He stays in India from 1st April to 25th Sept (approx 178 days). Since he leaves for employment, the 60-day rule is replaced by 182 days. Since 178 < 182, he is a Non-Resident.

Section 17(5) of the CGST Act blocks ITC for goods that are lost, stolen, destroyed, written off, or disposed of by way of gift or free samples.

Prime Cost represents the total direct costs of production (Material, Labor, and Expenses) before adding any overheads.

The threshold limit for TDS on interest income for Senior Citizens is ?50,000. For others, it is ?40,000.

BEP (Units) = Fixed Cost / Contribution per Unit = 40,000 / 10 = 4,000 units.

For intra-state supply, both CGST (Centre) and SGST (State) are levied concurrently. This concurrent taxation power defines the Dual GST model.

Spending less than the standard (budgeted) amount increases profit, so it is a Favorable Variance.

As per Section 208, every person whose estimated tax liability for the year is ?10,000 or more is liable to pay advance tax.

ZBB does not take the previous year's budget as a base. Every activity/expense must be justified from scratch as if it were new.

Composition dealers cannot collect tax from customers or claim Input Tax Credit. They must pay a small percentage of turnover from their own pocket and issue a "Bill of Supply" instead of a Tax Invoice.

PV Ratio indicates the rate at which profit is earned. Contribution = Sales - Variable Cost.

If Taxable Income > Accounting Income, you pay more tax now but will pay less later. This prepayment creates an Asset (DTA). Example: Disallowance of expenses in tax that are allowed in books.

In Process Costing, costs are accumulated for each process/stage because the product moves continuously from one process to another.

IGST is collected by the Centre on inter-state transactions and imports. It effectively replaces the sum of CGST and SGST.

Usage Variance isolates the efficiency of material use. It compares quantities allowed (Standard) vs used (Actual), valued at the standard price.

Under Section 111A, STCG on listed equity shares is taxed at a concessional rate of 15% (plus surcharge/cess).

The Master Budget aggregates all sub-budgets to present the overall plan of the organization, typically culminating in a Budgeted P&L and Balance Sheet.

Opportunity Cost is the benefit foregone from the next best alternative. It is an implicit cost used in decision-making but not a cash outflow recorded in books.

Margin of Safety indicates how much sales can fall before the company starts making a loss. Higher MoS means lower risk.

Normally, the supplier pays tax. Under RCM, the liability shifts to the recipient (e.g., a registered dealer buying from an unregistered dealer, or specific services like GTA).

The aggregate limit for deductions under sections 80C, 80CCC, and 80CCD(1) is currently capped at ?1.5 Lakh per financial year.

Job Costing is used when production is not continuous and each product/job is unique according to customer specifications (e.g., Printing, Repair shops).

Efficiency Variance measures productivity. If workers take more time (Actual Hours) than allowed (Standard Hours) to produce the output, the variance is Adverse.

A recent rule change mandates PAN/Aadhaar for cash deposits or withdrawals aggregating to ?20 Lakh or more in a financial year, or for opening a current account.

For exclusive suppliers of goods, the threshold is ?40 Lakh. For service providers (and some goods suppliers), it remains ?20 Lakh.

To maximize profit with scarce resources, a firm must prioritize products that yield the highest contribution per unit of the scarce resource (e.g., Contribution per kg of material).

Cash Budget records only actual cash inflows and outflows. Depreciation is a non-cash expense and is excluded.

Unit costing is used where a single standard product is produced continuously (identical units). Examples: Bricks, Coal, Cement.

Under Section 64(1A), a minor's income is clubbed with the parent having the higher income. Exception: Income earned through manual work or skill/talent of the minor.

Schedule I of the CGST Act specifies activities to be treated as Supply even without consideration. This includes disposal of business assets where Input Tax Credit has been taken.

In the short run, a firm can ignore fixed costs (sunk). But if revenue < variable cost, every unit sold increases the loss. Hence, the Shutdown Point is where Price = Average Variable Cost.

Volume variance arises when actual production volume differs from budgeted volume. If actual production is higher, fixed costs are over-absorbed (Favorable).

