income tax act 1961

Reforms Needed To Expand Tax Net

Finance - Tax-to-GDP ratio represents the size of a country’s tax kitty relative to its GDP. It indicates the size of the government’s tax revenue expressed as a percentage of the GDP. A higher tax to GDP ratio means that the government is able to cast its fiscal net wide. It reduces a government’s dependence on borrowings [&helli...

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Tax provisions relating to receipt and forfeiture of earnest money

Finance - Introduction The provisions of section 51 of the Income-tax Act deal with advance money received for transfer of a capital asset. As per the old provisions where any capital asset was on any previous occasion the subject of negotiations for its transfer, any advance or other money received and retained by the assessee in respect […...

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Constitution – When Does A Tax Liability Arise? Analysis of Various Ratios Lay Down by Apex Court

Finance - When Does A Tax Liability Accrue? Article 265 of the Constitution of India provides that no tax shall be levied or collected except by the authority of law. Such tax does not depend upon an assessment to be made by the assessing officer. Section 4 of the Indian Income Tax Act, 1961, which is the charging section, charges tax on income at ...

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Set-off & carry-forward of losses under Income-Tax Act, 1961

Finance - The Income-Tax Act, 1961, allows set-off and carry-forward of the loss incurred by any assessee subject to some restrictions Apart from other information, the new income-tax forms, ITR-1 to ITR-8, notified by the Central government seeks details on set-off of losses. Now almost every assessee has to give this information. Therefore, one h...

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Whether amended section 115BBE of Income Tax Act applicable retrospectively or prospectively ?

Finance - Present article demonstrate the section 115BBE of Income Tax Act, 1961 which amended from time to time and the relevant case laws of the applicability of amendment prospectively. ...

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वित्त वर्ष 2018-19 के लिए आयकर के स्वैच्छिक अनुपालन पर ई-अभियान

Finance - वित्त वर्ष 2018-19 के लिए आयकर के स्वैच्छिक अनुपालन पर ई-अभियान शुरू करने के लिए सीबीडीटी 20 जुलाई, 2020 से आयकर विभाग की नई पहल 20 जुलाई, 2020 से ...

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Draft Guidance Note on Report U/s. 92E of Income Tax Act, 1961

Finance - Following is the Exposure Draft of the Guidance Note on Report under section 92E of the Income-tax Act, 1961 (Transfer Pricing), issued by the Committee on International Taxation of ICAI for comments. Changes have been made to the extent of amendments made by the Finance Act, 2017....

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Register for online Crash course on GST & Income Tax

Finance - Now-a-days, all the practitioners are tied up with so many tax compliances in every month and hence they are not able to allocate major time on learning new things. Hence we TaxGuru Edu, an educational wing of Taxguru now bring you the Crash Courses on GST and Income Tax. The motive will be to give maximum coverage in optimum time utilisa...

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CBDT release Time-series and income-distribution data

Finance - Central Board of Direct Taxes has further released Time-series data updated up to F.Y. 2018-19 and income-distribution data for A.Y. 2018-19 (F.Y. 2017-18). ...

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Extend Tax Audit due date to 31 October 2018: BJP Economic Cell (Rajasthan)

Finance - BJP economic Cell (Rajasthan), State Co-Convener CA R P Vijay & CA Sachin Kumar Jain have requested Honble FM to extend due date for submission of Tax Audit Reports and Income Tax Returns from 30 September, 2018 to 31 October, 2018 in the case of corporate assesses and where tax audit is applicable so that […]...

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PIL in Kerala HC for 3 Month extension of Tax Audit Due Date

Plywood and Allied Products Dealers Association Of India Vs. UOI & Ors (Kerala High Court) - Plywood and Allied Products Dealers Association of India Vs. UOI & Ors (Kerala High Court) The Petitioner is an association of plywood and allied product dealers and the 2nd petitioner is a member of that  association, they have filing  Public Interest Litgation praying for a general Order...

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Interest u/s 234A despite due date extension: HC issue Notice to CBDT

Lucknow CA Tax Practitioners Association VS. UOI (Allahabad High Court) - Lucknow CA Tax Practitioners Association VS. UOI (Allahabad High Court) As far as prayer no.1 of the petitioner-association for issuance of a mandamus to the respondents to extend the “Due Date” of filing of Income Tax Return of Tax Audit Cases from 15.10.2018 to at least up to 31.10.201...

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Tax Audit Due Date Extension: FTAPs withdraws writ filed in Delhi HC

Foundation of Tax and Accounting Professionals Vs. CBDT (Delhi High Court) - Appellant Foundation of Tax and Accounting Professionals (FTAPs) has withdrawn the writ in view of Further extension of Tax Audit Due Date by CBDT to 31.10.2018. ...

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Consider Extending Tax Audit Due Date to 31.12.2018: Gauhati HC

Tax Bar Association And Anr. Vs. Union of India And Anr. (Gauhati High Court) - Gauhati High Court has instructed CBDT to Consider Representation filed by Tax Bar Association on or before 25.10.2018 by which they requested to extend the Tax Audit Due Date to 31.12.2018. ...

