learn

Ad valorem tax is a type of tax that is levied based on the assessed value of an item or property rather than a fixed amount. The term Ad valorem tax derives its meaning from the Latin word “ad valorem,” which means “according to value.” In other words, the tax is calculated as a percentage of the value of the item or property being taxed. What Is an Ad Valorem Tax? An ad valorem tax is calculated based on the value of an item of property such as real estate or personal property. The Latin phrase ad valorem means “according to value.” Ad valorem taxes are based on the assessed value of the item being taxed. The most common ad valorem taxes are property taxes levied on real estate but they’re also assessed as a component of car registration. They may extend to tax applications such as import duty taxes on goods from abroad. What are the Types of Ad Valorem Tax? Property Tax: Property tax is the tax levied on the commercial and personal properties owned by an individual. Every time an individual purchases a property, the state and municipal governments levy tax on the property. Sales Tax: This type of tax is levied on every transaction. Sales tax is applicable when anyone buys a product or service. It is expressed in the form of a percentage of the value of the product/service. Value Added Tax (VAT): VAT is the tax charged by the authorities on the services that help add value to the product/service. VAT is charged on the extra value added to the service or product. What are the Benefits of Ad Valorem Tax? Revenue Generation: Ad valorem taxes generate revenue based on the value of taxable items or properties. This means that as the value of these items or properties increases, tax revenue also increases proportionally. This can help governments collect more revenue. Fairness and Equity: Ad valorem taxes are fairer because they are based on the value of assets. Wealthier individuals or businesses generally pay more in taxes because they own more valuable assets or make larger purchases, promoting an equitable tax system. Encouraging Efficient Use of Resources: Property owners may consider the tax implications when using or developing their properties, potentially leading to more efficient land and resource use. For example, higher property taxes on undeveloped land might incentivize owners to put the land to productive use. Simplicity: In some cases, ad valorem taxes can be easier to administer and calculate compared to other forms of taxation, such as income tax. The tax rate is applied directly to the assessed value, making it relatively straightforward to determine the tax liability. Stability: Ad valorem taxes provide a relatively stable source of revenue for governments because they are tied to the value of assets or transactions. Even during economic downturns, when income tax revenue may decline, property values and consumption often remain more stable. Self-Adjusting: The tax base for ad valorem taxes can naturally adjust over time with changes in the economy and inflation. As asset values increase or decrease, the tax revenue adjusts accordingly without the need for frequent legislative changes. Transparency: Ad valorem taxes are usually transparent, as taxpayers can see precisely how their tax liability is calculated based on the value of the item or property. This transparency can foster greater trust in the tax system How does Ad Valorem Tax Work? The term Ad Valorem is a Latin word that literally means according to value. This type of tax is charged as per the assessed value of the property. This tax forms a major source of revenue for the Central and State governments. The assessors chosen by the concerned authorities determine the value of the property and decide the tax rate applicable for further tax calculation. FAQs How is Ad Valorem Tax calculated? To calculate ad valorem tax, you multiply the assessed value of the item by the tax rate (expressed as a percentage). For example: Tax Amount=Assessed Value×Tax Ratetext{Tax Amount} = text{Assessed Value} times text{Tax Rate}Tax Amount=Assessed Value×Tax Rate How does Ad Valorem Tax differ from specific tax? Ad valorem tax is based on the value of the property or goods, while specific tax is a fixed amount per unit of measurement (e.g., a set dollar amount per gallon of fuel or per pack of cigarettes), regardless of the item’s value.

A bank guarantee refers to a promise provided by a bank or any other financial institution that if a certain borrower fails to pay a loan, then the bank or the financial institution will take care of the losses. The bank will assure the original creditor through this bank guarantee that if the borrower does not meet his or her liabilities, then the bank will take care of them. Bank Guarantee Bank Guarantee a promise made by the bank to any third person to undertake the payment risk on behalf of its customers. Bank guarantee is given on a contractual obligation between the bank and its customers. Such guarantees are widely used in business and personal transactions to protect the third party from financial losses. This guarantee helps a company to purchase things that it ordinarily could not, thus helping business grow and promoting entrepreneurial activity. For Example- Xyz company is a newly established textile factory that wants to purchase Rs.1 crore fabric raw materials. The raw material vendor requires Xyz company to provide a bank guarantee to cover payments before they ship the raw material to Xyz company. Xyz company requests and obtains a guarantee from the lending institution keeping its cash accounts. The bank essentially cosigns the purchase contract with the vendor. If Xyz company defaults in payment, the vendor can recover it from the bank. A bank guarantee is a contract between 3 different parties and they include The applicant (the party that requests a bank guarantee from the bank and borrows from a creditor) The beneficiary (the party that receives a partial guarantee) The bank (the party that agrees to sign and assures payment in case the applicant fails to repay the loan) Bank guarantees are very commonly utilised among business entities. With the help of a bank guarantee, the debtor or borrower or customer will be able to purchase equipment, machinery, raw materials, acquire additional funds, etc. for commercial purposes. Bank guarantees help businesses as creditors will get a proper reassurance that the loan amount will be repaid by the bank if the business is unable to repay the loan entirely on time. When a bank signs a bank guarantee, it promises to pay any amount according to the request made by the borrower. Hence, signing a bank guarantee implies a high risk for banks. Uses of Bank Guarantee When large companies purchases from small vendors, they generally require the vendors to provide guarantee certificate from banks before providing such business opportunities. Predominantly used in the purchase and sale of goods on credit basis, where the seller is assured of payment from the bank in case of default by