Section 2(14) defines capital asset in IT act. As per this section, capital asset means property of any kind held by an assessee whether or not connected with his business or profession but does not include; Stock in trade, raw material or consumable stores held for the purpose of business or profession ( surplus arises out of these are taxed under the head profits and … [Read more...] about Capital asset – As defined under section 2(14) of income tax act, 1961
Capital Gain Account Scheme – CGAS to save capital gain tax
Different sections are specified under Indian income tax act to provide certain exemption on long term capital gain. These exemptions are available if specified conditions under those sections are fulfilled. One of such condition is to invest the capital gain or net consideration in certain specified investments. If such investments are not possible prior to the due date of … [Read more...] about Capital Gain Account Scheme – CGAS to save capital gain tax
Section 194J – TDS on Professional Fees or Technical Services
As per section 194J of Income tax act 1961, a person is required to deduct TDS @ 10% on following payments paid to a resident in excess of Rs. 30,000 during a financial year; Fees for professional services; or Fees for technical services; or Royalty; or Non-compete fee as referred under section 28(VA) of income tax act. Threshold limit of Rs. 30, 000 as specified … [Read more...] about Section 194J – TDS on Professional Fees or Technical Services
TDS under section 194D – Insurance Commission
Section 194D deals with TDS on insurance commission. It’s applicable to any person responsible for paying any income to a resident by way of remuneration or reward, whether by way of commission or otherwise, for soliciting or procuring insurance business including business relating to the continuance, renewal or revival of policies of insurance. Such person shall deduct Tax … [Read more...] about TDS under section 194D – Insurance Commission
TDS under section 194H – Commission or brokerage
TDS under section 194H is applicable to the person paying commission or brokerage to a resident exceeding Rs. 5, 000 per annum. Tax at Source has to be deducted at the rate of 10%, at the time of credit or payment whichever is earlier. Section 194H is not applicable to insurance commission as referred in section 194D of income tax act. While deducting TDS under section 194H … [Read more...] about TDS under section 194H – Commission or brokerage
Keyman insurance policy in income tax
Keyman insurance policy is an insurance policy where the employer ensures the life of its key person who plays a major role in the business of the company. There can be losses due to death or injury to the key person and the purpose of taking this kind of policy is to ensure the losses that may arise due to such death, sickness or injury to the key man. Keyman insurance … [Read more...] about Keyman insurance policy in income tax
Rounding off of taxable income and tax in India
Rounding off of taxable income and tax has been prescribed under section 288A and 288B of IT act, 1961. According to section 288A you need to round off your taxable income to the nearest multiple of 10 rupees. While deriving paise should be ignored. Section 288B talks about rounding off of tax payable or refund. According to this section, any amount of tax payable or … [Read more...] about Rounding off of taxable income and tax in India
Partnership Firm Registration in India
Partnership firms in India and its registrations are governed by partnership act, 1932. Anyone can form it with more than one individual. Each and every individual forming a partnership firm will be called as partners. Each partner will share their profits out of the income generated from the partnership firm's business based on the ratio that they have mentioned in the … [Read more...] about Partnership Firm Registration in India
How agricultural income is taxable in India
Agricultural income is exempted in India. The power to levy tax on agricultural income is with the state government. Central government cannot impose tax on it. For this reason, under section 10 (1) of IT act it has been specifically said that agricultural income will not form part of the total income and as such will be exempted from tax. In the finance act, it has been … [Read more...] about How agricultural income is taxable in India
Definition of Agricultural income as defined under section 2(1A) of income tax act.
Agricultural income means - (a) Any rent or revenue derived from land which is situated in India and is used for agricultural purposes; (b) Any income derived from such land by— (i) Agriculture; or (ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce … [Read more...] about Definition of Agricultural income as defined under section 2(1A) of income tax act.