Importance of Education for Wife

This is the content which may be helpful to those who have wife but illiterate from real education. They should read the importance of education for wife and should start today for providing education to your wife.

1. If your wife will get education, then she did not quarrel with your other members of family. Good education is helpful to love other not quarrel or abusing other.

2. With getting education, your wife will leave selfishness. She will never threaten of divorce because after getting real education, she will learn real enjoy and peace in selfless. Our ancient wives learned education and become the great wives  like  Sita, Savitri and many others with their great sacrifice for husband.


3. It is basic right of every wife to get education after marriage. In my childhood, my parent taught me, if our mind is in free position, it is just like room of devil. After getting education, your wife will start to give education to other. With this, your wife will not live alone freely and she will become active in her duty. A devil will not bear in your wife's mind. It means that your wife will not have a single minute for quarrel, abusing or to do other bad things with you or other.

You can take example of me. This time, I am providing education because I learned some education. If I did not get education. I can not share it with you. It means, at that time, my mind will free and devil of mind will awake and I surely do bad works with my devil mind. Thanks to education who saved me this devil.

4. When I am talking about the importance of education for wife, I am not just talking the importance of education for your wife. I know, wife is just single role which she plays with her husband. But in real sense, she starts his big duty for society  from this way. My mother is also wife of my father. She fulfilled her great duty for me because she is not just wife of my father. Only with moral education, your wife will understand her great duty toward society and nation. After this, she will be helpful to integrate not only her husband but nation also.

I listened  the threaten of divorce stories in news papers but today, I am very sad when watched a woman who was saying that she will notice of divorce if you ( her husband) will not separate me from mother-in-law. Even she is graduate. Just getting the degree of graduation is not education in my eye. I persuaded her, you should do cool. Please love with your mother-in-law. Behave her with your own mother. You will also become mother-in-law in future. What will you feel when your son's wife will behave like this. But I was not her husband because I am still unmarried  but I think it is duty of her husband to educate her wife. Our moral values and ethics are more important than dead things. It is the India where we behave dead stone like real God. So, all wives of world should understand that you will start to give respect others and you will get respect from other.

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Accounting Objective Questions

I hope that many of you,  read accounting education's email updates daily. Today is 30th April 2011 end of this month. I am writing a simple accounting objective questions out of my written accounting contents during April 2011. Choose the correct answers  all these accounting objective questions honestly out of given options and check whether your accounting knowledge has been increased by accounting education or not.

1. Bank Errors  are

(a) Which are done by customers of banks.

(b)  Wrong report of ATM server error to bank

(c)  A simple mistake of your bank account

 2. Bank Statement  is

(a)  the bank column of your cash book

(b)  the movement of bank accounts over a period

(c)  statement in which bank requests your personal detail.

 3.  Balance Per Bank which is shown

(a) by your ledger's bank account

(b) the net by deduct your all expenses from your income through cheques.

(c) which is shown by your bank statement.

 4. Bank Charges

(a) include charges which are taken by banks from customers.

(b) include charges which are taken by central bank from commercial banks.

(c) include charges for taking  property on lease.

 5.  Application of Marginal Costing  in

(a) Managerial Decision Relating to Determination of Optimum Selling Price.
(b) Managerial decision relating to investment in new project.

(c) Managerial decision relating to linking sub-project cost with main project cost.

 6. Importance of Financial Inclusion

(a) It is useful for giving loan to rich customers of banks.

(b) It is useful for reaching every customer of rural sector.

 7. Advantages of Job Costing

(a) Easy to calculate cost of outflow from your per month salary.

(b) Easy to calculate the cost for finding a good  job in company.
(c) Easy to calculate overheads for specific job.


 8. Reason of Losses 

(a)  Lack of knowledge of inventory management.

(b) In night, you go to your godwon and set all stock on fire.

(c) A Ghost takes all your profit.


 9. How to  reduce the risk of  Death Spiral in Accounting ?

(a) By increasing price

(b) By decreasing price

(c) By using of activity based costing


 10. Why should You Use Financial Statement?

(a) Because it is useful for decisions of company.

(b) Because it is useful to case to be filed  against the CA of company.

(c) Because it is useful to reduce the loan.

Please check your answer with correct answers list at here.

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Importance of Lease Finance

Lease finance or lease financing means contract between owner of asset and user of asset. In this contract only rent is paid at periodical intervals for using of asset by user. If user of asset has no money to pay initial amount of leasing contract, he can also do contract with third part to pay initial amount or specific period rent of lease. It will be also lease finance. In following words, we can explain its importance

1. # Lease finance is easy to get than getting loan for buying all fixed assets.
2. # Monthly rent payment for lease finance will be operating expenses. It will be allowed to deduct total income. So, company can get tax benefits in lease financing.
3. # It can show as invisible debt of company out of its balance sheet. You can show lease finance in the footnote of balance sheet, if you did contract directly with the owner of asset.
4. # One of major important point is that it is more flexible way of finance. You can fix your need of asset and get it one lease through lease financing.
5. # A study from IFC [PDF] has revealed that 30% of  total share of lease financing as investment of fixed asset  is of emerging  and developed economies and now 15% of developing countries.  

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How to Control Foreign Exchange Risk

Foreign Exchange Risk and its Control  is CA (final - New)'s topic. In this topic, you have to explain different steps to control foreign exchange risk. All corporates demand from a CA that he should be perfect in strategic financial management. To manage foreign exchange risk is also part of strategic financial management. Moreover, all corporates who are operating their business more than one country, have to show profit or loss from foreign exchange fluctuation in their quarterly financial reporting. Decrease the value of your company's currency in overseas means decreasing the profit from foreign exchange or loss from foreign exchange.  So learn the steps to control foreign exchange risk.

Ist Step : Reduce Risk with Derivative Contracts

Suppose, you have to take some money from another country. If you estimates that its value will strong than your country's own currency. At that time, you can take part in derivative market. You can sell same currency and in consideration, you can buy your own currency. With this, you can reduce the risk of foreign exchange.

2nd Step : Deposit  Earned Money in Foreign Bank

If your own currency's value is low than foreign currency. At that time, you need not bring money from that foreign currency. Just open your bank account in that foreign country and deposit money in it. Suppose, you are Indian businessman and you earned  500,000  from Singapore. At this time, your currency of $ 1 =1.23 S$. If you estimates that its value will become rise in future. You can hold your money in Singapore bank. It is good way to reduce foreign exchange risk.

3rd Step : Deal in Currency Swaps

You have to exchange your currency's principal amount of given loan + receivable interest  for same type of loan and interest in other currency.

In this currency swaps

a) There are two parties. Your company and other.

b) Your company want to get cheaper loan of other country's party (Counterparty). Other country's party wants to present value of your loan. Both can deal currency swap just like foreign exchange deal. But it can control your foreign exchange risk.

