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Income Tax : Discover simplified taxation scheme under Section 44AD of Income Tax Act. Learn eligibility criteria, exemptions, and key insights...
Income Tax : Details of Form 13 & section 194C(6) of Income Tax Act 1961. Learn importance of these for transporters & how to avoid excess TDS ...
Income Tax : Explore Form 26A for TDS relief. Learn about legal provisions, benefits, and procedures for non-deduction or short deduction cases...
Income Tax : Discover the debate surrounding cash payments exceeding Rs. 10,000 to electricity boards in Income Tax. Learn about Rule 6DD, gove...
Income 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% ...
Income Tax : The existing provisions of section 40(a)(ia) of Income-tax Act provide for the disallowance of expenditure like interest, commissi...
Income Tax : Learn how ITAT Bangalore ruled in favor of Herbalife India on technical service payments, clarifying FTS under India-USA DTAA. Det...
Income Tax : ITAT Mumbai invalidates income tax assessment for a merged entity, emphasizing the legal principle against actions on non-existent...
Income Tax : Assessing Officer has nowhere determined as to how Section 194C is applicable on payments made by assessee. Unless a charge is bei...
Income Tax : Issuance Of Letters Of Comfort/Support will Construe As International Transaction U/s 92B considering corporate guarantee issued b...
Income Tax : Expenditure incurred by assessee should be disallowed to the extent that expenditure which had been incurred for evaluation of bus...
Income Tax : Circular No. 3/2015 Section 40(a)(i) of the Act stipulates that in computing the income chargeable under the head "Profits or gain...
Income Tax : 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...
Income Tax : Circular No. 10/DV/2013-Income Tax It has been brought to the notice of the Board that there are conflicting interpretations by j...
Vinod K Nevatia (2011-TIOL-65-ITAT-MUM) CIT (A) has rightly deleted the addition applying the decision of Kotak Securities Private Limited and Angel Broking observing that transaction fees paid to the stock exchange could not be said to be fees paid in consideration of stock exchange rendering any technical services to the assessee. Therefore, provisions of section 9(1)(vii) and section 40(a)(ia) are not applicable.
Business disallowance under section 40(a)(ia) – Payment to resident without deduction of tax-Amendment in section 40(a)(ia) by the Finance Act, 2010-Nature of amendment-Amendment made by the Finance Act, 2010 in section 40(a)(ia) is of clarificatory nature and hence would apply retrospectively from 1-4-2005.
During the year, the assessee paid Rs.2,83,43,188 to various contractor. The AO noticed that the payment of TDS was not made within the statutory period in respect of payments of the contractors and therefore, it required to be disallowed u/s 40(a)(ia). The assessee claimed before the AO that the entire payment was made in the month of March 2005 and tax was deducted in the month of March 2005 only Therefore, the tax deposited on 21.09.2005 is within the statut
The assessee made payments to sub-contractors during the previous year and though s. 194C requires TDS at the stage of payment/credit, did not do so. The tax was, however, deducted on 31st March and paid over in Sept before the due date for filing the return. The AO took the view that while the payment made to the sub-contractor for March was allowable, the payments for the earlier months was disallowable u/s 40(a)(ia).
The Interest Tax Act, 1974 specifically includes discounting charges in the definition of interest, however interest defined under ITA does not include discounting charges. Wherever the legislature was conscious of the fact that even the discount of bills of exchange is to be included within the definition of interest, the same was basically so provided for, hence the omission of these words in the definition provided under the ITA, enumerates the intention of the legislator to keep the same out of the ambit of „interest? under the ITA. The same rationale is also laid down in the Circular no. 652 issued by Central Board of Direct Taxes in relation to section 1 94A of ITA.
As per existing provision, in case of TDS deducted as per Chapter XVII-B but the payment of the same not deposited with the Government within due date of section 139(1) for the last month of the previous year and within the last day of the financial year for the first eleven months, results in the disallowance of such expenses, the same not being an amount deductible as an expense.
As per existing provisions of Section 40(a)(ia) of the Act, certain payments made to residents were not allowable as deduction where tax was not deducted or after deduction, was not paid before end of the year. In case where the tax was deducted in the last month of the year, then no disallowance u/s. 40(a)(ia) would be made, so long as the tax was deducted during the year and paid before the due date of filing the return of income.
“Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in subsection (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.”.
Finance Minister Pranab Mukherjee took the first step towards implementation of the Direct Taxes Code (DTC) on Friday. While retaining the basic exemption limits for all income levels (as in the DTC), he increased the other slabs. For instance, while the basic exemption limit for individuals has been retained at Rs 1.6 lakh, the 10 per cent rate will now be applicable for the Rs 1.6 lakh-Rs 5 lakh bracket. Earlier, the 10 per cent rate was applicable for income of Rs 1.6-Rs 3 lakh. The hike in the slab means that the taxpayer is going to save Rs 20,600 for incomes up to Rs 5 lakh.
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.
