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The term seed capital refers to the type of financing used in the formation of a startup. Funding is provided by private investors—usually in exchange for an equity stake in the company or for a share in the profits of a product. Much of the seed capital a company raises may come from sources close to its founders including family, friends, and other acquaintances. Obtaining seed capital is the first of four funding stages required for a startup to become an established business. What Is Seed Capital? A company that is first starting out may have limited access to funding and other sources. Banks and other investors may be reluctant to invest because it has no history or established track record, or any measure of success. Many startup executives often turn to people they know for initial investments—family and friends. This financing is referred to as seed capital. Seed capital—also called seed money or seed financing—is referred to as such because it is money raised by a business in its infancy or early stages. It doesn’t have to be a large amount of money. Because it comes from personal sources, it’s often a relatively modest sum. This money generally covers only the essentials a startup needs such as a business plan and initial operating expenses—rent, equipment, payroll, insurance, and/or research and development costs (R&D).The primary goal at this point is to attract more financing. This means catching the interest of venture capitalists and/or banks. Neither is inclined to invest large sums of money in a new idea that exists only on paper unless it comes from a successful serial entrepreneur.   How is Seed Funding different from growth-stage funding? Seed funding is the first stage of investment for a business – where the business could conspire of only a product idea and is still in the market validation process. Since the startup is in its early stages and often hasn’t yet proven its merit in the market, this funding generally involves risk on the part of the entity that is funding. But high risk also comes at a point when the startup’s valuation is at a low and has potential to scale and yield lucrative returns. As a result, investors bring in money at this stage through convertible preference share or common equity. They don’t prefer debt instruments with fixed interest rate burden on the startup since the early-stage startups are asset light with no validation of their business model. Grants are also a preferred instrument but is offered by Government schemes or competitions created for the purpose of promotion of entrepreneurship.  What are the challenges faced by Seed-stage startups? Product/Service: The product developed by the startup is in the idea validation stage with negligible brand value. Lack of access to funding makes it difficult for the startup to develop the Minimum Viable Product (MVP) which is required for field trail and market launch Customers: The startup needs to gain ground in terms of the market acquisition, market acceptance, and customer trust for the initial traction Processes: The founders generally don’t have the right expertise to regularise and formalise core team culture and to onboard the right human resources which makes up the Key Managerial Personnel Business Model: The startup faces challenges to define revenue channels, unit economics, and financial projections of the business  What should you know before raising this fund? Step 1 should ideally include a thorough evaluation of your startup’s market needs and customers. This is crucial for your business’s foundation and market research. Your pitch to investors should ideally constitute a well-rounded business plan, including a study on the competitors, SWOT analysis, financial projections, current and potential valuations, and growth prospects What are the different avenues to raise Seed Funding? 1.Incubators and Accelerators: Business incubators and accelerators are institutions, government-supported or privately held, that support entrepreneurs in developing their businesses, especially in the initial stages. These are institutions geared towards speeding up the growth and success of startups and early-stage companies. Incubation is usually done by institutions which have experience in the business and technology world. These institutions provide infrastructure/research facilities, administrative support, and mentorship.2.Angel Investors and Family Officers: Angel investors are wealthy private investors focused on financing small ventures in exchange for a stake in the business. Unlike a venture capital firm that uses an investment fund, angels use their own net worth. These are usually the first investors in a startup. These investors are driven by personal beliefs, demand higher control over portfolio companies, and have low ticket size investments.  3.Venture Capital Funds: Venture capital (VC) funds are managed investment pools that invest in high-growth startups and other early-stage firms and are typically only open to accredited investors. VC funds look out for startups that are highly scalable and have a huge target market. They also demand much control over their portfolio companies. It should be noted that all VCs may not focus on seed funding as they typically focus on companies already in market. 4.Government Funds: Funding from angel investors and venture capital firms becomes available to startups only after the proof of concept has been provided. Similarly, banks provide loans only to asset-backed applicants. It is essential to provide seed funding to startups with an innovative idea to conduct proof of concept trials.  DPIIT has created Startup India Seed Fund Scheme (SISFS) with an outlay of INR 945 Crore to provide financial assistance to startups for a host of requirements. SISFS aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization. This enables the startups to graduate to a level where they will be able to raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions FAQs What is seed capital? Seed capital refers to the initial funding or investment provided to start a new business or launch a new product. It is typically used to cover initial expenses such as market research, product development, and early-stage operations. Who provides seed capital? Seed capital can be provided by various sources, including individual investors (angel investors), venture capital firms, government grants or programs, crowdfunding platforms,