Related : Convertibility of Rupee

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How to Find Who Like My Youtube Video

It is the big question, "How to find who like my youtube video?" or  "Is there a way that I could track the usernames of people who like my video?" for all educational channels who create videos and upload in youtube. I have also lots of educational videos in youtube at svtuition channel  and I am also interested to know who liked my youtube video. Still youtube did not make any option to track this. But, I find a trick with this you can find who liked your youtube video.


First of all you have to add your website link to your all youtube's description. After this, you have to add your website to google webmater tool. Now, google webmaster will start to track your site's link in the web.
Google Webmaster Tools may help you find that information provided your feed is linking back to the source. Here is its link

https://www.google.com/webmasters/tools/external-links-domain-to-page?hl=en&siteUrl=http://www.svtuition.org/&bldomain=youtube.com

Replace http://www.svtuition.org/  in the above URL with your own site domain and you’ll get a list of all youtube username who liked your video. Following is the sample of youtube username who liked my video and I tracked their channel through above way.

1. http://www.youtube.com/user/chakrayuva
2. http://www.youtube.com/user/MrAgathian 

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Amendment in Service Tax 2011

Govt. of India ( Ministry of Finance) amended some Rules of Service Tax  in this month and previous month also ( March -April 2011)  and its notification has been published at its official site's notification. Two of its amendments are given below :

1st : Exemption of Service Tax to preschool coaching and training

Under this new amendment only pre-school coaching and recognised coaching centres are free from service tax. But all other private coaching centers have to pay service tax.

Notification No.33/2011 – Service Tax

G.S.R. (E) - In exercise of the power conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government on being satisfied that it is necessary in the public interest so to do, hereby exempt,-

(i) any preschool coaching and training;

(ii) any coaching or training leading to grant of a certificate or diploma or degree or any educational qualification which is recognised by any law for the time being in force;

when provided by any commercial coaching or training centre from the whole of the service tax leviable thereon under section 66 of the Finance Act, 1994.

2. This notification shall come into force on the 1st day of May, 2011.

2nd  Amendment in Taxation of Services (Provided from outside India and received in India ) Rules, 2006

Taxation of service rules, 2006. You can read at here. There is not big amendment in taxation of service. Just sections sub-part's names have been changed. Review this amendment at here.


If you want to read all amendments in service tax law, please read it at here.

Related : Amendment in Service Tax 2009

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Working Capital Turnover Ratio

There is direct relation of working capital of company with its sales. We have more control over working capital because we can change current asset or current liability according to our need. But, there is no full control over our sales because external business environment affects our level of sales. Working capital turnover ratio is good tool to take decision to manage sales. It shows the use of working capital for sales. Both high and low working capital turnover ratio is not good. Because low WCTR means low inefficient use of working capital in operation and very high working capital turnover ratio does not show good position of company because  its shows company is operating with high short-term debt obligations. Only optimum working capital turnover ratio is the best. Formula of Working capital turnover ratio.

= Cost of sale or sales / average working capital

This ratio also shows the return in volume on our net invested current assets. We can also compare it with Asset turnover ratio which shows the relationship of sales and total assets

= Cost of Sales or Sales / Total Assets

If we write earning asset instead of writing cost of sales or sales, it will be the Earning assets to total assets ratio. It is also better way to check the position of company.

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Parenting Children with Mental Retardation

Today, I read the book whose name is "Parenting Children with Mental Retardation". In this book, there are so many tips which are given for better parenting children with mental retardation. Some of them, I am sharing with you.

1st : Exercises for Increasing the Activities of Children with Mental Retardation

Due to weakness of nervous system, muscles and blood circulation system of  children with mental retardation. So, they  need special exercises for development.

a) Up and downs the the hand and legs of such children. Continuously doing such exercise will be useful to activate their  muscles.
b) Rotate the body from one side to another side.
c) Catch the feet of such children and try to operate it like operating cycle.
d) Capture the hands of such children  and help to clapping with their hands.
f)  See such child from 15 inch distance and then join you nose with child's nose. Do this exercise daily. It will increase concentration of such children.
g) Motivate child to climb.
h) Motivate child to stand. For this, give chair or table for his or her help.
i) Do some exercise for creating co-ordination between hand and eye.

2nd : Development the Language  of Children with Mental Retardation

Children with mental retardation's speed to learn language is very low. Parent should make the time table for special stress to develop their  language. Make interesting situation for speaking your child. Never ignore, if your child wants to tell something. Try to understand and respond promptly. Increase the dictionary of your child by joining one - one word with different places and different things. Children learn bad words more fastly. Try to tell good words same way and pressure on such words during speaking. 

Remember :

a) If such child does any mistake during speaking, never laugh on such mistake and never repeat such mistake. Speak correct words.
b) Never stop or comment on his speaking.

3th : Tips Face the Problems

Parenting children with mental retardation may be challenge for you. When, you face the problem in your activity, please follow following tips:

a) For parenting children with mental retardation, you should have tolerance power.

b) Give prize or reward, if such child behaves good.

c)  Never debate such child.

d) Give opportunity to such child  for solving the problem.

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Successful Women Entrepreneurs in World

When we talk about the successful women entrepreneurs in the world, it includes all the countries of world and we check their  successful working  roles and portfolio responsibility in industrial manufacturing, finance, and corporate ownership.  There is big list of  women entrepreneurs who succeeded at world level. Some of them, I studied at wikipedia and saw their interviews at YouTube. After meeting such women entrepreneurs and read "how did they achieve  their success?", you will learn that all women can start their own business and with their passion in work, they can succeed at international level.  If you are woman, you can get inspiration from them for becoming next successful woman entrepreneur in the world.


1st Successful Woman Entrepreneur - Katherine L. Adams from USA

Katherine L. "Kate" Adams is deemed as successful women in the world. She is the Senior Vice President and General Counsel at Honeywell International, the world's biggest maker of cockpit electronics. A highly regarded top executive and the most senior woman at Honeywell, she reports directly to its Chairman and Chief Executive Officer, David M. Cote. In 1986, she earned a Bachelor's degree in Comparative Literature with French and German concentrations from Brown University and, in 1990, a Juris Doctor's degree from the University of Chicago Law School in Chicago. She started his career from Law clerk but after her talent, she become  Chief Justice United States Court of Appeals for the First Circuit and vice president at Honeywell. Now, she is operating honeywell International successfully.

2nd Successful Woman Entrepreneur -  Sophia Aggelonitis from Canada 

Sophia Aggelonitis is a Canadian woman and successful women entrepreneur in the world in Souces business. Now, She is also a member of the Legislative Assembly of Ontario, representing the riding of Hamilton Mountain and is the province's Minister of Revenue in the Liberal government of Premier Dalton McGuinty.

