statements provided by the organization. Audit firms from Chennai and other cities can help you in this process. 

The Chief Differences and Relationship between Accounting and Auditing

These are some of the points that differentiate between accounting and auditing, in detail:

·     Accounting is an orderly way of maintaining the records of the monetary transactions and then preparing the financial statements of the company. Auditing is largely an analytical task which evaluates the financial information and independently expresses an opinion which is fair and true.

·        Accounting Standards presides over accounting, whereas the standards on Auditing preside over the auditing.

·        When compared to auditing, accounting is far simpler as a task. Accounting is as the name suggests is performed by the Accountants. Auditing is a much complex task and the task of auditing is performed by auditors.

·        Accounting helps in revealing the financial position, the profitability position and the performance of the organization.  Auditing, on the other hand, helps check the correctness of the financial report.

·     Accounting, unlike auditing, is a continuous activity. Auditing, on the other hand, is a periodic activity.

·        Where the accounting ends the auditing begins.

Conclusion

Accounting and Auditing are both important in their own ways and specialized fields, but the scope of auditing is much more than accounting as it is a thorough and painstaking process. You need to consider several things including various tax rules, acts. Also, knowing all about both accounting standards and auditing standards fixed by auditors in Chennai, as having proper communication skills is very important.

Apart from all the above points, there are several other points to consider and are required like integrity, confidentiality, honesty, and independence they are all to be maintained while you undergo the auditing process. When the auditor submits the financial report, it becomes helpful for a host of people such as investors, creditors, investors, debtors, suppliers, customers, government and so on for proper decision making.

Though auditing is considered more important, it would be foolhardy to consider accounting any less than auditing. There are several things which you need to keep in mind while conducting accounting. It requires you to have complete and in-depth knowledge of all the accounting standards, conventions, principles, and assumptions too along with Companies Act rules and tax laws. The truth is auditing cannot be conducted alone, the procedure of auditing can only to be conducted when accounting outsourcing services are conducted properly by accountants in Chennai and other major cities, so, accounting cannot be neglected by hook or by crook.

What is Transfer Pricing and How Can You Reduce their Tax Burden?

Transfer pricing is a setting of prices of goods and services that are exchanged between the commonly controlled legal entities within the paradigm of an enterprise. For example, if a subsidiary company sells goods or provides specific services of a holding company, the price charged for these services is known as transfer price and the setting is called transfer pricing. Entities under the common control refer to those that fall under the single parent corporation. Multinational corporations utilize transfer pricing to allocate profits (the earnings before interest and taxes) among the various subsidiaries all through the organization.

Transfer pricing offers tons of services for a company from a taxation point of view, although regulatory authorities do not think of using transfer pricing to avoid taxes. Transfer pricing takes advantage of a number of tax regimes in different countries by booking a number of profits for goods and services that are produced in a number of countries or economies which has a lower tax rate. In some cases, companies also lower your expenditure on interrelated transactions by avoiding the tariffs on goods and services exchanged internationally. International tax laws are regulated by the Organization for Economic Cooperation and Development (OECD) and the auditing firms fall under OECD review and think of auditing the financial statements of MNCs accordingly.

Example

Consider A Co., an Indian pen company manufacturing pens at a cost of 10 rupees each in India.  ABC Co.’s subsidiary B  sells the pens to neighboring customers at 1 rs per pen and spends 10 Rs per pen on marketing and distribution. The group’s total profit amounts to 80 Rs per pen. Now, Co. A will charge a transfer price ranging from 20 Rs and 80 Rs per pen. Because of a dearth of transfer price regulations, A Co. will evaluate where the tax rates are lower and add more profit in that country. Thus, if Indian tax rates are higher than the neighboring companies tax rates, the company will assign the lowest possible transfer price to the sale of pens to company B.

 The Transfer Pricing Laws in India was enacted in India in 2001. It brought forward with the issue of Transfer Pricing to the forefront amongst the numerous multinational corporations operating in India as well as several Indian companies. Transfer Pricing is one of the key tax issues for growth-oriented businesses that makes the international operations a part of their operations wherein the senior management’s time and attention are mandatory. Whatever may be the size, organizations they need an effective and dependable Transfer Pricing policy, which when taken into consideration the organization’s overall business strategy and operating structure.

