Categories
Taxation

Overview of Advance Ruling under Income Tax Act’1961

Advance rulings was introduced by the Finance Act,1993​. Chapter XIX-B (Section 245N to 245V) of the Income-tax Act, which deals with advance rulings, came into force with effect from 1-6-1993.

What is advance ruling?

“Advance Ruling is a more or less a binding statement from the revenue authorities upon the voluntary request of a person, concerning the treatment and consequence of one or series of future actions or transactions.”

Simplification of Reason to introduce the concept of Advance ruling

In a simple term advance tax ruling is a written interpretation of tax laws.  It is issued by tax authorities to corporations and individuals who request for clarification of certain tax matters. An advance ruling is often requested when the taxpayer is confused and uncertain about certain provisions. Under Income Tax advance ruling is available in International Taxation.

It helps foreign investors in determining their tax liabilities in advance so that they can assess the transaction that they propose to undertake.

It also brings certainty in determining the tax liability, as the ruling given by the Authority for Advance Ruling is binding on the applicant as well as Government authorities.

Why is advance ruling under Income-Tax necessary?

  • Provide certainty for tax liability in advance in relation to a future activity to be undertaken by the applicant
  • Reduce litigation and costly legal disputes
  • Attract Foreign Direct Investment (FDI) – By clarifying taxation and showing a clear picture of the future tax liability of the FDI.
  • Rulings are binding on the applicant as well as the department.

Transactions on which taxpayer can request for advance ruling under Income-Tax

Any taxpayer can request for advance ruling when he is uncertain of the provisions. Advance tax ruling is a determination or decision by the authority in relation/respect;

(i) To a transaction which has been undertaken or is proposed to be undertaken by a non-resident applicant; or

(ii) To the tax liability of a non-resident arising out of a transaction which has been undertaken or is proposed to be undertaken by a resident applicant with such non-resident; or

(iia) To the tax liability of a resident applicant, arising out of a transaction which has been undertaken or is proposed to be undertaken by such applicant;

and such determination shall include the determination of any question of law or of fact specified in the application;

(iii) Of an issue relating to computation of total income which is pending before any income-tax authority or the Appellate Tribunal and such determination or decision shall include the determination or decision of any question of law or of fact relating to such computation of total income specified in the application;

(iv) Whether an arrangement, which is proposed to be undertaken by any person being a resident or a non-resident, is an impermissible avoidance arrangement as referred to in Chapter X-A or not:S

Provided that where an advance ruling has been pronounced, before the date on which the Finance Act, 2003 receives the assent of the President, by the Authority in respect of an application by a resident applicant referred to in sub-clause (ii) of this clause as it stood immediately before such date, such ruling shall be binding on the persons specified in section 245S

Procedure on receipt of application

Appeal to the Appellate Authority

Categories
Accounting

Bookkeeping

Book keeping and Accounting Services

Accounting is one of the pillar which decides a business growth. Our team of experienced professionals committed to provide complete accounting and bookkeeping services with utmost sincerity, integrity and compliance

• Expertise in various accounting frameworks, Accounting Standards and IFRS.

Provide bookkeeping solutions for businesses established in various countries and assist to managing finances and accounts

Work on Quick books and Xero but over and above also work on the customised Software

Charge on a model compatible to the size of the business either on hourly basis or a complete package

Value addition to your business

Check how much cash on hand you have

The bookkeeping has all the records of the funds you have, which helps the management to decide. The administration will understand the cash on hand the business currently has

Regular preparation and sending of invoices

Proper preparation of the invoices and sending it at the appropriate time is one of the crucial tasks in the businesses. So, we should carefully prepare and post the invoices in the proper destination.

Filing vendor bills and payment records

The generation of the bill for all the different vendors is appropriately made. Also, all the records of the payments are done in the bookkeeping correctly.

Stay aware of incoming and outgoing payments

Whenever a business spends or gain an amount, it should immediately update in the bookkeeping. This helps to analyse the areas where the payment is coming in and the areas where the amount is going out

Recording customer billings and payments

Businesses should make appropriate customer billings and the payments on each of the purchases. This is a regular basis activity, so payments must get a proper update at the appropriate place in bookkeeping.

Updating payroll file

It is imperative to maintain a proper payroll of the employees of the organization in an appropriate order. Therefore, the payroll file update in a well-ordered way helps the management of the business to calculate the amount spent on the employees and the output earnedby the business.

FAQs

Will this Virtual Bookkeeping work?

We perform the bookkeeping in these ways:

1) QuickBooks Online

2) Cloud hosted platform of the client with a client provided login

3) Locally on our computer and send you back the file once complete

 

How do I share documents with you?

Dropbox is our preferred, we also use Google Drive, OneDrive, and email. We can work on any process that makes our clients’ life easier.

How do you ensure security of our data?

We understand how important it is to have trust in the company that you hire to manage your private financial information. The privacy of our customers is the utmost importance to us and we won’t share your information with third parties. Any data that we come in contact with will be held in the strictest confidence.

  • All employees have been vetted and background checks performed.
  • Your company data is accessed by your assigned bookkeeper and reviewer/manager only.
  • All company records are kept under lock and key in a secure server encrypted using 256-bit Advanced Encryption Standard (AES).
  • All passwords used are strong and unique and we utilize two-step verification whenever possible.
  • If our agreement ends, we will return all files to you, and/or destroy them.
  • For accounting files, we use secure third party hosting platforms such as QuickBooks Online or Right Networks.