MINISTRY OF CORPORATE AFFAIRSNOTIFICATIONNew Delhi, the 15th March, 2019 S.O. 1382(E)—In exercise of the powers conferred by sub-section (1) of section 8 read with subsection (1) of section 10 of the Competition Act, 2002 (12 of 2003), the Central Government, vide office orderNo. Comp-05/9/2018-Comp-MCA dated the 11th December, 2018, appointed Ms. Sangeeta Verma as Member2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]of the Competition Commission of India, with effect from the 24th December, 2018 (Afternoon) for a periodof five years or till 65 years of age, or until further orders, whichever is the earliest.2. The terms and conditions of her service shall be governed by the Competition Commission of India(Salary, Allowances and other Terms and Conditions of Service of Chairperson and other Members) Rules,2003. [F. No. 05/9/2018-Comp-MCA]K.V.R. MURTY, Jt. 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When a business wants to increase its market share or geographical reach at a low cost, it may franchise its product and brand name. A franchise is a joint venture between a franchisor and a franchisee. The franchisor is the original business. It sells the right to use its name and idea. The franchisee buys this right to sell the franchisor’s goods or services under an existing business model and trademark.Franchises are a popular way for entrepreneurs to start a business, especially when entering a highly competitive industry such as fast food. One big advantage to purchasing a franchise is you have access to an established company’s brand name. You won’t need to spend resources getting your name and product out to customers. WHAT IS A FRANCHISE? A franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor’s name and system. Technically, the contract binding the two parties is the “franchise,” but that term more commonly refers to the actual business that the franchisee operates. The practice of creating and distributing the brand and franchise system is most often referred to as franchising. There are two different types of franchising relationships. Business Format Franchising is the type most identifiable. In a business format franchise, the franchisor provides to the franchisee not just its trade name, products and services, but an entire system for operating the business. The franchisee generally receives site selection and development support, operating manuals, training, brand standards, quality control, a marketing strategy and business advisory support from the franchisor. While less identified with franchising, traditional or product distribution franchising is larger in total sales than business format franchising. Examples of traditional or product distribution franchising can be found in the bottling, gasoline, automotive and other manufacturing industries. The Franchisee/Franchisor Relationship The relationship between a franchisee and a franchisor is inherently one of advisee and advisor. The franchisor provides guidance and support on hiring and training staff, setting up shop, advertising its products or services, sourcing its supply, and so on.In return for the franchisor’s advisory role, use of intellectual property, and experience, the franchisee generally pays a startup fee plus an ongoing percentage of gross revenues to the franchisor.At the start, the franchisor assigns the franchisee an exclusive location far enough from its other franchises to avoid competition. Franchisee Benefits The costs of opening a franchise can be lower compared to starting a company from the ground up. The business has immediate brand recognition, a ready-built supply system, and a professional marketing campaign already in place. Franchisees adopt the business practices of their franchisors rather than create them from scratch. The franchisor is invested in the success of its franchisees and will take an active advisory role. Franchisee Responsibilities A franchisee must follow the proven business model that is already in place, down to its choice of location, furnishings, products, and decor. Franchisors require this to maintain consistent quality among all of the locations using its brand name.The franchisee is responsible for growing the franchise via the usual means of advertising and marketing within its exclusive area of operation. However, all marketing campaigns must be approved by the original establishment before their release.As the manager of the franchise, the franchisee is expected to protect the brand name by offering only approved products and services that are created by or sourced by the original company. FAQs Does a Franchisee Own a Business? Yes, a franchisee is the owner of the business. The owner is licensed to use products supplied by the franchisor. The franchisee is contractually obligated to use only products and services supplied by or authorized by the franchisor. This limits the business owner’s scope and autonomy. A McDonald’s franchisee cannot sell a peanut butter and jelly sandwich or even hang a picture on the wall that isn’t issued by McDonald’s. Is a Franchisee the Same As a Franchisor? No. The franchisor is the entity that owns the intellectual property, patents, and trademarks of the brand or business being franchised. A franchisee buys the right to operate a location of the franchisor. Can a Franchisee Be Fired or Removed? A franchisee can effectively be fired. The franchisor can shut down one of its licensed operators that breaks the rules. Those rules allow the franchisor to act quickly if a franchisee is discovered to be running a location that fails to meet health and safety guidelines, among other infractions. 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In this age of cut-throat competition, everyone wants to grow their business beyond the limits of the domestic market. Doing business globally is more easy now-a-days due to the advent of internet and technology. However, before going business globally, you need to follow several procedures and laws and get various registration and license. IEC (Import Export Code) license is one of such prerequisites when you’re thinking of importing into or exporting from India. It is also known as Importer- Exporter Code. IEC (Import Export Code) is required by anyone who is looking to kick-start his/her import/export business in the country. It is issued by the DGFT (Director General of Foreign Trade). IEC is a 10-digit code that has lifetime validity. Predominantly importer merchants cannot import goods without the Import Export Code and similarly, the exporter merchant cannot avail benefits from DGFT for the export scheme, etc., without IEC. International trade is a gateway to a world of opportunities for businesses in India. Whether you’re looking to import goods, export products, or expand your business globally, having an Importer Exporter Code (IEC) is your key to entering the international market. This code is issued by the Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce. For importers, the IEC is indispensable for the clearance of customs and facilitating payments to foreign banks, ensuring smooth international