A

FINAL PROJECT REPORT ON

ACCOUNTS & FINANCE

(TAXATION)

(MADHUSUDAN GAUTAM K & ASSOCIATES)

IN THE PARTIAL FULFILLMENT OF THERE

QUIREMENT FOR THE DEGREE OF BACHELOR
OF COMMERCE (B.COM H)

SESSION (2021-2024)

SUBMITTED TO: SUBMITTED BY:

MS. POOJA MAKEN Khushi GOEL

Assistant Professor Roll No. -1221248

MMIM, MMDU B.com Hons. 3RD YEAR

MMIM, MMDU

1
2
 ACKNOWLEDGEMENT

It gives me a great pleasure to submit this project to MAHARISHI

MARKANDESHWAR (DEEMED) TO BE UNIVERSITY. I take this
opportunity with great pleasure to present before this project on “
TAXATION” which is result of co- operation, hard work & good wishes
of many people. The most pleasant part of any project is to express the
gratitude towards all those who have contributed to the success of my project.

I would like to thanks M.S POOJA MAKEN who has been my mentor for
this project. It was only through her excellence assistance & good suggestion
that I have been able to complete this project.

I am deeply grateful to DR. SUNAYNA KHURANA (Director)

MAHARISHI MARKANDESHWAR INSTITUE OF MANAGEMENT
for their everlasting support or guidance on ground of which I have acquired
a new field of knowledge the course structure created for curriculum has
benefited with inclusion on recent development in an organization &
management aspects.

3
 PREFACE

For the completion of B.COM it is mandatory to obtain training. This

training session really help me ingathering knowledge of market.

I have prepared this project on effectiveness of ‘TAXATION” in

MADHUSUDAN GAUTAM K & ASSOCIATE. in which I have written
about how an organization set their standards to make comparison and better
production.

The training is one of the prime importance as it is the vehicle for obtaining
the best possible person-to-job fit that will, contribute significantly towards
the company effectiveness. It is also becoming increasingly important, as
the company evolves and changes, that new recruiters show a willingness to
learn, adaptability and ability to work as a part of a team.

4
 DECLARATION

I, KHUSHI GOEL declare that the project letter of credit at MADHUSUDAN

GAUTAM K & ASSOCIATES. submitted to MAHARISHI MARKANDESHWAR
(Deemed) To Be University for the partial fulfilment of the requirement of
degree of Bachelor of Commerce (B.com) is a record of original project
work done by me.

I further declare that this project has not been submitted to any other
university/institution of any degree.

KHUSHI

5
 CERTIFICATE FROM THE FACULTYGUIDE

This is to certify that MS KHUSHI GOEL student of B.com 3rd year of

MAHARISHIMARKANDESHWAR (DEEMED) TO BE UNIVERSITY,
MULLANA has undertaken the project entitled "TAXATION” of
MADHUSUDAN GAUTAM K & ASSOCIATES." Under me
guidance and supervision for the partial fulfillment of the requirement for
the degree of Bachelor of Commerce (B.COM).

MS. POOJA MAKEN

(Project Guide)

6
 TABLE OF CONTENTS

SR.NO. TITLE PAGE NO.

CHAPTER 1 INTRODUCTION ABOUT TOPIC 8-37

CHAPTER 2 -ALL OVER INDIA INDUSTRY 38-52

PROFILE
-COMPANY PROFILE 53-54

CHAPTER 3 LITERATURE REVIEW 55-56

CHAPTER 4 RESEARCH METHODOLOGY 57-60

CHAPTER 5 DATA ANALYSIS AND 61-63

INTRPRETATION

CHAPTER 6 SUGGESTION/CONCLUSION 64-66

7
 CHAPTER-1

INTRODUCTION

8
Introduction-

Taxes are an important and largest source of income for the government. The government uses the money
collected from taxes for various projects for the development of the nation. The Indian tax system is well
structured and has a three-tier federal structure.

The tax structure consists of the central government, state governments, and local municipal bodies. When it
comes to taxes, there are two types of taxes in India - Direct and Indirect tax. The direct tax includes income tax,
gift tax, capital gain tax, etc while indirect tax includes value-added tax, service tax, goods and services tax,
customs duty, etc.
The Central Government of India imposes taxes such as customs duty, central excise duty, income tax, and service
tax. The state governments impose income tax on agricultural income, state excise duty, professional tax, land
revenue and stamp duty. The local bodies are allowed to collect octroi, property tax, and other taxes on various
services like water and drainage supply.

Types of Taxes in India

Taxation in India is majorly divided into Central and State Govt taxes with two types of taxes:

1. Direct Taxes

2. Indirect Taxes

While direct taxes are levied on your earnings in India, indirect taxes are levied on expenses. The responsibility
to deposit the direct tax liability lies with the earning party, whether individual, HUF or a company.

Indirect taxes are collected majorly by the corporates and businesses providing services and products. Thus, the
responsibility to deposit indirect taxes lies with these entities.

9
What is Direct Tax?

Direct taxes are imposed on corporate entities and individuals. These taxes cannot be transferred to others. For
individual taxpayers like you, the most important type of Direct tax is the income tax. This tax is levied during
each assessment year (1st April to 31st March). As per the Income Tax Act, 1961, it is mandatory for you to
make income tax payments if your annual income is above the minimum exemption limit. You can get tax
benefits under various sections of the Act.
What are the Different Types of Direct Tax?

Direct taxes account for almost 50% of the government’s revenue in India. However, income tax is not the only
direct tax. Here are the types of direct taxes applicable in India:

1. Income Tax

2. Capital Gains Tax

3. Corporate Tax

Income tax applies to any income of an Individual and HUF except capital gains and profits from business and
profession. Income tax is calculated as per the applicable slab rates for the Assessment Year.
The central government announces the slab rates in the annual budget.

You also have the provision to reduce your taxable income using the tax-saving investments and expenses
under section 80C.
What other Taxes come under Direct Tax?

Individuals in India, earn an income in a diverse range. Therefore, it is important to levy a tax on you based on
your income and if someone earns more, the tax percentage should be different. The Income Tax Act segregates
the income range and charges different rates as per the segregation. The different groups are known as tax slabs.
Your income tax slab can vary not only based on your income but also your age. Every year during the Central
Government’s Budget Session, amendments are made in the income-tax slabs.
1. Capital Gains Tax

Capital gains tax apply to the profits from the sale of a capital asset only. The rate of tax on capital gains depends
on the type of capital gain. Income Tax Act, 1961 divides the capital gains tax into the following two types:

10
  Short-Term Capital Gains Tax
 Long-Term Capital Gains Tax
Short-term capital gains are when the assets are sold within a specified period, for example:

1. Equity stocks sold within 12 months of purchase

2. Debt mutual fund units sold within 36 months of purchase

3. Real estate property or gold sold within 36 months of purchase

If the asset is sold after the specified period, the gains or losses will become long-term capital gain or loss.

Depending on the type of asset your gain may receive indexation benefit on long-term capital gains. Indexation
allows you the benefit of inflation to your capital gains, reducing your tax liability.

Also Read: Capital gains accounts scheme

2. Corporate Tax

The corporate tax applies to the businesses and entities filing their returns as a company. This is also a slab rate
depending on the turnover of the firm.

Income* Turnover less than or For other domestic companies Foreign

equal to Rs 4 billion companies
in FY 2018/19

Base Effective# Base Effective# Base Effective#

Rate Rate Rate

Less than 25 26 30 31.2 40 41.6

Rs 1 crore

More than 25 27.82 30 33.38 40 42.43

Rs 1 crore
but less

11
than Rs 10
crore

More than 25 29.12 30 34.94 40 43.68

Rs 10
crore

* Surcharge of 10% if income exceeds Rs 1 crore

# Health & Education Cess of 4% as of FY 2020-21
What are the Different Types of Indirect Taxes in India?

Indirect taxes in India have been the most consistent and largest revenue source for the government. The Indian
tax system has had multiple indirect taxes, some of these are still operational:
1. Service Tax

2. Indian Excise Duty

3. Value Added Tax (VAT)

4. Customs Duty

5. Securities Transaction Tax (STT)

6. Stamp Duty

7. Entertainment Tax

Few of the indirect taxes in India like service tax, value-added tax and excise duty have been removed for a large
number of goods and services. These taxes have been replaced by a single Goods and Services Tax.

