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CA Sanjiv Kumar
Enlightened
Asked: In:

  1. Advocate Dr Amit Dua Explainer

    Going concern concept is one of the accounting principles that states that a business entity will continue running its operations in the foreseeable future and will not be liquidated or forced to discontinue operations for any reason. In other words, a going concern is expected to have the followingRead more

    Going concern concept is one of the accounting principles that states that a business entity will continue running its operations in the foreseeable future and will not be liquidated or forced to discontinue operations for any reason.

    In other words, a going concern is expected to have the following things working in their favour:

    1. The business is capable of running the daily operations and has capital and raw materials to do so.
    2. A business has the ability to pay off the debt during the accounting period.
    3. There should be demand in the market for the products or services offered by the company.
    4. There should be no changes in the law governing the business.

    Importance of Going Concern Concept in Accounting

    Going concern concept is very important for the generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). The concept of going concern plays a significant role in the way assets are treated.

    The concept of depreciation and amortization are based on the assumption that a business will continue to perform its operations in the near future (this period is the next 12 months after an accounting period).

    Advantages of Going Concern Concept

    Following are some of the advantages of the going concern concept

    1.Companies during the formation years will be purchasing fixed assets that will be requiring expenditure upfront, but such assets will be providing the benefits spread over a long term, that is well beyond one accounting period. Therefore, the going concern concept provides a way to record the value of such assets.

    2. It is the basis on which the profits and losses of the business are recorded for the year to which it belongs.

    Disadvantages of Going Concern Concept

    Listed below are some of the disadvantages of the going concern concept:

    1. Financial statements are prepared at cost and not on the basis of current market value. In such a case, if the company in an event of liquidation, will have assets valued at the market value, and as such these values will be different from the value determined at cost.

    2. In the event of business being liquidated, the financial statements will be calculated on the on going concern basis, which can be misleading for the stakeholders.

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CA Vishnu Ram
Enlightened
Asked: In:

  1. Advocate Dr Amit Dua Explainer

    HUF means Hindu Undivided Family. You can save taxes by creating a family unit and pooling in assets to form a HUF. HUF is taxed separately from its members.   Mainly A Hindu family can come together and form a HUF. And Buddhists, Jains, and Sikhs can also form a HUF. And also HUF has its own PRead more

    HUF means Hindu Undivided Family. You can save taxes by creating a family unit and pooling in assets to form a HUF. HUF is taxed separately from its members.

     

    Mainly

    A Hindu family can come together and form a HUF. And Buddhists, Jains, and Sikhs can also form a HUF.

    And also HUF has its own PAN and files tax returns independent of its members.

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CA Vishnu Ram
Enlightened
Asked: In:

  1. Advocate Dr Amit Dua Explainer
    This answer was edited.

    TDS @ 2% on cash withdrawal u/s 194N of the Act is applicable starting 1st September 2019, or FY 2019-2020. TDS will be deducted at a rate of 2% on cash withdrawals in excess of ₹ 1 crore if the person withdrawing the cash has filed income tax return for any or all three previous AYs. TDS will be deRead more

    TDS @ 2% on cash withdrawal u/s 194N of the Act is applicable starting 1st September 2019, or FY 2019-2020.

    TDS will be deducted at a rate of 2% on cash withdrawals in excess of ₹ 1 crore if the person withdrawing the cash has filed income tax return for any or all three previous AYs.
    TDS will be deducted at 2% on cash withdrawals of more than ₹ 20 lakh and 5% for withdrawals exceeding ₹ 1 crore if the person withdrawing the cash has not filed ITR for any of the preceding three AYs.

     

    Whereas,

    TDS on cash withdrawal u/s 194N will not apply to withdrawals made by the following persons:

    • Central or state government
    • Private or public sector bank
    • Any cooperative bank
    • Post office
    • Business correspondent of any bank
    • White label ATM operator of any bank
    • Central government specified commission agents or traders operating under Agriculture Produce Market Committee (APMC) for making payment to the farmers on account of purchase of agriculture produce
    • Authorized dealers and its franchise agent and sub-agent and Full-Fledged Money Changer (FFMC) licensed by RBI and its franchise agents
    • Any other person notified by the Government in consultation with RBI.

