Mandatory Filing – In the following situations of the Income Tax Act it's mandatory for you to file an Income Tax Return in India in case any one of these conditions is applicable to you:

• Your gross total income (before allowing any deductions under section 80C to 80U) exceeds Rs.2,50,000 in the financial year that begins on 1st April 2015 and ends on 31st March 2016. This limit is Rs 3,00,000 for senior citizens ( who are more than 60 years old but less than 80 years old) or Rs 5,00,000 for super senior citizens (who are more than 80 years old)

• You are a company or a firm irrespective of whether you have income or loss during the financial year

• You want to claim an income tax refund.

• You want to carry forward a loss under a head of income.

• Return filing is mandatory if you are a Resident individual and have an asset or financial interest in an entity located outside of India. (Not applicable to NRIs or RNORs).

• Or if you are a Resident and a signing authority in a foreign account. (Not applicable to NRIs or RNORs).

• You are required to file an income tax return when you are in receipt of income derived from property held under a trust for charitable or religious purposes or a political party or a research association, news agency, educational or medical institution, trade union, a not for profit university or educational institution, a hospital, infrastructure debt fund, any authority, body or trust.

• A proof of return filing may also be required at the time of applying for a loan or a visa.

NRI or not, any individual whose income exceeds Rs.2,50,000 (for FY ending 31st March 2015 or Rs.2,00,000 for FY ending 31st March 2014) is required to file an income tax return in India. Note that for an NRI, income earned or accrued in India is taxable in India.

A significantly large number of returns are e-filed and gradually the income tax department is hoping to bring all returns online. In any of the following cases the Income Tax Department has made it mandatory to e-file your Return.

• you have to claim a refund.

• Your gross total income is more than Rs 5,00,000.

• You want to claim an income tax refund. Those who are over 80 years old and are filing ITR-1 or ITR-2 can still file a paper return to claim a refund.

• ITR-3, 4, 5, 6, 7 have to be mandatorily e-filed.

Under section 271F, the assessing officer may levy a penalty of Rs 5,000 when you have not filed your return by the due date.

1) Compulsory in case you want to apply for loans

2) To carry Forward Losses to the next year

3) Compulsory in case of VISA processing

4) To Claim Income Tax Refunds on the TDS deducted from your income

5) Self-employed? Businessmen, consultants and partners of firms do not get Form 16. Hence, ITR receipts become an even more important document for them, provided their annual income exceeds the basic exemption limit of Rs 2.50 lakhs.

For all sorts of financial transactions, ITR receipts will be the only proof of income and tax payment for the self-employed.

Conservative Investment Options

1) PPF

2) National Savings Certificate (NSC)

3) Senior Citizen Savings Scheme (SCSS)

4) Money Market Funds.

5) Bank Fixed Deposits (FDs)

6) Sukanya Samriddhi Yojana

7) National Pension System

8) Atal Pension Yojana

Aggressive Investment Options

9) Tax saving mutual funds – ELSS( Equity Linked Saving Scheme)

10) Diversified Mutual Funds

11) Direct Equity/Stock Investments

12) Real Estate Investments

13) Gold/Commodity investments

14) Corporate/Commercial Deposits (CDs)

Other investment Options

15) ULIPs

16) Endowment/Money Back Insurance Policies

17) Art/Wine Investing

18) Private Equity

19) Chit Funds

• You will be eligible to claim both the interest and principal components of your repayment during the year.

• Interest can be claimed as a deduction under Section 24. You can claim up to Rs. 200,000 (Rs. 150000/- up to A.Y. 2014-15) or the actual interest repaid whichever is lower. (You can claim this interest only when you are in possession of the house)

• Principal can be claimed up to the maximum of Rs. 150,000 (Rs. 100000/- up to A.Y. 2014-15) under Section 80C. This is subject to the maximum level of Rs 150,000 (Rs. 100000/- up to A.Y. 2014-15) across all 80C investments.

• You will need to show the statement provided by the lender showing the repayment for the year as well as the interest & principal components of the same.

Things you must know about tax benefits on home loan

1) Home loan borrowers are entitled to tax benefits under Section 80C and Section 24 of the Income Tax Act. These can be claimed by the property’s owner.

2) In the case of co-owners, all are entitled to tax benefits provided they are co-borrowers for the home loan too. The limit applies to each co-owner.

3) A co-owner, who is not a co-borrower, is not entitled to tax benefits. Similarly, a co-borrower, who is not a co-owner, cannot claim benefits.

4) Housing companies usually require all co-owners to be joint borrowers to a home loan. Loan providers specify who can be a joint borrower for a home loan.

5) The tax benefit is shared by each joint owner in proportion to his share in the home loan. It’s important to establish the share for each co-borrower to claim tax benefits.

6) The certificate issued by the housing loan company, showing the split between principal and interest for the EMIs paid, is required for claiming tax benefits.

The GST is basically an indirect tax that brings most of the taxes imposed on most goods and services, on manufacture, sale and consumption of goods and services, under a single domain at the national level. In the present system, taxes are levied separately on goods and services. The GST is a consolidated tax based on a uniform rate of tax fixed for both goods and services and it is payable at the final point of consumption. At each stage of sale or purchase in the supply chain, this tax is collected on value-added goods and services, through a tax credit mechanism.

