No Answer is Posted For this Question
2. Tell me what is an excise duty?
The Excise and Taxation Department controls the manufacturing and sale of following excisable articles:
☛ Intoxicating liquor.
☛ Rectified Spirit.
☛ Denatured Spirit.
☛ Methanol.
3. Tell me how is income tax calculated?
Income of the person is categorized and calculated under the following five heads:
☛ Salaries
☛ Income from house property.
☛ Profits and gains of business or profession.
☛ Capital gains.
☛ Income from other sources.
4. What is an entertainment duty?
Entertainment duty is levied on entertainment places like Cinemas, Amusements, Parks, Variety Programmes Sports etc on following rates.
☛Presently no duty is being collected from Cinemas.
☛Dramas, plays, variety Programmes 10% of the payment for admission.
☛Games and Sports 5% of the payment for admission.
☛Items of amusement other than above 25% of the payment for admission.
5. Tell me which items fall under the category of securities?
Securities are defined under Section 2(h) of the Securities Contracts (Regulation) Act, 1956 (SCRA) to include:
☛ Shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate.
☛ Derivatives.
☛ Units or any other instrument issued by any collective investment scheme to the investors in such schemes.
☛ Security receipt as defined in Section 2(zg) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
☛ Such other instruments as declared by the central government.
☛ Rights or interest in securities.
Equity-oriented mutual funds (not debt-oriented mutual funds).
6. Tell me what do you know about dissolution of firm?
Dissolution of firm means assets of firm are realized and liabilities are paid off and the surplus, if any is distributed among the partners according to their right. It is to be noted that dissolution of Firm involves dissolution of partnership but dissolution of partnership may not lead to dissolution of firm.
7. Tell me what are dis-allowable expenditure?
Dis allowable expenditure:
☛private expenditure
☛clothes bought for ordinary everyday wear
☛acquisition and depreciation of business assets
☛your own wages or salary
☛your business partner's wages or salary
☛payments to charities
☛travel expenses between your home and place of business
☛a general (non-specific) provision against doubtful debts
☛legal costs of acquiring land and buildings
☛fines for breaking the law
☛your own life, accident or sickness assurance
☛costs of alterations, additions or improvements to business premises
8. Tell me about allowable expenditure?
Allowable expenditure:
☛the cost of goods bought for the business
☛the prime costs of running a business asse
☛wages and salaries of employees
☛heat, light and cleaning of business premises
☛repairs to and maintenance of business premises
☛postage and stationery
☛business telephone and rental
☛bank charges and interest on business loans and overdrafts
☛travel and entertaining if the sole purpose is to retain or acquire business
☛legal costs of defending business rights and renewing leases of less than 50 years duration
☛bad debts and specific doubtful debts
☛protective clothes necessary for the business
9. Tell me how would you calculate House Rent Allowance (HRA)?
Minimum of following three amounts is available as HRA exemption:
☛ Actual House Rent Allowance provided by employer to employee.
☛ House Rent paid in excess of 10% of Salary.
☛ 50% of Salary in case House is located in major cities.
For all three conditions mentioned above relevant period is very important. Means if there is any change in Salary, HRA paid to employee, location of rented house and actual rent paid by employee HRA need to calculate from that relevant change Hence one should avoid calculating HRA on annual basis if there is any change in above factors.
Meaning of Salary for calculating HRA (Basic Salary + Dearness allowance if terms of employment so provide + fixed percentage of turnover achieved by employee).
10. What do you know about Public Provident Fund (PPF)?
Public Provident Fund (PPF) involves minimum contribution of Rs.500 per annum and the maximum contribution is Rs. 100,000 per annum. The contribution made along with interest earned is repayable after 15 years, unless extended.
11. Tell me about Statutory Provident Fund (SPF)?
Statutory Provident Fund is mainly meant for Government, University, Educational Institutes (affiliated to university) employees.
12. Can you define Unrecognized Provident Fund (URPF)?
Unrecognized Provident Fund are not approved by The Commissioner of Income Tax and is started by employer and employees in an establishment.
13. Please define Recognized Provident Fund (RPF)?
Recognized Provident Fund schemes must be approved by The Commissioner of Income Tax and applicable to an organization which employs 20 or more employees.
14. list the types of Provident funds?
The 4 types of provident funds:
☛ Recognized Provident Fund (RPF)
☛ Unrecognized Provident Fund (URPF)
☛ Statutory Provident Fund (SPF)
☛ Public Provident Fund (PPF)
15. Tell me what do you mean by transfer income?
Transfer of Income means when someone retains the ownership of an asset but makes an agreement to transfer its income but still the income is considered as your income and it will be added to the total income.
16. Tell me about the form d in sales tax?
Form D:
Sale to government is taxable 4% or applicable sales tax rate for sale within the State whichever is lower. This concession on CST is applicable if Form D is issued by the government department which purchases the goods.
17. Tell me about the form c in sales tax?
Form C:
The sales tax on inter-state sale is 4% or the applicable sales tax rate for sale within the State whichever is lower if the sale is to a dealer registered under CST and the goods are covered in the registration certificate of the purchasing dealer. The purchasing dealer is eligible to get these goods at concessional rate if a declaration in C form is submitted to the selling dealer.
18. List the names of items which are deducted under Salary Head?
Deductions that are made under salary head are Entertainment allowance and Professional tax:
☛ Entertainment Allowance:
Entertainment allowance received is already included in the income of the employee and then a deduction is made only for government employees.
