How Tax Policies Impact Individuals and Businesses?

The subject of taxation is complex and ever-evolving, affecting individuals and businesses in various…

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The subject of taxation is complex and ever-evolving, affecting individuals and businesses in various ways. This article will explore how tax policies affect individuals and companies and how online taxation courses can help comprehensively understand these policies.

Tax policies play a crucial role in shaping the financial landscape for individuals and businesses alike. They are a fundamental aspect of the financial system and have far-reaching consequences for individuals and companies. These policies are crucial in determining how much individuals and companies have to pay taxes and directly impact their financial well-being. Understanding these policies can be a complex task, especially for the newbies of the taxation world. However, with the advancement of technology and the increasing trend toward digitalization, online taxation courses have become a popular option for those seeking to deepen their knowledge and understanding of the tax system.

How do tax policies affect individuals?

One of the most significant ways tax policies impact individuals is through income redistribution. The government aims to redistribute wealth from the highest earners to those in lower income brackets through progressive taxation. Progressive taxation, where those with higher incomes are taxed at a higher rate, is a common form of income redistribution. The goal of progressive taxation is to reduce income inequality and support those in need.

However, some individuals argue that it discourages work and investment, while others believe it is necessary to fund government programs and services that benefit lower-income individuals.

Employment is another area in which tax policies can have a significant impact. Tax credits and deductions for businesses can encourage companies to hire new employees, as these incentives reduce the cost of employing workers.

On the other hand, if tax policies become too burdensome for businesses, they may choose to lay off workers or reduce their workforce.

For example, taxes on wages and salaries can increase the cost of hiring workers, discouraging employers from creating new jobs.

On the other hand, tax credits and deductions for businesses that invest in new equipment or hire new employees can encourage job creation and economic growth. Online taxation courses can help individuals understand how tax policies can impact the job market and how they can prepare for changes in the employment landscape.

In addition, tax policies can impact where individuals choose to live. For example, states and cities with lower tax rates may be more attractive to individuals and businesses, as they can save money on taxes. This can lead to population growth in these areas and a corresponding decline in other areas with higher tax rates.

With the growth of online taxation courses, individuals now have access to a wealth of information and resources to understand better how tax policies affect their financial well-being. Online courses can provide a comprehensive overview of the tax code, including information on different types of taxes, tax credits, deductions, and other vital topics.

How do tax policies affect businesses?

Tax policies play a crucial role in shaping the economic landscape for businesses of all sizes and legal forms. From influencing borrowing and investment decisions to determining where companies choose to conduct their operations, tax policies profoundly impact businesses.

With the advent of online education, online taxation courses have become a popular and convenient way for business owners and executives to stay informed about tax policies and their impact on their operations. This article will examine how tax policies affect businesses in these critical areas.

One of the most significant ways tax policies impact businesses is through the tax code’s treatment of different legal forms of companies.

Whether it be a sole proprietorship, partnership, limited liability company (LLC), or corporation, it can have a significant impact on tax obligations and benefits. For example, corporations are taxed differently than sole proprietorships, and LLCs have different tax benefits and obligations than partnerships.

Borrowing is another area in which tax policies can impact businesses. For example, tax incentives for businesses to invest in capital equipment or make other investments can encourage companies to borrow money. On the other hand, if tax policies make borrowing more expensive, businesses may choose to reduce their borrowing or delay investments.

Investing is another critical aspect of business operations that can be affected by tax policies. For example, tax incentives for businesses to invest in research and development (R&D) or capital equipment can encourage companies to make these investments. On the other hand, if tax policies make investment more expensive, businesses may choose to reduce their investment or delay investments.

In addition, tax policies also impact where businesses choose to conduct their operations. For instance, high state and local taxes can make conducting business in certain areas more expensive, causing companies to consider moving to areas with lower tax rates. This can lead to the growth of companies in these areas and a corresponding decline in other areas with higher tax rates.

In conclusion, tax policies significantly impact individuals and businesses, shaping their financial well-being, employment opportunities, and decision-making.

They determine the amount of income individuals and businesses must contribute to support government services and initiatives. They also contribute to redistributing income to support those in need.

Therefore, understanding the tax code and its effects is crucial for individuals and businesses to make informed decisions and plan for their future. And with the rise of online taxation courses, it is easier for individuals and owners to access information and resources to understand better how tax policies affect their financial well-being and operations.

By taking advantage of these courses, individuals and businesses can understand the tax code comprehensively, including information on different types of taxes, tax credits, deductions, and other essential topics. The knowledge and understanding gained from online taxation courses can help individuals and businesses make informed decisions that allow them to grow and succeed in today’s complex and constantly evolving economic landscape.

Knowledge Series For Commerce Students: Know Your Home Loan

Home Loans cater to your needs or possibly a renovation, construction, or additional repairs…

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Home Loans cater to your needs or possibly a renovation, construction, or additional repairs to your humble abode. It is affiliated with a plethora of facets that the borrower needs to take into consideration before he/she can finally attempt to avail of such a loan.

