Contents
Contents
In your case, the recipient of service is co-operative bank, which is neither a company nor a body corporate, reverse charge will not applicable. Recipient of service— The company or a body corporate located in the taxable territory. It also suggested that tax rates for orthopaedic implants ; Orthoses (Splints, braces, belts & calipers); Prostheses be cut to a uniform 5 per cent, from the current differential rate of 12 and 5 per cent. The fitment committee said the selling of space for advertisement in print media attracts tax at 5 per cent. The activities carried out by different institutions/ organizations towards selling of space for advertisement in souvenirs would attract 5 per cent tax and the stated position in GST law be clarified accordingly, it said.
Consideration paid by company on buyback of shares or other securities would be deemed as full value of consideration. The difference between the cost of acquisition and buy-back price would be taxed as capital gain in the hands of the shareholder. Any sum paid as an employer for setting up or as contribution to any fund, trust, company, AOP, BOI, Society or other institution shall not be allowed as deduction if such contribution or payment is not required by any law. Qualifying expenditure incurred by resident persons on prospecting for the minerals or on the development of mine or other natural deposit of such minerals shall be allowed as deduction . Capital expenditure incurred for acquiring any license or right to operate telecommunication services shall be allowed as deduction over the term of the license. Any expenditure incurred by a company on scientific research on in-house scientific research and development facilities as approved by the prescribed authorities shall be allowed as deduction .
More Under Income Tax
20A.43AAAny foreign exchange gain or loss arising in respect of specified foreign currency transactions shall be treated as income or loss. A person who acquires any rights in or with respect to any building or part thereof, by virtue of any such transaction as is referred to insection 269UA, shall be deemed to be the owner of that building or part thereof. D) The taxpayer has taken all reasonable steps to institute legal proceedings for the recovery of the unpaid rent or satisfies the Assessing Officer that legal proceedings would be useless. For taxability of contribution made to various employee’s provident fund and interest arising thereon see Note 3.
One such important classification is with respect to payment for professional services. While in case of payment to a resident, all professional services related payments get classified u/s. 194J of the act for TDS purposes, in DTAA such payments may get classified as Fees for Technical Services or Business Income or Independent Personal services . If equity shares in company or new asset acquired by company is sold or transferred within a period of 5 years from date of acquisition.
50,000 or the amount of salary, whichever is lower (Any salaried person & pensioners)2. Expenditure incurred on travelling of patient and one attendant- exempt, if Gross Total Income of the employee, does not exceed Rs. 2,00,000. B) Where such facility is maintained by the employer, and is not available uniformly to all employees, the value of benefit shall be taken to be the value at which such facilities are offered by other agencies to the public. Any amount recovered from the employee shall be deducted from the taxable value of perquisite. License fees determined in accordance with rules framed by Government for allotment of houses shall be deemed to be the taxable value of perquisites. A) Salary income is chargeable to tax on “due basis” or “receipt basis” whichever is earlier.
Entire amount of interest paid or payable on borrowed capital shall be allowed as deduction. Pre-construction interest shall be allowed as deduction in 5 annual equal installments . 30% of net annual value of the house property is allowed as deduction if property is let-out during the previous year. C) The house property should not be used for the purpose of business or profession carried on by the taxpayer.
However, where the shares of co-owners are not definite, the income of the property shall be assessed as that of an Association of persons. Amount received in respect of arrears of rent or any subsequent recovery of unrealized rent shall be deemed to be the income of taxpayer under the head “Income from house property” in the year in which such rent is realized or received . Family pension received by legal heirs or widow of deceased employee shall not be taxed under the head “salary”, but it shall be taxed under Income from Other sources. Any family pension received by the widow or legal heirs of a deceased employee shall not taxed under the head “Salaries” However is taxable under the head “Income from other Sources”. Any sum of money received by an individual, from any person, in respect of any expenditure actually incurred by him on his medical treatment or treatment of any member of his family in respect of any illness related to COVID-19, shall not be considered as income of such person. B) If taxpayer could not invest the capital gains to acquire new asset before due date of furnishing of return, the capital gains can be deposited before due date for furnishing of return of income in deposit account in any branch of a nationalized bank in accordance with Capital Gain Account Scheme 1988.
