Revision: Financial Planning Algebra Maths 1 SSC (English Medium) 10th Standard Maharashtra State Board

Goods mean every kind of movable thing/property, i.e. anything which can be taken (moved) from one place to another. 

Goods do not include money and securities. Securities mean: shares, stocks, bonds, debentures, etc. 

Services mean anything other than goods, money and securities. Services include activities relating to the use of money, e.g. banking services, insurance services, etc. 

Prior to 1^st July 2017, we had a number of indirect taxes such as VAT, excise, service tax, etc. From 1st July 2017 onwards, the government of India has abolished all such indirect taxes and introduced a new (indirect) tax called Goods and Services Tax (GST). 

Definition: HSN Code

HSN (Harmonised System of Nomenclature) is a numerical code used for the classification of goods under GST.

Definition: SAC Code

SAC (Services Accounting Code) is a numerical code used for the classification of services under GST.

A tax invoice is a bill issued by a registered GST dealer showing details of goods or services supplied, taxable value, GST charged (CGST, SGST or IGST), and total amount payable.

GSTIN is a 15-digit alphanumeric identification number allotted to every registered GST dealer for the purpose of tax administration.

• Mandatory for dealers with turnover above ₹20 lakh.

• Structure of GSTIN:

  Part of GSTIN	Meaning
  First 2 characters	State code
  Next 10 characters	PAN of the business
  13th character	Entity number
  14th character	Usually the letter ‘Z’
  15th character	Check digit

Input Tax Credit (ITC) is the credit a registered dealer can claim for GST paid on purchases used in the course of business.

\[ \boxed{\text{GST Payable} = \text{Output GST} - \text{Input GST (ITC)}} \]

Intra-state supply

An intra-state supply occurs when the supplier and the place of supply are in the same state or Union Territory.

• Example: A seller in Mumbai supplies goods to a buyer in Pune.

• Both are in Maharashtra, so this is an intra-state supply.

• GST is divided into CGST + SGST.

Inter-state supply

An inter-state supply occurs when the supplier and the place of supply are in different states or Union Territories.

• Example: A seller in Maharashtra supplies goods to a buyer in Gujarat.

• This is an inter-state supply.

• GST is charged as IGST.

The shares of different companies can be bought or sold in the market through the stock exchange.

The value of a share printed on the share certificate is called its Nominal Value, or Face Value, or Par Value.

A stock exchange is a place where the buying and selling of shares takes place. It is also known as the share market or capital market.

A shareholder is a person who owns one or more shares of a company. A shareholder is a part owner of the company in proportion to the number of shares held.

The total amount of money needed to run the company is called the capital.

A share is the smallest unit of the capital of a company. The capital of a company is divided into small equal parts, each of which is called a share.

The annual profit distributed among shareholders is called a dividend.

GST (Goods and Services Tax) is charged on the brokerage amount.

• In most school-level examples, GST on brokerage is taken as 18%.

• GST is calculated on the brokerage, not directly on the market value of shares.

Brokerage is the amount charged by a registered share broker for buying or selling shares on behalf of an investor.
Brokerage is always calculated on the Market Value (MV) of shares.

A Systematic Investment Plan (SIP) is a method of investing a fixed amount at regular intervals (monthly/quarterly) in mutual funds.

A Mutual Fund is a professionally managed investment scheme in which money from many investors is pooled together and invested in shares, bonds, debentures or other securities by an Asset Management Company (AMC).

\[ \text{GST} = \text{Taxable Value} \times \text{GST Rate} \]

For an intra-state sale, GST is generally divided into two equal parts:

\[ \text{CGST} = \frac{\text{GST}}{2} \]

\[ \text{SGST} = \frac{\text{GST}}{2} \]

\[ \text{Invoice Value} = \text{Taxable Value} + \text{CGST} + \text{SGST} \]

Remember:

For intra-state transactions, CGST and SGST are usually equal. Together, they make up the total GST.

Investment and Number of Shares

\[ \text{Investment} = \text{Number of Shares} \times \text{Market Value} \]

\[ \text{Number of Shares} = \frac{\text{Total Investment}}{\text{Market Value per Share}} \]

Dividend

\[ \text{Dividend per Share} = \frac{\text{Dividend } \%}{100} \times \text{Face Value} \]

\[ \text{Total Annual Dividend} = \text{Number of Shares} \times \text{Dividend per Share} \]

Rate of Return

\[ \text{Rate of Return} = \frac{\text{Total Annual Dividend}}{\text{Total Investment}} \times 100 \]

Brokerage

\[ \text{Brokerage} = \frac{\text{Rate of brokerage}}{100} \times \text{Market Value} \]

Buying Price

When shares are purchased, brokerage is added to the market value.

\[ \text{Buying Price} = \text{Market Value} + \text{Brokerage} \]

If GST on brokerage is included:

\[ \text{Total Purchase Cost} = \text{Market Value} + \text{Brokerage} + \text{GST on Brokerage} \]

Selling Price

When shares are sold, brokerage is deducted from the market value.

\[ \text{Selling Price} = \text{Market Value} - \text{Brokerage} \]

If GST on brokerage is included:

\[ \text{Net Sale Proceeds} = \text{Market Value} - \text{Brokerage} - \text{GST on Brokerage} \]

Total Brokerage

\[ \text{Total Brokerage} = \text{Brokerage per share} \times \text{Number of shares} \]

GST on Brokerage

\[ \text{GST} = \frac{18}{100} \times \text{Brokerage} \]

Profit or Loss

\[ \text{Profit or Loss} = \text{Net Sale Proceeds} - \text{Total Purchase Cost} \]

If the result is positive, there is a profit.