Don’t Delay Filing Your Income Tax Returns

The government gives its taxpaying citizens a window of at least 4 months to consolidate the income details and file the income tax returns every assessment year from 1 April to 31 July for the previous year which ended on 31 March. Since filing your ITR, takes only a few minutes reasonable. Besides paying taxes on time, we must also file the returns by the due date or face consequences. 

The Income Tax Department makes it a must for everyone to file an income tax return if your gross total income is more than Rs 250,000 in a financial year (before allowing the deductions under the section 80C to 80U). This limit is extended to Rs 300,000 for elderlies who are past the 60 years old mark but the age is lower than the 80 years old) and the amount increases 500,000 for super-senior citizens ( that is more than 80 years old). However, you can file your income tax returns even if your income is less than the maximum exemption limit. Get help from the best CA firms. 

You can file ITR1 through TDS return service with the help of accountants of Chennai, where you need to fill up the income from salary and other sources. Show your salary income under the category of “income from salary” and the income you earn from part-time from “income from other sources. “

An online platform helps us file TDS returns with effortless ease. People are now going for e-TDS as it is a simple procedure. There are many e-TDS filing software that you can utilize. It makes the process of filing TDS returns simple and something that you can rely upon. You can go for Host Books TDS is listed on NSDL as it is an e-TDS service provider. The income tax department has withdrawn, the filing of manual returns.

Ministry of corporate affairs has shaken things up and transform the entire filing process online. The
just introduced GST can also be conducted online, starting from the registration process to the returns filing process.

Are you looking for reasons to e-file your income tax returns? Check out the below reasons,

1 ) Carry forward of loss

When the firm or an individual incurs business losses such as speculative and non-speculative or capital losses (both short-term and long-term) it cannot be shown as an exemption to extend and carry forward last year’s losses. However, a person only benefits if he/she files one’s income tax return.

2) Income tax refund

Tax return filing is not merely fulfilling one’s duty towards the nation but to claim an income tax refund. 

3) Avoiding penalty

Under the section 234F of the Income-Tax Act, if a person fails to file his returns by July 31 then he is supposed to cough up a fee Rs 5000 if the return is furnished before 31st December. The fee would shoot up to Rs 10,000 if it is filed after 31st December. However, it must be noted if the total income of a person does not cross the Rs 5 lakh marker then the money should not cross Rs 1000.

4) Legal sanction to your income

The assessees' income must be audited according to the IT Act, the date of filing the return would be 30th September.  If you regularly file your returns you will give a stamp of legal sanction to your income even if you are not supposed to pay the taxes for the year.

5) Your loan would be easily processed

You need to submit your income tax returns to process different types of loans such as home loans, educational loans and so on. You need to file your returns to enable the process of any visa. Even some of the credit card companies require your proof of tax returns before providing a card.

6) Registration of immovable property

A few states demand that your income-tax return of the last three years must be registered as per the immovable property. Also, a legal sanction pertaining to taxable or otherwise helps you to prepare for the property owned.

Filing income tax return ensures you perform duties as a senior citizen and also ensures smooth governance. Also, it protects the hassles of being served a show-cause notice from the I-T department.

What is the due date for Income Tax Filing Returns? Why Should you File it?

The Income Tax Department makes it mandatory for everyone to file income tax return if your gross total income is more than Rs 250,000 in a financial year (before allowing deductions under section 80C to 80U). This limit is extended to Rs 300,000 for senior citizens who are more than 60 years old, but is less than 80 years old) and the amount increases to 500,000 for super-senior citizens ( that is more than 80 years old). However, you can still file your income tax returns even if your income is less than the maximum exemption limit. Get help from the best CA firms. 

You can file ITR1 via TDS return service with the help of the best accountants of Chennai, where you need to provide details of income from salary and other sources. Show your salary income under the paradigm of” income from salary” and the income you earn from part time from “income from other sources. “

An online platform helps us file TDS returns with ease. People are now going for e-TDS as it really convenient and simple. There are many e-TDS filing software that you can use. It makes the process of filing TDS returns simple and something that you can depend upon. You can go for Host Books TDS is listed on NSDL as an e-TDS service provider. The income tax department has long withdrawn, the filing of manual returns.

