Accounting Outsource to India

In general, outsourcing is a trend that has been on the rise due to several obvious advantages. The market place is a high-pressure environment. With competitors constantly cutting into your profit margins and market share, the only area that you can try and out do them is by being more operationally efficient. For the best result to be achieved, resources need to be collaborated and optimized. Therefore, the CFOs of many companies have deemed it practical and smart to entrust their accounting services to third party firms who specialize in these services and understand regulatory and compliance requirements for legal and taxation purposes.

With India emerging as a much sought-after outsourcing destination and meeting all global benchmarks, any companies worldwide, especially in the United States have outsourced their accounting services here. Many successful companies have popped up across the country in response to this rising demand. They have carved a special niche for themselves and have been successfully helping American companies streamline their operational models and gain better control over their data and analytics. Account Outsourcing companies in India have successfully helped their clients align their long-term goals with their everyday operations.

The outsourcing companies are comprised of a network of professionals dedicated to providing competent accounting services that include the standardization of certain accounting practices including recurrent transactions which makes the overall financial processing much simpler and clear-cut. In the long run it is highly cost-effective. Companies can leverage the collective expertise of this group of specialists and tap into their extensive industry knowledge. They can shift their focus entirely to the core of the business and its long-term goals as opposed to being engaged in the everyday drudgery of bookkeeping andaccounting service.

These organisations being highly customer-centric understand the specific requirements of their client and come up with the most effective solutions which usually tends to be beyond the competency of the company to do it on its own. Even some CPAs today outsource accounting services to overseas firms to save time required to train and supervise accountants and labor costs to hire and pay them. The fundamental logic behind outsourcing is increasing productivity and efficiency.

Also, many small or medium sized firms may not be able to procure in-house support for their financial services. Outsourcing with the US may not be viable either. For such companies outsourcing in India becomes an attractive option where they can acquire the services of a thoroughly professional organisation at very affordable prices and successfully run their business without unnecessary hassles. Even some larger firms may consider this to further reduce their operational cost.

There is also the added advantage of scalability and agility. There are times when your company will need to expand and consolidate; others where you may need to cut back either due to economic restraints or to rapidly pursue a short-term goal. This will be enabled due to the customized professional support that an outsourcing firm of experts can provide

How to restructure your income, investments and expenses to optimise your tax

A Person, a 32-year-old manager in a Chartered account firm, is worried about his tax outgo. Lamba's company deducts more than Rs 10,000 as TDS every month from his salary. Lamba should rejig his salary structure. Instead of the high special allowance, his employer can put up to 10per cent of his basic salary in the NPS under Sec 80CCD2. He should also ask for perks such as newspaper and phone allowance which are tax free on submission of bills. These two measures will reduce his annual tax bill by Rs 20,000.

Lamba's tax planning also needs a rejig. He is putting too much in the PPF. Instead, he should put Rs 50,000 in the NPS under the new Section 80CCD1b. That will cut his yearly tax by Rs 10,000. He should also consider investing in ELSS funds or go for a low-cost online Ulip for better returns. Lamba is repaying a home loan but cannot avail benefits since the house is not self-occupied. He should give it out on rent and enjoy full deduction of the Rs 3.62 lakh he pays in interest. The rent (Rs 7,000 per month) will be taxed after a 30per cent standard deduction. But the deduction of the interest will cut his overall tax by almost Rs 62,500.

ICAI vision 2030

"World's leading Accounting body,          

 a Regulator and Developer of trusted and independent professionals

with world class competencies

in Accounting,assurance,taxation,finance and business advisoryservices"

ICAI Vision 2030 emphasizes four elements:

a) To be World’s leading accounting body: ICAI envisions becoming the world’s leading

accounting body by playing a predominant role in setting world class standards in identified

service areas developing thought leadership and research that addresses concerns of countries,

developed, developing and under-developed.

b) A regulator and developer of Trusted and Independent Professionals: ICAI will lay

further thrust on its regulatory and developmental role that sets the highest standards of

professional and ethical conduct of its members as a core value. Each and every member of ICAI

will not only have the obligation to maintain exacting standards of clarity, transparency and

disclosure and present an independent, informed and balanced opinion but ICAI will make

examples of delinquent members to ensure this core value is embedded in the DNA of its

members.