Expenditure incurred by the employer (i.e. hire charges, if car is on rent or normal wear and tear at 10% of actual cost of the car, if car is owned by the employer) plus salary of chauffeur if paid or payable by the employer minus amount recovered from the employee. Taxable value of perquisite shall be salary paid or payable by the employer for such services less any amount recovered from the employee. Director Remuneration shall be taxed under salary, if the director is an employee of the company in terms is honorarium taxable in india of a contract of employment or the AOA. Otherwise it is taxable as income from business and profession or income from other sources depending upon the facts of each case. Amount received from profession as a musician, incidentally rendered services to a college of music shall not be treated as salary because there does not existed and employer and employee relationship. Income taxable under the head of “salary” when there is existing a relationship of employer and employee between payer and payee.
Q- Would the winnings be taxed at the tax slab rate?
A standard deduction is available, which deducts 1/3 of the family pension or Rs. 15,000/- whichever is less, from the family pension. However, the said amount of remuneration shall be taxed under the head “Business Income” since the partner cannot be an employee of the entity. Provisions of u/s 57 shall not provide for any deduction of expenditure from such said salary incomes, etc. of a Member of Legislative Assembly/ Member of Parliament. “Such incomes are not added to your total taxable income for that assessment year and thereby remain tax-free. Section 10 of the Indian Income Tax Act of 1961 lists the various incomes that come under this category,” says Adhil Shetty, founder & CEO of BankBazaar.com.
Only two properties selected by the taxpayer will be considered as self-occupied house properties and all other properties shall be deemed to be let-out for the purpose of computation of income under the head house property. However, if an employee is contributing to the fund but there is no contribution to such fund by the employer, then the interest income accrued during the previous year shall be taxable to the extent it relates to the contribution made by the employee to that fund in excess of Rs. 5,00,000 in a financial year. No exemption shall be available for the interest income accrued during the previous year in the recognised and statutory provident fund to the extent it relates to the contribution made by the employees over Rs. 2,50,000 in the previous year. Salary received by a non-resident foreign national for services rendered in connection with his employment on a foreign ship if his total stay in India does not exceed 90 days in the previous year. A) Taxable value of perquisite shall be expenditure incurred by the employer less amount recovered from employee.
- B) Gift in kind up to Rs.5,000 in aggregate per annum would be exempt, beyond which it would be taxable.
- This difference in tax treatment makes it imperative to understand in detail the concept of Independent Personal services as obtained in DTAAs.
- Any decision regarding taxability or otherwise of income in the hands of NR must be taken after careful study of DTAA with the country of residence of NR payee.
If a payment gets classified as Fees for Technical Services, almost all DTAAs of India allows the taxability of income in India, requiring thereby a TDS by the payer entity. However, if it is a payment for Independent Personal services, then it is taxable in India only in very limited cases and as such in majority of cases, payer does not have a liability of TDS. This difference in tax treatment makes it imperative to understand in detail the concept of Independent Personal services as obtained in DTAAs. J) From any person, in respect of any expenditure actually incurred by individual on his medical treatment or treatment of any member of his family, for any illness related to COVID-19 (subject to such conditions as prescribed by Govt.). Any income which is not chargeable to tax under any other heads of income and which is not to be excluded from the total income shall be chargeable to tax as residuary income under the head “Income from Other Sources”.
It shall be deemed that such debt or part thereof has been written off as irrecoverable in the accounts. Expenditure incurred under Voluntary Retirement Scheme is allowed as deduction. All assessees32Additional depreciation on new plant and machinery (other than ships, aircraft, office appliances, second hand plant or machinery, etc.). ‘Systemically Important Non-deposit Taking NBFC’ means a NBFC which is not accepting or holding public deposits and having total assets of not less than Rs. 500 crore as per the last audited balance sheet and is registered with the RBI. While as in case of contract for providing services with indeterminate number of acts over a specified period of time shall be determined on basis of straight line method.