trade transactions. Similarly, exporters rely on the IEC to streamline the process of sending shipments and receiving payments from overseas clients. Import Export Code (IE Code) Import & Export Code is to be obtained by the business entity for import into or export from India. Import & Export Code is popularly known as the IEC number. Import & Export Code is a ten-digit unique number issued by the Directorate General of Foreign Trade (DGFT). IEC registration certificate is mandatory for a business involved in import and export. Hence, before initiating an import of goods into India, an importer must ensure that the importing entity has GST registration and IE code – both of which are required to clear customs. If an importer does not have both IE code and GST Registration, the goods will be stuck at the port and start incurring demurrage charges or could be destroyed. Importance of Import Export Code International market unlocks: As the IE Code is a requirement for the import and export business, they allow the products to reach the global market. IE code makes the entry of the international Indian company smoother and opens doors for growth and expansion. Online registration: The process to find the IE Code is entirely online and hassle-free with short document submission. Less document requirement: It is not required to submit many documents to obtain an IEC. Lifetime Validity: IE Code is a lifetime registration valid as long as the business exists. Hence, there are no issues with updating, filing, and renewing Import Export Code registration. The IE registration is valid until the company exists or the registration is not revoked or surrendered. Reduces illegal goods transportation: The most basic requirement for the Import-Export code is that you need to provide authentic information. Without giving proper information, IE code cannot be obtained. This criterion makes the transportation of illegal goods impossible. Availing Several Benefits: IE code has enormous benefits for importers and exporters. The registered business entities can get help through subsidies from the Customs, Export Promotion Council or other authorities. With LUT filing under GST, the exporters can make exports without paying taxes. If the exports are made with tax payment, the exporter can claim the refunds of the paid tax amount. Compliances: Unlike other tax registration, the person carrying import or export does not require to fulfill any specific compliance requirements such as the annual filing or the return filings. Validity of IE Code As mentioned above, IE Code registration is permanent and valid for a lifetime. Hence, there will be no hassles with updating, filing, and renewing the IEC registration. It is valid till the business exists or the registration is not revoked or surrendered. Further, unlike tax registrations like GST registration or PF registration, the importer or exporter does not require to file any filings or follow any other compliance requirements like annual filing. As IE code registration is one-time and requires no additional compliance, it is recommended for all exporters & importers to obtain IE code after incorporation. Nature of the Firm obtaining an IEC Proprietorship Firm Partnership Firm Limited Liability Partnership Limited Company Trust Hindu Undivided Family (HUF) Society Pre-Requisites for Applying for IEC Valid Login Credentials to DGFT Portal (After Registering on DGFT Portal) IEC may be applied on behalf of a firm which may be a Proprietorship, Partnership, LLP, Limited Company, Trust, HUF, and Society. The Firm must have an active Firm’s Permanent Account Number (PAN) and details like Name as per Pan, Date of Birth, or Incorporation. The Firm must also have a bank account in the Name of the Firm and a valid address before applying Documents required for IEC Code registration The list of scanned documents required for IEC Registration is listed as follows: Proof of establishment/incorporation/registration: The following type of Firm needs to submit the establishment/incorporation/registration certificate: Partnership Registered Society Trust HUF Other Proof of Address: Proof of Address can be any one of the following documents: Sale Deed Rent agreement Lease deed Electricity bill Telephone landline bill Mobile, post-paid bill MoU Partnership deed Other acceptable documents (for proprietorship only): Aadhar card Passport Voter id Note: In case the address proof is not in the Name of the applicant firm, a no objection certificate (NOC) by the firm premises owner in favor of the Firm, along with the address proof, is to be submitted as a single PDF document. Proof of Firm’s Bank Account Canceled Cheque Bank Certificate User should have an active DSC or Aadhaar of the Firm’s member for submission. Active Firm’s Bank accounts for entering its details in the Application and making online payment of the application fee. FAQs Is IEC mandatory? Yes. An Importer-Exporter Code (IEC) is mandatory for import to India or export from India. It is a significant

An employee stock ownership plan (ESOP) is an employee benefit plan that gives workers ownership interest in the company in the form of shares of stock. ESOPs give the sponsoring company—the selling shareholder—and participants various tax benefits, making them qualified plans, and are often used by employers as a corporate finance strategy to align the interests of their employees with those of their shareholders. What is ESOP? An ESOP (Employee stock ownership plan) refers to an employee benefit plan which offers employees an ownership interest in the organisation. Employee stock ownership plans are issued as direct stock, profit-sharing plans or bonuses, and the employer has the sole discretion in deciding who could avail of these options. However, employee stock ownership plans are just options that could be purchased at a specified price before the exercise date. There are defined rules and regulations laid out in the Companies Rules that employers need to follow for granting employee stock ownership plans to their employees. How Does an Employee Stock Ownership Plan (ESOP) Work? An ESOP is usually formed to facilitate succession planning in a closely held company by allowing employees the opportunity to buy shares of the corporate stock.ESOPs are set up as trust funds and can be funded by companies putting newly issued shares into them, putting cash in to buy existing company shares, or borrowing money through the entity to buy company shares. ESOPs are used by companies of all sizes, including a number of large publicly traded corporations.Contrary to what some people say, companies with an ESOP must not discriminate and are required to appoint a trustee to act as the plan fiduciary. Among other things, it is not possible for senior employees to receive