Learn more about Accounting in India

Whether you are an individual or a company, Indian or foreign, your activities, property, and income in India are subject to Indian law. As a result, the various laws governing taxation and accounting apply to you. Accounting is an important part of running a business. It is a necessary component of business operations. Even if you’re not aware of it, you do it every day. Accounting is involved whenever you record a transaction, prepare tax paperwork, or plan an expense. This is why Themis Partner makes it easier for you to manage your company’s accounting. You can call on the services of partner accountants who are experts in the current legislation. You will also find essential documents for your business. Entrust your business accounting to experts such as financial statements, tax filing and management report.

Table of contents

What is an Accountant?

An accountant is a person who records business activities on behalf of a firm, reports to management on company performance, and prepares financial statements. Here are a few instances of transactions in which an accountant may be involved:

➤ Sending an invoice to a customer, which requires the recording of a sale and an account receivable
➤ Collecting an invoice from a supplier, which necessitates the recording of a cost or asset as well as an account payable
➤ Paying a salary or compensation to a worker, which requires documenting a cost and cash outflow
➤ Reconciling a financial statement, which will almost certainly result in modifications to the cash account

Aside from transaction recording, an accountant creates a variety of reports. The following are the primary types:
Financial statements are distributed to firm owners and/or operators, as well as lenders and other creditors. The income statement, balance sheet, and statement of cash flows are included in the financial statements.
Management reports are distributed to the management team. The reports are highly customizable to the needs of each business and may include issues such as sales of certain product lines, cost variance investigations, sales returns, and a study of overtime expenditures.
Tax returns are distributed to various government agencies. The reports reflect the amounts paid for taxable income, real estate taxes, sales taxes, use taxes, as well as other taxes.

What is the difference between Bookkeeping and Accounting?

Bookkeeping is similar to the basis of accounting in that it organizes data that will be analyzed during the accounting phase. Accounting is the process of summarizing, analyzing, and communicating an organization’s financial data, whereas bookkeeping is simply concerned with identifying and recording financial transactions. Accounting data may be used by management to make key choices where the procedures includes financial statements as opposed to bookkeeping. Accounting requires analyzing and generates business insight. Bookkeeping does not reveal a company’s financial situation. Accounting aids in presenting a clear picture of a company’s financial status.

What are the Accounting Standards in India?

Indian Accounting Standards, according to conventional definitions, are nothing more than rules to be followed in the accounting system. It refers to the procedures to be followed when recording accounting and financial transactions. It regulates how a company’s financial statements are prepared and presented.
The Institute of Chartered Accountants in India develops and publishes accounting standards. Accountants of all businesses registered in India follow these guidelines. These accounting standards, as previously said, help in the preparation and presentation of financial statements.
While you may have grasped the basic goal of Indian accounting standards, let us delve further into these goals to see what kind of underlying goals are present.

What are the Indian Accounting Standards' primary goals?

Any mission has to have a cause behind it. Similarly, having accounting standards serves a specific purpose. Let’s look at the goals of accounting standards to get a better understanding of what they’re all about.

➤ The major goal of Indian accounting standards is to make yearly financial statements in corporate accounts more transparent
➤ Ensure that Indian businesses follow these guidelines in order to implement internationally recognised best practises
➤ A single, methodical accounting system that is used by all of the companies. Getting rid of misunderstandings and deceptions
➤ Indian accounting standards are so straightforward that they can be understood anywhere in the world
➤ There are a number of global requirements, and Indian accounting standards are meant to comply with them
➤ To improve the financial statements' trustworthiness

How to outsource an Accountant in India?

The Institute of Chartered Accountants of India (ICAI) is a statutory body formed by an Act of Parliament, The Chartered Accountants Act, 1949, for the purpose of regulating the profession of chartered accounting in India. The Institute is administered by the Ministry of Corporate Affairs of the Government of India. The ICAI is the world’s second biggest professional organization of chartered accountants, with a long history of public service to the Indian economy.

Why should I hire a Chartered Accountant to help me with my business?

Outsourcing a chartered accountant is vital since he is a compliance specialist, and in order to run your business successfully and smoothly, you must adhere to all laws and regulations as well as the law of the land. Outsourcing a certified accountant will give you and your company a competitive advantage. For the following reasons, it is necessary to hire a chartered accountant on a contract basis: expansion of the company submitting a GST return reporting at the end of the year, compliance that works, Income tax minimization, bookkeeping, accounting other requirements must be met.

How can I locate an accountant in India?

We can give you and your PTE.ltd with effective and transparent tax and accounting submission services through Themis Partner. You can focus entirely on your business by using outsourced accounting services like Themis Partner, as our professional accounting staff will handle a variety of mandatory requirements throughout the fiscal year, such as income statement, investment, maintenance, income tax return filing, and more.

How much does it cost to hire an Accountant?

Accounting firms now offer a variety of pricing models, each with its own set of advantages and disadvantages. So in order to help you understand and interpret the best price structure for your business, here are some princing model that are used a lot:

1. Model of pay-as-you-go
An outsourcing company, as the name suggests, provides resources for a set price for the time you need them.
Here, an hourly rate is calculated by the outsourcing firm, that varies mainly from £10/hour to £20/hour for accounting, and £5/hour to £15/hour for bookkeeping. In some circumstances, the hourly rates of specific employees may fluctuate depending on their degree of seniori

2. Dedicated resource or full-time employee (FTE) model
This is the most common type among the others. In this case, an accounting outsourcing firm will provide a committed person for a monthly charge.
For a senior accountant with around two years of experience, this fee could range from £1000 to £1800 per month. A fixed amount is billed to the accounting firm at the end of each month. In this case, the outsourcing firm essentially aims to finish the specified amount of hours within the agreed-upon monthly cost.

What is India's business Tax Rate?

The Income Tax Act of 1961 imposes a business tax on both domestic and foreign corporations. The Government of India mandates that domestic companies pay business taxes depending on their basic income through this Act. Foreign corporations, on the other hand, are only taxed on income earned or collected in India. A corporate entity, also known as a corporation, is a legal entity that is considered to have certain rights and responsibilities and thus has its own legal identity separate from that of its shareholders.
Corporations in India are divided into two groups, as follows:

Domestic Corporations A Domestic Corporation is a firm that was founded in India and is registered under India's Companies Act, 2013. If the Indian arm's management and control is entirely situated in India, even a foreign firm can be called a local corporation
Foreign Corporations As the name implies, a foreign corporation is a company that is located outside of India. If a component of a company's administration and control is situated outside of India, it is referred to as a foreign corporation

This distinction is significant because domestic companies in India are taxed on their total income, whereas foreign corporations are only taxed on the income generated through their Indian operations.
The rate of taxation changes from year to year and by business type. To fully comprehend the Indian system, it is therefore advisable to obtain professional assistance.

You can get professional advice on your case by contacting Themis Partner accountants.

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