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Tax Audit Due Date Extension: Gujarat HC disposes writ as not pressed

All Gujarat federation of tax Consultants Vs Union of India (Gujarat High Court) - All Gujarat Federation of Tax Consultants Vs Union of India (Gujarat High Court) 11.10.2018–  It is an agreed position that subsequent to filing of these petitions, CBDT has granted extension for filing returns and accompanying documents. In that view of the matter, learned counsel for the pe...

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Fall in collection of direct taxes is on expected lines: CBDT

NA - (07/06/2020) - There are reports in a certain section of media that the growth of direct taxes collection for the FY 2019-20 has fallen drastically and buoyancy of the direct tax collection as compared to the GDP growth has reached negative. These reports do not portray the correct picture regarding the growth of ...

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Section 9A Remuneration to be paid to an eligible Fund Manager

Notification No. 29/2020-Income Tax [G.S.R. 315(E)] - (27/05/2020) - CBDT has vide notification dated 27th may 2020 amended Guidelines for application of section 9A. Section 9A  contains provisions related to Certain activities not to constitute business connection in India. CBDT has also notified Following new forms and Annexures- -FORM No. 3CEJA- Report from an ac...

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Section 10(46) exemption to Cochin Special Economic Zone Authority

Notification No. 27/2020-Income Tax [S.O. 1659(E)] - (27/05/2020) - Notification No. 27/2020- Central Government notifies ‘Cochin Special Economic Zone Authority’, Kochi (PAN AAAGC0659L), a authority constituted by the Government of India, in respect of the specified income arising to that board under section 10(46) of Income Tax Act, 1961. MINISTRY OF FINANCE (...

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FM Releases Ordinance on relaxation Provided on 24th March 2020

(Release ID: 1609734) - (31/03/2020) - Finance Ministry issues Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020 today In order to give effect to the announcements made by the Union Finance Minister vide Press Release dated 24.03.2020, regarding several relief measures relating to statutory and regulatory complia...

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CBDT notifies Revised Form No. 10DA – Section 80JJAA Report

Notification No. 104/2019-Income Tax [G.S.R. 937(E)] - (18/12/2019) - CBDT has notified revised FORM NO. 10DA (Report under section 80JJAA of the Income-tax Act, 1961) under rule 19AB of Income Tax Rules vide Notification No. 104/2019 dated 18th December, 2019....

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Recent Posts in "income tax act 1961"

Reforms Needed To Expand Tax Net

Tax-to-GDP ratio represents the size of a country’s tax kitty relative to its GDP. It indicates the size of the government’s tax revenue expressed as a percentage of the GDP. A higher tax to GDP ratio means that the government is able to cast its fiscal net wide. It reduces a government’s dependence on borrowings [&helli...

Read More
Posted Under: Income Tax |

Tax provisions relating to receipt and forfeiture of earnest money

Introduction The provisions of section 51 of the Income-tax Act deal with advance money received for transfer of a capital asset. As per the old provisions where any capital asset was on any previous occasion the subject of negotiations for its transfer, any advance or other money received and retained by the assessee in respect […...

Read More
Posted Under: Income Tax |

Constitution – When Does A Tax Liability Arise? Analysis of Various Ratios Lay Down by Apex Court

When Does A Tax Liability Accrue? Article 265 of the Constitution of India provides that no tax shall be levied or collected except by the authority of law. Such tax does not depend upon an assessment to be made by the assessing officer. Section 4 of the Indian Income Tax Act, 1961, which is the charging section, charges tax on income at ...

Read More
Posted Under: Income Tax |

Set-off & carry-forward of losses under Income-Tax Act, 1961

The Income-Tax Act, 1961, allows set-off and carry-forward of the loss incurred by any assessee subject to some restrictions Apart from other information, the new income-tax forms, ITR-1 to ITR-8, notified by the Central government seeks details on set-off of losses. Now almost every assessee has to give this information. Therefore, one h...

Read More
Posted Under: Income Tax |

Whether amended section 115BBE of Income Tax Act applicable retrospectively or prospectively ?

Present article demonstrate the section 115BBE of Income Tax Act, 1961 which amended from time to time and the relevant case laws of the applicability of amendment prospectively. ...

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Long-term capital gains tax exemption on Investment U/s. 54EC

Section 54EC of the Income Tax Act, 1961 provides exemption from long-term capital gains tax provided an assessee invests within six months after the sale of his property in long-term specified assets. The Finance Act 2007 limited such exemption to Rs 50 lakh in any financial year. Some overzealous tax assessing officers seem to interpret...

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Abuse of power by taxmen and remedies

Pavan Ved  Abuse of power by taxmen is common both in direct and indirect taxes. Many times the taxpayers feel they have no remedy and they have to suffer such harassment. This article is an attempt to make taxpayers aware as to the remedies which they have against such taxmen who abuse their powers. Read […]...

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Section 40A(3) of Income Tax Act, 1961 read with Rule 6DD

Article explains Section 40A(3) of Income Tax Act, 1961 read with Rule 6DD i.e. Cash Payment in excess of Rs. 10,000 to single person in a single day, Exception to Section 40A(3) of Income Tax Act, 1961 (Rule 6DD), Clauses omitted by the Income-tax (3rd Amendment) Rules, 2020 and Important Notes related to Section 40A(3) […]...

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Analysis of Section 172 applicable on Profit of foreign Shipping Company

Section 172 of income tax act is a special provision which deals with levy and recovery tax from foreign shipping companies. It specifies that every foreign shipping company has to declare a certain percentage of profit on its freight income and pay tax on it....

