Vk Singhania Income Tax Book Pdf ##BEST## Free Download
Rhona Gallaher
Every business needs to prepare basic financial statements that summarize its operating results and financial position for a particular period. These statements primarily include income statements, balance sheets, and cash flow statements.
Preparing Comparative Financial Statements is the most commonly used technique for analyzing financial statements. This technique determines the profitability and financial position of a business by comparing financial statements for two or more time periods. Hence, this technique is also termed as Horizontal Analysis. Typically, the income statements and balance sheets are prepared in a comparative form to undertake such an analysis.
A comparative income statement showcases the operational results of the business for multiple accounting periods. It helps the business owner to compare the results of business operations over different periods of time. Furthermore, such a statement helps in a detailed analysis of the changes in line-wise items of the income statement.
The format of the comparative income statement puts together several income statements into a single statement. This helps the business owner in understanding the trends and measuring the business performance over different time periods.
Firstly, specify absolute figures of items such as cost of goods sold, net sales, selling expenses, office expenses, etc. relating to the accounting periods considered for analysis. These amounts are mentioned in Column I and Column II of the comparative income statement.
Finally, calculate the percentage change in the income statement items of the current year relative to the previous year. This percentage change in items is mentioned in Column V of the comparative income statement.
As is evident from the above comparative income statement, the sales of M/s Singhania increased by Rs 20,400 during 2018 as against 2017. However, the cost of goods sold for the company increased by just Rs 15,000 in the same period. If you see carefully, sales increased by 12% whereas the cost of goods sold increased by 14.3%. Thus, the Gross Profit for M/s Singhania did not increase significantly. Now, there can be several reasons for accounting lower Gross Profit during the year:
About 50 crore individuals fall within the income bracket conducive to consumer spending, a number he sees rising to 100 crore over the next 7-8 years. More people will go into the income bracket of Rs 6 lakh and above, which would lead to higher discretionary spending, according to Singhania.
On the other hand, the analysis from the year 2021 does not address the matter of flat rate taxation almost at all, since it addresses it by only one paragraph where it states that the flat rate taxation option is too wide, and that this does not correspond with the good business practice principle. The opinion of the Fiscal Council is that the tax equity principle may be compromised due to such policy, both observed in relations between citizens who pay regular taxes and contributions, and in relations among flat taxpayers who accrue significantly different levels of income.
Even though there are no significant general remarks to the statement that the possibilities for flat rate taxation are set too widely, the most substantial issue of flat rate taxation is represented in the fact that the basic criteria, i.e. only criteria for flat rate taxation is the income, i.e. turnover of the tax payer.
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