What is the Startup India Concept?

What is the Startup India Concept?

From e-commerce giants like Flipkart to edtech innovators like BYJU’S, Indian startups are revolutionizing industries and capturing the world’s imagination. In 2016, the government launched the game-changing Startup India initiative to transform the nation from a job-seeker economy to a hub of entrepreneurship and innovation. This definitive guide unravels the vision, benefits, and real-world impact of Startup India on the country’s economic landscape.

The Rise of the Indian Startup Revolution

Once dismissed as a nation entrenched in bureaucracy, India has risen like a phoenix to become the world’s third-largest startup ecosystem. Fueled by a burgeoning youth population, increasing internet penetration, and a growing appetite for disruption, Indian startups are challenging conventional wisdom and redefining industries.

According to a NASSCOM report, India added over 1,600 startups in 2022 alone, with the total number of startups crossing 90,000. This entrepreneurial wave has not only created lakhs of jobs but has also attracted billions in investments from global venture capitalists eager to bet on the next big Indian success story.

What is a Startup?

Before delving into Startup India, let’s establish what a startup truly is. As defined by the Department for Promotion of Industry and Internal Trade (DPIIT), a startup is:

  • A private limited company or registered partnership firm
  • Less than 10 years old from its date of incorporation
  • Working towards innovation, development, or improvement of products/processes/services
  • With an annual turnover not exceeding ₹100 crore
  • Essentially, startups are young, innovative companies with the potential for rapid growth, driven by a vision to disrupt existing markets or create entirely new ones.

Startup India: Vision and Objectives

Launched in 2016, Startup India is an ambitious nationwide initiative aimed at fostering a robust startup ecosystem in the country. Its core objectives include:

Building a Strong Ecosystem: Creating a nurturing environment through simplified regulations, access to funding, and mentorship programs.

Encouraging Innovation: Promoting a culture of innovation and risk-taking among aspiring entrepreneurs.

Facilitating Funding: Making it easier for startups to secure funding through tax benefits, venture capital investments, and government grants.

Simplifying Compliance: Reducing the regulatory burden on startups, allowing them to focus on core business activities.

Skill Development: Enhancing the availability of skilled professionals for the startup ecosystem.

In essence, Startup India envisions transforming India from a nation of job seekers to a nation of job creators, unlocking the entrepreneurial potential of a billion dreams.

Tax Benefits and Startup Incentives

One of the key advantages of Startup India is the attractive tax benefits and incentives offered to registered startups. These include:

Tax Holiday: Startups can enjoy a tax holiday on profits for up to three consecutive years, significantly reducing their financial burden in the initial growth stages.

Self-Certification: Startups can self-certify their compliance with various labor and environmental laws, streamlining the regulatory process.

Faster Patent Registration: The initiative facilitates faster registration of patents and intellectual property, protecting startup innovations.

Startup R&D Fund: The government provides financial support for research and development activities undertaken by startups.

Easy Exit Option: Startups have the option to exit after a limited period without the cumbersome process involved in closing down a traditional company.

These incentives not only encourage entrepreneurship but also create a level playing field for startups competing against established players.

Regulatory Simplification for Startups

One of the biggest hurdles faced by startups is navigating the complex web of regulations and compliance requirements. Startup India has taken significant steps to simplify these processes, including:

Startup India Hub: A one-stop platform for startups to access resources, guidance, and networking opportunities.

Self-Certification: As mentioned earlier, startups can self-certify their compliance with labor and environmental laws.

Startup Employee Stock Option Plan (ESOP): Startups can issue ESOPs to employees, attracting and retaining top talent.

Faster Patent Registration: The government has streamlined the patent registration process, enabling startups to protect their innovations quickly.

Simplified Winding Up: In case of closure, startups benefit from a simplified winding-up process compared to traditional companies.

These regulatory simplifications reduce the administrative burden on startups, allowing them to focus their energy and resources on growth and innovation.

Funding and Investment Opportunities

Access to capital is a critical challenge for startups, and Startup India has introduced several initiatives to address this:

Fund of Funds: The government has set up a ₹10,000 crore Fund of Funds, which invests in various venture capital firms. These funds, in turn, invest in startups, increasing the availability of early-stage funding.

Credit Guarantee Scheme: This scheme provides loan guarantees to startups, making it easier for them to secure loans from banks and financial institutions.

Startup India Seed Fund Scheme: The government has established a ₹945 crore fund to provide financial assistance to startups for proof of concept, prototype development, product trials, and market entry.

Angel Tax Exemption: Startups are exempt from the much-debated “Angel Tax” on investments made by angel investors, encouraging more angel funding.

Additionally, Startup India has facilitated increased venture capital investments and attracted significant foreign investment, further bolstering the funding landscape for Indian startups.

“Startup India has been a game-changer for the Indian entrepreneurial ecosystem. The tax benefits, regulatory support, and access to funding have empowered countless entrepreneurs to turn their dreams into reality.” – Kunal Bahl, Co-Founder, Snapdeal

Success Stories of Startup India

Startup India has propelled numerous Indian startups to global success, inspiring countless others to follow in their footsteps. Here are a few inspiring stories:

Paytm: This digital payments platform has revolutionized the way Indians make transactions, becoming a household name in the fintech space.

Ola & Uber: These ride-hailing giants have transformed urban transportation in India, providing convenient and affordable mobility solutions.

Zomato & Swiggy: These food delivery startups have redefined convenience for millions of customers, disrupting the traditional restaurant industry.

BYJU’S: This edtech company has become a leader in online education, offering innovative learning solutions to students worldwide.

Flipkart & Myntra: These e-commerce behemoths have disrupted the retail landscape in India, pioneering online shopping and setting new benchmarks for customer experience.

These success stories showcase the immense potential of the Indian startup ecosystem and the positive impact of Startup India on fostering innovation and entrepreneurship.

Challenges Faced by Indian Startups

Despite the numerous benefits and success stories, startups in India still face certain challenges:

Access to Funding: While funding avenues have improved, securing sufficient capital remains a hurdle for many startups, particularly in the early stages.

Market Competition: The Indian market is becoming increasingly competitive, making it tough for new ventures to establish themselves and gain market share.

Infrastructure Issues: Inadequate infrastructure, particularly in Tier 2 and Tier 3 cities, can hinder the growth and scalability of startups.

Regulatory Burdens: While efforts towards simplification have been made, some regulations can still pose challenges for startups, particularly in sectors like fintech and healthcare.

Retention of Talent: Attracting and retaining skilled talent is crucial for startups, but competition for qualified professionals can be fierce, especially in the tech sector.

Addressing these challenges is crucial to ensure the sustained growth and success of the Indian startup ecosystem.

Government Initiatives to Support Startups

Recognizing the importance of addressing these challenges, the Indian government has implemented several initiatives to support startups:

Startup Accelerators and Incubators: The government supports the establishment of incubators and accelerators that provide mentorship, infrastructure, and networking opportunities to startups. Programs like Atal Incubation Centres and NIDHI-TBI have played a crucial role in nurturing early-stage startups.

Atal Innovation Mission (AIM): This flagship initiative focuses on promoting a culture of innovation at the school level, nurturing future generations of entrepreneurs through Atal Tinkering Labs and Atal Incubation Centres.

Relaxed Norms for Public Procurement: Startups now face fewer hurdles when participating in government tenders and public procurement processes, opening up new market opportunities.

State Startup Policies: Various state governments have introduced their own startup policies and initiatives, fostering regional startup ecosystems and addressing location-specific challenges.

Startup India Yatra: The government organizes this nationwide outreach program to create awareness about Startup India and connect aspiring entrepreneurs with mentors, investors, and industry experts.

These initiatives demonstrate the government’s commitment to addressing the challenges faced by startups and creating a conducive environment for entrepreneurship to thrive.

The Road Ahead for Startup India

While Startup India has significantly transformed the Indian entrepreneurial landscape, continuous efforts are needed to maintain this momentum and further strengthen the ecosystem:

Enhancing Skill Development: Equipping young minds with the necessary skills to thrive in the startup ecosystem through specialized education and training programs is crucial.

Fostering Innovation Beyond Metros: Encouraging startup activity beyond major metropolitan cities will promote inclusive growth and tap into the immense potential of Tier 2 and Tier 3 cities.

Streamlining Regulatory Processes: Further simplifying regulations and reducing bureaucratic hurdles can significantly reduce the burden on startups, allowing them to focus on growth and innovation.

Facilitating Easier Exits: Establishing mechanisms for smoother exits can encourage calculated risks and foster a culture of innovation by mitigating the fear of failure.

Promoting Global Collaboration: Encouraging partnerships between Indian and international startups can foster knowledge sharing, access to global markets, and accelerate growth.

By addressing these areas, Startup India can ensure that India remains at the forefront of global innovation and entrepreneurship, cementing its position as a startup powerhouse.

Looking to Start Your Entrepreneurial Journey?

If you’re an aspiring entrepreneur looking to embark on your startup journey, filingwala.com can be your trusted partner. Our team of experienced professionals offers a range of services to help you navigate the complexities of starting a business in India:

Company Registration: We handle the entire process of registering your startup, ensuring compliance with all legal requirements.

Trademark Registration: Protect your brand’s identity by securing a trademark through our efficient registration services.

Income Tax and GST Compliance: Stay on top of your tax obligations with our comprehensive income tax and GST filing and advisory services.

Legal Advisory: Our legal experts provide guidance on various aspects of starting and running a business, from drafting agreements to intellectual property protection.


At filingwala.com, we understand the unique challenges faced by startups and are committed to providing tailored solutions to support your entrepreneurial dreams. Visit our website or reach out to our team today (9284041780) to learn more about how we can assist you on your startup journey.

FAQs About Startup India

Q: What is the definition of a startup under Startup India?
A: According to the DPIIT, a startup is a private limited company or registered partnership firm, less than 10 years old, working towards innovation, development, or improvement of products/processes/services, with an annual turnover not exceeding ₹100 crore.

Q: What are the key tax benefits offered to startups under Startup India?
A: Startups can enjoy a tax holiday on profits for up to three consecutive years, self-certify compliance with labor and environmental laws, and benefit from faster patent registration processes.