the buyer. Helps in certifying the credibility of individuals, which in turn, enables them in obtaining loans and also assists in business activities. Though there are lots of uses from a bank guarantee for the applicant, the bank should process the same only after ensuring the financial stability of the applicant/business. The risk involved in providing such a guarantee must be analysed thoroughly by the bank. Kinds of Bank Guarantee Deferred payment guarantee: This refers to a bank guarantee or a payment guarantee that is offered to the exporter for a deferred period or for a certain time period. When a buyer purchases capital goods or machinery, the seller will give credit to the buyer when the buyer’s bank gives a guarantee that it will pay the unsettled dues of the buyer to the seller. Under this type of guarantee, payment will be made in installments by the bank for failure in supplying raw materials, machinery or equipment. Financial guarantee: A financial bank guarantee assures that money will be repaid if the party does not complete a particular project or operation entirely. According to the financial guarantee agreement, when there is a delay in the completion of the project, the bank will make the payment. Advance payment guarantee: Under this kind of guarantee, an advance payment will be made to the seller. There will also be a guarantee that if the seller fails to deliver the service or product accurately or promptly, the buyer will receive a refund of the payment. Foreign bank guarantee: A foreign bank guarantee is provided by a bank on behalf of a borrower. This will be offered on behalf of the foreign beneficiary or creditor. Performance guarantee: Under a performance guarantee, compensation of money will be made by the bank when there is any delay in delivering the performance or operation. Payment will have to be made even if the service is delivered inadequately. Bid bond guarantee: Under this type of guarantee, there will be a supply bidding procedure. This will be conducted by the contractor for the owner of an infrastructure or industrial project or any kind of operation. The contractor of the project will guarantee that the best bidder or the highest bidder will have the capability and authority to implement a project as per his or her preferences. The bid bond will be given to the owner of the project as a proof of guarantee and the bond will imply that the project will have to be devised according to the bid contract. Advantages and Disadvantages of Bank Guarantees Bank guarantee has its own advantages and disadvantages. The advantages are: Bank guarantee reduces the financial risk involved in the business transaction. Due to low risk, it encourages the seller/beneficiaries to expand their business on a credit basis. Banks generally charge low fees for guarantees, which is beneficial to even small-scale business. When banks analyse and certify the financial stability of the business, its credibility increases and this, in turn, increase business opportunities. Mostly, the guarantee requires fewer documents and is processed quickly by the banks (if all the documents are submitted). On the flip side, there are some disadvantages such as: Sometimes, the banks are so rigid in assessing the financial position of the business. This makes the process complicated and time-consuming. With the strict assessment of banks, it is very difficult to

The right business structure will allow your enterprise to operate efficiently and meet your required business targets. In India, every business must register themselves as part of the mandatory legal compliance. A Private Limited Company is the most common type of Company Registration in India, which is governed by the Companies Act 2013 under the Ministry of Corporate Affairs (MCA). It is mandatory to have a minimum of two directors and two shareholders. These directors and shareholders can either be the same or different individuals, with at least one director being an Indian Resident. Private Limited Company is a preferred choice for startups and businesses eyeing growth & expansion due to its flexibility in ownership and efficient management. What are the types of business structures in India? Proprietorship Firm- A proprietorship firm can be established and managed by a single person. Only one person runs the business, and it is ideal for small business owners with low investments. The entire control of the business will be with the sole proprietor, who can enjoy the profits, but he/she will also have to bear all the business losses.   Partnership Firm- Two or more persons enter into a partnership and establish a partnership firm. The partners of the firm equally share the profits derived from the business. They will also have to bear the losses of the firm. The partnership firm is regulated under the Partnership Act, 1932. It is ideal for small businesses run by two or more persons with low investment. One Person Company (OPC)-Recently introduced in the year 2013, an OPC is the best way to start a company if there exists only one promoter or owner. It enables a sole proprietor to carry on his work and still be part of the corporate framework. It is registered under the Companies Act, 2013. It is ideal for small businesses who want to raise capital. Limited Liability Partnership (LLP)- An LLP is a separate legal entity where the liabilities of partners are only limited only to their agreed contribution. An LLP is established under the Limited Liability Act, 2008 with the Registrar of Companies (ROC). It has features of both the partnership firm and the company. It is ideal for businesses established by partners who want limited liability. Private Limited Company – A Private Limited Company in the eyes of the law is regarded as a separate legal entity from its founders. The directors of the company look after the affairs of the company. The shareholders (stakeholders) invest in the company and are part owners. A PLC is registered under the Companies Act, 2013 with the ROC. It is ideal for medium to big businesses who wish to raise capital. Public Limited Company- A Public Limited Company is a company established by seven or more members under the Companies Act, 2013. The directors are responsible for the affairs of the company. It has a separate legal existence and the liability of its members are limited to the shares they hold. It is ideal for medium to big businesses who wish to raise capital from the public. Why is it important to choose the right business structure? It is important to choose your business structure carefully as your Income Tax Returns will depend on it. While registering your enterprise, remember that each business structure has different levels of compliances that need to be met with. For example, a sole proprietor has to file only an income tax return. However, a company has to file an income tax return as well as annual returns with the Registrar of Companies. A company’s books of accounts are to be mandatorily audited every year. Abiding by