How Much Of A Loan Amount Are You Eligible To Avail?
The predominant requirement is the eligibility of the borrower in the repayment of the loan that would determine the tenure, interest rates, and down payments attached to the loan amount. Your surplus income will drive the lender to figure out the actual amount of loan that you are eligible for.

So, your total assets, total liabilities, and the apparent stability of income play a pivotal role in gaining the lender’s trust. At the end of the day, a bank needs to ensure that your financial stability will not pose any problem for them in the repayment of the loan amount.

Additional Charges And Figures That You Need To Be Aware Of
Statistically, the bank assumes that as much as 50% of your income would suffice for your loan repayment, furthermore, the desired tenure, as well as pegged interest rate, will also impact the decision of assessing the amount of loan.

The majority of lenders expect around 10 to 20 per cent of the amount of home’s purchase in the form of a down payment on your part, and the remaining portion of the loan is eventually financed by the lender.

Now, this aggregate amount of loan encompasses certain charges, for instance, registration, transfer, stamp duty etc. You may be eligible for a larger amount but it does not necessarily mean that you have to get that much amount financed, even a significantly smaller amount can also be availed which directly relies on your requirement.

It is advisable, however, that keeping the ratio of down payment relatively higher than the ratio of loan amount so that the ultimate cost of interest payable can be mitigated and be kept at the desired level.

The Necessity Of A Co-Applicant
Additionally, having a co-applicant is an indispensable requirement to fulfil, so if you are the only owner of the property under scrutiny, then, in this case, an immediate sibling or any other family member can be anointed as a co-applicant.

What Specific Documents You Will Require For The Loan?
The documentation process is another integral and intrinsic phase where a checklist of specified documents is handed out by the bank which is to be filled accurately to steer clear of future ramifications.

Your unique identity proof, proof of residence, form 16/Income tax returns and recent salary slips which has to be decidedly authenticated by your employer and has to be self-attested.

But generally, in most cases, collateral security is also warranted such as insurance policies, units of mutual funds or any other significant investment. In most cases, the designated property is purposefully mortgaged in favour of the lender in the form of security until the loan has been repaid in its entirety.

Should You Secure Your Home Loan With An Insurance Policy?
It is vehemently advisable to secure insurance in favour of the home loan so that the liability does not fall on anyone else, but you alone will be secured enough to repay it. Now there are two prominent plans which are prevalent in today’s scenario, i.e. pure term insurance and the other one is a Mortgage insurance plan.

Now the loan amount should be equivalent to the insurance amount. As far as the premium is concerned, then a single premium, as well as regular premiums, will be the coveted choice. However, it is not mandatory to avail of insurance cover but a sense of self-assurance is generated by availing of such service.

Disbursement Of Loan
The documentation process is the precursor of the disbursement of the loan. The magnitude of the loan amount is solely scrutinised based on the documentary proof and that entails the procurement of a sanction letter from the bank which explicitly states the final amount of loan, duration, and applicable interest rate etc.

So in a nutshell, when the loan has finally been confirmed from the bank, it is commonly referred to as disbursement of the loan after getting through entire technical and legal or valuation activities and handover the cheque or demand draft in favour of seller after successful execution of sale deed and mortgage deed of the house.

Types Of Interest Rates
Rates of home loan can be distinct in the form of fixed or flexible. Calculation of EMI varies as per the various financial institutions/banks from where your loan has been sanctioned. Underlying additional charges also apply in tandem with the payment of the EMI such as processing fee which is generally about 0.5 to 1% of the loan amount. Now, repayment in the form of EMI begins right after the month when the loan has been disbursed.

Repayment Through ECS
Electronic Clearing System (ECS) is one of the avenues through which the repayment of the loan can be done, which involves direct payment of the loan amount from your salary account on a specific date of the repayment.

If you are eligible to pay higher EMI, then it will certainly benefit you since it acts as a long-term advance. Clearing the obligated amount faster will alleviate and relieve your mental stress easily.

The borrower always has this option at his disposal to pre-close his/her loan way ahead of the specified duration. However if the interest on your loan is of floating nature, then you will not be bound to pay additional charges, whereas if it is of a fixed nature, then certain charges may be applicable.

Every financer or lender should explicitly state in their statement the total interest as well as the principal amount payable at the very beginning of the financial year. This will eventually serve as a propellent factor to the department of accounts regarding your proof of investment for necessary tax deductions.

This phenomenon will serve you to reap tax benefits at the end of the year. It is prudent to pick the lender that renders the lowest EMIs option which can mean that you are paying a significantly lesser amount of money in the form of repayments as compared to other applicants from any other financial institution.

How Your Grievances Can Be Addressed
There may be incidences that a borrower may not be satisfied with the services rendered by the bank or some other pertaining relevant problem might occur.

So in that case, you can mention your grievance specifically in writing delineating the factors that displeased you, which needs to be addressed at the concerned branch and if however, the bank does not resolve or overlooks your concern then you have the option at your disposal to lodge your complaint with the ombudsman.