Q: How does Startup India facilitate funding for startups?
A: Initiatives like the Fund of Funds, Credit Guarantee Scheme, Startup India Seed Fund Scheme, and Angel Tax exemption have increased the availability of funding for startups.

Q: What are some regulatory simplifications introduced by Startup India?
A: Startups can self-certify compliance, issue ESOPs, benefit from faster patent registration, and undergo a simplified winding-up process.

Q: What are some success stories of Startup India?
A: Notable success stories include Paytm, Ola, Uber, Zomato, Swiggy, BYJU’S, Flipkart, and Myntra, which have disrupted various industries and achieved global recognition.

Q: What are some challenges faced by Indian startups?
A: Key challenges include access to funding, market competition, infrastructure issues, regulatory burdens, and retention of talent.

Q: How can aspiring entrepreneurs benefit from filingwala.com’s services?
A: filingwala.com offers a range of services to support startups, including company registration, trademark registration, tax compliance, and legal advisory services.

Startup India has ignited the entrepreneurial spirit of a billion dreams, empowering countless individuals to turn their innovative ideas into successful ventures. By fostering a nurturing ecosystem, simplifying regulations, facilitating funding, and promoting innovation, this initiative has propelled India to the forefront of the global startup revolution. As the nation continues to embrace this entrepreneurial wave, the future looks promising for aspiring entrepreneurs to leave their mark on the world.

How to Legally Save Income Tax on Salaries Above ₹20 Lakhs in 2023

Save Income Tax

Paying taxes is a civic duty. But for high income individuals, the tax outgo can make a serious dent in your earnings. Fortunately, there are legitimate ways to reduce your tax burden while staying compliant with income tax laws.

This comprehensive guide will teach you 10 proven and legal methods to save tax on salaries above ₹20 lakhs per annum in 2023. Follow these tips for smart tax planning and keep more of your hard-earned money.

Introduction: Is It Possible to Legally Minimize Taxes on ₹20 Lakh+ Salaries?

The tax rates in India for incomes above ₹10 lakhs per annum are pretty steep. Individuals earning ₹20 lakhs or more per year fall under the highest 30% tax bracket.

But there are smart and legal ways to reduce your tax liability even if you are a high income earner. With proper tax planning, individuals earning ₹20 lakhs annually can potentially save over ₹1.5 lakhs in income tax every year.

The key is to fully utilize all the tax rebates, deductions and exemptions permitted under the Income Tax Act. Let’s look at how.

Use Tax-Saving Investment Options Under Section 80C

Section 80C of the Income Tax Act allows you to reduce your taxable income by up to ₹1.5 lakhs per year by investing in certain approved investment schemes and expenses.

Some popular Section 80C options include:

  • Public Provident Fund (PPF): Offers guaranteed tax-free returns of up to 7.1% and capital safety. The maximum investment limit is ₹1.5 lakhs per year.
  • Employee’s Provident Fund (EPF): For salaried individuals, contributing more towards EPF above the 12% mandatory amount allows tax savings under Sec 80C.
  • Equity Linked Savings Schemes (ELSS): Investments in ELSS mutual funds up to ₹1.5 lakhs per year qualify for tax deductions. ELSS also offers the lowest lock-in of 3 years among tax-saving instruments.
  • Life Insurance Premiums: The premium paid towards life insurance policies for self, spouse or children is eligible for tax benefits under Section 80C.
  • 5-Year Tax Saving Bank FDs: Offer guaranteed returns with tax savings up to ₹1.5 lakhs under Sec 80C.
  • Sukanya Samriddhi Yojana: Offers tax rebates up to ₹1.5 lakhs per year on deposits made for up to 2 girl children.
  • Home Loan Principal Repayment: Principal repayments of up to ₹1.5 lakhs on home loans taken for self-occupied property are eligible for tax savings under Section 80C.

By making the maximum permitted investments across the above Section 80C options annually, high income earners can potentially save over ₹46,000 in taxes every year.

Get Tax Benefits on Health Insurance Premiums

Having an adequate health insurance cover is necessary today, even more so for high income individuals in higher tax brackets.

The good news is that the premium paid towards health insurance policies also offers tax benefits for self, spouse and dependent children.

Under Section 80D, you can claim deductions on health insurance premium up to ₹25,000 for self, spouse and dependent children.

An additional deduction of ₹25,000 is permitted for health insurance premium paid for parents aged 60 years or above, taking total deduction to ₹50,000.

For very senior citizen parents above 80 years of age, the deduction amount is ₹50,000 per parent, with an overall limit of ₹1 lakh.

So a family floater health plan with coverage for self, spouse, children and parents can potentially save taxes up to ₹50,000 annually for high income individuals.

Claim Interest Deduction on Education Loans

Education loans taken for higher education of self, spouse or children offer huge tax benefits under Section 80E of the IT Act.

The entire interest amount paid on education loans is eligible for tax deduction for up to 8 years from the start of the repayment period. There is no upper limit on the deduction amount.

So if you or your dependents have taken an education loan, be sure to claim deductions on the interest repayment to reduce your tax outgo.

Avail Tax Rebates Under Sections 80D and 80DD

In addition to standard deductions, two sections of the IT Act allow special tax benefits for expenses incurred towards medical treatment and disability:

Section 80D: Get a deduction of ₹75,000 on expenses incurred for medical treatment of a dependent with a disability (40% or more). This limit is ₹1.25 lakhs if the disability is severe (80% or more).

Section 80DD: Claim up to ₹75,000 tax deduction on medical expenses incurred for self or dependant with 40% disability. This goes up to ₹1.25 lakhs deduction if the disability is higher.

So if you have disabled dependents, ensure you claim deductions under the above sections to lower tax liability.

Claim Deductions on Home Loan Interest and Principal

Owning a home involves paying significant EMIs comprising both interest and principal components. The good news is that the Income Tax Act allows separate deductions on home loan interest and principal repayments.

Under Section 24, you can claim deductions on home loan interest paid up to ₹2 lakhs annually. This is over and above the ₹1.5 lakhs deduction permitted on principal repayment under Section 80C.

So if you have a home loan, you can claim deductions up to ₹3.5 lakhs per year – ₹1.5 lakhs principal and ₹2 lakhs interest. This results in tax savings of over ₹1 lakh annually for high income earners.

Making donations to approved charitable institutions and funds is another way to reduce tax liability. Under Section 80G, deductions up to 100% are permitted on certain donations.

For instance, donations made to Prime Minister’s Relief Fund offers 100% tax deduction with no qualifying limit.

Donations made to other approved charities and funds allow 50% deduction without any capping. Certain donations even permit 100% or 50% deduction subject to a qualifying limit.

So if you have a habit of giving, you can save taxes while fulfilling your charitable intents.

Additional Tax Saving Tips

Here are some additional perfectly legal ways to further minimize your taxes:

  • Opt for the new simplified tax regime without deductions if you have limited investments. It offers lower tax rates.
  • Claim standard deduction of ₹50,000 annually on your salary income to reduce tax liability.
  • Set aside a portion of your salary as tax-free allowances like LTA, medical reimbursement, etc. as permitted by your employer.
  • Pre-pay taxes through TDS, advance tax and self-assessment tax before financial year closing to avoid interest penalties.

Choosing Between Old and New Tax Regimes

From FY 2020, taxpayers in India have the option to choose between the old and new tax regimes while filing returns.

The new regime offers lower tax rates but does not permit popular deductions under Section 80C, 80D, standard deduction, etc.

So individuals with limited deductions and expenses are better off choosing the new regime. But for high income earners with sizeable deductions, the old regime with higher rates is more beneficial.

Use online tax calculators to determine your tax liability under both regimes and choose the one that results in lower outgo. Proper regime selection itself can save taxes up to ₹46,000 annually.

Tax Planning Services for High Income Earners

To enjoy maximum tax savings through planning, deductions and exemptions, it helps to consult a tax planning expert, especially if your income exceeds ₹15 lakhs per annum.

FilingWala.com offers end-to-end tax planning and filing services for salaried employees and business owners.

Their tax experts will analyze your financial profile to identify tax planning opportunities to legally minimize your liability. They also ensure accurate tax filing and compliance.

Conclusion

The above tips can help high income professionals earning ₹20 lakhs or more per year save over ₹1.5 lakhs in income tax through proper planning and deductions.

Remember to make permitted investments under Section 80C, get health insurance coverage, prepay taxes, and file tax returns correctly before the due date. This will ensure you maximize tax savings while avoiding penalties.

With the help of a good tax advisor, high net worth individuals can potentially reduce their tax outgo and increase investible income. So be sure to consult an expert like FilingWala.com for your tax planning and filing needs.

Follow these tips for smarter tax planning and keep more of your hard-earned money each year!

Frequently Asked Questions

1. How much tax do I need to pay if my salary is ₹20 lakhs per year?

  • For an annual salary of ₹20 lakhs, the tax liability will be approximately ₹4.2 lakhs under the old tax regime and ₹3.1 lakhs under the new regime without claiming any deductions.

2. What is the best way to save tax on ₹20 lakh salary?

  • The best way is to invest ₹1.5 lakhs under Section 80C in instruments like PPF, ELSS, life insurance, etc. Also claim ₹50,000 deduction on health insurance premium and utilize other rebates. This can potentially save over ₹1.5 lakhs tax annually.

3. Can I avoid paying any tax if my income is above ₹10 lakhs?

  • It is not possible to avoid paying complete tax if your annual income exceeds ₹10 lakhs. However, you can significantly reduce tax liability through permitted deductions, proper regime selection and tax planning.

4. Should I choose old or new income tax regime for 20 lakhs salary?

  • If you have sizeable deductions of over ₹2 lakhs, choosing the old regime with higher rates but more deductions leads to lower overall tax outgo. Use online calculators to determine the optimal regime.

5. How much self-assessment tax should I pay if my income is ₹20 lakhs annually?

  • You need to pre-pay 100% of your estimated tax liability for the year through TDS, advance tax and/or self-assessment tax. This will help avoid interest penalties.

So in summary, with prudent tax planning and claiming all eligible deductions, it is possible to save over ₹1.5 lakhs income tax annually on salaries above ₹20 lakhs. Consult a tax expert and follow the tips shared above.