these legal compliances requires spending money on auditors, accountants and tax filing experts. Therefore, it is important to select the right business structure when thinking of company registration. An entrepreneur must have a clear idea of the kind of legal compliances he/she is willing to deal with. Comparative List of Different Types of Business Structures in India Company type Ideal for Tax advantages Legal compliances Limited Liability Partnership Service-oriented businesses or businesses that have low investment needs Tax holiday for first 3 years under Startup India and benefit on depreciation Business tax returns and ROC returns to be filed One Person Company Sole owners looking to limit their liability Tax holiday for first 3 years under Startup India, higher benefits on depreciation and no tax on dividend distribution Business tax returns and ROC returns to be filed Private Limited Company Businesses that have a high turnover Tax holiday for first 3 years under Startup India and higher benefits on depreciation Business tax returns to be filed, ROC returns to be filed and mandatory audit to be done Public Limited Company Businesses with  a high turnover Tax holiday for first 3 years under Startup India Business tax returns to be filed, ROC returns to be filed and mandatory audit to be done What is a private limited company? In India, a private limited company is a privately held entity with limited liability, and it ranks among the nation’s most favored business structures. This popularity is primarily attributed to its numerous advantages, including limited liability protection, ease of formation and maintenance, and its status as a distinct legal entity. This encourages a prospective businessman to start company. A private limited company enjoys legal separation from its owners and necessitates a minimum of two members and two directors for its operation. Here are the key characteristics of a private limited company in India: Limited Liability Protection: Shareholders of a private limited company are liable only to the extent of their shareholding. Their assets remain safeguarded, even in cases of financial setbacks incurred by the company. Separate Legal Entity: A private company possesses its own distinct legal identity. It can own property, engage in contracts, and initiate or defend legal actions under its unique name. Minimum Number of Shareholders: A private company must have a minimum of two shareholders and cannot exceed 200 shareholders. Minimum Number of Directors: A private limited company necessitates a minimum of two directors. At least one of

Gaushala registration in Rajasthan is a formal process managed by the Directorate of Gopalan (Department of Cow Protection), which ensures that the shelters for cows (Gaushalas) meet the necessary standards for their care and protection. Eligibility Criteria Organization Type: The applicant must be a registered entity like a trust, society, or non-profit organization that works for the welfare and protection of cows. Land: The Gaushala must have sufficient land to accommodate and take care of the cows. This could be owned by the organization or leased. Facilities: The shelter should have facilities for feeding, water supply, and medical care for the cows. Proper hygiene and management practices must be followed. Documents Required for Registration Society/Trust Registration Certificate: Proof that the Gaushala is run by a registered society or trust. Land Documents: Proof of ownership or lease agreement for the land where the Gaushala is situated. This is important to show that there is space available for cow protection and care. List of Cattle: A detailed list of the number of cows currently housed in the Gaushala. Identity Proof: Government-issued identity proof (Aadhaar, PAN, etc.) of the authorized person applying for the registration. Bank Account Details: The organization’s bank account information, which will be used for receiving any financial assistance or subsidies from the government. Photographs: Recent photographs of the Gaushala showing the land, infrastructure, and cows being sheltered. Application Procedure for Gaushala Registration Step 1: Obtain the Registration Form You can visit the Directorate of Gopalan’s office or their official website to get the Gaushala registration form. Alternatively, the form may be available for download on the government portal. Step 2: Fill in the Application Form The application form will ask for details like the name of the Gaushala, address, contact information, details about the society/trust, land details, number of cows, and more. Ensure that all the information provided is accurate and complete. Step 3: Attach Required Documents Along with the completed form, you will need to submit the documents mentioned above, including registration proof, land documents, identity proof, bank details, and cattle information. Step 4: Submit the Application You can either submit the form online through the Directorate of Gopalan portal or submit it physically at the office of the Directorate of Gopalan in Rajasthan. If applying online, ensure that you upload all scanned documents. Verification and Inspection Process The officials from the Directorate of Gopalan will conduct a physical inspection of the Gaushala premises to verify the information provided in the application. They will check the land area, the number of cows, feeding and water facilities, medical care arrangements, hygiene standards, and the general condition of the cows. Based on their findings, a report will be generated, which will determine the approval of the registration. Benefits of Gaushala Registration Government Support: Registered Gaushalas can receive subsidies for cattle feed, medicines, and veterinary care. Grants and Schemes: They become eligible for government schemes and grants aimed at improving cow protection services. Recognition: Official recognition of the Gaushala provides legitimacy and trust, which helps in fundraising and securing donations from the public. Additional Guidelines and Information The government has strict policies regarding the management of Gaushalas to prevent the exploitation or mistreatment of cows. The Gaushala must adhere to all rules and guidelines laid down by the Directorate of Gopalan, including proper vaccination, medical care, and nutritional support for the cattle. Failure to comply with the regulations may result in penalties or cancellation of the registration. FAQs What is a Gaushala? A Gaushala is a shelter or sanctuary established for the care and protection of cows, particularly stray, abandoned, or non-productive ones. Gaushalas aim to provide cows with proper care, food, and shelter in a safe environment. Why is Gaushala registration required? Gaushala registration is important to gain recognition from the government and to be eligible for various benefits, such as grants, subsidies, and assistance for running the shelter. Registration also ensures transparency and proper management of the Gaushala.