(iv)Income under the Head Family Pension getting by widow from former employer of her husband
It includes expenses of capital nature incurred in connection with such purchase or for completing the title of the property. Any transfer of a capital asset by original fund to the resulting fund in a relocation. The period of holding of such converted asset shall be reckoned from the date of conversion. A) Any kind of property held by an assessee, whether or not connected with business or profession of the assessee.
K) Consequent to transfer of share(in a scheme of amalgamation as referred to in Section 47 of a foreign company which derives, directly or indirectly, its value substantially from the share or shares of an Indian company held by amalgamating foreign company to the amalgamated foreign company. When a depreciable asset of a power generating units is sold, discarded, demolished or destroyed then terminal depreciation shall be deductible from sale consideration while computing capital https://1investing.in/ gains, or balancing charge is taxable in the relevant year, as the case may be. Computation of capital gain depends upon the nature of the capital asset transferred during the previous year, vis-à-vis, short-term capital asset, long-term capital asset or depreciable asset. Capital gain arising on transfer of short-term capital asset or depreciable asset is considered as short-term capital gain, whereas transfer of long-term capital asset gives rise to long-term capital gain.
L) Consequent to transfer of capital asset by the demerged company to the resulting Indian company. 5A.Conversion of preference shares into equity sharesThe part of the cost of preference shares in relation to which such asset is acquired by the assessee.6. Gratuity actually paid during the year and contribution to approved gratuity fund is allowed as deduction. Any sum payable outside India or to a non-resident, which is chargeable to tax in India in the hands of the recipient, shall not be allowed to be deducted if it was paid without deduction of tax at source or if tax was deducted but not deposited with the Central Government till the due date of filing of return. Employer’s contribution towards approved gratuity fund created exclusively for the benefit of employees under an irrevocable trust shall be allowed as deduction . Any sum paid by assessee-employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee.
Amount paid by way of royalty, license fee, service fee, privilege fee, service charge or any other fee or charge, by whatever name called, which is levied exclusively on a State Government undertaking by the State Government shall not be deductible. Deduction in respect of bad debts actually written off under section 36 shall be limited to that amount of bad debts which exceed the provision for bad and doubtful debts created under section 36. Deposit Taking NBFC’ means a NBFC which is accepting or holding public deposits and is registered with the RBI. Amount withdrawn from special reserves created and maintained underSection 36 shall be chargeable as income in the previous year in which the amount is withdrawn. However, it shall be deemed to be distinct and separate from any other business.
Deductions and exemptions on income from awards and prizes
If such relationship does not exist between payer and payee, income shall not be taxable under the head “salary”. If you win awards or prizes, check whether they are approved by the Government or not. Understand the implication of taxation and how much tax is payable so that you don’t face any penalty from the income tax department. Awards which are not approved by the Government and prizes are taxed at the rate of 30%. Cess would also have to be added to the tax rate which brings the total tax rate to 31.2%.
The payment should be made with the specified direction that the sum shall be used in a scientific research undertaken under an approved programme. B) 20% of profits from such business before making any deduction undersection 33ABA and before adjusting any brought forward loss. B) 40% of profits from such business before making any deduction undersection 33AB and before adjusting any brought forward loss. 1) New asset should be acquired and installed during the period beginning on the 1st day of April, 2015 and ending before the 1st day of April, 2020.
It has observed that supply of all goods and services are taxable unless exempt or declared as ‘no supply’. The committee gives its recommendation regarding tax rates, after analysing demands from stakeholders, in every meeting of the Council. The recommendations of the committee which will be placed before the GST Council meeting on June also include a clarification on the issue of applicability of GST on payment of honorarium to the guest anchors. We are engaging the services of US citizen for marketing in USA and paying on per day basis.
Acquisition of any asset (except stock-in-trade) by the taxpayer in the scheme of amalgamation or by way of gift, will etc. However, where in respect of any such sum, Equalisation levy is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year. However, if tax is deducted or deposited in subsequent year, as the case may be, the expenditure shall be allowed as deduction in that year. Expenditure incurred by a company on any notified skill development project is allowed as deduction .