Endowment Policy

Endowment Policy

Endowment Policy An   endowment policy   is a   life insurance contract which, apart from covering the life of the insured, helps the po... 12:53 AM

Endowment Policy

An endowment policy is a life insurance contract which, apart from covering the life of the insured, helps the policyholder to save regularly over a specific period of time so that he/she is able to get a lump sum amount on maturity of the policy. These are the group of policies. It is opposite from whole life policy. This maturity amount can be used to meet various financial needs such as funding one's retirement, children's education, marriage or buying a house.

Types of Endowment Policy

1.     Ordinary Endowment Policy: under this policy, premium is paid for a specific period of time. Payment is made after expiry of period or in case of death. It is a very popular scheme. It is a insurance as well as an investment (we get interest also with the premium amount).

2.     Limited payment Endowment Policy: In this, single premium is included. For example we take policy for 20 years or total amount 2,00,000 rupees. If a shareholder wants to pay whole amount at one installment than company gives some benefit to the shareholder.

3.     Deferred Endowment Policy: in case of death of insured during the contract period payment of premium would be stop but amount of claim is paid on actual due date(which is opted by insured in a contract). If nominee is also died than insured person should be disclose in his will that after nominee’s death who will be the receiver of that amount.

4.     Pure Endowment Policy: No amount of claim is paid by insurer in case of death during the contract period. Amount is paid only when he is alive during contract period

5.     Double Endowment Policy: In case of death of insured, insured amount paid by insurer or if insured person is alive upto the maturity date of the contract than double amount of insured value is paid by the insurer.

6.     Joint Life Endowment Policy: This policy is suitable for spouse, partnership firm. Under this policy, two life are secured at a one time. If any one dies, insurance company pay full amount to other person. Premium is determine by calculate both person’s age difference. Ex. Jeevan Sathi, Jeevan Mitra.

Budget- Meaning and Concepts

Budget- Meaning and Concepts

Budget- Meaning and Concepts Budget is a quantitative tool of presentation of business plans and policies to be pursued in the future ... 7:46 AM

Budget- Meaning and Concepts

Budget is a quantitative tool of presentation of business plans and policies to be pursued in the future period of time. Budgeting is a part of management process which includes preparation of budget, buget control all those activities that are related with budget.

According to Harry L. Wylie: “Budgets are formal programmes of future operations and expected results. Budgets result from forward thinking and planning”.

According to I.C.M.A.London: “A Budget is a financial statement prepared prior to a predetermined period of time of the policy to be persued during that period for the purpose of attaining a given objective”

Preparation of a Budget

1.      Formation of a policy: First, an organization formats a policy to make a budget.

2.      Preparation of Forcast: It is a quantitative term. Company forcast the future demand, trends and fashion.

3.      Evaluate the different alternatives: Company evaluates all the alternative. After that select the best alternative

4.      Prepare a budget: After following all the steps, company finally prepare budget.

Essentials of an effective Budgeting

1.      Sound forcasting

2.      A proper plan

3.      Efficient organization with definite plan of responsibility

4.      Formation of budget committee

5.      Clearly define business policies

6.       Availability of statistical policies

7.      Support of top management

8.      Good reporting system

9.      Motivational approach

Classify the various type of Return

Classify the various type of Return

Classify the various type of Return  1.Voluntary Return : Assesee voluntary may file the return of his/ her income to the Income Tax Dep... 1:20 AM

Classify the various type of Return

 1.Voluntary Return: Assesee voluntary may file the return of his/ her income to the Income Tax Department. It involves two types of Assesee.

1)    Corporate Assesee: Any corporation or company registered under Companies Act 2013 is comes under Corporate Assesee. It has a separate tax rate.

2)    Non- Corporate Assesee: These Assesee are individual, HUF, Partnership Firm (if it is not convert into another business form). According to Companies Act 2013, it should be individual under Partnership firm, Partners and Partnership firm is a separate Assesee; individual partner does not pay any tax. They are exempt because partnership firm already paid tax.

When file return

1.      Regarding Corporate Assesee: No criteria of Income for deciding filling the   income

2.      Regarding Non- Corporate Assesee: if total income exceeds the minimum taxable limit without deducting 80C to 80U deduction than Assesee will file the return to income tax department.

Last date of submission of return:

1.     Corporate Assesee: 30 September of A.Y.

2.     Any Assesee: Accounts are subject to audit under Income Tax (compulsory audit in Business or Profession)

3.     Individual or HUF: 31 July of A.Y.

4.     Non- Corporate Assesee: 30 November of A.Y.

If an Assesee mis the last working day or the filling on the last day than it is considered as belated income. If an Assesee not submit on the due date, they have a chance to file the return.

