legal, startup-costs, taxes, accounting, indiaI’m about to register a company and my chartered accountant(CA) is saying that he’ll take about 50,000/- per annum for tax auditing and managing my accounts. The capital amount for the company I’m starting is 1,00,000/- and I think he’s asking too much for managing my account and auditing.
I’ve read that big companies pay about 18/- per lakh of revenue or income they earn. I know that these are big companies and maybe it generates few lakh rupees for cost on accountant firms, for small companies they don’t work at this small rate. But considering I’m just starting a company with 1,00,000/- and half of that is going to spend on accounting and auditing, is too much. What is the recommended rate for tax auditing in India for small companies.
Please help. Thanks in advance.
There is a lot of info at https://www.quora.com/Chartered-Accountants/How-much-does-a-CA-charge-to-audit-and-file-returns-for-a-proprietary-business-with-a-turn-over-of-5-Lakh-rupees-in-India
It seems that the general consensus falls around Rs. 5000/- with maybe a little more if additional services are provided.
It really sounds like he is overpriced unless he is doing a lot more for your company than the average CA typically does. Is he spending as much time helping start the business as you are? If so, maybe he is worth half.
I suggest getting quotes from a few other CA’s. If you can find a better price, switch who your are working with. If he is willing to try to deceive you on this, do you want him working on your books at all?
Don’t outsource your book keeping, hire someone part time to do it in your office or do it yourselves and then ask your CA to check the books on a monthly basis. Hiring a part time accountant will cost you about 3K/p.m. (he would be giving about 4 hrs /week) But don’t let the part time accountant take your docs and pass the entries in his home, which many insist for.
If you are just starting your business, the no. of entries that you need to pass in the books of accounts would be less as well and there are many accounting software (check BUSY free edition) which are quite capable.
Donot outsource too much. Bookkeeping / Accounting is a very important business activity and if ignored you will be loosing a lot of money in frauds. Always keep an eye on the accounting side of the business, this can make or break your business.
The fair fees should be: New Company Registration - 10K to 15K (one time),Tax Audit & ROC filing - 5K to 7K (per annum)
I haven’t heard anyone charge fees on the basis of turnover.
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