section 43

Analysis of Cash Payments under section 40A(3) and 43(1)

Income Tax - Implication of Cash Cash payments exceeding Rs.10,000 under the provisions of Section 40A(3) & Section 43(1) of Income Tax Act, 1961.  This article mainly focuses on the concepts of, i) Cash payments made for revenue expenditures, which are covered within the provisions of Sec. 40A(3) and ii) Cash Payments that are made for acquisiti...

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F&O Turnover, Taxation, Audit & More

Income Tax - Now a day Derivative Trading i.e. trading in future and options (F&O) on stocks, currencies, and commodities has become a hot topic amongst investors. Data suggest that during last two years during pandemics the trading in shares & derivative increased substantially. Unfortunately, most people have little knowledge about taxation ...

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Disallowance of Depreciation | Section 43(1) | Cash Payment for Fixed Assets

Income Tax - Disallowance of Depreciation section 43(1)) Disallowance of Depreciation where cash payment exceeding Rs. 10,000 is made for purchase of asset (Amendment to section 43(1)) Clause (1) of section 43 defines ‘actual cost’ for the purposes of claiming depreciation. The cost in acquisition of any asset or part thereof in respect of...

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Disallowance of depreciation & capital expenditure on cash payment

Income Tax - Under the existing provisions of the Act, revenue expenditure incurred in cash exceeding certain monetary threshold is not allowable as per sub-section (3) of section 40A of the Act except in specified circumstances as referred to in Rule 6DD of the Income-tax Rules, 1962....

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Assessment of Income from Transactions in Shares and Securities as Business Income

Income Tax - Assessment of income from transaction in shares and securities under the Income-tax Act 1961 involves multiple issues. Such transactions give rise to income assessable under different heads of income e.g. business income, capital gain and income from other sources. This article is an attempt to discuss some major issues involved in assess...

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Currency derivative transactions are not speculative transaction- Section 43(5)

Vinay Prakash (HUF) Vs ACIT (ITAT Delhi) - Trading of currency derivatives are covered by definition of ‘derivatives’ and excluded from the ambits of speculative transactions defined under Section 43(5) of Income Tax Act, 1961....

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Foreign currency is not a commodity for Section 43(5) of Income Tax

ACIT Vs M/s. Lifestyle International (P) Limited (ITAT Bangalore) - ACIT Vs M/s. Lifestyle International (P) Limited (ITAT Bangalore) The brief facts in relation to the above ground is that the assessee had imported certain trade merchandise from parties located outside Payments to such foreign vendors is required to be made in future on specified dates in foreign c...

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Depreciation cannot be claimed on Enhanced Value of second hand Windmill

V.Sabitamani Vs Asst.CIT (Madras High Court) - The issue under consideration is whether the actual purchase price of a second-hand asset can be ignored by purported recourse to Explanation 3 to Section 43(1) of the Income Tax Act, 1961?...

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ITAT allows set-off of Derivative losses against Business Income

Magic Share Traders Ltd Vs ITO (ITAT Ahmedabad) - Magic Share Traders Ltd Vs ITO (ITAT Ahmedabad) The issue under consideration is whether a company dealing in ‘derivatives’ could be considered as engaged in speculative business as per Section 73 or not? In the present case, the assessee seeks set off of losses arising from derivative losses as...

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Income arising out of trading of commodities at unrecognized stock exchange amounts to speculation income

DCIT Vs. Ms. Edelweiss Capital Ltd. (ITAT Mumbai) - Ms. Edelweiss Capital Ltd. Vs DCIT (ITAT Mumbai) From the record, we found that assessee was carrying out business of commodity trading on un-recognised exchange and also business of trading in shares. Assessee has claimed set off of loss arising out of trading in shares against the income arising o...

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CBDT notifies more modes of e-payments; 6DD limit reduced to ₹ 10000

Notification No. 08/2020-Income-Tax [G.S.R. 56(E)] - (29/01/2020) - Notification No. 8/2020-Income-Tax- CBDT has notified Other electronic modes by inserting New Income TAx Rule 6ABBA. It also amended marginal heading of rule 6DD and in rule 6DD for the words ‘account payee bank draft, exceeds twenty thousand rupees’, the words, figures and letters ̵...