Form 26Q is for TDS on payments other than salary to residents. 24Q is for Salary. 27Q is for non-residents.

HSN is an internationally accepted product coding system used to maintain uniformity in classification of goods.

Allocation is the direct assignment of cost to a unit (e.g., Salary of Dept A Manager to Dept A). Apportionment is distributing common costs.

A Flexible Budget adjusts budgeted costs for different levels of activity, recognizing that variable costs change with volume while fixed costs remain constant.

The year in which income is earned is the Previous Year (FY 2023-24). The year in which it is assessed and taxed is the Assessment Year (AY 2024-25).

Contribution = Sales - Variable Cost. Alternatively, Contribution = Fixed Cost + Profit (since Sales - VC - FC = Profit).

Under GST, movement of goods of value exceeding ?50,000 generally requires an E-Way Bill generated from the GST portal.

Retention money ensures the contractor completes the work satisfactorily. It is released after the defect liability period.

Form 15G is for individuals below 60 years, and Form 15H is exclusively for Senior Citizens (60 years and above).

Formula: (Standard Price - Actual Price) * Actual Quantity. (10 - 12) * 1000 = -2 * 1000 = -2000. Since actual price is higher, it is Adverse.

ISD (like Head Office) receives invoices for services used by branches and distributes the Input Tax Credit (ITC) to them proportionately.

Unlike traditional budgeting which focuses on inputs (expenditure items), Performance Budgeting links funding to expected outcomes and outputs (results).

Section 80E allows deduction of the entire interest amount paid on education loans for self, spouse, or children, for a maximum of 8 years.

Fixed costs will be incurred regardless of the decision (unless specific avoidable fixed costs exist). Therefore, the relevant cost to manufacture is only the Marginal/Variable cost.

UTs with legislature (Delhi, J&K, Puducherry) have their own SGST Act. UTs without legislature (Andaman, Lakshadweep, etc.) are governed by the UTGST Act.

Lubricants are consumables not part of the finished product but necessary for production. Hence, Indirect Material.

Agricultural income is exempt from central income tax. However, it is included for rate purposes to determine the tax slab for other income (Partial Integration).

MBE saves management time by alerting them only when actual performance deviates significantly from the plan.

Time of Supply determines the due date for payment of tax. For goods, it is usually the earlier of invoice date or last date to issue invoice.

Cost centers help in allocating and controlling costs. Example: Maintenance Dept, Assembly Line, or a Sales Manager.

In India, the Previous Year always runs from 1st April to 31st March immediately preceding the Assessment Year.

A wider Angle of Incidence means higher profitability (profit grows fast as sales increase). A narrow angle suggests low profitability.

Section 16 of CGST Act lays down 4 conditions: 1. Possession of Invoice 2. Receipt of Goods 3. Tax paid to Govt 4. Return furnished.

Sales Variance = Actual Sales - Budgeted Sales. Since actual revenue is higher than budgeted, it is Favorable.

Credit sales do not bring immediate cash. Only when debtors pay (collection) does cash flow in. Depreciation and Bad Debts are non-cash items.

Income from House Property is applicable only to the OWNER. A tenant subletting the house is not the owner, so the rent received is taxed under "Other Sources" or Business (if it's their business).

Total Fixed Cost remains constant, but as production volume increases, the fixed cost is spread over more units, reducing the cost per unit.

The standard GST slabs are 5%, 12%, 18%, and 28%. There is no 25% slab.

Sales Volume Variance measures the impact of the difference between actual quantity sold and budgeted quantity. If a firm sells more units than planned (Actual Qty > Budgeted Qty), it generates more revenue/profit, resulting in a Favorable variance, regardless of the price difference (which is Price Variance).

To claim exemption on Long Term Capital Gains, the assessee must invest the gains in specified bonds of NHAI, REC, etc., within a strict timeline of 6 months from the date of asset transfer. The maximum limit for investment in a financial year is ?50 Lakh.

Composite supply consists of two or more naturally bundled supplies where one is the Principal Supply. Section 8 of the CGST Act states that the tax liability shall be the rate applicable to the Principal Supply (e.g., Mobile Phone rate applies to the whole package).