How to Claim Income Tax Deduction on Medical Expenses for Family Members Suffering from Specified Illnesses

Filing income tax returns can be confusing, especially when claiming deductions for medical expenses. However, the Indian Income Tax Act contains a special provision – Section 80DDB – that allows taxpayers to lower their taxable income if they have incurred costs for medical treatment of dependents suffering from certain chronic diseases.

This extensive guide explains everything you need to know about claiming deduction under Section 80DDB, the documentation required, and key points to remember.

What is Section 80DDB of the Income Tax Act?

Section 80DDB of the Income Tax Act, 1961 contains provisions for claiming tax deduction on medical expenditure incurred by a taxpayer for treatment of their dependent family members suffering from specified diseases.

This section was introduced to provide financial relief to individuals paying high costs for medical care of relatives with certain chronic conditions. The deduction applies to resident Indian assessees.

Who is Eligible to Claim the Deduction?

The deduction under Section 80DDB can be claimed by:

  • Resident individual taxpayers
  • Hindu Undivided Families (HUFs)

For individual taxpayers, the deduction can be claimed for medical expenses incurred on the below dependent family members:

  • Spouse
  • Children
  • Parents
  • Siblings

In case of a HUF, any member of the family can be considered a dependent and their treatment expenses can qualify for the tax deduction.

What Diseases Are Covered Under Section 80DDB?

The income tax laws have identified 5 categories of critical illnesses for availing deduction under Section 80DDB. These are:

  1. Neurological diseases: These include dementia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia, and Parkinson’s disease. The disability level from these diseases must be certified to be 40% or more by a specialist doctor.
  2. Cancer: This covers malignant cancers of all organs diagnosed by an oncologist.
  3. Full blown AIDS: The deduction can be claimed if the dependent is diagnosed with full blown Acquired Immuno-Deficiency Syndrome (AIDS).
  4. Chronic kidney disease: This includes advanced kidney failures and end stage renal disease necessitating dialysis or transplant.
  5. Hematological disorders: Eligible disorders are hemophilia and thalassemia major.

Therefore, as a taxpayer, you can claim deduction under Section 80DDB only if a dependent family member is suffering from any of the above specified chronic illnesses. Common ailments like diabetes, hypertension, arthritis, asthma, tuberculosis, etc. do not qualify for this deduction.

What is the Deduction Amount Allowed?

As per current income tax rules, the maximum deduction that can be claimed under Section 80DDB is:

  • For taxpayers below 60 years of age: ₹40,000 per year
  • For senior citizens (60-80 years): ₹1 lakh per year
  • For very senior citizens (above 80 years): ₹1 lakh per year

However, the actual deduction allowed will be lower of the following:

a) Actual amount spent on treatment

b) Maximum deduction limit as per age

So if your medical bills exceed the prescribed deduction limit, you can only claim up to the limit and not the full billed amount.

What Certification is Required for Claiming Deduction?

To claim deduction under Section 80DDB, you must obtain a certificate from specified medical specialists confirming diagnosis and treatment of the dependent.

The relevant specialists based on the disease are:

  • Neurological diseases: Neurologist holding DM (Doctorate in Medicine) in Neurology
  • Cancer: Oncologist with DM in Oncology
  • AIDS: Postgraduate doctor in General Medicine or Internal Medicine
  • Kidney failure: Nephrologist with DM in Nephrology or Urologist with MCh in Urology
  • Hematological disorders: Specialist doctor with DM in Hematology

This certificate should clearly mention the patient’s name, age, disease, fees charged and other details. In case of treatment at a government hospital, the certificate must also state the hospital name and address.

If you receive any insurance payment or reimbursement from employer for the treatment, this amount must be deducted from the total deduction claim.

Documents Required to Claim Deduction

To successfully claim deduction u/s 80DDB, keep the following documents ready when filing your tax returns:

  • Certificate from specialist doctor
  • Original receipts for hospitalization, tests and medicines
  • Discharge summary from the hospital
  • Any payment receipts from insurer or employer as reimbursement

Key Points to Remember

When claiming deduction under Section 80DDB, keep the following important points in mind:

  • Get the diagnosis and treatment certificates only from the specified specialist doctors as per the disease type
  • Collect proper original bills, receipts and discharge summary as proof
  • Ensure the patient meets the definition of dependent as per income tax rules
  • Claim deduction only up to the prescribed limit based on your age
  • Deduct any reimbursement received from the total deduction amount
  • Furnish all documents with your income tax returns for smooth processing of deduction
  • Avoid claiming expenses for common ailments not covered in the list of specified diseases

Summary

The Section 80DDB deduction provides much needed financial relief to taxpayers paying high medical bills for severe illnesses of dependent family members. Make sure you carefully assess your eligibility, get proper certification, maintain documents and claim deduction as per specified limits. Consult a tax expert such as Filingwala.com if you need assistance on using this provision. Being aware of such deductions can help you save tax and ease the stress of caring for loved ones with chronic health conditions.

Here are 10 additional FAQs on Section 80DDB deduction:

  1. Who issues the certificate for claiming deduction under Section 80DDB?

The certificate has to be issued by a specialist doctor like a neurologist, oncologist, nephrologist etc. depending on the disease. The specialist must have a recognized postgraduate degree or equivalent qualification.

  1. Can I claim the deduction if my wife undergoes a kidney transplant?

Yes, you can claim deduction up to ₹1 lakh under Section 80DDB for your wife’s kidney transplant and related expenses as it covers chronic kidney failure.

  1. Are dental treatments covered under Section 80DDB?

No, dental treatments do not qualify for deduction under Section 80DDB as they are not covered under the list of specified diseases.

  1. Can I claim deduction for autism treatment of my child?

No, autism and other developmental disorders are currently not in the list of eligible illnesses, so you cannot claim deduction for them under Section 80DDB.

  1. What documents are required if the patient dies during the treatment?

If the dependent dies during treatment, you would need death certificate along with the other documents like original bills, discharge summary etc. incurred till the time of death.

  1. How do I claim deduction if treatment is spread over 2 financial years?

You can claim deduction in each year up to the eligible limit based on when the expense was incurred. So bills pertaining to each year have to be used to claim deduction in that year.

  1. Can I claim deduction under 80DDB for my parents who are NRIs?

No, deduction under 80DDB is only available for resident ordinary taxpayers in India. Medical expenses incurred abroad for family members who are NRIs cannot be claimed.

  1. What if I don’t have all documents for past treatment when filing returns?

It is recommended to file your IT returns only when you have all the necessary documents. If you don’t have the documents, you cannot claim deduction under 80DDB.

  1. Can I claim the deduction every year for chronic condition treatment?

Yes, you can claim deduction under 80DDB each financial year as long as the expenses relate to treatment of an eligible illness of your dependent.

  1. Is CGHS/ECHS reimbursement taxable if claimed under 80DDB?

No, CGHS and ECHS payments received for medical expenses are non-taxable. So you can claim deduction on remaining expenses not covered under CGHS/ECHS.

How to Make Your Nidhi Company Wildly Profitable: The Ultimate Guide

Dreaming of starting a lucrative financial services company in India? Look no further than a Nidhi company!

Nidhi companies are mutual benefit companies specifically designed to encourage savings and lending activities among their members. With relatively simple registration requirements, flexible operations, and bonuses like tax benefits, Nidhi companies offer serious profit potential for savvy entrepreneurs.

This extensive guide will walk you through everything you need to know to make your Nidhi company wildly successful, from understanding regulations to expert tips for maximizing profits. Let’s get started!

What is a Nidhi Company?

A Nidhi company is a type of Indian non-banking finance company (NBFC) that is registered under Section 406 of the Companies Act, 2013. The main purpose of a Nidhi company is to cultivate the habit of thrift and savings amongst its members.

Nidhi companies can provide their members loans and allow them to deposit money, but all transactions must take place only between members. They are not allowed to deal with non-members. The deposits mobilized by Nidhi companies are their main source of funds.

The name of a Nidhi company must end with “Nidhi Limited”. They are regulated by the Ministry of Corporate Affairs and the Reserve Bank of India.

Rules and Regulations for Nidhi Companies

While Nidhi companies are subject to fewer regulations than other NBFCs, there are still important rules they must follow:

  • Must have at least 7 members and 3 directors
  • Minimum paid up equity share capital must be Rs. 5 lakhs
  • Net owned funds should be at least Rs.10 lakhs
  • Unencumbered deposits must be at least 10% of outstanding deposits
  • Ratio of net owned funds to deposits cannot exceed 1:20
  • Cannot engage in activities like hire-purchase, insurance or chit funds

Deposit Requirements

Nidhi companies have restrictions on the deposits they can accept:

  • Cannot accept deposits over 20% of their net owned funds
  • Fixed deposits can be accepted for 6 months to 5 years
  • Recurring deposits for minimum 1 year and maximum 5 years
  • Interest rate cannot exceed rates offered by nationalized banks by more than 2%

Branch Limitations

  • Can open branches only after 3 years of profitability
  • Can initially open up to 3 branches within the district
  • Further branches allowed only after filing balance sheet with Registrar

Loan Limitations

  • Loans up to Rs.2 lakhs allowed if deposits are Rs.2 crores
  • Loans up to Rs.7.5 lakhs allowed if deposits are between Rs.2-20 crores
  • Loans up to Rs.12 lakhs allowed if deposits are between Rs.20-50 crores
  • Loans up to Rs.15 lakhs allowed if deposits exceed Rs.50 crores

Key Facts About Nidhi Companies

  • No RBI approval required, easier to register
  • Must include “Nidhi Limited” in name
  • Regulated by RBI due to NBFC-like activities
  • Transactions only between members for safety
  • Locker facilities rental income capped at 20%

Benefits of Starting a Nidhi Company

  • Simple registration process
  • Exempt from RBI compliance
  • Lower risk as transactions only between members
  • Cost-effective registration
  • Promotes savings culture
  • Allows net owned funding for growth

Required Documents for Registration

  • Digital Signature Certificates (DSC)
  • Directors Identification Numbers (DIN)
  • PAN cards of directors and members
  • Address proof of directors and members
  • Photographs of directors
  • Registered office address proof
  • NOC if required
  • Memorandum of Association (MOA)
  • Articles of Association (AOA)

Step-by-Step Registration Process

  1. Obtain DSC and DIN for all directors
  2. Apply for approval of 3 unique names with MCA
  3. File registration application with MOA and AOA
  4. Receive incorporation certificate and CIN in 15-20 days

Fulfilling Conditions for Incorporation

To successfully register and operate a Nidhi company, some conditions must be met:

  • Minimum 7 members with 3 directors
  • Minimum equity share capital of Rs.5 lakhs
  • Limited company status under Companies Act, 2013
  • MOA must state objectives relating to thrift and savings
  • Adhere to all rules and regulations for Nidhi companies

Expert Tips to Maximize Profits

Here are some pro tips to boost your Nidhi company’s profitability:

  • Leverage digital marketing and social media to attract members
  • Offer competitive interest rates on deposits
  • Maintain excellent customer service and transparency
  • Expand branches aggressively once eligible
  • Keep debt recovery processes streamlined
  • Utilize fintech to automate and streamline operations
  • Hire experienced professionals in banking, finance and management

Frequently Asked Questions

Q: How is a Nidhi company different from an NBFC?

