ID #1307

What is the process of calculation of tax in sale and purchase?

Common rules of calculation process of tax inclusive and exclusive are as follows;


When Tax is Exclusive:
Tax Amount = Rate*Tax %

When Tax is Inclusive:
1. Tax @ 1%=Rate*100/101
e.g. Rate=Rs.200, Tax Inclusive=1%
Taxable amount=200*100/101=198.01
And Tax = 200-198.01=1.99

2. Tax @ 4%=Rate*100/104
e.g. Rate=Rs.200, Tax inclusive=4%
Taxable amount=200*100/104=192.30
And Tax = 200-192.30=7.70

3. Tax @ 12.5%=Rate*100/112.5
e.g. Rate=Rs.200, Tax inclusive=12.5%
Taxable amount=2200*100/112.5=177.77
And Tax = 200-177.77=22.23

In order to charge tax after discount/charge added in purchase/sale entry, please check the links given below;

  1. Is it possible to calculate discount and charge on sale rate and calculate tax on the amount after charge added to the sale rate?
  2. How to give Item discount on purchase bill before adding the tax? 
  3. Is it possible to enter other discount detail in percentage for purchase bill which will be calculated before tax? 
  4. Is it possible to enter other charges detail in percentage for purchase bill which will be calculated before tax?

 

In order to charge tax before discount/charge added in purchase/sale entry, please check the link given below;
  1. How to enter Other Charges detail in percentage for purchase bill which will be calculated after tax?
  2. How to enter other discount detail in percentage for purchase bill which will be calculated after tax? 
...
In order to maintain separate charge and discount ledger in purchase/sale entry, please check the link given below;
  1. Is It possible to set separate accounting entry for discount and charges? 
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In order to see item discount and item charge in sale register voucher view, please check the link given below;
  1. Is it possible to check the item discount and item charges in sale register in voucher mode? 

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