Welcome Guest

Businessex.Com
Home Article Managing A Business Finance  Paying Your Taxes

Paying Your Taxes

Be it an entrepreneur or an employee everyone comes under the sphere of taxation

Tags: Paying Your Taxes, taxation, tax obligations

BY Entrepreneur  |  Dec 15, 2009 comments ( 0 ) |

Be it an entrepreneur or an employee everyone comes under the sphere of taxation. Trying to escape tax obligations is a futile exercise as it can land you in the legal net. Therefore it becomes imperative to acquaint oneself with the complete knowledge of various tax authorities for better compliance and to be on the right side of law.

 

Your Tax Authorities

A)   Income Tax (IT) Authority: This is one authority to which everyone has to report  whenever one starts earning his/her living whether as a salaried employee or an employer/entrepreneur. To get enrolled with the IT department one needs to get a PAN (Permanent Account Number) card. A PAN card is a laminated card having a ten-digit alphanumeric number. It is mandatory to quote PAN while filing the income tax returns and during a correspondence with any income tax authority. It is also compulsory for all documents pertaining to financial transactions to be notified from time-to-time by the Central Board of Direct Taxes. Dinesh Konchady, Consultant at Inode Technologies says, “A PAN card is vital for any financial transaction today. Non-quoting or wrong quoting is a punishable offence.”

 

When to Use: You can use your PAN card when opening your bank account, obtaining credit card, doing a sale/purchase of property or vehicle, and for bank deposits exceeding Rs 50,000, and travel expenses exceeding Rs 25,000.

Note: A PAN card is not required for those whose income is below taxable limit and for those who are agriculturists.

 

B)   Service Tax Authority: Service tax is essential for entrepreneurs who are in a service-oriented business and fall under this authority. According to Konchady, “At present there are 96 categories including 15 new services, which come under the service tax net.” It is mandatory for an owner whose business has a turnover exceeding Rs 10 lakh and so should register within 30 days from starting the business. There is no specific penalty for failure on registration but as per the convention a fine of Rs 1000 can be levied.

 

C)   VAT Authority: Value added tax or Goods & Services tax (GST) is a consumption tax levied on value added. In contrast to sales tax, VAT is much simpler. As per definition, VAT is not applicable on export items and if you are charged then it is refundable. A dealer who purchases, sells, supplies or distributes goods as part of his business for valuable consideration has to register with the VAT authority. You have to submit an application to your nearest commercial tax office and then you will be issued a VAT certificate.

 

When to Register:

When you do business within the state and your turnover exceeds Rs 10 lakh or when your business is outside the state and the turnover exceeds Rs 5 lakh. If you happen to pay VAT on your purchases, registration would allow you to set off the purchase tax against collection.

Please add your comment

Rating
Not readable? Change text. Enter the characters as seen on the image (case insensitive)
  Notify me of follow up comments via e-mail   Subscribe for daily newsletter

Related Articles

Micro Finance for Micro Entrepreneurs

BY Entrepreneur

Microfinance institutions borrow money from mainstream financers like banks to lend to entrepreneurs without credit histories. These institutions serv...

Keep your Cash Flowing

BY Entrepreneur

Whether it is a multi-billion dollar empire, or the tiny mom-and-pop convenience store on the street corner, cash is the lifeblood of any business....

12 Tips to Bootstrap Your Startup

BY Entrepreneur

Quite often you are lead to believe that you cannot afford to start a business. Eking out a loan from a bank is little less than a necessary evil. ...

Rating Can Enhance Your Credibility

BY Entrepreneur

If you have been turned away by banks for being unworthy of credit, you are not the only one. In the absence of sufficient collateral security, most b...

5 Reasons Why Banks Refuse to Lend

BY Entrepreneur

Banks are the first ones to come to your mind when you need funds to start your business. You approach the bank with lot of expectations but your l...

Get Your Business Insured

BY Entrepreneur

Just a few days ago, Indian Oil Corporation’s depot went into fumes in Jaipur. Everything went up in smoke, but there remained a flicker of hope...

Be Interesting to Investors

BY Entrepreneur

You may be having an excellent idea but are unable to get the right people to fund and support your business venture. Don’t worry! The soluti...

Know your taxes

BY Entrepreneur

Tax is one of those terms, which is persistent in everyone’s life and it’s not just hard but almost impossible to escape it. Whether an em...

Five reasons to keep your personal and b

BY Entrepreneur

Have you started your business recently and often been advised to keep your personal and business-finances separate?   Most of the small busin...

Reality Check Post the Downturn

BY Entrepreneur

Whether recession has reached its termination point or not, is still unknown but what is known is our changed perspective towards the financial world ...

Financial Jitters to Success

BY Entrepreneur

Entrepreneurship has never been an easy path to tread on as it demands a lot of risk taking abilities, and innumerable responsibilities. Starters make...

Plastic money can buy you peace!

BY Entrepreneur

Managing expenses is one of the crucial steps in controlling a business, especially for small business owners. To have a system in place in order to k...