Ministry of corporate affairs has changed things up and transformed the entire filing process online.
Recently introduced GST can also be conducted online, starting from the registration process to the returns filing process.

Still looking for reasons to e-file your income tax returns? Check out the below reasons,

1 ) Carry forward of loss

When the individual or a firm incurs business losses such as speculative and non-speculative or capital losses (both short-term and long-term) it cannot be shown as an exemption to extend and carry forward last year’s losses. However, a person can benefit only if he/she files one’s income tax return.

2) Income tax refund

Tax return filing is not merely fulfilling one’s duty towards the nation but to claim an income tax refund. 

3) Avoiding penalty

Under the section 234F of the Income-Tax Act, if a person is unable to file his returns by July 31 then he is supposed to pay a fee of Rs 5000 if the return is furnished before 31st December. The fee would increase to Rs 10,000 if it is filed after 31st December. However, if the total income of the person does not cross the Rs 5 lakh marker then the money should not cross Rs 1000.

4) Legal sanction to your income

The income of the assessees must be audited according to the IT Act, the date of filing the return would be 30th September.  If you regularly file your returns you will give a stamp of legal sanction to your income even if you are not supposed to pay the taxes for the year.

5) Your loan would be easily processed

You need to submit your income tax returns to process different types of loans such as home loans, educational loans and so on. You need to file your returns to processes any visa. Even credit card companies require your proof of tax returns before providing a card.

6) Registration of immovable property

A few states demand your income-tax return of the last three years for registering immovable property. Also, a legal sanction to income taxable or otherwise helps you to prepare for the property owned.

Filing income tax return helps you perform responsibilities as a citizen and also ensures smooth governance. Also, it shields you from the hassles of being served a show-cause notice from the I-T department. Tax consultantsin Chennai or consultants in other cities of the country help you return files on time.

The Best Auditing Firm in Chennai that Works with a Tech Startup

If you want a successful business, you simply must make accounting a part of your scheme of things. For this you can seek the help of chartered accountant firms in Chennai,  Business owners not only design the website but also choose the perfect business name that have a basic understanding of the numbers, otherwise, they won’t be able to put their best foot forward. 

If the entrepreneurs do not pay heed to the financials of their business now, they would repent later, that is they would have to pay for it, in some way or the other, later. 

How Can Start-ups Enhance their Financial Prospects?

The Small Business Administration or the (SBA) makes a list where they give 11 reasons why small businesses falter and fail. Amongst the top reasons, at least four of them concentrates on the financial aspect of a small business. And the number 1 reason is trying to do everything on your own. 

Hire an Accounting Professional

If you do not have a degree in accounting to boast of you need the help of a professional to set up to update your accounting system. To get to the bottom of your financial nitty-gritty, you have to decide whether you should hire an accountant or a bookkeeper.

What a Bookkeeper can do

Most startup requires the services of a bookkeeper. A bookkeeper's accounting service in Chennai make the running of business a simple uncomplicated affair. A bookkeeper can look after several aspects your business such as for maintaining a record keeping system, produce your financial statements and handle your financial transactions.

How Can an Accountant Help a Startup?

If you are dabbling in a complex business structure or dealing with limited liability Company, you must hire an accountant, especially when you want to grow your business. An accountant can also help you when you need to hire more employees on a payroll.

Many entrepreneurs start small with a part-time business or also work at home to manage the escalating expenses. If this is the case then you may not be able to hire a full-time accountant. However. You can seek help from an accountant for your end-of-the-year tax preparations. 

Cash or Accrual Accounting Methods

The two accepted accounting methods are cash accounting and accrual accounting. Some small business organizations choose one amongst the two while other small startups use the accrual method. Employ the services of an accountant to find out which method you can use, suiting your purpose.

VRamaratnam & Company is one of the top Indian Chartered Accountants firm in Chennai, powered by experienced and skilled Chartered Accountants and other professionals. They are regarded as one 

 of the best auditing firm in Chennai. 

The firm has a goal to achieve that is, to provide a large range of financial and consulting services to its clients. Their wide spectrum of services includes direct and indirect taxation, Auditing and Assurance Services, and they largely focus on Non-Resident Indians. Their chief interest veers around startups business valuation, business entity registration in India, along with Accounting and Payroll Outsourcing Services.