Subsequently, Aggelonitis has served as Parliamentary Assistant to the Minister of Economic Development and Trade. In addition, Aggelonitis has served as a member of the Standing Committee on Finance and Economic Affairs, as a member of the Standing Committee on Social Policy, the Cabinet Committee on Justice, Intergovernmental and Aboriginal Affairs and was appointed by the Premier as the Chair of the Restaurant and Hospitality Caucus.

3rd Successful Woman Entrepreneur - Lynn Jurich from USA

Lynn Jurish is 32 years old young and successful woman entrepreneur from USA. holds an MBA and BS from Stanford University. She is the co-founder and president of SunRun, a residential solar financing company headquartered in San Francisco, California. Previously Lynn was a member of the investment team at Summit Partners, a venture capital and private equity firm with over $9 billion under management. During her tenure at Summit Partners, Lynn completed investments with an aggregate market value of over $900 million in the financial services and technology sectors.

4th Successful Woman Entrepreneur - Anousheh Ansari from Iran

Anousheh Ansari can also identify as successful woman entrepreneur in the world. She ( born September 12, 1966 in Mashhad, Iran) is an engineer and the Iranian-American co-founder and chairman of Prodea Systems. Her previous business accomplishments include serving as co-founder and CEO of Telecom Technologies, Inc. (TTI)

She received her Bachelor of Science degree in electrical engineering and computer science at George Mason University in Fairfax, Virginia and her master's degree at George Washington University in Washington D.C.

Telecom technologies was acquired by Sonus Networks, Inc. in 2001 in a stock-for-stock transaction for 10.8 million shares of Sonus stock. Anousheh Ansari became "a vice president of Sonus and general manager of Sonus' new INtelligentIP division.

She is also the first woman space tourist-astronaut. She talks about her $20-million trip to the International Space Station in 2006 with Forbes Adventurer Jim Clash in above video.

5th Successful Woman Entrepreneur - Tan Le from Vietnam

Tan Le (born 1978), a Vietnamese-Australian telecommunications entrepreneur, is president and co-founder of Emotiv Systems. She was named in  Young Australian of the Year.

Born in Vietnam, Tan migrated to Australia as a refugee with her family in 1982. Tan was awarded a KPMG Accounting Scholarship at the age of sixteen, and entered Melbourne’s Monash University in 1997. She went on to complete a combined Bachelor of Commerce/Laws (Honors) in 1998 and started her career with one of Australia's leading law firms. Tan Le was admitted as a barrister and solicitor in 2000.

As president of the Vietnamese Community of Footscray Association, she made a number of contributions to charities and newspapers throughout Melbourne.

Related : Successful Women Entrepreneurs in India

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Cost Drivers examples

In activity based costing method, to identify cost drivers is very necessary for unit cost and total cost. We know that activity-based costing is based on the concept that products consume activities and activities consume resources. From activity pools, we can find cost drivers. Suppose, a company wants to produce several products. At that time, what will company do for calculating per unit cost? Just adding of raw material and labor cost and absorbing production overheads on direct labour hours or machine hours is not good way. There will be many activities where we have to spent money. All these activities will become cost drivers. Examples of these cost drivers are given below:

1st  : No. of Purchase Orders

When we have to make any product, we issue the order. This is a simple activity. Its cost can be calculated one the basis of no. of purchase orders. So, number of purchase order is an example of cost driver.

2nd : No. of Set Up of Machine

Setting up the machine is an activity of production. This activity will also consume certain expenses. To know machine set up rate, we need a cost driver. No. of set up will be cost driver. With this, we can calculate set up of machine overhead  rate per set up of the machine for production.

3rd : No. of Machine Hours

No. of Machine hours is different cost driver which can be used for calculating machine hour rate relating to depreciation, repair and maintenance of machines.

4th : No. of Parts or Weight of Material Handled

Suppose, a company is making 4 products. These 4 products need 16 parts to assemble with each other. different expenses may be spent for this activity. We can calculate rate of this overhead on the basis of no. of parts. So, number of parts is a cost driver.

5th : No. of Test or No. of Inspections

When any product is made, it is test for checking its quality. Specific experts are appointed for this. They consume money in the form of salary, electricity, travel and other depreciation of their specific equipments. Now, we need to calculate rate of these type of overheads. It can be calculated on the basis of no. of test. So, number of test is cost driver. Suppose, we need 5 test per unit of  A product and suppose we have made 1000 units. It means, we need 5000 tests for these units. If the accounts of inspection and test departments show the total cost Rs. 1,00,000. We can calculate rate of per unit test.

= 1,00,000 / 5000 = Rs. 20 per unit test

6th : No. of Direct Labour Hours

No. of direct labour hours is that cost driver which can be used for calculating supervising cost per unit.


8th : No. of Batches of Material

For calculating, storage cost per batch, we have to make a cost driver that will be no. of batches of material.

9th : No. of Machine Operators

No. of machine operators is better cost driver for calculating electricity rate per machine operation.

Above are just examples of cost drivers which are used but you can also different cost drivers which may be appropriate for calculating overhead cost of products under ABC method.

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Sweden Accounting Standards

For becoming perfect in accounting, we should learn each country's accounting standard. I have explained  almost all Indian Accounting Standards. Now, I am explaining about Sweden Accounting Standards. Sweden is the third largest country in the European Union by area. International Financial Reporting Standards (IFRS) was adopted 2005. Some swedish govt.'s members have been included in Accounting Regulatory Committee (ARC) because Sweden is an EU Member State and they give suggestions to improve IFRS.  It has been adopting  IFRSs since 2005. It has also made Swedish Accounting Standards Board which is govt. authority there for checking rules and regulation of accounting. However, all the rules in Sweden Accounting Standards are of IFRS.  But the Swedish Financial Accounting Council (SFASC) and The Swedish Accounting Standards Board has issued  new  following accounting standards due to some differences with IAS.  

• SFASC 9, Income Taxes (based on IAS 12).
• SFASC 10, Construction Contracts (based on IAS 11).
• SFASC 11, Revenues (based on IAS 18).
• SFASC 12, Property, Plant and Equipment (based on IAS 16).
• SFASC 13, Associated Company (based on IAS 28).
• SFASC 14, Joint Ventures (based on IAS 31).
• SFASC 18, Earnings per Share (based on IAS 33).
• SFASC 20, Interim Financial Reporting (based on IAS 34).
• SFASC 1:00, Business Combinations (based on IAS 22 and 27).
• SFASC 15, Intangible Assets (based on IAS 38).
• SFASC 16, Provision, Contingent Liabilities and Contingent Assets (based on IAS 37).
• SFASC 17, Impairment of Assets (based on IAS 36).
• SFASC 19, Discontinuing Operations (based on IAS 35).
• SFASC 21, Borrowing Costs (based on IAS 23).
• SFASC 22, Presentation of Financial Statements (based on IAS 1).
• SFASC 23, Related Party Disclosures (based on IAS 24).
• SFASC 25 - Segment Reporting (based on IAS 14, Segment Reporting)
• SFASC 26 - Events After the Balance Sheet Date (based on IAS 10, Events After the Balance Sheet Date)
• SFASC 27 - Financial Instruments: Disclosure and Presentation (based on IAS 32, Financial Instruments: Disclosure and Presentation)
• SASB 2001:1 Income Taxes (based on SFASC 9).
• SASB 2001:2 Transaction Recording.
• SASB 2001:3 Property, Plant and Equipment (based on SFASC 12).
• SASB 2001:4 Statement on How to Account for Inventory Obsolescence.

