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Section 44AA Compulsory maintenance of accounts

Compulsory maintenance of accounts Provision regarding maintaining of books of accounts shall be given below: Every person carrying on business and profession (other than profession mentioned in sub-section (1) shall maintain books of accounts if the following condition is satisfied Case 1– If Income from business and profession exceeds one lakh fifty thousand in all three …

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Method of Accounting Types, Section 43B Deduction on Actual payment. Section 43CA

Method of Accounting Computation of Income and Expenses under the Profit and Gain of Business or Profession comes under Method of Accounting. There are two types of Method of accounting. Cash system of accounting. Mercantile system of accounting What ever system of accounting office adopted should be adopted regularly and any changes shall be allowed …

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Deductibility in respect of Gratuity Fund Section 40A(7), Employers contribution Section 40A(9), Income under Section 41.

 Provision for Gratuity Fund deduction under Section 40A(7) As per Income Tax no provision is allowed for deduction in general, however in case of provision of Gratuity Fund it is allowed for deduction. The assessee can make provision for contribution toward approved gratuity fund but such provision should be actuarial provision. Employer’s contribution towards fund …

Deductibility in respect of Gratuity Fund Section 40A(7), Employers contribution Section 40A(9), Income under Section 41. Read More »

Payment to Relative/Related Person SEction 40A(2), Payment in Excess of 10,000 SEction 40A(3) Rule 6DD

Section 40A(2) Payment Relative Any excessive and unreasonable payment and expenditure made by the assessee to any relative (person mentioned below) and such payment made is excessive or unreasonable having regard to the fair market value of goods, services or any facilities, so excessive and unreasonable payment will be disallowed as a deduction. Relative or …

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Agriculture Extension Project Section 35CCC Rule 6AAD/ Rule 6AAE, 35CCD, 35D, 35DDA

Expenditure on Agriculture Extension Project Section 35CCC Rule 6AAD/Rule 6AAE If any assessee has incurred any expenditure on agriculture extension project, the assessee shal be allowed to debit 1.5 times of the expenditure incurred.Expenditure on Land and building is not allowed Expenditure on skill development project 35CCD If any company has incurred expenditure on skill …

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Expenditure on Scientific Research Section 35, section 35(2AB), Section 41(3)

If any person has done any scientific Expenditure revenue or capital relating to business, such expenditure is allowed to be debited without any restriction. Revenue Expenditure:- Any Revenue expenditure incurred scientific research relating to business, such whole expenditure is allowed to be debited to profit & loss. Capital Expenditure:- Any Capital expenditure Incurred for scientific …

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Depreciation Section 32, Additional Depreciation, Special deduction Section 32AD

What is Depreciation? As per Income Tax Act Depreciation is Reduction in Carrying value of Intangible or Tangible Assets over a period of time. Depreciation is non-cash expenditure as per Income-Tax Act. There are two method of Deduction in terms of Depreciation. Written Down Method Straight Line Method However  Income Tax Act allowed Depreciation as …

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Income chargeable to Tax under the Head Business/Profession Section 28

Business and Profession income defines those income which has been occurred day day activity of business and is related to  general practice of accountancy but income and expenditure shall be such as are given under Income Tax Act. However there are certain income shall be taxable under the head Business/Profession. Income from Speculation Business :-Speculation …

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Tax liability in respect of arrears of Rent Section 25A, Section 56, Section 26, Section 22/27

Tax liability in respect of arrears of Rent Section 25A Sometimes rent of a house property may be increased from retrospective effect i.e from back date and the assessee may receive arrear of rent, such arrears are taxable in the year in which arrears have been received, however  deduction shall be allowed @ 30% of …

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