Monthly Archives: September 2015

section 40(a)(ia) Payer not liable for TDS default due to retrospective amendments

Whether disallowance under section 40(a)(ia) should be made on the basis of subsequent amendment brought into the Act with retrospective effect.? Summary of Case on section 40(a)(ia) :- Where Assessing Officer on basis of amendments introduced in section 9(1)(vi) with retrospective effect held that assessee was liable to deduct tax at source from licence fee… Read More »

CBEC :Circulars contrary to Supreme Court judgment need not be followed

Q Whether Circulars contrary to Supreme Court judgment need to be followed? As per the following clarification Circulars contrary to Supreme Court judgment need not be followed CLARIFICATION REGARDING BINDING NATURE OF CIRCULAR AND INSTRUCTIONS CIRCULAR NO. 1006/13/2015-CX, DATED 21-9-2015 A large number of judgments have been delivered by the Hon’ble Supreme Court on various… Read More »

Gains from sale of shares out of investment portfolio are capital gain and not business profits

Whether Gains arising out of investments portfolio are business income or Capital Gain ? Where assessee company had maintained accounts with applicable accounting standards and revenue was unable to find fault with assessee’s claim, capital gains arising out of investments portfolio was to be taxable under head ‘Capital gain‘ and not as business income HIGH… Read More »

Proportionate interest is disallowable under Section 14A

Whether Proportionate interest is disallowable under Section 14A even if bank’s current deposits exceed tax-free investment ? Interest liable to be disallowed u/s 14A on proportionate basis even if assessee-bank’s current deposits exceed its investments yielding tax-free returns. Assessee-bank cannot escape disallowance of interest u/s 14A by taking the plea that its interest-free funds (own… Read More »

Ind AS 107 Financial Instruments

Indian Accounting Standard (Ind AS 107) Financial Instruments: Disclosures (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective of Standard on Financial Instruments: Disclosures 1. The objective of this Indian Accounting Standard (Ind AS) is to require entities to… Read More »

Residential status under Income Tax Provisions

Residential status under Income Tax Act 1961 ​Is the residential status of a person relevant for determining the taxability of the income in his hands? ​ Yes, the residential status of a person earning income is very much relevant for determining the taxability of such income in his hands. Taxability of any income in the hands… Read More »

Assessment under Income Tax Act 1961

Assessment under Income Tax Act 1961​ What is the meaning of assessment?​ Every taxpayer has to furnish the details of his income to the Income-tax Department. These details are to be furnished by filing his return of income. Once the return of income is filed by the taxpayer, the next step is the processing of… Read More »

Computation of Taxable Income and Tax

Computation of Taxable Income and Tax under Income Tax Act 1961 [As amended by Finance Act, 2015] Reference: www.Incometaxindia.gov.in Under how many heads the income of a taxpayer is classified for computing Taxable Income?​ ​S​ection 14​ of the Income-tax Act has classified the income of a taxpayer under five different heads of income, viz.: Salaries Income from… Read More »

Income tax Questions and Answers

Income tax Act 1961 ​What is Income tax? It is a tax levied by the Government of India on the income of every person. The provisions governing the Income tax Law are given in the Income tax Act, 1961.​ ​What is the administrative framework of Income tax?   The revenue functions of the Government of… Read More »

Taxable salary when excess salary is refunded by employee

Assessee earned salary during FY 2007-08 Rs.4,56,821 however recovery of Rs .2,13,132 was made for excess salary payments relating to earlier years and net salary of Rs 243689 was received by the Assessee . How much is taxable salary during FY 2007-08 Rs 4,56,821 or Rs 243689 ?   Taxable Salary is Rs 243689 What is taxable under… Read More »

Construction for an educational institutions and service tax Exemption

Whether for the construction of educational institutions, service tax is exempted as per Circular No. 80/10/2004 ST, dated 17.9.2004 upto 30.6.2012 ? Section 65(105)(zzzza), read with section 65(25b), of the Finance Act, 1994 Taxable services – Works contract services Period October, 2008 to June 2012 Facts of the Case Assessee constructed classrooms, hostels, etc., for educational… Read More »

SECURITIES AND EXCHANGE BOARD OF INDIA (PROCEDURE FOR SEARCH AND SEIZURE) REPEAL REGULATIONS, 2015

THE GAZETTE OF INDIA EXTRAORDINARY PART III – SECTION 4 PUBLISHED BY AUTHORITY NEW DELHI, SEPTEMBER 17, 2015 SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION Mumbai, the 17th September,2015 SECURITIES AND EXCHANGE BOARD OF INDIA (PROCEDURE FOR SEARCH AND SEIZURE) REPEAL REGULATIONS, 2015 No. SEBI/LAD-NRO/GN/2015-16/020.– In exercise of the powers conferred by section 30 of… Read More »

