What is a Subsidiary?

A subsidiary company is defined under Section 2(87) of the Companies Act, 2013 as a company where another company (holding company) meets either of the following conditions:
✅ Owns more than 50% of its total share capital; or
✅ Controls the composition of its Board of Directors.

The parent (holding) company has significant control over the subsidiary’s operations, decision-making, and financial reporting.

What is a Joint Venture (JV)?

A joint venture is a business partnership where two or more companies collaborate for a common goal. Although the Companies Act, 2013 does not explicitly define a JV, it is generally understood as a strategic alliance where parties:
✔️ Contribute capital, resources, and expertise
✔️ Share risks and profits
✔️ Make joint decisions as per the JV agreement

A JV can be structured as a company, partnership, or contractual arrangement, depending on the agreement between the parties.

Key Differences Between a Subsidiary and a Joint Venture

Real-Life Examples

🚗 Subsidiary Example:
Maruti Suzuki India Ltd. is a subsidiary of Suzuki Motor Corporation, Japan, where Suzuki holds a majority stake and controls its operations.

🔩 Joint Venture Example:
Tata Steel and Nippon Steel formed a JV in India to manufacture high-quality steel, sharing expertise, investment, and control.

The Union Budget 2025 has introduced key modifications to the taxation of equity shares and equity-oriented mutual funds. The following table summarizes the before and after impact of the changes:

Comparison of Capital Gains Taxation Before and After Budget 2025

Key Takeaways from Budget 2025

✅ Higher LTCG Tax Rate: Increased from 10% to 12.5% for gains exceeding ₹1 lakh.
✅ Higher LTCG Exemption Limit: Increased from ₹1 lakh to ₹1.25 lakh per financial year.
✅ No More Rebate (87A) on Capital Gains: Investors can no longer claim this benefit.
✅ Impact on Foreign Investors: FIIs and non-residents now face 12.5% LTCG tax, up from 10%.
✅ Short-Term Capital Gains Tax (15%) Remains Unchanged.

1. Basic Documents

✅ PAN Card of the Partnership Firm – The firm must have a separate PAN card issued by the Income Tax Department.
✅ Partnership Deed – A notarized or registered partnership deed is required, mentioning the firm’s name, partners, and profit-sharing ratio.
✅ PAN Cards of All Partners – Each partner must submit a copy of their PAN card.

1. Identity & Address Proof of Partners

Each partner must provide:
✅ Aadhaar Card (Mandatory)
✅ Passport / Voter ID / Driving License (Any one as additional proof)
✅ Latest Passport-Size Photograph

1. Business Address Proof (Any one of the following)

✅ Electricity Bill / Water Bill / Property Tax Receipt (Not older than 2 months)
✅ Rent Agreement (If Rented Property) – An agreement between the firm and the property owner.
✅ NOC from Property Owner – A No Objection Certificate (NOC) from the property owner (if rented/leased).

1. Bank Account Proof

✅ Cancelled Cheque or Bank Statement – A firm’s bank account statement or a cancelled cheque displaying the firm’s name, account number, and IFSC code.

1. Authorized Signatory Documents

✅ Authorization Letter – If a specific partner is appointed as the authorized signatory, an authorization letter is required.

1. Digital Signature Certificate (For LLPs & Large Firms)

✅ DSC (Digital Signature Certificate) – If the firm is an LLP (Limited Liability Partnership), a DSC of the authorized partner is required for GST filing.

Key Points to Remember:

📌 All documents should be clear and self-attested.
📌 Ensure the mobile number & email ID are active for OTP verification.
📌 Keep soft copies of the documents ready for online submission

Many businesses in India wonder whether an invoice must be signed or if a system-generated invoice is legally valid. Let’s break it down from both GST and Income Tax perspectives.

1. GST Rules on Invoice Signatures

As per Rule 46 of the CGST Rules, 2017, an invoice must contain specific details such as:
✅ Supplier’s Name & Address
✅ GSTIN
✅ Invoice Number & Date
✅ Description of Goods/Services
✅ Taxable Value & GST Amount

However, a physical signature is NOT mandatory if the invoice is issued electronically. Businesses can simply add a note stating:
📝 “This is a system-generated invoice and does not require a signature.” Here Computer generated means generated through a computer System/application.

What About E-Invoicing?

For businesses with a turnover of ₹5 crore or more (from 1st August 2023), e-invoicing is mandatory. These invoices are digitally signed by the Invoice Registration Portal (IRP), making a physical signature unnecessary.

2. Income Tax Perspective on Invoice Signatures

The Income Tax Act, 1961, does not prescribe any format for invoices, nor does it require a signature. However, invoices should contain necessary details to support expenses or revenue for tax assessments.

• For Tax Audit Cases (Section 44AB): No requirement for a signature, but proper record-keeping is necessary.
• For TDS Deductions: A signed invoice is not mandatory, but details must be accurate for compliance.
• For Books of Accounts (Section 44AA): Invoices serve as supporting documents, but again, no signature is required.

3. When Should You Sign an Invoice?

Although signatures are not mandatory, some situations may require them:
✔️ Export Transactions: Foreign clients may request a signed invoice.
✔️ Government Contracts: Some government departments require physical signatures.
✔️ Legal Disputes: A signed invoice can provide stronger evidentiary value.

Conclusion: What Should You Do?

For most businesses, a computer-generated invoice with a disclaimer is legally valid. If required, businesses can use digital signatures (DSC) or scanned signatures instead of manual signing.

👉 Recommended Disclaimer for Your Invoices:
📌 “This is a system-generated invoice and does not require a signature.”

This ensures compliance while keeping your invoicing process efficient.