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Confusion of balance sheet growth of Banks

In banking industry, when we talk about balance sheet growth. There are many confusion arise in the mind of investors which I am sharing with you.

1st : Return on Assets and Return on Equity

Suppose, any CEO presents his balance sheet growth on the basis of return on assets and return on equity. It means company has achieved high return on limited assets. On the other side, when, he or she told that we get more return on limited equity capital by publishing in media. Both declarations  create confusion because main assets of banks are 'given loan'. Main source of earning of bank is interest. It means company has given limited loan and earned high interest on it. This is high return on assets. Yes! But credit risk is also with this. Means, borrowers will be unable to repay interest and principal as specified in the loan contract. A bank never explains detail of expected defaulters. It is ok, we can find unplayable money from bank's balance sheet. But, it is most difficult to get idea of expected default borrowers in bank's balance sheet. Financial crisis  in USA financial market is also the example of my confusion. All are showing high return on assets but what happened when they become liquidated. So, showing return on assets in which given loans are included, is not better way  for showing company's progress.

2nd : High Amount of Deposits

Bank's main aim is  to get cheap money in the form of deposits and invest by giving loan at high rate of interest. It means, deposits in banks is treated just like loan to bank. Now, bank starts to do trading on equity. But, depositors have rights to withdraw money. So, by showing high growth of deposits is the way of high return on equity is also one of big confusion. Read more leverage effect on ROE.

3rd : Off - Balance Sheet Items

There may be lots of liabilities which can not be mentioned in bank's balance sheet. Wikipedia's Off-balance-sheet content's given example is the best proof of this.

Related : Importance of Balance Sheet

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What is Freight-in?

Freight-in is one of direct expenses which is paid by purchaser of goods. It is included in cost of goods for knowing gross profit. Freight-in may give to road or train transport. If company imports goods from foreign country, loading charges via ship or air will be also freight-in. If buyer has used both means and paid freight-in for buying goods, all these cost will be the part for calculating cost of goods sold and cost per unit goods sold.

In India, manufacturers, wholesalers and other big dealers use railway for obtaining goods for their godown. Previous year, 67.33 Crores Tonnes goods are loading from Indian Railways. Still, there is no increment in freight charge of railway in Railway Budget 2011. So, it is good news for buyers.

Related : Direct Expenses

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Tips to Reduce the Cost of Making Furniture

Recently, I did take big project for making my personal furniture and I found following things which may be helpful to you to reduce the cost of making furniture.

When you make your furniture items, you should meet a good carpenter. Good carpenter has good knowledge of quality of wood, wood board and ply board and other skills for making furniture. In my local area, there are lots of carpenter but most of all are money minded. But, after search, I found a good carpenter who saved my cost more than 50% for making the furniture. What did he do for me?

1st Tip : He knows where I can buy second hand wood boards, ply wood boards and other raw materials of good quality. Actually, there are big contractors who buy second hand furniture and other furniture parts from big companies at very low rates and sell it as second hand. These materials are not so old but when a new company wants to decorate their office with branded ply wood or with new design, at that time it sell it with auction way to big contractors of timber industry. All these furniture's material are of good quality. So, I decided to buy this. Suppose, I need (5 foot X 9 foot) size ply wood board's 10 pieces.

New Ply Wood's Cost = Rs. 20 per foot

If I buy new, my raw material cost will be = 5 x 9 x 10 x 20 = Rs. 9000

Second hand ply wood's cost = Rs. 10 per foot

If I buy second hand quality ply wood material = 5 X 9 X 10 X 10 = Rs. 4500

I saved cost of raw material of furniture = Rs. 9000 - Rs, 4500 = Rs. 4500 which is 50% less than new raw material.

2nd Tip : My carpenter told me that by buying second hand raw material of furniture, we also saved the wastage because no vendor sells same size what we need for specific thing of furniture. At that time, we have to pay more than what is our budget for making furniture. My carpenter has good maths skills. He measured all area of different things correctly and calculated the net need of raw material for this. After this, we went to buy.

3rd Tip : During the setting of my fixture in my building, he gave me good suggestion for saving my place. I followed and now I am using my place effective way. This is also one of good benefit for me.

Related : What are Furniture and Fixtures?

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What are Furniture and Fixtures

Furniture and fixtures are long term assets which are showed in assets side of balance sheet. These assets are the part of fixed asset and every year, we charged depreciation on these assets. Depreciation is calculated on their useful life and it is deducted from all furniture and fixture's book value for showing written down value in balance sheet.

Now, you can understand the meaning of furniture and fixture. If any part of furniture and fixtures is used in equipment of business, it will be added in equipment instead of furniture and fixture. It will be very helpful for liquidator who will calculate the value of furniture and fixture separately at the time of liquidation of company. In furniture, we generally includes desk, chairs, tables, bench, Cupboard Chest, Stool, Bookcase on Stand, Storage Rack and Doors. Fixture is also that type of furniture which is fixed in specific place and position of building.

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Renting or Buying a House

First of all, I want to tell, why am I taking this finance topic to discuss in accounting education? Because today morning one person is coming to my house for searching a house on rent. I asked his profession and other financial detail. That was good. But, he was ignorant of finance knowledge. I told him that buying a house is better than renting in your case. I tried to use some financial calculation for telling the logic behind this. All these things, I am sharing with you.



Reasons of Buying a House is Better than Renting a House

1st Reason : Buying a House is better than Renting a House

{ Co-relation of Increasing the Prices of House and Increasing the Rent Rates}

  I take my house's example. My parent bought my house in Rs. 15,000 in 1980 ( India)

Now, Same house's market value is more than Rs. 1 Crore ( 2011 Current Year)

I asked my parent about the rent of same house and it was just Rs. 100 per month or Rs. 1200 per year in 1980. But, now each room's rent is Rs. 1000 and If we have 10 rooms, it means today rent of this house is Rs. 10,000 per month or Rs. 1,20,000 per year. We make 10 new rooms, rent of this house will increase to Rs. 20,000 per month or Rs. 2,40,000 p.a..

