November 2024

Transfer pricing is an accounting practice that represents the price that one division in a company charges another division for goods and services provided. Transfer pricing allows for the establishment of prices for the goods and services exchanged between subsidiaries, affiliates, or commonly controlled companies that are part of the same larger enterprise. Transfer pricing can lead to tax savings for corporations, though tax authorities may contest their claims. How Transfer Pricing Works Transfer pricing is an accounting and taxation practice that allows for pricing transactions internally within businesses and between subsidiaries that operate under common control or ownership. The transfer pricing practice extends to cross-border transactions as well as domestic ones. A transfer price is used to determine the cost to charge another division, subsidiary, or holding company for services rendered. Typically, transfer prices are reflective of the going market price for that good or service. Transfer pricing can also be applied to intellectual property such as research, patents, and royalties. Section 92 of the Income Tax Act, 1961 Section 92 of the Income Tax Act, 1961 – Computation of income from international transactions having regard to arm’s length price. This section states that any international or specified domestic transaction between associated enterprises which has been mutually agreed and undertaken for the purpose of allocation or apportionment of any cost or expense incurred or to be incurred for a benefit, service or facility undertaken or to be undertaken by one or more of the enterprises, then the cost or expense allocated, must be contributed having regard to the arm’s length price of such benefit, service or facility. Section 92A of the Income Tax Act, 1961 Section 92A of the Income Tax Act, 1961 – Meaning of Associated Enterprises For the purpose of Sections 92, 2B, 92C, 92D, 92E, and 92F the term associated enterprises in relation to another enterprise shall mean, an enterprise- Which participates either directly or indirectly or through one or more intermediaries in the control or management or capital of the other enterprise. In respect of one or more persons that participate either directly or indirectly or through one or more intermediaries in the control or management or capital are the same persons that participate either directly or indirectly or through one or more intermediaries in the control or management or capital of the other enterprise. For the purpose of this section, two enterprises will be deemed to be associated enterprises if any time during the previous year at any time- One enterprise holds directly or indirectly, shareholding carrying not less than 26% of the voting power in another enterprise. Any individual or an enterprise holds directly or indirectly not less than 26% of the voting power in each of such enterprises. Any loan advanced from one enterprise to the other company constitutes not less than 51% of the book value of the total assets of the other enterprise. The guarantees of one enterprise is not less than 10% of the overall borrowings of the other enterprise. More than half of the board of directors or the governing board, or the executive members or directors are appointed by the other enterprise. One enterprise has a dependency in terms of know-how, patents, trademarks, rights or any other business or commercial rights or any data, documentation, drawing or specification relating to any such patent, invention, model or design for manufacturing or processing of goods, and the other enterprise holds the rights to such patents. 90% or more of the raw materials or consumables are supplied by the other enterprise or by persons specified by the other enterprise, and the prices and other conditions relating to supply are influenced by such other enterprises. The goods or articles required by one enterprise are supplied by another enterprise, and the prices and other several conditions relating to supply are influenced by such other enterprises. Where one enterprise is controlled by an individual and the other enterprise is also in control of the same individual or his relative jointly. Where one enterprise is controlled by an undivided Hindu family, the other enterprise is controlled by a member of such Hindu undivided family or by a relative of a member of such Hindu undivided family or jointly by such member and his relative. Where one enterprise is a firm, association of persons or body of individuals, the other enterprise holds not less than 10% interest in such a firm, an association of persons or body of individuals. There exists between the two enterprises, any relationship of mutual interest, as may be prescribed. Section 92B of the Income Tax Act, 1961 Section 92B of the Income Tax Act, 1961 – Meaning of international transaction This section defines international transaction(s) for the purpose of this Section and the Section(s) 92, 92C, 92D and 92E as a transaction between two or more associated enterprises, wherein either one or both the enterprises are non-residents. (Non-resident means a body corporate whose control and management lies outside India) The nature of transaction can be purchase, sale or lease of tangible or intangible assets, or provision of services, or lending or borrowing money, or any other transaction having an effect on the profits, income, losses or assets of such enterprises. Section 92E – Audit Under Transfer Pricing A report from an accountant has to be furnished by persons who are entering into an international transaction or a specified domestic transaction. A report from an accountant in a prescribed form, duly signed and verified by the accountant must be obtained before the specified date by any person entering into an international transaction or specified domestic transaction in the previous year. The audit is applicable to both international and specified domestic transactions. Form 3CEB must be filed. The due date for complying with Form 3CEB requirement is 31st October of the Assessment Year and the due date of ITR filing for persons who are subjected to comply with Form 3CEB is 30th November of the Assessment Year. FAQs What Are the Disadvantages of Transfer Pricing? One of the key disadvantages is that the seller is