The proposed model of GST and the rate

A dual GST system is planned to be implemented in India as proposed by the Empowered Committee under which the GST will be divided into two parts:

• State Goods and Services Tax (SGST)

• Central Goods and Services Tax (CGST)

Both SGST and CGST will be levied on the taxable value of a transaction. All goods and services, leaving aside a few, will be brought into the GST and there will be no difference between goods and services. The GST system will combine Central excise duty, additional excise duty, services tax, State VAT entertainment tax etc. under one banner.

The GST rate is expected to be around 14-16 per cent. After the combined GST rate is fixed, the States and the Centre will decide on the SGST and CGST rates. At present, 10 per cent is levied on services and the indirect taxes on most goods are around 20 per cent.

Advantages of GST Bill

Introduction of a GST is very much essential in the emerging environment of the Indian economy.

• There is no doubt that in production and distribution of goods, services are increasingly used or consumed and vice versa. Separate taxes for goods and services, which is the present taxation system, requires division of transaction values into value of goods and services for taxation, leading to greater complications, administration, including compliances costs. In the GST system, when all the taxes are integrated, it would make possible the taxation burden to be split equitably between manufacturing and services.

• GST will be levied only at the final destination of consumption based on VAT principle and not at various points (from manufacturing to retail outlets). This will help in removing economic distortions and bring about development of a common national market.

• It will also help to build a transparent and corruption-free tax administration. Presently, a tax is levied on when a finished product moves out from a factory, which is paid by the manufacturer, and it is again levied at the retail outlet when sold.

Benefits of GST Bill

For the Centre and the States

According to experts, by implementing the GST, India will gain $15 billion a year. This is because, it will promote more exports, create more employment opportunities and boost growth. It will divide the burden of tax between manufacturing and services.

For individuals and companies

In the GST system, taxes for both Centre and State will be collected at the point of sale. Both will be charged on the manufacturing cost. Individuals will be benefited by this as prices are likely to come down and lower prices mean more consumption, and more consumption means more production, thereby helping in the growth of the companies.

Items not under GST

Alcohol, tobacco, petroleum products

Bottlenecks in the implementation of GST

Though the Government wants the GST Bill to be implemented by April 2016, there are certain bottlenecks which need to be taken care of before that:

• What preparations are needed at the level of Central and State Governments for implementing the GST?

• Whether the Government machinery is efficient enough for such an enormous change?

• Whether the tax-payers are ready for such a change?

• What will be the impact on the Government’s revenue?

• How will the manufacturers, traders and ultimate consumers be affected?

• Will GST help the small entrepreneurs and small traders?

Status of implementation of GST

To be fully viable by law in all the States, the GST Bill needs to be passed by a two-thirds majority in both Houses of Parliament and by the legislatures of half of the 29 States. In December 2014, Finance Minister Arun Jaitley introduced the constitutional amendment Bill of the GST in the Lok Sabha. He announced that the GST would be a major reform in India’s taxation system since 1947, which would reduce transaction costs for business and boost the economy.

Earlier, the Bill was rejected by a few States saying that it does not include the issues of compensation, entry tax and the tax on petroleum products. Jaitley while introducing the Bill said that all efforts have been taken to make sure that the States do not suffer any loss of revenue with the implementation of the GST. The States will receive Rs 11,000 crore this fiscal year so that it would compensate the losses suffered by them for decline in Central sales tax (CST) and subsequently financial assistance would be provided for a five-year period.

All said and done, the GST Bill which was conceived way back in the year 2000 has not seen the light of the day as yet. If everything goes well, most likely the Bill will be legislated by April 2016. According to a study by the National Council of Applied Economic Research (NCAER), full implementation of the GST could expand India’s growth of gross domestic product by 0.9-1.7 percentage points. By removing the system of multiple Central and State taxes, the GST can help in reducing taxation and filing costs and expand business profitability, thereby attracting investments and promoting GDP growth. Simplification of tax norms can help in improving tax compliance and increasing tax revenues.

For a Indian Start-up, LLP and Private Limited Company both are best but if we Compare according to Compliance and Pricing then LLP is the best for any Start-up.

Why LLP is best for any Start-up?

• No minimum capital contribution required.

• Liability is Limited

• Separate legal entity

• Economics & Working

• Lesser Compliances

• Tax Benefit

But One More thing is important that is Convert from Pvt Ltd Company to LLP is possible but for the LLP to Pvt ltd , you have to incorporate another company and takeover to LLP.

But for small start-ups who have a budget and want to enjoy company features on less compliance then must go for LLP.

Proprietorship is also an option for those start-ups who just want to try a business and are not much aware about the compliances and budget is less than 5000 rupees.

a) Opt For Proprietorship when you just want to try the Business.

b) Go for Partnership when Start-up Founders don’t want to leave their jobs and want to just try the business

c) Go for LLP when you are completely involved in your startup but your main aim is brand building and increasing the turnover without funding.

d) Go for Pvt Ltd Company when you know that you need funding and you are already applying for funding.

e) Go for One Person Company when you know that you are just Sole owner of the company and want a legal status of the company for your Start-up and doing the business in Foreign Countries with Subsidiary Company.