The Maternity Benefit Act, 1961 is a legislation that protects the employment of women at the time of her maternity. It entitles women employees of ‘maternity benefit’ which is fully paid wages during the absence from work and to take care of her child. The Act is applicable to the establishments employing 10 or more employees. The Maternity Benefit Act, 1961 has been amended through the Maternity (Amendment) Bill 2017 which was passed in the Lok Sabha on March 09, 2017. Thereafter, the said Bill was passed in Rajya Sabha on August 11, 2016. Further, it received assent from the President of India on March 27, 2017. The provisions of the Maternity Benefit (Amendment) Act, 2017 (“Amendment Act”) came into effect on April 1, 2017, and the provision with regard to crèche facility (Section 111 A) came into effect with effect from July 1, 2017. An overview of the Maternity Benefit Act, 1961 The Maternity Benefits Act of 1961 was passed by the Union of India on December 12, 1961, following the country’s independence. The statute included conditional benefits for pregnancy, childbirth, and complications related to those, in conformity with the then-current international standards. The Act covered a lot of areas with meticulous precision and care was paid to many dimensions of considerations influencing maternity benefits, despite the fact that India was still a developing nation and in its 14th year of independence.The Maternity Benefit Act, 1961 governs maternity benefits in India. Every organisation with ten (10) or more employees is subject to the Act. According to the Act, maternity benefits are available to any woman who has worked for an organisation for at least eighty (80) days.The Maternity Benefit Act, 1961 aims to provide all the facilities to a working woman in a dignified manner, so that she may overcome the “state of motherhood honourably, peacefully, undeterred by the fear of being victimised for forced absence during the pre or postnatal period”, as was observed by the Supreme Court in the case of Municipal Corporation of Delhi v. Female Workers (Muster Roll) (2000).According to the Maternity Benefit Act of 1961, the employer must pay the beneficiary a medical bonus of up to 1,000 rupees if there is no prenatal confinement and no paid postpartum care. The Central Government has raised the medical bonus to 25,000 rupees. If the woman experiences a miscarriage or any other pregnancy-related complications, she is entitled to paid leave. A 30-day extra leave with pay is offered to the beneficiary upon verification of any ailment related to pregnancy. After reporting back to work, the mother is entitled to a break and is allowed two breaks to feed the child until they are 15 months old. The “facility of a crèche” has also been mandated to be available in convenient locations in every firm with fifty or more female employees. Women will be allowed to leave with pay for their tubectomy operation based on the proof provided.According to the Act, it is against the law for an employer to fire or dismiss a pregnant woman while she is away or on account of her pregnancy, or to give notice of a termination on a day when the notice will expire while she is away, or to change any of the terms of her employment to their detriment. According to the law, light work allotted to pregnant women and breaks for child feeding are not grounds for wage deductions.The statute is applicable to all businesses, including those that belonged to the government and those that employed people to do equestrian, acrobatic, and other acts for display in factories, mines, and plantations. Additionally, it applied to any store or business with ten or more employees. The inclusion of provisions for industrial, agricultural, and commercial establishments marked the act as a significant improvement over the rudimentary one from 1928. The Act covers all maternity benefits in the following sections: Section 4: Employment of, or work of, women prohibited during certain periods. Section 5: Right to payment of maternity benefits. Section 7: Payment of Maternity Benefits in case of death of a woman. Section 8: Payment of Medical Bonus. Section 9: Leave for miscarriage, etc. Section 10: Leave for illness arising out of pregnancy, delivery, premature birth of a child, miscarriage, medical termination of pregnancy or tubectomy operation. Section 11: Nursing Breaks. Section 12: Dismissal during absence of pregnancy. Section 13: No deduction of wages in certain cases. Section 18: Forfeiture of maternity benefits. Benefits covered under the Maternity Benefit Act of 1961 The Act requires the employee to refrain from hiring any known women in any place for the six weeks immediately following the day of the employee’s delivery, miscarriage, or medical termination of pregnancy. During the six weeks immediately following the day of delivery or miscarriage, no woman shall work in any company. The employer shall not require such women to perform any work unless requested to do so by the employed lady. Which negatively affects her pregnancy or the foetus’s development normally, Any work that could result in her miscarrying or otherwise have a negative impact on her health. Every woman has the right to maternity benefits, and her employer is responsible for paying them at the amount of the average daily income for the time she was actually away from work, i.e.,: The time leading up to the day of her delivery. On the day she gave birth and for the period immediately afterwards. Features of the Maternity Benefit Act, 1961 Duration of leave: A woman is entitled to twelve weeks of maternity leave under the terms of the Act, not more than six weeks of which may come before the due date. The ILO guideline at the time took this into account. Job protection: According to the guidelines of the 1961 Act, it has been ruled unlawful for an employer to fire or let go of a woman at any time during or because of her absence. However, the employer may notify the employee in writing if the dismissal or discharge is the result of serious wrongdoing. Remuneration during leave: Women who meet the requirements for

