Regular Book keeping plus Income Tax Reconciliation
Brief about Accounting and its reconciliation with income tax
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 or importance of accounting and book keeping
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 crush and liquidity crisis.
What do we mean by reconciliation with income tax?
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.
Why reconciliation with Income tax?
Income tax return filing: The income tax returns along with with statement of profit and loss account and balance sheet are to be filed with income tax department every financial year. Now, It is very important that correct and accurate data summited to income tax department. Thus it becomes most important to reconcile the accounting data with that of the income tax.
Audit report: Those businesses which have turnover exceeding certain limit shall compulsorily file income tax audit report along with audited financial statement. Any discrepancy or variations found in accounting data and income tax report will lead to scrutiny or investigation against assessee. Thus, there has to be much accuracy in accounts. That’s why we always prefer reconciliation of accounting data with that of the income tax audit report.
For scrutiny and appeals: While going through scrutinies, the assessing officer of income tax departments may demand certain reports of books of accounts. In such cases, if the books of accounts and income tax returns or audit report do not match with each other then it can cause serious damage on the part of assessee and assessee may loose handsome amount of money due to irregularity and inaccuracy.
For Income tax refund: Many a times it happens with anyone that TDS may get deducted more than the assessee is actually liable to pay tax. In such scenario, an assessee is eligible to get refund of excess TDS deducted on his account. If we ignore the reconciliation with income tax, assessee loose those handsome amount of Income tax refund, which we never want in any case. So for the benefit of our client we always advice to get your accounts reconciled with Income tax so that you can get refund for which you are eligible under income tax act.
What we will be providing in reconciliation
- Maintenance of sales and purchase ledgers
- Maintenance of bank book (unlimited banks accounts)
- Maintenance of cash book
- Maintenance of Income Ledgers
- Maintenance of Expenditure ledgers
- Finalization of accounts
- Preparation of profit and loss account
- Preparation of Balance sheet
- Preparation of cash flow statement (If demanded)
- Reconciliation with form 26AS
- Reconciliation with previous audit report and income tax return
Get all your queries solved here
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. All you need to do is just relax and trust our experts. We will take care of every angle of income tax.
Reconciliation will be carries depending upon the size of the data. If the data is of large size then we will reconcile it on monthly basis otherwise we will reconcile it annually.
No, this package include reconciliation. There is no separate charge.
The dictionary meaning of reconciliation is tallying or matching. In accounting we match or tally your accounting data with that of income tax.
We will reconcile form 26AS with that of the books of accounts. We will also reconcile with previous year's audit report and income tax returns