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CBDT notifies Ace Derivatives and Commodity Exchange Ltd.’ for trading of commodity derivative U/s. 43(5)

Notification No. 15/2014-Income Tax - (20/03/2014) - Notification No. 15/2014-Income Tax entral Government hereby notifies the Ace Derivatives and Commodity Exchange Limited, Ahmedabad as a recognised association for the purposes of clause (e) of the proviso to clause (5) of the section 43(5), with effect from the date of publication of this notificat...

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Recent Posts in "section 43"

Analysis of Cash Payments under section 40A(3) and 43(1)

Implication of Cash Cash payments exceeding Rs.10,000 under the provisions of Section 40A(3) & Section 43(1) of Income Tax Act, 1961.  This article mainly focuses on the concepts of, i) Cash payments made for revenue expenditures, which are covered within the provisions of Sec. 40A(3) and ii) Cash Payments that are made for acquisiti...

Read More
Posted Under: Income Tax |

Currency derivative transactions are not speculative transaction- Section 43(5)

Vinay Prakash (HUF) Vs ACIT (ITAT Delhi)

Trading of currency derivatives are covered by definition of ‘derivatives’ and excluded from the ambits of speculative transactions defined under Section 43(5) of Income Tax Act, 1961....

Read More

F&O Turnover, Taxation, Audit & More

Now a day Derivative Trading i.e. trading in future and options (F&O) on stocks, currencies, and commodities has become a hot topic amongst investors. Data suggest that during last two years during pandemics the trading in shares & derivative increased substantially. Unfortunately, most people have little knowledge about taxation ...

Read More
Posted Under: Income Tax |

Foreign currency is not a commodity for Section 43(5) of Income Tax

ACIT Vs M/s. Lifestyle International (P) Limited (ITAT Bangalore)

ACIT Vs M/s. Lifestyle International (P) Limited (ITAT Bangalore) The brief facts in relation to the above ground is that the assessee had imported certain trade merchandise from parties located outside Payments to such foreign vendors is required to be made in future on specified dates in foreign currency. The assessee had also obtained ...

Read More

Disallowance of Depreciation | Section 43(1) | Cash Payment for Fixed Assets

Disallowance of Depreciation section 43(1)) Disallowance of Depreciation where cash payment exceeding Rs. 10,000 is made for purchase of asset (Amendment to section 43(1)) Clause (1) of section 43 defines ‘actual cost’ for the purposes of claiming depreciation. The cost in acquisition of any asset or part thereof in respect of...

Read More
Posted Under: Income Tax |

Depreciation cannot be claimed on Enhanced Value of second hand Windmill

V.Sabitamani Vs Asst.CIT (Madras High Court)

The issue under consideration is whether the actual purchase price of a second-hand asset can be ignored by purported recourse to Explanation 3 to Section 43(1) of the Income Tax Act, 1961?...

Read More

Disallowance of depreciation & capital expenditure on cash payment

Under the existing provisions of the Act, revenue expenditure incurred in cash exceeding certain monetary threshold is not allowable as per sub-section (3) of section 40A of the Act except in specified circumstances as referred to in Rule 6DD of the Income-tax Rules, 1962....

Read More
Posted Under: Income Tax | ,

Assessment of Income from Transactions in Shares and Securities as Business Income

Assessment of income from transaction in shares and securities under the Income-tax Act 1961 involves multiple issues. Such transactions give rise to income assessable under different heads of income e.g. business income, capital gain and income from other sources. This article is an attempt to discuss some major issues involved in assess...

Read More
Posted Under: Income Tax |

Income Tax Law Relating To Cash Transactions

A number of new provisions have been introduced in the Income Tax Act from time to time to put restrictions on cash transactions as well as to incentivise the non-cash transactions. Cash transactions have always played a major role in the Indian Economy and consistently were responsible for generation and accumulation of Black Money. The ...

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Posted Under: Income Tax |

Restrictions on Cash Transactions under Income Tax Act, 1961

In order to restrict cash transactions, the government has come out with several provisions and related rules to prohibit various types of cash payments in the Finance Acts. The effects of restrictions under provisions of income tax act are as follows: Restrict cash transactions by disallowances of expenses or deduction under chapter VIA ...

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Posted Under: Income Tax |

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