c) With World Class Competencies: ICAI will ensure that members have the right skills to

serve global markets which are regularly updated and are relevant in the changing economic

order. ICAI will provide holistic education, effective practical training and continuous

professional development to ensure that the knowledge base of the profession keeps pace with

emerging global practices and innovations.

d) In accounting, assurance, Indirecttaxation, finance and business advisory

services: ICAI will strengthen facilities available for providing education, training and

continuous updation of knowledge as also research and development relevant in current

times to establish thought leadership in these areas where members of ICAI have been

providing services.

It sets out its Mission as

ICAI is a leverange technology and infrastructure and partner with its stakeholders to:

•        Impart word class education, training and professional development opportunities to create global professionals.

•        Develop an independent and transparent regulatory mechanism that keeps pace with the changing time.

•        Ensure adherence to highest ethical standards

•        Conduct cutting edge research and development in areas of accounting, assurance, taxation, finance and business advisoryservice

•        Establish ICAI members and firms as indian multi-national service provider.

The Mission 2030 of ICAI lays focus on following key elements:

a) Global Professionals: ICAI will develop skilled professionals with competencies to service

clients not only within India but across the globe that requires technical skills as also cross

cultural appreciation and understanding of global needs. As one of the largest producers of CAs in the world, we will make sure our members can take the rightful place in the global talent pool.

b) Independent and Transparent Regulatory Mechanism: ICAI will further strengthen and

visibly demonstrate its regulatory role through proactive, visible, timely and unbiased action. We

will create public awareness and sensitize all stakeholders to the effectiveness of the

quasijudicial role of ICAI and ensure inclusion of wider section of users of member services in carrying out ourrole as regulator.

c) Highest ethical standards: ICAI will continue to inculcate highest ethical standards amongst

its members to assist them in upholding the values that the accounting profession stands for. We

will continue to include and emphasize ethical values as part of the education and training of

students and members.

d) Cutting-edge research and development: ICAI will become the hub of valued Thought

leadership and innovation in the field of accounting, assurance, taxation, finance and business.

ICAI will devote resources and create an enabling environment to become the predominant

contributor to setting standards across the world in these fields. We will support, fund and take

up research on issues that impact has locally and globally.

e) Multi-national Service Providers: ICAI will facilitate the Indian professional services firms

and professionals to establish as multi- national service providers and help them in harnessing

global opportunities on one hand and assist them in building capabilities on the other.

Account outsourcing companies in India - Six things to know about the new income tax return forms

Having dropped the controversial provision for mandatory disclosure of foreign trips and dormant bank accounts, the Finance Ministry has finally come out with new and simplified income tax return (ITR) forms. The simplified ITR forms have been brought after the earlier version was opposed by the industry, MPs and assessees for its cumbersome disclosure norms.

The ITR forms,available in all "Indirect  taxation firms in India" which were notified last month by the CBDT for the current assessment year, had specific columns for banks accounts, IFSC Code, names of joint account holders and foreign visits, including the ones paid by companies.

The good news now is that apart from doing away with some controversial provisions, the new forms -- ITR 2 and ITR 2A -- will have only three pages and other details will have to be filled in schedules, according to a Finance Ministry statement issued recent .. 

However, "as the software for these forms is under preparation, the new forms are likely to be available for e-filing only by the third week of June. Accordingly, the time limit for filing these returns is also proposed to be extended up to August 31, 2015, for which a separate notification will be issued," says Rama Karmakar, senior tax professional at EY India.

Here are the 6 things you need to know about the new ITR forms:

1) Providing a big relief to assessees, the new ITR forms have been reduced to three. The number of pages for the new ITR forms has been reduced from 14 pages to 3, making it easier for income tax assesses. The new forms, known as ITR 2 and ITR 2A, will therefore consist of only 3 pages. Any other details that must be filled will have to be included in schedules," informs Adhil Shetty, founder & CEO of BankBazaar.com.

