This document provides an overview of income from business and profession under the Indian Income Tax Act. It defines business and profession, outlines the key points and basis of charge for income from business/profession. It also discusses the computation of income, specific deductions allowed, depreciation rules and amounts that are not deductible. The key information includes definitions of business and profession, income includes profits and losses, relevance of accounting method, and that income from illegal businesses is taxable.
Income Tax Act 1961
Capital Gain, Basis of Charge, Capital Asset U/s 2(14) Income Tax Act, Transactions that do not constitute TRANSFER U/s 47, Types of Capital Assets, Computation of STCG, Computation of LTCG, Tax Exemption for Capital Gain.
Income Tax Act 1961
Capital Gain, Basis of Charge, Capital Asset U/s 2(14) Income Tax Act, Transactions that do not constitute TRANSFER U/s 47, Types of Capital Assets, Computation of STCG, Computation of LTCG, Tax Exemption for Capital Gain.
Helps the student to know about the Agricultural Income in Indian Income tax Act 1961 and also how the Tax Liability will be calculated when an Assessee have both Agricultural and Non Agricultural Income
Unit II Tax Planning and Company PromotionDayanand Huded
The chapter comprises of Meaning of Tax Planning, Tax Avoidance, Tax Evasion and Tax Management; Features and Scope for Tax Planning; Business Location and Tax Planning; Nature of Business and Tax Planning: FTZ, Units in SEZ, 100% EOU and Infrastructure Development.
Tax planning is a focal part of financial planning. It ensures savings on taxes while simultaneously conforming to the legal obligations and requirements of the Income Tax Act, 1961. The primary concept of tax planning is to save money and mitigate one's tax burden.
Tax Planning is the arrangement of financial activities in such a way that maximum tax benefits are enjoyed by making use of all beneficial provisions in the tax laws. It entitles the assessee to avail certain exemptions, deductions, rebates and reliefs, so as to minimise its tax liability.
(i) Reduction of tax liability: One of the supreme objectives of tax planning is the reduction of the tax liability of the payer and the resultant saving of the earnings for a better enjoyment of the fruits of hard labour.
(ii) Minimization of litigation and the tax payer may be saved from the hardships and inconveniences caused by unnecessary litigations.
(iii) Productive investment: Tax planning is a measure of awareness of the taxpayer to the intricacies of the taxation laws and it is the economic consciousness of the income earner to find out the ways and means of productive investment of the earnings which would go a long way to minimize its tax burden.
(iv) Healthy growth of economy: The saving of earnings is the only basement upon which the economic structure of human life is founded.
(v) Economic stability: Productive investment increase contours of the national economy embracing in itself the economic prosperity of not only the tax payers but also of those who earn the income not chargeable to tax. The planning thus creates economic stability of the nation and its people by even distribution of economic resources.
(i) Residential status and citizenship of the assessee: We know that a non-resident in India is not liable to pay income-tax on incomes which accrue or arise and are also received outside India, whereas a resident in India is liable to pay income-tax on such incomes.
(ii) Heads of income/assets to be included in computing net wealth: Before the Tax-planner goes in for his task; he has to have a full picture of the sources of Income of the tax payer and the members of his family
Every assessee earning more than the basic exemption are eligible to seek deduction from Gross Total Income by way of deductions allowed for investments or payments made, under Chapter VI-A of the Income Tax Act. Chapter VI-A helps an assessee to reduce the overall tax burden to the extent of investment and expenses made within the ambit of law and fulfilemt of prescribed conditions. In this Webinar, we shall be focusing on the provisions of Chapter VI-A which are essential for Individuals, HUF and Firms for the purpose of claiming deductions against their total income.
In the day to day operations of the business, it is essential to have grip on Tax Deducted at Source (TDS) which acts as a means to collect tax at the inception of the income itself and Tax Collected at Source (TCS) where a seller collects a certain amount of tax from the buyer at the time of sale. In this webinar we will be learning the applicability, non-applicability, prevailing rate of tax and other related provisions of the Income-tax Act with respect to TDS and TCS
Helps the student to know about the Agricultural Income in Indian Income tax Act 1961 and also how the Tax Liability will be calculated when an Assessee have both Agricultural and Non Agricultural Income
Unit II Tax Planning and Company PromotionDayanand Huded
The chapter comprises of Meaning of Tax Planning, Tax Avoidance, Tax Evasion and Tax Management; Features and Scope for Tax Planning; Business Location and Tax Planning; Nature of Business and Tax Planning: FTZ, Units in SEZ, 100% EOU and Infrastructure Development.