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How to fill ITR 3 from Tax Audit Report – An Analysis

In case of assessee who has to obtained and upload Audit Report under section 44AB of the Income Tax Act, 1961 has to file income Tax Return for the same previous year. As there are some information or data which are same in Income Tax Return and in Tax Audit Report. So assessee has to […]...

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Posted Under: Income Tax |

Received Gift – Whether it is Taxable or Not?

Under the provisions of Section 56(2)(vi) certain gifts are liable to income tax as income from other sources. However, this provision is applicable only for individuals and Hindu Undivided Families (HUFs). Thus, if gift is received by any Trust or A.O.P., then it is not liable to income tax as "income from other sources". The provision o...

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Income Tax Updates- September, 2020

DOMESTIC TAX CASE LAWS SUPREME COURT 1. Where High Court upheld Tribunal’s order setting aside addition made by AO under section 153A on ground that said addition was not based on any incriminating material found during course of search, SLP filed against said order was to be dismissed due to low tax effect. [Pr. CIT […]...

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AIR – meaning, provisions, Applicability & FAQs

Annual Information Return (AIR) – meaning, provisions, Applicability & FAQs Annual Information Return (AIR) of ‘high value financial transactions’ is required to be furnished under section 285BA of the Income-tax Act, 1961 by ‘specified persons’ in respect of ‘specified transactions’ registere...

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Transactions not Considered as Transfer under Income Tax Act,1961

Dear Friends , as we are aware that any profits arising from transfer of a Capital Assets effected in the previous year, shall be chargeable to income tax under the head ‘Capital Gain,’ and shall be deemed to be the income of the previous year in which the transfer took place unless such capital gain […]...

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Revision In Important Income-Tax Returns Deadlines

In the wake of the continuous disruption caused by the COVID-19 pandemic and as a result of various requests received from the businessmen and assesses under the Income-Tax Act 1961. The Central Board of Direct Taxes (CBDT) on September 30 prolonged the last date for filing belated and revised ITRs for Assessment Year 2019-20 from Se...

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Whether Education Cess allowable as deduction under Income Tax?

Exordium The issue that whether or not ‘Education Cess’ is allowable as deduction under the Income-tax Act, 1961 (‘the Act’) is debatable for a while now. Of late this issue has been decided in favour of the taxpayers by many Tribunals and High Courts. This article succinctly discusses this issue through provisions of the Act [&he...

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Posted Under: Income Tax |

Section 196 versus Section 194O of Income Tax Act, 1961

Whether by virtue of the provisions of Section 196, can TDS under Section 194O be avoided in case the seller or the service provider is the Government....

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Liability of Legal Representative under Income Tax Act, 1961

Dear friends, as we are aware that under normal circumstances, tax is levied upon the person, who has earned income. The income tax considers him/her as assessee and income tax will be levied on all income he has earned in previous year. There are three types of assessees such as Resident and Ordinary Resident, Resident […]...

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e-Campaign for High Value Transactions in Compliance Portal

Introduction The income-tax department has started to reach out to certain taxpayers who have either not filed income-tax returns (ITR) or failed to accurately report high-value transactions in their returns. Objective of the e-campaign is to facilitate taxpayers to validate their financial transaction information against information avai...

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Compilation of CBDT Notifications & Circulars of August 2020

Compilation of Notifications & Circulars issued by CBDT in the month of August 2020 Direct Tax Updates 1. Non-applicability of Section 206AA to non-residents to whom Section 139A does not apply on account of  Rule 114AAB: Section 206AA provides that any person receiving payment (deductee), on which TDS is required to be deducted shal...

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Use of section 144A of the Income Tax Act 1961

Assessments under Income Tax Act 1961 are made U/S 143, 144, 147, 153. The criteria’s for selection of cases for scrutiny has been increased. While making the assessment the assessing officer has to appreciate all the facts properly. If there is any misinterpretation of facts it may result in injustice to the assessee. Some times when t...

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Special Audit – Section 142(2A) – Income Tax Act, 1961

A) The rationale behind the introduction of the provision of Special Audit √ Assessee is liable to get its account audited u/s 44AB only when the situation stated in Section 44AB triggered which are mostly based on the Turnover/Gross receipt Criteria. √ The main objective of the introduction of Section 44AB is to determine whether [&h...

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Section 44AA Compulsory maintenance of books of accounts

Article explains Maintenance of accounts by certain persons carrying on profession, Maintenance of accounts by certain persons carrying on business, Limits for Individual & HUF for maintenance of accounts in case of business or profession, Maintenance of accounts by other person, Penalty for contravention of provisions related to Main...

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Taxability of Education Cess & Issues relating to its computation

Till AY 2018-19, Education Cess & Secondary & Higher Education Cess was an additional levy charged @ 2% and 1% respectively on Income Tax as increased by applicable rate of surcharge. However, vide Finance Act 2018, w.e.f AY 2019-20 the aforesaid cess has been replaced with Health & Education Cess and the rate has been [&helli...

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Is Income Tax is tax on income or tax on turnover ????

