Applicability of Amendments for Nov 2016 Final Exams

Applicability of Standards/Guidance Notes/Legislative 
Amendments etc. for November, 2016 – Final Examination

Paper 1: Financial Reporting
 

I. Framework for the Preparation and Presentation of Financial Statements.
 

II. Accounting Standards

AS No. AS Title
1 Disclosure of Accounting Policies
2 Valuation of Inventories
3 Cash Flow Statements
4 Contingencies and Events Occurring after the Balance Sheet Date
5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies
6 Depreciation Accounting
7 Construction Contracts (Revised 2002)
9 Revenue Recognition
10 Accounting for Fixed Assets
11 The Effects of Changes in Foreign Exchange Rates (Revised 2003)
12 Accounting for Government Grants
13 Accounting for Investments
14 Accounting for Amalgamations
15 Employee Benefits
16 Borrowing Costs
17 Segment Reporting
18 Related Party Disclosures
19 Leases
20 Earnings Per Share
21 Consolidated Financial Statements
22 Accounting for Taxes on Income
23 Accounting for Investment in Associates in Consolidated Financial Statements
24 Discontinuing Operations
25 Interim Financial Reporting
26 Intangible Assets
27 Financial Reporting of Interests in Joint Ventures
28 Impairment of Assets
29 Provisions, Contingent Liabilities and Contingent Assets

III. Guidance Notes on Accounting Aspects

1. Guidance Note on Accrual Basis of Accounting.
2. Guidance Note on Accounting Treatment for Excise Duty.
3. Guidance Note on Terms Used in Financial Statements.
4. Guidance Note on Availability of Revaluation Reserve for Issue of Bonus Shares.
5. Guidance Note on Accounting Treatment for MODVAT/CENVAT.
6. Guidance Note on Accounting for Corporate Dividend Tax.
7. Guidance Note on Accounting for Employee Share-based Payments.
8. Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961.
9. Guidance Note on Measurement of Income Tax for Interim Financial Reporting in the context of AS 25.
10. Guidance Note on Applicability of AS 25 to Interim Financial Results.
11. Guidance Note on Turnover in case of Contractors.
12. Guidance Note on the Schedule III to the Companies Act, 2013.
13. Guidance Note on Accounting for Expenditure on Corporate Social Responsibility Activities.
14. Guidance Note on Guidance Note on Accounting for Derivative Contracts.

IV. Applicability of the Companies Act, 2013 and other Legislative Amendments

The relevant notified Sections of the Companies Act, 2013 and legislative amendments including relevant Notifications / Circulars / Rules / Guidelines issued by Regulating Authority up to 30th April, 2016 will be applicable for November, 2016 Examination.

V. Applicability of Indian Accounting Standard (Ind AS)

Topic of “Introduction of Indian Accounting Standards (Ind AS); Comparative study of ASs vis-a-vis Ind ASs; Carve outs/ins in Ind ASs vis-à-vis International Financial Reporting Standards (IFRSs)” has been made applicable in place of “Overview of International Accounting Standards (IAS) / International Financial Reporting Standards (IFRS), Interpretations by International Financial Reporting Interpretation Committee (IFRIC), Significant differences vis-a-vis Indian Accounting Standards; Understanding of US GAAPs, Applications of IFRS and US”.

Considering the significance and relevance of the Ind AS, the above topic has been included in the syllabus and the students are expected to have an overall knowledge of the contents covered therein. However, considering the extensive coverage of the contents covered in such topic, from the examination perspective, simple problems involving conceptual or application issues may be asked in the examination.

VI. Non-applicability of AS 30, 31 and 32 on the topic ‘Accounting and Reporting of Financial Instruments’

Ind AS 32 “Financial Instruments: Presentation”, Ind AS 107 “Financial Instruments: Disclosures” and Ind AS 109 “Financial Instruments” have been made applicable to the topic ‘Accounting and Reporting of Financial Instruments’ instead of AS 30 “Financial Instruments: Recognition and Measurement”, AS 31 “Financial Instruments: Presentation” and AS 32 “Financial Instruments: Disclosures”.

