Are you a small business owner or running a multi-stories showroom in Gurugram? Who finds trouble managing bookkeeping? Then this article is for you.

In this business world, bookkeeping has become essential to maintain accurate financial records. One cannot underestimate its importance, particularly for people who own small businesses trying for success.

In this article, let’s discuss the basic concepts of bookkeeping that are specifically targeted toward Gurugram business organizations and show the importance of bookkeeping in Gurugram, particularly maintaining correct financial records using bookkeeping software.

Understanding Bookkeeping Basics

Bookkeeping is known to be the backbone of any business. It helps businesses stay organized, and make decisions while following rules.

Bookkeeping is like the financial diary of a business. It involves the process of recording and organizing all the financial transactions, like sales, purchases, Banking, and expenses. All these transactions are first of all recorded in the Journal also known as the books of Original entry and then a Ledger also known as Secondary Books is prepared for all the Accounts used in the Journal. The main objective of bookkeeping is to maintain accurate and up-to-date records of all monetary transactions related to business.

Importance of Bookkeeping

The main significance of bookkeeping is given below;

• It helps businesses to keep track of their financial record.
• Businesses can make better decisions about their future.
• It helps to know the profitability of the business.
• Accurate bookkeeping is required to meet legal and tax requirements.
• It makes sure that businesses are following the rules and helps them avoid any trouble with the higher authorities.

Difference between bookkeeping and accounting

Consider bookkeeping to be the foundation and accounting to be the whole picture. Here are some differences between bookkeeping and accounting:

Bookkeeping	Accounting
Bookkeeping focuses on recording transactions in books like Journal, Ledger, etc.	Accounting involves the evaluation and interpretation of financial data by preparing Final Accounts like Trading & Profit and Loss Accounts and Balance Sheet.
Bookkeeping is the Primary stage of Accounting.	Accounting starts where Bookkeeping ends.
Bookkeeping is done by Junior Staff	Accounting is done by senior staff.

Advantages of Bookkeeping

Accurate financial records play an important role in ensuring the overall success of a business.

Here are some detailed benefits that businesses obtain by maintaining accurate financial records:

• Ensuring Financial Health of Business:

A detailed evaluation of a company’s financial health is made possible by maintaining accurate financial records, which give an understanding of its financial situation, including income, costs, and profits.

• Helps in decision-making:

Proper records of accounting help business owners make good decisions. Proper records assist in taking the right choices especially when it comes to managing finances, investing in new potential consumers, or reducing expenditures.

• Compliance with Legal and Tax limitations:

Accurate financial records are essential for meeting legal and tax requirements. Businesses are required by tax authorities and regulatory agencies to keep proper records and submit reports on schedule.

Getting Started with Bookkeeping

For every company, the first step to financial success is to start bookkeeping. To understand it properly, let’s divide it into three main parts:

1. Setting up a bookkeeping system:

Creating a bookkeeping system involves creating an outline that can track your financial activities. To start with, organize your documents clearly, such as bills and receipts. Take into consideration using bookkeeping services, digital tools, or folders to safely protect your papers. To guarantee accuracy and success, it’s essential to establish an organized process for recording transactions.

2. Choosing the right bookkeeping method (cash basis vs. accrual basis):

 The two main methods to take into consideration while choosing bookkeeping are accrual basis and cash basis.

3. Choosing accounting software:

Choose a bookkeeping software such as Xero, Zoho Books, Tally, and QuickBooks that will help you with your bookkeeping process.

*For small Business Owner- Busywin, Bahi Khata, Tally, Quickbooks

*For large Business Owner- Xero, Quickbooks, ERP, etc

These applications include a variety of functions and good user interfaces that will help you to efficiently manage your finances.

Buy bookkeeping software that fulfills the demands of the business and your budget, keeping in mind essential features like customer support and flexibility.

When choosing software, consider features like invoicing, tracking of expenditures, bank statements, business requirements, and reporting capabilities.

Here are some tips for using bookkeeping software:

• Take the backup of the data on a timely basis.
• Learn how to use it with training resources.
• Keep your records and software updated.
• Use automation to save time.
• Prepare Timely Reconciliation to track the completeness of the transactions.

Bookkeeping Best Practices

Best practices for bookkeeping are like the rules to maintain proper financial records. Here is a detailed review of the three best bookkeeping practices:

• Updating records regularly:

Maintaining proper financial records requires checking all your transactions. This guarantees that you will have accurate financial records, giving you a complete understanding of your finances.

• Reconciling accounts:

To confirm the efficiency of accounts, data is compared with bank statements and other financial records. This process guarantees that your finances are correct and follow the law.

• Maintaining proper documentation:

Accurate financial records help in auditing, and maintaining them is important. Here documenting receipts and financial records includes organizing and protecting all of the payments.