more shares or for ESOP participants to have no voting rights. Cost of ESOPs and Distributions Legal fees, accounting fees, and administrative expenditures may be included in the initial costs of an Employee Stock Ownership Plan (ESOP) in India. The cost of establishing and sustaining an ESOP varies according to the plan’s size and complexity. Furthermore, ESOP distributions in India may occur in a variety of ways. When an employee exercises their stock option to obtain shares, they have the option of selling them immediately or storing them for future appreciation. If the employee decides to sell the shares, the proceeds, less any taxes due on the gain, will be sent to them. If the employee agrees to keep the shares, they will own a piece of the company and may be eligible for dividends or capital gains if the stock price rises. Why Company offers ESOPs to their employees? Organisations often use Employee stock ownership plans as a tool for attracting and retaining high-quality employees. Organisations usually distribute the stocks in a phased manner. For instance, a company might grant its employees the stocks at the close of the financial year, thereby offering its employees an incentive for remaining with the organization for receiving that grant. Companies offering ESOPs have long-term objectives. Not only do companies wish to retain employees for the long term, but also intend to make them the stakeholders of their company. Most of the IT companies have alarming attrition rates, and ESOPs could help them bring down such heavy attrition Start-ups offer stocks for attracting talent. Often such organisations are cash-strapped and are unable to offer handsome salaries. But by offering a stake in their organisation, they make their compensation package competitive. ESOPs from an employee’s perspective With ESOPs, an employee gets the benefit of acquiring the shares of the company at the nominal rate, and selling them (after a defined tenure set by his employer) and making a profit. There are several success stories of an employee raking in riches together with founders of the companies. A very notable example is Google when it went public. Its founders Sergey Brin and Larry Page became the richest persons in the world, even the stock-holder employees earned millions too. ESOP Taxation ESOPs have dual tax effects: When an employee exercises their rights and purchases company stock When the employee sells the stock after purchasing it Let’s take a closer look at these examples: Tax treatment at the time of buying the shares Employees can purchase shares after the vesting date at a price less than the share’s Fair Market Value (FMV) on that date. As a result, the difference between the FMV and the exercise price of the share is considered a pre-condition in the employee’s hands and taxed at his income tax slab rate. However, in the case of new businesses, the government has softened the tax implications of ESOPs. Employees at the start-up would not have to pay the tax on the perk in the year in which they exercised the ESOP. TDS on ESOPs would be delayed until the sooner of the following dates: Five years from the date of the ESOP grant When does the employee sell the ESOP? Date of departure from the company Tax treatment at the time of selling the shares If the employee sells the shares, the difference between the selling price and the FMV on the date the share was exercised is taxable as capital gains. If you sell your shares within a year of buying them, you will have to pay a 10% tax on any profits over Rs.1 lakh. If the shares are sold within 12 months, the profits are taxed at 15%. Taxation of foreign ESOPs in India is also similar, and you would be taxed in India on the perquisites earned from a foreign company.  Benefits of ESOPs for the employers Stock options are provided by an organization as a motivation to its employees. As the employees would benefit when the company’s share prices soar, it would be an incentive for the employee to put in his 100%. Although motivation, employee retention and awarding hard work are the key benefits which ESOP brings to employers, there are several other noteworthy advantages too. With the help of ESOP options, organisations could avoid cash compensations as a reward,

when you’re launching digital campaigns, you want to be sure you’re maximizing your efforts — and your profits — by boosting your ad’s impression share. Your impression share tells you how well your ad is performing compared to its total potential audience, and boosting it can help increase engagement as well as profit.  If you’re only engaging a small portion of your target audience, then analyzing your impression share is usually a good place to start. Increasing this value will help you propel ads to the top of the Search Engine Results Page (SERP) — and ultimately generate more engagement for your campaigns. What Is Impression Share? Impression share is an ad metric that compares the performance of your ads against the performance of other ads in its category. This is calculated by comparing its total number of impressions to the number of impressions that it has the potential to receive.Each time your ad is displayed on a webpage, that’s counted as an impression. Ads have the potential for more impressions for different reasons, especially when they’re keyword-savvy, attractive, and relevant. When you track impression share, you have a clear representation of how well your ad is performing and how you can improve it over time — particularly through keywords. While there are plenty of metrics that can track how well your ads are doing, impression share helps you identify the shortcomings of your ad so you can fix it and make it more engaging to your audience. Types of Impression Share Search Impression Share- Search impression share is your ad’s impression share on a search network. According to Google, a search network is “a group of search-related websites where your ads can appear,” including Google search results, Google apps such as Maps and Shopping, and on Google search partners’ websites. This metric divides the impressions that your ad receives by the number of impressions it could receive on the search network.This metric is greatly impacted by budget. If you have a low daily budget on Google, your ad will no longer be shown once you hit your budget. This means your ad might be getting impressions, but it’s still missing out on more engagement because of this daily limit.If you’re not looking to spend more on your campaign, another way to improve search impression share is to focus on the quality score, target, bid, and conversion rate of your ads. These metrics gauge the effectiveness of your ad and improving them will lead to more engagement. Display Impression Share- Google defines its Display