Now Co-relate it with rates of buying of house

	1980	2011
	(Amount in Rs. )	(Amount in Rs.)	Increase	Increase times
My House (Buying)	15,000	1,00,00,000	99,85,000	10,000 times
My House ( Renting)	1200/ per year	120,000/ per year	1,18,800	100 times

From above table, you can get clear idea. Rent rates is also increasing with increasing house rates. Moreover, if my parent thinks to rent in 1980, then today we have no house and plus, we are still paying Rs. 1,20,000 per year. One more thing, I want to compare it, if payment of 15,000 was 15 times (approximately) more than rent per year in 1980 but now, payment of Rs. 1,00,00,000 is 100 times more than rent per year in 2011.   So, this is better to buying house instead of renting of house.


2nd Reason : Buying a House is better than Renting a House

{Annual Interest Saving and Tax Saving }

Suppose, above person's salary is Rs. 20,000 per month in designing company. He is ready to get house at  rent of Rs. 10,000 per month.

Annual Rent  = 10,000 X 12 = Rs. 1,20,000

Annual Loss of Interest on Saving Bank Account = Rs. 120,000 X 3.5% = Rs. 4200

Means total cost of Rent of Rs. 1,20,000 + Rs. 4200 = Rs. 1,24,200

Still, there is no provision in Income Tax Act 1961 for providing deduction or rebate out of total tax for rent payment of residential house.

On the other side, you can buy different types of houses according to size of land. Means you can buy a land of Rs. 5,00,000 and make small house on it by using your investment of Rs. 5,00,000. Overall cost of your house will be Rs. 10,00,000.

At that time, you will be the plus point that you will need not pay per month investment and you can get interest on this saved interest. Suppose, if you have not full Rs. 10,00,000, you can get home loan from bank. In India, all Govt. and private banks provide home loan. I know SBI's home loan, it is between 8.5% to  9.5% p.a. upto repayment of home loan. Tax benefits on home loan are of two types:

(A) As per section 24(b) of Income Tax law, you can deduct  Rs. 1,50,000 towards the total interest payable on the home loan towards purchase / construction of house property.

 if your loan is of Rs. 5,00,000 and its interest is Rs. 47,500 annually ( approximate).  You need not pay tax on income which is used in interest on home loan because, this interest is less than Rs. 1,50,000.

 (B)  According to new section 80 C and 80 CCE of deduction, you  will get deduction of Rs. 1,00,000 on home loan's actual repayment amount.


Total Tax Saving =  Rs. 100,000 + 1,50,000 = Rs. 2,50,000

That is the reason, buying of a house is better than renting of a house.

3nd Reason : Buying a House is better than Renting a House

{Value of Land is appreciating but Value of Money is depreciating}

House is made on land and we are seeing that value of land is appreciating very fast in real estate market. On the other side, value of money is depreciating in financial market. Because financial market is so connected with international currency market, international economy, crisis and other things. Investment in house will be good gift to children and one of basic need of any human being in the world.

If my parent did not buy my house and deposited in FD bank account in India for 31 years. What does happen? We receive just Rs. 67,500 as interest income without house roof. But today, we are better than this condition.

From this, you can get idea, investment which is in house is appreciating when we are comparing it with investment just in money market.

 Reasons of Renting a House is Better than Buying a House

1st Reason : Renting a House is Better than Buying a House

{ Low resources of Earning}

Sometime, a person takes home loan from bank or other but due to low resources, he can not pay his home loan. At that time, his life may be more stressful. Personally, I am not in the favor of taking any type of loan for any purpose. [ I did not take loan of Rs. 1 from any one in my past 30 years life . With this, I sleep deeply without  any tension of repaying of loan.]

Today, buying a house is long term project. If your resources of earning is low. Renting a house is best option for you. Live an extra 10 years, or buy and die of worry earlier.

2nd Reason : Renting a House is Better than Buying a House

{ Future is Uncertain }

I think, I am living peaceful in my buying house. This is my biggest mistake. Future is totally uncertain. Only one minute earthquake and tsunami may break your house of 100 Billion $. We are all passengers of a train that is called life. Next one second, what will happen, we can not estimate. Then, why are you taking tension for buying a house? Enjoy your happy life on rented a house just like travel in train.

3rd Reason :  Renting a House is Better than Buying a House

{ Relation is Better than a Physical Property}

If you want to make good relation, I will say you renting a house. My father did Govt. service for 37 years. He lived his 37 years in renting house. He rented more than 10 houses and made a peaceful relation with different owners of house. Still, all are our family members. Actually, sometime, situation can decide whether you will live in renting house or in buying house. Remember, no one can carry this physical property.

My Own Thoughts on this Debate

In end, to live in renting house is not bad but bad is thinking of wealthy people. Food, clothes and house are basic need of any human being, animals and birds. If any person, animal and bird  lives without food, cloth and house, it means it is default of society. Wealthy people of the world are playing bad game for increasing their income. One side, they are increasing the prices of land by capturing it for rental purpose. With this, prices of houses will touch sky. On the other side, they take big rent from middle class or poor. I know lots of wealthy people in my area. They made lots of building with their black money. They have captured all most all the land of our area. Now, there is no free land. Now, they are demanding high value of  these residential building.

Not in India, there are lots of capitalists all over the world whose one aim is  to increase surplus value for their multi billion dollar enterprises in real estate industry and to transfer wealth to the top by increasing both rate of land and rent. Their bad politics is just to reach top position of billionaires.

 They are also demanding high rent on these building. Today is earth day ( 22nd April 2011) and we have to promise that we did not do the bad business of  house. Earth is our mother. We are all brothers and sisters due to this relation. Line of Control has been made by bad persons. We did not buy or sell it for exploiting middle or poor. We will distribute our extra house and land to middle and poor as donation. Many years ago, Great saint of India Vinoba Bhave  had started this movement. He took donated land from rich Indians and gave to poor free of cost. He got more than 1000 villages in the form of donation for poor Indians. Out of these, he obtained 175 donated villages in Tamilnadu.  We should start this movement again. We did not take high rent from middle or poor. I know lots of religious and not for profit organisations  who are providing free house to middle and poor.  I am thankful all these organisations. According to my thinking, house is not the name of building but it is the place where we understand other's feeling and other understand our feeling.

