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Income Tax - 1. Disallowance of expenditure; u/s 40(a)(i) of and section 40(a)(ia), if Tax not deducted / not deposited till the due date of filing of return; a. Payment to Non-resident ;100% expenses disallowed b. Payment to resident ;30% expenses disallowed However, if tax is deducted or deposited in subsequent year, the expenditure so disallowed s...
Read MoreIncome Tax - Under the Income tax Act, 1961 Profit or gain from Business or profession is considered income and such income is chargeable to tax. The expenses incurred in relation to business can be deducted from the revenue from Business or profession. However, there is certain restriction on such deduction of expenses....
Read MoreIncome Tax - Section 40(a)(ia) of Income Tax Act, 1961 deals with non compliance of provision of TDS where payment is made to a Resident. 30% cent of any sum payable to a resident on account of interest, commission or brokerage, Rent, Royalty, fees for professional services or, fees fir technical services payable to a resident, or amounts payable to a...
Read MoreIncome Tax - The provisions of Section 40(a)(ia) of the Act were brought on Statute by Finance Act 2004, w.e.f. 01.04.2005, i.e the same is applicable for assessment year 2005-06 and subsequent assessment years....
Read MoreIncome Tax - In Recent past we noticed that department has taken late payment of TDS very seriously and in addition to imposing Interest and Penalty for Late Payment, they also start initiating Criminal Prosecution against those responsible for Deduction and Payment of TDS....
Read MoreIncome Tax - Section 40(a)(ia) is amended via Finance (No. 2) Act, 2014 to restrict the amount of disallowance for non-deduction of tax to 30% of expenditure. The proviso is also amended to the effect that 30% of such sum shall be allowed as a deduction in computing the income of the previous year in which tax has been paid....
Read MoreIncome Tax - The existing provisions of section 40(a)(ia) of Income-tax Act provide for the disallowance of expenditure like interest, commission, brokerage, professional fees, etc. if tax on such expenditure was not deducted, or after deduction was not paid during the previous year....
Read MoreM/s Knight Frank (India) (P) Ltd. Vs ACIT (ITAT Mumbai) - Services rendered by foreign concern for introducing a client did not make-available any technical knowledge, experience, skill, know-how or processes to assessee, therefore, related payment did not fall within the realm of "Fees for included services" as envisaged in Article 12 of the Indo-US, DTAA...
Read MoreManne Hareesh Vs ITO (ITAT Hyderabad) - Manne Hareesh Vs ITO (ITAT Hyderabad) During the course of scrutiny assessment proceedings, it was observed by the Ld. AO that the assessee has debited in his P & L Account an amount of Rs. 2,40,000 towards Accounting Charges. On query, it was explained by the assessee that the outstanding amoun...
Read MoreSai Pushpa Sharada Alliance Vs ITO (ITAT Pune) - Second proviso to section 40(a)(ia) is retrospective in nature and in such circumstances, if payee has paid tax to government account then payer cannot be held liable for non-deduction of TDS....
Read MoreCIT Vs M/s. Sri Parameswari Spinning Mills Private Limited (Madras High Court) - Whether the Tribunal is correct in not confirming the disallowance under Section 40(a)(ia) made by the Assessing Officer when the assessee did not comply with requirements of Sub-Section 7 of Section 194C read with Rule 31A?....
Read MorePCIT Vs Make My Trip India Pvt. Ltd. (Delhi High Court) - Services provided by the payment gateway is such that the charges collected by it has to be necessarily treated as fees and not as a commission. The payment in fact is made by one principal to another and it is only being facilitated by the payment gateway by providing a service....
Read MoreCircular No. 3/2015-Income Tax - (12/02/2015) - Circular No. 3/2015 Section 40(a)(i) of the Act stipulates that in computing the income chargeable under the head "Profits or gains of business or profession", any interest, royalty, fees for technical services or other sum chargeable under this Act either payable in India to a non-resident (not bei...
Read MoreInstruction No. 02/2014 - (26/02/2014) - Sub: Deduction of tax at source under Section 195 read with Sections 201 of the Income-tax Act, 1961 relating to payment made to a non-resident-reg. Section 195 of the Income-tax Act (hereafter referred to as 'the Act') provides that any person, responsible for paying to a non-resident not being ...
Read MoreCircular No. 10/DV/2013-Income Tax - (16/12/2013) - Circular No. 10/DV/2013-Income Tax It has been brought to the notice of the Board that there are conflicting interpretations by judicial authorities regarding the applicability of the provisions of section 40(a)(ia) of the Income-tax Act,...
Read MoreM/s Knight Frank (India) (P) Ltd. Vs ACIT (ITAT Mumbai) -
Manne Hareesh Vs ITO (ITAT Hyderabad) -
Sai Pushpa Sharada Alliance Vs ITO (ITAT Pune) -
CIT Vs M/s. Sri Parameswari Spinning Mills Private Limited (Madras High Court) -
PCIT Vs Make My Trip India Pvt. Ltd. (Delhi High Court) -
DCIT Vs Amol Dicalite Ltd. (ITAT Ahmedabad) -
Pr. CIT Vs Komal Amin Exports Pvt Ltd (Gujarat High Court) -
Sunil Kumar Vs ITO (ITAT Delhi) -
CIT Vs Infosys Technologies Ltd. (Karnataka High Court) -