Tax planning is a focal part of financial planning. It ensures savings on taxes while simultaneously conforming to the legal obligations and requirements of the Income Tax Act, 1961. The primary concept of tax planning is to save money and mitigate one's tax burden.
Tax Planning is the arrangement of financial activities in such a way that maximum tax benefits are enjoyed by making use of all beneficial provisions in the tax laws. It entitles the assessee to avail certain exemptions, deductions, rebates and reliefs, so as to minimise its tax liability.
(i) Reduction of tax liability: One of the supreme objectives of tax planning is the reduction of the tax liability of the payer and the resultant saving of the earnings for a better enjoyment of the fruits of hard labour.
(ii) Minimization of litigation and the tax payer may be saved from the hardships and inconveniences caused by unnecessary litigations.
(iii) Productive investment: Tax planning is a measure of awareness of the taxpayer to the intricacies of the taxation laws and it is the economic consciousness of the income earner to find out the ways and means of productive investment of the earnings which would go a long way to minimize its tax burden.
(iv) Healthy growth of economy: The saving of earnings is the only basement upon which the economic structure of human life is founded.
(v) Economic stability: Productive investment increase contours of the national economy embracing in itself the economic prosperity of not only the tax payers but also of those who earn the income not chargeable to tax. The planning thus creates economic stability of the nation and its people by even distribution of economic resources.
(i) Residential status and citizenship of the assessee: We know that a non-resident in India is not liable to pay income-tax on incomes which accrue or arise and are also received outside India, whereas a resident in India is liable to pay income-tax on such incomes.
(ii) Heads of income/assets to be included in computing net wealth: Before the Tax-planner goes in for his task; he has to have a full picture of the sources of Income of the tax payer and the members of his family
Every assessee earning more than the basic exemption are eligible to seek deduction from Gross Total Income by way of deductions allowed for investments or payments made, under Chapter VI-A of the Income Tax Act. Chapter VI-A helps an assessee to reduce the overall tax burden to the extent of investment and expenses made within the ambit of law and fulfilemt of prescribed conditions. In this Webinar, we shall be focusing on the provisions of Chapter VI-A which are essential for Individuals, HUF and Firms for the purpose of claiming deductions against their total income.
In the day to day operations of the business, it is essential to have grip on Tax Deducted at Source (TDS) which acts as a means to collect tax at the inception of the income itself and Tax Collected at Source (TCS) where a seller collects a certain amount of tax from the buyer at the time of sale. In this webinar we will be learning the applicability, non-applicability, prevailing rate of tax and other related provisions of the Income-tax Act with respect to TDS and TCS
Chapter VI A - Deductions while Computing Total Income - Part IIDVSResearchFoundatio
OBJECTIVE
Every assessee earning more than the basic exemption limit is eligible to seek deduction from Gross Total Income by way of deductions allowed for investments or payments made, under Chapter VI-A of the Income Tax Act. Chapter VI-A helps an assessee to reduce the overall tax burden to the extent of investment and expenses made within the ambit of law and fulfilment of prescribed conditions. In this Webinar, we shall be focusing on the provisions of Chapter VI-A which relate to Corporate Assessees.
Dividend Income
For the purposes of inclusion in the total income of an assessee,—
(a) any dividend declared by a company or distributed or paid by it within the meaning of section 2(22)(a)/(b)/(c)/(d)/(e) shall be deemed to be the income of the previous year in which it is so declared, distributed or paid, as the case may be;
(b) any interim dividend shall be deemed to be the income of the previous year in which the amount of such dividend is unconditionally made available by the company to the member who is entitled to it.
The sales tax structure has become simple & transparent after implementation of VAT system in India, also helping in avoiding cascading effect of tax. Summarized provisions are provided in attached PPT..
The Wealth Tax Act, which came into force from AY1957-58 occupies place of importance in the Indian Taxation System. Though it has got abolished from AY 2016-17, it is in force prior to that period..
This presentation will guide you about various Income Tax Forms to be used with its due dates under Indian Income Tax. Also explains the various terms assigned to those returns & their time limits.
Under Fundamental Concepts of Income Tax Presentation, Important Definitions under Income Tax Act, Residential Status of the assesses & its tax incidence is covered.
CAPITAL GAINS some basic provisions are provided. Except for exemption u/s 54/ Useful for B.Com or M.com Students. Provisions related are for AY 2014-15
In 2020, the Ministry of Home Affairs established a committee led by Prof. (Dr.) Ranbir Singh, former Vice Chancellor of National Law University (NLU), Delhi. This committee was tasked with reviewing the three codes of criminal law. The primary objective of the committee was to propose comprehensive reforms to the country’s criminal laws in a manner that is both principled and effective.