The Cost Indifference Point is the volume of production at which total costs under two different methods (e.g., Machine A vs Machine B) are identical. Below this point, the option with lower fixed cost is preferred; above it, the option with lower variable cost is preferred.

ZBB reverses the traditional incremental budgeting approach. Managers must justify all expenses for each new period, starting from a "zero base," forcing a review of cost-benefit for every activity to eliminate inefficiencies.

For payments to resident contractors: If the payee is an Individual or HUF, TDS is 1%. For others (like companies/firms), it is 2%. If PAN is not provided, the rate jumps to 20%.

Mixed supply refers to two or more individual supplies sold for a single price which are NOT naturally bundled. GST law mandates that such a supply be taxed at the rate of the item attracting the highest tax rate to prevent tax evasion.

Factory Cost + Administrative Overheads related to production + Opening WIP - Closing WIP = Cost of Production. Selling expenses are added later to find Cost of Sales.

Under Section 73, losses from a speculation business are treated distinctly. They cannot be set off against normal business profits or other heads. They can only be set off against speculation profits and carried forward for 4 years.

ABC assigns overheads based on activities. A Cost Driver (e.g., number of machine setups, number of inspections) is the factor that influences the volume/cost of that activity, providing more accurate costing than traditional volume-based absorption.

To prevent recipients from enjoying tax credit without paying suppliers, GST law mandates reversal of ITC if payment is not made within 180 days. The credit can be re-availed once payment is made.

P/V Ratio = (Sales - Variable Cost) / Sales. Reducing the Variable Cost increases the Contribution margin, thereby increasing the P/V Ratio. Fixed costs do not affect P/V ratio.

The general limit is ?25,000. However, for senior citizens (age 60 or above), the limit is enhanced to ?50,000. This is separate from the self/family limit.

Paying more than the planned (standard) rate increases costs, which reduces profit. Hence, it is an Adverse variance. Formula: (Standard Rate - Actual Rate) * Actual Hours.

A projected cash deficit indicates that outflows exceed inflows. Management must arrange temporary financing like an overdraft or short-term loan to maintain liquidity.

As per IGST Act, for services to a registered person or account holder, the place of supply is the location of the recipient. If the recipient is not an account holder and location is unknown, it is the bank's location.

Sunk costs (e.g., R&D spent on a failed product) are irrelevant for future decision-making because they cannot be changed regardless of the action taken.

If the taxpayer is non-compliant (doesn't file return, doesn't produce documents), the officer estimates the income to the best of their judgment and determines the tax liability.

Contribution must cover both Fixed Cost and the desired Target Profit. Dividing the total required Contribution (FC + Profit) by the PV ratio gives the required Sales volume.

ITC is available only for goods/services used for business furtherance. Personal consumption is a non-business use, so the proportionate credit must be reversed.

Job Costing tracks each unique job separately (heterogeneous). Process Costing averages costs over a large number of identical units produced in a continuous flow (homogeneous).

For compliant taxpayers (who filed returns), TDS @ 2% applies on cash withdrawals exceeding ?1 Crore. For non-filers, the threshold is lower (?20 Lakh).

The Sales Budget estimates the revenue and demand. Since production, purchasing, and cash needs depend on how much the company expects to sell, the Sales Budget is the starting point (Key Factor).

This variance measures the over or under-absorption of fixed overheads based on the actual output achieved versus what was actually spent.

Cross-border transactions between states are Inter-State supplies and attract IGST.

Sales = Variable Cost + Contribution. Dividing by Sales: 1 = (VC/Sales) + (Contribution/Sales). Thus, VC Ratio + P/V Ratio = 1.

For individuals (other than senior citizens) and HUF, interest on savings accounts (bank/post office) up to ?10,000 is deductible. (For Senior Citizens, Sec 80TTB gives ?50,000 limit including FD interest).

Cost unit is a unit of product or service in relation to which costs are ascertained. For transport, it combines quantity (passenger/ton) and distance (km).

GST replaced multiple taxable events (like manufacture, sale, provision of service) with a single event: "Supply".

This ensures that a budget for a full year is always available, keeping the plan current and responsive to changes.