If the result is negative, there is a loss.

The market value of one unit of a mutual fund is called Net Asset Value (NAV).

\[\mathrm{NAV}=\frac{\text{Total fund value}}{\text{Total number of units}}\]

1. GST: one destination-based indirect tax, launched 1 July 2017. It replaced older taxes such as VAT and excise.
   

2. Goods: movable property, excluding money and securities.
   

3. Services: activities such as banking and insurance.
   

4. Dual GST: levied by both the Centre (CGST) and the State (SGST).

5. Slabs : \[ 0\%, \; 5\%, \; 12\%, \; 18\%, \; 28\%, \] plus special rates of \[ 3\% \] (gold) and \[ 0.25\% \] (rough stones).

6. Benefits: no tax-on-tax (cascading), more transparency, and uniform rates: "One Nation, One Tax".

7. Registration: required above \[ \text{₹}20 \text{ lakh} \] turnover ( \[ \text{₹}10 \text{ lakh} \] in special-category states).

8. Outside GST: petroleum, alcohol, stamp duty, customs duty.

• GST is an indirect tax on the supply of goods and services.

• A tax invoice records the sale and the GST charged.

• GSTIN is the 15-character identification number of a GST-registered business.

• HSN code classifies goods.

• SAC code classifies services.

• Taxable value is the value on which GST is calculated.

• CGST and SGST are equal parts of total GST for intra-state transactions.

• Invoice value = Taxable value + CGST + SGST.

• Apply discounts before calculating GST, unless the question says otherwise.

• GST is an indirect tax on the supply of goods and services.
• Intra-state sales attract \[ \text{CGST} + \text{SGST}. \]
• Inter-state sales attract IGST.
• GST is charged at each stage: \[ \text{manufacturer} \rightarrow \text{wholesaler} \rightarrow \text{retailer} \rightarrow \text{consumer}. \]
• Registered dealers claim Input Tax Credit for GST paid on eligible purchases.
• Net GST payable is calculated as: \[ \boxed{\text{GST Payable} = \text{Output GST} - \text{Input GST (ITC)}} \]
• The final consumer pays the total GST included in the final invoice.
• Total GST deposited by all dealers equals the GST paid by the final consumer.

• Types of Tax: GST is classified into CGST, SGST/UTGST, and IGST.
• Intra-State Supply: When supply is within the same state or UT, tax is shared equally as \[ \text{CGST} + \text{SGST/UTGST}. \]
• Inter-State Supply: When supply takes place between two states or UTs, IGST is charged instead.
• Total GST Amount Formula: \[ \text{GST} = \text{Taxable Value} \times \text{GST Rate} \]
• Intra-State Tax Breakdown Formula: \[ \text{CGST} = \frac{\text{GST amount}}{2}, \quad \text{SGST/UTGST} = \frac{\text{GST amount}}{2} \]
• Inter-State Tax Formula: \[ \text{IGST} = \text{GST amount} \]
• Net GST Payable Formula: \[ \text{Net GST payable} = \text{Output GST} - \text{Eligible ITC} \]

• Market Value (MV): Current buying or selling price of a share.
• Brokerage: Broker's commission, calculated on market value.
• Buying cost: \[ MV + \text{Brokerage} + \text{GST on brokerage}. \]
• Net selling amount: \[ MV - \text{Brokerage} - \text{GST on brokerage}. \]
• GST on brokerage: Usually \[ 18\%. \]
• Profit/Loss: Net sale proceeds plus dividend minus total purchase cost.
• Dividend: Usually calculated on face value.

• A mutual fund pools money from many investors and invests it through an AMC.
• Investors receive units; the value of one unit is its NAV.
• \[ \text{NAV} = \frac{\text{Total Value of Fund}}{\text{Total Number of Units}} \]
• \[ \text{Units Purchased} = \frac{\text{Amount Invested}}{\text{NAV}} \]
• A SIP means investing a fixed amount at regular intervals.
• SIPs promote discipline, affordability, and rupee-cost averaging.
• Mutual funds offer diversification and professional management but do not guarantee returns.
• Equity funds generally have higher risk and return potential than debt funds.
• ELSS is a tax-saving mutual-fund category, subject to applicable tax rules and lock-in requirements.