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Is CFA/ADBF from ICFAI Tripura and Dehradun Eligible for Appearing in UGC NET EXAM

I have completed M.Com. with 70% marks (regular) and completed cfa from icfai Tripura (distance learning mode) and Advance diploma in finance from Icfai Dehradun. Now I am appearing in UGC NET EXAM on the basis of my M.com. degree I can appear in the commerce sub. I need to know, can I appear in the management sub. on the basis of my CFA Charter and Advance diploma in finance, Actually initially I was enrolled in the Ms-Finance programme of the icfai Hyderabad and got charter and adf from different  icfai center. Can you explain this as well, I am still to complete 3 groups of ms-finance programme,

thanks and regards

Shilpi Gupta from India

According to UGC NET rules, only Master’s degree with at least 55 % marks or its equivalent grade from any of central, state or deemed university but not private university. Still, CFA and ADBF  is not valid but M.Sc in Finance from ICFAI  is  valid for appearing in UGC NET because ICFAI is deemed university declared under Section 3 of the UGC Act, 1956. Time to time, UGC adds new subject, degree and university for UGC NET purpose, so, please take some update from UGC's official site.

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Annual Report of Our Local Students Welfare NGO

 

for every student

I have already told in my 31st birthday's message that we have created our local students welfare NGO. Recently, we published its annual report. So, I am sharing this report with you. I hope, you will encourage from our NGO and will start one in your local area for providing free education to poor and needy students.

1. # We have found 1085 very needy students in 66 village and  our local city previous year and helped them.

2. # Special Support

i) One girl who passed 10+2 in Non Medical in 2010 with first division. We supported Rs. 47250 for her higher study in college.

ii) One other needy student who passed +2 ( Commerce) . We helped Rs. 7115 for his C.A. Entrance exam. and B.Com. Ist year (C.C.) exam.

3. #  Income and Expenditure Detail

 Opening Balance of Cash Book  on 1st April 2010  Rs.  1,51,545

New Donation from 1st April 2010 to 31st March 2011 Rs. 2,41,237

Total Donated Fund Rs. 3, 92, 782

Closing Cash Balance Rs. 1,01,967

Cash at Bank Rs. 86,099

Cash in Hand Rs. 15,868

4.  # Form of Our Support

Admission fees, tuition fees and fund, examination fees, books, stationary, school bag, school shoes, school dresses and other etc.

5. # We received following things as gift for poor students

Approximately, Rs. 40,000's things we received in the form of books, dresses, school shoes, sweets and afternoon food for poor students free of cost which has been distributed in schools. This amount is not included in income and expenditure statement. Time to time, refreshment cost is given by members of this organisation.

6. # Auditing of Accounts

One of our member who is retired accounting officer from Govt. department, has taken duty to audit our NGO accounts at end of every month. We are thankful that great personality.


 We have 21 members in working committee of our local NGO. Many of them are retired senior citizen who serve without any motive. I am also one of them.

Same type organisation, I have started online at http://support.svtuition.org/  where you can add a needy student. We will also support them according to our resources.

My aim is also to tell you when we can start this type organisation in our local area and support more than 1000 poor, orphan and needy students annually, then why can't you start in your local area?

Again, I hope, you will inspire from our NGO activity for students development and soon this type of NGO, you will start in your local area.  If you want to ask any question relating to this, please contact me at vinod@svtuition.org instead of using ask a question option.

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Marginal Costing - FAQ

Marginal costing is one of important technique of cost accounting to control the cost. It is used every type of company who is interested to reduce cost and increase profitability. Marginal costing is also included in all professional accounting courses. That is the reason, you should watch following frequently asked questions (FAQ) of marginal costing.

Q: - 1. What is marginal costing?

Ans. Marginal costing means to control the cost by calculating all variable cost and deduct it from sale. With this, we find a special reserve that is called contribution. This contribution can be used to pay fixed cost and rest will be our profit. With this we decide whether we have to produce new product or not, whether we have to diversify of producing of our product or not. Marginal costing is one of best technique, with this, we can proper use of cost-volume- profitability analysis because PV ratio is just relationship of contribution and sales. By calculating it, we can compare two products PV ratio.  Products having high PV ratio will be prefer to produce instead of producing products having  low PV ratio.


Q:- 2. What is marginal Costing formula?

Ans. Following are the main formulae which are used in marginal costing.

Marginal Cost : Effect on total cost by producing one more or less unit of product.

Marginal Costing  Equation

Contribution = Sales - Variable Cost

or
Contribution = Fixed Cost +/- Profit

If both side will equal, then

Contribution = contribution

Sales - Variable cost = Fixed Cost +/- Profit

S - V = F + P

Profit Volume Ratio =  Contribution / Sale

PV Ratio = Fixed Cost  +/- Profit / Sale or F- P / S

or
PV Ratio = Sales - Variable Cost / Sale or S-V / S


Q:- 4. What is difference between marginal costing and absorption costing?

Ans. 1. # Absorption costing is a costing system which treats all costs of production as product costs, regardless weather they are variable or fixed. This would usually include direct materials, direct labor and variable portion of manufacturing overhead. Fixed manufacturing cost is not treated as a product costs under marginal costing.Link

2. # Main difference of marginal costing and absorption costing is of calculating profit. In marginal costing, we calculate profit by calculating contribution and then net profit by deducting fixed cost from contribution. By this, we need not to absorb fixed cost per unit. Per unit cost will be same because we give first preference to marginal cost or variable cost. It is easy to decide by how much contribution (and therefore profit) will be affected by changes in sales volume

3. # In absorption costing, we calculate profit with following formula

Absorption Cost of Production = Opening stock + Production Cost - closing stock

Absorption Cost of Sales = Absorption Cost of Production + Add Selling, Admin & Distribution Cost +/- Adjustment of Under or Over absorption of Overheads

Adjusted Profit = Sales - Absorption Cost of Sales

But, in marginal costing, we calculate first contribution and then net profit

Contribution = Sales - Variable Cost

Net Profit = Contribution - Fixed Cost

In marginal costing, however, the actual fixed overhead incurred is wholly charged against contribution.

Q: - 5. What are the main applications of marginal costing?

Ans. Please read it at here.

Q:- 6. What are the limitations of marginal costing?

1. Proper classification of fixed and variable cost is not easy. If you deem any fixed cost as variable cost, it may mislead your decision. Moreover, some cost may be semi-variable. We can not classify it either in fixed cost or variable cost.

 

2.  In marginal costing, we give less preference to fixed cost. But fixed cost can also affect net flow of cash and cash from operation. So, your decision may be affected from this point.

 

3. In the area of construction or making of building or big contract, we can not use marginal costing technique for controlling the cost because fixed cost is more important and it should be take as part of cost of production for normal showing of profit every year.

 

Q :-  7. Which product would you recommend to be manufactured in a factory under marginal costing rules, time being the key factor?

 

Given information  :

 

	Per unit of product A	Per unit of product B
	$	$
Direct Material	24	14
Direct Labor at $ 1 per hour	2	3
Variable Overheads at $ 2 per hour	4	6
Selling Price	100	110
Standard Time to Produce	2hrs.	3 hrs.

Ans. We have to calculate contribution for checking whose contribution is better as per marginal costing rules.

