Regular Book Keeping with Income tax & GST reconciliation

Regular Book Keeping with Income tax & GST reconciliation

Brief about Accounting and its reconciliation with income tax and GST

Accounting and book keeping is the most prominent aspect of any organization since all the confidential information lies with this department. It is imperative for any organization to maintain their books of accounts up to date and that too in accordance with accounting standards to be followed as per income tax and other acts. Book keeping and accounting is regular day to day activity of the business needs to carried out thoroughly by expert accountants. Accountants plays a major role in keeping accounts in proper format. Accounting is the base for complying income tax, GST and other regulations like PF, ESI and so on. Thus, it is impossible for any organization to imagine their growth without proper maintenance of books or accounts.

BENEFITS/IMPORTANCE

To comply with law: The income tax act and GST act requires certain books of accounts to be compulsorily maintained by an organization. In such situations, an accountant must have knowledge about which are the ledgers or accounts that are mandatorily required to be kept. The amount of tax payable or GST payable largely depends on the proper maintenance of accounting ledgers.

To ascertain profitability: Profit is the basic goal of any organization. Regular evaluating the profitability of the business enables an organization to take strategic decisions for business. It brings the actual picture of business.

Performance appraisal: A businessman or leader must ascertain the performance of the business which can be carved out by evaluating the accounts of the business. How particular business is performing is the basic question that any entrepreneur should ask themselves.

For getting funds: While applying loan or subsidy from banks or government authority, the presentation of profit and loss account and balance sheet plays a major role. The profit and loss account and balance sheet are the deciding factors whether the funds shall be granted to an organization or not.

Maintenance of liquidity: Liquid cash is the running factor of business. It runs the daily expenditure of business such as tea/coffee, stationary exp, raw material procurements and so on. The books of accounts helps the businessman to plan the cash inflow and outflow which ultimately saves an organization from cash cruch and liquidity crisis.

What do we mean by reconciliation with income tax and GST?

The dictionary meaning of reconciliation is tallying or matching. In accounting we match or tally your accounting data with that of income tax. For example, If you are a service provider, we tally the TDS deducted on you by downloading form 26AS from income tax’s website and tally it with your sales and TDS ledgers maintained. This will enable us to find if there is any discrepancy found in your 26AS so that we can get it rectified as soon as possible.

GST reconciliation includes verification of sales filed in GST returns and sales reported under income tax audit report. Apart from that, it also includes reconciliation of purchases and ITC claimed in GST returns with that of the income tax and books of accounts.

Why reconciliation with Income tax and GST?

1) Reporting of IT turnover in GST: The annual return of GST that is GSTR-9 and its reconciliation statement called GSTR-9C requires a taxpayer to report turnover figure as per income tax audit report. This will enable the GST department to tally the sales and purchase data reported in GST returns match with what have been filed in income tax. Thus government will actually tally GST and income tax data. So why don’t we tally first and make it 100% accurate???

2) Income tax website shows turnover of GST: The income tax website shows the turnover of those taxpayers who are registered under GST. Which clearly indicates that both the departments that is GST as well as INCOME TAX shares the data with each other for the sake of matching purpose. So it becomes most important for taxpayers to tally all this figures. before filing any returns either in GST or in INCOME TAX, we must ensure that both the figures are same, accurate and also finds entries in books of accounts.

3) Any mismatch can lead to notices: If the data reported under income tax and GST do not tally with each other then any of the department can send the notice seeking clarification. The taxpayer is bound to reply to notice dictating accurate and correct data to the concerned department.

Isn’t it sufficient reasons to reconcile books of accounts with that of the income tax and GST???

What we will be providing in this

  1. Maintenance of sales and purchase ledgers
  2. Maintenance of bank book (unlimited banks accounts)
  3. Maintenance of cash book
  4. Maintenance of Income Ledgers
  5. Maintenance of Expenditure ledgers
  6. Finalization of accounts
  7. Preparation of profit and loss account
  8. Preparation of Balance sheet
  9. Preparation of cash flow statement (If demanded)
  10. Reconciliation with form 26AS
  11. Reconciliation with previous audit report and income tax return
  12. Reconciliation with GST returns i.e GSTR-3B & GSTR-1 (sales, purchase and ITC)
  13. Reconciliation of ITC with GSTR-2A
  14. Reconciliation of tax paid under GST
  15. Reconciliation of any TDS deducted under GST
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Get all your queries solved

which is GST annual return and reconciliation statement?
For GSTR-9 is annual return of GST and FORM GSTR-9C is reconciliation statement of gst.
Does income tax website shows GST turnover?
Yes, income tax websites shows the GST turnover of those assessee who are registered under GST.
Is there is any separate charge for reconciliation?
No, this package include reconciliation. There is no separate charge.
Which return requires income tax turnover to be reported?
GST reconciliation statement in form GSTR-9C requires income tax turnover to be declared.
Why is it necessary to reconcile income tax and gst?
Income tax’s website shows the turnover declared under GST whereas GST annual reconciliation statement demand INCOME TAX turnover to be declared. Any discrepancy found in GST and INCOME TAX will lead to serious litigation. Thus it is clear that both the departments will tally data with each other. So we are bound to report same, accurate and correct data to each department. this is possible only when we regularly reconcile our data from the point of view of income tax as well as GST.
How OC will do it?
1) Our expert accountant will maintain your accounts up to date and will finalize it in accordance with income tax rules and regulations. 2) After finalization, we will download form 26AS from income tax website to reconcile your TDS. 3) Our expert will also tally data with previous audit report and income tax return so that uniformity can be maintained. 4) Our expert will reconcile sales and purchase figures with that of all the returns filed under GST. 5) Our expert will also verify certain important aspects of GST from the point of view of inocme tax. which is very technical matter. All you need to do is just relax and trust our experts. We will take care of every angle of income tax and GST.
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