F.A.Q on Indian Income Tax Laws F.A.Q on Indian Income Tax Laws The blog is regarding Indian Income Tax Laws.The format is FAQ.Readers can also ask question Articles
Is capital gain exempt if LTCG on sale of land is used for buying flat in
2010-10-28 03:58:00 Exemption u/s 54F states that exemption from tax on Long Term Capital Gains on sale of asset other than house is allowed if the net consideration ( Sale s consideration less exependiture on selling the asset) should be invested in residential house.So, it is not the LTCG which should be invested , but the net sale consideration. Pleaase read For Exemption u/s 54F , Net Sales Consideration Should Be Invested or Used and Not The Capital Gains !Is capital gain exempt if LTCG on sale of land is used for buying flat in joint name ? is a post from: India Income Tax Made Simple More About: Buying , Land
Simple TDS rate chart effective from 01/07/2010
2010-10-28 03:58:00 TDS & TCS rates keeps changing. Therefore, for the benefit of readers , rates effective from 1st july 2010 is given below Related Posts:Simple TDS Chart For FY 2009-10Income Tax Rates For FY 2009-10 (Asst Year 2010-11 )Income Tax Rates For FY 2010-11 (Asst Yr 2011-12)Individual & HUF Tax Rate as per Direct Tax Code ...Simple TDS rate chart effective from 01/07/2010 is a post from: India Income Tax Made Simple
Explanation to Section 73 is no more from 01/04/2012!
2010-10-28 03:58:00 Direct Tax Code 2010 has good news for companies Section 73 of the I T Act is about setting of losses of speculative business. Explanation to section 73 was inserted vide Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1977?. The said insertion was on account of Wanchoo Committee Report. Explanation.?Where any part of the business of ...Explanation to Section 73 is no more from 01/04/2012! is a post from: India Income Tax Made Simple
8 businesses which exempt you from maintaining and audit of accounts !
2010-10-28 03:58:00 The scheme of presumptive taxation is also continuing under Direct Tax Code 2010. Schedule 14 of the Direct Tax code contains eight business for which you can just pay tax at specified rates . The benefit attached to such presumptive tax scheme is that there is no obligation to either maintain books of accounts or getting your accounts audited . Here is the scheme:8 businesses which exempt you from maintaining and audit of accounts ! is a post from: India Income Tax Made Simple More About: Audit
How to compute tax in case you get taxable PF accumulated balance?
2010-10-28 03:58:00 Where the accumulated balance due to an employee participating in a recognised provident fund is included in his total income owing to the provi-sions of rule 8 not being applicable, the [Assessing] Officer shall calculate the total of the various sums of [tax] which would have been payable by the emp-loyee in respect of his total income for each of the years concerned if the fund had not been a recognised provident fund, and the amount by which such total exceeds the total of all sums paid by or on behalf How to compute tax in case you get taxable PF accumulated balance? is a post from: India Income Tax Made Simple More About: Case , Balance
Is tax free schlarship in foreign country taxable in India ?
2010-10-28 03:58:00 Please note that if you are non resident in the year in which you earned tax free scholarship in foreign country, the receipt can not be taxable. So, compute yourself if the year in which you got the scholarship.Is tax free schlarship in foreign country taxable in India ? is a post from: India Income Tax Made Simple More About: Country , Free , Foreign
How Direct Tax Code restricts Non Resident Indians? stay in India ?