Income Tax Benefit of Housing Loan
Interest payment for housing loan is deductible under the head income from house property. The maximum limit is Rs. 2 Lacs p.a. u/s. 24(b). Moreover, we can also get benefit u/s. 80C of income tax for the principal repayment of housing loan with maximum limit of Rs. 1.50 Lacs. The stamp duty and registration charges paid at the time of registration of sale deed is also deductible u/s 80C of Income Tax Act, 1961.

Knowledge Of Insurance For Tax Professionals

Varsha who works at a media office in Ahmedabad met with an accident on…

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Varsha who works at a media office in Ahmedabad met with an accident on her way to work. She was rushed to the hospital where she was treated for four days before being discharged. The hospital bill amounted to about Rs.60,000.

Fortunately, she had a health insurance cover of Rs.3,00,000. The hospitalization and treatment charges were taken care of by the insurer. Had there been no insurance coverage, she would have had to pay the entire amount out of her own pocket.

Insurance is your cushion against unexpected financial losses or damages. An insurance policy is what Varsha signed with the insurance company which was a legal statement of her agreement with the company, which agreed to cover costs in case of a damage, in exchange for a periodic premium paid by her.

Here, the company is the ‘insurer’ while Varsha is the ‘policyholder’ as well as the ‘insured’. A policyholder is not always the same as the ‘insured’. Such cases will be explained further in this read.

Insurance is not only procured by individuals but also by businesses to insure against specific types of risks. Premium, Deductible and the Policy Limit are three essential components of an insurance policy. A good understanding of what all an insurance policy entails can be gathered by enrolling in the taxation course in Ahmedabad.

Components Of An Insurance Policy

  • Premium – A premium is a regular payment – annual, semi-annual or monthly —made by the policyholder to the insurance company for purchasing a policy. The amount of the premium depends on factors like the type of coverage (business-specific, medical insurance, home insurance etc.), the amount of total coverage, an individual’s insurance history (to determine risk factors), as well as competition in the insurance industry. Higher the risk factors, more the amount of premium you have to pay.
  • Deductible – It is the amount that a policyholder has to pay on her own while the insurer pays a claim. Deductibles are meant to work as disincentives against minor or insignificant claims. The policyholder usually has the choice to decide their deductible. As a general rule, higher the deductible, lower is the premium and vice versa. 
    Policy Limit – It is the maximum amount the insurance company will pay for a covered claim. These maximum amounts can be determined per-damage, per-time-period or over a policy’s lifetime. Higher policy limits have higher premiums.

Policy limits can vary within a policy according to various aspects of the damage. To delve into understanding these, one may consider taking the tax practitioner course in Ahmedabad.

Types Of Insurance Policies

Life Insurance or Term Plan

It is particularly an essential coverage in cases where the beneficiaries are heavily dependent on the insured person. Life insurance policies promise to compensate the beneficiaries of the insured person, in case they expire during the policy term, or after a set period. The payment made for life insurance is deductible under section 80C of Income Tax Act,1961. To know details about how much you can save as tax you can learn by taxation course in Ahmedabad.

Health Insurance 

For medical emergencies, health insurance covers the costs of treatment, hospitalization and medication. Health insurance plans in India also come with tax benefits on premiums as mentioned in section 80D of Income Tax Act, 1961. Types of Health insurance plans include 

  • Individual plans
  • Family plans
  • Senior Citizen plans
  • Critical Illness plans
  • Maternity plans
  • Group plans
  • Unit Linked health plans
  • Coronavirus plans

Employees these days are mostly covered under Group insurance plans by employers, who pay the premium instead of the employees.The same is allowable expense for the company. Though the amount is usually not great, yet it is advisable to be covered under such plans since some benefits still count against zero-premium paid.

Vehicle Insurance 

It ensures monetary compensation in case of any accidents that may have led to the damage of the motor vehicle. A four-wheeler insurance policy is mandatory in India as per the Motor Vehicle Act 1988.

Vehicle insurance includes all expenses in case of death and damage suffered due to collisions or natural calamities, hospitalization expenses in the event of an accident, legal/financial damages due to third party liability, as well as rider benefits like roadside assistance. Major types of car insurance plans available in India are –

  • Comprehensive car insurance: Insures car damages and third-party liability cover 
  • Third-Party car insurance: Only third-party legal liability cover
  • Pay as you drive insurance: Insurance premiums are decided by the kilometres driven (suitable for people who own more than one car, and each of the vehicles is not used very frequently)

The taxation training in Ahmedabad is a good option to consider if one wants to learn about new policy developments like the ‘Pay as you drive insurance’, that are created as a response to changing lifestyles and newer needs.

Education Insurance 

Securing their child’s future is the biggest concern of a parent. Education insurance policies aid in the same by providing an amount of education cost when the child is ready to indulge in higher education; 18 years of age and above. This is the kind of policy where the ‘policyholder’ is not the same as the ‘insured’. Here, the parent/guardian is the policyholder while the child is the insured. 