PFA the attached file to know more in details

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Income Tax Provision for Doctors

Among the busiest of professionals, doctors have little time to learn about the latest tax law. Tax planning is often neglected in the crush of other obligations. Being India’s Top 10s income earners, they have need to give more attention to their financial planning and taxation.

Here we are providing some necessary documentation and legal requirements for doctors in India as necessary to follow to avoid unnecessary payment of tax, interest & penalty.

Income Tax:-
Section 44AA read with Rule 6F

Section 44AA mandates the maintenance of books of accounts for the medical professionals for Income Tax purpose.

Those Doctors whose Gross Receipt/Collection exceed Rs.1.50 Lakhs per annuam.

Books required to maintain

• Cash Book, Journal( if mercantile system), Ledger;

• Carbon copies of bills exceeding Rs. 25 whether machine numbered or otherwise serially numbered,
• Original bills wherever issued to the person and receipts in respect of expenditure incurred by

the person or, where such bills and receipts are not issued and the expenditure incurred does not exceed fifty rupees, payment vouchers prepared and signed by the person.

A person carrying on medical profession shall, in addition to the books of account and other documents specified in sub-rule (2), keep and maintain the following, namely:

• a daily case register in Form No. 3C;

• an inventory as on the first and the last day of the previous year, of the stock of drugs, medicines and other consumable accessories used for the purpose of his profession.

The books of account and other documents specified in sub-rule (2) and sub-rule (3) shall be kept and maintained for period of [Eight] years from the end of the relevant assessment year: Penalty for non-maintenance of books of accounts is Rs.25, 000. (As Per Section-271A of Income Tax Act)

Audit: 44AB

If practicing doctor is having gross fee collection of Rs. 25, 00,000 (twenty five lakhs)* or more during the previous year (April to March), then books of accounts should be audited by a Chartered Accountant in Practice.

Penalty for non-complying with tax audit is Rs.1, 50,000 or ½ % of gross receipt whichever is lower. (As Per Section-271B of Income Tax Act)

-* Rs. 25,00,000 has been substitute as Rs. 50,00,000 from AY 2017-18.(As proposed)

Due Date:-

a) Non Audit Case: 31st July of the year
b) Audit Case: 30th September of the Year

Presumptive Tax Scheme for Professionals

Section -44ADA-(Extract of Section 44ADA from Proposed Finance Bill 2016)

This section is to be proposed only for Individual, HUF & Partnership firm to

- Reduce compliance burden for small professional (Like non maintenance of books under section 44AA & no tax audit required if gross receipt not exceed Rs. 50,00,000/-)

- To bring parity between small professional & businessmen.

AND to tax income on presumptive basis as HIGHER of 50 % of gross receipt or Total Income assessed.

As doctor’s always says

“Self-Medicine is dangerous to health which doctor discourages to every patient. Just like that Self –Tax planning is also not advisable.

Income Tax Returns Statistics for FY 2011-12 released by Department

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The Statistical data relating to filing of Income Tax Returns for FY 2011-12 is released by Income Tax Department. The numbers will help to analyse and understand more of the Income Tax Return filing trend for the year.

I) Income Tax Returns declaring 'Salary Income':

The Highest number of Returns are filed by Persons having Salary Income between Rs.5.5 lacs to 9.5 lacs.

II) Income for Business or Profession:

Around 3.11 crore Taxpayers have reported Income from Business or Profession. The highest number of taxpayers in this Head ranges again between Rs.5.5 lacs to Rs.9.5 lacs.  There are only 45,570 taxpayers in FY 2011-12 who have reported Income more than Rs.1 crore from Business/Profession.

Lets discuss about Corporates i.e. Companies now. 

III) Companies having Income from House Property:

IV) Companies having Business Income:

 There are 6.35 lacs Companies who have reported Income from Business of which 3.24 lacs have reported either Nil Income or lacs i.e. almost 50% of the total companies!
26,299 Companies have filed Return stating Income more than Rs.1 crore during FY 2011-12.

V) Let us have a look at types of Industries in which Business is reported by Corporate and non-corporate taxpayers:
 
 
 
 The highest category of business where maximum numbers of business is done in India is Trading (Others) followed by Service Sector (Others) and then Trading (Retailers)
 

(Author can be reached at By- Sonu Mehla Mobile- 8285910007 E-Mail- sonuandfirm@gmail.com)