The Chhattisgarh government issues ration cards through the Department of Food and Civil Supplies to provide commodities such as wheat, rice, pulses, sugar, kerosene, etc., at subsidised rates to the residents of Chhattisgarh. Types of Chhattisgarh Ration Card Priority Household (PHH) Ration Card Issued to – The households in rural areas of the state. Benefits – Provides 35 kg of wheat and rice for Rs.2 per kg and 2 kg of pulses at Rs.10 per kg. Antyodaya Anna Yojana (AAY) Ration Card Issued to – The family with annual income less than Rs.15,000. Benefits – Provides 35 kg of wheat and rice at Re.1 per kg. Below Poverty Line (BPL) Card Issued to – The native residents with annual income less than Rs.10,000. Benefits – Provides necessary commodities at subsidised prices. Above Poverty Line (APL) Card Issued to – The native residents with annual income above Rs.10,000. Benefits – Provides 15 kg wheat and rice at 15% lower than the Minimum Support Price. Annapurna Ration Card: Issued to – Senior citizens who are not eligible for an old-age pension, aged above 65 years and do not have any earning member in the family. Benefits – Annapurna cardholders receive a specified quantity of food grains free of charge each month. Benefits of Ration Card Identity proof Ration card is used to establish one’s identity. It does the ration card serves as an identity proof in availing government services which are offered for the citizens of the state. It also serves as an identification proof for your whole family since it comprises of details like the number of family members, children, income levels, gender, photographs, etc. Residence Proof Ration card is essential in the case of proof of residential address to secure loans from the banks. Also, the Aadhaar card can be linked to your ration card, as linked with the bank account. Eligibility for Chhattisgarh Ration Card Resident of Chhattisgarh. Individuals or any family member should not have existing ration cards in their name. Should not have a house in the urban areas with area above 10,000 sq. ft. Should not have irrigated and non-irrigated land more than 4 hectares or 10 acres and 8 hectares or 20 acres, respectively. As per the guidelines mentioned under sub-section(a) of Section 15 of the Chhattisgarh Food and Nutrition Security Act (CFNSA), no member of the household should fall under a restricted family for ration cards. Documents Needed to Apply for Chhattisgarh Ration Card Aadhar card Bank Passbook Proof of address Photo identity proof Domicile certificate Category and Disability certificates (if applicable) Passport-sized photograph of each family member How to apply for a Ration Card in Chhattisgarh? Step 1 – Visit the official website of the Directorate of Chhattisgarh Food Supplies. Step 2 – Under the ‘New and Announcement’ section, click on ‘Application for Ration Card cum Declaration form’. Step 3 – Download and print the application form that appears on the new page. Step 4 – Fill in the application form. Step 5 – Submit the application form to the concerned Gram Panchayat or Urban Local Body. FAQs What is the difference between orange ration card and white ration card? Red or orange ration cards are issued to people who come under special government schemes such as the Antyodaya scheme. While White ration cards are for those people who belong to Above Poverty Line (APL) group.  How can I change my ration card location? Visit the Assistant Commissioner (AC) /Taluk Supply Officers (TSO) and apply for a ration card address change. After processing the application, change the address mentioned in the ration card in person. The address gets changed after successful verification and you will be informed about the completion of the process. 

Accounting today is much more than bookkeeping. Two important aspects of accounting are debit and credit. We must only enter a transaction after understanding the detailed meaning of which account should be debited or credited. When a financial transaction takes place, it affects two accounts, and in the dual entry system of accounting, we have two columns for entering our transactions. As we all know, one is the debit side, and the other is the credit side. To understand an accounting entry, first, we need to understand the account types and their corresponding debit credit rule Types of Accounts Personal Account: Debit the Receiver, Credit the Giver: When dealing with personal accounts like individuals or organizations, debit what comes in and credit what goes out. Types of Personal Account – Artificial Personal Account: Non-human bodies that act as separate legal entities as per the law. These include hospitals, banks, companies, government bodies, partnerships, and cooperatives. Natural Personal Account: This type of account represents human beings. It includes individual capital accounts, debtors account, creditors account, drawings account. Representative Personal Account: This account represents the accounts of natural or artificial entities. Real Account Real Accounts are a set of tangible aspects of business like furniture, cash, etc. It contains transactions related to the assets and liabilities of the company. The asset category can be further subdivided into tangible and intangible assets. Real accounts deal with material assets of the business. If the item that belongs to the real