A: Nidhi companies are a specialized form of NBFC but are exempted from RBI regulations that govern other NBFCs. They have more flexibility in operations and regulatory compliance.

Q: What is the minimum capital required?

A: The minimum paid-up equity capital for a Nidhi company is Rs.5 lakhs. The minimum net owned funds should be Rs.10 lakhs.

Q: Can anyone become a member?

A: No, only individuals who satisfy a Nidhi company’s membership criteria can be admitted as members. Membership is not open to companies, trusts etc.

Q: What is the process to apply for membership?

A: You need to submit the membership application form along with identity and address proof to the Nidhi company. Membership is at the discretion of the company.

Q: How fast can loans be disbursed?

A: Loan disbursal times depend on the Nidhi company, but well-run Nidhi companies strive to disburse loans to members within a few working days.

Conclusion

Starting a Nidhi company offers lucrative opportunities for entrepreneurs looking to enter India’s thriving NBFC sector. By following RBI regulations, leveraging technology, hiring professionals, and acquiring members aggressively, your Nidhi company can become highly profitable.

This guide covers everything from understanding Nidhi company rules to expert tips for growth. So polish your business plan and get ready to enjoy the fruits of running a successful Nidhi enterprise!

To make the registration process seamless, trust the experts at FilingWala. They have helped hundreds of businesses successfully start Nidhi companies with their end-to-end services. Give their advisors a call today to clarify any questions and get your profitable Nidhi company up and running!

How to File ITR Without Form 16: A Step-by-Step Guide for Salaried Employees

Tax Return Financial Form Concept

Filing income tax returns can seem like a complicated process, especially if you don’t have access to key documents like Form 16.

As a salaried employee, you may rely on your employer to issue Form 16 – a TDS certificate that has details of your taxable income and deductions. But what if your employer doesn’t give you Form 16? Does that mean you can’t file your ITR?

The good news is that you can and should file your ITR even without Form 16. In this detailed guide, we will walk you through the entire process step-by-step.

What is Form 16 and Why is it Important?

Form 16 is a TDS certificate that your employer issues every year by June 15. It has complete details of the total taxable salary paid to you and the TDS deducted on it.

Since your employer deducts TDS on your salary income, Form 16 acts as proof that tax has already been paid on your behalf. It is an important document to accurately file your ITR.

However, the lack of Form 16 does not mean you are exempt from paying taxes or filing ITR. Even without Form 16, you are obligated to pay any additional tax and file returns if your income exceeds the basic exemption limit of ₹2.5 lakhs.

When Can an Employer Not Issue Form 16?

There are a few scenarios when your employer may not issue Form 16:

  • No TDS deducted: If your income is below the taxable limit, no TDS will be deducted and employer is not required to issue Form 16.
  • TDS deducted but no certificate issued: If TDS is deducted but your employer does not provide Form 16, they can be penalized with ₹100 per day of default. You can inform the Income Tax Department.
  • Income below exemption limit: Even if you have received salary, if it is below ₹2.5 lakhs, your employer may not issue Form 16.

So the lack of Form 16 alone does not indicate your tax filing requirements. You must pay due taxes and file ITR based on your total income for the year.

Do I Still Have to Pay Tax and File ITR Without Form 16?

Yes, even without Form 16, your obligation to file ITR remains if:

  • Your total income from all sources exceeds basic exemption limit of ₹2.5 lakhs.
  • Tax has been deducted (reflected in Form 26AS) but employer has not issued Form 16.
  • No TDS was deducted by employer, but your tax liability as per income slab rates is more than zero.
  • You want to claim refund of excess TDS deducted.
  • You have incurred capital gains, interest income, etc over and above salary.

So ensure you calculate your total tax liability correctly and file ITR within due date even if employer does not give Form 16.

Step-by-Step Guide to File ITR Without Form 16

Here is a detailed step-by-step process salaried individuals can follow to file ITR without Form 16:

1. Determine Income from All Sources

  • Salary income: Add up net taxable salary from all employers during the year, based on your pay slips.
  • Income from house property: Any rental income earned from leased property.
  • Capital gains: Profits from sale of assets like shares, property, bonds, etc.
  • Interest income: Interest earned from savings account, fixed deposits, etc.
  • Other income: Any other taxable income like offshore income, lottery wins, etc.

Account for all taxable income you have received during the year from different sources.

2. Find TDS Deducted on Income

Refer to Form 26AS to determine total TDS deducted on various incomes. Form 26AS can be downloaded from the TRACES website.

This will help you reconcile total TDS with income earned.

3. Claim Deductions

Some common deductions salaried individuals can claim:

  • House rent allowance
  • Section 80C investments like PPF, ELSS
  • Health insurance premiums
  • Home loan interest
  • Professional tax

Maximise tax deductions by claiming all eligible expenses, investments and allowances.

4. Compute Total Taxable Income

Total taxable income is computed as:

Gross Total Income

LESS Total Deductions Claimed

EQUALS Total Taxable Income

This is the final income on which tax liability will be calculated.

5. Calculate Tax Liability

Based on total taxable income and the applicable tax slab, calculate tax payable for the year.

You can use online tax calculators to compute tax liability accurately.

6. Determine Tax Payable

Compare the total TDS deducted during the year with calculated tax liability.

If TDS < Tax liability: Pay additional tax

If TDS > Tax Liability: Claim tax refund

This will give the final tax amount payable or refundable.

7. File ITR

Finally, file ITR online selecting the applicable ITR form. Confirm all details, compute taxes payable/refund and submit the tax return.

Ensure you file before the ITR due date for the assessment year.

What if I Get Form 16 Late and Find Discrepancies?

If you receive Form 16 after filing ITR and notice any mismatches in income or TDS details, you can revise your return within the due date.

File an updated, accurate ITR including details as per Form 16 to avoid getting a defective notice.

Conclusion

  • Form 16 should not stop you from fulfilling your tax compliance obligations.
  • Even without Form 16, calculate total income, deductions, TDS, tax liability and file ITR within due date.
  • Refer to pay slips, Form 26AS and claim evidence to compute correct figures.
  • Use online tools to estimate taxes accurately and file error-free returns without Form 16.
  • Timely filing will avoid penalties, scrutiny and allow you to claim refunds if applicable.

FAQs

Q: Can I file ITR using my salary slips instead of Form 16?

Yes, you can use your monthly salary slips to file ITR by calculating total taxable salary income. Form 16 is not mandatory.

Q: What documents do I need to file ITR without Form 16?

You will need salary slips, Form 26AS, income proof, investment proofs for deductions, and bank statement reflecting TDS.

Q: How do I get my Form 16 if my employer does not issue it?

You can file a request to your employer to issue Form 16 as required under the law. If they still do not provide, complain to the jurisdictional Income Tax Department.

Q: I did not file ITR as I did not get Form 16. What do I do?

Compute your taxable income from other documents, pay any due tax, and file belated ITR immediately with late filing fees. Also inform IT department about non-issue of Form 16.

Q: Where can I get help with filing ITR without Form 16?

You can take assistance from experienced chartered accountants at an affordable price at platforms like filingwala.com. They can help compute income, taxes, and file accurate returns.

The Complete Guide to Patentability Criteria in India [2024 Update]

Everything You Need to Know About Obtaining a Patent in India

Gain a competitive edge for your inventions. Understand patentability criteria in India with this comprehensive 3500+ word guide.

Patentability Criteria

Have you created an extraordinary new invention? Are you wondering how to secure exclusive rights for your intellectual property in India?

Obtaining a patent in India can be tricky without understanding the patentability requirements and process.

This extensive guide covers all key aspects of patents in India:

Let’s start with a brief background on intellectual property rights and patents in India.

Introduction to Patents in India

India has a robust legal framework around intellectual property rights including patents, trademarks, copyrights, and industrial designs.

The Indian Patents Act of 1970, amended in 2002, 2005 and recently in 2022, governs patents in India. This Act outlines the patentability criteria, application process, and rights of patent holders.

According to the Act, a patent gives the creator an exclusive right over the invented product or process for a limited period of 20 years.

This enables the inventor to reap commercial benefits from the innovation by preventing others from copying it.

Patent protection promotes innovation and technology advancement in a country. It enables companies to reap returns on their R&D investments and acts as an incentive to compete on innovations.

However, the patentability criteria are stringent to ensure that trivial innovations do not get patented. An invention has to be substantially innovative and non-obvious to get patent protection.

India aims to balance public interest and preventing evergreening of patents with promoting genuine innovation through its patent regulations.

Having a patented technology or product differentiates you from competitors and attracts investors, apart from safeguarding your exclusive rights.

Objectives of Patent Protection

Before we get into India’s patentability criteria, let us look at why inventors and companies pursue patent protection:

  • Monetary gains – Patents enable the inventor to earn from their innovation by preventing others from commercially using it without consent. Licensing or assigning the patent rights can generate significant revenues.
  • Exclusive rights – A patent grants the holder the exclusive rights to commercially exploit the patented invention for 20 years. Others need to obtain a license or face infringement penalties.
  • Competitive edge – Companies with patented technologies have an edge over competitors who must either license the patent or invest resources into developing alternate technologies.
  • Attract investment – A strong patent portfolio demonstrates an innovator’s technical capabilities. Venture capital and equity investors often consider patents as an asset.
  • Prevent copying – Patents deter others from copying an invention and eroding the creator’s competitive position. Potential infringers may have to obtain a license or find alternative solutions.
  • Enhancing company value – IP portfolios including patents increase a company’s net worth and valuation during acquisitions or public listing.
  • Incentivizing innovation – Patent protection fosters a culture of innovation within companies and motivates investment into cutting-edge R&D.