	Per unit of product A	Per unit of product B
	$	$
Selling Price	100	110
Less Marginal Cost :
Direct Material	( - ) 24	( - )14
Direct Labor at $ 1 per hour	( - ) 2	( - ) 3
Variable Overheads at $ 2 per hour	( - ) 4	(  - ) 6
Contribution	70	87
Standard Time to Produce	2hrs.	3 hrs.
Contribution Per Hour = contribution/ standard time	$ 35 per hour	$ 29 per hour

From the above it is clear that contribution per hour of Product A is $ 35 per hour which is more than that of product B by $ 6. There product A is more profitable and is recommend to be manufactured.

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What is Equipment Expense

I already told that we purchase equipment for lots of purposes in company and it is different from purchasing of machinery. Today, we are discussing, what is equipment expense or what are equipment expenses? Main expense of equipment is of purchasing of equipment. It is capital expenditure because we purchase equipment for using purposes more than one year instead of trading purposes. Some time, we get equipment on rent or rental basis, at that it is also our equipment expense. But it will be little difficult for us whether we should show it in balance sheet as capital expenditure or show it in income statement as operating expenses. This can be decided on following basis.

1. # If  company gets equipment on lease basis and rental installment  is paid annually basis, it should be showed in balance sheet as capital expenditure.

2. # If some equipment is consumed within one year and its monthly rent can be shown in income statement as operating expenses.

Some time, we have to repair the equipment, at that time, it will be also equipment expenses. It is shown in income statement. Annual depreciation on equipment is not expense but it is loss. But because profit and loss has two side, one is expenses and other is income, so we show depreciation in expenses side because effect of expenses and losses are same on income. Both reduce the income of business.

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Google's Financial Results First Quarter 2011 ( Simplified )

April 14, 2011, Google Inc. Top USA Internet Company announced First Quarter 2011 Financial Results. In these results, there are four things, one is financial summary, second is latest balance sheet after three months changes, income statement for 1 Jan. to 31st March 2011 and cash flow statement. Today, I studied all these latest financial results more than two hour. For helping, investor, general public and accounting researchers and lovers, I am trying  to simplify its some of accounting terms.

1. Total Revenue Simplified


a. # Google reported revenues of $8.58 billion for the quarter ended March 31, 2011, an increase of 27% compared to the first quarter of 2010.  Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs (TAC).  In the first quarter of 2011, TAC totaled $2.04 billion, or 25% of advertising revenues.

b. #  Revenues from outside of the United States totaled $4.57 billion, representing 53% of total revenues in the first quarter of 2011

c. # Revenues from the United Kingdom totaled $969 million, representing 11% of revenues in the first quarter of 2011, compared to 13% in the first quarter of 2010.

2.   Traffic Acquisition Costs

 As per company's detail traffic acquisition cost  totaled $2.04 billion and company did not deducted this amount from his gross revenue which is $8.58 billion. Why? For this, I was interested to know what is traffic acquisition cost.  Traffic acquisition costs is  mainly paid amount to company's partners. They may be AdSense, YouTube or even others. For example,  Google pays some large amount of money annually to the Mozilla Foundation to be the default search engine in the search box on the Firefox browser. This is a great demographic. And this is also TAC for Google. Link  If we deduct $2.04 billion from gross revenue of Google, we can find net revenue which is $6.54.


3. Google reports operating income, operating margin, net income, and earnings per share (EPS) on a GAAP and non-GAAP basis. 

For preparing and presenting financial statements, USA company has to follow some accounting rules. That is the reason, google's operating income, operating margin, net income and EPS is different on GAAP and on Non -GAAP. Google is showing both way because, it may be possible any foreign investor who invested in Google, can take idea of earning of three months without any effect of GAAP.


4. Gains related to our foreign exchange risk management program.

In the first quarter of 2011, Google recognized a benefit of $14 million to revenues through our foreign exchange risk management program, compared to a benefit of $10 million in the first quarter of 2010. Actually, this programme has been made to eliminate all risks, negative exchange outcomes and to preserve the value of currency inflows, investments and loans. I think, company is using demanding hard currency, diversifying properly and employing hedging strategies.


5. Data center operational expenses

Google has included data center operational cost in Other Cost of Revenues. Data center operational expenses are those which are paid for electric bill. Google may be large number of servers, storage devices and network equipments. For cooling them, google offices  needs AC and its electric bill will be the data center operational cost. Company did not mention exact of this cost but overall other cost of revenue has  increased to $897 million, or 10% of revenues, in the first quarter of 2011.

6. Amortization of intangible assets

Amortization of intangible assets also includes in other cost of revenue of Google in first quarter 2011. It means consumption cost of intangible assets. It is just like the depreciation on intangible assets. Let me explain, for example company has 100$ intangible asset at the end of year due to obsolescence or any other reason, its value may be 80$. Then, 20$ will be amortization of intangible assets. Google is showing net intangible assets in balance sheet after deducting amortization. In income statement, it has been included in other cost of revenue.

7. Content acquisition costs

This has been also included in other cost of revenue in google's income statement. There is big difference between traffic acquisition cost and content acquisition cost. According to my thinking, Google has to pay for obtaining content from studios, distributors and other suppliers through direct purchases or pay to writers who writes contents for Google. It is duty of its financial analyst to Coordinate Content Acquisition Costs (CAC) month end close and payments processes with Accounting and Sales.

8. Credit card processing charges

It is also part of its other cost of revenue. There are two types of these charges, one is an interchange fee, which is the fee the credit card companies charge for each transaction and other is an additional fee charged by your merchant service provider, which may be the merchant bank on on each credit card sale.

9. Total charge related to SBC

SBC means Stock-Based Compensation. In the first quarter 2011, In the first quarter of 2011, the total charge related to SBC was $432 million, compared to $291 million in the first quarter of 2010.    Stock Based Compensation is share based payment, is remuneration offered to an employee by way of an option to purchase shares in the employing company at a discounted rate at a future point in time. This is a common method used by corporations to compensate executives. Google Inc. has included it in cost of revenue and it is $ 49 million in first quarter 2011.  

10.  IT infrastructure investments, including data centers, servers, and networking equipment

In the first quarter of 2011, capital expenditures were $890 million, the majority of which was related to IT infrastructure investments, including data centers, servers, and networking equipment. For calculating net cash flow, it is necessary to compare inflow and outflow of cash in investing activity. Purchases of property and equipment is just outflow of cash example in investing activity.

11. Free cash flow

Company has explained  free cash flow as Non- GAAP measure of liquidity, is defined as net cash provided by operating activities less capital expenditures. It means net amount which we receive from our business activity after deducting all cash capital expenditures.


