Beruflich Dokumente
Kultur Dokumente
income of a person on the basis that it has accrued or arisen or is deemed to have accrued or
arisen to him shall not again be so included on the basis that it is received or deemed to be
received by him in What is CBDT Central Board for Direct Taxes is the important institution in
carrying out administration and planning of income tax. It issues circulars and clarifications
regarding difficulties arising in Income Tax.
There are 3 types of residents that we will explain here for your understanding.
BUT IN CASE
The period of stay would be 182 days instead of 60 days in the previous year as per above point #(2)
BUT IN CASE
The period of stay would be 182 days instead of 60 days as per point#(2)
AND
3. If you are a resident in India has been at least 2 out of 10 years preceding to previous year;
4. If your stay in India has been 730 days or more out of 7 years preceding to previous year.
If you satisfy any one from (1) & (2) and satisfy both (3) & (4) then your status will be Resident
and Ordinarily Resident (ROR);
If you satisfy any one from (1) & (2) and satisfy one or none from (3) & (4) then your status will
be Resident but Not Ordinarily Resident (RNOR).
S.N .
O
1
2
3
4
5
6
7
8
INCOMES
Resident
and
ordinary
resident
(ROR)
Income received in India whether accrued in Yes
India or outside India.
Income deemed to be received India whetherYes
accrued in India or outside India.
Income accruing or arising in India whether Yes
received in India or outside India.
Income deemed to accrue or arise in India
Yes
whether received in India or outside India.
Income received and accrued outside India Yes
from a business controlled in or a profession
setup in India.
Income received and accrued outside India Yes
or a profession set up outside India from a
business controlled from outside India or a
profession set up outside India.
Income (not being from a business
Yes
/profession) received and
accrued outsideIndia.
Income earned and received outside India in No
the year preceding to the relevant previous
year and remitted to India in the relevant
previous year.
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
Normal Depreciation
Additional Depreciation
Block of assets means group of assets having same rate of depreciation and falling under a specific
class of assets. These assets are grouped together and depreciation is provided on the block as
illustrated in the coming points.
Computation of WDV of the block:WDV at the beginning of year: XXXX
Add:-Actual cost incurred on assets (Acquired during the year): XXXXX
Less:-Money Payable during the year (Which is sold): xxxxx
Depreciation at the prescribed %: XXXXX
Closing WDV:XXX
Depreciation is provided for whole year except when, Asset is Acquired and put to use during the year
for less than 180 days during the year , in this case the depreciation is limited to 50% of total
depreciation, but if same asset acquired during earlier years but put to use this year and usage period
less than 180 days during current year then depreciation for whole year.When all the assets of block
are sold, in such a case no depreciation is allowed and short term capital/gain or loss would be
attracted as per provisions of section 50 discussed in capital gains.PART OF BLOCK SOLD BUT
MONEY PAYABLE EXCEEDS WDV:- In such a case no depreciation is allowed and also short term
capital gain provision as per section 50 is attracted.
Take a look after Depreciation section in PGBP (Profits and Gains from Business or Profession):
ADDITIONAL DEPRECIATION :
Additional depreciation is only to manufacturing concerns. Additional depreciation on certain assets:
20% or 10% (for <180days). Only factory machinery and equipments.
Assets on which additional depreciation is not allowed:
assessee.
Others: 5% of cost of project
Before commencement of business: For setting up any Business
After setting up of business: Extension or setting up of new undertaking.List of specified
expenditure including documents like feasibility report, project report, market survey, engineering
services, legal charges , Drafting and printing of MOA and AOA, registration fees, issue of shares
and debentures, underwriting commission, expenditure on prospectus have to be submitted.
Deduction for amalgamation/ demerger and VRS
Quantum: -1/5 of expenditure in each successive year but it is to be noted that VRS is allowed only
when amount is actually paid which is not a case Amalgamation demerger.
Other Deductions in PGBP (Profits and Gains from Business or Profession)
OTHER DEDUCTIONS (section 36)
Income from sale recognized. If any amount has been subsequently recovered in respect of
above then it shall be taxable under business head even if business is discontinued.
Provision for bad and doubtful debts: NO deduction in general but deduction available to
Scheduled or non-scheduled cooperative banks Foreign banks or State Finance Corporation
Incurred during PY .
Wholly or exclusively for business or profession:
Remuneration to Employees
Payment of penalty/ damages of compensatory nature. Penalties paid to custom, sales tax
authorities, excise authorities, Income tax authorities not allowed.
Some Expenses not deductible in PGBP (Profits and Gains from Business or Profession) are briefly
discussed below:
EXPENSES NOT DEDUCTIBLE:
Section 40A (2):
AO may disallow payment made to relative if in his opinion it is excess of the market value.
