In many cases, assessees engaged in the business of financing assets, acquire such assets which were used by the borrower for the purpose of his business or profession. Post-acquisition of such assets, the finance companies lease out the same to another person under operating lease.
Section 43D of the Act provides that income by way of interest in relation to bad and doubtful debts of a public financial institution or a scheduled bank or a cooperative bank or a state financial corporation or a state industrial investment corporation or a housing finance company
Currently, bill payments related to electricity consumption made to electricity companies are not allowed through cheque in case payment is made after a certain date or delayed/late payment after due date. Assessee in such situations is left with no option but to pay in cash.
In relation to section 40(a)(ia), Explanatory Memorandum to Finance (No.2) Bill 2014/CBDT Circular No. 1 of 2015 explained that disallowance of whole of the amount of expenditure in case of payments to residents for whom TDS
In many cases, a consortium may be formed by two or more members to jointly bid for big projects wherein each of the members brings in his own expertise and resources. If the consortium is assessed as AOP
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.
Corporates are currently involved in various areas of social responsibility / community development as part of nation building. Further, the concept of Corporate Social Responsibility Costs has been introduced under Companies Act, 2013. The expenditure is mandatory in its nature and as such it is a statutory levy. Accordingly it deserves tax deduction.
specified under the relevant legislation of the fund. The employees contribution credited to the employees account in the relevant fund after the due date specified under section 36(1)(va) are disallowed to the employer. Further, any payments made by the employer after the due date is also NOT allowed as a deduction in the year of payment.
Expenses incurred for raising capital are being treated as capital in nature and no deduction is allowed in tax assessment. Section 35D provides for deduction in respect of some of the expenses, over a period of five years, subject to conditions and limits. Raising capital is necessary activity for carrying out the business activity.
CS Makarand Lele, a Fellow Member of the Institute has been elected as President of the Institute of Company Secretaries of India for the year 2018 w.e.f. 19th January, 2018.