2010-10-28 03:58:00 # Do not stay for more than 60 days in a year in India if in previuos four years , he was in India for more than 365 days. If he was not, he can stay in India , safely upto 182 days. # Also please go through the Double Taxation Avoidance Agreement signed between India and your country and find that what are the income which are taxed only in your country. For example , salary income earned in USA of a resident of USA is to be taxed in USA only even if he also becomes resident of Indi under I T Act.How Direct Tax Code restricts Non Resident Indians ’ stay in India ? is a post from: India Income Tax Made Simple
When can income of a non resident exempt even if he becomes resident in Ind
2010-10-28 03:58:00 Any income accruing to an individual outside India, in a financial year from a source other than a business controlled in or a profession set up in India, if the individual? (a) has been a non-resident in India in nine out of ten financial years preceding that financial year; or (b) has during the seven financial years preceding that financial year been in India for less than seven hundred and thirty daysWhen can income of a non resident exempt even if he becomes resident in India ? is a post from: India Income Tax Made Simple
Exemption u/s 10(10C) available for RBI employees opting Exit Option Scheme
2010-10-28 03:58:00 Venkat Rao, Behrampur asked “I want to know whether an employee who has retired voluntarily under “Exit Option Scheme” of S.B.I in the year 2006 is eligible to avail exemption upto Rs. 5 lakh of the ex-gratia amount he received u/s 10(10C) of the I.T Act ? If yes, kindly answer the same with latest ...Exemption u/s 10(10C) available for RBI employees opting Exit Option Scheme” should also be for S.B.I ! is a post from: India Income Tax Made Simple More About: Employees
Due date for filing return and getting tax audit extended to 15th October 2
2010-10-28 03:58:00 Read the order by CBDT for extending the last date of filing return and getting the accounts audited to 15/10/2010. F.No. 225/72/2010-ITA.II Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes Dated : September 27, 2010 Order under Section 119 of the Income Tax Act, 1961 On consideration of the ...Due date for filing return and getting tax audit extended to 15th October 2010 is a post from: India Income Tax Made Simple More About: Audit , Return
No Deprecaiation On Stock Exhange Memebership Card Rules Mumbai High Court!
2009-09-13 14:20:00 Whether Stock Exchange Card is an asset for the purpose of Depreciation was always a matter of interpretation differently by assessee and income tax department.While the Department had all along treated memebrship card of stock exchange as not an asset for depreciation claim , the assessee claimed otherwise. Till now various benches of Tribunal have given verdict in favour of assessee and allowed depreciation claim on cost of memebrship of stock exchange. Some of these rulings were in follwowing case laws: Techno Shares & Stock Ltd vs ITO [2006]101 ITR 349 Peninsular Capital Market vs ACIT [2008] 19 SOT 421 R.M Valippan vs ACIT [2006] 103 ITD 63 (CH) However, now the Bombay High Court has given verdict overruling many Tribunals judgement including in Techno Shares , regarding allwance of depreciation on memebrship card.The issue before,Court was The ITAT has held that the Bombay Stock Exchange Membership Card (hereinafter referred to as the 'BSE card') acquired by a... More About: Mumbai , Rules
Highest Ever Cost Inflation Index Notified For FY 2009-10!
2009-09-13 07:23:00 Highest ever Cost Inflation Index notified by Central Govt. The cost inflation index is used when you compute the long term capital gains on sale of a capital asset. Therefore, higher CII means, less taxable lng term gains. Read the notification below NOTIFICATION NO : 67/2009, Dated: September 9, 2009 In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes, number S.O.709(E), dated the 20th August, 1998, namely :- In the said notification, in the Table, after serial number 28 and the entries relating thereto, the following serial number and entries shall be inserted, namely:- ?29 2009-10 632? F.No.142/13/ 2009-TPL (Vijay Kumar Jaiswal) Under Secretary (TPL-IV) Complete list of Cost Inflation Index since 1981 is as under:
Can You Deposit Andhra Pradesh Professional Tax in Orissa?
2009-09-09 03:45:00 We are deducting Professional Tax from the Salary of our employees at Hyderabad Branch .Can we deposit the same in the local Professional Tax Authority in Bhubaneswar.If yes. then no problem.But if no, there should be different rates and procedures for this formality.Please let me know.Brahmananda Mohanty ,Bhubneswar Indian states collect revenue through this source ,however , Uttar Pradesh , Uttaranchal, Jharkhand and Arunachal Pradesh are the only exceptions and have not levied professional tax. Municipal bodies in Goa , Haryana, Himachal Pradesh , Kerala , Rajasthan, Bihar, Punjab and Tamil Nadu are empowered their to collect professional tax while Jammu & Kashmir , Maharashtra, Madhya Pradesh and Andhra Pradesh impose this tax themselves. The original ceiling on the professional tax, as prescribed in the Constitution passed by the Constituent Assembly, was Rs 250 a year. It was raised to Rs 2,500 a year in 1988 and since then both the 11th and 12th Finance Commission ha... More About: Orissa
Can You Claim Exemption u/s 54 & 54EC Simultaneously ?