Most of taxpayers under Income tax act, 1961 afraid to file appeal against additions made by assessing officers due to fear of departmental procedures/penalty/bar/attachment in  the thought process of normal taxpayers. however, most of cases  seen  where department made disallowance of expenditure even if payment made through  electro...

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When Income of Previous Year assessed in Previous Year itself

Cases where Income of a Previous Year will be assessed in the Previous Year itself under Income Tax Act, 1961. General Rule:- Income of a previous year is assessed in the assessment year following the previous year. Exception to this rule:- Cases where income of a previous year is assessed in the previous year itself:- […]...

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Keyman Insurance Policy | Practical issues | Income Tax Act

a) Whether the assignee is liable to pay tax on surrender value of Keyman Insurance Policy at the time of assignment or not ? If answer is affirmative then what is the TDS liability on the Company ? b) Whether assignee is liable to pay tax on maturity proceeds of Keyman Insurance Policy or not […]...

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Taxability of monthly financial assistance to legal heir of deceased government employee

In the light of the various judicial decisions of the higher authorities as mentioned below, it is observed that Top of Form Income received by widow of deceased person who died while in Government service) as Monthly Financial Assistance from Government is not chargeable to tax whether it is received on monthly basis or lumps […]...

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Income Tax Updates – August 2020

NEWS DIRECT TAX 1. CBDT advised banks to refund charges collected on electronic transactions carried over modes prescribed u/s 269SU. [Ref: Circular 16/2020 dated 30.08.2020] 2. CBDT notifies conditions to be satisfied by pension fund to become eligible for exemption u/s 10(23FE). [Ref: Notification No. 67/2020/ F. No. 370142/28/2020-TPL]...

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Income tax Changes and Points to take care

♦ If you are paying more than Rs.50 lakhs to any resident person for any professional / commission or contract work – You need to deduct 5% TDS irrespective of facts that expense is personal or business. For e.g. Assume you wants to construct a residential house and you hire a contractor and pays more […]...

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Types of common notices under Income Tax Act, 1961

Being a finance and tax professional, we are aware of the fear of people with respect to the Income Tax Notice, especially if they do not belong to the finance and tax field. Government laws are very strict in terms of Income Tax Return (ITR), so the assessee /person may get a notice even for […]...

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Taxpayer’s Charter – Income Tax

On 13 August 2020, between much pomp and fanfare, Prime Minister Modi announced the new Transparent Taxation platform i.e. the new way forward for the Central Board of Direct Taxes. The main idea behind the Transparent Taxation platform is ‘faceless’ assessments and faceless appeals. Further, the Prime Minister promised that the tax a...

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NRI Taxation in India under Income Tax Act, 1961

The Income Tax Act & Rules allowed to Non-Resident Individual is different from those applicable to Resident Individuals. NRI Taxation in India is a matter of concern for a large number of persons living abroad. In this article, I have talked about the definition of NRI, the income on which the tax liability arises and […]...

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Posted Under: Income Tax |

Taxability of Compensation & Interest awarded by Motor Accidents Claims

As per Income Tax Act, 1961, the definition of income do not specifically define compensation received as income. The question is whether the provisions of the Income Tax Act 1961, and more specifically, whether the compensation awarded by the Motor Accident Claims Tribunal to the victim can be classified as a  taxable income under the [...

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Tax on Income Distributed By Way of Buy-Back of Shares By Unlisted Companies- Anti Abuse Provision

Tax on Income Distributed By Way of Buy-Back of Shares By Unlisted Companies- Anti Abuse Provision Dear Friends, payment of taxes is the duty of every citizen of this country. The Governments utilises taxes paid by us into different types of economic and socio works. Non payment or avoidance of taxes shall be punishable monetarily [&helli...

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Posted Under: Income Tax |

Is Tonnage Tax Scheme Restricted only for Companies Handling Cargo?

IS TONNAGE TAX SCHEME RESTRICTED ONLY FOR COMPANIES HANDLING CARGO? It has been presumed by many that the benefit of Tonnage Tax Scheme (TTS) should only be restricted to companies with ships carrying on cargo handling activities. Since there are various other companies which are not handling cargo but are involved in moving men and [&hel...

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Chartering the rough tax-sea

A 20 point Taxpayer Charter was launched by the Prime Minister which promises to maintain the privacy and confidentiality of income taxpayers and to reduce the cost of compliance with the tax laws. The Income Tax department adopted the taxpayers’ charter w.e.f. August, 13, 2020, which mentions that it is committed to treat every t...

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Platform for Transparent Taxation- Honouring the Honest Taxpayer

Prime Minister Narendra Modi has launched the platform for ‘Transparent Taxation – Honouring the Honest’ on 13/08/2020 via Video Conferencing. In the past 6 years, India has witnessed the evolution of a new governance model in tax administration. Govt have decreased – complexity, taxes, litigation, and increased – transp...

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Restrictions on Cash Transactions under Income Tax Laws

The Income tax laws have various restrictions on payment in cash and receipt of money in cash. Some restrictions apply to those engaged in business or profession and some restrictions apply to all. It is important for all of us to understand these restrictions Restrictions on Cash Transactions under Income Tax Laws so as to […]...