Home Insurance 

It covers all expenses in case of damages incurred to a house due to any sort of physical damage caused either due to human-caused accidents or natural calamities. Home insurance covers not only the building or structure but also the contents of the house and any other detached structures that may be a part of it. Home insurances are aimed at providing indemnities for a variety of damages and include- 

  • Fire and Special perils
  • Public Liability cover
  • Building structure insurance
  • Burglary or Theft
  • Personal accident
  • Contents insurance
  • Landlord insurance
  • Tenant insurance

Professional Liability Insurance 

It ensures professionals like lawyers, trainers, tax preparers, accountants, doctors, beauticians and so on, against claims of damage made by clients. It indemnifies professional liability for the policy period only. The cover is provided mainly on a claims-made basis.

The aspect of a retroactive date is also available in the case of Professional Liability Insurance, which means that damages caused before the beginning of the policy period, which is being claimed during the policy period, are also covered.

Knowledge about insurance and its acute parts and mechanisms can be expanded by enrolling in the best tax course provider in Ahmedabad. A deeper understanding will help one to better analyze and choose the perfect insurance needed for a specific case and time. Knowledge so gathered will assist in making wiser decisions when choosing financial safety nets for oneself or clients.  

All About PAN And TAN For Bcom Students

To collect and manage tax from various incomes, the Income-tax department issues various unique…

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To collect and manage tax from various incomes, the Income-tax department issues various unique identification numbers. While PAN (Permanent account number) is a 10 digit identity number allotted to taxpayers, TAN  is a 10 digit number allocated to Tax deductors.

PAN: Permanent Account Number
PAN is an identification number that is mandated by the Income Tax Department for any individual who carries out financial transactions or pays the income tax.

PAN Card For Students
A PAN card is issued by the NSDL and UTI on behalf of the government, to all the individuals. It is generally adults over the age of 18 who apply for a PAN card. However, a student can also apply for a PAN card.

The government of India has made it mandatory for all the individuals who has taxable income to possess a PAN card, including a PAN card for students as well. Since PAN card is an official document for identity proof in India, it should be used by all income earning individuals and non-individuals.  For students, a PAN card can act as an alternate identity for a school ID card.

Benefits Of Having A PAN Card
A PAN card comes into a student’s life with numerous benefits, keeping all the prospects in mind. Students should apply for a PAN card as early as possible since  it comes with numerous perks like:

  • Proof Of Identity: It will serve as one of the major sources of identification proofs in both governments as well as private institutions. It is one of the Indian documents that is accepted universally. Any student who wishes to go abroad for further studies should apply for a PAN card making the entire journey hassle-free.
  • Applying For Student Loans: A PAN is a must for getting loans from the bank. If a student going through a crisis, wishes to apply for a bank loan for further studies, they should apply for a PAN card first.
  • Life-Long Validity: Once applied, the PAN card doesn’t require any further replacements. This document will link all your lifelong financial transactions through one single identity card.
  • IT Returns Filing: Let’s admit, all of us have to start paying taxes one day, all individuals who are eligible for IT are expected to file for their IT returns. A PAN card is necessary for filing IT returns, hence it would be advisable to get familiar will the IT culture beforehand and be well equipped rather than applying for a PAN card at the heat of the moment.
  • Starting A Business: If you are a young budding entrepreneur who is fascinated by the start-up culture in India, you have to know that to start a company it is mandatory to have a PAN Registered on its name. The earlier you start to learn about taxes and banking, the more beneficial it is, here is the link of a verified tax practitioner course in Ahmedabad that will give you a better perspective about taxes and transactions.

Linking Of PAN With Aadhar
Being a responsible citizen one should link their PAN card with their Aadhaar to help our nation avoid the problem of issuing numerous PAN cards under a single name. Government has mandated to have aadhar card and linking of the same with PAN. No New PAN can be issued without Aadhar card. Even issued PAN has to be linked with Addhar, Your PAN will be cancelled if it will be not linked to Addhar in near future.

How Can One Apply For A PAN Card?

PAN card is issued by the IT Department of India under the supervision of the Central Board of Direct Tax. There are different steps to apply for a PAN card online and offline.

  • For the online process of PAN Card UTIITSL, NSDL is the most authentic platforms for students to apply.
  • If an applicant is from India they should pay Rs.110 as the application fee.
  • A 49A form has to be filled for both online or offline proceeding of the application.
  • One has to carry 2 latest passport size photographs, and a copy of Aadhar Card required as address and identity proofs. If Aadhar card don’t have date of birth then birth proof is required to be attached.
  • TAN: Tax Deduction And Collection Account Number: While filing for Tax deducted at source (TDS) or Tax Collected at Source (TCS), quoting TAN is a prerequisite. As a 10- digit alphanumeric identifier for individuals or entities that deduct or collect tax at source, TAN helps streamlining or collection of tax at source.

Do Students Need TAN?
As TAN Furnishes details about Tax deducted at source and is used for Filing TDS return it is not required by students as they are not. Tax Deductor or TDS return filer.

However, students should have a brief idea about Taxes as it is not taught in educational institutions and can be quite a tedious task once they start adulting. Understanding taxes can be quite arduous at times, here is a link to one of the best tax courses in Ahmedabad that will help you learn better.

