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Taxchopal Latest Questions

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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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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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

    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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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 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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Advocate Dr Amit Dua
Explainer
Asked: In:

  1. Ramesh Sharma Enlightened

    FPO is an organization where the members are farmers. Farmers Producers Organization provides end-to-end support and services to the small farmers and covers technical services, marketing, processing, and others aspects of agriculture inputs. The object behind the Farmer Producer Organizations (FPO)Read more

    FPO is an organization where the members are farmers. Farmers Producers Organization provides end-to-end support and services to the small farmers and covers technical services, marketing, processing, and others aspects of agriculture inputs.

    The object behind the Farmer Producer Organizations (FPO) is that the “Farmers, who are the producers of their agriculture products, can form the groups and can register themselves under the Indian Companies Act

    The Small Farmers Agribusiness Consortium (SFAC) supports the State Government to form the Farmer Producer Organizations (FPOs). The goal is to enhance the farmers’ competitiveness. The major operations of the Farmers Producer Organization (FPO) include the supply of seed, machinery, market linkages & fertilizer, training, networking, financial and technical advice.  

    The Farmer Producer Organization ensures a better income for the producers through an organization of their own and to increase their advantage in emerging market opportunities. 

    Small producers do not have the volume individually to get the benefit of economies of scale. Also in agricultural marketing, the chain of intermediaries take the advantage of small farmers by buying their products at lower rates. By FPO they will be eliminated. Farmers Producers can get the advantage of better bargaining power by bulk production and supplies.

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