Income Tax Expert

A tax liability that a company owes and does not pay at that current point, although it will be responsible for paying it at some point in the future. Deferred tax liability (DTL) is a balance sheet item that accounts for the temporary difference between taxes that will come due in the future and taxes paid today.

The unrealized tax that is put into account comes under deferred tax liability. Depreciation is the main source or the type of an item of deferred tax liability.

As per the provisions of Income Tax Act residential status of an individual is categorized as Resident and Non Resident.

Under Section 6(1), an individual is said to be resident in India in any previous year if he satisfies any one of the following basic conditions:

1. He is in India in the previous year for a period of at least 182 days.

2. He is in India for a period of at least 60 days during the relevant previous year and at least 365 days during the four years preceding that previous year.

The above provisions are applicable only to those who are residents of India irrespective of their nationality otherwise they are included in Non resident.

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.

1. FBT stands for Fringe Benefit Tax which is a tax that an employer has to pay in respect of the benefits that are given to his/her employees.

2. Fringe benefits is something that an employer provides to his employees in addition to the cash salary. FBT is payable in lieu of the value of fringe benefits provided or deemed to have been provided by an employer to his employees during the previous year.

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.

Deferred tax liability arises from different depreciation methods being used for tax as depreciable assets are reported as non current.

Income tax is an annual tax charged on income of a person by the government. It is charged for the corresponding assessment year at the rates laid down by the Finance Act for the assessment year in respect of the previous year.

Income of the person is categorized under the following five heads

☛ Salaries

☛ Income from house property

☛ Profits and gains of business or profession

☛ Capital gains

☛ Income from other sources.

Income is calculated under these heads separately and accordingly tax is calculated using the income tax slab issued by the government every financial year.

Capital structure is a term which is referred to be the mix of sources from which the long term funds are required for business purposes which are raised to improve the capital of the company. To fund an organization plan this capital structure is required which is the combination of debt and equity. The management ensures the capital structure accesses which are needed to fund future growth and enhance financial performance.

The principles of capital structure management which are essentially required are as follows:

1) Cost Principle

2) Risk Principle

3) Control Principle

4) Flexibility Principle

5) Timing Principle

Capital expenditures are capitalized because of the timing of their estimated benefits – the lemonade stand will benefit the firm for many years. The employees’ work, on the other hand, benefits the period in which the wages are generated only and should be expensed then. This is what differentiates an asset from an expense.

The key is to focus on your achievable objectives and what you are doing to reach those objectives.

For example: "Within five years, I would like to become the very best accountant your company has on staff. I want to work toward becoming the expert that others rely upon. And in doing so, I feel I'll be fully prepared to take on any greater responsibilities which might be presented in the long term. For example, here is what I'm presently doing to prepare myself…"

Then go on to show by your examples what you are doing to reach your goals and objectives.

Two examples include deterioration of working capital (i.e. increasing accounts receivable, lowering accounts payable), and financial shenanigans.

Total Income is the amount on which the Income Tax is paid. Total income include all income that accrue, arise, earned or received in India (except those income which accrues or arises outside India). Total Income is the total amount earned by an individual or organization, including income from employment or providing services, revenue from sales, payments from pension plans, income from dividends, or other sources. Total income is generally calculated for the assessment of taxes, evaluating the net worth of a company, or determining an individual or organization's ability to make payments on a debt.

Yes, tax liability of an individual does gets affected due to his residential status as per Section % of the Income Tax Act 1961 and is also dependent on place and time of accrual or receipt of income. You must understand the difference between Indian income and Foreign income as Indian income is always taxable in India in accordance with the residential status of the taxpayer.

1. Securities Transaction Tax (STT) was introduced in India at time of 2004 budget and is applicable from 1 October 2004. STT is the tax which is payable on the amount of taxable securities transaction.

2. STT is just levied on purchase and sale of those securities that are listed on the Indian Stock Exchanges.

3. Securities Transaction Tax was introduced by the Finance Minister, P. Chidambaram to restrict people from evading tax on capital gains.

He can fill NRI in an Income tax form only if he does not satisfy any of these two conditions:

1. He is in India in the previous year for a period of 182 days or more or

2. He is in India for a period of 60 days or more during the previous year and 365 days or more during the four years immediately preceding the previous year.

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.

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.