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Income Tax Updates – July 2020

NEWS DIRECT TAX 1. CBDT notifies ‘Director General / Secretary, CCI’ u/s 138 for sharing of information. [Ref: Notification No. 57/2020/F. No. 225/ 98/2019-ITA-II] 2. CBDT further extends due date for filing of ITR for AY 2019-20 till 30-09-2020. [Ref: Notification No. 56/2020/ F. No. 370142/23/2020-TPL] 3. CBDT amends Forms for furni...

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Important Amendments applicable for FY 2019-20 (AY 2020-21)

Article discusses Important Amendments applicable for AY 2020-21 (PY 2019-20) which includes Changes in Rebate under section 87A, Increase in Standard Deduction for Salaried employees, Increase in Tax Audit Limit, Amendment in Section 54 Provisions, Amendment in provisions related to deduction under section 80EEA and section 80EEB, Decrea...

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Submission of Response on High Value Transactions – FAQs

FAQ for Submission of Response on High Value Transactions on Compliance Portal CBDT to launch e-campaign to ask certain taxpayers to file returns or report accurate details. The income-tax department will reach out to certain taxpayers who have either not filed income-tax returns (ITR) for AY2019-20 (relevant to FY 2018-19) or failed to a...

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23 CBDT Circulars to Reduce Litigation 

CBDT Circulars CBDT Circulars to Reduce Litigation  S.No. Section of Income Tax Act Circular No. & Date Summary of Circular 1 2(22)(e) Circular No.19/2017 [F.No.279/ Misc./140/2015/ITJ], Dated 12-6-2017 Trade advances, which are in the nature of commercial transactions, would not fall within the ambit of the word ‘advance’ in Sec...

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Retrospective Law: Global and Indian Instances

From the ancient time, retrospective law or ex post facto law has been a part of standard jurisprudence. It is neither an Indian creation, nor it is being used exclusively in India. Instances of its application to the International law as well as to the domestic laws of many countries have been cited in the article....

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Exemption – Whether all Adventures (Transactions) are Covered in Business Definition for Levy of Income Tax

Exemption – Whether all Adventures (Transactions) are Covered in Business Definition for Levy of Income Tax PRELUDE: The general rule under the Income-tax Act is that all revenue receipts are taxable unless a receipt is specifically exempt and equally well, all capital receipts are exempt from taxation unless an item falls within th...

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Changes related to Pass through Income in Income Tax Returns of AY 2020-21

Changes Related To Pass Through Income In Income Tax Returns of Assessment Year (AY) 2020-21 Pass through income-> Any income accruing or arising to, or received by, a person, being a unit holder of an investment fund, out of investments made in the investment fund, shall be chargeable to income-tax in the same manner as […]...

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Key notes on Implementation of Right Claim under Income Tax Act 1961

Key notes under Implementation of Right Claim under Income Tax Act, 1961 in respect of Association under THE CONSTITUTION OF INDIA An Assessee has not claimed and /or overlooked some deductions / exemptions in return of Income before the authority, subsequently the Assessee awarded that additional claim for deductions /exemptions could ha...

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High Value Transactions under Income Tax Act 1961

1. Introduction High Value transactions are transactions which are incurred in high denominations. From last few years income tax department is shaking hands with all the other related Govt. departments from which it can procure financial information and trace all the persons who are spending high amount but are not filing income tax retu...

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20 Recent Income Tax amendments Applicable for AY 20-21 & AY 21-22

So, let’s take a look to 20 RECENT Amendments that has changed Income Tax in a big way. Majorly applicable from AY 21-22 & SOME APPLCIABLE FROM AY 20-21. Some changes are so drastic steps that this will change the Income tax completely like option for New vs. old in personal taxation and same way new rates for Corporate....

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Taxation of Business Process Outsourcing Units in India

The provisions containing taxation of IT-enabled business process outsourcing units are not contained in the Income-tax Act, 1961 but are given in Circular No. 5/2004 dated 28.9.2004 issued by CBDT. The provisions are briefed hereunder – ♣  A non-resident entity may outsource certain services to a resident Indian entity. If there is ...

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वित्त वर्ष 2018-19 के लिए आयकर के स्वैच्छिक अनुपालन पर ई-अभियान

वित्त वर्ष 2018-19 के लिए आयकर के स्वैच्छिक अनुपालन पर ई-अभियान शुरू करने के लिए सीबीडीटी 20 जुलाई, 2020 से आयकर विभाग की नई पहल 20 जुलाई, 2020 से ...

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Posted Under: Income Tax |

Cashbacks: Whether An Invitation To Income Tax?

We often get tempted by attractive offers and cashbacks offered by various vendors when we make digital payments. Online shopping websites and some stores are offering cashbacks on use of certain credit cards or mobile wallets to pay for the goods....

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Voluntary Retirement Scheme and Tax implications

1. Overview of Voluntary Retirement Scheme. As the name suggests a voluntary retirement scheme is an option given by an organization to its current employees to take early retirement before the actual date of retirement. Unlike a compulsory layoff, this scheme is optional to employees, and decision about whether they want to continue with...

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Expenditure on Scientific Research – Income Tax Treatment

Expenditure on Scientific Research And Its’ Treatment Under Income Tax Act, 1961 Dear friends, we are going through a very turbulent phase in which we are facing unpresented threat of COVID-19 pandemic, declining pace of economy, lack of foreign reserves and new threat of India -China war position at our borders. The government has show...