Network as a group of over two million websites, videos, and apps where ads can appear. Display Network sites reach up to 90% of internet users and can show your ads in a particular context, or to a specific audience.With display campaigns, you can increase your ad placements to improve impression share, but you’ll need to adjust your budget to accommodate this increase as well. Or, you can decrease your number of placements to make your campaign more cost-effective, but this will reduce the frequency of your ad’s display. The best approach is testing the number of placements until you’ve reached a point where you’ve optimized impression share without going over your campaign’s budget. Target Impression Share- Target impression share provides an automatic approach to bidding on ads. With this tool, you can set automated bids for your campaign, which gives your ad a better chance of reaching the top of the SERP. And, with a more prominent position on a search results page, your ad is likely to gain more impressions over time.  Although impression share is only available per campaign, you can track target impression share for all of your campaigns at once. There are plenty of options for customizing it, too. For example, you can set it to bid for a certain section of the page — like the top half — or for certain times and places. Adwords Impression Share- Wondering how to access your impression share data in Google Ads?Once you’ve logged into your Ads account, just go to Campaigns > Columns > Modify Columns > Competitive Metrics > Impression Share, then click Save.Now, your impression share will appear in a table that you can download. Exact Match Impression Share- Exact match impression share is just as it sounds. This metric compares the impressions your ad received compared to how many it was eligible to receive for searches that exactly match your keywords. You can use exact match impression share to hone in on your keywords and improve your ads. Search Lost Impression Share- The “Search Lost Impression Share (budge)” column shows you the percentage of impressions that you’re missing out on because of your budget. A high percentage here may mean that investing in a larger budget could boost your advertising efforts and sales in the long-run.The “Search Lost Impression Share (rank)” column shows you the number of impressions you’re losing based on a low rank. If this percentage is high, advertisers should consider how to boost rank through quality score and cost-per-click rates. Quality score evaluates your keywords’ past performances, ad relevance, landing page experience, and expected clickthrough rate. Impression Share Formula “Eligible impressions are estimated using many factors, including targeting settings, approval statuses, and quality.” Once the maximum number of impressions is determined, all you have to do is divide the number of impressions that the ad receives by the maximum number of impressions that Google decides it’s eligible for. We can see how this formula is written in the example below.  We can also modify this formula to find the total number of impressions that our ad is eligible for. For instance, if we already know our impression share, we can reformat the formula to look more like this.  Impression Share Formula Example Let’s say we created an ad and Google says there are 5,000 potential impressions available. After monitoring our ad’s performance for a month, we recorded about 4,000 impressions. This would mean that our impression share is 80% (4,000 recorded impressions / 5,000 available impressions

National Electronic Fund Transfer is one of the most prominent electronic fund transfer systems of India. NEFT was introduced in November 2005, and it is a facility provided to bank customers to enable them to transfer funds quickly and securely to one account to another account. It is a nationwide payment system facilitating safe and secure transaction all over the country.NEFT, or National Electronic Funds Transfer, is a fund transfer mechanism started by the RBI in 2005. It settles transactions in half-hourly batches. Organisations, companies and individuals can use it to transfer funds from one bank account to another. It is available 24/7 throughout the year. NEFT enjoys pan-India coverage.   You can do an NEFT transaction from the comfort of your home. There is no compulsion to visit your nearest bank branch for an NEFT process.  NEFT Under NEFT, funds are transferred using RBI’s (Reserve Bank of India)NEFT service to the credit account with the other participating. RBI works as the service provider and transfers the credit to the other bank’s account. NEFT operates on a deferred net settlement (DNS) basis which settles transactions in batches. In DNS, the settlement or transactions happens only at a particular point of time. NEFT Process Request for NEFT by bank customer Data Entry at the Sending Bank Branch. Processing or Data Upload at Sending NEFT Service Centre. Transmission or submission of NEFT message to the NEFT centre. Processing and transmission of NEFT message to the beneficiary banks. Data validation at receiving NEFT Service Centre. Payment to the beneficiary. Information Required for Remittance The required information that the remitting customer would have to furnish at the time of remittance through NEFT are as follows: Original cancelled cheque leaf (with pre-printed account holder name, account number and IFSC code) / if cheque leaf is not personalised, please provide the copy of latest bank statement (original) or bank attested statement/passbook). IFSC code (11 digit character code appearing on your cheque leaf. If you do not find this on your cheque leaf, then please consult your bank). NEFT Service Availability Durations NEFT transactions will be forwarded to RBI based on the following schedule: Day Start Time End Time Monday to Friday 8:00 am 4:00 pm Saturday 8:00 am 11:30 am Note: The NEFT transactions will have slight variations in the transaction processing time depending upon the various ban NEFT Timings You can do a NEFT transaction 24/7 throughout the year. The transactions are settled in batches at half-hourly intervals. NEFT Charges RBI has capped the fees that banks can charge customers for NEFT transactions. The following are the maximum charges that can be levied for NEFT: Transaction Value Maximum Fees Up to Rs. 10,000 Rs. 2.50 + GST Rs. 10,000-1,00,000 Rs. 5 + GST Rs. 1,00,000-2,00,000 Rs. 15 + GST Over Rs. 2,00,000 Rs. 25 + GST NEFT Limit Per Day The RBI has not placed any limits on NEFT transactions. However, an individual bank may set up an NEFT transfer limit. Advantages of NEFT Safe and Effective – For a flawless transfer of funds on the Internet, NEFT helps you to transfer any amount of money quickly. Low Processing Charges– NEFT is flexible