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2021

Applicability of Secretarial Audit in India

Secretarial audit is a mandatory compliance which has to be carried out by certain companies in India. The main law that regulates secretarial audit in India is the Companies Act, 2013. Under section 204(1), companies are required to obtain a secretarial audit report from the secretarial auditor. Such provision has to be read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

The Secretarial Audit is an audit where the Secretarial Auditor expresses an opinion as to whether there subsist appropriate systems and processes in the company proportionate with the size and operations of the company to monitor and check compliance with applicable laws, rules, regulations, and guidelines. In this article we will discuss some of the key features of Secretarial Audit.

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2021

Cost audit

Cost Audit is the verification of cost accounts to determine the accuracy of cost accounting records. Cost audit ascertains the accuracy of cost accounting records to ensure that they are in conformity with cost accounting principles, plans, procedures and objectives.

A cost audit comprises the following:

  • Verification of the cost accounting records such as the accuracy of the cost accounts, cost reports, cost statements, cost data and costing technique.
  • Examination of these records to ensure that they adhere to the cost accounting principles, plans, procedures and objective.
  • To report to the government on optimum utilization of national resources.

2021

Treatment of House Rent Allowance under the Income Tax Act 1961

House Rent Allowance (HRA) is the allowance provided by an employer to their employee as a compensation for house rental expenses paid by the employee. It forms part of the salary paid by the employer to their employee.

House Rent Allowance or HRA is a salary component paid to employees by an employer towards the accommodation cost of living in that city. Even though it is a part of your salary, unlike your basic pay, HRA isn’t entirely taxable, subject to conditions (a percentage of HRA is exempted under Section 10 (13A) of the IT Act, 1961).

House rent allowance (HRA) is a basic component of your salary. However, most of us are not familiar about the rules that can help us save tax on it. If you are a salaried employee living on rent, then here's how you can use HRA to reduce your tax liability.

2021

TDS

Dividend refers to a reward, cash or otherwise, that a company gives to its shareholders. Dividends can be issued in various forms, such as cash payment, stocks or any other form. Essentially, a dividend is the distribution of some of a company's earnings to a class of its shareholders, as determined by the company's board of directors. It requires the shareholders’ approval to pay dividend. However, it is not obligatory for a company to pay dividend.

In a nutshell, the dividend is simply an equity (and preference) shareholders profit share in the company and section 194 calls for the deduction of tax on such dividend income given to shareholders.

2021

Overview of Employees State Insurance Scheme in India

Employees' State Insurance is a self-financing Social Security and Health Insurance Scheme for Indian workers. The fund is managed by the Employees' State Insurance Corporation (ESIC) according to rules and regulations stipulated in the ESI Act 1948. ESIC is a Statutory and an Autonomous Body under the Ministry of Labour and Employment, Government of India.

The Employee State Insurance Scheme (ESI) is one of the largest social security schemes, globally. ESI provides primarily sickness benefits and some other benefits to approximately thirteen crores Indians that include Insured Employees and their dependents.

Applicability of the Scheme:

  • This scheme extends to the whole of India and covers all places of business registered under either in the Factories Act or under the Shops and Establishments Act. However, this scheme is not applicable to the seasonal factory or mine.
  • This scheme is applicable only in the areas defined as ‘Implemented Area’ under this scheme.

2021

TDS on Winningfrom LotteryCrossword PuzzleorHorseraces

TDS on Winnings from Lottery or Crossword Puzzle (Section 194B)

We all are aware of many famous reality shows and game shows like ‘Kaun Banega Crorepati’, Indian Idol and Dance India Dance etc. These shows offer huge prizes in the form of cash as well as kind. Similarly, many people are fond of buying lottery tickets and some win them too. The income earned from such sources is not tax free. The price money received by a person is subject to TDS under Section 194B of the Income Tax Act, 1961. 

Financial Management