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Unjust Enrichment To CBDT- 21 Examples

Concept of Unjust enrichment refers to situations in which one person is enriched at the expense of another in circumstances which the law treats as unjust. Whenever the word unjust enrichment is told by someone two names immediately crept in the mind one is highest authority of indirect tax i.e. CGST and other one is […]...

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Taxation of income from hydroponic farming

1. Introduction The Hydroponic farming is an emerging trend in Indian agricultural sector, which is far different from traditional agriculture activities carried on in the country. In this method plants are grown without using soil, by using mineral nutrient solutions in a water solvent. Further, in this method of farming plants are grown...

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Income Tax Updates – March to June 2020

NEWS DIRECT TAX 1. Employee opting for Sec. 115BAC eligible to claim exemption for tour, travel and conveyance exp. [Ref: NOTIFICATION NO. G.S.R. 415(E) [NO. 38/2020/F.NO.370142/15/2020-TPL], DATED 26-6-2020] 2. CBDT further extends various due dates for compliance under Income-tax Act. [Ref: NOTIFICATION S.O. 2033(E) [NO. 35 /2020/F. NO....

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Analysis of extension of due dates under Income Tax, GST & FTP

Extension of due dates under Income Tax, GST & FTP Recently Central Government has issued Income Tax Notification No. 35/2020 and Notification No. 48/2020-Central Tax to Notification No. 54/2020-Central Tax on 24th June 2020 which relates to extension of Due dates under GST, Law, Income Tax Law and other Laws. In Addition to that Gove...

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Evidentiary value & burden to prove under Tax Law

Legal fictions create an artificial state of affairs by a mandate of the legislature. They compel everybody concerned including the courts to believe the existence of an artificial state of facts contrary to the real state of facts. When a fiction is created by law, it is not open to anybody to plead or argue that the artificial state of ...

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Things To Do Before 30th June 2020

Because of covid pandemic, government has extended various due dates of returns and compliances in many laws. I try to sum up all extended date up to 30 June 2020 of Income Tax and GST, so that it may not create any confusion related to the due dates. I have distributed in two parts in […]...

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Posted Under: Income Tax |

Amendment in MAP Rules -A taxpayer’s tool reinvented

Mutual Agreements Procedure (MAP) is a model or mechanism available to taxpayers to resolve disputes that have arisen due to double taxation. When two countries enter into an agreement to avoid double taxation, it gives a clear pathway to the concerned authorities under MAP in those particular jurisdictions....

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Posted Under: Income Tax |

Taxability of interest earned by Resident Welfare Association

Note on Taxability of Interest Income from fixed deposits made out of corpus fund and maintenance surplus.  PRINCIPLES OF MUTUALITY   The Resident Welfare RWA’S( RWA) is primarily formed with a purpose to maintain, upkeep and provide amenities to the apartment owners/occupiers. Maintenance fee is collected every year for the purpose o...

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Posted Under: Income Tax |

Fall in collection of direct taxes is on expected lines: CBDT

NA (07/06/2020)

There are reports in a certain section of media that the growth of direct taxes collection for the FY 2019-20 has fallen drastically and buoyancy of the direct tax collection as compared to the GDP growth has reached negative. These reports do not portray the correct picture regarding the growth of direct taxes....

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Recent Changes & Issues in Income Tax & International Taxation

Article explains guidelines for Mutually Agreed Procedure (MAP), Changes in Tax Residency Rules, Changes in equalization levy, Amendments w.r.t. Dividend Distribution Tax (DDT), Applicability of S 269 SU to B2B Businesses, Deferment for Approval/ Registration of Charitable Trusts & Exempt Institutions, Reduction in TDS/TCS Rates, TDS ...

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Draft Guidance Note on Report U/s. 92E of Income Tax Act, 1961

Following is the Exposure Draft of the Guidance Note on Report under section 92E of the Income-tax Act, 1961 (Transfer Pricing), issued by the Committee on International Taxation of ICAI for comments. Changes have been made to the extent of amendments made by the Finance Act, 2017....

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Major Changes In Income Tax Law for AY 2020-21 & AY 2021-22

Article explains Major Changes In Income Tax Law for Assessment Year (AY)  2020-21/ Financial Year (FY) 2019-20  and AY 2021-22/FY 2020-21 which includes changes in Tax Rates, TDS Rates, Depreciation Rates, Widening of Scope of Form 26AS,  Changes in the provisions related to NRIs, Tax Treatment of Dividends Changed, Fresh Registration...

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Posted Under: Income Tax |

Major Income Tax changes for the month of May, 2020

There are changes /updated by Ministry of finance in certain provision and rule of income tax due to consideration  of COVID-19 which is being shared for the benefits of everyone at all in one place. 1.  The CBDT  has modified the norms for Mutual Agreement Procedures (MAP) by prescribing two years as the average time-frame for res...

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Posted Under: Income Tax |

Taxability of Indirect Transfer of Indian Assets

1. Background When a foreign Company holds shares of foreign companies which having substantial interest in Indian entities and derive their value from Indian assets. In this article we are addressing  if a company transfers its stake of Foreign entity outside India whether capital gains will be applicable on the said transaction. This A...