payment options which are very economical. To utilise this facility, you don’t have to pay a huge sum of money to your bank. The processing charges are economical, and you can transfer any amount of money without any difficulty. Highly Dependable–NEFT, an integral aspect of Internet banking, is a highly dependable method of making payments and receiving funds online. In India, most of the banks are regulated under the norms set by RBI and, hence, the Internet banking facility too is quite safe. Rapid Settlement–Unlike the regular banking methods of fund transfer, NEFT transfer is really quick, and you can enjoy rapid settlement of accounts, thereby improving the overall functionality of your business. NEFT System Transaction Procedure Step 1: Firstly, the remitter has to provide the requisite information like Beneficiary’s Name. Beneficiary’s Account number Beneficiary’s Account type ( cash credit, loan account, etc.) Bank name, location & base branch in which the beneficiary account is held. IFSC code of beneficiary bank etc. to start the process of NEFT. Step 2: The bank branch at which the fund transfer request originated, prepares a message and sends it to its pooling centre (also called the NEFT Service Centre). Step 3: The pooling centre forwards the message to the NEFT Clearing Centre (operated by the National Clearing Cell, RBI, Mumbai) to be included in the next available batch. Step 4: The RBI at the clearing centre sorts the transaction bank-wise and prepares to account entries to receive funds from(debit) the originating banks and give the funds to (credit) the destination banks. Therefore, bank-wise remittance messages are forwarded to the destination banks through their polling centre (the NEFT Service Centre). Step 5: The destination banks receive the remittance messages from the Clearing Centre and pass on the credit to the beneficiary accounts. FAQs What is NEFT? NEFT stands for National Electronic Funds Transfer. It is a nation-wide payment system facilitating one-to-one funds transfer. How does NEFT work? NEFT works on a deferred settlement basis, where transactions are processed in batches. Customers initiate fund transfers electronically through internet banking, mobile banking, or by visiting their bank branches. The transactions are then settled in batches at scheduled intervals throughout the day. What information do I need to initiate an NEFT transaction? To initiate an NEFT transaction, you need the following information: Beneficiary’s name Beneficiary’s account number Beneficiary bank’s name Beneficiary bank’s branch IFSC (Indian Financial System Code) code Amount to be transferred Your account details Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code

NPA expands to non-performing assets (NPA). Reserve Bank of India defines Non Performing Assets in India as any advance or loan that is overdue for more than 90 days. “An asset becomes non-performing when it ceases to generate income for the bank,” said RBI in a circular form 2007. To be more attuned to international practises, RBI implemented the 90 days overdue norm for identifying NPAs has been made applicable from the year ended March 31, 2004. Depending on how long the assets have been an NPA, there are different types of non-performing assets as well. What Is a Nonperforming Asset (NPA)? A nonperforming asset (NPA) refers to a classification for loans or advances that are in default or in arrears. A loan is in arrears when principal or interest payments are late or missed. A loan is in default when the lender considers the loan agreement to be broken and the debtor is unable to meet his obligations. Sub-Classifications for Non-Performing Assets (NPAs) 1. Standard Assets- They are NPAs that have been past due for anywhere from 90 days to 12 months, with a normal risk level. 2. Sub-Standard Assets- They are NPAs that have been past due for more than 12 months. They have a significantly higher risk level, combined with a borrower that has less than ideal credit. Banks usually assign a haircut (reduction in market value) to such NPAs because they are less certain that the borrower will eventually repay the full amount. 3. Doubtful Debts- Non-performing assets in the doubtful debts category have been past due for at least 18 months. Banks generally have serious doubts that the borrower will ever repay the full loan. This class of NPA seriously affects the bank’s own risk profile. 4. Loss Assets- These are non-performing assets with an extended period of non-payment. With this class, banks are forced to accept that the loan will never be repaid, and must record a loss on their balance sheet. The entire amount of the loan must be written off completely. How Nonperforming Assets (NPA) Work Nonperforming assets are listed on the balance sheet of a bank or other financial institution. After a prolonged period of non-payment, the lender will force the borrower to liquidate any assets that were pledged as part of the debt agreement. If no assets were pledged, the lender might write-off the asset as a bad debt and then sell it at a discount to a collection agency.In most cases, debt is classified as nonperforming when loan payments have not been made for a period of 90 days. While 90 days is the standard, the amount of elapsed time may be shorter or longer depending on the terms and conditions of each individual loan. A loan can be classified as a nonperforming asset at any point during the term of the loan or at its maturity. For example, assume a company with a $10 million loan with interest-only payments of $50,000 per month fails to make a payment for three consecutive months. The lender may be required to categorize the loan as nonperforming to meet regulatory requirements. Alternatively, a loan can also be categorized as nonperforming if a company makes all interest payments but cannot repay the principal at maturity.Carrying nonperforming assets, also referred to as nonperforming loans, on the balance sheet places significant burden on the lender. The nonpayment of interest or principal reduces the lender’s cash flow, which can disrupt budgets and decrease earnings. Loan loss provisions, which are set aside to cover potential losses, reduce the capital available to provide subsequent loans to other borrowers. Once the actual losses from defaulted loans are determined, they are written off against earnings. Carrying a significant amount of NPAs on the balance sheet over a period of time is an indicator to regulators that the financial fitness of the bank is at risk. Types of Nonperforming Assets (NPA) Overdraft and cash credit (OD/CC) accounts left out-of-order for more than 90 days Agricultural advances whose interest or principal installment payments remain overdue for two crop/harvest seasons for short duration crops or overdue one