With these benefits in mind, let us look at the process of applying for a patent in India.

Types of Patent Applications in India

Under the Indian Patents Act, you can file for these types of patent applications:

  • Ordinary Application – This standard application is for applicants who have not already filed in other countries. You submit details of the invention without claiming priority date.
  • Convention Application – If you have first applied for a patent for the same invention in a convention country, you can file this application within 12 months to claim priority.
  • PCT International Application – For patenting an invention in multiple countries, you can begin with a single international application under the PCT (Patent Cooperation Treaty).
  • PCT National Phase Application – This application enters the national phase when you pursue patent grant in specific PCT member countries like India. The application must be made within 31 months of your priority date.
  • Patent of Addition – If you wish to improve or modify your already patented invention, you can apply for a patent of addition.
  • Divisional Application – In case your original patent application claims multiple inventions, you can pursue divisional applications for each invention while retaining your priority date.

Thoroughly review the types of applications to determine the right fit for your needs. Our patent filing experts at Filingwala can also guide you on selecting the optimal application strategy.

Now let’s look at the benefits and potential drawbacks of patenting your invention.

Advantages of Obtaining a Patent in India

  • 20 years of exclusive rights – Patents enable you to exclude others from commercially exploiting your invention for up to 20 years from the patent application date. This provides adequate time to build your competitive edge.
  • Stronger legal position – You can file lawsuits for damages against any entity infringing upon your patented technology. A patent strengthens your legal position.
  • Higher valuation – Patents add to your intellectual property assets. This increases the net worth and valuation of your company, making it more lucrative for investors or acquirers.
  • Revenue generation – You can earn revenues by licensing the patent rights to interested parties. Assigning the patent can also provide financial gains.
  • Competitive edge – Your patented product or process is legally protected from copying. Competitors must innovate with alternate technologies giving you a competitive advantage.
  • Attract investors – Securing patents demonstrates your technological innovation capabilities and IP assets. This makes your company appealing to venture capitalists and equity funds providers for financing.
  • Incentivizing R&D – Patent protection encourages allocation of resources towards pioneering research leading to new technologies and scientific advances.

However, patents also have some drawbacks:

  • High application and maintenance costs – The entire patenting process from drafting to registration involves substantial expense in attorney fees and other charges. Annually renewing patents also costs money.
  • No guarantee of success – A patent application can get rejected after you’ve invested significant time and money into it. Even approved patents may not translate into commercial success.
  • Geographical limitations – Patent rights are limited to national or regional jurisdictions. You may need to apply for patents in multiple countries.
  • Infringement risks – Your patent can still be copied or infringed upon illegally. Defending your IP worldwide requires great effort and expense.
  • Disclosure risks – The public disclosure of your invention during the patenting process can enable others to understand and possibly replicate aspects of it.
  • Lengthy process – It typically takes 3-5 years for a patent application to result in approval, blocking any enforcement of rights during that period.

Weigh both the advantages and disadvantages before deciding whether to patent your invention in India. Your decision may also depend on how novel and commercially promising the invention is.

Now let’s get into the patentability criteria you must fulfil for approval.

Criteria for Patentability in India

India has stringent eligibility criteria to ensure that patents are only granted for substantive innovations and not frivolous improvements.

For an invention to be patentable under the Indian Patents Act, it must satisfy these three essential criteria:

1. Novelty

Your invention must be new and novel compared to existing knowledge and public domain.

  • It should not be anticipated by prior publication or commercial use anywhere in the world.
  • You need to demonstrate that no prior art exists disclosing the invention.
  • Section 2(1)(l) of the Patents Act explains the novelty requirement for patentability.
  • The invention should not form part of public knowledge or public use in any manner before your patent application date. This includes written or oral disclosures, sales, trade or use by others.
  • Absolute worldwide novelty is required. Known use of the invention in any geography will invalidate your claim to novelty in India.

Essentially, you must prove your invention has never been known, published, described or used publicly before filing for the patent. It should not resemble existing art in the field.

Absolute novelty is difficult to establish given expanding global information access. Thorough prior art searching before application submission is crucial.

2. Non-Obviousness

Mere novelty is inadequate. Your invention should involve an inventive step compared to existing knowledge in the field.

  • It should be non-obvious to an ordinary person skilled in the art. Someone with reasonable skills in that technological field should not be able to easily deduce or derive your invention just by combining existing prior art.
  • As per Section 2(1)(ja) of the Patents Act, inventive step means a feature that makes the invention not obvious to a person skilled in the art.
  • The test for non-obviousness is whether a technically skilled person would have arrived at the invention by combining previous existing art.
  • If the invention can be construed as an obvious permutation, combination or extension of known art, it lacks an inventive step.
  • Your application must clearly articulate the problem your invention solves and demonstrate the non-obvious inventive step compared to prevailing knowledge.
  • Non-obviousness prevents trivial extensions of existing art from getting patented, thereby improving the quality of patents.

3. Industrial Applicability

Besides novelty and inventiveness, your invention should be capable of industrial application and provide utility.

  • It must be technologically feasible and producible on an industrial scale.
  • The invention’s practical applicability and potential use in trade or industry must be established.
  • Section 2(1)(ac) clarifies that industrial applicability means an invention which can be made or used in an industry.
  • The patent application should disclose the practical application of the invention through examples or sound reasoning.
  • Frivolous or useless innovations with no industrial or commercial value cannot be patented. The invention’s utility must be proven.
  • Scientific theories, purely intellectual principles, aesthetic creations, etc. that cannot be applied in manufacturing do not qualify as inventions as per Indian patent law.

Only innovations that are novel, non-obvious, and industrially applicable are eligible for patents as per sections 2(1) and 3 of the Indian Patents Act.

Besides these primary criteria, you must ensure your invention does not fall under non-patentable subject matter.

Non-Patentable Inventions

Even if an invention satisfies the main criteria, a patent cannot be granted in India if the subject matter falls under these categories:

  • Frivolous and mere discovery of scientific principles or formulations
  • Algorithms and computer programs per se
  • Business methods and mathematical or mental processes
  • Literary, dramatic, musical, or artistic works for aesthetics
  • Mere discovery of new properties or uses of known substances
  • Admixture (simple combinations or mixtures) of known components
  • Methods of agriculture and horticulture
  • Traditional medicinal knowledge or biological processes for producing plants/animals
  • Atomic energy inventions
  • Inventions against public order or morality or injurious to human, animal or plant life.

Further, Section 3(d) clarifies that a new form or derivative of a known substance that does not significantly enhance efficacy cannot be patented.

This prevents incremental innovations from getting patented easily, unless the efficacy is substantially improved versus known substances.

India adopted product patents in pharmaceuticals only from 2005. Section 3(d) ensures patent quality by requiring true drug innovation and preventing evergreening of patents through minor chemical variations.

With the criteria and exclusions clear, let us now look at the step-by-step process for obtaining a patent in India.

Patent Application Process in India

Follow these key steps for drafting and submitting your patent application:

Step 1) Invent and Document

  • Invent your unique product, technology or process through innovation. Maintain detailed records and evidence during the conception and prototyping stages.

Step 2) Conduct Prior Art Search

  • Thoroughly research existing public knowledge, patents and technologies in your field of invention. Analyze similarities or differences to evaluate novelty.

Step 3) Draft Patent Application

  • Disclose your invention’s complete details in the application including title, description, claims, drawings, sequence listings, etc. Demonstrate novelty, inventiveness and utility.

Step 4) Submit Application

  • File the prescribed forms along with required documents and fees at the appropriate patent office. Engage a patent attorney for expert drafting and filing services.

Step 5) Examination by Patent Office

  • The application undergoes formal and substantive examination. Queries may be raised that require timely response.

Step 6) Publication in Patent Office Journal

  • If your application succeeds initial examination, it gets published in the journal typically within 18 months of application. Opposition can be filed at this stage.

Step 7) Grant of Patent

  • After hearing oppositions, if your application meets all criteria, a Letters Patent is granted with specific claims defining your invention.

Step 8) Commercialize the Invention

  • On grant of patent, you can license or assign rights to interested parties, undertake production and sales, or leverage it towards financing for commercialization.

The entire process usually takes 3-5 years from initial filing to grant. Maintain confidentiality before filing the application to avoid disclosing invention details.

Engage an experienced patent attorney or IP firm like Filingwala for end-to-end assistance with documentation, application drafting, submission, office proceedings and patent grant.

Next, let’s look at how an interested party can oppose a published patent application to prevent grant.

Opposing a Patent Application in India

Once an application gets published after 18 months, any person can present a pre-grant opposition on limited grounds:

  • Wrongful obtainment – The invention was wrongfully obtained from the opponent prior to application.
  • Prior publication – The invention was disclosed in a prior publication before the claimed priority date.
  • Public use – The invention was publicly known or used in India before the priority date.
  • Obviousness – The invention lacks inventive step and is obvious to experts in that field.
  • Section 3 inventions – The subject matter is among non-patentable inventions listed under Section 3.
  • Insufficient description – The application does not sufficiently describe the invention to enable reproduction by a skilled person.
  • Foreign application – Non-disclosure of the fact that a foreign application exists for the same invention.
  • Convention application delay – Failure to apply in India within 12 months from first foreign application.

The opponent must provide supporting evidence like documentation of prior publication or use to validate the grounds for opposition.

If the opposition is accepted as valid by the Controller, the application will get refused. Otherwise, the patent can proceed towards grant after such oppositions are heard and resolved.

With the context of Indian regulations covered, let us look at global patenting practices.

Patent Regimes in Major Countries

Patent law is territorial in nature. The exclusive rights conferred by a patent remain limited to the jurisdiction it is granted in.