Before the expiry of the assessment year or within the any date of the assessment year(whichever is earlier). If tax liability is due. According to under section 234 C Penalty is charged. If no tax liability then no penalty is charged.

2. Defective Return: It means something is missed. For ex. Some expenses or some income, if anything is not filled by Assesee or if any revision is necessary revise means only original is allowed. Only the original return is allowed as per Income Tax Law. Sometimes Government may increase the last day to file the return (In case belated return the revised return of Income is not permitted.)

Return of Loss: Return of Income as the name suggests we file the Income but in case there is loss return is file. In few cases return is not file when loss is occurred.

Cases in which filling of return of loss is compulsory

1.     Loss under Business or Profession including speculation and Non-speculation business.

2.     Loss from Capital Gain (Long term or Short term both)

3.     Loss from maintaining or owing the horse races. (Lottery is a casual income, there is no loss in lottery. No deduction is allowed.

Filing of return of loss is compulsory because it reduce income in future at the time of set off and it is not compulsory that loss is the actual loss. It may be profit after checking by Assessing Officer.

Cases in which filling of return of loss is not compulsory

1.     In case of loss from House Property or Staff occupied house.

2.     Loss due to Unabsorbed depreciation

3.     Loss due to Capital expenditure of Scientific Research other than land

4.     Expenditure on the Family planning

3.Compulsory Return: If an Assesee crossed the minimum taxable limit considering all deduction u/s 80C to 80U or if return is not filled by Assesee. A notice of demand is serve by Assessing Officer to the Assesee regarding for filling of return after expiry the due date of filling of return. A specific period would be given to return the file. Within the time framework assesee can not file the return under the notice of Demand.

“Best Judgment Assessment” would be made by assessing officer. It is called as ‘Ex- party’. It takes decision in the interest of both the party. If compulsory notice is given then according to “U/S 234C” interest is charged.

Computation of Taxable Income (Illustration)

Computation of Taxable Income (Illustration)

Computation of Taxable Income (Illustration) Illustration: Mr. Rajat’s GTI for the P.Y. 2012-13 was Rs. 5, 00,000. He made the following d... 11:09 PM

Computation of Taxable Income (Illustration)
Illustration: Mr. Rajat’s GTI for the P.Y. 2012-13 was Rs. 5, 00,000. He made the following donations by cheques.

• a)     Maharashtra Chief Minister’s Earthquake Relief Fund – Rs. 10,000
• b)    National Foundations for Communal Harmony – Rs. 15,000
• c)     Municipal Corporation for promotion of family planning – Rs 40,000
• d)    Minority Community Corporation(notified) – 25,000
• e)     Rs. 10,000 to an Educational Institution of National Eminence

Compute his taxable income for the A.Y. 2013-14.

Solution:

Computation of Taxable Income

                                                                                                   Rs.                   Rs.

              Gross Total Income                                                                    5,00,000

                 Less: Deduction u/s 80G:

1)    Deduction allowed (100%)

a)  M C M E RF                                            10,000

b) N F C H                                                     15,000

c)  E I N E                                                      10,000

2) With limit donation (40,000+25,000)

Qualifying amount 10% of GTI is 50,000

a)  Deduction for Family planning(100%)       40,000

b) Deduction for minority Community(50%)  5,000    82,500

                           Taxable income                           4,17,500

Accounting entries of issue of Share (Basic Entries)

Accounting entries of issue of Share (Basic Entries)

Accounting entries of issue of Share (Basic Entries a)         On receiving the Application amount                  Bank Account   ... 9:43 PM

^{Accounting entries of issue of Share (Basic Entries}

^{a)        On receiving the Application amount}

                 ^{Bank Account                                     Dr.}

                       ^{To Share Application Account}

                 ^{(Being application amount received)}

^{b)       On transferring the application amount into capital account}

              ^{Share Application Account                  Dr}

                     ^{To Share Capital Account}

       ^{(Being transfer of application money into capital account)}

^{c)        On Allotment due}

               ^{Share Allotment Account                    Dr}

                      ^{To Share Capital Account}

             ^{(Being allotment amount due)}

^{d)       On Allotment amount received}

                ^{Bank Account                                    Dr}

                       ^{To Share Allotment Account}

               ^{(Being allotment amount received)}

^{e)        On First Call due}

                 ^{Share First Call Account                    Dr}

                        ^{To Share Capital Account}

                ^{(Being First call due)}

^{f)        On first call amount received}

                ^{Bank Account                                   Dr}

                      ^{To Share First Call Account}

                ^{(Being First Call amount received)}

^{g)       On Second or Final Call Due}

                ^{Second or Final Call Account              Dr}

                      ^{To Share Capital Account}

                 ^{(Being Second or Final call due)}

^{h)       On Second or Final Call amount received}

                 ^{Bank Account                                   Dr}

                        ^{To Second or Final Call Account}              

          ^{(Being Second or Final Call Account received)}        

      

