Tag Archives: Business
Today, I am here on my Blog with a special Post which perhaps may not concern to most of my Readers who are not involved in business. Actually, this Article was written for my community members of Accounting and Taxation on PeerPower, an Exclusive web site of Times Group for Professionals only; but, being the same to be extensive to the limit of number of certain words, I thought to publish it here. Our family businesses fall under various categories of firms such as Proprietary, Partnership, Private Company as well as Professional. We are not purely dependent on our Tax Consultants and therefore we take keen interest in Taxation and its planning limited to our own concerns for fair discussion with them prior to finalize the documents of taxation.
To make my Article precise, I’ll discuss only the provision of Remuneration to Partner/s under Section 40 (B). Up to Ass. Year 1992-93, the Partnership Firms (Both Business and Professional) were levied Firm Tax; and over and above, the Partners also had to pay Individual Personal Tax on share of profit earned from the firm. Thereafter, as per provision of Financial Act 1992, the Partnership firms have to pay tax on total income at the flat rate of 35% and later on from Ass. Year 2006-07at the rate of 30% with applicable Surcharge as well as Education Cess. The Partners have to mention their share of profit as Non-Taxable Firm Profit in their Income and Expense A/c and such income is tax exempted u/s 10 (2-A).
As per above Financial Act of 1992, some notable provisions were made in Clause 40 (B) and accordingly the working partner/s are allowed to have Firm Management Remuneration. Following Table indicates what amount the working partner can have based on Book Profit of the firm. Remuneration to partners can be paid only to working partner/s authorized by the partnership deed. It should not pertain to period prior to partnership deed and must not exceed the limits prescribed.
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It is very interesting to observe the people divided mostly into two groups of competition for one or the other goals of their own. From individuals to nations, all are in race to go ahead from their rivals. Subjects and goals of such rivalries may be many. Here in this brief Article, I am going to discuss the ‘Rivalry’ of two sectors of Retail Trade. Both strive for the same customers or the markets. These two retail sectors will be named further as ‘Former’- An Unorganized Small Traders’ Group, serving the society for not only centuries but millenniums; and ‘Latter’ – The Organized Mall Culture, recently developed during the last two decades and growing fast throughout the world.
The back and forth between these two retail sectors is rapid. I just remember an old Hindi movie “Toofan Aur Diya”. The title may be taken in English version as “Lamp (lit with kerosene with no shield of glass) against whirl-wind”. Here, as an observer, we can watch the exertions of the weak with the strong. Let us see how long this competition does go on and what its future would be. It can be presumed that this ‘Rivalry’ may end with either of the two outcomes – one, as per Charles Darwin’s theory “Survival of the Fittest”; and the other the “Co-existence of Both”. Whether we Love it or hate it, the organized retail sector is to stay everywhere. On the basis of viability of business, some units of both the retail sectors may close their shutters for ever or may shift elsewhere, but all of them are never to quit the battle field of their rivalry.
Due to straight result of globalization, the Latter is increasing at the speed of light stretching the feet towards even smaller cities. Some Social Activists have started their movements against the Mall Culture with their slogans as “No more Shopping Malls in India”. One of such Activists, Medha Patkar says, “Opening of a mall in a city puts an end to the business of thousands of hawkers and traders. This mall culture will plunge the middle class into a greater financial crisis and turn hawkers into beggars.”
On the other hand, quite contradictory to above, ICRIER (a renowned think tank) commissioned by the Ministry of Commerce to study impact of the Latter on the Former reported that they both can co-exist. How surprising the finding is that a lion and a hare can live together in a den as we might have read in some fables in our childhood days. It is easy to say ‘Nothing is impossible in the world’, but somebody has humorously commented as whether we have ever tried to insert back the tooth paste once pressed out from the tube!
I have studied the Report with a bird-fly-view and noted as over all that ICRIER has, no doubt, sought opinions from various people concerned to the studies; but at the same time, we should bear in our mind that it is not all the time necessary to believe that few opinion givers represent the views of all the people. Just to have fair and authentic opinions, the Researchers should take into consideration many factors and particularly intellectual standards of the opinion givers. We have witnessed many Reports of Commissions and findings of Opinion Polls, not only in India but worldwide, and found that realities and such calculative results have no match of their ends. We all know that when Saddam was in power, he had gone under the exercise of having mandate of the people of Iraq and showed to the world that 98.5% of the population was in favor of his dictatorial rule of Government. But, when he was finished, the very same public had destroyed the statues of Saddam erected in public places.
While summing up, I would say that the casting votes are in the hands of the customers and they only can play a role of a king-maker whom the crown of success is awarded. Any sector, whether be a traditional retail street shop or a big mall, will have to create good relationships with customers and attract them to pay frequent visits to their respective business premises. They would need to win the trust of the customers with standard quality of goods, fair price, genuine weight & measurement and prompt services after sale. The customer will never compromise with these fundamental expectations. A trader, in any status, may fool the customer for one time, but not all the times. Now-a-days, the customer everywhere has become more aware of his best interests as well as laws of consumer protection. Those days have gone when they were easily cheated and exploited.
– Valibhai Musa