☛ Professional Tax:
Professional Tax is imposed by the government on employment by whatever name called.
19. What does a commercial tax mean?
Commercial Tax is a tax imposed on the scheduled Commercial goods as indirectly collected by the seller or purchaser against his business transaction which now comprises of Sales Tax, Entertainment, Luxury Tax, Entry Tax and Profession Tax.
20. Do you know what is luxury tax?
A tax imposed on goods and services that are non-essential or not included in the necessities. Luxury tax is included in the indirect tax and is incurred by those who purchase or use the product.
21. What is the major difference between excise tax and service tax?
The major difference between excise tax and service tax is that excise tax is charged on manufactured goods and sales tax is imposed on certain services provided.
22. Tell me what is a service tax?
Service tax is an indirect tax imposed by the government on service providers on certain service transactions, but is actually paid by the customers. Services provided by air-conditioned restaurants and short term accommodation provided by hotels, inns, etc are included in the taxable services.
23. Tell me about the Excise tax?
Excise tax is an indirect tax that is imposed on the manufacture, sale or use on certain types of goods and products. Excise taxes are generally imposed on goods such as cigarettes or alcohol, also in the price of an activity such as gambling. Excise taxes may be imposed by both Federal and state authorities.
24. How is fair rent calculated?
Fair rent is calculated in place of mortgage interest, other financing costs and depreciation related to certain property, including land, buildings and non movable equipment. It is calculated only once, at the time the facility begins operation.
Fair rent is the rent charged for a private property that is fixed and registered by a rent officer. Fair rent is decided on the basis of size, condition and usefulness of the property.
26. Tell me about the sales tax?
Sales Tax is imposed on the finished product which is paid by the consumer. Sales tax is imposed on sale or purchase within the State. Different states levy different levels of sales tax, while there is a Central Sales Tax levied on sale or purchase in the course of interstate trade.
27. Tell me if you know what is excise duty?
Excise Duty is an indirect tax imposed on goods that are manufactured and produced within the country. This is paid by the manufacturer on the finished good when it goes out of the factory. Excise Duty is levied on all goods, except certain goods that are exempted.
28. Do you know the difference in between Fund flow and Cash Flow?
Difference between Fund flow and Cash flow:
☛Fund flow is based on working capital. Cash flow is based on only one element of working capital that is cash.
☛ Fund flows tells about the various sources from where the funds are generated. Cash flow starts with the opening balance of cash and closes with the closing balance of cash.
☛ Fund flow is useful for understanding long term financial strategy. Cash flow is useful for understanding short term strategies that affects liquidity of the business.
Changes in current assets and current liabilities are shown through the schedule of changes in working capital.
29. When does Deferred tax liability arise?
Deferred tax liability arises from different depreciation methods being used for tax as depreciable assets are reported as non current.
30. Tell me when does Deferred Tax Asset arise?
Deferred tax asset arises when the expenses are recorded in the income statement before they are required to be recognized by the taxing authority. Also when revenue is being taxed before it is taxable in the income statement.
31. Do you know what is the difference between profit and gain?
Profit is the amount that is left after deducting expenses from revenue that makes the receipt of revenue possible. There are two streams of earnings that is direct earnings and indirect earnings. Direct earnings are incurred from main activities and indirect earnings are incurred from other activities so the profits is calculated as gross profit and net profit.
Gross profit is the amount of revenue from which trading expenses has been deducted (expenses related to main activities of the business). Net profit is the amount of revenue that includes incomes from other activities.
Gain is the amount that is earned on selling assets which is not included in the inventory of the business. This sales activity is not the actual trading and these sales does not includes goods that are sold on regular basis.
32. Do you know who is non resident?
An individual who does not fulfill the below mentioned conditions in that previous year will be considered as Non Resident:
☛ You have to be in country atleast 182 days in that year.
☛ You have to atleast be in country for 365 days during 4 years preceding that year and atleast 60 days in that year.
33. Tell me what is permanent account number (PAN)?
Permanent Account Number (PAN) is a ten digit alphanumeric number, which is issued by the Income Tax Department in the form of laminated card as PAN enables the department to link all kinds of transactions of the person with the department. Transactions include tax payments, TDS/TCS credits, returns of income/wealth/gift/FBT, specified transactions, correspondence, etc.
PAN helps the department in maintaining a fair record of every persons transactions through a ten digit number in order to avoid tax evasion in any case.
34. Do you know what is the Securities Transaction Tax?
Securities Transaction Tax was introduced in India at time of 2004 budget and is applicable from 1 October 2004. Securities Transaction Tax is the tax which is payable on the amount of taxable securities transaction.
Securities Transaction Tax is just levied on purchase and sale of those securities that are listed on the Indian Stock Exchanges.
Securities Transaction Tax was introduced by the Finance Minister, to restrict people from evading tax on capital gains.
35. Tell me about the inter company reconciliation?
Every year commonly controlled company prepares a combined or consolidated financial statement for tax and reporting purposes. Inter Company
Reconciliation is the process that helps parent company to split from its subsidiaries companies by location. Each year, commonly controlled business must prepare a combined or consolidated financial statement for tax and reporting purposes. The inter company accounting process is an important process for parent companies with subsidiaries or companies split by location. Inter Company Reconciliation helps in avoiding double counting of transactions as it also helps in maintaining accurate reports. Even it helps the companies to avoid misrepresentation of a firm's financial position.