Types of Financial Statements

Financial statements are like reports that tell us about a company’s finances. There are mainly three types of financial statements, they are as follows:

Income Statement: A company’s income statement shows the total amount of money it generated and spent throughout a particular period. It tells about the company’s profit/loss.

Balance Sheet: This shows the financial status of an organization like an image. It lists the property, the debts, and the remaining money owed to the owners of the business.

Cash Flow Statement: This shows the source and direction of the company’s financial assets. It helps see how well the company manages its cash.

Tips for Small Business Bookkeeping Success

Here are some tips for small businesses for their bookkeeping success:

• Be regular to update your financial records.
• Verify your finances to make sure that they are proper.
• Use bookkeeping software to make things easier.
• Keep all transaction bills together for easy access.
• Get help from consultancies regarding any issues in finances.

Conclusion

Maintaining Bookkeeping is important for all the small businesses at Gurugram. As it provides accurate financial records that help to make informed decisions.

At Rebus Consultancy, we’re here to support you by providing bookkeeping services and allow us to assist you in achieving growth as we simplify your bookkeeping process. Reach out for inquiries or assistance.

By being aware of these forms, individuals can boost their savings by avoiding unnecessary TDS deductions. The purpose of this blog is to make Forms 15G and 15H easier to understand to ensure readers efficiently manage their taxes.

Overview of Form 15G and Form 15H

Form 15G and Form 15H are the self-declaration forms submitted by individuals to banks/financial institutions to declare that their income is below the taxable limit.

These forms help people prevent TDS deducted from their salary, particularly those with low incomes such as students, senior citizens, or freelancers.

Eligibility criteria for submitting Form 15G and Form 15H:

• Form 15G is filed by a Resident Individual or HUF or trust or any other assessee but not a company or a firm with age less than 60 years and having an income below the taxable limit.
• Form 15H is submitted by Resident senior citizens (over 60 or 65 years old, depending on the correct tax bracket).

Key differences between Form 15G and Form 15H

Purpose and Usage of Form 15G and Form 15H

For people with lower incomes, these forms are beneficial since they save them from the stress of collecting their refunds later.

Form 15G and Form 15H are used to avoid TDS deductions on income like interest, dividends, etc., for individuals whose total income falls below taxable limits.

These forms serve as declarations by individuals (15G for those below 60 years, 15H for senior citizens) It’s especially helpful for those with income from interest on savings, fixed deposits, or recurring deposits.

It requires having a valid Permanent Account Number (PAN) and being an Indian citizen. In addition, your entire income must not be above the basic exemption limit.

Who Can Submit Form 15G and Form 15H?
Individuals under 60 years of age with taxable income below the exemption limit can submit Form 15G to prevent TDS deduction on interest income.
Senior citizens aged 60 years or above can submit Form 15H if their tax liability is zero on total income.
Both forms have limitations:
They can only be submitted by individuals, not companies or firms. Also, false information can lead to costly penalties.
How to Fill and Submit Form 15G and Form 15H?
Following these simple steps ensures the smooth submission of Form 15G and Form 15H:

Step-by-step guide to filling out the forms

• You can download Form 15G and Form 15H from the Income Tax Department website or get them from your bank or financial institution.
• Fill details such as name, PAN, address, and contact.
• Provide information about your income, including sources such as interest, dividends, and any other earnings.
• Read the declaration form carefully and then sign.

Submission process of forms to banks, financial institutions, and employers:

• Take the completed forms to the desired organization, and get the information provided verified.
• Organizations can ask for additional documents if required.
• Acknowledged receipt will be provided after verification.

Online submission options and procedures:

Benefits of Submitting Form 15G and Form 15H

• These forms bring financial benefits and ease tax-related responsibilities for eligible candidates.
• Individuals can avoid TDS deductions on their income.
• They simplify tax compliance, making the process less time-consuming.

Risks and Considerations

• Providing false information on Form 15G or Form 15H can lead to costly fines.
• Filling the forms correctly will reduce your tax burden and improve tax planning strategies.
• Form 15G and Form 15H need to be renewed and re-submitted each financial year.

Frequently Asked Questions (FAQs)

What is the validity period of Form 15G and Form 15H?

Form 15G and Form 15H are valid for one financial year. You need to submit a new one each year to avail of tax benefits

Can Form 15G and Form 15H be submitted for all types of income?

Form 15G and Form 15H can only be submitted for certain types of income like interest on savings, dividends, etc., but not for salary income.

What to do if TDS is already deducted despite submission of Form 15G/15H?

If TDS is deducted despite submitting Form 15G/15H, you can claim a refund by filing an income tax return.

Case Studies and Example(Considering Old Regime):

Conclusion

Form 15G and Form 15H prevent unnecessary tax deductions for eligible individuals. By submitting them accurately, one can explore tax-saving opportunities, and retain more earnings. Take the help of professionals like Rebus, to maximize your savings.