     

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CA Vishnu Ram
Enlightened
Asked: In:

  1. Advocate Dr Amit Dua Explainer

    If a person receives any sum in contravention of the provisions of section 269ST, he will be liable to pay a penalty of a sum equal to the amount of such receipt under Section 271DA. However if a person proves that there were good and sufficient reasons for the contravention, no penalty will be impoRead more

    If a person receives any sum in contravention of the provisions of section 269ST, he will be liable to pay a penalty of a sum equal to the amount of such receipt under Section 271DA.

    However if a person proves that there were good and sufficient reasons for the contravention, no penalty will be imposed.

     

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    • 1
CA Vishnu Ram
Enlightened
Asked: In:

  1. Advocate Dr Amit Dua Explainer

    In order to put check on use of cash in high value transactions, the government has put a blanket ban on acceptance of cash beyond 2 lakhs by any person under Section 269ST. It is for each occasion like marriage, birthday party etc. or for each transaction like sale of gold, immovable property, holiRead more

    In order to put check on use of cash in high value transactions, the government has put a blanket ban on acceptance of cash beyond 2 lakhs by any person under Section 269ST. It is for each occasion like marriage, birthday party etc. or for each transaction like sale of gold, immovable property, holiday package, renovation/furnishing of property etc. for which this restriction will apply. It may happen that the payer does not claim tax deduction for it but the restriction on recipient will still apply.

    Unlike business expenditure, here the restriction is all pervasive for the whole transaction as a whole and not necessarily for payment made in a single day. For example, a caterer cannot accept two lakhs or more in aggregate for marriage reception form a single payer, whether on a single day or spread over several days. Law, generally, does not have any restrictions for payment of cash for transaction of purchase/sale of jewellery or immovable property etc. but if the value of a single transaction exceeds two lakhs, then seller is prohibited from accepting any cash beyond two lakhs for such transactions.

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CA Vishnu Ram
Enlightened
Asked: In:

  1. Advocate Dr Amit Dua Explainer

      STT is a kind of financial transaction tax which is similar to tax collected at source (TCS). STT is a direct tax levied on every purchase and sale of securities that are listed on the recognized stock exchanges in India. STT is governed by Securities Transaction Tax Act (STT Act) and STT ActRead more

     

    STT is a kind of financial transaction tax which is similar to tax collected at source (TCS). STT is a direct tax levied on every purchase and sale of securities that are listed on the recognized stock exchanges in India. STT is governed by Securities Transaction Tax Act (STT Act) and STT Act has specifically listed down various taxable securities transaction i.e., transaction on which STT is leviable.

    Taxable securities include equity, derivatives, unit of equity oriented mutual fund. It also includes unlisted shares sold under an offer for sale to the public included in IPO and where such shares are subsequently listed in stock exchanges. STT is an amount to be paid over and above transaction value and hence, increases transaction value.

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Advocate Dr Amit Dua
Explainer
Asked: In:

Profit and Loss to Partners Clause of LLP Deed for distribution of only profits to a sleeping partner Distribution of Profit and Loss to active and sleeping Partners of LLP  This article aware us of the situation wherein we can add a sleeping ...Read more

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    Mutual rights and duties of partners and mutual rights and duties of LLP and its partners are governed by the LLP Agreement between the partners, or between the LLP and its partners. In case the LLP Agreement is silent on any matter, provisions in the First Schedule to the LLP Act relating to that mRead more

    Mutual rights and duties of partners and mutual rights and duties of LLP and its partners are governed by the LLP Agreement between the partners, or between the LLP and its partners. In case the LLP Agreement is silent on any matter, provisions in the First Schedule to the LLP Act relating to that matter will apply.

    All the partners of LLP are entitled to share equally in the capital, profits, and losses of the LLP. However, they are free to decide the ratio in which they will share profits. Accordingly, they can decide to share profit but not the losses as per the conditions of agreement. 

