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18 January, 2017

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How to Start Architecture Firm in India?

How to start Architecture Firm in India?

Architecture is the art and science of designing buildings and (some) non-building structures. It is the style of designs and methods of construction of buildings and other physical structures. It requires the creative manipulation and coordination of materials and technology, and of light and shadow.
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The current growth in real estate sector is creating enormous demand in India wherein only 3500-4500 architect graduates annually from 180 schools. With an estimated 40,000 architecture professionals serves India population of 1.2 billion, the demand is only set to grow.

Hence we can say it is a profitable business idea.

Registration with the Council of Architecture (COA)

Registration with COA entails a requisite qualification as per The Architecture Act, 1972. After completion of Bachelor of Architecture from recognised university, a person needs to get registered with council of architecture.

A certificate of registration will be provided to the candidate on compliance of education standard which needs to be renewed periodically.

The registration certificate entitles the candidate to use the title of architect and to provide architectural services.

Legal Entity of Firm
Ø  The firm can be registered as sole proprietorship as in case of single promoter.

Ø  In case of 2 or more person firm can be registered as partnership firm or Limited Liability Partnership Firm. In this case all partners need to be registered with Council of architecture.

Ø  Public Limited company, Private Limited Company, societies and other juridical individuals are needs not to allow to practice as architect nor use the title of an architect as per The Architect Act, 1972.

Type of Services
Ø  To start business entrepreneur has to decide the type of service s/he would like to offer to service receiver.

Ø  Type of services may be large or small range os services including landscape interior design and engineering services, boutique design studio or specialised firm for niche clients. 

Ø  Now a day due to government initiative and high cost of energy green/sustainable building design is in demand. 

Ø  Survival of business structure is depends on strong networking. There are many different way for create network in architecture firm, these are as follows:
o   Participation in Competition: Participating in national/international competition, getting work published in magazine and attending design conclaves are number of ways to make design visible.
o   Informal networking strategies: Informal networking strategies may be used for private clients with small scale residential projects.
o   However, government institution work mandates would require working on RFP (Request for proposals) and RFQ (Request for Qualification) for which certain number of candidates should be shortlisted.
o   Provide high class quality to clients may help in increasing client base and improve networking structure. Try to provide excellent services to the existing client can help in marketing of the firm too.

Taxability of Architecture services
Ø  Architectural services are taxable under the purview of service tax.
Ø  Exemption of small service provider is given to architectural servicesle. Hence, service provided up to Rs. 10,00,000 is not taxable. But thereafter service tax is chargeable at rate of 15%.
Ø  As per Section 194J of The Income Tax Act, 1961 TDS is to be deducted at the rate of 10% on any amount paid to any resident as:-
o   Fee for professional services.
o   Fees for technical services.
o   Royalty or
o   Any sum referred in Section 28
Ø  Professional services means services rendered by a person in the course of carrying on legal,medical, engineering or architectural profession or the profession of accountancy or Technical consultancy or interior design or advertising or other profession as is notified by the board for the purpose of Section 44AA.
Ø  Other profession notified by the board for the purposes of section 44AA are – “profession of authorised representative”, “Profession of the film artist” and “profession of company secretary”.

Ø  Other relevant points regarding Section 194 J

o   Where any sum referred to in this section is credit to  any account whether called “suspense account” or by any other name in the books of accounts of the person liable to pay such sum, such crediting shall demeed to be credit of such sum to be credited to the account of the payee and the provision of section 194J shall apply accordingly.

o   The person deducting TDS shall issue a tax credit certificate in Form 16A indicating the amount paid and TDS deducted thereon.


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