The committee’s focus was on ensuring the safety and security of individuals, communities, and the nation as a whole. Throughout its deliberations, the committee aimed to uphold constitutional values such as justice, dignity, and the intrinsic value of each individual. Their goal was to recommend amendments to the criminal laws that align with these values and priorities.
Subsequently, in February, the committee successfully submitted its recommendations regarding amendments to the criminal law. These recommendations are intended to serve as a foundation for enhancing the current legal framework, promoting safety and security, and upholding the constitutional principles of justice, dignity, and the inherent worth of every individual.
A "File Trademark" is a legal term referring to the registration of a unique symbol, logo, or name used to identify and distinguish products or services. This process provides legal protection, granting exclusive rights to the trademark owner, and helps prevent unauthorized use by competitors.
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Responsibilities of the office bearers while registering multi-state cooperat...Finlaw Consultancy Pvt Ltd
Introduction-
The process of register multi-state cooperative society in India is governed by the Multi-State Co-operative Societies Act, 2002. This process requires the office bearers to undertake several crucial responsibilities to ensure compliance with legal and regulatory frameworks. The key office bearers typically include the President, Secretary, and Treasurer, along with other elected members of the managing committee. Their responsibilities encompass administrative, legal, and financial duties essential for the successful registration and operation of the society.
How to Obtain Permanent Residency in the NetherlandsBridgeWest.eu
You can rely on our assistance if you are ready to apply for permanent residency. Find out more at: https://immigration-netherlands.com/obtain-a-permanent-residence-permit-in-the-netherlands/.
PRECEDENT AS A SOURCE OF LAW (SAIF JAVED).pptxOmGod1
Precedent, or stare decisis, is a cornerstone of common law systems where past judicial decisions guide future cases, ensuring consistency and predictability in the legal system. Binding precedents from higher courts must be followed by lower courts, while persuasive precedents may influence but are not obligatory. This principle promotes fairness and efficiency, allowing for the evolution of the law as higher courts can overrule outdated decisions. Despite criticisms of rigidity and complexity, precedent ensures similar cases are treated alike, balancing stability with flexibility in judicial decision-making.
ALL EYES ON RAFAH BUT WHY Explain more.pdf46adnanshahzad
All eyes on Rafah: But why?. The Rafah border crossing, a crucial point between Egypt and the Gaza Strip, often finds itself at the center of global attention. As we explore the significance of Rafah, we’ll uncover why all eyes are on Rafah and the complexities surrounding this pivotal region.
INTRODUCTION
What makes Rafah so significant that it captures global attention? The phrase ‘All eyes are on Rafah’ resonates not just with those in the region but with people worldwide who recognize its strategic, humanitarian, and political importance. In this guide, we will delve into the factors that make Rafah a focal point for international interest, examining its historical context, humanitarian challenges, and political dimensions.
ASHWINI KUMAR UPADHYAY v/s Union of India.pptxshweeta209
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Victims of crime have a range of rights designed to ensure their protection, support, and participation in the justice system. These rights include the right to be treated with dignity and respect, the right to be informed about the progress of their case, and the right to be heard during legal proceedings. Victims are entitled to protection from intimidation and harm, access to support services such as counseling and medical care, and the right to restitution from the offender. Additionally, many jurisdictions provide victims with the right to participate in parole hearings and the right to privacy to protect their personal information from public disclosure. These rights aim to acknowledge the impact of crime on victims and to provide them with the necessary resources and involvement in the judicial process.
1. TAXATION
( M.Com- Part I)
INCOME FROM BUSINESS & PROFESSION
-: Complied By :-
Prof. Rajesh Jain
rmjainca@gmail.com
2. Income from Business & Profession
Meaning of Business : [ Sec 2(13) ]
Business Includes,
a)Trade,
b) Commerce
c) Manufacture
d) Any adventure or concern in the nature of trade, commerce or
manufacture.
Meaning of Profession : [ Sec 2(36) ]
Profession includes vocation.
Profession requires purely intellectual skill or manual skill on the
basis of some special learning.
3. Income from Business & Profession
-:- Key Points -:-
Must be carried on by Assessee.
Must be carried on during the previous year.
Only profit of the previous year are to be taxed.
Income includes negative income i.e. Loss.
Relevance of method of accounting ( Cash or Mercantile )
A Person Cannot do business with one self. Hence, notional profit is
not taxable. If a proprietor withdraws goods casting Rs.50000 for
personal use at an agreed value of Rs.60000 then profit of Rs.10000
shall not be taxable.
There is no difference between legal & illegal business for taxation
purpose. Even income from illegal business shall be taxable.
