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Statutory Governance · Phase 8 Trust Architecture

Methodology & Accounting Standards

IndiaSimplified enforces strict mathematical reproducibility. Every metric published on the platform originates from primary statutory publications, adheres to official government accounting standards, and is audited automatically before publication.

1. National Accounts & Macroeconomic Indicators

Base Year Series: All Gross Domestic Product (GDP) and Gross Value Added (GVA) series utilize the 2011–12 Base Year series established by the Ministry of Statistics and Programme Implementation (MoSPI).

Nominal vs. Real Accounting:

  • Nominal GDP: Evaluated at current market prices (GDP_nominal = Σ P_t × Q_t). Denominator for the Buffett Indicator, fiscal deficit ratios, and tax-to-GDP ratios.
  • Real GDP: Evaluated at constant 2011–12 base prices to isolate physical volume growth from inflationary price shifts (GDP_real = Σ P_2011 × Q_t).
  • GSDP Alignment: Territorial GSDP sums across all 36 States and UTs reconcile within 3% of National GDP. Residual differences correspond to extra-territorial economic activity (offshore oil extraction, continental shelf mining, and diplomatic installations) which MoSPI does not attribute to any single sub-national entity.
2. Federal Fiscal Transfers & Devolution Formula

Constitutional Basis: Tax devolution is governed by Article 280 of the Constitution of India. The 41% state share represents the award of the 15th Finance Commission (chaired by N.K. Singh) accepted by Parliament for the 2021–22 to 2025–26 award period.

Divisible Pool Definition: Net proceeds of central taxes under Article 270 exclude non-divisible cesses and surcharges (such as Road and Infrastructure Cess, Agriculture Infrastructure and Development Cess, and Health & Education Cess).

Horizontal Allocation Formula Weights (Sum = 100.0%):

Income Distance:45.0%
Population (2011):15.0%
Area:15.0%
Forest & Ecology:10.0%
Demographic Performance:12.5%
Tax Effort:2.5%
3. Personal Finance & Compounding Mathematics

Inflation Discounting (Fisher Equation): Rather than simple subtraction ($r - i$), all real purchasing power projections apply the exact discrete Fisher relationship:

Real Value = Nominal Value / (1 + i)^t   |   where i = 5.5% (10-Yr Headline CPI Average)

Statutory Equity Capital Gains Tax (Section 112A):

  • Holding Period > 12 months = Long-Term Capital Gain (LTCG).
  • First ₹1,25,000 of LTCG per financial year is strictly exempt from tax.
  • Gains exceeding ₹1,25,000 are taxed at 12.5% + 4% Health & Education Cess = 13.00% effective.
  • Holding Period ≤ 12 months = Short-Term Capital Gain (STCG) taxed at 20% + 4% cess = 20.80% u/s 111A.

Banking Quarterly Compounding: Cumulative Bank FDs and RDs are compounded on a strict quarterly calendar boundary (A = P × (1 + r/400)^(4t)) per RBI Master Directions on Interest Rates on Deposits.

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