Value Analysis Vs Work Study and Corporate Tax Planning

J.H.Westing, I.V.Fine & Joseph Zenz have recommend certain techniques
which include….
1) Design analysis
2) The preparation of a detailed checklist
3) A study of other manufacturers cost reduction efforts
4) Brain storming or hitch hiking
5) Price analysis & supplier assistance
Alan Fields holds opinion that an investigation of value analysis precedes 5
Stages…
1) The information stage Complete background information
2) The speculation stage Basic & secondary functions are presented
3) The investigation stage Proposals are passed for the production or
purchasing department
4) The recommendation stage Value analyzed alternative is put into production
5) The implementation stage Ensure that the proposal is put into production

Value Analysis Vs Work Study
Value analysis primarily aims at controlling materials cost & sometimes, as a
consequence may affect labor costs & overheads while work study aims just at
labor cost.
Value analysis overs the

Value Analysis – A Fresh Look
3 approaches to the practice of value analysis.
1) Committee arrangement with co-ordination to direct team efforts.
2) Operating personnel
3) Value analysis, awareness & appreciation in the existing organization
structure.

Corporate Tax Planning
The major success to economic stability is gained only by industrial activities
which may be small scale, medium & large scale.
When the corporate make use of facilities, resources & infrastructure of the
nation, it’s the basic obligation of the corporation to contribute to the revenue of
the government.
The revenues may be collected in different forms, …
Sales tax, central sales tax, excise, customs & income tax
The income tax levied under Income Tax Act, 1961 is known as Corporate Tax.
Tax planning helps the corporate to gain more profit.

Tax Planning – Tax Evasion – Tax Avoidance
Tax Planning - Tax saving device under legal framework.
Corporate will take advantage of the…
1) Exemptions
2) Deductions
3) Rebate
4) Relief & other tax concessions allowed by taxing status leading to the
reduction of tax liability of the tax payer.
Tax Evasion Illegally hiding income or concealing the particulars of income or
manipulating the accounts so as to inflate the expenditure & other
outgoing with a view to illegally reduce the burden of the tax.
Tax Avoidance Refer to dodging the payment of the taxes without breaking the law.
A corporate dodges the payment of income tax within the legal
framework, it amounts to tax avoidance.
Tax Planning Tax saving device under legal framework.

Objects of Tax Planning
1) To reduce the burden of paying high percentage of tax
2) To take advantage of the exemptions, deductions, rebates, relieves & other
tax concessions
3) To avoid unwarranted addition to trading account as account of low gross
profit
4) To avoid worries & tensions

Some important Tax Planning Techniques Practiced by the corporate

Venture Capital
It is considered as life blood of economic activities.
FARA Act, 1973
It is defined as long term funds in equity or semi equity form to finance hi-tech
projects involving high risk & yet having strong potential of high profitability.
Venture capital refers to capital investment made in a business or industrial
enterprise.
Capital investment may assume the form of either equity or debt or both as
derivative instrument.
The investment made in the form of equity – Prime objective being Capital gain
Equity investment enables the investor to convert the investment into cash
when required.
The 1995 Finance bill, defined Venture Capital as long term equity investment
in novel technology based projects with display potential for significant growth
and financial returns.
Venture capital implies an investment in the form of equity for high risk projects
with the expectation of higher returns.