Is PAN Compulsory For A TAN Application?
The Central Board of Direct taxes is considering making PAN mandatory as a requirement for allotting  Tax Deduction Account Numbers (TAN) to companies that deduct tax at source.

Can PAN Replace TAN?
PAN should never be quoted in the field where TAN is required to be quoted. However, a person required to deduct tax under section 194-1A can use PAN in place of TAN as such a person is not required to obtain Tan.

Procedure To Apply For TAN
Just like PAN a person has the choice to apply for TAN either through online or offline methods.

  • One has to fill a TAN Application form 49B to avail a new Tax Deduction and Collection Number.
  • While applying for TAN the applicants are not required to submit any documents, they only have to submit an acknowledgment slip if they apply for a new TAN.

As we grow older Taxes become an essential part of our life, PAN card will become a core part of our identity, due to their lack of knowledge a lot of people get cheated in the beginning process of their tax filings. Here is a link to a taxation training course in Ahmedabad, that will save you on a rainy day.

Professional Etiquettes For Tax Professionals

How you conduct yourself speaks volumes about you. The way you act and communicate…

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How you conduct yourself speaks volumes about you. The way you act and communicate with people around you becomes your hallmark, especially in professional settings. 

In a professional setting, you would come across a lot of people, including your seniors, your subordinates and your clientele. To leave a positive impression on them and to earn their trust and respect, you must abide by some unwritten codes of conduct. Simply put, professional etiquettes are what define you in a professional setting. 

Tax professionals to need to abide by a set of professional etiquettes, to succeed. You can consider taking the course on taxation training in Ahmedabad if you want expert advice on this matter.

Why Tax Professionals Must Act According To Professional Etiquettes
If you are an aspiring tax professional, you must understand a simple fact. While dealing with your clientele, you must win them over with your manners. Your courteous demeanour will help you forge good relationships with your clients.

Even your chances of being recommended to other potential clients would improve to a great extent. If you opt for a tax practitioner course in Ahmedabad, you will surely receive proper guidance about professional etiquettes that you must observe.

Etiquettes Which All Tax Professionals Must be Mindful of
Now that you know why tax professionals must be mindful of professional etiquettes, you must know what codes of conduct you must abide by. Let’s take a look at how you must conduct yourself while dealing with your clients, under different circumstances:

1. When You Are Having A Face-to-Face Interaction In Real Life

While having a face-to-face interaction with your clients in real life, you must act according to the following etiquettes:

  • Be polite and amiable when greeting them. 
  • Stand up when you are welcoming them. When you are introducing yourself to them or are being introduced, you must stand up.
  • Try not to avoid eye contact with your client when talking to them or negotiating with them. Staring at them for several minutes might indeed make them feel uncomfortable. But a complete avoidance of eye contact is not acceptable either. 
  • A little small talk can help your clients feel at ease with you. However, avoid asking them overly personal questions. For instance, you may enquire after their health but you must refrain from asking them about their relationship status.
  • Listen to your clients attentively. 
  • Your dress code forms a part of your professional etiquette. So, dress formally and professionally.
  • Be confident when discussing matters with your clients or filing tax returns. If you speak with an air of confidence, it will leave a lasting impression on the minds of your clients.

2. When You Are Having A Virtual Face-to-Face Interaction

Owing to the COVID-19 pandemic raging all over the world, face-to-face communication with clients had to be shifted to the digital and virtual platforms. 

So, when you are interacting with your clientele on Google Meet or Zoom, you must be mindful of a few more points in addition to the professional etiquettes as discussed above. The additional etiquettes or rather, netiquettes have been discussed in the following section:

  • It’s important to minimize distractions and noises in the background when you are having an online meeting with your clients. Choose a relatively noise-free area when you are attending the meeting. 
  • Make sure that you have a stable internet connection. You must make sure to ask your clients politely, about their internet connection as well. In case any problem arises in connection to this issue, you must apologize to your client and talk to them about making an alternative arrangement.
  • While listening to your client, you must mute yourself.
  • Even if you are having an online meeting, it’s important to abide by a formal dress code. If you appear presentable and professional, it will leave a good impression on the minds of your clients.

3. When You Are Talking To Clients Over Phone

Sometimes, you might have to connect with your clients over the phone. You must uphold your professionalism in this regard as well. Following are the professional etiquettes which you must keep in mind in this regard:

  • Refrain from calling your clients at ungodly hours, unless there is an exigency. Calling them after normal working hours, on weekends or national holidays may be perceived as unprofessional.
  • Once they receive your call, politely ask them if they can talk to you at that particular point of time. If they are unable to talk to you at that juncture, you may call them later as per their convenience.
  • Be direct and straightforward while discussing matters over a phone call. It’s always advisable to keep it short and sweet.
  • Try minimizing distractions and background noises too.

4. When You Need To Send E-mails To Your Clients

You must remember to act professionally while sending e-mails to your clients and responding to their queries. So, without further ado, let’s look at the professional etiquettes that you should observe when it comes to e-mail:

  • Always use salutations and proper greetings.
  • Avoid making grammatical errors, syntactical errors and other minor mistakes. It’s important to thoroughly proofread the emails which you would send to your clients.
  • Write concisely and crisply. 

