Category: Finance

A new clause (d) has been introduced in Section 158BB(1A) that the income of certain assesses shall be considered disclosed income where return filing for them is not mandatory and the tax is deducted from such income. The incomes that shall be considered disclosed income under this provision shall be as follows: Where the total… Continue reading Key Amendment to Finance Bill 2025 as Passed by the Lok Sabha-Basis of income where return filing is not mandatory

Section 194Q: TDS on purchase of goods Applicable to the Buyer whose Turnover/Gross Receipts in the preceeding Financial year exceeds 10Cr. and aggregate amount of purchases from such particular buyer exceeds Rs.50L. -TDS is required to be deducted @1% on the amount exceeding Rs.50L (The threshold limit of Rs.50L is to be reckoned from the… Continue reading Applicability of Section 194Q & 206AB under Income Tax Act

The Principles of Accounting are foundational concepts that guide the preparation and presentation of financial statements. They ensure consistency, reliability, and comparability in financial reporting. Here are the main accounting principles: 🔹 1. Accrual Principle Revenue and expenses are recorded when they are incurred, not when cash is received or paid. 🔹 2. Consistency Principle… Continue reading Principles of Accounting

The Golden Rules of Accounting are the fundamental principles that guide the recording of financial transactions in double-entry bookkeeping. These rules are categorized based on three types of accounts: 1. Personal Account Rule: Debit the receiver, Credit the giver Example: If you pay a supplier (a person or business), the supplier is credited, and cash… Continue reading Golden Rule of Accounting

Understanding ERP Systems as a Source of Audit Evidence ERP systems, such as SAP, Oracle, Microsoft Dynamics, and NetSuite, are designed to maintain comprehensive records of transactions, controls, and reporting. This centralized data repository offers auditors a robust and integrated source of information that supports all phases of an audit — from risk assessment to… Continue reading Importance of Obtaining Crucial Audit evidence from ERP Software

Rule 86B of the Central Goods and Services Tax (CGST) Rules, effective from January 1, 2021, imposes a restriction on the utilization of Input Tax Credit (ITC) for certain taxpayers.  Applicability of Rule 86B This rule applies to registered persons whose taxable supplies (excluding exempt and zero-rated supplies) exceed ₹50 lakh in a month. Under… Continue reading Rule 86B of the Central Goods and Services Tax (CGST)

Depreciation allocates cost of an asset to the period benefited in line with the Matching concept. To record depreciation, credit Accumulated Depreciation (contra-asset to PP&E on B/S) Methods of depreciation Straight Line Method (SLM) (HC – SV) × SLM% (SLM= 1/Useful life) Double Declining Balance (HC-Acc Dep) * DDB% (DDB%= 1/Useful life*2 Sum of the… Continue reading Depreciation of Assets

1.What is Inventory? Inventory refers to the goods a company intends to sell to customers. It’s an important asset for businesses that sell physical products (like retailers, wholesalers, and manufacturers). 2. Why is Inventory a Current Asset? Inventory is classified as a current asset because it is expected to be sold, used, or converted into… Continue reading Inventory

Accounts Receivable or Trade Receivables A/R should be reported in B/S at Net Realizable Value (NRV) A/R at gross amount is adjusted for Cash Discounts (discounts for prompt payments) Trade discounts (recorded net of any trade discounts) balk purchases. Bad Debts (representing receivables which are uncollectible) Sales Returns and allowances (expected to be returned in… Continue reading Accounts Receivables

Current assets are assets which are expected to be consumed or converted to cash within one year or the normal operating cycle whichever is longer Cash and cash equivalents trading securities Accounts receivable and notes receivable Inventories Prepaid expenses Short term investments Cash surrender value of life insurance Current liabilities are labilities which are expected… Continue reading Current Assets & Current Liabilities