4. Income from Business & Profession
Basis of Charge : [ Sec 28 ]
The following income shall be chargeable to income tax under the head “ Profit & Gains of
Business or Profession.
The profit or gains of any business or profession. [ Sec 28 (i) ]
Income derived by a trade, professional or similar association from specified services
performed for its members. [ Sec 28 (ii) ]
Export Incentive. [ Sec 28 (iiia), Sec 28 (iiib), Sec 28 (iiic), Sec 28 (iiid) ]
- Profit on sale of import license or duty entitlement pass book.
- Cash Assistant received or receivable by an exporter under any scheme of the Govt.
- Export Duty draw back.
The Value of any benefit or perquisite, whether convertible into money or not, arising from
business or the exercise of profession. [ Sec 28 (iv) ]
Any interest, Salary, bonus, commission or remuneration due to or received by a partner
from a firm. [ Sec 28 (v) ]
Any Sum received for not carrying out any activity in relation to any business or not to share
any know-how, patent, copyright, trademark etc. [ Sec 28(va) ]
Income from speculative transaction
Any sum received under Keyman Insurance Policy including Bonus on such policy.
5. Income from Business & Profession
COMPUTATION OF INCOME FROM BUSINESS [ Sec 29 ]
The profit and gains of business or profession shall be computed in accordance with
the provisions contained in Sec 30 to 44 DB.
It must however be noted that the allowances and deductions are not exhaustively
listed.
Admissibility of deduction will depend upon the method of accounting followed by
assessee, subject to deeming provisions of the Act.
6. Income from Business & Profession
SPECIFIC DEDUCTIONS [ Sec.30 to Sec 37 ]
1. Rent, Rates ,Taxes & Insurance for Building [ Sec 30 ]
2. Repairs & Insurance of Plant & Machinery , Furniture [ Sec 31 ]
3. Depreciation [ Sec 32 ]
4. Investment Allowance [ Sec 32 AC ]
5. Tea/Coffee/Rubber Development A/c [ Sec 33 AB ]
6. Site Restoration Fund [ Sec 33 ABA ]
7. Reserve for Shipping Business [ Sec 33 AC ]
8. Scientific Research Exp [ Sec 35 ]
9. Amortisation of telecom licence fees [ Sec 35 ABB ]
10. Expenditure on eligible projects or scheme [ Sec 35 AC ]
11. Deduction in respect of exp on specific business [ Sec 35 AD ]
12. Payment to Association and institution for carrying out rural development program [ Sec 35
CCA ]
13. Weighted deduction for expenditure incurred on Agricultural Extension Project [ Sec 35 CCC ]
14. Weighted deduction for expenditure for skill development [ Sec 35CCD ]
15. Amortisation of Preliminary Expenses [ Sec 35 D]
16. Amortisation of Expenditure on development of certain minerals [ Sec 35 E ]
7. Income from Business & Profession
-: Deduction U/s 36 :-
1. Insurance Premium [ Sec 36 (1) (i) ]
2. Insurance premium paid by a Federal Milk Co-op Socierty [ Sec 36 (1)(ia ]
3. Insurance premium on health of employees [ Sec 36(1) (ib) ]
4. Bonus or Commission to employees [ Sec 36 (1) (ii )
5. Interest on Borrowed Capital [ Sec 36 (1) (iii ) ]
6. Discount on Zero Coupon Bond [ Sec 36(1) (iiia) ]
7. Employer’s Contribution to Recognised PF & Superannuation Fund [ Sec 36(1)(iv)]
8. Employer’s Contribution to Notified Pension Scheme (NPS) [ Sec 36(1)(iva)]
9. Provision for bad & doubtful debts relating to rural branches of scheduled
commercial Bank. [ Sec 36(1)(viia) ]
10. Transfer to Special Reserve [ Sec 36 (1) (viii) ]
11. Family Planning Expenditure [ Sec 36(1) (ix) ]
12. Revenue Expenditure incurred by entities establised under any Central, State or
Provincial Act. [ Sec 36 (1) (xii ) ]
13. Banking Cash Transaction Tax & Securities Transaction Tax.
14. Contribution to Credit Guarantee Trust Fund [ Sec 36(1) (xiv) ]
15. Commodities transaction tax [ Sec 36(1) (xvi) ]
16. Advertisement Expenses [ Sec 37 (2B) ]
8. Income from Business & Profession
-: General Deduction U/s 37 (1)
Sec 37(1) is a residuary section. In order to claim deduction under this section, the
following condition should be satisfied :-
• The expenditure should be other than covered u/s 30 to 36.