All the points discussed in this section must be remembered by every budding tax professional and they might reap a lot of benefits if they take up a taxation course. A tax practitioner course in Ahmedabad might help them immensely.


All tax professionals in the making must be mindful of the fact that if somebody wants to be respected, they must respect others first. If you act by the codes of conduct, a lot of opportunities might come along your way. 

As Clarence Thomas puts it: “Good manners will open doors that the best education cannot.” That is why prospective tax professionals need to follow certain professional etiquettes. Do you want to discover more about it and gain some valuable first-hand experience concerning professionalism? In that case, you may consider taking up the best tax course in Ahmedabad without further delay.

All About Deferred Tax – What You Need To Know

Contrary to its name, deferred tax is actually an accounting concept. It is governed…

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deferred tax simplfied - what you need to know

Contrary to its name, deferred tax is actually an accounting concept. It is governed by Accounting Standard 22, which is studied as part of course curriculum of most accounting classes.

In reality, deferred tax is not any form of tax expense paid/payable to the government. It represents accounting for difference between tax expense as per books and as per tax return filed by a taxpayer entity.

Differences in tax expense as per books and as per tax return could occur on account of various reasons, for example the rate at which depreciation on certain asset is accounted for in books may be higher/lower than what is permitted as per income tax law. Another example could be donations made by the company – while they are recorded as expense in profit and loss account, they are not an allowable deduction while computing taxable income.

All such differences are to be classified as either timing difference or permanent difference. Timing differences are those which will get reversed in the future. However, permanent differences are those which, as the name suggests, are permanent in nature and will not be reversed in the future. In the above example, while the book depreciation rate may be different than tax depreciation rate, the cost of asset would eventually be depreciated in entirety in both books and tax records. It is merely that the period over which it is depreciated will differ. Hence, it would qualify as timing difference. On the other hand, donation is never allowed as an expense and therefore qualifies as a permanent difference.

Deferred tax is recognised only on timing differences. Depending upon the nature of timing difference, either a deferred tax asset is created or a deferred tax liability is recognized in a financial year. Every year, the position is revisited and the deferred tax asset or deferred tax liability may be reversed depending upon the calculations made.

When there is a disallowance / addition to Profit before tax in tax return, deferred tax asset is created. When additional deduction / allowance is claimed from Profit before tax in tax return, deferred tax liability is created. Instead of mugging it up, whether an asset is to be created or liability, can be understood in logical terms as under:

  • When a disallowance / addition is made in tax return vis-a-vis the expense booked in books, it implies that taxable income is higher in current year, i.e. tax paid is higher now, thus lower tax would need to be paid in future, hence recognize an asset now.

  • Conversely, when higher deduction is claimed in tax return vis-a-vis the expense booked in books, it implies that taxable income is lower in current year, tax paid is lower now, thus higher tax would need to be paid in future, hence recognize a liability now.

Accounting Standard 22 provides for various other aspects related to deferred tax recognition as well, such as:

  • deferred tax is to be recognized at enacted or substantively enacted rate as on balance sheet date
  • deferred tax asset is recognized when there is ‘virtual certainty’ that the asset can be reversed in the future
  • deferred tax getting reversed within the tax holiday period should not be recognized

This might sound like too complicated and confusing, but if one were to think logically, the concept of deferred tax is pretty simple. Accounting classes at Super 20 Training Institute can help you learn complex accounting concepts such as these with ease.

All About Assessment Proceedings

Every democratic country has three wings – the legislators, the administrators, and the judiciary.…

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Assessment Proceedings

Every democratic country has three wings – the legislators, the administrators, and the judiciary. As has always been the case with any law, once it is enacted by the law-makers / legislators, it is expected that the public at large must abide by it. In order to ensure that the law is being followed, there are administrators, and in case of disagreement between the two, there is judiciary to resolve these issues.


In the context of income tax as well, the law (Income Tax Act, 1961) has prescribed a set of rules and compliances. It is expected of people to honestly follow the same. At the same time, an administrative body – the Income Tax Department – has been set up in order to ensure correct implementation of the law. 

Once a tax return is filed by a taxpayer, it is picked up for processing. It may be accepted as it is. On the other hand, should the department feel the need, it can make some inquiries from the taxpayer regarding various incomes declared / not declared by him. These inquiries are conducted as part of assessment proceedings. The law provides for various kinds of assessment proceedings, the manner in which they must be conducted, and the time frame within which they must be initiated and completed. A good knowledge on the subject can be gathered from commerce course at Super 20 Training Institute. Nevertheless, an overview is provided below.


The main type of assessment proceeding is Scrutiny assessment. Some key aspects are:

  • Requisite notice must be issued in order to initiate the same
  • Such notice can be issued within 6 months from the end of the financial year in which return is filed
  • The time frame to complete this assessment is 21/ 18/ 12 months from the end of the assessment year (depending upon which year’s assessment it is) 

Scrutiny assessment is clubbed with other provisions of the Income Tax Act in certain situations, such as:

  • Best judgment assessment: when the taxpayer doesn’t cooperate / submit information, the tax officer can make an assessment on the basis of information available with him
  • Section 148 assessment: when the income considered to have escaped assessment exceeds specified limits and the afore-said time period of 6 months to issue notice has expired
  • Block assessment: when search / survey has been conducted, and assessment proceedings of multiple years are to be pursued on the basis of evidence collected during such search / survey.