             

Ratio Analysis

Ratio Analysis

Ratio Analysis A ‘Ratio’ is a arithmetical expression of relationship between two related and inter-dependent items. It is used to e... 7:59 AM

Ratio Analysis

A ‘Ratio’ is a arithmetical expression of relationship between two related and inter-dependent items. It is used to evaluate various aspects related to company’s operating and financial performance. It also helps to calculate the efficiency, liquidity, solvency and profitability of the company. Accounting Ratio based on Accounting Data. In other words, accounting ratio defines as quantitative relationship between two or more than two variables. “Ratio Analysis” is the one of the powerful techniques for analysis and interpretation of Financial Statement. It involves four steps mainly.

1.   Selection of relevant Data: Relevant data are selected from the financial statement which is depending upon the objective of the analysis.

2.    Calculations of Ratio: After selecting the relevant data appropriate ratio are calculated according to the objective.

3.     Comparison of Ratios: Ratios are compared with the past ratios.

Interpretation of Ratios: After comparison of ratio, interpreted the ratio and drawn the conclusion. 

Transaction in Which PAN is Compulsory

Transaction in Which PAN is Compulsory

Transaction in Which PAN is Compulsory 6:46 AM

Transaction in Which PAN is Compulsory

Ethnocentric Approach

Ethnocentric Approach

Ethnocentric Approach 6:44 AM

Ethnocentric Approach

Procedure for Assessing HUF

Procedure for Assessing HUF

Procedure for Assessing HUF HUF is the person and it is treated as a separate Assesee. It is separate from members. Under HUF they tak... 12:22 AM

Procedure for Assessing HUF

HUF is the person and it is treated as a separate Assesee. It is separate from members. Under HUF they take business and use parental property. The member of HUF is become through birth.

Exception: from 2005, all sons and daughter (unmarried daughter) is become the member of HUF. In 2005, one amendment came in Hindu Law that married daughter and female is become the member of HUF and she can claim for parental property. From 2016, married daughter also a member of HUF.

HUF member:   1) By birth sons and married daughter

2) Adopted but legally (follow legal process), ( transfer of child from one parents to another parents).

Member of HUF: 1) Birth is essential part under HUF.

                            2) Sons and wife also a member of HUF

                            3) Legal adoption of a Child

HUF only a single person where since birth become a member.

Membership Criteria: Minimum two member should be there for forming a HUF and there is no limit for maximum member. For partnership minimum two and maximum 20 member should be there.

Rights of member under HUF: 1) Every member of HUF has right to seen any document.

                                                 2)  Only Karta is responsible for any kind of activity.

                                                 3) HUF having busing and using a parental property. Common

                                                    Property is in the name of Karta.

Selection Criteria for Karta:   1) most senior male member of HUF will be the Karta.

                                             2) If Senior most male member is not able for Karta than we go

                                                 for Junior male member.

                                            3)  Suppose no male member is available or he is not competent to         

                                                Contract than female member become Karta(2005).

LIC AAO Exam Preparation (2018)

LIC AAO Exam Preparation (2018)

LIC AAO Exam Preparation (2018) 12:17 AM

LIC AAO Exam Preparation (2018)

Types of Life Insurance Policy

Types of Life Insurance Policy

Types of Life Insurance Policy 1.        On the basis of Payment of Premium 1)       Single premium payment/ Lum- sum payment 2)  ... 1:51 AM

Types of Life Insurance Policy

1.       On the basis of Payment of Premium

1)      Single premium payment/ Lum- sum payment

2)      Multiple premium payment

(a)    Limited premium payment

(b)   Whole Life Premium Payment

2.       On the basis of Profit sharing

1)      With profit policy

2)      Without profit policy

3.       On the basis of Market value

4.       On the basis of Life Assured

1)      Single Life policy

2)      Joint Life policy

5.       On the basis of Sum Assured

1)      Single installment

2)      Multiple installment

6.       On the basis of Duration of the policy

1)      Limited period(10 year or 20 year)

2)      Whole life(till death)

The GST council has finanlised the rate

The GST council has finanlised the rate

The GST council has finanlised the rate From July 1, prices of various item will change as the GST is slabed to be implemented from th... 1:47 AM

The GST council has finanlised the rate

From July 1, prices of various item will change as the GST is slabed to be implemented from that day. Finally, the GST rate council has finalized the rates of tax for all the articles of consumptions. Under new tax rates, several item including AC and refrigerator will get cheaper while SUVs, Car with big capacity engine will cost more.

Fan is the mass consumption item in the market for the commom men. Yet fan and Ac has been grouped in the same GST bracket of 28%, said by an Industrialist.