Idle time represents hours paid for but not worked (due to power failure, machine breakdown, etc.). Since this is a cost without production, it always results in an Adverse variance.

If inputs/capital goods are not returned within 1 year/3 years respectively, it is deemed that the principal has supplied them to the job worker on the day they were sent out, and tax becomes payable with interest.

For LRS remittances (other than for education via loan), TCS @ 20% (revised rate) applies on amounts exceeding ?7 Lakh in a financial year.

BEP = Fixed Cost / Contribution per unit. Since the numerator (Fixed Cost) increases and the denominator (Contribution) stays same, the BEP increases (you need to sell more to cover higher fixed costs).

1/4 lag means 1 week's wages are paid next month. So, in April, you pay for the remaining 3 weeks (3/4 or 75%) of April and the pending 1 week (1/4 or 25%) of March.

Since opening and closing WIP are only partially complete, they cannot be simply added to completed units. They are converted into "Equivalent Units" based on the percentage of completion.

Section 171 mandates that any reduction in tax rate or benefit of ITC must be passed on to the consumer. The Competition Commission of India (CCI) now oversees this.

If a firm is subject to audit, the due date for the firm AND its working partners is 31st October of the Assessment Year.

"A" items are high value (70% value, 10% quantity), "B" are moderate, and "C" are low value (10% value, 70% quantity). It helps focus control efforts on high-value items.

This variance arises because the actual hours taken to produce the output differ from the standard hours allowed, affecting the absorption of variable overheads.

Taxpayers with turnover > ?5 Cr must declare 6 digits of HSN code. For turnover up to ?5 Cr, 4 digits are required for B2B.

Contribution = Fixed Cost + Profit = 30,000 + 10,000 = 40,000. P/V Ratio = (Contribution / Sales) * 100 = (40,000 / 1,00,000) * 100 = 40%.

The standard deduction for salaried individuals is ?50,000 (or the amount of salary, whichever is less) under both Old and New Tax Regimes.

Operating Costing is the method used to ascertain the cost of providing a service (e.g., Transport, Hospital, Hotel, Power generation).

Budgets prepared for individual functions/departments of the organization (e.g., Sales Budget, Production Budget) are Functional Budgets. They are consolidated into the Master Budget.

Holding more than one PAN is illegal. The Income Tax Act imposes a penalty of ?10,000 for possessing multiple PANs.

Casual Taxable Persons do not have the benefit of the turnover threshold. They must compulsorily register 5 days before starting business and pay advance tax.

Profit % = Margin of Safety % * P/V Ratio. 20% * 40% = 0.20 * 0.40 = 0.08 or 8%.

Prime Cost = DM + DL + Direct Expenses = 10,000 + 5,000 + 1,000 = 16,000. Factory Rent is an overhead, not part of Prime Cost.

Mix variance calculates the cost impact of changing the ratio/proportion of different materials used (e.g., using more cheap material A and less expensive material B).

As per Section 28(ii), compensation for termination or modification of terms of agency is taxable as "Profits and Gains of Business or Profession".

Renting a residential house for residential purposes is exempt. However, renting it for commercial purposes is taxable.

Capacity Ratio measures whether the available capacity was utilized fully. >100% means overtime was worked; <100% means underutilization.

This clause allows the contract price to be increased if input costs rise beyond a certain limit, protecting the contractor from inflation.

Under Article 222(2) of the Constitution and Income Tax Act, allowances paid to Judges of High Court and Supreme Court are fully exempt from tax.

To stop loss (reach BEP), revenue must cover total costs. This can be done by increasing sales volume/price or reducing costs (Fixed or Variable).

The general rule is 30 days. For banking and financial institutions (NBFCs), the time limit is extended to 45 days.

Ideal standards represent the best possible performance under perfect conditions. They are rarely achievable and are used more for motivation than actual control.

In Budget 2023, the highest surcharge rate was reduced from 37% to 25% under the New Tax Regime to provide relief to high income earners.

Semi-variable costs have a fixed component (e.g., fixed line rental) and a variable component (e.g., charge per call/unit). Rent is Fixed. Material is Variable.