account is coming into the business, it should be written on the Debit side while making the accounting entries. If the item of the real account is going out of business, it should be written on the Credit side while making the accounting entries. Personal Accounts   Personal accounts can be considered general ledgers related to people, associations, and companies. If the person/ group of persons/ legal body is receiving something from the business, then – Debit the receiver. If the person/ group of persons/ legal body is paying something to the business – Credit the payer or giver Nominal Accounts   Nominal Accounts represent all the transactions of business like Expenses, Losses, Income, and gains incurred while doing business. Some common, e.g., are Electricity Expenses, Telephone Expenses, Interest Received, Profit on the Sale of Machines, etc. If it’s an expense or loss for the business – DebitIf it’s an income or gain for the business – credit Type Of Account Golden Rules of Accounting Nominal Account Debit the loss or expense of the business Credit the profit or income of the business Personal Account Debit the receiver Credit the giver Real Account Debit what comes into the business Credit what goes out of the business Benefits of Accounting Procedures Maintaining financial transaction accounts in accordance with accounting’s golden standards provides some benefits. Maintenance of Business Records – Maintaining business records is crucial to a company’s success. Accounting makes sure that all of the business transactions are documented in a secure location in the correct order and, more significantly, in a methodical manner. Business Valuation – A solid accounting procedure aids in correct business valuation, allowing for more investment and expansion. Budgeting and Future Projections – A healthy budget based on proper accounting processes may provide a solid foundation for any organization to grow. With a solid accounting process in place, future estimates are more accurate. Financial Statement Preparation – If the golden rules of accounting are followed, financial transactions will be recorded correctly. If the accounting is done correctly – financial statements like profit and loss statements, trading accounts, and balance sheets could all be created rapidly. Comparison of Financial Results – Accounting done according to the golden principles makes it easy to compare one year’s financial outcomes to another. Analysis of year-on-year financial performance becomes simpler and more reliable. Regulatory Compliance – Accounting is critical for organizations in order to comply with regulatory bodies. It would be hard to accomplish regulatory compliance without the basic basis laid down by the accounting rules. Aids in Taxation Matters – Tax shortfalls caused by faulty accounting methods may result in substantial penalties from government agencies, negatively harming image and brand value. Corporate Decision-Making – The accounting procedure based on the accounting rules ensures that financial data are trustworthy and valuable in the decision-making procedure of senior management. Golden Rules of Accounting Rule 1 “Debit what comes in – credit what goes out.” This rule pertains to personal accounts and ensures accurate recording of transactions where value is exchanged between parties. It mandates that every financial transaction is properly documented by tracking both the giver (payer) and the receiver (payee). To maintain accurate records: When a business receives value: Debit the corresponding account. When a business gives value: Credit the corresponding account. This approach guarantees clear and reliable financial records, enhancing the accuracy of financial statements. Example: If your business pays 500 in rent to your landlord: Landlord: Giver (providing rental space) Your Business: Receiver (benefiting from rental space) You need to: Debit the Rent Expense account by 500 Credit the Cash/Bank account by 500 Rule 2 “Credit the giver and Debit the Receiver.” The principle for real accounts is “Debit what comes in, and credit what goes out.” This rule ensures that all inflows and outflows of resources are accurately recorded, providing a systematic approach for tracking assets and liabilities. Key Points: Debit what comes in: When a business acquires an asset, the asset account is debited to reflect the increase in value. Credit what goes out: When a business disposes of an asset, the asset account is credited to reflect the decrease in value. Importance: Effective management of assets and liabilities is crucial for maintaining sound financial health. This rule provides transparency in showing both the acquisition and disposal of assets. By adhering to this rule, businesses ensure that their accounting records accurately reflect changes in their assets and liabilities, aiding in clear and organized financial reporting. Example: If a business acquires equipment worth 1,000: Equipment Account: Debit 1,000 (to record the increase in asset value) If the business later disposes of the same equipment: Equipment Account: Credit

