Deduction refers to the amount of money which is deducted from salary of an employee. Generally deductions are done in the form of PF, ESIC, PT and TDS as mentioned below:
Provident Fund: 12% of basic and Dearness allowance (DA).
Employee State Insurance Corporation (ESIC): 1.75% of gross salary.
Professional Tax (PT): Vary state wise.
Tax Deducted at Source (TDS): According to tax slab.
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Demerger refers to corporate strategy in which a company splits into more than one entity. Converse to merger, it is done to operate each of the segments smoothly, dissolve one of the segments to raise capital or to focus on core business.
In most of the cases, demerger takes place when management decides to focus on core business activities. Also, it is used as a mechanism to raise capital by selling off one of the parts of entity. It also simplifies the company structure and is used to expand the operation of segmented part(s).
On 3rd June 2015, Adani Enterprise demerged its Ports, Power and Transmission businesses in Adani Ports and Special Economic Zone Limited, Adani Power Limited and Adani Transmission Limited. The company took the decision to simplify it’s structure and expand operations.
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Income tax is amount of tax levied upon income of an individual earned during a financial year.
Taxable income computation is first step in calculation of income tax. Income tax is calculated on annual taxable income and deduct every month from income of an individual on average basis. Total Income is sum of YTD and prorated income.
Tax is applicable on the basis of income tax slab which categorizes income and rate of tax levied on each category.
For example Dinesh was born on 26 July 1985. He is working in XYZ Ltd. His taxable income for the financial year 2015 – 2016 is 22,68,000. Tax rate applicable for his income would be like this:
Now, based on the above categorization, computation of tax for Dinesh’s income can be done as follows:
Because on the income below 250000, tax amount is nil, so Dinesh won’t have to pay any tax on the this amount i.e. 250000.
On income in excess of 250000 (but less than 500000), he will have to pay a tax of 10% plus 3% of tax amount as education cess:
Now on income in excess of 500000 (but less than 1000000) he will have to pay 20% tax plus 3% of tax amount as education cess:
Dinesh’s income is more than 10,00,000. So he will have to pay 30% tax and 3% of tax amount as education cess on the income in excess of 1000000.
Total tax payable for Dinesh would be:
25750 + 103000 + 1279412 = 520562
Note: Surcharge is not applicable on Dinesh’s income as his total taxable income is less than 10000000. Also Dinesh is not eligible for rebate u/s 87A as his total taxable income is more than 500000.
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Share capital is the value of total shares issued by a company and is calculated by multiplying the number of issued shares by the par value of each share.
Shares are small units of ownership which give holders, the ownership rights in a company.
Irrespective of the market value of shares, share cap does not change because this value is calculated on the basis of nominal value of share and not on the market price of shares.
The value of share capital is shown on the balance sheet of a company.
Let’s suppose on 01/04/2017, XYZ Ltd raised an amount of INR 10,00,000 through its initial public offering by issuing 1,00,000 shares of INR 10 each. On 01/10/2017, market value of each share is INR 13.
Share cap of company XYZ ltd on 01/10/2017 = 1,00,000 × 10 = 10,00,000
Market price of shares doesn’t have an impact on total share cap.
Accounts receivable refers to the amount of money which a company has to collect from its debtors. The money so owed by customers is assumed to be collected within a financial year. Thus account receivable is part of current assets of a company.
Usually accounts receivable occurs as a result of credit sale policy adopted by the company.