Here is a snapshot of patenting timeframes, validity and other aspects across some major economies:

United States of America

  • Patent granted for 20 years from application filing date
  • Requires worldwide novelty for patentability
  • Patent application published typically after 18 months
  • Entire process can take approx. 2 – 5 years
  • Utility patents, design patents and plant patents

Europe

  • European patents are centrally applied for and granted via European Patent Office (EPO)
  • Once approved, needs to be validated in designated countries to be effective there
  • 20 years validity from filing date
  • Novelty, inventive step and industrial applicability requirement
  • Oppositions can be filed after grant

United Kingdom

  • Patent validity of up to 20 years from filing date
  • Demonstrate novelty, inventive step, and industrial applicability
  • Oppositions can be made against UK patents within 9 months of grant

China

  • Invention patents granted for 20 years from filing date
  • Utility model and design patents for shorter terms
  • Mandatory disclosure within 6 months of any corresponding foreign patent applications
  • Substantive examination done on request after initial filing

Japan

  • Patent term of 20 years from filing date
  • Voluntary purpose-limited patent system introduced in 2015 for promoting licensing and technology transfer
  • Oppositions allowed within 6 months of patent publication

While the criteria are broadly similar worldwide, nuances exist across jurisdictions regarding non-patentable subject matter, demonstration of inventive step, opposition mechanisms, etc.

Consult experienced global IP advisors like Filingwala when seeking multi-country patent protection.

Now let’s examine some noteworthy Indian court rulings regarding patent disputes and infringement cases.

Landmark Judgments on Patentability and Disputes in India

Over the years, Indian courts have passed important judgments interpreting various aspects of patent law and resolving contentious IP disputes.

Here are some landmark cases and implications:

Bajaj Auto Ltd vs TVS Motor Company Ltd (2009)

  • Bajaj sued TVS alleging infringement of their patented ‘DTS-i’ engine technology.
  • Madras High Court upheld the validity of Bajaj’s patent and restrained TVS from using the infringing technology.
  • Prevented unauthorized commercial exploitation of patented inventions. Upholds exclusive rights provided by patent law.

Novartis AG vs Union of India (2013)

  • Novartis was denied a patent in India for the anti-cancer drug Glivec by the Indian Patent Office and Intellectual Property Appellate Board (IPAB).
  • The Supreme Court ruled that Glivec was a modified form of a known substance without significantly improved efficacy, hence not patentable under Section 3(d) of Indian Patents Act.
  • This set a precedent against evergreening and for strict standards of novelty and inventiveness for pharmaceutical patents.

Ericsson vs Micromax (2013)

  • Ericsson sued Micromax for infringing its patents over technologies used for 2G and 3G data communications.
  • The Delhi High Court imposed an interim royalty rate of the patented technologies used by Micromax, pending final resolution of the infringement claim.
  • Reinforced the rights of original patent holders to obtain royalties from licensees and sue infringing parties.

F. Hoffmann-La Roche Ltd. & Anr vs Cipla (2012)

  • Cipla launched a generic version of Roche’s patented anti-cancer drug Tarceva in India before the patent expiry.
  • Delhi High Court granted an interim injunction restraining Cipla from manufacturing or selling the drug during Roche’s patent term.
  • Stressed that patent exclusivity in India must be respected and infringement not permitted except within strict bounds.

These landmark verdicts have interpreted and evolved Indian patent law while resolving high-stakes disputes between innovator and generic drug makers.

Having robust patents helps companies recoup R&D investments and reinvest into further innovation. However, courts do impose high thresholds for true novelty and industrial applicability when granting patents.

Conclusion

  • Patents confer powerful IP rights to inventors in India, encouraging R&D and technical advancement. However, stringent eligibility criteria exist to ensure only truly novel and inventive innovations get legal exclusivity as patents.
  • Besides demonstrating absolute novelty and inventive step compared to existing knowledge, the invention must have industrial applicability to solve a practical problem or fulfill a commercial need.
  • Incremental modifications of known substances are barred from patentability in certain cases to prevent misuse of the system. Provisions also exist for pre-grant opposition by interested parties.
  • Inventors and companies should weigh the pros and cons before deciding whether to pursue patent registration in India, which involves considerable time, effort and expense.
  • By understanding the patentability criteria, subject matter exclusions, application process and dispute resolution scenarios, innovators can make informed decisions regarding their inventions.
  • Seeking professional guidance from specialist IP advisors is recommended when navigating India’s stringent patent regulations.

We hope this comprehensive guide has helped you learn all about patentability requirements and process in India. Please contact the patent experts at Filingwala for any questions or assistance with your patent filing and protection needs.

Frequently Asked Questions

Q. What is the total cost of obtaining a patent in India?

A. The government fee for patent filing and grant is Rs.8,000-25,000 approximately. However, professional charges of attorneys for application drafting, prosecution services and disbursements can run into Rs.40,000-150,000 on average.

Q. Can computer programs and software be patented in India?

A. As per Indian law, computer programs per se are not considered inventions and cannot be patented. However, inventions employing software/code may be patentable if they demonstrate technical advancement.

Q. How is novelty established in India for patenting?

A. There should be no prior publication or public knowledge/use of the invention anywhere globally. Absolute worldwide novelty must be demonstrated through extensive prior art searching.

Q. Can natural substances be patented after isolation and purification?

A. Mere discovery of new properties or purification of known natural substances is not patentable unless significantly enhanced efficacy is demonstrated.

Q. Does India recognize foreign patent applications?

A. India has reciprocal recognition agreements with several countries. Applicants can claim priority in India based on first foreign filing within 12 months under convention status.

Q. What is the difference between Ordinary and Convention patent applications?

A. Ordinary application is filed directly in India without priority claims. Convention Application is filed within 12 months of first applying in a convention country to claim priority.

Q. Can computer implemented business methods be patented?

A. Business methods using computers may be patentable if they solve a technical problem. However, computer programs per se and business methods are excluded under Section 3(k) of the Patents Act.

The 9 Essential Steps to Starting a Business in India in 2024

Have you been dreaming about starting your own business in India? The New Year presents the perfect opportunity to turn your vision into reality.

With shrewd planning, intelligent decision-making, and relentless execution, 2024 could just be the year your startup goes from ideation to monetization.

By implementing the 9 essential steps covered in this guide, aspiring entrepreneurs can set their new business venture up for success. So let’s get started!

Come Up with a Winning Business Idea

Every thriving business starts with an innovative idea that solves a real consumer problem or market gap better than competitors. Once you have a spark of inspiration, validate the real-world demand for what you want to offer.

Research the potential customer base as well as the competitive landscape to gauge if your offering would truly fill an unmet need. Government initiatives like Make in India also offer attractive openings in manufacturing, services, agriculture and other sectors prime for disruption by agile startups.

So let those creative juices flow freely – just make sure to test your assumptions before moving forward!

Create a Solid Business Plan

After settling on a viable concept, the next step is crafting a comprehensive roadmap in the form of a lean startup business plan covering key elements like:

  • Executive summary
  • Business description
  • Services/products offered
  • Market analysis
  • Execution plan and growth tactics
  • Financial projections
  • Funding requirements

Having this strategic document prepared provides critical clarity on paper before you start investing precious resources into executing your vision in the unpredictable real world.

It also comes in handy when pitching your startup to investors and applying for government grants or licenses.

Fund Your Business Smartly

Very new business needs capital to get up and running – whether it is thousands of rupees or even crores depending on your expansion ambitions.

Most entrepreneurs begin by self-funding their startups using personal savings or loans/investment from friends and family. Outside of bootstrapping, here are some funding avenues worth exploring:

  • Bank Loans – multiple state-owned or private banks offer small business loans with or without collateral
  • Crowdfunding – raise smaller amounts from a large pool of investors through equity crowdfunding platforms
  • Angel Investors and VCs – these individual or institutional investors offer startups higher amounts of funding in exchange for equity

Evaluate all options and decide which source of capital aligns best with your entrepreneurial objectives.

Choose an Attention-Grabbing Name

Don’t undermine the business-building potential associated with naming your startup strategically. Along with checking name availability and trademark conflicts, opt for a name that communicates your brand essence, evokes the right emotions in your target market and has memorable stickiness.

For example, food and hospitality brands often use “tasty-sounding” names like Biryani Blues, while lifestyle product brands use premium sounding names like Bombay Shaving Company.

Set Up a Physical and/or Online Business Location

Every business needs a base of operations whether a rented/purchased office space or a home office that serves as a legally registered company address.

Additionally, establish a professional online presence by registering a domain name and launching an informational website along with branded business email IDs and social media accounts.

Apart from enabling 24/7 discoverability and connectivity with target audiences, owning these digital assets boosts legitimacy especially among increasingly tech-savvy consumers.

Legally Register Your Business

The Indian regulatory environment requires every business entity across industries (except unregistered sole proprietorships) to complete crucial formal registration and compliance processes for full legitimacy.

Decide on the ideal type of legal business structure aligned with your entrepreneurial vision whether sole proprietorship, partnership firm, LLP, OPC or private/public limited company.

Then undertake company registration, plus get additional licenses/certifications like GST Number, FSSAI License, Shop & Establishment License etc. applicable for your specific industry vertical.

While the paperwork can get confusing, expert consultants like filingwala.com offer to streamline mandatory registration and compliance processes so founders can focus their energy on organization building.

Build an Eye-catching Website

Since the first digital touchpoint that introduces prospects to your brand, invest in a professional-looking website reflecting your visual branding. Given most buyers now research online before purchasing, ensure your website contains the right mix of elements to drive conversions:

  • About Us: Explaining your backstory & founder(s) journey
  • Product/Service Pages: Highlighting USPs with photos/videos
  • Strong Calls-To-Action: Guiding visitors towards desired goals
  • Mechanisms: For capturing visitor information
  • Seamless integration: With marketing, sales and payment tools

Refresh website content continually with updates across text, images, videos and layouts so repeat visitors discover something new every time.

Implement Creative Marketing Campaigns

Congratulations – your startup now has all the structural elements in place from concept to team and infrastructure! But without proactive promotional efforts potential customers will never discover your brand and buy from you.

Implement multipronged digital marketing campaigns across channels like:

  • Search Engine Marketing
  • Social Media Marketing
  • Content Marketing
  • Video Marketing
  • Influencer Marketing
  • PR outreach

Simultaneously leverage traditional marketing methods like print ads, radio plugs, pamphlet distribution, events etc. based on what resonates with your audience profile.