How is scrutiny assessment conducted?

Once a notice is received, it is usually accompanied by a questionnaire seeking information as the tax officer may deem fit. The assessee must prepare a response and appear before the tax officer with all explanations. In case there is no questionnaire, the tax officer may ask for information during the course of discussion. The assessee can always seek some time which he thinks he will require to collate the details. If the tax officer considers the request reasonable, he would allow the assessee to come back with answers at a later date. Such back and forth may continue until all queries are responded to and tax officer has no further questions. 

More recently, the department has been moving towards e-proceedings, which implies that all responses to the inquiries raised can be responded over email, and do not require the assessee to be present in person. This has turned out to be a sincere blessing for all taxpayers, since it saves significant effort, time and paper, and even rules out any chances of harassment of any kind.

What happens after?

It is not necessary that the tax officer may agree with all the explanations furnished by the assessee. In case he is not satisfied, he may make suitable adjustments to the taxable income of the assessee for that year and raise demand for any shortfall in taxes paid, basis such revised income computed by him. 

If the taxpayer does not agree with such assessment, he can approach the higher authorities to appeal against the assessment so completed and the matter can be argued by both parties (taxpayer and tax officer) for adjudication. 

You can learn more about assessment proceedings as part of taxation training given by Super 20 Training Institute in its Advanced Executive of Commerce course.

Section 80C of the Income Tax Act

In computing the total income of an assessee, being an individual or a Hindu…

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In computing the total income of an assessee, being an individual or a Hindu divided family (HUF), section 80C deductions are applicable. This section tells us that if we invest our money into specific investment avenues like life insurance, subscription to certain equity mutual funds or debentures, etc., you will get a reduction in your tax payable amount by way of deduction from tax computable income. The deduction does not exceed Rs. 1,50,000/-.

But the question arises where to invest or if any expenses are made then which are the expenses which will get a deduction, right? So here is the list…

1. Life Insurance: Premiums paid toward all life insurance policies are eligible for tax benefits under Section 80C. This deduction can be claimed for premiums paid towards ensuring self, spouse or wife, dependent children and any member of Hindu Undivided Family (HUF).

2. Public Provident Fund: Public Provident Fund (PPF) contributions are eligible for tax deductions under Section 80C. PPF accounts have a maximum or utmost deposit limit of Rs. 1,50,000/- p.a., therefore, we can claim a deduction of the amount deposited in PPF account under Section 80C.

3. Stamp Duty and Registration Charges: While buying a property, one of the largest expenses you will have to bear is the 4.9% stamp duty and 1% registration charges of sale deed value in Gujarat. To give some benefit to the taxpayers or people are eligible to pay tax, the government has included these expenses under Section 80C of the Income Tax Act, 1961. To the benefit of taxpayers.

4. Sukanya Samriddhi Yojana: Investments made in Sukanya Samriddhi Yojana, which is a saving scheme for the girl child, are to be claimed for tax deduction under Section 80C of the Income Tax Act, 1961. A parent or legal guardian of a girl child, who has not crossed the age of 10 years, can open this account. Sukanya Samriddhi Yojana account can be opened for two girl children. We can open one account per one girl child and can be extended to a third if twins are involved.

5. As tuition fees (excluding any payment towards any development fees or donation or payment of similar nature), whether at the time of admission or thereafter-
(a). To any university, college, school or other educational institutions situated within India;
(b). For the purpose of full-time education of any of the persons as specified in the act.

6. As subscription of any units of any mutual fund referred to in clause (23D) of section 10 and approved by the Board of an application by such mutual fund in the prescribed form.

7. As subscription to such bonds issued by the National Bank for Agriculture and Rural Development.

8. In an account under the Senior Citizens Savings Scheme Rules, 2004.

9. The insurance, deferred annuity, provident fund & superannuation fund.

10. Unit-linked insurance plan and an annuity plan.

11. Pension fund and subscription to any deposit schemes as specified.

12. Principal repayment of the amount borrowed for purchase or construction of a residential house.

To learn more about taxation (income tax), join our classes Super20. S20 is well known for the Best Tally Classes and #1 Taxation Institute in Ahmedabad.

Key Highlights of Interim Budget 2019 for Individual Tax Payer

Key Highlights of the changes in the interim budget affecting the individual taxpayer are…

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Key Highlights of the changes in the interim budget affecting the individual taxpayer are as under:

Income under the head salaries
Section 16(ia): Limit of Standard deduction from income under the head salary is increased from Rs. 40,000/- p.a. to Rs. 50,000/-p.a. for all salaried person.

Income from house property
Section 23(4): Previously, If we own more than one house property, we have to pay tax on the rental income or notional rent income for second house property whether we had given it on rent or not. Now, the second house is also exempted from tax as we don’t require to calculate notional rent if we have not given second house property on rent.