crop season for long duration crops Expected payment on any other type of account is overdue for more than 90 days FAQs What is Non Performing Assets? Non-Performing Assets (NPAs) are loans or advances made by banks or financial institutions that have ceased to generate income for the lender due to the borrower’s failure to repay the loan principal and interest for 90 days or longer. How Do Banks Deal With NPA? Banks deal with non-performing assets (NPAs) using various methods, including litigation recovery, loan restructuring, and selling NPAs to asset reconstruction businesses. The Reserve Bank of India has also implemented procedures such as the Insolvency and Bankruptcy Code (IBC) to simplify the settlement of stressed assets. What Happens to Non-Performing Assets? When a loan account is categorized as an NPA, the bank or financial institution takes different steps to recover the funds; however, if the bank is unable to collect the funds, the NPA amount is written off as a loss, and the bank is required to put aside provisions to cover the loss.  Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice | Psara License | FCRA Online

The Internal Rate of Return (IRR) is the discount rate that makes the net present value (NPV) of a project zero. In other words, it is the expected compound annual rate of return that will be earned on a project or investment. What Is IRR? IRR, or internal rate of return, is a metric used in financial analysis to estimate the profitability of potential investments. IRR is a discount rate that makes the net present value (NPV) of all cash flows equal to zero in a discounted cash flow analysis. IRR calculations rely on the same formula as NPV does. Keep in mind that IRR is not the actual dollar value of the project. It is the annual return that makes the NPV equal to zero.Generally speaking, the higher an internal rate of return, the more desirable an investment is to undertake. IRR is uniform for investments of varying types and, as such, can be used to rank multiple prospective investments or projects on a relatively even basis. In general, when comparing investment options with other similar characteristics, the investment with the highest IRR probably would be considered the best. The Formula for IRR The IRR formula is as follows:  Calculating the internal rate of return can be done in three ways: Using the IRR or XIRR function in Excel or other spreadsheet programs (see example below) Using a financial calculator Using an iterative process where the analyst tries different discount rates until the NPV equals zero (Goal Seek in Excel can be used to do this) What Is IRR Used For? In capital planning, one popular scenario for IRR is comparing the profitability of establishing new operations with that of expanding existing operations. For example, an energy company may use IRR in deciding whether to open a new power plant or to renovate and expand an existing power plant. While both projects could add value to the company, one will likely be the more logical decision as prescribed by IRR. Note that because IRR does not account for changing discount rates, it’s often not adequate for longer-term projects with discount rates that are expected to vary.IRR is also useful for corporations in evaluating stock buyback programs. Clearly, if a company allocates substantial funding to repurchasing its shares, then the analysis must show that the company’s own stock is a better investment—that is, has a higher IRR—than any other use of the funds, such as creating new outlets or acquiring other companies. Individuals can also use IRR when making financial decisions—for instance, when evaluating different insurance policies using their premiums and death benefits. The consensus is that policies that have the same premiums and a high IRR are much more desirable. Note that life insurance has a very high IRR in the early years of the policy—often more than 1,000%. It then decreases over time. This IRR is very high during the early days of the policy because if you made only one monthly premium payment and then suddenly died, your beneficiaries would still get a lump sum benefit.   Another common use of IRR is in analyzing investment returns. In most cases, the advertised return will assume that any interest payments or cash dividends are reinvested back into the investment. What if you don’t want to reinvest dividends but need them as income when paid? And if dividends are not assumed to be reinvested, are they paid out, or are they left in cash? What is the assumed return on the cash? IRR and other assumptions are particularly important on instruments like annuities, where the cash flows can become complex. Finally, IRR is a calculation used for an investment’s money-weighted rate of return (MWRR). The MWRR helps determine the rate of return needed to start with the initial investment amount factoring in all of the changes to cash flows during the investment period, including sales proceeds. Using IRR With WACC Most IRR analyses will be done in conjunction with a view of a company’s weighted average cost of capital (WACC) and NPV calculations. IRR is typically a relatively high value, which allows it to arrive at an NPV of zero. Most companies will require an IRR calculation to be above the WACC. WACC is a measure of a firm’s cost of capital in which each category of capital is proportionately weighted. All sources of capital, including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC calculation.In theory, any project with an IRR greater than its cost of capital should be profitable. In planning investment projects, firms will often establish a required rate of return (RRR) to determine the minimum acceptable return percentage that the investment in question must earn to be worthwhile. The RRR will be higher than the WACC.Any project with an IRR that exceeds the RRR will likely be deemed profitable, although companies will not necessarily pursue a project on this basis alone. Rather, they will likely pursue projects with the highest difference between IRR and RRR, as these will likely be the most profitable. Limitations of IRR IRR is generally ideal for use in analyzing capital budgeting projects. It can be misconstrued or misinterpreted if used outside of appropriate scenarios. In the case of positive cash flows followed by negative ones and then by positive ones, the IRR may have multiple values. Moreover, if all cash flows have the same sign (i.e., the project never turns a profit), then no discount rate will produce a zero NPV.Within its realm of uses, IRR is a very popular metric for estimating a project’s annual return; however, it is not necessarily intended to be used alone. IRR is typically a relatively high value, which allows it to arrive at an NPV of zero. The IRR itself is only a single estimated figure that provides an annual return value based on estimates. Since estimates of IRR and NPV can differ drastically from actual results, most analysts will choose to combine IRR analysis with scenario analysis. Scenarios can show different possible NPVs based on varying assumptions.As mentioned, most companies do not rely on IRR and NPV analyses alone. These calculations are usually also studied in conjunction with a company’s WACC and an RRR, which provides for