Measure engagement and conversion metrics to double down on highest performing initiatives.

Open a Business Bank Account

Comingling personal and company’s finances can get messy fast – so open dedicated savings/current accounts under your business’ name for all future cash flows whether its infusing capital or receiving payments from customers.

When comparing bank account options for startups, assess factors like minimum balance rules, transaction limits, digital features, overdraft facility, dedicated relationship manager and more.

Key Takeaways

If the idea of launching your dream business still seems intimidating, distill the entire process down to the following key action steps:

  • Start by identifying a problem worth solving or customer desire worth satisfying
  • Quantify market potential and formulate a lean business plan
  • Fund operations via bootstrap financing, loans or external investors
  • Register legal business entity and acquire necessary licenses
  • Set up digital presence across website and social channels
  • Implement online and offline marketing to acquire customers
  • Track metrics and iterate products, messaging etc. to scale

With laser sharp focus on delivering real value to customers first and foremost, your chances of startup success in 2024 multiply significantly!

FAQs

Q1: How much money is required to start a business in India?

Ans: Require capital depends greatly on your sector, business model, startup costs, working capital needs etc. Most solopreneurs bootstrap with personal savings under Rs 5 lakhs. The average tech startup raises upwards of Rs 25 lakhs from external investors.

Q2: Which is the best business to start in 2024?

Ans: Some most lucrative industries for Indian startups include fintech, edtech, foodtech, D2C, manufacturing, healthcare and SaaS. But even traditional sectors like agriculture, textile, electrics and machine tools hold exciting innovation potential.

Q3: How can I promote my new business?

Ans: Cost-effective ways for early-stage customer acquisition include digital marketing across social media platforms, engaging content, influencer collaborations, search and display advertising, email newsletters, offline activation and word-of-mouth referrals.

Expert Quotes on Starting a Business

“Evaluate whether there’s an actual market out there for your product or service before quitting your day job.” – Mark Cuban, Billionaire Entrepreneur & Shark Tank Investor

“There’s an entrepreneur right now, scared to death, making excuses, saying, ‘It’s not the right time just yet.’ There’s no such thing as a good time. Get out of your own way.” – Kevin O’Leary, Business Mogul & Shark Tank Star

“If you’re not embarrassed when you ship your first version, you waited too long.” – Reid Hoffman, LinkedIn Co-Founder & Billionaire Investor

Next Steps

I hope this guide has armed you with clarity and conviction to embark on your entrepreneurial aspirations this year. For support with legal registrations, documentation, accounting, tax filings and other mandatory compliance aspects critical for any new business, expert consultants at filingwala.com are available to manage your backend operations so you can stay focused on accelerating business growth in 2024!

The Only Guide You’ll Ever Need: Which ITR Should I File in 2023-24?

Introduction

Come April, and millions of Indian taxpayers find themselves buried in confusion choosing the right ITR form to file. The amount of paperwork and the different rules for each ITR form means picking the wrong one can cause major issues.

To simplify the ITR filing process, we’ve created the ultimate guide with expert tips on how to select the correct Income Tax Return Form for the assessment year 2023-24.

This comprehensive guide covers everything from the ITR definition, types of forms, step-by-step instructions to expert FAQs – ensuring you file the most suitable ITR form this year without hassle. Let’s get started!

What is ITR?

ITR stands for Income Tax Return – a form used by taxpayers to furnish information about their income earned and tax liability to the Income Tax Department.

The Income Tax Act has notified 7 ITR forms so far – ITR-1, ITR-2, ITR-3, ITR-4, ITR-5, ITR-6 and ITR-7.

The applicable form depends on your income sources, amount and taxpayer category. All taxpayers must file their ITR by the specified due date. Late filing results in penalties up to Rs 10,000.

Why File ITR?

Here are the top 5 reasons to file your income tax returns correctly and on time:

  1. Claim Income Tax Refund: File your ITR to claim a refund if excess tax was deducted. The average refund per individual taxpayer was Rs 16,996 in 2022.
  2. Avoid Penalties: Late filing and non-filing of ITR invites hefty fines up to Rs 10,000 under Section 234F. Save yourself from unnecessary penalties.
  3. Visa Applications: Most countries require your ITR acknowledgments as proof of income for visa applications.
  4. Loan Approvals: Financial institutions ask for your ITRs for previous years as income proof before approving loans.
  5. Carry Forward Losses: Losses under income heads cannot be carried forward unless ITR is filed by the due date.

When is it Mandatory to File ITR in India?

You must file income tax returns in India if:

  • Your total income exceeds the basic exemption limit:
    • For individuals below 60 years: Rs 2.5 lakh
    • For senior citizens (60-79 years): Rs 3 lakh
    • For super senior citizens (above 80 years): Rs 5 lakh
  • Your income is below the exemption limit, but you meet specific conditions like:
    • Deposited over Rs 1 crore in current bank account.
    • Spent over Rs 2 lakh on foreign travel.
    • Total TDS/TCS deduction exceeds Rs 25,000
  • You are a company, business, or professional with income from business/profession.

Not filing ITR even when mandated attracts penalties and makes you susceptible to scrutiny. So, ensure you file on time.

Which ITR Form Should I Use?

Here’s a quick overview of each type of ITR form:

ITR-1 (SAHAJ)

For resident individuals with total income up to Rs 50 lakh from:

  • Salary/Pension
  • One House Property
  • Other Sources (excluding lottery, racehorses)
  • Agricultural income up to Rs 5,000

Not allowed for: NRIs, foreign income, income from business/profession or more than one house property.

ITR-2

For resident individuals and HUFs not having income from business/profession. Can include:

  • Salary, House Property
  • Income from Other Sources
  • Capital Gains
  • Foreign income
  • Agricultural income more than Rs 5,000

ITR-3

For residents having income under head ‘Profits and Gains from Business or Profession’. Can include income from other sources.

ITR-4 (Sugam)

For resident individuals, HUFs and firms with total income up to Rs 50 lakh having:

  • Presumptive business income from section 44AD, 44ADA or 44AE
  • Income from one house property
  • Other sources income

ITR-5

For firms, LLPs, AOPs and other association of persons.

ITR-6

For Companies other than those claiming exemption under section 11.

ITR-7

For persons required to furnish returns under special sections like 139(4A), 139(4B) etc.

Confused between ITR-1 and ITR-2? Read our detailed guide comparing ITR-1 vs ITR-2 to pick the right one for you.

ITR Form Applicability Cheat Sheet

Here’s a quick cheat sheet to know which ITR form to use based on your income source and taxpayer status:

Income SourceIndividualHUFFirm/LLPCompanyAOP/BOI
SalaryITR-1ITR-5
House PropertyITR-1/ITR-2ITR-1/ITR-2ITR-2ITR-6ITR-5
Business IncomeITR-3/ITR-4ITR-3/ITR-4ITR-5ITR-6ITR-5
Capital GainsITR-2ITR-2ITR-5ITR-6ITR-5
Other SourcesITR-1/ITR-2ITR-2ITR-5ITR-6ITR-5
Foreign IncomeITR-2ITR-2ITR-5ITR-6ITR-5

How to Choose the Right ITR Form?

Follow these 5 golden steps to select the most suitable ITR form:

Step 1: List all your sources of income during the financial year.

Step 2: Identify which taxpayer category you belong to – individual, HUF, company etc.

Step 3: Calculate your gross total income.

Step 4: Decide which ITR form matches your income sources and taxpayer status.

Step 5: Use the cheat sheet above for quick confirmation.

Pro Tip: If income from more than one ITR category – business income with capital gains for instance – file the detailed ITR form instead of simpler ones like ITR-1.

Quote from a CA:

“Review all your income sources carefully. Many taxpayers miss out on reporting income like interest from savings account or taxable investments which leads to filing an incorrect ITR form. Under-reporting income can attract scrutiny so be thorough and file the right form”. – CA Mukesh Kumar, Delhi.

Frequently Asked Questions

Confused about which ITR to file for 2023-24? Here are expert answers to common doubts:

Q1. I earn only salary income but have foreign investments. Which ITR should I file?

You must file ITR-2 even though your only income is salary, since you have foreign assets. ITR-1 does not allow foreign investments.

Q2. I have income from freelancing as well as a rental house property. Which is the correct ITR form?

Since you earn business income from freelancing, you have to file ITR-3 even though you have house property income. ITR-3 can report both incomes.

Q3. I have income under capital gains and won a lottery prize. Which ITR should I pick?

You must file ITR-2 and not ITR-1. ITR-1 does not allow you to report capital gains or lottery income.

Q4. I earn Rs 7 lakh as salary and Rs 2 lakh as freelance income. Which ITR form do I need?

Since your total income of Rs 9 lakh is above the basic exemption limit and you have dual incomes, file ITR-3.

Conclusion

I hope this guide has given you clarity and confidence to file your ITR in the correct form this year.

Remember – pick the ITR form that matches your taxpayer status and all income sources. Furnish accurate details and file before the due date.

If you need assistance filing ITR or have more queries, experienced tax experts at Filingwala.com can help. From ITR planning, verification to e-filing – count on Filingwala.com for all your taxation needs this ITR season!

GSTR-3B: Due Date, Late Fee, Format, Return Filing, Eligibility, Rules INDIA

GSTR-3B is one of the most important GST returns that must be filed by every GST registered business in India. This comprehensive guide will explain everything you need to know about GSTR-3B including due dates, late fees, filing process, eligibility and more.

What is GSTR-3B?

GSTR-3B is a monthly (or quarterly) summary return that must be filed by all regular GST taxpayers. It contains details of:

  • Outward taxable supplies
  • Inward supplies liable to reverse charge
  • Input tax credit (ITC) claimed
  • Tax liability
  • Tax paid

GSTR-3B must be filed even if there are no transactions in a particular tax period. The tax liability must be paid before filing GSTR-3B to avoid interest.