Section 40A (3):
Any payment exceeding Rs. 20000 or Rs.35000( in case of payment to a transporter engaged in
plying,hiring, transporting etc.) in a day by a assessee will be allowed as a deduction only when
payment is made by a account payee cheque.
EXCEPTIONS:
This section is not applicable when
Payment to employees not exceeding Rs.50,000 Payment in a village not served by a bank
Book Adjustment
Payment for purchase of agriculture produce, Poultry farm produce, Dairy items, cottage
industry(working without aid of power.
SALARY AND INTEREST ON CAPITAL TO PARTNERS (SECTION 40(b):
Interest, salary:
Deduction as per provisions in partnership deed.
Interest on capital:
Rate specified in partnership deed or 12% whichever is lower.
Salary:
Allowed only to working partners.It should be lower of amount specified in partnership deed or
following amount:-On First Rs.300,000 Of Book 90% of book profits or Rs.150,000 Profits whichever
is more
On Balance Of Book Profits 60% of book profits
DEDUCTION UNDER SECTION 43B:Section 43 B mentions some cases where deduction will be allowed only when amount is
actually paid by the assessee before due date of filing return.In all these cases deduction of the
expense is allowed on paid basis.However when expenditure is disallowed in one year, it will be
allowed as a deduction in the previous year in which such expenses are actually paid.
1.
Any sum payable by way of tax, cess, duty or fee under any law and by whatever name
called.
2.
3.
4.
Any sum payable as interest on loan borrowed from public financial institution or state
financial institution.
5.
Any sum payable as interest on loan taken from scheduled bank including co-operative
societies.
6.
Any profit or gain on transfer of a capital asset effected in the previous year (1)
Receipt of insurance amount for capital assets in the year of receipt damage due to
flood, riot, accident fire and action by enemy
(1A)
Any gain on transfer on capital assets to firm or AOP (not Company &Co-operative
Any gain on distribution of capital assets on dissolution of firm or AOP at fair market
price (4)
Difference on repurchasing of units sec. 80CCB (2) in the year in which repurchase
took place (6)
Company purchasing its own shares -Sec. 46A*Purchase of its own shares by company , taxed in the hands of the shareholders
3. Transactions not transfer- Sec 47
HUF partitions
Transfer from holding to its 100% Indian subsidiary company except stock in trade.
Any Capital Assets of art, book etc. to university/museum/ art gallery etc. as notified.
Any transfer of membership to stock exchange in exchange of shares prior to 31st Dec.
1998.
Reverse mortgage.
Provision 1.- Calculation of Capital gain for non-resident -conversion of transaction value into
foreign currency & then conversion of capital gain in foreign currency into Indian
Provision 2.- Capital gain other than non resident- indexed cost of acquisition and indexed of
Any improvement will be adopted , Except bond or debenture (other than indexed bond by
govt.)
Provision3. In case of transfer share/debenture/warrants under ESOP, market value at the time
of transfer to be considered
Provision 4 . No deduction for STT.
Expl. Cost of acquisition- index of the year of first year of assets hold or year beginning April
1981 whichever is later.
Index cost of acquisition/improvement same proportion as it bears to the index of the year of sale
and first year of assets held.
6. cost of certain acquisition Sec 49
(1)Assets acquired due to
HUF partition
Any undertaking if held not more than 36 month to be considered short term capital
assets
(2)-where assessee claims stamp value exceeds FMV and such value not disputed in any
appeal the assessing officer may refer valuation to the valuation officer.
(3)- if valuation officer value higher, then stamp duty valuation shall be taken as a full value
If consideration not ascertainable FMV shall be taken as full value. Sec. 50D
Advance money received on any previous occasion to be deducted from the computation of
cost of acquisition. Sec. 51
Capital Gain Tax -EXEMPTIONS
Profit on sale of property used for residence Sec.54 (1)
-Transfer of long term building or lands appurtenant thereto and being residential house and
income chargeable under the head income from house property & assesse being individual or
HUF has purchased within the a period of one year before or two year after the date of transfer
or constructed within a period of 3 year one residential house in India , then Charge excess of
capital gain over the cost of purchase / construction and for sale of new assets within 3 years,
cost will be taken nil.
-No tax if capital gain equal or less than cost of purchase / constructed & cost of new assets to
be reduced by capital gain for sale within 3 years for calculation of capital gain.
(2) -the amount of capital gain not appropriated for purchase before one year or not utilized
Before filling the return the amount shall be deposited in accounts with such banks as specified
before due date of filing return and utilized as per scheme.
-The amount so deposited will be considered a cost of new assets together with other cost of
purchase / consideration if utilized.
