Important Compliance for Running Business in India

Do you own a business or have any idea to start one? Do you have any idea on how to start a company? Are you lacking information about the compliances? Well don’t worry, here we are going to discuss all the compliance that is important for running a business in India.

In India, before you start setting up a business, you need to choose the business entity you would like to opt for. The various available business entities include partnership firm, limited liability partnership registration, proprietorship and company registration, etc.

Let’s have a look at various available compliances that are needed to be fulfilled under different categories:

·        Accounting

Like everywhere else in the whole world, business in India also needs to keep a complete track of all the accounting related functionalities. These must compulsorily be in acceptance with the government-sanctioned accounting policies of the country. All the organizations have the freedom to state their accounting year in accordance with the calendar year or financial year etc. According to the income tax laws of India, it is mandatory to close all the account books by the end of the financial year.

·        Payroll

On the basis of employment regulations and the income tax laws set by the Indian Government, it is required to draft the employment contracts appropriately. The company needs to pay the salary on a monthly basis and generate payslips for each and every employee. The company should comply with all the labor laws that are outlined by the Indian government.

·        Statutory audit

According to the Indian companies act, it is required for the businesses to get all the accounts audited by the legal chartered accountants who in turn will get everything filed with company registrars and in some special cases, with the RBI.

·        Tax audit

If the annual turnover of your business is more than 10 million INR, it is required to get the accounts audited under the provisions of the income tax laws of India. Also, it is required to have the certification done by the IFCA (Indian Firm of Chartered Accountants).

·        Internal audit

The private companies who are having more than 2 billion annual turnovers are required to have a proper intra company audit system. This can be done either by an in-house team or by the IFCA.

·        Corporate tax

The businesses need to regularly deposit the annual tax payment in order to properly identify the required amount. In case of any incorrect calculations or deferment or any delays, there are chances of penal provisions. At the year end, the complete annual returns along with tax audit reports and audited accounts reports need to be submitted.

·        GST Compliance

Goods and service tax is applicable on supply of any services and goods. The Compliance Under GST includes filing of quarterly or monthly returns along with the deposit of all taxes.

·        Transfer pricing

The businesses that deal with any cross-border related dealings need to follow the Indian transfer pricing regulations. The Indian firm of chartered accountants needs to maintain the certification and documentation stating that the profits were accurate and appropriately reported by the business entity.

·        Customs duty

The businesses that are part of cross border trading needs to comply with all the regulations related to customs duty. These duties need to differentiate on the basis of different products.

These are some of the important compliances that you should follow properly in order to keep your business up and running. So before you plan to jump into any business, make sure you cover all the legalities and have the idea that everything is covered properly.

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