District Industry Center (DIC) under the Directorate of Industries and Commerce offers a subsidy loan scheme for young professionals under the guidance of the Ministry of Social Justice and Empowerment. Established in 1978, District Industries Centers’ program was initiated by the Central Government to promote tiny, cottage, village, and Small Scale Industries (SSIs) in smaller towns and their particular areas to make them available with all the basic needs, services, and facilities. DIC’s primary focus is to generate employment in rural regions of India. District Industries Centers are managed and operated at the district level to provide all the necessary support services to entrepreneurs or first-time business owners to start their own MSMEs. DICs also promote the Registration and Development of Industrial Cooperatives. Eligible Entities People belonging to scheduled castes, safai karamcharis families, and other backward classes (OBCs) Additional entities include physically disabled young professionals, such as engineers, doctors, pathologists, chartered accountants, advocates, physiotherapists, architects, pragmatists, etc. Objectives of DIC To spot the new and potential entrepreneurs and render assistance for them to kick start their ventures. To extend financial and organisational support to strengthen the rural and cottage industries. To improve the efforts of industrialisation in all rural areas. Generate more employment opportunities for the people. To centralise all the procedures required to start ventures by the entrepreneurs anew and reduce their time and efforts obligatory to acquire permissions, licenses, registrations, incentives etc. To ensure that all the benefits and schemes offered by the Central Government reach the entrepreneurs appropriately. To reduce the industrial and economic imbalance in the country and obtain its equality in every district. To strengthen the rural industrialisation and enhance the development of handicrafts. To promote export and marketing activities in the Districts through Export Guidance Cell available in the DICs. Provide financial assistance to the Industrial Co-operative Societies through the TAICO and other financial institutions. To endorse awards to MSMEs and artisans offered by the State and Central Government. Administration & Monitoring of DIC There are currently 31 DICs functioning in Tamil Nadu which is headed by the General Manager in the corresponding Districts. The Regional Joint Director supervises the functioning of the DICs in the Chennai District. The Project Manager, Manager (Credit), Manager (Economic Investigation), Manager (Village Administration) and an office Superintendent supports the General Manager in the functioning of the DICs. The Principal Secretary/Industries Commissioner & Director of Industries & Commerce is the responsible body to monitor the functioning and performance of the DICs. The committee assesses the periodical report submitted by the General Manager to appraise the performance and assist DICs in case of any difficulties in the implementation of schemes. Operations of the DIC Implementation of Quality Control Generating awareness among the consumers in Tamil Nadu regarding the usage of quality electrical products through the enforcement of Quality Control Order Centre for Domestic Electrical Appliances. The authorities ensure that the MSMEs manufacture, store, distribute and sell particular items without the recognition of Bureau of Indian Standard marking. Enforcement of Steel and Steel Products Orders Implementation of Steel and Steel Products (Quality Control) Order, 2012 to make sure that the quality products reach the consumers in the State. The order prohibits the manufacturers from the production, storage and distribution of Steel and Steel products that are not mentioned in the norms of the Bureau of Indian Standards. Restoration of non-operative MSMEs The Ministry of Micro, Small and Medium Enterprises, Government of India, formed ‘Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises’ and gazetted the notification on May 29, 2015. The Notification is to accelerate the funding process for the MSMEs and assist them in promoting and developing their business. The duo RBI and the Ministry of MSME brought in the modifications to make it compatible with the already functioning regulatory guidelines on ‘Income Recognition, Asset Classification and provisioning pertaining to Advances’ released to Banks by RBI. The Empowered Committee for MSMEs has been constituted to restore the non-functional MSMEs as per the framework of RBI. The State Level Rehabilitation Committee (SLRC) has been established under the Chairmanship of the Secretary of Government, MSME, to analyse the cause of sickness of MSMEs and provide advisory measures for their restoration. A quarterly review meeting is conducted to oversee the enforcement of the Rehabilitation of non-functional MSMEs in the State. Establishment of Micro Small Enterprises Facilitation Council As per the advise from the Ministry of MSME and Micro, Small and Medium Enterprises Development Act, 2006, the state governments can establish facilitation councils. Government of Tamil Nadu have established four Regional Micro Small Facilitation Council in the state. The Council which are located at Chennai, Tiruchirapalli, Madurai and Coimbatore aims at encouraging fast settlement of unpaid balances of the goods distributed to major industrial units. FAQs What is a District Industries Centre (DIC)? A District Industries Centre (DIC) is an institution set up by the government in each district to promote and facilitate the growth and development of small-scale and medium-sized enterprises (SMEs) and cottage industries. What are the main functions of DICs? Providing financial assistance and guidance to entrepreneurs. Facilitating the registration of small-scale industries. Offering information on various government schemes and incentives. Organizing training programs and workshops for skill

A Fixed Deposit (FD) Calculator calculates the FD maturity value and interest income based on principal amount, FD interest rates and tenure. Online FD calculators of some banks additionally allow users to calculate their FD interest income based on the interest payout options (monthly, quarterly, half-yearly, yearly and reinvestment). How can a Fixed Deposit calculator help you? Easy to use: Using an online FD interest calculator for FD maturity and interest computation is easy. Users are usually required to enter a few basic details such as the principal amount, FD tenure and compounding frequency (quarterly, half-yearly and annual compounding) in the online calculator to get results. Know the maturity amount: Before investing in an FD scheme, prospective depositors should know the expected amount in advance so as to determine whether the investment scheme will serve their investment goals at maturity or not. Accurate calculation: Using an online Fixed Deposit calculator for calculating FD interest amount and maturity amount saves depositors from complex calculations and eliminates the risk of error caused due to miscalculations. Make comparisons for FD selection: FD interest rates vary across banks and NBFCs/HFCs. Using an Fixed Deposit calculator can help depositors calculate and compare maturity amounts and interest income after considering FD features like tenure, interest rate, payout option and compounding frequency (quarterly, half-yearly, annual