If amount so deposited not utilized within the period specified (2/3 yrs) amount not utilized will
be taxable after expiring of 3yrs. and amount can be withdrawn the amount so deposited
Land used for agriculture purpose Sec. 54B
Transfer of land being used for agriculture purpose in two year immediately preceding by
assesses / his parents / HUF and purchased any other land being used for agriculture
purpose within two years, exemption in the same manner as laid dawn u/s 54.
Compulsory acquisition of land and building.- Sec. 54D-Transfer under compulsory acquisition of land or building or any right in L&B forming part of
any industrial undertaking and was being used for such undertaking in two years immediately
preceding and within 3 yrs purchased / constructed any other L&B for shifting or setting up
another industrial undertaking capital gain to be taxed as provided u/s 54.
Capital gain invested in certain bonds Sec. 54EC
Capital gain if invested within a period of 6 months with lock in period of 3 years in
specified bonds (infrastructure bonds) upto Rs 50 Lakhs in total
(1) (a)Any capital gain on long term assets not being residential house of individual/HUF and
purchased before one year or after two year or constructed within 3 years one residential house
in India ,the capital gain will be taxed as under.
-If the cost of new assets is more than the net consideration of original assets no tax
-If the cost of new assets is less than the net consideration than tax same proportion of capital
gain as the cost of new assets bear to the net consideration of original assets.
(b) Income from such residential house (other than one owned on the date of
original assets) is chargeable under head income from house property.
transfer of
(2) if assesee purchase within 2 years or constructed within 3 years of original transfer a
residential house other than new assets whose income chargeable under income from house
property, exempt capital gain to be taxed in the year of purchased or construction.
(3) if new asset transferred within 3 years of it purchases/constructed capital gain exempted to
be
(4) procedure of bank deposited apply for net consideration.
Shifting of industrial undertaking from urban area Sec. 54G
Capital gain on capital assets being machinery or plant or building or land or any right in
L&B of industrial undertaking situated in an urban and transfer effected due to such
shifting to any area other than urban and assessee within one year before or 3 years
after of transfer purchased / acquired / constructed P&M , Land , building and incurred
other expenses specified for purpose of such shifting, than capital gain to be treated as
under
If capital gain in excess of the above cost, difference will be treated as capital gain.
-If capital gain is equal or less than the above cost capital gain nil.
-The lock in period of 3 years to be
-Procedure of bank deposit of capital gain not utilized before filling of return apply in this case
also Shifting industrial undertaking from urban area to any special economic zone Sec. 54 GA(provision similar to 54G)
Sec. 54GB Capital gain of long term residential property include land & building by
individual /HUF and utilises net consideration in equity share of the eligible company before due
date of Filing return u/s 139(1) AND The company utilises this amount for new asset within one
year of subscription then Tax on capital gain will be proportionate if cost of new assets is lower
than net consideration or nil if cost of new assets is equal or higher than net consideration.
Eligible Company:
It is a new formed Indian company after 1st April of relevant previous year It is a
manufacturing company.
it is a SME
*Company may follow the procedure of bank deposit if not purchases new assets before due
date of filing the return.
In case of transfer by compulsory acquisition under any law, period of investment to be
reckoned from the date of the receipt of compensation. Sec. 54H
Cost of improvement:- Sec . 55 (1)
NIL
-NIL
-NIL
In case of purchase
In other case
purchase price
NIL
NIL
actual cost
In case renouncement
with nil price
With cost
-NIL
-Actual cost price
property acquired before 1st April 1981 actual cost of acquisition or FMV as on 1st
In case of share conversion etc. cost with reference to the cost of original
shares.
where cost of previous owner can not be ascertained FMV.
For ascertaining FMV , A.O. may refer to valuation officer if- Sec. 55A-
A.O. is of opinion that value claimed is at variance with the registered valuer valuation.
A.O. is of opinion that FMV exceed any certain %age or value an prescribed or it is
necessary to do so.
Equity shares in a company, or units of business trust & sale subject to STT , tax @
15%.
In case of resident individual & HUF , total Income (excluding STCG) is below taxable
limit. STCG will be reduced to that extent .
Deduction under chapter VI-A & rebate u/s 88 from income excluding STCG.
20 % for resident individual / HUF , domestic company and any other resident person
In case of resident individual & HUF benefit of deduction for income below taxable limit
available.
In case of listed securities ( other than a unit ) or Zero coupon bonds , LTCG tax limited
to 10 % Without index benefit
*Deduction of chapter VI-A and rebate u/s 88 from income excluding LTCG
LTCG on equity share in a company or unit of equity oriented funds and such transaction
subject to STT, fully exempted Sec. 10(38)
-Such gain to be considered for MAT (115JB).
- See more at: http://taxguru.in/income-tax/capital-gain-tax-income-tax-provisionslatest.html#sthash.fiPEZWVA.dpuf