Customs duty tax applies to the goods being imported into India from other countries, and in a few cases on the
goods being exported from India.

Securities Transaction Tax or STT applies to the transactions involving an exchange of financial securities. For
example, equity stocks, mutual fund units, future and options contracts. This tax is necessarily applied to

12
securities exchange transactions. However, you can also pay Stamp duty and STT on securities changing hands
outside the exchange or over the counter.

STT allows the buyers and sellers of securities to benefit from lower short and long-term capital gains taxes on
the exchange.

Stamp duty is a State Government levy on the transfer of assets within their territory. It acts as legal proof of
ownership of the asset or security.

Entertainment tax in India is also a state subject and applies to the transactions involving the entertainment
business in the country. Such businesses and activities will include movie releases, sporting events, concerts,
amusement parks, theatres, etc.

13
Goods & Services Tax (GST) What is GST in India? Indirect Tax Law Explained

1. What is GST in India?

GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in
India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament
on 29th March 2017 and came into effect on 1st July 2017.

In other words, Goods is levied on the supply of goods and services. Goods and Services Tax Law in India is
a comprehensive, multi-stage, destination-based tax that is levied on every value addition. GST is a single
domestic indirect tax law for the entire country.

Before the Goods and Services Tax could be introduced, the structure of indirect tax levy in India was as follows:

Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales, Central GST and
State GST are charged. All the inter-state sales are chargeable to the Integrated GST.

Now, let us understand the definition of Goods and Service Tax, as mentioned above, in detail.

Multi-stage

An item goes through multiple change-of-hands along its supply chain: Starting from manufacture until the final
sale to the consumer.

Let us consider the following stages:

 Purchase of raw materials

 Production or manufacture

 Warehousing of finished goods

 Selling to wholesalers

14
  Sale of the product to the retailers

 Selling to the end consumers

The Goods and Services Tax is levied on each of these stages making it a multi-stage tax.

Value Addition

A manufacturer who makes biscuits buys flour, sugar and other material. The value of the inputs increases when
the sugar and flour are mixed and baked into biscuits.

The manufacturer then sells these biscuits to the warehousing agent who packs large quantities of biscuits in
cartons and labels it. This is another addition of value to the biscuits. After this, the warehousing agent sells it to
the retailer.

The retailer packages the biscuits in smaller quantities and invests in the marketing of the biscuits, thus increasing
its value. GST is levied on these value additions, i.e. the monetary value added at each stage to achieve the final
sale to the end customer.
15
Destination-Based

Consider goods manufactured in Maharashtra and sold to the final consumer in Karnataka. Since the Goods and
Service Tax is levied at the point of consumption, the entire tax revenue will go to Karnataka and not Maharashtra.

2. The Journey of GST in India

The GST journey began in the year 2000 when a committee was set up to draft law. It took 17 years from then
for the Law to evolve. In 2017, the GST Bill was passed in the Lok Sabha and Rajya Sabha. On 1st July 2017,
the GST Law came into force.

16
17
3. Objectives Of GST

 To achieve the ideology of ‘One Nation, One Tax’

GST has replaced multiple indirect taxes, which were existing under the previous tax regime. The advantage of
having one single tax means every state follows the same rate for a particular product or service. Tax
administration is easier with the Central Government deciding the rates and policies. Common laws can be
introduced, such as e-way bills for goods transport and e-invoicing for transaction reporting. Tax compliance is
also better as taxpayers are not bogged down with multiple return forms and deadlines. Overall, it’s a unified
system of indirect tax compliance.

 To subsume a majority of the indirect taxes in India

India had several erstwhile indirect taxes such as service tax, Value Added Tax (VAT), Central Excise, etc.,
which used to be levied at multiple supply chain stages. Some taxes were governed by the states and some by the
Centre. There was no unified and centralised tax on both goods and services. Hence, GST was introduced. Under
GST, all the major indirect taxes were subsumed into one. It has greatly reduced the compliance burden on
taxpayers and eased tax administration for the government.

 To eliminate the cascading effect of taxes

One of the primary objectives of GST was to remove the cascading effect of taxes. Previously, due to different
indirect tax laws, taxpayers could not set off the tax credits of one tax against the other. For example, the excise
duties paid during manufacture could not be set off against the VAT payable during the sale. This led to a
cascading effect of taxes. Under GST, the tax levy is only on the net value added at each stage of the supply
chain. This has helped eliminate the cascading effect of taxes and contributed to the seamless flow of input tax
credits across both goods and services.

18
  To curb tax evasion

GST laws in India are far more stringent compared to any of the erstwhile indirect tax laws. Under GST, taxpayers
can claim an input tax credit only on invoices uploaded by their respective suppliers. This way, the chances of
claiming input tax credits on fake invoices are minimal. The introduction of e-invoicing has further reinforced
this objective. Also, due to GST being a nationwide tax and having a centralised surveillance system, the
clampdown on defaulters is quicker and far more efficient. Hence, GST has curbed tax evasion and minimised
tax fraud from taking place to a large extent.

 To increase the taxpayer base

GST has helped in widening the tax base in India. Previously, each of the tax laws had a different threshold limit
for registration based on turnover. As GST is a consolidated tax levied on both goods and services both, it has
increased tax-registered businesses. Besides, the stricter laws surrounding input tax credits have helped bring
certain unorganised sectors under the tax net. For example, the construction industry in India.

 Online procedures for ease of doing business

Previously, taxpayers faced a lot of hardships dealing with different tax authorities under each tax law. Besides,
while return filing was online, most of the assessment and refund procedures took place offline. Now, GST
procedures are carried out almost entirely online. Everything is done with a click of a button, from registration
to return filing to refunds to e-way bill generation. It has contributed to the overall ease of doing business in India
and simplified taxpayer compliance to a massive extent. The government also plans to introduce a centralised
portal soon for all indirect tax compliance such as e-invoicing, e-way bills and GST return filing.

 An improved logistics and distribution system

A single indirect tax system reduces the need for multiple documentation for the supply of goods. GST minimises
transportation cycle times, improves supply chain and turnaround time, and leads to warehouse consolidation,

19
among other benefits. With the e-way bill system under GST, the removal of interstate checkpoints is most
beneficial to the sector in improving transit and destination efficiency. Ultimately, it helps in cutting down the
high logistics and warehousing costs.

 To promote competitive pricing and increase consumption

Introducing GST has also led to an increase in consumption and indirect tax revenues. Due to the cascading effect
of taxes under the previous regime, the prices of goods in India were higher than in global markets. Even between
states, the lower VAT rates in certain states led to an imbalance of purchases in these states. Having uniform GST
rates have contributed to overall competitive pricing across India and on the global front. This has hence increased
consumption and led to higher revenues, which has been another important objective achieved.

4. Advantages Of GST

GST has mainly removed the cascading effect on the sale of goods and services. Removal of the cascading effect
has impacted the cost of goods. Since the GST regime eliminates the tax on tax, the cost of goods decreases.

Also, GST is mainly technologically driven. All the activities like registration, return filing, application for refund
and response to notice needs to be done online on the GST portal, which accelerates the processes.

20
5. What are the components of GST?

There are three taxes applicable under this system: CGST, SGST & IGST.

