Every generation thinks that they are in the pinnacle of development. But subsequent generation just prove then that they are wrong. One of the fields where this is very evident is the Information Technology and Communication Industry. For Example when Graham Bell invented the telephone he would have thought that their generation has reached the pinnacle in communication. He would have never thought that in future there would be a thing called Mobile phone which would enable anyone in this world to talk to anyone, anywhere. In a similar manner, cloud computing has come to revolutionize the way we use our computers.
So what is cloud computing? Cloud computing means computing based on shared resources which are accessible using the internet. So if Cloud computing has to do a lot with internet and the shared resources. This shared resource may be software or even any hardware. But where did the word cloud come from. Cloud actually has the same meaning as internet. Internet got the name cloud because of the fact that while drawing networking Diagrams, internet is represented by drawing a cloud.
For those who think that Cloud computing is something of the future, think once again. Every one of you here would have definitely used cloud computing. But the fact is that you never knew that you are using cloud computing. The best example I can give about a cloud computing service which everyone uses is email. This is why I said that everyone has used cloud computing without even knowing that.
In order to understand why web based email is a cloud service, we has to go back some 15 – 20 year. Continue reading Cloud Computing
No government in anywhere in this world has placed so much trust and confidence in Public Accountants like the Indian Government has placed on Chartered Accountants. Tax Audit by a Chartered Accountant is an Indian phenomenon and does not exist in any other country. Finance Act, 1984 introduced Tax Audit under Section 44AB with effect from the assessment year 1985-86. This not only broadened the area of practice by a Chartered Accountant to an unimaginable scale but also pinned so much trust on the Chartered Accountancy Profession. If you say that you are a Chartered Accountant to any stranger, he would say “ Oh ! you are one of those people who are busy in the month of September” Yes friends the association between a CA and tax audit is inseparable.
Purpose of Tax Audit:
The purpose of Tax Audit is to ensure that books of Accounts have been maintained in accordance with the provisions of the Income Tax Act. Circular No.387 issued by the Central Board of Direct Taxes which has been annexed to the material circulated to you also highlights this fact. Accordingly a proper audit for tax purposes would ensure that proper records are being maintained, and that the accounts properly reflect the income reported by the Assessee. This audit effectively curbs Tax Evasion and ensures Tax Compliance. Tax Audit also ensures that the Accounts are properly being presented to the Assessing Officers when called for. The precious time of the Assessing Officers is also saved from the routine and ineffective verifications like checking of totals and vouching of Purchase and Sales transactions. They can devote their time in more important investigation aspects of a Case. Thus Tax Audit saves considerable time to the Income Tax Department.
Who has to get accounts audited?
Now after knowing the purpose and necessity of Tax Audit, the next question arises as to the applicability of Tax Audit. Audit under section 44AB is applicable to four categories of Assesseess. Now let me explain each category one by one. Continue reading Issues in Tax Audit under Section 44AB
The Direct Taxes Code (DTC) is the most expected Indian Legislation of the decade. For the first time, a bill has been kept open for public commentary even before its introduction in the Parliament. The DTC, as such, is the simplest any tax legislation can become. Has then the DTC, 2009 proved Albert Einstein’s saying (“The hardest thing in the world to understand is the Income Tax”) to be false? Of course not… It has become simple for people who know income tax and not the layman. Let me critically appraise some of the provisions of the Direct Taxes Code, 2009 which may have missed the common eye.
Hefty Increase in Tax Slabs:
The most welcome measure in the DTC Bill is the increase in individual tax slabs. It has increased the slabs to an extent no one expected. When the DTC Bill is enacted, income up to Rupees 10 Lakhs will be taxed only at 10%. Further income between 10 Lakhs and 25 Lakhs will be taxed at 20% and income above 25 Lakhs will be taxed at 30%. Further there will be no more surcharge, Education Cess and Higher and Secondary Education Cess. This will ensure easier tax compliance. All individual will be making whooping tax savings. Let’s compare how the Gross Total income of a General Individual will be taxed under the present regime and under the Direct Taxes Code.
||As Per the Income Tax Act 1961, (For AY : 2010- 11)
||As per Direct Taxes Code Bill, 2009
||Gross Total Income
||Less : deduction for savings
||Income Tax on Above
||Add: Education Cess on Above
||Add: Higher and Secondary Education Cess
||Total Tax Payable
From the above it is very much evident that the individual will be making a whooping tax savings of Rs. 2,09,720/- under the Direct Taxes Code.
Adieu Assessment Year!
The Direct Taxes Code proposes to do away with the terms Assessment Year and Previous Year. Continue reading Critical Appraisal of the DTC Bill, 2009