Section 43B of Income Tax act allows certain expenses on the basis of actual payment made within the stipulated time i.e. before the due date of filling income tax return. If such expenses are not paid within the due date then it will be allowed in the year of payment i.e. on the basis of actual payment. Section 43B will be applicable only if incomes are chargeable to tax … [Read more...] about Section 43B – Tax deductions based on actual payment
Income tax
Section 193 – TDS from Interest on Securities
Section 193 is applicable to interest on certain specific securities from which TDS has to be deducted at the time of payment or credit to the books of accounts which ever is earlier. Transfer to any account like suspense account other than the party account will be considered as if such interest amount has been credited in the books of account. Any person who is responsible … [Read more...] about Section 193 – TDS from Interest on Securities
What is capital gain tax in India
Profits earned by transferring capital assets in India will be liable to capital gain tax under income tax act, 1961. The difference between your sale price and cost of acquisition will be treated as capital gain. Computation of capital gain depends upon the nature of capital asset transferred. Capital asset can be of two types; Long term Short term If the capital … [Read more...] about What is capital gain tax in India
Section 54- Exemption of Capital gain tax on transfer of house property
Any long term capital gain arises to an individual or HUF from transfer of residential house property (income from which is chargeable under the head income from house property) shall be exempt to the extent of such capital gain as invested in the purchase or construction of another residential house property. Such new residential house property should have been purchased … [Read more...] about Section 54- Exemption of Capital gain tax on transfer of house property
Capital asset – As defined under section 2(14) of income tax act, 1961
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
Section 80G – Tax deductions for Donations to specific fund
Any person can claim income tax deduction under section 80G of the Income tax act, 1961, for the amount donated to approved funds or charitable institutions. To understand section 80G of the Income tax act, 1961, we have divided types of donation in to two parts. For “Type I” donations we need not do any calculation. If we have donated to a fund that is coming under “Type I” … [Read more...] about Section 80G – Tax deductions for Donations to specific fund