LIC Mutual Fund was set up by the Life Insurance Corporation of India (LIC), a government-run insurance provider, on 20 April, 1989. Being in the asset management sphere for more than 2 decades, LIC Mutual Fund has managed to carve a name for itself by coupling systematic investment discipline, corporate governance, and a high degree of financial ethics. With its robust and innovative investment strategies, LIC Mutual Fund intends to generate value for its investors, across all segments. LIC Mutual Funds currently operate with funds worth Rs. 30170.82 Crores. Currently, LIC Mutual Fund provides investors with about 26 different schemes catering to investors of varied risk appetites. It has 90.06% investment in the Indian Stock market, of which 87.62% is in large-cap stocks, and 2.43% is in mid-cap stocks. LIC AMC recorded a CAGR of 14.56% in the last 3 fiscal years, making it one of the most preferred large and mid-cap mutual funds amongst investors. Customers can also avail tax benefits from LIC MF Tax Plans, both of which are ELSS based investment options. Types of LIC Mutual Fund LIC Mutual Fund offers schemes in 5 categories – Equity, Debt, Hybrid, Solution Oriented, and ETFs & Index Funds. In total, it offers 28 schemes in the open-ended, close-ended, and interval subcategories. Features of LIC Mutual Funds Life Insurance Corporation has gained the trust of many investors ever since its inception. Therefore, the mutual funds offered by it are always the most preferred choice of the Indian mutual fund investors. LIC mutual funds have been in existence for a longer period of time. The funds have a wide range of options to offer investors which can be opted for based on affordability. Equity schemes by LIC Mutual Fund LIC MF Banking and Financial Services Fund This is an open-ended equity scheme that concentrates its investments in equities of companies in the banking and financial services sector. Scheme features: Benchmark IndexNifty Financial Services IndexMonthly Average Expense RatioAs on 1 May 2018, TER: Direct Plan – 1.44%, Regular Plan – 3.22%Investment OptionsGrowth and DividendMinimum InvestmentRs.5,000Entry LoadNot ApplicableExit Load1% exit load will apply for redemption or withdrawal before 1 year from unit allotment date. No exit load for withdrawal after 1 yearRiskometerHighFund ManagerMr. Saravana Kumar Investment objective – To create capital growth for the investor by investing a significant part of its investment in equity and its related instruments of firms engaged in banking and financial services. Ideal for – Investors who seek capital gains over a longer duration and who wish to invest in equity and its related securities of firms engaged in financial services and banking. LIC MF Multicap Fund – This is an open-ended equity scheme that invests in equities of large, mid, and small cap companies to achieve growth of capital.Scheme features:Benchmark IndexNifty 500 IndexMonthly Average Expense RatioAs on 1 May 2018, TER: Direct Plan – 1.95%, Regular Plan – 3.12%Investment OptionsGrowth and Dividend. The dividend option offers payout and reinvestment facilitiesMinimum InvestmentRs.5,000Entry LoadNot ApplicableExit Load1% exit load will apply if investor exits the scheme before 1 year from unit allotment date. No exit load for exit after 1 yearRiskometerModerately HighFund ManagerMr. Saravana Kumar Investment objective – To offer capital appreciation to the investor by focusing its investments on equity and its associated instruments. Ideal for – Investors who prefer to invest in stocks of large, mid and small cap companies and who wish to achieve capital growth over a long term. The scheme is also suitable for investors who seek current income. LIC MF Large Cap Fund – This is an open-ended equity scheme that mainly invests in equities of large cap companies and was previously known as Dhanasamriddhi.Scheme features:Benchmark IndexNifty 100 IndexMonthly Average Expense RatioAs on 1 May 2018, TER: Direct Plan – 1.86%, Regular Plan – 3.13%Investment OptionsGrowth and Dividend (Reinvestment and Payout)Minimum InvestmentRs.5,000Entry LoadNot ApplicableExit Load1% exit load will apply if investor exits the scheme before 1 year from unit allotment date. No exit load for exit after 1 yearRiskometerModerately HighFund ManagerMr. Sachin Relekar Investment objective – To generate capital appreciation for the investor by concentrating the investments on equity and its associated instruments including derivatives, of large cap companies. Ideal for – Investors who seek capital growth over a long term and who wish to invest in equities of large cap firms. LIC MF Infrastructure Fund – This is an open-ended equity scheme that invests in infrastructure and its allied sectors. This scheme was initially launched as a close-ended scheme in 2008 but later was opened for subscription with effect from 24 March 2011.Scheme features:Benchmark IndexNifty Infrastructure IndexMonthly Average Expense RatioAs on 1 May 2018, TER: Direct Plan – 1.47%, Regular Plan – 3.25%Investment OptionsGrowth and Dividend (Reinvestment and Payout)Minimum InvestmentRs.5,000Entry LoadNot ApplicableExit Load1% exit load will apply if investor exits the scheme before 1 year from unit allotment date. No exit load for exit after 1 yearRiskometerHighFund ManagerMr. Sachin Relekar Investment objective – To produce capital appreciation for the investor by investing in equities of firms engaged in the infrastructure sector. Ideal for – Investors who wish to grow their capital over a long term and have a high appetite for risk to invest in equities of infrastructure and its allied sectors. LIC MF Large & Mid Cap Fund – This is an open-ended scheme that invests in equities of both large and mid cap firms.Scheme features:Benchmark IndexNifty LargeMidcap 250 IndexMonthly Average Expense RatioAs on 1 May 2018, TER: Direct Plan – 0.58%, Regular Plan – 2.89%Investment OptionsGrowth and Dividend (Reinvestment and Payout)Minimum InvestmentRs.5,000Entry LoadNilExit Load1% exit load will apply if investor exits the scheme before 1 year from unit allotment date. No exit load for exit after 1 yearRiskometerModerately HighFund ManagerMr. Sachin Relekar Investment objective – To create capital appreciation for the investor by investing in large and mid cap stocks. Ideal for – Investors who wish to achieve capital gains and prefer investing in stocks of large and mid cap firms. LIC MF Tax Plan – This is an open-ended equity linked savings scheme that has a statutory lock-in period of 3 years and offers tax benefits to the investor. This