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Posted Under: Income Tax |

Section 9A Remuneration to be paid to an eligible Fund Manager

Notification No. 29/2020-Income Tax [G.S.R. 315(E)] (27/05/2020)

CBDT has vide notification dated 27th may 2020 amended Guidelines for application of section 9A. Section 9A  contains provisions related to Certain activities not to constitute business connection in India. CBDT has also notified Following new forms and Annexures- -FORM No. 3CEJA- Report from an accountant to be furnished for purpose of ...

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Section 10(46) exemption to Cochin Special Economic Zone Authority

Notification No. 27/2020-Income Tax [S.O. 1659(E)] (27/05/2020)

Notification No. 27/2020- Central Government notifies ‘Cochin Special Economic Zone Authority’, Kochi (PAN AAAGC0659L), a authority constituted by the Government of India, in respect of the specified income arising to that board under section 10(46) of Income Tax Act, 1961. MINISTRY OF FINANCE (Department of Revenue) (CENTRAL BOARD OF...

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Income Tax on Buyback of Shares

INTRODUCTION: The term Buy Back of shares is not a new concept to the Capital market in India. Recent, action in corporate world has witnessed large amount of buy back of shares by cash rich companies mostly in IT Sectors like TCS, Infosys and Wipro and others. In common parlance, Buy Back of shares means […]...

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Interpretation of Deeming Provisions in Income Tax Act – A Deep Dive

Deeming provisions are important part of statutes in general and Income Tax Act (‘Act’) in particular. Without deeming provisions modern tax legislation cannot think of implementing effective tax administration. Considering the recent trend, one gets amused how much legislature has got creative in imagining tax fictions to collect rev...

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Posted Under: Income Tax |

Taxability of Lump Sum or Monthly Alimony Money received at time of Divorce

The Income Tax Act, 1961 does not contain specific provisions relating to Alimony. Analogous provisions along with relevant case laws must be studied for taxation of alimony. Under circumstances where there is NO divorce; when an asset is transferred by one spouse to another, for inadequate consideration, the same shall be a gift exempt f...

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Tax Deduction/Collection Account Number (TAN)

Article discusses about Meaning/ Structure/ Relevance of TAN, Persons liable to apply for TAN, Consequences of not quoting TAN, Procedure to obtain TAN, Places from where to obtain Form 49B, Authority empowered to allot TAN, Procedure for online TAN application....

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Income Tax on Revenue From YouTube

YouTube video blogging, popularly known as vlogging has reached at the peak of its popularity by now. The trend of googling for a content has shifted to you tube search. Many budding vloggers are making money from YouTube. However most of them are not aware of the tax implications. Let’s try to explore this in […]...

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Posted Under: Income Tax |

Moving out of India Permanently- You may get taxed in Previous Year itself

Certain transactions which leads to tax being payable in the Previous Year instead in the Assessment Year  Mottu: Hello Patlu, it came to my knowledge that you are planning to relocate yourself outside India? Patlu: Hello Mottu, yes, I have got an opportunity in gulf country effective from 19-05-2020 and hence I am relocating out [&helli...

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Posted Under: Income Tax |

Section 115BBE- Bleak line between Righteousness & Injustice

Recent amendments in section 115BBE emerge from the seesaw battle between the government and the assessees who leaves no stone unturned to evade taxes and between these skirmishes the honest taxpayer is often overripen in this heat of revenge. The provisions of sec 115BBE of the Act are draconian at first glance and can give nightmares to...

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Posted Under: Income Tax |

Modes of investment or deposits | Section 11(5) | Income Tax Act

Modes of investment or deposits by a Charitable or Religious Trust or Institution as per provisions of Section 11(5) of the Income Tax Act, 1961 Surplus fund of the Charitable entities should be invested as per forms and modes prescribed under section 11(5) of Income Tax Act. Investment in shares by a charitable Trust As […]...

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Dividends – No Longer Tax Exempt? under the Income Tax Act, 1961

Section 115-O of the Act, provides that, in addition to the income tax chargeable in respect of the total income of a domestic company, any amount declared, distributed or paid by way of dividends shall be charged to additional income tax @15%* (plus applicable surcharge and health & cess)...

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CA Final Direct Tax | What is Direct Tax & Advantages

What is Direct Tax A Direct Tax wherever the impact and therefore the incidence been equivalent class is outlined as a right away Tax. The direct tax is paid directly by the organization or a person to the entity that has obligatory the payment. The tax should be paid on to the govt and can’t […]...

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Why Section 47A of Income Tax Act, 1961 introduced?

Rationale behind introduction of Section 47A of Income Tax Act, 1961 Lacuna in the law that have been plugged by introduction of Section 47A & amendment of Section 47 of the act in order to nullify the following tax planning ,– 1) Before section 47A , there was a standard law that if a holding […]...

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Agriculture Income under Income Tax

Income Tax have various contentious issues despite being one of the oldest Law of the Land. On these issues assesse and revenue used to loggerhead each other on various form of Authorities. Taxation of AGRICULTURAL INOCME is also one of such contentious issue. One of the main reason for various dispute on Agriculture Income is attribute ...

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Taxability of Foreign Shipping Business in India

Taxability of Foreign Shipping Business in India : Governed by the provisions of Section 172 and Section 44B of Income Tax Act, 1961. The provisions relating to taxability of Foreign Shipping Business have been introduced in the Income Tax Act, 1961 to govern and regulate the manner in which Foreign Shipping Businesses will be taxed [&hel...

