"January, 2018" Archive - Page 40

Residential Status Of Companies: Concept Of Place Of Effective Management (“Poem”)

Prior to the introduction of the concept of POEM, a Company was said to be resident in India in any previous year if it was an Indian company or during that year, the control and management of its affairs was situated wholly in India. The Finance Act, 2015 amended the above provision so as to provide that a Company would be resident in In...

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Posted Under: Income Tax |

Allow Benefit of presumptive taxation U/s. 44AD to LLP: ICAI

Section 44AD relating to presumptive taxation applies only to businesses run by residents Individual, HUF and Firms excluding LLP. Tax on presumptive basis should be extended to all assessees, including a LLP. Only section 44AD excludes LLP, for which there appears to be no cogent reason. Otherwise under the Act, a LLP and a Firm are tre...

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Posted Under: Income Tax |

Clarify Depreciation on capital asset acquired vide Cash payment: ICAI

system through a bank account, exceeds ten thousand rupees, such expenditure shall be ignored for the purposes of determination of actual cost of such asset. Similar amendment is made in section 35AD. Further, cash payment limit under section 40A(3) is also reduced to Rs.10,000. Thus, the Finance Act 2017 disallowed even the capital expen...

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Posted Under: Income Tax |

Dilution of tax incentive U/s. 35AD by insertion of Section 73A

The underlying idea behind allowing the investment linked incentive granted under Section 35AD of the Act is to enable the taxpayer to set-off the business losses incurred by this write-off against the taxable profits from their existing businesses and reduce their tax liability in the year of deduction and thereby to provide part of the ...

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Posted Under: Income Tax |

Address Concerns in Computation of capital gain in case of JDA: ICAI

The Finance Act 2017 inserted sub-section (5A) in the existing section 45 to provide that the capital gains arising to an individual or Hindu undivided family under a Joint Development Agreement shall be taxed in the year in which completion certificate for the whole or part of the project is received...

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Posted Under: Income Tax |

Section 44AD Presumptive Income – amend definition of eligible business

According to the new provisions, in case of an eligible assessee engaged in eligible business, income shall be deemed equal to a sum @ 8% of the turnover or higher income as per books. Section 44AD is applicable to any business except the business of plying...

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Posted Under: Income Tax |

Section 44AD Allow deduction of interest and remuneration paid to partners by firm: ICAI

The amendment made via the Finance Act, 2016 to disallow deduction of expenditure in the nature of salary, remuneration, interest paid to the partner as per section 40(b) out of presumptive income. This amendment would hit small and medium firms...

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Posted Under: Income Tax |

Clarify provisions of section 44AD: ICAI

(4) Where an eligible assessee declares profit for any previous year in accordance with the provisions of this section and he declares profit for any of the five assessment years relevant to the previous year succeeding such previous year not in accordance with the provisions of sub-section (1)...

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Posted Under: Income Tax |

Exclude agricultural land from the ambit of Section 43CA: ICAI

This section provides for adoption of stamp duty value in case of transfer of land or building or both held as stock-in-trade. Several issues have cropped up due to implementation of this section in its present form and suggestions thereof are as under...

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Posted Under: Income Tax |

Allow Capitalization of foreign exchange loss for domestically acquired asset: ICAI

Section 43A was inserted in the Income-tax Act, 1961 by Finance (No. 2) Act 1967, which permitted Capitalization of Foreign Exchange Fluctuation Loss in the borrowing used for acquisition of assets outside India....

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Posted Under: Income Tax |