Accountancy Part 2 Ebook by CA Mohamad Lateef | Download Here
Accountancy Part 2 Ebook by CA Mohamad Lateef | Download Here
TABLE OF CONTENTS
1. Taxation, Tax Laws- Direct & Indirect Tax
2. Cost Accounting
3. Cost Management- Budget & Budgetary Controls
4. Indian Financial Management System (IFMS)
5. Developments in Accounting
6. Additional Content on Previous Topics
7. Multiple choice questions (600 MCQ’s)
8. Answer key of MCQ’s
9. Corrigendum to Answer Key of Previous book
CHAPTER 23 | TAXATION, TAX LAWS – DIRECT & INDIRECT TAX
Why tax?
The Government takes primary responsibility for the welfare of its citizens, as in matters of
health care,
education,
employment,
infrastructure,
social security and
other development needs.
To facilitate these, Government needs revenue. The taxation is the primary source of revenue to the Government for incurring such public welfare expenditure.
In other words, Government is taking taxes from public through its one hand and uses it through another hand.
However, no one enjoys handing over his hard-earned money to the government to pay taxes. Thus, taxes are compulsory or enforced contribution to the Government revenue by public. Government may levy taxes on income, business profits or wealth or add it to the cost of some goods, services, and transactions.
Direct Tax and Indirect Tax
There are two types of taxes:
Direct Tax and
Indirect Tax
Tax, of which incidence and impact fall on the same person, is known as Direct Tax, such as Income Tax. It means, in the case of Direct Tax, tax is recovered directly from the assessee, who ultimately bears such taxes. It is Progressive in nature i.e., higher tax are levied on person earning higher income and vice versa.
On the other hand, tax, of which incidence and impact fall on two different persons, is known as Indirect Tax, such as GST, it means tax is recovered from the assessee, who passes such burden to another person & is ultimately borne by consumers of such goods or services. It is Regressive in nature i.e.; all persons will bear equal wrath of tax on goods or service consumed by them irrespective of their ability.
Basic Principles for Charging Income Tax
Sec. 4 is a charging section and it is the backbone of the Income Tax Act. Every Person whose total income exceeds maximum amount which is not chargeable to tax is an assessee & shall pay income tax at the rate or rates prescribed in the finance act as well as income tax act in the relevant Assessment year.
However, his total income shall be determined on the basis of Residential status in India. Although tax on income of the previous year is subject to income tax in the Assessment year but assessee is liable to pay advance tax or he gets the credit of TDS which has been deducted during the previous year.
(... CONTINUE...)
595. Whether IGST revenue is to be apportioned to state?
a. No
b. Yes- apportioned to origin state
c. Yes- apportioned to destination state
d. Discretion of Parliament
596. Which of the following "tax" is levied at every stage of sale?
a. VAT
b. Income tax
c. Custom duty
d. None of the above
597. If 'Tata Company' imports a product from abroad, then which tax will be levied
on it?
a. VAT
b. Custom duty
c. Income tax
d. Corporation tax
598. Customs duties are imposed on commodities as they cross:
a. State boundaries
b. District boundaries
c. National boundaries
d. Municipal boundaries
599. After Introduction of GST, import in India is subject to
a. BCD Plus IGST
b. CGST Plus SGST Plus BCD
c. Zero rated
d. SGST Plus CGST Plus IGST
600. Under GST law SAC refers to –
a. Systematic Accounting Code
b. Services Accounting Code
c. System administration code
d. Scientific accounting code
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About Author:- The author of the is book is a Chartered Accountant by profession. He has passed the CA Final Exams in 2016 with All India 35th Rank, being the First Rank holder from Kashmir & has also been teaching Accountancy subject from last 6 years. Presently the author is working as Chartered Accountant in India Oil Cooperation.