compounding) offered by various banks and NBFCs/HFCs. This would further help depositors choose the optimum FD scheme after considering the above-mentioned FD schemes. The formula to determine FD maturity amount The fixed deposit calculator for simple interest FD uses the following formula – M = P + (P x r x t/100), where – P is the principal amount that you deposit r is the rate of interest per annum t is the tenure in years For example, if you deposit a sum of Rs. 1,00,000 for 5 years at 10% interest, the equation reads – M= Rs. 1,00,000 + (1,00,000 x 10 x 5/100) = Rs. 1,50,000 For compound interest FD, the FD return calculator uses the following formula – M= P + P {(1 + i/100) t – 1}, where – P is the principal amount i is the rate of interest per period t is the tenure For example, if you take the same variables, the compound interest FD will accrue, M= Rs. 1,00,000 {(1 + 10/100) 5-1} Or, Rs. 1,61,051 FAQs What is an FD calculator? An FD calculator is an online tool that helps you estimate the maturity amount and interest earned on a fixed deposit based on the principal amount, interest rate, tenure, and compounding frequency. How does an FD calculator work? An FD calculator works by applying the formula for compound or simple interest. You input details such as the deposit amount, interest rate, tenure, and compounding frequency, and the calculator instantly shows the maturity amount and interest earned.

Section 194C states that any person responsible for paying any sum to the resident contractor or sub-contractors for carrying out any work (including the supply of labor), in pursuance of a contract between the contractor and the following: The Central Government or any State Government Any local authority Any Statutory Corporation Any corporation established by or under a Central, State or Provisional Act Any company Any co-operative society Any authority constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the needs for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages or for both Any society registered under the Society Registration Act, 1980 or under any such corresponding law to the Act in any Part of India Any trust Any university or deemed university Any firm Any Government of a foreign state or foreign enterprise or any association or body established outside India Any person who is an individual, HUF, AOP or BOI, who has total sales from the business or profession exceeds 1 crore or 50 lakhs during the previous Financial year respectivley. Section 194C Section 194C of Income Tax Act, 1961 deals with the TDS that has to be deducted from specific payments made to resident contractors and sub-contractors. Generally, individuals paying the contractors or sub-contractors are entrusted with the responsibilities of deducting TDS.  As a result, both parties involved, i.e. a contractor and a payer (party or person) need to be aware of this Section of ITA to avoid the implications of not deducting the same. Also, contractors should find out about Nil or lower TDS provisions to protect their earnings from eroding.  Who is a ‘Person’ Under Section 194C? Under Section 194C, a ‘person’ can be described as an individual who enters into a contract to get work done against payment. In general, a person can denote any of these following – A company Trusts Firms A university A local authorised body The Central Government or the State Government  A corporation A co-operative society A registered society Other than these, an authority that has been incorporated to fulfil household requirements can be termed as a person under Section 194C of Income Tax Act. What Constitutes as Work Under Section 194C? As per Section 194C, ‘work’ may constitute any of these following – Advertising Broadcasting and telecasting Catering Carriage of passengers or goods by any transportation mode besides railways. Supplying or manufacturing goods as per the specifications or requirements shared by the customer. It includes goods that have been manufactured using the materials purchased from customers or their associates. However, it does not include supply or manufacturing of goods made using materials that are not purchased from the customer or its associates.  Also, Section 194C TDS elaborates that any person paying a resident individual to carry out a specific work as per an agreement in exchange of payment is liable to deduct TDS. The Section also defines the contractor and states that it is an individual who agrees to become a part of a contract to carry out work or supply workforce. On the other hand, a sub-contractor is an individual who has decided to enter into a contract to either carry out a part or entire work. Also, a subcontractor may enter into a contract to supply the workforce to a given project.   Provisions for TDS Deductions Under Section 194C Concerned entities can deduct TDS under Section 194C of Income Tax Act only under these following conditions – The concerned contractor should be a resident Indian as per Section 6 of the Income Tax Act’s guidelines. Payments made to contractors must be carried out by individuals mentioned in the provision of Sec 194C.  Payment made should be to conduct any work that includes the supply of workforce. Concerned entities must pay as per the clauses mentioned in their contract that is agreeable to both the contractor and the payer. Notably, such a contract can either be in a written or oral format.  At any time, the amount of payment between the two parties should not exceed Rs. 30,000. When the advance payment made to a contractor is more than Rs. 30000 the payer has to make sure that TDS is deducted from the paid amount. If at any time the payment made by the payer to the contractor exceeds Rs. 75000 in a fiscal year, the payer must ensure that TDS is deducted from the payment. Other than these, if there is a situation where the contractor’s payment does not exceed Rs. 30000 at first but subsequently exceeds it, the payer has to deduct TDS accordingly. Notably, TDS is deducted when payment is credited to the payee’s account, in cash or by the issuance of a cheque or any other mode (whichever is earlier).  What is the meaning of contractor and subcontractor? Contractor means any person who enters into a contract with the central/state government; corporation; company; local authority, or a cooperative society to conduct any form of work (including the supply of manpower). Subcontractor means a person who engages in a contractual agreement with the contractor to perform, or provide labor for the execution of all or a portion of the work undertaken by the contractor under a contract with any of the authorities, or to supply labor, in whole or in part, as specified in the contractor’s agreement with any of the authorities mentioned in this section. Conducting either all or part of the work, which the contractor has agreed to complete Supplying manpower for all or part of the work taken by the contractor. What is the TDS rate that needs to be deducted u/s 194C? The rate of tax deduction u/s 194C is- – 1% (when payment is given to Individual/HUF) or – 2% (when given to others). Nil for payment made to transporters And the time of deduction is earlier of – The credit of income to the account of the payee (receiver) or – Actual payment (in cash, cheque,