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Advocate Dr Amit Dua
Explainer
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    Yes,  An LLP can have an activity of Trade in Stock and Securities. There is no bar in the LLP Act, 2008 for having this activity. Further, as per section 451(c) of the RBI Act, an LLP is considered a financial institution and allowed to do investment activities by investing in marketable securitiesRead more

    Yes,

     An LLP can have an activity of Trade in Stock and Securities. There is no bar in the LLP Act, 2008 for having this activity.

    Further, as per section 451(c) of the RBI Act, an LLP is considered a financial institution and allowed to do investment activities by investing in marketable securities.

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CA Vishnu Ram
Enlightened
Asked: In:

  1. Advocate Dr Amit Dua Explainer

    ​​​​​​TONNAGE TAX​ In case of a company, the income from the business of operating qualifying ships, may, at its option, be computed in accordance with the provisions of Chapter XII-G. Thus, tonnage taxation is a scheme of presumptive taxation wherein notional income arising from operation of shipsRead more

    ​​​​​​TONNAGE TAX​

    • In case of a company, the income from the business of operating qualifying ships, may, at its option, be computed in accordance with the provisions of Chapter XII-G.
    • Thus, tonnage taxation is a scheme of presumptive taxation wherein notional income arising from operation of ships is determined on basis of tonnage of ships.

    Special provisions relating to income of shipping companies

    • Section – 115V : Definitions.
    • Section – 115VA : Computation of profits and gains from the business of operating qualifying ships.
    • Section – 115VB : Operating ships.
    • Section – 115VC : Qualifying company.
    • Section – 115VD : Qualifying ship.
    • Section – 115VE : Manner of computation of income under tonnage tax scheme
    • Section – 115VF : Tonnage income.
    • Section – 115VG : Computation of tonnage income.
    • Section – 115VH : Calculation in case of joint operation, etc.
    • Section – 115V-I : Relevant shipping income.
    • Section – 115VJ : Treatment of common costs.
    • Section – 115VK : Depreciation.
    • Section – 115VL : General exclusion of deduction and set off, etc.
    • Section – 115VM : Exclusion of loss.
    • Section – 115VN : Chargeable gains from transfer of tonnage tax assets.
    • Section – 115V-O : Exclusion from provisions of section 115JB.
    • Section – 115VP : Method and time of opting for tonnage tax scheme.
    • Section – 115VQ : Period for which tonnage tax option to remain in force.
    • Section – 115VR : Renewal of tonnage tax scheme.
    • Section – 115VS : Prohibition to opt for tonnage tax scheme in certain cases.
    • Section – 115VT : Transfer of profits to Tonnage Tax Reserve Account.
    • Section – 115VU : Minimum training requirement for tonnage tax company.
    • Section – 115VV : Limit for charter in of tonnage
    • Section – 115VW : Maintenance and audit of accounts.
    • Section – 115VX : Determination of tonnage.
    • Section – 115VY : Amalgamation.
    • Section – 115VZ : Demerger.
    • Section – 115VZA : Effect of temporarily ceasing to operate qualifying ships.
    • Section – 115VZB : Avoidance of tax.
    • Section – 115VZC : Exclusion from tonnage tax scheme.
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CA Sanjiv Kumar
Enlightened
Asked: In:

  1. Advocate Dr Amit Dua Explainer

    Where 85% of the income is not applied for charitable purposes, the NGO is required to accumulate or set apart such income for future application. The incomes so accumulated will not be included in the total income of the NGO if the following conditions are applied: Such trust or institution furnishRead more

    Where 85% of the income is not applied for charitable purposes, the NGO is required to accumulate or set apart such income for future application. The incomes so accumulated will not be included in the total income of the NGO if the following conditions are applied:

    • Such trust or institution furnishes Form No. 10 – notice of accumulation of income by charitable trust or institution electronically to assessing officer, on or before the due date for filing the return of income.
    • Mention the purpose for which income is being accumulated or set aside.
    • Income shall not be accumulated for more than 5 years and years in which income accumulated or set aside due to order or injunction of any court to be excluded in computing 5 years.
    • Money so accumulated or set aside is invested or deposited in specified mode as mentioned under section 11(5).

    Above such option is to be exercised in form 10 to be furnished electronically to the assessing officer with or without digital signature by the trust on or before due date of filing the return.

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