• It should not be in the nature of Capital Expenditure.
• It should not be Personal Expenditure of the Assessee.
• It should have been incurred in the previous year.
• It should be in respect of business carried on by the assessee.
• It should have been spent wholly & exclusively for the purpose of business.
• It should not have been incurred for any purpose which is an offence or is
prohibited by any law.
9. Depreciation Chart
(Important Block of Assets )
Block of Asset Asset Rate of Depre
(%)
1) Building Residential Building 5
Factory Building, Office Building, Godown,
Stock yard, borewell, well, Wall compound,
Temple, road etc
10
Temporary Erections 100
2) Furniture Office Furniture & Appliances 10
3) Plant &
Machinery
Machinery, Car, Two Wheeler, Mobile 15
Computer, laptop and software,
books ( other than covered under 100% )
60
Books used by Professionals, Air Pollution
Control Equipment
100
4) Intangible
Assets
Patents, Copyrights, Trademarks, know-how 25
10. Depreciation : Key Points
Depreciation is available whether or not the assessee has claimed
deduction in books of account.
If a part of the assets is used for business purpose and part is used
for personal purpose ( e.g. Resi-cum-office ) ,depreciation should be
allowed only for the portion for which the asset is used for business
purpose.
Usage during the previous year is important :
a) if asset was acquired during any Preceding Previous Years (PPY)
and put to use in current P.Y. ( even for 1 day ), it is eligible for full
depreciation.
b) Further, asset acquired during the PY ( Current year) and usage :
i) No usage - No Depreciation.
ii) Used for more than 180 days – full normal depreciation.
iii) Used for less than 180 days – 50% of normal depreciation.
11. Depreciation : Key Points....
Block is formed for Common Asset with common rate of depreciation.
And accordingly, depreciation is calculated based on Block Concept and
not on individual asset.
Any expenditure incurred till date , asset is put to use is to be capitalised
i.e. Added to the Cost of Assets.
Depreciation is calculated only as per WDV method.
SLM method is not allowed. ( except in case of Power Units ,where
prescribed rate on actual cost of asset, and NOT block value of assets )
In case of Company Assessee, depreciation is recorded as per Company
Law, in such case, depreciation as per Books is added back while
depreciation as per Income Tax Act is allowed, while computing the
income of such company.
Whether asset is eligible for depreciation or not, it depends on nature of
asset and purpose of holding asset.
Land is never to be depreciated.
12. Amount Not Deductible [ Sec 40 ]
Sec 40 (a) (i) { TDS Compliance related }
No deduction is allowed in respect of interest, royalty, fees for technical service or
other sum payable to :
a) Any person outside India OR
b) In India to a Non-resident (not being Company or Foreign Company) on
which TDS under chapter XVII B has not been deducted or paid.
Sec 40 (a) (ia)
No deduction is allowed in respect of payment to resident towards interest,
commission, brokrage, fees for professional service or technical service, amount
payable to Contractor or sub contractor, rent or royalty in which provisions of TDS
under chapter XVII-B has not been complied with.
13. Amount Not Deductible [ Sec 40 ]...
Sec 40 (b ) { Related to Partnership Firm }
According to Scheme of assessee of Firms, Salary, Bonus, commission or
remuneration to partners of firms is allowable as deduction in the hands of the
firm, as under :-
* Remuneration to Partners :
Maximum Permissible limit
* Interest on Capital to Partners :
Conditions to be satisfied :
i) Rate of interest should not exceed 12% p.a. Simple interset.
ii) Payment of interest on capital should be authorised by partnership deed.
iii) Payment of int should be pertained to the period after partnership Deed.
Book Profit Limit
On the First Rs.300000 of Book
profit or in case of LOSS
Rs.150000 or 90% of Book
profit whichever is more
On the balance of Book Profit 60% of Book Profit.
14. Amount Not Deductible [ Sec 40 ]...
Sec 40 A (2 ) : Excessive or Unreasonable Payments to Relatives/Associates
Any Expenditure in respect of which payments have been or is made to a relative
or associate concern, so much of the expenditure as is concerned to be excessive
or unreasonable shall be disallowed by the Income Tax Officer.
Sec 40 A (3) : Payment in excess of Rs.20000/- in cash.
As per Income Tax Act,1961, any expenditure incurred in respect of which
payment is made in a sum exceeding Rs.20000/- in CASH, shall not be allowed as
deduction.
Explanation : In case payment is made to same party on one day and the total of
payment in a day crosses Rs.20000 , then this section is attracted.
( Note : In case of payment is made to plying , hiring or leasing goods carrier the
limit of payment is increased to Rs.35000 )