 CGST: It is the tax collected by the Central Government on an intra-state sale (e.g., a transaction
happening within Maharashtra)

 SGST: It is the tax collected by the state government on an intra-state sale (e.g., a transaction
happening within Maharashtra)
21
  IGST: It is a tax collected by the Central Government for an inter-state sale (e.g., Maharashtra to
Tamil Nadu)

In most cases, the tax structure under the new regime will be as follows:

Transaction New Old Regime Revenue Distribution

Regime

Sale within the CGST + VAT + Central Revenue will be shared equally between the
State SGST Excise/Service tax Centre and the State

Sale to another IGST Central Sales Tax + There will only be one type of tax (central) in
State Excise/Service Tax case of inter-state sales. The Centre will then
share the IGST revenue based on the
destination of goods.

Illustration:

 Let us assume that a dealer in Gujarat had sold the goods to a dealer in Punjab worth Rs. 50,000.
The tax rate is 18% comprising of only IGST.

In such a case, the dealer has to charge IGST of Rs.9,000. This revenue will go to Central Government.

 The same dealer sells goods to a consumer in Gujarat worth Rs. 50,000. The GST rate on goods is
12%. This rate comprises CGST at 6% and SGST at 6%.

The dealer has to collect Rs.6,000 as Goods and Service Tax, Rs.3,000 will go to the Central Government and
Rs.3,000 will go to the Gujarat government since the sale is within the state.

22
6. Tax Laws before GST

In the earlier indirect tax regime, there were many indirect taxes levied by both the state and the centre. States
mainly collected taxes in the form of Value Added Tax (VAT). Every state had a different set of rules and
regulations.

Inter-state sale of goods was taxed by the centre. CST (Central State Tax) was applicable in case of inter-state
sale of goods. The indirect taxes such as the entertainment tax, octroi and local tax were levied together by state
and centre. These led to a lot of overlapping of taxes levied by both the state and the centre.

For example, when goods were manufactured and sold, excise duty was charged by the centre. Over and above
the excise duty, VAT was also charged by the state. It led to a tax on tax effect, also known as the cascading
effect of taxes.

The following is the list of indirect taxes in the pre-GST regime:

 Central Excise Duty

 Duties of Excise

 Additional Duties of Excise

 Additional Duties of Customs

 Special Additional Duty of Customs

 Cess

 State VAT

 Central Sales Tax

 Purchase Tax

 Luxury Tax

 Entertainment Tax

 Entry Tax

23
  Taxes on advertisements

 Taxes on lotteries, betting, and gambling

CGST, SGST, and IGST have replaced all the above taxes.

However, certain taxes such as the GST levied for the inter-state purchase at a concessional rate of 2% by the
issue and utilisation of ‘Form C’ is still prevalent.

It applies to certain non-GST goods such as:

i. Petroleum crude;

ii. High-speed diesel

iii. Motor spirit (commonly known as petrol);

iv. Natural gas;

v. Aviation turbine fuel; and

vi. Alcoholic liquor for human consumption.

It applies to the following transactions only:

 Resale

 Use in manufacturing or processing

 Use in certain sectors such as the telecommunication network, mining, the generation or distribution
of electricity or any other power sector

7. How Has GST Helped in Price Reduction?

During the pre-GST regime, every purchaser, including the final consumer paid tax on tax. This condition of tax
on tax is known as the cascading effect of taxes.

24
GST has removed the cascading effect. Tax is calculated only on the value-addition at each stage of the transfer
of ownership. Understand what the cascading effect is and how GST helps by watching this simple video:

The indirect tax system under GST will integrate the country with a uniform tax rate. It will improve the collection
of taxes as well as boost the development of the Indian economy by removing the indirect tax barriers between
states.

Illustration:

Based on the above example of the biscuit manufacturer, let’s take some actual figures to see what happens to
the cost of goods and the taxes, by comparing the earlier GST regimes.

Tax calculations in earlier regime:

Action Cost Tax rate at 10% Invoice Total

(Rs) (Rs) (Rs)

Manufacturer 1,000 100 1,100

Warehouse adds a label and repacks at 1,400 140 1,540

Rs.300

Retailer advertises at Rs. 500 2,040 204 2,244

Total 1,800 444 2,244

25
The tax liability was passed on at every stage of the transaction, and the final liability comes to a rest with the
customer. This condition is known as the cascading effect of taxes, and the value of the item keeps increasing
every time this happens.

Tax calculations in current regime:

Action Cost Tax Tax liability Invoice

(Rs) rate at to be Total
10% deposited (Rs)
(Rs) (Rs)

Manufacturer 1,000 100 100 1,100

Warehouse adds label and repacks at Rs. 300 1,300 130 30 1,430

Retailer advertises at Rs. 500 1,800 180 50 1,980

Total 1,800 180 1,980

In the case of Goods and Services Tax, there is a way to claim the credit for tax paid in acquiring input. The
individual who has already paid a tax can claim credit for this tax when he submits his GST returns.

In the end, every time an individual is able to claims the input tax credit, the sale price is reduced and the cost
price for the buyer is reduced because of lower tax liability. The final value of the biscuits is therefore reduced
from Rs.2,244 to Rs.1,980, thus reducing the tax burden on the final customer.

8. What are the New Compliances Under GST?

Apart from online filing of the GST returns, the GST regime has introduced several new systems along with it.

26
e-Way Bills

GST introduced a centralised system of waybills by the introduction of “E-way bills”. This system was launched
on 1st April 2018 for inter-state movement of goods and on 15th April 2018 for intra-state movement of goods
in a staggered manner.

Under the e-way bill system, manufacturers, traders and transporters can generate e-way bills for the goods
transported from the place of its origin to its destination on a common portal with ease. Tax authorities are also
benefited as this system has reduced time at check -posts and helps reduce tax evasion.

E-invoicing

The e-invoicing system was made applicable from 1st October 2020 for businesses with an annual aggregate
turnover of more than Rs.500 crore in any preceding financial years (from 2017-18). Further, from 1st January
2021, this system was extended to those with an annual aggregate turnover of more than Rs.100 crore.

These businesses must obtain a unique invoice reference number for every business-to-business invoice by
uploading on the GSTN’s invoice registration portal. The portal verifies the correctness and genuineness of the
invoice. Thereafter, it authorises using the digital signature along with a QR code.

e-Invoicing allows interoperability of invoices and helps reduce data entry errors. It is designed to pass the invoice
information directly from the IRP to the GST portal and the e-way bill portal. It will, therefore, eliminate the
requirement for manual data entry while filing GSTR-1 and helps in the generation of e-way bills too.

Indirect Tax -

In India, direct taxes are imposed by the central government on individuals and entities based on their income or
profits earned. They are levied directly on the income of individuals, corporations, and other entities without any
intermediary. Broadly, direct taxes in India include income tax, corporate tax, and capital gains tax. These taxes

27
are essential sources of revenue for the government and play a crucial role in financing public expenditure and
promoting economic development.

Examples of Direct Taxes

Examples of direct taxes in India include income tax, which is levied on the income earned by individuals and
businesses. Corporate tax, which is imposed on companies’ profits; and capital gains tax, which is applicable on
the gains arising from the sale of capital assets, including property, stocks and mutual funds among others.

These taxes are directly collected from the taxpayers by the government authorities and contribute significantly
to the country’s overall revenue.

Types of Direct Taxes

In India, several types of direct taxes are levied by the central government. Let’s take a look at some of the most
common forms of direct taxes.

 Income Tax: It is a levy imposed on the income earned by individuals, Hindu Undivided Families (HUFs),
partnerships, and associations of persons (AOPs). Individuals have to pay income tax on the basis of their
income and age. The Income Tax Act 1961 provides guidelines for the computation and collection of
income tax in India.

 Corporate Tax: It is a form of direct tax levied on the profits companies, and corporations earn. Corporate
Tax applies to both domestic and foreign companies operating in India. The Finance Act determines the
corporate tax rates, deductions, and exemptions applicable to different categories of companies.

 Capital Gains Tax: This tax applies to the gains arising from the sale or transfer of capital assets, such as
real estate, stocks and mutual funds, among others. Capital gains are further classified into two categories
– Long-term capital gains and short-term capital gains. The rates and exemptions of capital gains tax vary
with the asset and the holding period.