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Cross border reimbursement – Dilemma continues

Reimbursement can be described as repayment of what has already been spent or incurred. Therefore, it should not be considered a reward or compensation for a service rendered....

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Posted Under: Income Tax |

Income Tax Compliance Handbook

This is a compliance handbook covering important compliance related provisions of Income Tax Act, 1961 and covers following topics- Tax Rates for AY 2020-21 Tax Rates for AY 2021-22 Advance Tax Tax Deducted at Source (TDS) Tax Collected at Source (TCS) Presumptive Tax Scheme Tax Audit Income from Capital Gains Income from House Property T...

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Analytical View of Section 139 of Income Tax Act 1961

SECTION 139 OF INCOME TAX ACT’1961 [AMENDED UPTO FINANCE ACT (NO.2) 2019] Ques 1: Why this post? Ans: In the approaching return filing season the aforesaid section namely ‘FILING OF RETURN’ has a great importance and that too w.r.t. amendments it contains till AY 2020-21 i.e. FY 19-20. Thus, the author has come up with […]...

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Clubbing of remuneration income of Spouse from a Concern in which other Spouse has Substantial Interest

Applicability of Clubbing Provisions on remuneration income of Spouse from a Concern in which other Spouse has Substantial Interest ‘Substantial Interest’ by an Individual – Meaning The following are the two cases where it can be said that an individual has a “substantial interest”— In the case of a company –...

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Show Cause Notices

Does Demand or Coercive Action sustain without a notice and without the personal hearing  Show cause notice means a Court order that requires a party to appear before the court and explain why a certain course of action should not be taken against it. If the party cannot convince the court or fails to appear, that course of […]...

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Test of Human Probabilities & surrounding circumstances in Income Tax

Theory of the Test of Human Probabilities and surrounding circumstances and its applicability to the provisions of Income Tax Act 1961 The purpose of this article is to provide a focus on various decisions and judgments of Tribunals and Courts on the issue of Theory of the Test of Human Probabilities and sorrounding circumstances and [&he...

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Residential Status of Companies under Income Tax Law

With effect from AY 2017-18 company would be resident in India if in any previous year: 1. It is an Indian Company (i.e. Incorporated as per Companies Act 2013 or 1956) 2. Its Place of Effective Management (POEM) is in India for a particular PY. POEM means a place where key managerial and Commercial decisions […]...

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Posted Under: Income Tax |

A Brief Note on Slump Sale

As per section 2(42C) of the Income-tax Act 1961, ‘Slump Sale’ means the transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being assigned to the individual assets and liabilities in such sales. For understanding the term ‘Slump Sale’, it is significant to delve into […]...

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Posted Under: Income Tax |

Section 194J TDS on Fees for Professional or Technical Services

The present article features the TDS provisions contained under section 194J of the Income Tax Act, 1961 relating to the TDS deduction on fees for professional or technical services. Coverage of Section 194J of the Income Tax Act Categories of the person covered under section 194J Every person, except an individual or a HUF, making payme...

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FM Releases Ordinance on relaxation Provided on 24th March 2020

(Release ID: 1609734) (31/03/2020)

Finance Ministry issues Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020 today In order to give effect to the announcements made by the Union Finance Minister vide Press Release dated 24.03.2020, regarding several relief measures relating to statutory and regulatory compliance matters across sectors in view of CO...

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Implications under section 79 of Income Tax in case of no change in beneficial ownership

Section 79 stipulates that in case of a Company, not being a company in which the public are substantially interested, shall not be allowed to carry forward and set-off the losses against the income of previous year, unless on the last day of the previous year, the shares of the company carrying not less than […]...

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Clubbing of Your Income with Income of your Spouse

There are certain occasions when the income of your spouse gets clubbed with your income. So, if you are planning to transfer any of your income or any asset to your spouse to avoid the associate tax on such income, hold on.  There are certain specified situations when the income of both the husband as […]...

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Meaning, Formation, Taxation, Membership & Partition of HUF

The Hindu Undivided Family can best be defined as a family that consists of a common ancestor and all his lineal male descendants and their wives and unmarried daughters. The Hindu Undivided Family (HUF) cannot be created by acts of any party. The only exceptions are in the case of an adoption or a marriage when a stranger may become a HU...

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TDS on Exempt Incomes (Especially Agricultural income)

It is obvious that the TDS provisions are going to be expanded day by day even in the direct Tax Code era. In the process to recover more and more tax through this mode of recovery, in many cases tax is also deducted from incomes which are expressly exempt. Many cases are wandering the corridors of various courts of law on this ground. Th...

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Taxation of Pensioners, Senior Citizen & Super Senior Citizen

Pension received from a former employer is taxable as ‘Salary’. Hence, the various deductions available on salary income, including relief u/s 89(1) for the arrears of pension received would be granted to pensioners who received their pension from, a nationalised bank and in other cases their present Drawing & Disbursing Officers. Sim...

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Importance of 31st March 2020 in our lives!

In India, the Financial Year (F.Y.) runs from 1st April to 31st March. We have to perform certain important tasks before the end of the F.Y. to plan our present and future. Although we have a full year to complete these tasks in advance but we Indians are adventure loving people and we wait for the […]...

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Posted Under: Income Tax |

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