As per the Income Tax Act‚ 1961 where a person dies‚ his legal representatives shall be liable to pay any sum which the deceased would have been liable to pay if he had not died‚ in the similar manner and to the same extent as the deceased. As per section 159 of the Income Tax Act‚ 1961 (Act)‚ even when a person dies‚ the assessment of his income is to be done upto the time of his death. So‚ the legal representative of the deceased has to file the income tax return for the income on which the deceased
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Income statement The income statement or the profit and loss account as it is also called measures reports how much profit (wealth) has the business generated over a period of time. To measure profit the total generated revenue over a period must be identified. Revenue is a measure of inflow of economic benefits arising from the operations of the business. These benefits will either result in an increase of assets such as cash or amounts owed to the business by the customers or a decrease
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distribution of income is to achieve economic equality‚ which is to give every citizen the opportunity of earning a decent living. However‚ our current system’s inability to better allocate the resources we have at our disposal has widened the gap between the wealthy and the poor especially during the past 20 years. The primary benefit of the distribution of income is to transfer wealth‚ with the help of the government‚ to those who are less fortunate. The current distribution of income is a cost to
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Case 5-1 Income Smoothing a. Firstly‚ investors tend to invest in companies with stable earnings rather than one with volatile earnings. With stable earnings‚ there will be more likely an issuance of dividends and investors could easily predict the company’s future earnings compared to one with unstable earnings. With consistent earnings generated‚ it gives investors a secured feeling that it will again generate earnings as predicted. Confidence in the growth of rate of earnings is crucial because
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comprehensive income PURPOSE AND SCOPE .01 This Section establishes standards for reporting and display of comprehensive income. It does not address issues of recognition or measurement for comprehensive income and its components. .02 This Section does not apply to not-for-profit organizations (see FINANCIAL STATEMENT PRESENTATION BY NOT-FOR-PROFIT ORGANIZATIONS‚ Section 4400). DEFINITIONS .03 The following terms are used in this Section with the meanings specified: (a) Comprehensive income is the
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Introduction The income smoothing literature has been the centre of attention in the accounting world for the past few decades. When companies experience economic turbulence due to a poor performance year‚ they turn to the accounting management department to resolve the bottom line. A strategy that managers can approach is changing the true information content of the company. As a result this has led managers to resort to smoothing their income. Many questions have been raised whether or not it
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National Income Determination Introduction • A key objective of Macroeconomics is to explain GDP growth and its fluctuations • Therefore‚ need to understand the forces that determine GDP (“National Income”) • John Maynard Keynes in his “General Theory of Employment‚ Interest and Money” (1936) developed a model of income determination • Known as Keynesian Theory of Income Determination • Aggregate spending / demand determines the level of aggregate output Concepts and Functions Actual
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During a ‘fireside chat’ days before President Roosevelt signed the Fair Labor Standards Act of 1938 into law‚ he said‚ “Do not let any calamity-howling executive with an income of $1‚000 a day‚ ...tell you that a wage of $11 a week is going to have a disastrous effect on all American industry” (DOL.gov). This was 76 years ago by a Democratic president whose rhetoric sounds like something our current Democratic president would say. President Roosevelt signed the Fair Labor and Standards Act on Saturday
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INCOME TAX NOTES Residential Status and Incidence of Tax According to Section 5 of the Income Tax Act the scope of total Income of an assessee depends on his residential status.On the basis of residential status assessee are classified under the following two categories: 1. Resident 2. Non-resident. As per as resident individuals and Hindu Undivided Families are concerned‚ they can be further divided into two categories: 1. Ordinarily Resident 2. Not ordinarily Resident. Residential
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Definition of Tax “Taxes are compulsory payment to government without expectation of direct return in benefit to the tax payer” According to section 2 (62) of the ITO (Income Tax Ordinance) 1984: “Tax means the income tax payable under ordinance and includes any additional tax‚ excess profit tax‚ penalty‚ interest‚ fees or other charges leviable or payable under this ordinance.” Characteristics of Tax i. Tax is a payment to the government by the people. ii. Payment of taxes is non-penal
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