28
  Securities Transaction Tax (STT): STT is a tax imposed on the purchase and sale of listed securities, such
as shares, bonds, derivatives, and equity-oriented mutual funds. The tax is payable by the buyer or seller,
depending on the type of transaction. STT aims to generate revenue and discourage speculative trading
in the securities market.

 Dividend Distribution Tax (DDT): It is a levy imposed on dividends distributed by the companies to their
shareholders. Income from dividends is added to the taxable income of the recipient and taxed as per the
applicable slab rate. Before 1 April 2020, it was levied on the company distributing dividends instead of
the recipient.

 Gift Tax: Gift tax was a direct tax imposed on the transfer of certain specified assets without consideration.
However, gift tax was abolished in India, and any income arising from gifts is now subject to income tax.

 Estate Tax: Estate tax, also known as inheritance tax, is a tax on transferring an individual’s estate or
assets upon their death. Currently, India does not have a specific estate tax provision at the national level.

These are some of the key types of direct taxes in India. The rates, deductions, and exemptions for these taxes
are subject to change as per the provisions of the relevant tax laws introduced or amended by the government
from time to time. It is advisable to consult with a tax professional or refer to the official tax authorities for the
most up-to-date information.

Who is eligible to pay Direct Tax?

 Individuals: Any resident individual, non-resident individual, or person of Indian origin who meets the
criteria of being a taxpayer as per the Income Tax Act is eligible to pay direct taxes. This includes salaried
employees, self-employed professionals, freelancers, and other individuals earning taxable income.

 Hindu Undivided Families (HUFs): HUFs are considered separate tax entity under the Income Tax Act.
The Karta, or the head of the HUF, is responsible for filing tax returns and paying taxes on behalf of the
HUF.

29
  Partnership Firms: Partnership firms registered under the Indian Partnership Act, 1932 are eligible to pay
taxes. The profits of the partnership firm are taxed in the hands of the partners as per their respective
shares.

 Companies: All types of companies, including domestic companies and foreign companies operating in
India, are liable to pay corporate tax on their profits. This includes public limited companies, private
limited companies, and one-person companies.

 Association of Persons (AOPs) and Body of Individuals (BOIs): AOPs and BOIs are entities consisting
of individuals, companies, or a combination thereof, with a common objective. They are subject to tax as
separate entities, and the income is taxed in their hands.

Tax liability is determined based on various factors such as income thresholds, tax slabs, exemptions, deductions,
and other provisions specified in the Income Tax Act.

Taxpayers are required to assess their income, calculate their tax liability, and comply with the filing and payment
obligations as per the applicable tax laws.

Advantages of Direct Taxes

There are multiple advantages of direct taxes.

 Economic and Social Balance: The government has implemented balanced tax slabs based on income and
age to achieve economic and social equality. Exemptions are provided to address income inequalities and
ensure fairness.

 Productivity: As the workforce and economy grow, the revenue generated from direct taxes also increases,
making them a productive source of government income.

 Inflation Control: During inflationary periods, the government can increase taxes, reducing the demand
for goods and services, which helps curb inflation.

 Certainty: Direct taxes provide clarity and certainty to both taxpayers and the government. Taxpayers
know the amount they are required to pay, while the government has a predictable source of revenue.

30
  Wealth Distribution: Higher taxes are levied on individuals or organizations with higher incomes, and the
additional funds are utilized to support and uplift disadvantaged sections of society.

Despite a few disadvantages, direct taxes play a crucial role in India’s economy. When implemented effectively,
they contribute to maintaining price stability and preventing inflation.

How to Calculate Direct Tax?

Calculating direct tax, such as income tax, involves several steps. Here’s a general outline of how to calculate
income tax in India for individuals:

 Determine your income: Calculate your total income for the financial year, including income from salary,
business or profession, house property, capital gains, and other sources.

 Identify applicable tax slabs: Understand the income tax slabs and rates applicable for the specific
financial year. The slabs and rates may vary based on your age, income level, and residential status.

 Compute taxable income: Deduct eligible deductions and exemptions from your total income to arrive at
the taxable income. Common deductions include investments in specified savings schemes, insurance
premiums, medical expenses, and home loan interest.

 Calculate tax liability: Use the income tax slab rates to calculate the tax liability on your taxable income.
The tax rates increase progressively with higher income levels.

 Consider surcharges and cess: Factor in any applicable surcharges and health and education cess as per
the prevailing tax laws. These additional charges are calculated based on the tax amount.

 Apply for any tax credits: Subtract any eligible tax credits, such as tax deducted at source (TDS) or
advance tax payments made, from your tax liability. These credits help reduce the overall tax payable.

31
  Final tax payable or refundable: After considering deductions, tax rates, surcharges, cess, and tax credits,
you will arrive at the final tax payable or refundable amount. If the tax paid in advance exceeds the
calculated tax liability, you may be eligible for a tax refund.

It is important to note that tax calculations can be complex, and it is advisable to consult a tax professional or
refer to the official guidelines and tax calculators provided by the Income Tax Department of India for accurate
calculations.

Tax Rate for the Different Types of Direct Tax

Here’s a table outlining the tax rates for different types of direct taxes in India (as of my knowledge, cut off in
September 2021):

Direct Tax Tax Rate (for individuals) Tax Rate (for companies)

Progressive tax rates ranging from 0% to 25% for domestic companies;

30% based on income slabs and age. 40% for foreign companies.
Income Tax
Additional surcharges may apply for Additional surcharges may
high-income earners. apply.

25% for domestic companies;

40% for foreign companies.
Corporate Tax NA
Additional surcharges may
apply.

32
 Varies based on the type of asset, holding 25% for short-term capital
period, and nature of gain (short-term or gains on listed securities.
Capital Gains long-term). Generally, 15% or 20% for Long-term capital gains on
Tax long-term capital gains and as per listed securities are exempt if
applicable income tax slab rates for Securities Transaction Tax
short-term capital gains. (STT) is paid.

Securities Applicable rates on specific transactions.

Transaction Rates vary based on the type of security NA
Tax (STT) and transaction.

Note that tax rates and provisions keep changing. It’s advisable to refer to the latest tax laws and consult with a
tax professional or refer to the official guidelines provided by the Income Tax Department of India for the most
accurate and up-to-date information.

Income Tax as Direct Tax

Income tax is one of the prominent forms of direct tax imposed by the government on individuals, businesses,
and other entities. It is levied on the income earned during a specific financial year.

Income tax is calculated based on progressive tax rates, where the tax liability increases as the income level rises.
Factors such as age, income slabs, and applicable deductions are considered while determining the tax liability.
The revenue generated from income tax plays a significant role in financing public expenditure, funding welfare
programs, and promoting economic development.

It is a crucial tool for the government to ensure equity, fairness, and social welfare by redistributing wealth and
providing resources for essential services and infrastructure.

How to pay direct tax?

33
To pay direct taxes, such as income tax, in India, you can follow these steps:

 Calculate your tax liability by assessing your total income, deductions, and applicable tax rates.

 Generate a challan using the online tax payment portal or obtain a physical challan from authorised banks.
Fill in the required details such as PAN, assessment year, and tax amount.

 Make the payment through online banking, debit card, or credit card, or by depositing cash at the
designated bank branches. Ensure that you select the correct tax type and provide accurate information.

 Retain the challan as proof of payment upon successful payment, which can be used for future reference
or while filing your income tax return.

Remember to file your tax return by the due date to complete the tax payment process.

How to download direct tax challan?

To download a direct tax challan in India, visit the official website of the Income Tax Department of India
(incometaxindia.gov.in) and navigate to the “Downloads” section. There you will find the appropriate tax challan
form and download it.