Rebate from tax
Section 87A: rebate from income tax is increased from Rs. 2,500/- to Rs. 12,500/- for individual or HUF. This rebate is allowed to the individual who has net total income up to Rs. 5,00,000/-. If the net total income of any individual is more than Rs.5,00,000/- then the benefit of the rebate is not available.

Tax Deducted at Source (TDS)
Section 194A: Limit for TDS deduction is increased from Rs. 10,000/-p.a. to Rs. 40,000/-p.a. for interest income from bank deposits and post office savings. Limit for other interest is remained the same, i.e., Rs.5,000/-p.a.

Section 194I: Limit for TDS deduction is increased from Rs. 1,80,000/-p.a. to Rs. 2,40,000/-p.a. for Rent income from property or plant and machinery took on rent.

Capital Gain
Section 54: If we invest capital gain on sale of house property to another house property it is exempted from tax under section 54. Now, the same benefit can be availed up to new house property maximum up to Rs. 2 Crores. However, this benefit can be claimed only once in a lifetime.

Incentives for farmers
Government has also provided incentive of Rs. 6000/- p.a. (under the scheme of Pradhan Mantri Kisan Samman Nidhi) to all the farmers having agriculture land less than 2 hectares of cultivable land. It will be applicable from September 2018. The amount will be transferred to farmer’s account in three installments. It will cover 12 crore small and marginal farmers of the country.

Pension Scheme for the unorganized sector
The government has introduced a mega pension scheme to provide a monthly pension of Rs. 3000/- for workers in the unorganized sector after the age of 60 years with a contribution of Rs. 100/- p.m.

Super20 is one of the best taxation coaching Institute, located in Ahmedabad. If you have any query regarding the tax you can contact s20 at [email protected].

Taxes Benefits for Salaried Individuals

As soon as the filing season begins, salaried class are frenzy about taxes they…

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As soon as the filing season begins, salaried class are frenzy about taxes they must pay for the said financial year. It is important to understand tax slab and what each of salary breakup component means. This can help to figure out how to save on taxes. Here are the important things to understand.

Standard Deduction: Salaried person are given a standard deduction of Rs. 40,000/- from their salary income irrespective of their salary per annum.

House Rent Allowance: This allowance can be claimed by those individuals who live in rented house. This can be partially or completely exempted from tax. Method for computing HRA is given in the income tax act that can be claimed as exemption. Also note that, if you received HRA and don’t live on rent, then it is fully taxable.

Leave Travel Allowance (LTA): Salaried employees can avail exemption for a travelling expenses, i.e., travel fare within India under LTA if the same is reimbursed by the employer. This allowance can only be claimed for a trip taken with your spouse, children, and parents, but not with other relatives. This particular exemption is up to the actual expenses, therefore unless you actually take the trip and incur these expenses, you cannot claim it. It can be avail only 2 times in block of 4 years. Submit the bills to your employer to claim this exemption.

Professional Tax: In our income tax return, professional tax is allowed as a deduction from our salary income. It is usually deducted by the employer and deposited with the state government. The maximum amount of professional tax that can be levied by a state is Rs. 2,500.

Food Allowance: The amount given as food allowance upto Approx. Rs. 15000/-per annum is non-taxable in the hands of employees.

Donation to Political Parties U/s 80GGC: Any Donation made to political parties is exempt from tax if it satisfies certain conditions.

Donation to Charitable Trust u/s 80G: Any donation made to registered charitable trust by cheque is exempt upto 50% of donation amount from tax if it satisfies certain conditions.

Interest On Housing Loan: Under Section 24 of the Income Tax Act, an individual can claim tax deduction of the interest payment on the housing loan up to a maximum amount of Rs. 2,00,000.

Deduction u/s 80C: Following expenses are claimed as exemption u/s 80C. Maximum amount which can be claimed as deduction for the following expenses is Rs. 1,50,000/- per annum.

  • Tuition fees of school or college
  • Life Insurance premium
  • National Saving certificate and Kisan Vikas Patra
  • Employee Linked Saving Scheme
  • Principal Repayment Towards Housing Loan
  • Sukanya Samridhhi Scheme (It is only for those who has girl child)
  • Public Provident Fund
  • Statutory Provident fund
  • Stamp duty and registration charges of house purchase, etc.

NPS: An individual can avail an exemption of Rs.50,000 if he invested in National Pension Scheme under section 80CCD regardless to the deduction of 1,50,000 in 80C.

Mediclaim u/s 80D: This deduction can be avail by an assesse upto Rs.25000 for his family. However, if any of the parents covered by the mediclaim policy is a senior citizen, then the deduction amount is increased to Rs. 30,000.

Education Loan u/s 80E: The deduction allowed is the total interest part of the EMI paid during the financial year. There is no limit on the maximum amount that is allowed as deduction. You, however, need to obtain a certificate from your Bank.

You can also write to us at [email protected]. We provide people of any background a simple, effective and practical training in Accounting, Taxation, GST, Tally. You can know more about our courses at www.s20.in/courses.