Share or stock buyback is the practice where companies decide to purchase their own share from their existing shareholders either through a tender offer or through an open market. In such a situation, the price of concerning shares is higher than the prevailing market price. When companies decide to opt for the open market mechanism to repurchase shares, they can do so through the secondary market. On the other hand, those who choose the tender offer can avail the same by submitting or tendering a portion of their shares within a given period. Alternatively, it can be looked at as a means to reward existing shareholders other than offering timely dividends. What Is a Buyback? A buyback is a company’s purchase of its outstanding stock shares. Buybacks reduce the number of shares available on the open market. Companies usually buy back shares of their stock to increase the value of the remaining shares by reducing the supply of them. They may also buy back shares to prevent a major shareholder from taking a controlling stake in the company. Reasons for Share Buyback When There Is Excess Cash But Not Enough Projects To Invest In- Companies issue shares to raise equity capital and expand their venture, but often such a practice does not prove to be of much use. Similarly, keeping excess money at the bank is more like a truncated cash flow offering liquidity over the ideal requirement. Hence, instead of piling on cash reserves, companies with robust financial standing tend to make the best possible use of the cash available through a stock buyback. It is a Tax-effective Rewarding Option- When compared to dividends, share buybacks are more tax-effective for both companies and their shareholders. To elaborate, stock buybacks are subjected only to DDT, and the amount of money is deducted before distributing the earnings to the surrendering shareholders. On the other hand, dividends are taxed at 3 different levels. To Consolidate Hold Over the Company- Often when the number of shareholders of a company exceeds the manageable limit, it becomes challenging for the entity to reach a decision unanimously. Additionally, it may result in a power struggle within the company and among the shareholders with voting rights. To avoid or aggravate such situations, company board members often resort to share buybacks and plan to consolidate their hold over the company by increasing their voting rights. To Signal that the Stock Is Undervalued- When a company decides to buy back its shares, it may also indicate that the company considers its shares to be undervalued. Besides serving as a remedy for the situation, it also helps to project a positive picture of the company’s prospects and its current valuation. Other than these, stock buybacks may be prompted to improve companies’ overall valuation or to reward their existing shareholders. What Does Share Buyback Signify Investors often believe that the declaration of upcoming buyback of shares signifies that the company’s prospect is profitable. Further, it is believed to influence the overall stock price of the company. For instance, investors often believe that repurchasing shares from shareholders is a probable indication of the acquisition of big companies, the launch of new and improved product lines, etc., among others. All in all, it can be said that share buyback signifies that the stock valuation of a company is going to increase shortly. Notably, hinting at such positive prospects further helps to draw the attention of investors who wish to make the most of such favorable circumstances. Regardless, certain companies may resort to this practice when their stock valuation decreases. It is mainly done to prevent their capital from eroding further. As a means to identify the actual motive behind the stock buyback, investors should factor in a few things, like the current trends in stock prices and current earnings per share. Additionally, it will help them understand the implications of such a decision. Difference Between Dividend and Share Buyback Though share buybacks and dividends are different ways of rewarding a company’s shareholders, their significance is entirely different. To understand the concept better, individuals need to become familiar with the difference between the two and their underlying purpose. To elaborate, the pointers below highlight the differences between Dividend vs Share Buyback- Dividends are earnings that are allocated to all the existing shareholders of a company. On the other hand, existing shareholders who decide to surrender a portion of their shares would benefit from share buybacks. When a company decides to offer a dividend to its shareholders, the total number of shares does not undergo any change. Conversely, for share buybacks, the total number of outstanding shares undergoes a reduction. In terms of regularity and payout frequency, most companies prefer to reward their shareholders by offering dividends. Comparatively, the practice of stock buyback is new in India and a rare occurrence. Typically, companies tend to declare a reward in the form of a regular, annual, special, or one-time dividend. However, when it comes to share buyback meaning, there is no variation or type of it. Tax on Buyback of Shares – Both dividends and share buybacks are subject to different tax treatments. To elaborate, in the case of dividends, there is a three-way tax implication. First, it is paid out from the net profit of the company, wherein, the tax has already been paid. Next, a Dividend Distribution Tax or DDT of at least 15% has to be paid by the company declaring dividends during profit allocation. Lastly, shareholders with an accrued dividend of over Rs. 10 Lakh would be liable to pay Additional Dividend Tax at the rate of 10%. Previously, share buybacks were treated as capital gains and hence, were subjected to capital gain tax. However, post-July , investors are not required to pay such a tax on their earnings through a stock buyback. Conversely, the share buyback declaring companies are entitled to deduct 20% of the generated profits as DDT before disbursing them to the shareholders. The table below highlights the fundamental differences between dividends and stock buybacks – Point of Difference  Dividend  Share Buybacks Beneficiary Existing shareholders.