34
Direct Taxes vs. Indirect Taxes

Both direct and indirect taxes play vital roles in revenue generation and economic management. Direct taxes
focus on individuals’ income and profits, ensuring fairness, while indirect taxes target goods and services,
impacting overall consumption patterns and economic growth. Let’s look at the difference between direct and
indirect tax in India.

35
 Direct Taxes Indirect Taxes

Imposed directly on individuals or entities Imposed on the production, sale, or consumption of

based on their income or profits. goods and services.

Examples include income tax, corporate Examples include goods and services tax (GST),
tax, and capital gains tax. excise duty, and customs duty.

Collected directly from the taxpayers by Passed on to the end consumers by producers or
the government. service providers.

Progressive in nature, where tax rates Regressive in nature, as the tax burden may impact
increase with higher income levels. lower-income individuals more heavily.

Generate revenue for the government while

Promote equity and social justice by
influencing consumer behavior and economic
ensuring a fair distribution of tax burden.
activities.

FAQs

Gift tax is direct or indirect?

Gift tax is a direct tax. It is levied under the Income Tax Act. Gift tax specifically applies to the transfer of
property or assets from one person to another as a gift, and the tax liability is typically borne by the person making
the gift (the donor).

36
What is a direct tax code?

How can I save on direct tax?

What is the disadvantage of Direct taxes?

Direct Tax is good or not?

Is it necessary to pay direct tax?

What is the difference between direct and indirect tax?

37
 CHAPTER-2
-ALL OVER INDIA INDUSTRY
PROFILE
-COMPANY PROFILE

38
Financial Outsourcing Services by CA Firms – An Analysis

What are Financial Outsourcing Services?

These are a broad range of services provided by the financial sector. These include services in insurance,
investment, banking, etc. Most companies from start-ups and small-scale companies to big multi-national
companies often outsource these tasks to various financial firms for better quality reports as well as to better
focus on their own growth. We’ve discussed the importance of outsourcing financial services in the previous
article with advantages and disadvantages, now let’s see one such financial firm providing services, the Chartered
Accountants/ CA firms.

Who are the Chartered Accountants and what do they do?

Accounting professionals who are responsible for conducting audits, managing the accounts, all financial
accounting and reporting, taxation, other finances, etc. are usually given the designation of a chartered accountant.
In short, it is a global naming classification awarded to accounting professionals, mainly outside the United
States. In the US, the term Chartered Accountant (CA) is replaced with Certified Public Accountant (CPA). In
India, we have the Institute of Chartered Accountants of India (ICAI) which provides a top-notch curriculum
completely in tandem with the laws and regulations of India, which guarantees a bright with countless
professional options. Now let’s see what the CAs are responsible for. A chartered accountant is responsible for
many things including:

Financial Outsourcing Services by CA Firms # 1 – Auditing

Chartered accountants as auditors are responsible for making sure that the client company’s financial reports and
statements are made based on the respective rules and regulations. These reports cannot be fabricated as the
company’s reputation and goodwill are at stake. Hence why proper auditing is necessary.

39
Financial Outsourcing Services by CA Firms #2 – Accountancy

Chartered accountants also prepare all sorts of financial statements and reports while keeping records of the
accounts payable, bookkeeping, and other complex financial analysis.

Financial Outsourcing Services by CA Firms #3 – Cost Accountancy

Cost accountancy is very important especially when it comes to the manufacturing industry or a service provider
organization. The CA needs to determine the right cost of production and additional costs that may be incurred
during various stages of production. Hence, applying and following proper cost-controlling methods and
establishing suitable cost and selling prices are one of the most important roles of a chartered accountant.

Financial Outsourcing Services by CA Firms #4 – Taxation

As noted in the Statue book, there are various types of taxes of which the current and continuous tax information
are vital elements in the economics of Business Management as financial accountancy and tax assessment are
linked together. Here the chartered accountants are responsible for preparing tax returns, assessing the tax returns,
and submitting them to the Income tax authorities. The CA is responsible for auditing any complicated cases that
have large revenue potential. The CA should also be able to give any general tax advice to their clients.

Financial Outsourcing Services by CA Firms # 5 – Investigation

Chartered accountants are also in charge of conducting investigations to confirm the status of a business or
company. In case of the launch of a new product or issuing a new share capital, investigations can be done to
finalize and compare the sales profit or purchase total or overall business finances as well as unions between
businesses and reconstruction. Investigations can also tell about the efficiency achieved by the management while
figuring out the reason for the incline and decline in profits.

Financial Outsourcing Services by CA Firms # 6 – Executors and Trustees

When a chartered accountant collaborates with a lawyer in a legal firm or for any legal matter, then they are
known as an executor or a trustee. This collaboration ensures an accountant of legal help in their accounting jobs.

40
Financial Outsourcing Services by CA Firms # 7 – Secretarial Works of a company

For small companies and start-up companies, where the number of employees is limited that they may not be
able to afford a full-time secretary, they can rely on an accountant who can also manage the roles of a secretary.

Financial Outsourcing Services by CA Firms # 8 – Management Accounting

In this, the chartered accountant performs various functions in management accounting such as creating new and
efficient policies, daily jobs and control of other day-to-day activities, evaluating team and individual
performances, etc.

Financial Outsourcing Services by CA Firms # 9 – GST Compliance, Audit, and Training –

Chartered accountants are well-versed in the rules and regulations of GST and related complaint procedures.
Hence, they are able to perform good quality auditing and training of all necessary laws to the client and also
manage their accounts according to the given rules.

Recommend Read,

 Financial Modeling Best Practices

 Financial Consultant Profile
 Financial Modeling Terms
 Financial Modeling Career Path

Top Firms offering Financial Outsourcing Services

1. Deloitte India

Deloitte Touche Tohmatsu Limited, otherwise simply known as Deloitte is one of the top CA firms. This global
professional service network has its headquarters in London, England. With over 173 years of experience, the
company has grown and established in around 150 countries with over 415,000 employees making a difference
41
in society. In India, Deloitte is among one of the prestigious Big 4 companies. As such, they always deliver the
best quality services to their clients making sure to maximize the rate of success in any project. The company
also makes sure to encourage its employees by creating an environment where they can explore their talents and
thrive. This is shown true as Deloitte has been ranked at number 17 on the list of “Fortune 100 Best Companies
to Work For”, also winning the “Glassdoor Employee’s Choice Award for the Best Places to Work in 2023”,
“Fortune’s Best Workplaces in Consulting and Professional Services of 2022”, among many other awards.
Deloitte offers services to various industries including:

 Consumer
 Automotive
 Consumer products
 Retail, wholesale & distribution
 Transportation, hospitality & services
 Energy, Resources and Industrials
 Industrial products & construction
 Power, utilities & renewables
 Energy & chemicals
 Mining & metals
 Financial Services
 Banking & capital markets
 Insurance & investment management
 Real estate
 Government and Public Services
 Defense, security, civil & justice
 Federal health
 State & Local
 Higher education
 Life Sciences and Health Care
 Health care
 Life science
 Technology, Media & Telecommunications
 Telecommunications, media & entertainment
42
In General, the Services Provided by Deloitte Can Be Classified as Follows:

 Tax – In the vastly developing digital technology era, business models are also evolving at a rapid pace.
Companies need to keep up with evolving technology and skills to be on top and that is not possible
without expertise in forecasting and scenario modeling of the tax department. Deloitte offers insight into
various tax operation strategies and related technology. These include services in tax operation,
legislation, technology consulting, global employer services, legal business services, and other tax
services.
 Consulting – Every organization will, at one point or another, run into some business complications where
they need advice. The consulting services of the company include core business operations, customer &
marketing, enterprise technology & performance, human capital, and strategy & analytics.
 Audit & assurance – With high-end technologies and well-thought-out processes, the company ensures
to meet your expectation with their services in audit innovation, accounting standards, events &
transactions.
 M&A and restructuring – The experienced adviser will lead your organization to total success with their
merger, acquisitions & restructuring activities.
 Risk & financial advisory – This includes advice on risk related to accounting & internal controls, cyber
& strategic risk, regulatory & legal, transactions, and M&A.
 AI & analytics – Perhaps the new business complication will work better with an answer from a mix of
human and artificial intelligence with the help of data science and business models. The services offered
in this domain include AI services and solutions.
 Cloud – This includes cloud operation, ERP & SaaS, Hybrid cloud, cloud analytics, cloud infrastructure
& engineering, etc. among others.
 Diversity, equity & inclusion – This involves a system-based approach to orchestrate equitable outcomes
and ensure value while promoting equal involvement of all employees and clients across society and
within the workplace.
 Deloitte Private – This is a custom service or package for private firms as per their needs.