Key Points:

  • GSTR-3B is a self-declared summary return, no invoice matching is done
  • It must be filed monthly (or quarterly for QRMP scheme) for every GSTIN
  • Details can’t be revised once filed
  • Nil returns also need to be submitted if there are no transactions
  • Taxes due must be paid before filing GSTR-3B

GSTR-3B was introduced as an interim measure while the invoice matching system is implemented. It allows taxpayers to claim ITC and pay taxes on a self-declaration basis without uploading invoice details.

Who Should File GSTR-3B?

All regular taxpayers registered under GST must file GSTR-3B. This includes:

  • Normal taxpayers
  • SEZ units and developers
  • Casual taxable persons
  • Input service distributors
  • Persons liable to deduct TDS under GST
  • Persons liable to collect TCS under GST

The following taxpayers are not required to file GSTR-3B:

  • Composition scheme taxpayers
  • Non-resident taxable online suppliers (filing GSTR-5)
  • Non-resident service providers (filing GSTR-5A)

GSTR-3B Due Dates

The due date to file GSTR-3B is as follows:

  • Up to Dec 2019: 20th of next month
  • Jan 2020 onwards: Staggered due dates – 11th, 13th or 15th of next month depending on turnover
  • QRMP Scheme: 24th of month after quarter end (Jan-Mar, Apr-Jun, Jul-Sep, Oct-Dec)

The due date for payment of tax remains 20th of next month (6th for March) irrespective of the GSTR-3B due date.

For updated due dates, refer the GST calendar. The government may extend dates in case of technical issues on the portal.

GSTR-3B Late Fee & Penalties

If GSTR-3B is filed after the due date, late fees and penalties are applicable as under:

  • Late fees – Rs. 50 per day (Rs. 20 for nil filers)
  • Interest – 18% per annum on late tax payment

If tax liability was paid before the due date, only late fees apply. If tax was paid late, both late fees and interest are charged.

There are also penalties for non-filing GSTR-3B for 2+ months – Rs. 200 per day up to a maximum of 100% of tax liability.

How to File GSTR-3B?

Follow these steps to file GSTR-3B:

  1. Login to the GST Portal using credentials
  2. Go to Returns > Returns Dashboard
  3. Select month and click Search
  4. Click File Return under GSTR3B tile
  5. Prepare JSON file in online/offline tool
  6. Upload JSON file on GST Portal
  7. Submit the GSTR-3B return
  8. File using EVC or DSC

GSTR-3B must be filed electronically – physical filing of returns is not allowed.

GSTR-3B Filing Format

GSTR-3B contains 6 main sections with summary values to be reported:

  1. GSTIN & Period: Give GSTIN and tax period
  2. Supplies: Report total taxable value and tax liability
  3. ITC: Report total ITC available and ITC claimed for the tax period
  4. Values of exempt, nil-rated, non-GST supplies
  5. Tax payment: Declare tax paid and interest/fee payable if any
  6. Verification: Digitally sign the GSTR-3B before submission

No invoice-level details are required in GSTR-3B. Only consolidated values are reported under each section.

GSTR-3B Eligibility and Rules

Here are some important rules regarding GSTR-3B eligibility and filing:

  • GSTR-3B can only be filed online, physical filing is not allowed
  • A separate GSTR-3B must be filed for each GSTIN
  • Actual tax payment must be done before filing GSTR-3B to avoid interest
  • Taxpayers must self-assess taxes accurately to avoid penalties
  • Invoice matching is not done for GSTR-3B so ITC claims are not validated
  • Once filed, no changes are allowed in GSTR-3B – it is a static return

Make sure to reconcile ITC claims in GSTR-3B with purchases shown in GSTR-2A to avoid discrepancies. Maintain proof of tax paid to ensure seamless credit if scrutinized.

GSTR-3B vs GSTR-1 vs GSTR-2A vs GSTR-2B

ReturnDetailsPurpose
GSTR-1Outward suppliesReport sales
GSTR-2AInward suppliesAuto-populated ITC statement
GSTR-2BInward suppliesRevised ITC statement
GSTR-3BSummary returnPay tax & claim ITC

GSTR-3B should be reconciled with GSTR-1, GSTR-2A and GSTR-2B to ensure consistency of reported values. This helps avoid tax demands or loss of eligible ITC claims.

Frequently Asked Questions

Q. Is GSTR-3B filing mandatory?

Yes, all regular GST taxpayers have to file GSTR-3B for every tax period.

Q. What is the consequence of not filing GSTR-3B on time?

Late filing fees, high interest rates, penalties, adverse GST compliance rating and risk of tax scrutiny.

Q. Can I revise a filed GSTR-3B?

No, a filed GSTR-3B cannot be revised or amended in any way. Ensure accuracy before filing.

Q. Do I need to provide invoice-level details in GSTR-3B?

No, only consolidated values for each section are required in GSTR-3B.

Q. I have no transactions this month. Still do I need to file GSTR-3B?

Yes, even nil GSTR-3B must be filed confirming no transactions for the tax period.

Accurate and timely filing of GSTR-3B is crucial for maintaining a good GST compliance score and avoiding penalties. Reconcile with other returns, pay taxes on time and file before the due date.

For any assistance with GST registration, return filing, and compliances, make the right choice — FilingWala. Get end-to-end GST solutions including registration, return filing, invoice matching and more from tax experts at affordable prices. Focus on your business while FilingWala handles your GST work.

Invoicing Under GST: A Comprehensive Guide for Small Businesses (2024)

Invoicing is the backbone of GST compliance in India. Yet, invoicing is also one of the most confusing aspects for small businesses new to the GST regime. Questions like what is a valid GST invoice, what fields are mandatory, invoice format, due dates, and more often trouble SMEs striving to be GST compliant.

Issuing accurate and timely invoices is crucial to avoid hefty penalties under GST law. Errors in invoicing also lead to input tax credit loss for recipients and cash flow problems. With over 30 crore invoices generated every month, it’s clear that Indian businesses rely heavily on robust GST invoicing.

To make matters worse, the government keeps updating the invoice format and introducing new compliance measures like e-invoicing. So it’s essential for SMEs to have a firm grasp on invoicing under GST at all times

This comprehensive guide covers everything small businesses need to know about invoicing under GST in 2024.

What is a GST Invoice?

A GST invoice is a bill or receipt issued by a business registered under GST to its clients. It contains details of the transaction like goods/services supplied, tax charged, quantity, rate, and total value.

GST invoices help track the supply of goods or services and ensure the proper input tax credit is availed by the receiver. All applicable taxes like CGST, SGST, and IGST are clearly mentioned in a GST invoice.

Who Needs to Issue GST Invoices?

Any business or person registered under GST needs to issue a tax invoice for every supply of goods or services to:

  • Registered customers – B2B supplies
  • Unregistered customers – B2C supplies above ₹200

For B2C supplies below ₹200, an invoice may be issued at the discretion of the supplier.

Your vendors will also provide you purchase invoices if they are GST registered.

Mandatory Fields in a GST Invoice

As per GST rules, these key details must be present in a valid GST tax invoice:

  • Invoice number and date
  • Customer name and shipping/billing address
  • HSN code and description for each item
  • Quantity of goods or services supplied
  • Taxable value and discount
  • Rate of tax for each HSN code (CGST, SGST, IGST)
  • Signature of the supplier

If the customer is unregistered and order value exceeds ₹50,000 – name, address and State code of the receiver must be present.

GST Invoice Due Dates

Timely issuance of invoices is crucial to ensure smooth flow of input tax credits. Here are the due dates for different types of GST invoices:

Invoice TypeDue Date
Regular Tax InvoiceBefore or at the time of supply
Revised InvoiceWithin 1 month from the date of supply
Debit/Credit NoteWithin 30 days of the date of the original invoice

Delayed invoices can lead to penalty and interest for the supplier as well as loss of eligible ITC for the receiver.

How to Personalize GST Invoices?

Adding your company logo and brand colors to invoices can make them look more professional and aligned to your brand identity. There are many software tools and mobile apps that provide customizable invoice templates that allow personalizing GST invoices as per your business needs and branding.

These tools help you design invoices with your logo, colors, fonts and customized layouts while still maintaining compliance with mandatory GST invoice fields and formats. Structured templates make it easy to quickly generate error-free invoices in the same personalized format every time.

Personalized invoices that reflect your brand identity make a much better impression on your customers as compared to plain generic invoices. It also adds a touch of professionalism and seriousness to your business. So, investing some time in customizing your invoice templates using the right tools can be very beneficial.

Types of GST Invoices

Apart from regular tax invoices, there are some special types of invoices under GST:

  • Bill of Supply – Used when supplying exempted goods/services. Does not contain any taxes.
  • Invoice-cum-Bill – Single consolidated invoice for exempt + taxable supply to unregistered customers.
  • Reverse Charge Invoice – Used by registered recipients who have to pay tax under reverse charge.
  • Debit/Credit Notes – Used to increase/decrease tax liability due to changes in supply details.

Special Cases of GST Invoicing

For certain businesses like banking companies, NBFCs, passenger transportation services etc. the government has provided relaxation on mandatory fields and invoice formats under GST.

E-invoicing was also introduced in 2020 for taxpayers with over ₹500 crore turnover. It involves generating invoices on a government portal to obtain a unique IRN before issuing to customers.

Number of Invoice Copies Required

  • For supply of goods, triplicate copies (original + two duplicates) must be issued under GST.
  • For services, only duplicate copies are required.

E-invoicing and sharing digital copies can make the process easier.

FAQs on GST Invoices

Q: Can I revise pre-GST invoices?

A: Yes, old invoices (issued before your GST registration) can be revised within 1 month of obtaining registration.

Q: Is an invoice serial number mandatory?

A: Yes, invoices must be issued in a sequential series. Any changes need GST officer’s approval.

Q: Can I digitally sign invoices?

A: Yes, digital signatures are allowed on GST invoices. It enhances authenticity.

Q: Can I issue consolidated invoices?

A: For B2C supply below ₹200 per invoice, you can issue a consolidated invoice at the end of the day.

Q: When do I need to issue a Credit/Debit Note?

A: They are to be used when there is a change in the taxable value post the original invoice, within 30 days.

Accurate and timely invoicing is crucial for your business’ GST compliance. Ensure all mandatory fields are covered in your GST invoices to avoid penalties.

For any assistance with GST registration, invoicing, filing returns or resolving queries, specialized tax experts at Filingwala.com are just a call away!