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Doing business is only to earn profit. To find out the profit or loss in the business maintenance of accounts is necessary. If the business is dealing with the commodities exempted or non-taxable in small scale and below the income tax limit and if the concern is a sole proprietor concern nobody will question and hence proper maintenance of accounts is not needed.
If the taxable commodities are dealt with, Value Added Tax payable on sales has to be arrived after deducting the Value Added Tax paid on purchases. In case of service sectors, Service Tax has to be paid. In manufacturing sector input of raw materials and consumables like firewood, chemicals, electricity and other items to be included in the manufacturing expenses and then only cost price of the finished product will be arrived and selling price has to be fixed. If the shop or industry is managed or maintained by employees, the wages and salary and other benefits to them has to be accounted for. Above all Income Tax has to be paid on the profit or earnings in business.
For the above and other so many reasons, there is a need for business accounts now.
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ABHIVIRTHI Tax and Industrial Consultancy
R.R.JAGADEESAN
VAT Practitioner and Industrial Consultant
H-63, Palaami Enclave
New Natham Road,
Madurai-625014
Cell: 9994990599,
Wiki User
∙ 10y ago
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