43
Professional Courses from IIM SKILLS

 Digital Marketing Course

 SEO Course
 Technical Writing Course
 GST Course
 Content Writing Course
 Financial Modeling Course
 Business Accounting And Taxation Course
 CAT Coaching
 Investment Banking Course

2. Ernst & Young (EY)

The second on our list is also one of the Big 4 companies in India, and that is Ernst & Young. Result of a merger
of two accounting firms – ‘Ernst & Whitney’ and ‘Arthur Young & Co.’ in 1989, it finds its headquarters in
London, England. Having more than 250,000 employees spread across over 150 countries, it is one of the biggest
professional service networks globally. EY extends its services across various industries such as:

 Advanced manufacturing and mobility

 Consumer
 Energy and resources
 Financial services
 Government and infrastructure
 Private Equity
 Health science and wellness
 Technology, media & entertainment, and telecommunications

The Major Services Provided by EY Are as Follows:

 Consulting – This involves consulting advice or services with regard to customer experience, AI,
cybersecurity, data and decision intelligence, risk consulting, supply chain & operations, technology, and
how to accelerate digital transactions with AI, cloud, and data protection & privacy.

44
  People and workforce – This covers services in HR transformation, integrated workforce mobility,
workforce analytics, recognition & reward advisory, etc. among others.
 Transactions and corporate finance – This category explains the services such as corporate finance,
sustainability & ESG services, M&A – advisory, integration, technology & tools, valuation, modeling &
economics, value-added services for new-age businesses, etc.
 Assurance – This includes services for climate change & sustainability, financial accounting advisory
services, forensic and integrity, IFRS, and long-term value metrics creation.
 Tax – Tax services cover tax planning, function operations, policy & controversy, global trade, private tax
services, digital tax strategy, and tax compliance & policies.
 Technology – Technological services are services that involve the usage of various high-end tax
technologies, connected capital technologies, alliances, and ecosystems, etc.
 Managed services – This can be managed services in tax, finance, risk, and forensics.
 EY private – EY private is mainly for entrepreneurs, private businesses, business owners, and even
families as these services can be customized for family enterprises, and various tax services specially
designed for private firms.
 EY sustainability – This commonly involves sustainable finance, ESG strategies, supply chain
transformation, tax services in general, global renewables, etc.
 Strategy by EY Parthenon – this covers customized and well-prepared strategies in the areas of consulting,
corporate and growth, transaction and execution, restructuring & turnaround, industry, digital, and
commercial.

3. PwC

Up next on our list is yet again one of the Big 4 companies in India, which is PricewaterhouseCoopers
International Limited or simply known as PwC. Spread across 157 countries with over 740 locations consisting
of around 320,000 employee workforce, it is one of the largest professional service firms globally, also having
its headquarters in London, England. As with EY, PwC is the result of a merger between ‘Price Waterhouse’ and
‘Coopers & Lybrand’ in 1998. Their mantra is to act with care and integrity while working together to make a
difference in the livelihood and society, and reimagining the possible, no matter what the culture or background.
PwC offers its services to a vast number of industries such as:

45
  Aerospace & defence
 Automotive
 Capital projects & infrastructure
 Chemicals
 Education
 Financial services
 Government & public services
 Healthcare
 Industrial products
 Mining & metals
 Oil & gas
 Pharmaceuticals and life sciences
 Power
 Private Equity
 Retail and consumer
 Smart cities
 Technology, media & telecommunications

For All These Industries, the Services Offered Are as Follows:

 Accounting advisory – Businesses face numerous complex situations even on a daily basis regarding
acquisitions, consolidations, restatements, debt & equity, GAAP conversion, etc. and PwC provides a one-
stop solution to all these queries with their range of services in capital markets, IPO advice, accounting
training, treasury & hedge accounting services, GAAP conversion, M&A and corporate restructuring, etc.
 Alliances and ecosystem – Handling a business in the present day means keeping up with the ever-
changing technology-driven world. There’s automation and AI everywhere. As such PwC offers various
differentiating solutions and results with the help of most modern technology and alliance partners, be it
regarding cloud or innovation or business transformation or operational efficiency.
 Consulting – This majorly indicates management consulting, risk consulting, and technology consulting.
But within that umbrella, numerous services are included like – cyber security, data & analytics, forensics,
front-office transformation, HR transformation, financial risk & regulations, risk consulting, experience
consulting, value-led ERP, managed services, digital transformation, etc. to name a few.

46
  Deals – Deals are necessary for businesses for growth, rapid operational transformation, value realization
& protection. Here the services provided are – deal strategies, ESG in deals, corporate finance and
investment banking, business recovery services, valuation, value creation, etc.
 Entrepreneurial and private business – This involves any advice or professional business solution required
to grow, maintain, plan succession, and overall growth of your company given by trusted business
advisors.
 Environment, Social & Governance (ESG) – This includes ESG strategy and transformation, ESG
reporting & BRSR, climate change impact, responsible investment, sustainable value chain, and
sustainable finance.
 Industrial development and investment promotion – This aims to provide comprehensive solutions for
sectors such as services, manufacturing, tourism, logistics as well as government organizations.
 International business groups – This is mainly for businesses that operate globally, by helping them
operate better across borders and to enter new markets.
 Risk and regulation – This includes business risk consulting, risk analytics, third-party risk management,
and compliance risk services, among others.
 Startups – This provides all insights and advice required for a start-up to build itself, scale up, and expand
into a successful and resilient company.
 Transformation – This is like a sum-up of all the services we’ve seen so far provided by PwC for the
better standing of a company in the fast-moving world such as customer-led transformation, supply chain
transformation, finance transformation, etc.

4. KPMG India

Next on the list is also one of the Big 4 accounting companies in India – the KPMG, which is ‘Klynveld Peat
Marwick Goerdeler’. Also a result of the merger between ‘Klynveld Main Goerdeler’ and ‘Peat Marwick’, in
1987. KPMG has its headquarters in Amstelveen, Netherlands. Working in over 143 countries with more than
265,000 employees and partners, KPMG brings the best quality services to business, private, public, and
government companies through audit and assurance practices, capital markets, etc. In general, industries enjoying
the services of KPMG are:

 Aerospace & defence

47
  Building and Construction
 Consumer markets
 Education and skills development
 Emerging giants program – mainly for startups
 Energy and natural resources
 Financial services
 Government
 Life sciences
 Media
 Technology
 Telecommunications
 Transport and logistics
 KPMG Enterprise
 Sports

The Financial Outsourcing Services Provided by KPMG Are Mainly Related to Tax, Advisory, and Kpmg Learning
Academy:

 Tax – Effective tax-cost management goes a long in a business, and it requires careful consideration and
properly executed strategies. With experts from varying backgrounds, KPMG provides multi-
jurisdictional tax planning that covers all aspects of taxes whether it be direct, indirect, or personal taxes.
The service also includes service line specialization, industry specialization, and international exposure
with advanced training equipment. The major tax services provided by KPMG are corporate &
international tax, transfer pricing, indirect tax, deal advisory, mergers & acquisitions tax, global mobility
services, banking & financial services tax (BFSI), and tax technology & automation.
 Advisory – This involves business consulting, cyber security, government & public services, managed
services, M&A, risk advisory, technology, supply chain realignment, and transformation.
 The KPMG Learning Academy – provides a wide variety of programs to take your subject knowledge
and technology skills and capabilities to the next level.