2009-09-06 17:10:00 I have sold a residential house in April' 09 on which the long term capital gain is working out to be Rs.20 lacs.Also, I purchased a residential house in March'09 (I do not have any other residential property of any kind) for Rs.12Lacs.Can I invest Rs.8 Lacs in NHAI Capital gain bonds (under sec54ec) to get exemption of tax payment to full extent.The query can be summarised as follows: Can I take advantage of both CAPITAL GAIN BONDS and RESIDENTIAL HOUSE in minimizing my long term capital gain liability or is any one of the above options that I need to choose from?A.P.GUPTA , Pune Section 54 of the I T Act is providing exemption from taxation on the amount of long term capital gains arising out of sale of residential house if amount of gains are applied with stipulated time period in buying/constructing another residential house.Section 54EC provides exemption from taxation on the amount of long term capital gains arising out of sale of any kind of capital a...
Pay Income Tax For Buying Property Below Stamp Duty!
2009-09-05 12:27:00 The Clause 26 of the Finance Bill 2009 contains provision to be inserted under Clause (vii) under subsection 2 of section 56 to provide that an Individual or HUF receiving any immovable property or any property either without consideration or without adequate consideration from any person other than relative or on occasion of the marriage of the individual or under a will or by way of inheritance or in contemplation of death of the payer or donor from any local authority as defined in Explanation to clause (20) of section 10; orFrom any fund or foundation or university or other educational institution or hospital or other medical institution or any trust or institution referred in section 10(23C) From any trust or institution registered under section 12AA It means that if you buy any property from any developer after 1/ 10/2009 and the value of the property is less than value taken for charging stamp duty o... More About: Buying , Property , Income , Stamp , Budget
Whether Incentive Bonus Earned By Development Officer Salary or Income From
2009-09-05 12:19:00 Incentive bonus is Salary and actualy expenditure incurred by Development officer and later reimbursed by LIC under Incentive Bonus Scheme 1997 and Reimbursement Scheme 1997 are not be regarded as taxable salary . This is the view of CBDT which was asked Kerala High Court in CIT,Kottayam vs Jhon Varghese in its interim order asked CBDT decide -Whether the incentive bonus paid by LIC to Development Officer s would be assessable under the head ?Salary? or whether it is income from other sources on which 30 % deduction claimed by the Development Officer towards estimated expenditure to earn the income would be allowable. The Board decided as under ?The Board , after examining these two Schemes of LIC of India , has decided that ? the ?incentive bonus? would be taxable as ?salary? in view of the employer ?employee relationship and only such reimbursements that are actual reimbursement of the expenditure incurred would be treated as ?exempt? . Reimbursement of expenditure w... More About: Income
Claim of Exemption for Right to Buy Flat Is Valid
2009-09-05 12:18:00 I sold a piece of land in April 2004 with LTCG of Rs 1600000/. At the cost of 1800000/ got the right of purchased OF FLAT endorsed in my favour by the person who originally booked the flat with builder in APR05 .Original allottee has paid to the builder rs 1500000/ as 90% of the cost which was automatically adjusted against the cost of flat to me by the builder.The flat was jointly purchased with my wife the entire sum was paid by me to original purchaser rs 1800000/in April 2005.The last instalment of Rs 82000/ was paid to the builder in June2005 and possession obtained in the same month. Is my claim of exemption from Capital Gain correct? Jamil Ahmed , Lucknow Section 54F is a relief provision under which it is provided that if the net sale consideration is used for buying house/flat within two years or in construction of a house within three years, the capital gain on the sale of an asset (other than a house), is exempted from tax.Courts have given judgment to state ...
Is Payment to Detective Agency Subject to TDS?