12. Prepaid revenue share - non current asset

I also saw a new term in google's financial result that is prepaid revenue share ( Non current Asset). All guys of accounting may easily understand any prepaid expenses are the part of current asset because we have to pay to other before getting work from other over a year.  But sometimes prepaid expenses might be amortized over a period longer than a year after the balance sheet date. In such cases, the portion which is to be amortized to expenses after one year after the balance sheet date is considered non-current and presented in the non-current assets section on the balance sheet. That is the reason, Google's accountant has shown prepaid revenue share as non current asset.

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Why Does the Vendor Put E.& O.E. on an Invoice

This query came from  student of Georgetown, Demerara-mahaica, Guyana. You also see E.& O.E. on an Invoice. It means errors and omissions excepted.

Reason : When vendor makes the invoice for showing detail of sold goods. By writing E & O.E., he declares that I am not perfect. If any mistake of quantity, rate and amount in any sold amount will be again countable. This invoice is not end document for final payment from you.

For Example : Ram Sold $ 1,00,000 goods to Sham and an invoice with printed E & O.E. sent to Sham after sale. Due to clerk mistake, Quantity is written 40,000 units instead of correct of 10000. Due to this sale price has been written $ 4,00,000.  To write over quantity 30,000 units is big mistake. But due to this E. & O.E. rule, vendor has to correct it and send new with correct amount and quantity for taking payment.

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How to Teach Income Tax

Teaching income tax to commerce students is little difficult. You have to remember lots of secs and provisions in Indian Income Tax Laws. So how to teach them effectively? What methods can be used for easy teaching and evaluating them? How to make the subject interesting?

Udhaya from India

Udhaya ! of course, teacher of income tax has to remember lots of provisions, sections and sub-sections of Income Tax Law of India 1961. Moreover, teacher has to check lots of updates of amendments of income tax. But even after this, teacher of income tax can teach income tax with easy approach because every section and provision of income has some logic which may be helpful to remember them long time. Suppose, we can take the latest case of Vodafone and Income Tax department. Vodafone had in 2007 purchased 67% stake of Hutchison in Hutchison-Essar for more than $11 billion. The income tax department had raised a demand of about $1.7 billion on the company for its alleged failure to deduct the tax at source for such transaction. Now, there is big logic of demanding $ 1.7 billion from Vodafone (link). That are provisions of Income Tax Law.  Now, again Vodafone's legal authorities is dealing  with income tax department according to the same provisions of Income tax laws. Section 221 to Section 272BB are relating to penalties and just search which of them section are related to above cause. It means, if you want to teach income tax, first thing, you learn logic behind every provision. Person who made income tax is also human being. So, he made  rule like rules for travel on the roads.

You asked 2 question in your main question, I am trying to solve it.

Q:- 1. How to Teach Income Tax effective and interesting ways?

Ans. Before, writing tips and tricks to teach income tax effective and interesting ways, I want to share my personal experience with income tax. When, I studied Income Tax Law in my B.Com. - 3rd year, I remembered every section and provision by using my memory. Now, one day left for my examination of income tax paper. Morning time, I had to repeat all the provisions, for becoming perfect for exam. At that time, I heard a voice, outside from my house. In the street, a big accident was happened. For watching the scene of accident, I went to there. What did I see? A young student had dead on the road. Blood was coming from his head. His half head was crack. Actually, he was on the scooter. He did not see a big stone on the road and due to this he fell down without any control and on spot, he dead. After seeing that scene, I thought, why are we running for what purpose? Why are we cramming when there is no guarantee to reach college? My hand was trembling and there was big fluctuation in my mind. I could not read even a word that day. I forgot all sections and provisions due to this. Next day was the exam. day. Without any reading, I went to college for examination. Now, I concentrated on each topics of income tax question. I tried to remember the lectures of my professor. I tried to remember my past learning. I did my exam. and cleared.

From, above my experience, I want to tell, learning is long term and cramming is very short term. Learn each section of income tax by understanding not by cramming because if you understand the topic, you can remember it at any time.

Now, we start tips to teach Income Tax effective and interesting ways :

1st Tip :  Income tax law's good thing is it telling just 5 sources of income for income tax purpose. You should teach just 5 source's which income has to include in taxable income. Suppose, if income tax law shows 1,000 sources of income and  you have to teach, what does happen? Means, you have given very less syllabus to teach. Just teach 5 sources of income tax in five days and enjoy.

2nd Tip : Teach some bad things in Income Tax Laws 1961 because we learn bad things more easily and fastly like abusing other without any reason. If you ask me what are bad things in Income tax, I can make list of it.

i) Section 194B : If the payment to a resident or non-resident (in cash or kind or partly in cash and kind) exceeds Rs. 5,000, you must deduct TDS at 30.9% (includes 3% edu cess) of If the payment to a resident or non-resident (in cash or kind or partly in cash and kind) exceeds Rs. 5,000, you must deduct TDS at 30.9% (includes 3% edu cess) of Winnings the prize from lottery . Surcharge rate is 3%.
the prize. Surcharge rate is 3%. I am saying it is bad because 30% is very low income tax. Income tax must be 100% in the form of TDS, so that no body purchase lottery. 

ii)  Section 194BB : Winnings from Horse race is just like gambling. By charging just 30% TDS on it, IT department is promoting such activities. Income tax on such activities must be 100%.
iii) Section 206C: It is worst section because Alcoholic liquor for human consumption  must be banned and I.T. department is just taking 10% TDS. In my words, IT department is saying, dear alcoholic vendors, you are free to sell alcoholic liquor but just give us 10% commission. What a bad thing! If I will the P.M. of India, I will ban all alcoholic liquor  and lottery and all other gambling first. If anybody will do illegally, I will give power to I.T. officer to Get 10 times penalty. ( One day, I was travelling in Govt. bus and I took ticket and slept. An enquiry officer came my bus and asked ticket from me. I checked my pocket and ticket was not in my pocket. That enquiry officer took 10 times money from me. Same money, I want to alcoholic liquor and lottery vendors.)  

iv ) There is one more bad thing in Income Tax Law that there is no dead penalty to corrupt leaders who Robbed Indian people Income Tax via corruption and  deposited  in Swiss Bank. If you want to teach income tax interesting and effective way, as a teacher you can also find bad things in income tax law.

3rd Tip : Try to make simplify first yourself. Many things in income tax are really difficult because these have not been explain in simple way. This is the good duty of a teacher to do this responsibility, so that your kids will pride on you.

Q:- 2. What methods can be used for easy teaching Income Tax Law?

Your duty is to enable students to calculate tax on total taxable income without any other person's help. For this, you use very simple method.

First teach to  classify every assessee according to residential status.

Second  teach to  club his all taxable income.

Third teach to classify  of Assessee according to nature of business.

Finally teach to assess taxable income and calculate income tax but be careful and not forget to teach deduction of income tax and rebates of income tax.

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