2) Currently individuals/HUFs with income from more than one house property and capital gains are required to file Form ITR-2. "A new ITR 2A form is proposed which can be filed by an individual/HUF that has income from more than one house property, but does not have any income from capital gains, income from business/profession, foreign assets/foreign income," says Karmakar.

3) An individual/Hindu Undivided Family (HUF), who has exempt income without ceiling limit (other than agricultural income exceeding Rs 5,000), can now file Form ITR 1 (Sahaj). Earlier, an individual with exempt income (e.g. dividend income) of more than Rs 5,000 was required to file ITR-2.

4) With regard to foreign travel details, it is now proposed that only the passport number, if available, will be required to be furnished in ITR-2 and ITR-2A.

5) The Finance Ministry has done away with the disclosure of details of dormant accounts which are not operational during the last three years. "As regards bank account details in all these forms, only the IFS code, account number of all the current/savings account which are held at any time during the previous year will be required to be filled-up. The balance in accounts will not be required to be furnished," says the Finance Ministry statement.

6) An individual, who is not an Indian citizen and is in India for business, employment or on student visa, will not mandatorily be required to report the foreign assets acquired by him during the prior years in which he was non-resident, if no income is derived from such assets during the relevant financial year.

According to tax experts, the above changes proposed in the ITR forms will provide respite to the taxpayers, including all expatriate employees working in India.

Government has simplify new Income Tax Return Forms

Having dropped the controversial provision for mandatory disclosure of foreign trips and dormant bank accounts, the Finance Ministry has finally come out with new and simplified income tax return(ITR) forms. The simplified ITR forms have been brought after the earlier version was opposed by the industry, MPs and assessees for its cumbersome disclosure norms. 

The ITR forms, which were notified last month by the CBDT for the current assessment year, had specific columns for banks accounts, IFSC Code, names of joint account holders and foreign visits, including the ones paid by companies. 

The good news now is that apart from doing away with some controversial provisions, the new forms -- ITR 2 and ITR 2A -- will have only three pages and other details will have to be filled in schedules, according to a Finance Ministry statement issued recently. 

However, "as the software for these forms is under preparation, the new forms are likely to be available for e-filing only by the third week of June. Accordingly, the time limit for filing these returns is also proposed to be extended up to August 31, 2015, for which a separate notification will be issued," says Rama Karmakar, senior tax professional at EY India. 

Here are the 6 things you need to know about the new ITR forms: 

1) Providing a big relief to assessees, the new ITR forms have been reduced to three. "The number of pages for the new ITR forms has been reduced from 14pages to 3, making it easier for income tax assesses. The new forms, known as ITR 2 and ITR 2A, will therefore consist of only 3 pages. Any other details that must be filled will have to be included in schedules," informs Adhil Shetty, founder.

2) Currently individuals/HUFs with income from more than one house property and capital gains are required to file Form ITR-2. "A new ITR 2A form is proposed which can be filed by an individual/HUF that has income from more than one house property, but does not have any income from capital gains, income from business/profession, foreign assets/foreign income," says Karmakar. 

3) An individual/Hindu Undivided Family (HUF), who has exempt income without ceiling limit (other than agricultural income exceeding Rs 5,000), can now file Form ITR 1 (Sahaj). Earlier, an individual with exempt income (e.g. dividend income) of more than Rs 5,000 was required to file ITR-2. 

4) With regard to foreign travel details, it is now proposed that only the passport number, if available, will be required to be furnished in ITR-2 and ITR-2A.

5) The Finance Ministry has done away with the disclosure of details of dormant accounts which are not operational during the last three years. "As regards bank account details in all these forms, only the IFS code, account number of all the current/savings account which are held at any time during the previous year will be required to be filled-up. The balance in accounts will not be required to be furnished," says the Finance Ministry statement. 

6) An individual, who is not an Indian citizen and is in India for business, employment or on student visa, will not mandatorily be required to report the foreign assets acquired by him during the prior years in which he was non-resident, if no income is derived from such assets during the relevant financial year. 

According to tax experts, the above changes proposed in the ITR forms will provide respite to the taxpayers, including all expatriate employees working in India, by simplifying the process of the tax return filings. For more information click here