A private limited company is a privately held business entity held by private stakeholders. The liability arrangement, in this case, is that of a limited partnership, wherein the liability of a shareholder extends only up to the number of shares held by them. Private limited company definition as per Section 2 (68) of the Companies Act, 2013 is A Company having a minimum paid-up share capital as may be prescribed  1. Restricts the right to transfer its shares 2. Except in case of One Person Company, limits the number of its members to two hundred 3. Prohibits any invitation to the public to subscribe for any securities of the company. With the startup ecosystem booming across the country and more and more people looking to do something on their own, there is a need to be well-acquainted with different business registration types, i.e. sole proprietorship, limited liability company, and private limited company. Private Limited Company A private limited company, also known as Pvt Ltd company, is an organisation that limits the owners’ liability and restricts the ability to transfer its shares. The maximum number of shareholders is 50. A private limited company is registered under the Companies Act 2013. Private limited companies are popular among small and medium-sized businesses (SMEs) due to their flexibility, limited liability protection, and simplicity of ownership control. Private limited companies have an advantage over public companies in terms of long-term investment, keeping data confidential, operational independence, and flexibility. Characteristics of a Private Limited Company 1. Members The act mandates that a minimum of two shareholders are required to start such a company, while the limit for maximum number of members is fixed at 200.  2. Directors The Act mandates that a private limited company must have a minimum of two directors, while the maximum number of directors is 15. 3. Limited Liability Structure In a private limited company, the liability of each member or shareholder is limited. Therefore, even in the case of loss under any circumstances, the shareholders are liable to sell their assets for repayment. However, the personal and individual assets of the shareholders are not at risk. 4. Separate Legal Entity This is a separate legal entity and continues in perpetual succession. This means that even if all the members die, or the company becomes insolvent or bankrupt, the company still exists in the eyes of the law. The life of the company will be perpetual, not affected by the lives of its shareholders or members unless dissolved by way of resolution. 5. Minimum Paid-Up Capital A private limited company is required to have and maintain a minimum paid-up capital of ₹1 lakh. It could go higher, as prescribed by MCA from time to time. Types of Private Limited Company 1. Company Limited by Shares In these companies, the members’ liability is limited to the nominal share amount as mentioned in the Memorandum of Association. The shareholder cannot be held liable or asked to pay more than his/her share capital invested in the company. 2. Company Limited by Guarantee In a private limited company limited by guarantee, the members’ liability is limited to the amount of liability each member undertakes in the Memorandum of Association. Consequently, members of a Private Limited Company Limited by Guarantee can not be held accountable for a sum greater than the amount of guarantee performed by the member in the Association Memorandum. Furthermore, the shareholder’s guarantee in a company Limited by Guarantee can be sought only in the case of the company winding-up. The guarantee of the members of a Company Limited by Guarantee can not be withdrawn when the company is a going concern. 3. Unlimited Companies Unlimited corporations are those types of businesses that have no restrictions on their members’ liability. Each member’s liability extends over the entire amount of the company’s debts and liabilities. Hence, an unlimited company’s creditors have the right, if wound up, to impose the company’s debt and liabilities on shareholders. Private Limited Company Examples Google India Pvt. Ltd. A subsidiary of Google LLC Amazon Retail India Private Limited: An online shopping platform Microsoft Corporation (India) Private Limited: An information technology company with its registered office in Delhi. Requirements to Start a Private Limited Company Name of the company Choose an original and legally appropriate name for your firm. Verify that the chosen name fulfils the naming requirements. If the name is accepted, it will be reserved for 20 days, during which the company must be established legally. Shareholders and directors A private limited company requires two shareholders, at the very least. The early shareholders of a company are collectively known as promoters. The promoters have complete control over the ownership ratio. At least two directors are necessary. They must qualify under Section 164 of the Companies Act. Registered office address A registered Office is where a company keeps its official documents and accounts. Under Section 12 of the Companies Act of 2013, companies must always maintain a registered office. Digital signature certificates The application process for company incorporation is entirely digital. To complete it, fill out a form and submit it online with the relevant documents. A digital signature is the computerised version of a physical signature but is encrypted for further protection, making it irreversible and unique. FAQs What is Pvt Ltd full form? The full form of PVT LTD is a private limited company. Is a private company better than a public? Private companies have the upper hand over public companies concerning investment in long-term strategies, keeping the values of their shares and financial figures discreet, freedom, and flexibility of operations.