Tag - atul khurana

SCN-8 “CONTROLLED FOREIGN COPRORATIONS”

Hello Readers, Welcome to the SCN Series. Today's Term is CONTROLLED FOREIGN COPRORATIONS (CFC): It is an anti tax avoidance measure where a parent company opens a subsidiary in low tax jurisdiction and then evade the tax by non distribution of dividend or profits to the shareholders of parent company. Here it is..... Controlled Foreign Corporations (CFCs) are corporate entities incorporated in an overseas low tax jurisdiction and controlled directly or indirectly by residents of a higher tax jurisdiction (Parent State). Since each corporate entity [...]

SCN-7 “HEDGE”

Hello Readers,  Welcome to the SCN Series.  Today's Term is: Hedge A hedge is an investment that protects your finances from a risky situation. It is done to reduce the risk of adverse price movements (rise or fall) in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a future contract.  In simpler words, It is like making an alternate investment in 2nd security so as to reduce the adverse effect of price movements in 1st [...]

SCN-6 “CbC REPORTING”

Hello Readers. Welcome to the SCN Series. Today's term is from International Taxation part of the Income Tax: CbC Reporting: In order to prevent tax avoidance, Multinational Enterprises (MNEs) whose consolidated revenue of International Group is more than Rs. 5,500 crores (as reflected in the consolidated financial statements for the preceding accounting year) are required to report to the income tax department annually for each tax jurisdiction (each country) in which they do business the information set out therein. This reporting is called the Country-by-Country (CbC) Reporting. Click here for the [...]

SCN-5 “SLUMP SALE”

Hello Readers, Welcome to the SCN series. Today’s term is: Slump Sale As per section 2(42C) of Income -tax Act 1961, ‘slump sale’ means the transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales. In simple words, it is a sale of whole undertaking for a lump sum amount. Assests and Liabilities are not measured individually. Click here for the previous posts of [...]

SCN-4 “PERVASIVE EFFECT”

Hello Readers, Welcome to the SCN series. Today's term is one amongst the most confusing terms of the auditing: Pervasive Effect of Misstatement. The effect of misstatement is pervasive when such misstatement is not confined to one element, account or item of financial statement and even if it is so confined, it represents a substantial portion of financial statements. Click here for the previous posts of this series. For Tax Consultancy, Mail us at [email protected]  

SCN-3 “SECURITIZATION”

Hello Readers, Welcome to the SCN Series. Today’s Topic is: Securitization It is the process of converting the illiquid assets of the company into the securities. The company (originator) transfers its illuquid financial assets to the Asset Reconstruction Company (ARC) which in turn pay cash to the originator and then ARC with the involvement of Special Purpose Purpose Vehicle (SPV) convert the assets into securities and sell the same to the investors. #Originator gets immediate cash for illiquid assets. #The money collected from issuing of securities [...]

SCN-2 “Financial Leverage”

Hello Readers, Welcome to the SCN Series. Today's Topic is: Financial Leverage It basically relates to process of borrowing capital i.e. the debt and equity securities by the company. The more the debt, the more is the financial leverage. Higher financial leverage means higher interest payments by the company which is considered as little bit risky in terms of the growth of the company. For Tax Consultancy, Mail us at at [email protected]

SCN-1 “Tax Treaty”

Hello Readers, Starting with the first concept of this series: Tax Treaty Also known as a Bilateral Agreement, A tax treaty is a bilateral agreement signed between two nations so as to prevent the issues of double taxation on income. As per this agreement, both the nations decide the rates of tax that has to be applied to an income of a person in both the nations i.e. country of origin of income and the home country. Sometimes, it is in the form of [...]

Short Conceptual Notes (SCN) Series

In this fast moving world, we find it difficult to extract some time to read some stuff for enhancing our knowledge. When as a student of Chartered Accountancy, I use the word “knowledge” then yes it means to have updated knowledge on the topics of Finance, Taxation, Auditing and Law. Since the past 5 years, I am writing full fledged articles on the above mentioned topics. Even sometimes, I had run so many series so as to provide complete information [...]

National Financial Reporting Authority – Constitution

Disclaimer: The views are personal and if it offends you then accept the reality because I am not writing any fascinating story. NFRA Part 1: Click here to read NFRA – Provisions: When it comes to provisions of a certain thing, a section comes into light. Here it is the Section 132 of the companies Act, 2013. Let us discuss it: The section firstly justifies that the Central Government may by notification, constitute a National Financial Reporting Authority to provide for matters relating to [...]

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