2009-09-05 12:16:00 Our company paid some amount to detective agency, Is it Liable to deduct TDS, If Liable at what rate under which section. Praveen Kumar Makam ,Hyderabad The detective agency work may be a professional work , however, this is not specified profession under the I T Act. Professional services means services rendered by a person in the course of carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AA or of this section. Therefore, the work assigned to a detective agency shall come within the purview of section 194C for deduction of tax on contract. The rate of tax is 2.06 % of the amount of payment. More About: Agency , Payment , Detective
Can Buying Agriculture Land Get You Tax Exemption on LTCG?
2009-09-05 06:54:00 I am planning to buy a agricultural land ( in rural area), My question is may I get tax rebate on long term capital gain if I use this capital gain in purchasing agricultural land.Prashant Sangale , Pune Answer to your question is Yes and No. No, because the tax exemption or rebate is not allowed for buying agriculture land Yes , because there is one provision under section 54B of I T Act which is about capital gain on transfer of land used for agricultural purposes not to be charged in certain cases.The said provision is as under 54B. (1)] Subject to the provisions of sub-section (2), where the capital gain arises from the transfer of a capital asset being land which, in the two years immediately preceding the date on which the transfer took place, was being used by the assessee or a parent of his for agricultural purposes hereinafter referred to as the original asset), and the assessee has, within a period of two years after that date, purchased any other land... More About: Buying , Agriculture , Land
Can I.T.O Seek Information From Registrar of Companies u/s 131 or 133?
2009-09-05 06:50:00 Income Tax officers most frequently harass the Registrar of Companies (ROC) calling for copies of balance sheets of companies by using powers under section 131/133 of the Income Tax Act 1956. But all balance sheets of companies, once filed with ROC, goes into public domain (except profit and loss account of private limited companies). Is it lawful for I-T officers to thereaten ROC with section 131 or 133 calling for information which are already available in public domain? D. Bandopadhyay ,Kolkata Yes, the income tax officers have the power to call for information or documents from almost all the persons and categories or class of persons for the purpose of the enquiry or investigation under I T Act. However, section 131 and 133 are for different occasion and also having different powers embedded in. Section 131 gives very wide powers to A.O and all the powers vested in a Court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit. The excerpts of sect... More About: Information , Seek
When is Pension Received From UK Taxable in India?
2009-09-05 06:47:00 A senior citizen uncle is getting pension from UK in respect of contribution made by him during his employment there. He is resident in India & pension is received thru SBI. Till 2007-08, he had shown this as part of his income and return was filed with the SBI ward.Now, he saw article wherein it was stated that as per DTAA with UK, pensions are taxable only in that state. No tax has been deducted/paid in UK because of the amount is less than the personal allowance (i.e. exemption limit for old persons there).If this income is not taxable in India then his total income is below the taxable limit. Should he file his return? If yes, where will this amount be shown? Bharati Saxena . New Delhi First of all , one should understand that in case of Resident of India, his global income is taxable . Section 5 of I.T. Act is about total income of a person taxable under I T Act. Read 5. (1) ?the total income of any previous year of a person who is a resident includes all income fr... More About: Pension
Indira Vikas Patra Is Not A Capital Asset!