Also, Check,

 Online Financial Modeling Courses

48
  Financial Modeling Courses With Placements
 Financial Modeling Software

Conclusion on Financial Outsourcing Services by CA Firms :

In this article, we’ve seen the major services provided by CA firms for financial outsourcing and we’ve also seen
the major companies that are known for their top-quality services, that is the Big 4. They offer various packages
that fit your budget no matter if it is for your global organization, private company, government organization,
startup, or family finances. Having proper professional advice at the right may just be the key to saving your
company from bankruptcy or taking it to the next level by merging or expanding the business. So why wait,
contact one of the above companies for all your financial needs and business requirements.

Q. How to ensure data security while committing to financial outsourcing to CA firms?

Before giving data for financial outsourcing, discuss and analyze their approach to security measures involving
data storage and security, and staff awareness. Most reputed CA firms will have reliable automated security
systems in action that will alert the concerned person if there is ever a security breach, with efficient security
backup and recovery processes.

Q. What are some of the software used by CA firms to work with financial outsourced data?

Some of the software used are Sage, CCH, QuickBooks, TaxCalc, MYOB, Peachtree, NetSuite, Thomson
Reuters, Moneysoft, etc.

Q. How many should I have in the company before relying on the financial outsourcing services of CA firms?

It is always recommended to approach outsourcing regardless of the number of people. A good model can be
helpful to grow your business without needing too many internal teams.

49
History

The Indian Companies Act, 1913 passed in pre-independent India prescribed various books which had to be
maintained by a Company registered under that Act. It also required the appointment of a formal Auditor with
prescribed qualifications to audit such records. In order to act as an auditor, a person had to acquire a restricted
certificate from the local government upon such conditions as may be prescribed. The holder of a restricted
certificate was allowed to practice only within the province of an issue and in the language specified in the
restricted certificate. In 1918 a course called Government Diploma in Accountancy was launched in Sydenham
College of Commerce and Economics of Bombay (now known as Mumbai). On passing this diploma and
completion of three years of articled training under an approved accountant, a person was held eligible for grant
of an unrestricted certificate. This certificate entitling the holder to practice as an auditor throughout India. Later
on, the issue of restricted certificates was discontinued in the year 1920.
In 1930, it was decided that the Government of India should maintain a register called the Register of
Accountants. Any person whose name was entered in such register was called a Registered Accountant.[8] Later
on a board called the Indian Accountancy Board was established to advise the Governor General of India on
accountancy and the qualifications for auditors. However, it was felt that the accountancy profession was largely
unregulated, and this caused much confusion as regards the qualifications of auditors. Hence in the year 1948,
just after independence in 1947, an expert committee was created to look into the matter.[9] This expert
committee recommended that a separate autonomous association of accountants should be formed to regulate the
profession. The Government of India accepted the recommendation and passed the Chartered Accountants Act
in 1949 even before India became a republic. Under section 3 of the said Act, ICAI is established as a body
corporate with perpetual succession and a common seal.
Unlike most other commonwealth countries, the word chartered does not refer to a royal charter, since India is a
republic. At the time of passing the Chartered Accountants Act, various titles used for similar professionals in
other countries were considered, such as Certified Public Accountant. This designation inherited a general public
impression that Chartered Accountants had better qualifications than Registered Accountants.[10] Hence the
accountants were very stern in their stand that, the Indian accountancy professionals should be designated only
as Chartered Accountants. After much debate in the Indian Constituent Assembly, the controversial term,
chartered was accepted. When the Chartered Accountants Act, 1949 came into force on 1 July 1949, the

50
term Chartered Accountant superseded the title of Registered Accountant. This day is celebrated as Chartered
Accountants day every year.[11]
On 23 September 2019 chartered accountancy students organized protests under leadership of teacher CA
Praveen Sharma, named "Dear ICAI please change" at over 200 institute branches across India and on social
media demanding among other things right to re-checking of CA exam answer sheets. At present as per CA
regulations, re-checking of answer sheets are not allowed.[12] Students were demanding this right since 2018. A
protest was also called in December, 2018 but after assurance by the council and formation of a committee to
review the examination process the protest was called off.[13] Students were able to gather support of many
public figures which includes Congress leader Rahul Gandhi, Past President of ICAI Mr. N. D. Gupta, renowned
accountant Mr. Motilal Oswal, Mr. Mohandas Pai, Mr. Raghav Chadha, etc. on social media.[14]

51
Motto-

New CA Logo for exclusive use by Chartered Accountants

The motto of the ICAI is Ya Aeshu Suptaeshu Jagruti (Sanskrit),[15] which literally means "a person who is
awake in those that sleep". It is a quotation from the Upanishads (Kathopanishad). It was given to the ICAI at the
time of its formation in 1949 by Sri Aurobindo[16] as a part of its emblem. CA. C. S. Shastri, a Chartered
Accountant from Chennai went to Sri Aurobindo and requested him through a letter to give an emblem to the
newly formed Institute of which he was an elected member from the Southern India. In reply to this request, Sri
Aurobindo gave him the emblem with a Garuda, the mythical eagle in the center and a quotation from the
Upanishad: Ya Aeshu Suptaeshu Jagruti. The emblem along with the motto was placed at the first meeting of the
Council of the Institute and was accepted amongst many other emblems placed by other members of the council.
Apart from its emblem, ICAI also has a separate logo for its members. As a part of a brand building exercise,
ICAI introduced this separate new CA logo for the use of its members in 2007.[17] The logo is free for use by
all members of ICAI subject to certain conditions.[18] The logo was launched by the then Minister of Corporate
Affairs, Prem Chand Gupta at the occasion of the Chartered Accountant Day (1 July) in the presence of the then
President of ICAI Sunil Talati. Members of ICAI cannot use the ICAI emblem, but they are encouraged to use
the CA logo instead on their official stationery.

52
Company Profile- Madhusudan Gautam K & Associates

Who is a CA?

As already discussed above, Chartered Accountants, or CA deal with financial matters in a business which
includes taxation, auditing, and general financial management. They are employed across both public and private
sector organizations. With the seamless growth across start-ups, along with the international relations that are
monitored by the government, Chartered Accountants are hired to take care of the revenue and expenses.
Being accustomed to the financial laws and regulations of the countries, they act as an adviser and help businesses
to remain profitable. Every country has its associations that act as governing bodies for these professionals. Read
More: CA Salary

What does a CA do?

There are four specializations that a chartered accountant can choose from namely – financial accounting and
reporting, management accounting, applied finance, and taxation. They can be in charge of the whole accounting
department of the business or each CA can focus on a narrower single department. The list of functions that are
performed by a CA is listed below for your reference.

1. Chartered Accountants act as trusted advisers who manage the business by giving it a financial direction
strategically.

2. They generate financial statements monthly and annually which is highly useful in making decisions
regarding the performance of the company

3. As they are familiar with certain rules, regulations, and laws, they are responsible for implementing
changes and solving the financial problems of the company

4. They work as management accountants, business analysts, sales managers, and corporate leaders in
business and industry. Chartered accountants in the public sector have a huge role to play as they look
after public spending by strategically monitoring and allocating resources.

5. Some chartered accounts also work as consultants and freelancers as it helps them to grow with the
different projects, following the changing market trends and the new forces. Read: CA Jobs

Roles and Responsibilities of a CA

The following section highlights the major responsibilities of a CA and describes what a CA does after qualifying
for the necessary exams.

53
1. Company’s Financial Adviser: A chartered accountant acts as a financial adviser in the company.
They provide authentic and factual advice and information to the client, as well as render advice to the
clients related to business development, tax planning, financial risks, business acquisitions, and mergers.
They advise on the matter of selecting executive personnel in the field of marketing, production, data
processing, general administration, accounts, etc.