Capital Gain and Income Tax Provisions

 Income Tax Provisions for Capital Gain ​What incomes are charged to tax under the head “Capital Gains”? Any profit or gain arising from transfer of a capital asset during the year is charged to tax under the head “Capital Gains”.​ ​What is the meaning of capital asset? Capital asset is defined to include: a) Any kind… Read More »

Gift and Income Tax Provisions

Provisions of Income Tax on GIFT Are monetary gifts received by an individual or Hindu Undivided Family (HUF) taxable? If the following conditions are satisfied then any sum of money received (i.e, monetary gift may be received in cash, cheque, draft, etc.) by an individual/ HUF will be charged to tax (*): Sum of money… Read More »

salary income and Income Tax Questions

Income Tax on salary income ​What is considered as salary income? S​ection 17(1) ​ of the Income-tax Act defines the term ‘salary’. However, not going into the technical definition, generally whatever is received by an employee from an employer in cash, kind or as a facility [perquisite] is considered as salary. ​What are allowances in salary… Read More »

Income Tax Return Questions and Answers

Income Tax Return What is a Income Tax Return? It is a prescribed form through which the particulars of income earned by a person in a financial year and taxes paid on such income are communicated to the Income-tax Department. Different forms of returns of income are prescribed for filing of returns for different Status… Read More »

Tax audit Questions and Answers

Tax Audit [As amended upto Finance Act, 2015]​ What is Tax Audit ?  The Income-tax Law requires the taxpayer to get the audit of the accounts of his business/profession from the view point of Income-tax Law. ​What is the objective of tax audit? One of the objectives of tax audit is to ascertain/derive/report the requirements of… Read More »

Govt Defence equipment companies exempted to disclose Additional information of Schedule III

Govt. Defence equipment companies exempted to disclose Additional information of Schedule III to the Cos Act, 2013 SECTION 129 OF THE COMPANIES ACT, 2013 – FINANCIAL STATEMENT – NOTIFIED PARAS RELATING TO ADDITIONAL INFORMATION OF GENERAL INSTRUCTIONS FOR PREPARATION OF STATEMENT OF PROFIT AND LOSS IN SCHEDULE III OF SAID ACT NOT TO APPLY TO… Read More »

Apples Import through Nhava Sheva Port

[TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY PART-II, SECTION – 3, SUB-SECTION (ii)] GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT OF COMMERCE NEW DELHI NOTIFICATION NO. 21/2015-2020 Dated: September 14, 2015 Subject: Amendment in import policy conditions of apples under Exim code 0808 10 00 of Chapter 08 of ITC (HS),… Read More »

section 54 registration of documents is not necessary

Whether the registration of documents is necessary , where investment in construction of new building is made within three years of sale of property for claiming the benefit of section 54 ? where investment in construction of new building is made within three years of sale of property, benefit of section 54 is to be… Read More »

specially designed ponds are plants and eligible for depreciation

whether ‘natural pond’ which is  specially designed for rearing prawns would be treated as ‘plant’ within Section 32 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the purposes of allowing depreciation thereon ? since the ponds were specially designed for rearing/breeding of the prawns, they have to be treated as tools… Read More »

Foreign exchange loss is not Speculative Loss if

When will  Foreign exchange loss in forward contract is not speculative Loss and is allowed as Business Loss ? Foreign exchange loss incurred by assessee on account of entering into forward contracts with banks for purpose of hedging loss in connection with its import/export business has to be regarded as business loss subject to condition that… Read More »

Mineral Resources Exploration and Evaluation Ind AS 106

Indian Accounting Standard (Ind AS 106) Exploration for and Evaluation of Mineral Resources (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Question : What are the Objectives of standard on “Exploration for and Evaluation of Mineral Resources” ?… Read More »

Non-current Assets Held for Sale and Discontinued Operations Ind AS 105

Indian Accounting Standard (Ind AS 105) Non-current Assets Held for Sale and Discontinued Operations (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Question :What are the objectives of standard on Non-current Assets Held for Sale and Discontinued Operations ?… Read More »

Insurance Contracts Ind AS 104

Indian Accounting Standard (Ind AS 104) Insurance Contracts (see Note-1) (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1. The objective of this Indian Accounting Standard (Ind AS) is to specify the financial reporting for insurance contracts by… Read More »