2009-08-02 07:00:00 In decision delivered dated 3 April 2009 ,Kerala High Court in case of Dr R. V.Patel vs CIT decided that Indira Vikas Patra is not a capital asset , therefore, maturity proceeds paid by post office is not consideration for transfer of capital asset.As such there can not be capital gains . Read the excerpts The specific contention raised by the assessee is that IVP is a capital asset and therefore interest accrued is profit assessable as capital gains. The Tribunal rejected the claim by holding that IVP is nothing but a deposit with the Post Office which entitles die assessee to a specific rate of interest on compoundable basis and assessee can encash the deposit only for the maturity value which is pre-determined. The assessee has relied on several Courts' decisions for the proposition that IVP is a capital asset. IVP is admittedly a deposit scheme framed by the Government of India for making deposits in the Post Offices. Purchase of IVP amounts to depositing a specific a... More About: Capital , Asset , Capital Gain
No Service Tax Liability on Remuneration or Commission Paid to Directors of
2009-08-02 05:44:00 There was controversy regarding - (i) applicability of service tax under ?Business Auxiliary service? on commission paid to Managing Director / Directors (whole time, or Independent) by the company, (ii) applicability of service tax on Independent Directors who are part of the Board of Directors under ?Management Consultant service?. CBEC now issued circular to clarify that there is no service tax liability in case of payments of remuneration to directors of companies whether whole time or part time. Read the excerpts below: Circular No. 115/09/2009- ST, dated 31-7-2009 2. Both the matters have been examined by the Board and the clarifications are as under, - (i) Some Companies make payments to Managing Director/Directors (Whole-time or Independent) , terming the same as ?Commission s?. The said amount paid by a company to their Managing Director/Directors (Whole-time or Independent) even if termed as commission, is not the ?commission? that is within the scope of bu... More About: Service , Paid
Can One Claim Deduction of Interest u/s 24 on Loan Even After Sale of the
2009-07-29 04:38:00 I had taken a home loan [Single Applicant i.e. Me] from HDFC in May 2005 for a flat whose construction was start in year 2005. I had received the allotment letter in June 2005. I had received the offer for possession in July 2008. I'll be taking a formal possession in august 2009. Registration is likely to be done in year July, 2010 after the builder gets the completion certificate from Govt Authority. Already some families are staying in the apartment complex. The loan was completely paid in May 2008 and I already have No Dues Certificate from HDFC. Loan Amount: 15,00,000. (15 Lacs) Net total of amount paid to HDFC starting from May 2005 to May 2009: 21 Lacs (rounded to the nearest Lac figure) That means I have paid principle amount of Rs 15 Lacs and interest of Rs 6 Lacs. Interest amount in four financial years from April 2005 to March 2009 never exceeded the limit of 1.5 Lacs per annum for home loan benefit in income tax. I have not claimed IT benefit of home loan ... More About: Sale
Should Interest on Tax Saving Term Deposit Be Shown on Receipt or Accrual B
2009-07-26 11:01:00 I am a salaried employee. I have made a 5 year tax-saving FD for Rs.30000 and a 3 year FD for Rs.10000 in the financial year 2008-09. I am not any income other than salary and interest. I have following two questions: 1) In respect of FD of 3 years, can I pay tax on interest income in the 3rd year (i.e. cash basis) instead of paying it every year on interest accrued ? 2) In respect of tax-saving FD of 5 yrs, can it be taxed like NSC i.e. interest earned be treated as being reinvested and eligible as deduction u/s 80C ? If not, can this also be taxed on cash basis in the year of receipt of interest income? Please help...Sumit Kumar The income of interest can be shown on the basis of cash ( receipt ) or mercantile i.e due basis. But once you selected a particular system of accounting , you can not change . Therefore, it is perfectly alright if for you to pay the tax on the interest on FD for 3 years on maturity only. But if you follow that rule, you can not choose ... More About: Interest , Saving , Term
New TDS Procedure Kept In Abeyance by CBDT!
2009-06-30 17:10:00 No.402/92/2006-MC (14 of 2009) Government of India / Ministry of Finance Department of Revenue Central Board of Direct Taxes *** New Delhi dated 30th June 2009 PRESS RELEASE The Central Board of Direct Taxes have further decided that the Notification No.31 of 2009 dated 25.3.2009 amending or substituting Rules 30, 31, 31A and 31AA of the Income Tax Rules, 1962 shall be kept in abeyance for the time being.Taxpayers filing their income tax returns for assessment year (AY) 2009-10, or any other earlier AY, may continue to file their returns without mentioning the Unique Transaction Number (UTN) as required under the said Notification. The filing of such returns shall be treated as valid and in compliance to the requirements under section 139 of the Income Tax Act, 1961. Further, the date from which the Notification No. 31 / 2009 shall become applicable on tax deducted at source (TDS) or tax collected at source (TCS) and deposited during the current financi...
Filing Information About Remittance of Foreign Exchange A Must Now!