Point of sale (POS) refers to the payment counter in a retail store where customers pay for their purchased goods. When a customer picks out a product and wants to check them out, a culmination of hardware and software helps businesses make those sales. It helps customer management be easier and the time taken is the bare minimum What Is a POS? A POS or point of sale is a device that is used to process transactions by retail customers. A cash register is a type of POS. The cash register has largely been replaced by electronic POS terminals that can be used to process credit cards and debit cards as well as cash. A POS may be a physical device in a brick-and-mortar store or a checkout point in a web-based store.The software for POS devices is growing increasingly elaborate, with features that allow retailers to monitor inventory and buying trends, track pricing accuracy, and collect marketing data, Points of sale (POSs) are an important focus for marketers because consumers tend to make purchasing decisions on high-margin products or services at these strategic locations. Traditionally, businesses set up POSs near store exits to increase the rate of impulse purchases as customers leave. However, varying POS locations can give retailers more opportunities to micro-market specific product categories and influence consumers at earlier points in the sales funnel. For example, department stores often have POSs for individual product groups, such as appliances, electronics, and apparel. The designated staff can actively promote products and guide consumers through purchase decisions rather than simply processing transactions. Similarly, the format of a POS can affect profit or buying behavior, as this gives consumers flexible options for making a purchase. Features A business generates data on sales, returns, regular customers, high-selling products, seasonal preferences, low-selling products, reorder points, low inventory, top employees, returning customers, etc. An efficient POS system will help compile this data to help the management make crucial decisions regarding inventory, marketing, employees, and customer relationship. The POS database and software integrate all the data of a business. For example, a brand with its stores across different cities can compile all the data from its stores and warehouses using an efficient POS system or software. The POS terminal comprises a server, a desktop, a credit/debit card swiper, a drawer for cash, and a printer for bills. One may choose a barcode scanner or other specific customizations based on the business type. The POS installation company sets up your system, including all hardware and software. The staff usually undergoes training to be able to handle the system. POS transactions occur in retail stores, restaurants, hospitals, hotels, online shopping, etc. There are different POS systems such as counter POS, mobile POS, online POS, tablet POS, etc. Depending on whether one runs an online store, has a physical store, or both, one can decide upon the type of POS system. A mobile or tablet POS will reflect that one can pay for purchase anywhere in the store or the restaurant without the need for wires. This portability is the result of a cloud-based POS system. The cloud-based POS systems are advantageous over other POS systems as they process and store sales data online instead of locally on a computer server. They are often referred to as point-of-sale applications (apps) since they often find they’re used on mobile devices. Alternately, it is mentioned as an electronic point of sale (EPOS). The market is full of different POS systems enabled with varying features. Apart from the basics of sales and inventory records, many are designed to help with report generation, customer relationship management, loyalty program, automation, reorder point, employee performance data, cost-cutting, and profit generation. It is imperative to find one that suits your business. Although, experts have warned businesses and customers of POS fraud as card transactions are a magnet for cyber-attacks. In 2019, VISA discussed how malware tried to gather card details from a gas station POS system. As such, merchants must ensure a system that ensures data safety. How does the POS System Work? Point of sale systems enable a business to accept payments from customers and track sales. It keeps track of different data related to a business. Think of a payment checkout counter at a store. The counter displays a point of sale system and terminal. The POS system refers to the place where the customer makes the payment. The system allows processing payment transactions, recording transactions, inventory updates, and various other things depending on the POS software features. A POS terminal is usually a desktop, POS software, cash register, scanner, debit/credit card machine, and printer to facilitate a transaction. There are various layers to the concept of POS; let us start by taking a simple example. A customer decides to buy a product or service in a physical store. A sales associate now initiates the billing. The associate uses a barcode scanner to know the product’s price. When customers have completed adding items to their cart and click the checkout icon during online shopping, this step happens. The item’s price, inclusive of the sales tax, is calculated by the POS system. And then, the inventory count is updated, indicating that the item has been sold. After that, the customer pays using a means of payment. Apart from cash, a customer can pay using a credit card, tap card, or debit card. Some stores offer payments using PayPal, loyalty points, and gift cards. Once the customer’s bank authorizes the transaction, the store receives the money. With this, the POS transaction gets completed. A digital or a printed receipt arrives as the payment goes through. After that, the customer is free to leave with the purchases. Benefits of POS Systems Electronic POS software systems streamline retail operations by automating the transaction process and tracking important sales data. Basic systems include an electronic cash register and software to coordinate data collected from daily purchases. Retailers can increase functionality by installing a network of data-capture devices, including card readers and barcode scanners.Depending on