2. Conduct Financial Audits: They are responsible to check and prepare financial statements and ledgers
which is considered one of the primary practices of a chartered accountant. Auditing helps chartered
accountants to work in different sectors and enhance their skills along with experience. They submit
reports and recommendations after the audits which are essential for decision-making.

3. Acts as a Financial Accountant: Chartered Accountants participate in financial decisions regarding

mergers and acquisitions as well as pay visits to customers or suppliers to talk and business or set up a
new account. The role of financial accountants requires a remarkable knowledge of finance and
accounting.

4. Safeguards the Reputation of the Company: They are in charge of preventing and checking any fraud
or financial irregularities in the company. The financial statement which is prepared by a chartered
accountant monthly or annually is responsible for building up a reputation in the market. It displays the
financial fluctuations, incomes, and expenses of the company.

5. Perform Budget Analysis: They prepare and maintain financial budgets and statements of the
organization. There are plenty of negotiations involved in the work of budget analysis so candidates need
quantitative as well as soft skills. They check organizational spending and plan the budget strategically
intending to make a profit at the end of the day.

6. Management Consulting: A chartered account also looks over consulting services which include
preparing management information systems, designing the budget, analyzing ways of effective allocation
of resources, and installing the cost accounting system. They offer measures to the organization for the
proper use of working capital as a way to increase productivity. They assist in drafting a prospectus that
contains features of preparation of the public budget, brochure etc.

54
 CHAPTER-3
LITERATURE REVIEW

55
LITRATURE REVIEW-
The importance of the property tax as a source of financing tends to be overlooked because fiscal analysis
normally focuses on central government or state finances, and in that context the property tax is a relatively minor
source of revenue (McCluskey,1998).

Despite the relatively low contribution of property taxes to national revenue, virtually all countries seem to be
focusing on strengthening the property tax, the most common revenue source for local governments throughout
the world (Kelly, 2000).

One reason that taxes on land and property have been considered to be especially appropriate as a local revenue
source is that real property is immovable- it is unable to shift location in response to the tax. Another reason why
property taxes are considered to be appropriate as a source of revenue for local governments is the connection
between many of the services typically funded at the local level and the benefit to property values (Bird and Slack
2002).

Fischel (2001) for instance argued that the property tax in the United States is like a benefit tax because taxes
approximate the benefits received from local services. Contrast to the benefit view, many see the property tax as
a tax on capital or, to the extent it falls on housing, as a tax on housing services. Zodrow (2001), for example
argued that the property tax in the United States results in distortions in the housing market and in local fiscal
decisions. Homeowners who improve their houses for example, will face higher taxes as a result and will thus be
discouraged from doing so.

Property tax is believed to be a major contributor to annual budgets of many local authorities in the developed
countries. Property tax accounts for 24.1 percent of the annual budget for the metropolitan cities in South Africa
(Parker 2000). In Europe, property tax contributed average of 35-50 percents of their total tax revenue (OECD
revenue Statistics 1998). This has not been the case with local authorities in less developed countries. T

56
 CHAPTER-4
RESEARCH METHODOLOGY

57
 Research & Methodology

Statement of problem
There are a number of advantages and disadvantages to using taxation in accounting which leaves
businesses undecided on whether to use them or not. Additionally, the lack of a specific law on tax
poses concerns .

Hypothesis
The positives of a taxation clearly out number the drawbacks. Despite the fact that many foreignrules
have been developed, developing a single unified law on documentary credits has proven problematic
due to the complexities of any business

Objectives Of Research

 To read more about taxation and their meaning in accounting

 To weigh the benefits and drawbacks of using a taxation
 To compare the benefits and drawbacks of a taxation in order to comment on its
reliability.
 To analyses the legal position of taxation in various countries

Methodology of the study

The methodology of the study is as follows:

58
 Scope of study

The study is conducted among the topic of taxation

Nature of the study

The study adopted is analytical

Nature of data

The study requires both primary and secondary data.

Source of the study

The primary data have been collected by using questionnaires as a tool. It helps in collection
of primary data in a simple and understandable manner so as to fulfill the prime and other
objectives of the study and secondary data is collected from books, articles, internet and
other works of similar nature.

Method of sampling

Data is collected through Google forms. Response collected from firm employee

59
Sample unit

The study is conducted among the firm employee of Madhusudan Gautam K & Associates.

SAMPLING TECHNIQUE

Stratified sampling is used to collect data in such a way that 20 Respondents from the main
office are included in the sample.

Tools For Analysis

Data is analyzed using some statistical tools for interpreting the raw data. These tools will make
raw data into processed data. The analysis is done based on data collected from the respondents
by using percentage analysis Tables and graphs are used for presenting analysis

Limitation of the study

The research is restricted to aspects of Accounts & Finance, particularly taxation . This research was
conducted in Madhusudan Gautam K & Associates.
. The number of participants was limited to 60 for the collection of data.

60
 CHAPTER-5
DATA ANALYSIS AND
INTRPRETATION

61
 DATA INTERPRETATION ANDANALYSIS

Age of respondent

Classification of respondents on the basis of Age

Age No of Percentage
respondent
20 -30 19 31.1
31 -40 19 27.9
41 -50 17 31.1
51 -60 6 9.8
Total 61 100

Table no 4.1 reveals the classification on the basis of age. Among 61 samples 31.1%
respondents are from the age category of 20 -30, 27.9% respondents are from the category of
31 -40, 31.1% of respondents are from the age category of 41 -50, 9.8% of respondents are
from the age category of 51 -60.

62
 Firm employee doing taxation work very efficiently

(Employee review.)

Particulars No. of respondents Percentage

Strongly Agree 31 51.7
Agree 13 21.7

Neutral 5 8.3
Disagree 1 1.7
Strongly Disagree 10 16.7
Total 60 100
(Source: Primary Data )

Table 4.10 reveals Firm employee doing taxation work very

efficiently

Strongly agree by 51.7% of the respondents, agree by 21.7% of the respondents, 8.3% of the
respondents are neutral, 1.7% of the respondents disagree and16.7% of the respondents
strongly disagree.

63
 CHAPTER-6
SUGGESSIONS / CONCLUSIONS

64
Suggestions-

 1.Investment in tax-saving instruments.

 Increase in retirement fund contribution.
 Tax benefits on a home loan.
 Protecting oneself with health insurance.
 Claiming appropriate deduction for medical expenses, tuition fees etc.
 Filing of tax returns within the specified timelines.
 New concessional tax regime.

65
Conclusion-

The theory of taxation and public economics is usefully conceptualized in terms of a core framework. The setting
is the world of the two funda-mental theorems of welfare economics, modified to include an income tax to
accomplish redistribution in light of the infeasibility of distortion-free individualized lump-sum taxes. The
analysis is characterized by explicit attention to the social objective of welfare maximization in
determining how multiple instruments are best used to achieve it.The presence of the income tax and the related
second-best problem involving the tradeoff of distribution and labor supply distortion have a substantial
qualitative influence on how distinct forms of taxation and other tools of government policy are optimally
employed. The analytical task is further complicated by the difficulty of the optimal nonlinear income tax
problem, even standing alone. Frequently, how-ever, it is possible to construct reform packages that are
distribution neutral as a whole by choosing an offsetting income tax adjustment. This technique enables a
streamlined yet rigorous analysis of many subjects. As stated in the introduction, the proposed approach not only
is at-tractive a priori but also yields substantial concrete dividends. This chapter brings together some of
the results that appear throughout in order to illustrate these payoffs. In considering various examples,
it is useful to bear in mind that the central insights—some of which depart substantially from existing
understandings—are obtained directly as a consequence of following the suggested path of inquiry. As noted,
a number of topics are examined using a distribution-neutral policy experiment in which the income tax is
adjusted to offset the distributive effects of altering the particular instrument under consideration. To perform
this adjustment, it is not necessary either to

66