2009-06-30 04:35:00 CBDT has issued Circular No. 04/2009 dated 29/06/2009 by which procedure to file information regarding foreign exchange remittance electronically is now made must . The gist of the circular is given below: Section 195 of the Income-tax Act, 1961 mandates deduction of income tax from payments made or credit given to non-residents at the rates in force. The Reserve Bank of India has also mandated that except in the case of certain personal remittances which have been specifically exempted, no remittance shall be made to a non-resident unless a no objection certificate has been obtained from the Income Tax Department. This was modified to allow such remittances without insisting on a no objection certificate from the Income Tax Department, if the person making the remittance furnishes an undertaking (addressed to the Assessing Officer) accompanied by a certificate from an Accountant in a specified format. The certificate and undertaking are to be submitted (in duplicate) to ... More About: Information , Exchange , Foreign Exchange , Foreign
Can Nominee of Deceased Prevent TDS on Deposit in Senior Citizen Savings
2009-06-08 19:52:00 Yes, the good news is that now nominee of the deceased can file 15G or 15 H Form to the banks where the deceased had made deposits in Senior Citizen Savings Scheme 2004. Please read the circular of RBI to banks in this regardRBI/2008-09/493 Ref. No. DGBA.CDD.H-10566/15.15.001/2008-09 June 5, 2009 The General Manager Government Accounts / Business DepartmentState Bank of India / State Bank of Indore/State Bank of PatialaState Bank of Bikaner & Jaipur /State Bank of TravancoreState Bank of Hyderabad / State Bank of Mysore /Allahabad BankBank of Baroda / Bank of India / Bank of MaharashtraCanara Bank/Central Bank of India /Corporation Bank Dena Bank / Indian BankIndian Overseas Bank / Punjab National Bank / Syndicate Bank / UCO BankUnion Bank of India / United Bank of India / ICICI Bank Ltd / Vijaya Bank/IDBI Ltd Dear Sir, Senior Citizens Savings Scheme, 2004 ? Acceptance of Form 15-G from the Nominees As you are aware, investors under Senior Citizens Savings Sch... More About: Deceased
Now Derivative Trading in Foreign Exchange Is Business Activity!
2009-06-01 19:46:00 In India , there are two main commodity exchanges ?Multi Commodity Exchange of India Ltd (MCX ) and National Commodity & Derivative Exchange Ltd NCDEX in India where one can trade in derivative contract of different items ?from pulse to metal. Now there is another exchange MCX Stock Exchange Ltd in which one can trade derivatives of foreign exchange.The transactions in derivative segments are regarded as ?Speculative transaction? which has a great bearing on the taxation of one?s income as the loss out of speculation is not allowed to be adjusted with any other income . Speculation loss is allowed to be adjusted with only speculation gain.For example , a person having income of 10 lakhs from share dealing and Rs 10 lakhs loss out of commodity derivatives transaction , has actually did not earn any penny. Still, as per the provision of I T Act , he will have to pay tax on share dealing income of Rs 10 lakhs and the loss of Rs 10 lakhs will have to be carried forward as unadjus... More About: Business , Trading , Foreign Exchange , Foreign
The Dilemma of Tax at Source (TDS) & Exchange Rates!
More articles from this author:2009-05-31 12:58:00 A foreign vendor provided technical assistance to M/s. ABC co. with a payment terms as follows. $30,000 USD and tax is to be borne by the foreign vendor at applicable rate. M/s. ABC Co. made a liability in its books on 31.03.2008 and deducted TDS u/s 195 of IT Act at applicable rate and deposited the same to IT department.(Dollar rate as on 31.03.08 was Rs.40 per USD, say) Now, actual payment is to be made by M/s. ABC Co. to that foreign vendor(i.e. $30,000 USD) . Dollar rate at the time of payment is Rs.46 per USD, say. Question is: 1. Whether additional TDS is to be deducted on the amount increased due to exchange. Sujit Talukdar, Kolkata The fact is that section 195 prescribes that payer will deduct the income tax at the rates specified either at the time of credit of payment or at the time of payment whichever is earlier. M/s ABC Co did the right thing by deducting the tax on 31/3/2008 when it credited the forign vendor in its books. Only point to see is whether the exchange ra... More About: Source , Exchange , Dilemma , Rates 1, 2, 3, 4, 5, 6, 7 |
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