#complaince

One of the biggest reasons isn't tax evasion—it's simple compliance mistakes.

Here are a few common ones:

• Filing GSTR-1 and GSTR-3B with mismatched values • Claiming incorrect Input Tax Credit (ITC) • Missing GST return deadlines • Errors in invoice details or GSTIN numbers • Not reconciling books with GST returns regularly

A small error today can turn into a notice, penalty, or unnecessary stress later.

The best practice? Review your returns before filing, maintain proper records, and reconcile your data every month instead of waiting until year-end.

Good compliance isn't just about avoiding penalties—it's about building a financially healthy business.

Form 16 मिल गया… लेकिन क्या ITR सही है?

If you run a small trading or manufacturing business in India and your turnover is below Rs 1.5 crore, the GST Composition Scheme is worth understanding. It offers a simpler alternative to regular GST: lower tax rates, fewer returns, and significantly less record-keeping.

What Is the Composition Scheme?

The Composition Scheme under Section 10 of the CGST Act 2017 lets eligible registered businesses pay GST at a fixed percentage of their turnover instead of the regular transaction-by-transaction tax rates. You file fewer returns. You maintain fewer records. The trade-off: you cannot claim Input Tax Credit (ITC), and you cannot charge GST on your sales invoices.

Who Can Use It?

Turnover limits: Goods manufacturers and traders in general states -- Rs 1.5 crore. Special category states (Northeast and Uttarakhand) -- Rs 75 lakh. Service providers (Section 10(2A)) -- Rs 50 lakh.

Who cannot use it: Casual taxable persons; manufacturers of ice cream, pan masala, or tobacco; businesses making inter-state outward supplies of goods; suppliers via e-commerce operators collecting TCS under Section 52.

The Tax Rates

Manufacturers: 1% total (0.5% CGST + 0.5% SGST). Traders: 1% total. Restaurants (no alcohol): 5% total. Service providers: 6% total.

You pay this on your total turnover in the state. You do not collect this from customers separately.

Example: A textile trader in Hyderabad with Rs 30 lakh quarterly turnover pays Rs 30,000 as total GST. Under regular GST at 12%, the liability is Rs 3.6 lakh (before ITC), but requires full reconciliation.

Filing Requirements

CMP-08: Quarterly statement of self-assessed tax. Due by the 18th of the month following each quarter (April-June due by July 18, etc.).

GSTR-4: Annual return. Due by June 30 of the following financial year.

That is it. Regular composition dealers do not file GSTR-1, GSTR-2B, or GSTR-3B.

How to Opt In

Existing registered taxpayers: File Form GST CMP-02 on the GST portal before March 31 of the year preceding the scheme year. New registrants: Select composition at the time of GST registration in Part B of Form GST REG-01. You cannot switch mid-year.

Key Restrictions

You cannot issue tax invoices -- you issue Bills of Supply. You must display "Composition Taxable Person, not eligible to collect tax on supplies" on every bill. You cannot claim ITC on your purchases. You cannot supply goods inter-state.

When the Scheme Does Not Make Sense

Avoid it if a significant portion of your purchases carry GST and ITC would reduce your outflow substantially; if your customers are registered businesses who need a tax invoice for their own ITC; or if you regularly make inter-state supplies of goods.

For the complete guide including opt-in process, CMP-08 filing walkthrough, and conditions for switching back, read the full article at Tax Garden: https://taxgarden.in/blog/gst-composition-scheme-eligibility-rates-india-2026

Which ITR Form Should You File for AY 2026-27? A Guide for Individuals and Businesses

Filing your income tax return starts with one question: which ITR form applies to you? Using the wrong form means your return is defective. You get a defective return notice and may have to refile.

ITR-1 (Sahaj): Resident individuals only. Total income up to Rs 50 lakh. Income only from salary, one house property, and other sources (interest, dividends). Agricultural income up to Rs 5,000. Cannot be used by anyone with capital gains, income from more than one house, company directors, or persons holding unlisted equity shares.

ITR-2: Individuals and HUFs with capital gains (shares, mutual funds, property, crypto), income from more than one house property, foreign income, or who are company directors. For AY 2026-27, Schedule CG in ITR-2 has separate sections for pre and post 23 July 2024 transactions (Finance Act 2024 rate changes). LTCG above Rs 1.25 lakh at 12.5%, STCG at 20%.

ITR-3: Individuals or HUFs with income from a business or profession. Partners in partnership firms. Anyone with both business income and capital gains. Most freelancers, consultants, shop owners, doctors, lawyers, and architects with registered practices file ITR-3. Also required if you opt for Section 44AD/44ADA but have capital gains.

ITR-4 (Sugam): Individuals, HUFs, and partnership firms (not LLPs) under presumptive taxation. Section 44AD: business turnover up to Rs 2 crore, declare at least 8% of turnover (6% for digital receipts). Section 44ADA: professionals with gross receipts up to Rs 75 lakh, declare at least 50%. Cannot be used if you have capital gains, are an NRI, or are a company director.

ITR-5: Partnership firms, LLPs, Association of Persons, Body of Individuals, and cooperative societies. Individual partners do not file ITR-5; the entity does.

ITR-6: All registered companies (private limited, public limited, Section 8, OPC). Mandatory e-filing.

ITR-7: Charitable trusts registered under Section 12A/12AB, political parties, and institutions exempt under Section 10(23C).

Quick Reference for AY 2026-27:

Salaried, no capital gains, no business: ITR-1 (if all eligibility conditions met)

Salaried + sold shares or property: ITR-2

Freelancer or consultant without capital gains: ITR-4 under Section 44ADA

Freelancer with capital gains: ITR-3

Small business under Section 44AD: ITR-4 (if no capital gains)

Small business with capital gains: ITR-3

LLP or partnership firm: ITR-5

Private limited company: ITR-6

For the full guide including AY 2026-27 schedule tips and Form 16/AIS reconciliation guidance: https://taxgarden.in/blog/types-of-itr-filing-india

FPO banana easy hai…

Running a business comes with enough challenges.

Handling compliance shouldn’t be one of them.

From company registration to ROC filings, director updates, and tax audits, every step needs accuracy, follow-up, and proper guidance.

At Tax Garden, we help you stay compliant without the confusion.

No missed deadlines. No last-minute stress. Just structured and reliable support.

If you’re setting up or managing a business, getting the basics right makes all the difference.

Let us handle the paperwork, so you can focus on growing your business.