As per Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014, a director has the right to participate in a Board Meeting via video conferencing (VC) or other audio-visual means (OAVM) unless specifically restricted by the Articles of Association (AoA) of the company. Is it MandatoryRead more
As per Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014, a director has the right to participate in a Board Meeting via video conferencing (VC) or other audio-visual means (OAVM) unless specifically restricted by the Articles of Association (AoA) of the company.
Is it Mandatory for the Company to Provide VC Facility?
✅ Yes, if a director requests it in advance
If a director intimates their intent to participate via video conferencing at least 3 days before the meeting, the company is obligated to provide the facility.
The company must ensure that the VC/OAVM setup allows directors to hear and communicate clearly.
🚫 No, if the Articles of Association prohibit it
If the company’s AoA specifically restricts the use of video conferencing for Board Meetings, then the director cannot demand VC participation.
Key Compliance Points:
The minutes of the meeting must record the names of directors attending via VC.
The company must ensure that VC participation does not hinder decision-making.
Certain critical decisions (e.g., approval of financial statements, mergers, takeovers) cannot be conducted solely via VC.
Conclusion
If a director requests participation through video conferencing in advance, the company is required to provide the facility—unless restricted by the AoA. This ensures corporate governance, inclusivity, and compliance with the law.
Under Section 184(2) of the Companies Act, 2013, every director is required to disclose their interest in any company, body corporate, firm, or other entity in which they hold a stake. This is to ensure transparency and prevent conflicts of interest. When is the disclosure required? At the first BoaRead more
Under Section 184(2) of the Companies Act, 2013, every director is required to disclose their interest in any company, body corporate, firm, or other entity in which they hold a stake. This is to ensure transparency and prevent conflicts of interest.
When is the disclosure required?
At the first Board Meeting after becoming a director.
At the first Board Meeting of every financial year.
Whenever there is any change in their interest or concern in an entity.
What needs to be disclosed?
A director must disclose their direct or indirect interest in:
Any other company or body corporate in which they hold shares exceeding 2% of the paid-up share capital.
Any firm, partnership, LLP, or entity where they are a partner, owner, or hold significant influence.
Any contract or arrangement the company enters into with such an entity.
How should the disclosure be made?
The disclosure must be in Form MBP-1 and submitted to the company.
The company records it in the Register of Directors’ Interest.
What happens if a director fails to disclose?
If a director does not disclose their interest as required under Section 184(2), they may face:
A fine of up to ₹1,00,000, or
Imprisonment for up to 1 year, or both.
Key Takeaway: If you are a director in a company, always ensure timely disclosure of your interests to avoid legal consequences and maintain corporate governance compliance.
Filing your Income Tax Return (ITR) after the due date can lead to several consequences under the Income Tax Act, 1961. It's essential to be aware of these implications to avoid unnecessary penalties and interest charges. Interest on Outstanding Tax – Section 234A If there's any unpaid tax after theRead more
Filing your Income Tax Return (ITR) after the due date can lead to several consequences under the Income Tax Act, 1961. It’s essential to be aware of these implications to avoid unnecessary penalties and interest charges.
Interest on Outstanding Tax – Section 234A
If there’s any unpaid tax after the due date, interest is levied at 1% per month or part thereof on the outstanding amount. This interest accrues from the day immediately following the due date until the actual filing date or full payment of tax, whichever is earlier.
Example:
Outstanding Tax: ₹10,000
Delay in Filing: 3 months
Interest: ₹10,000 × 1% × 3 = ₹300
Late Filing Fee – Section 234F
A late filing fee is imposed based on the date of filing and total income:
Filing after the due date but before December 31:
Income up to ₹5,00,000: Late fee of ₹1,000
Income above ₹5,00,000: Late fee of ₹5,000
Filing after December 31:
Income up to ₹5,00,000: Late fee of ₹1,000
Income above ₹5,00,000: Late fee of ₹10,000
Note: No late filing fee is applicable if the total income does not exceed ₹2,50,000.
Loss of Certain Benefits
Carry Forward of Losses: Losses under the heads “Capital Gains” and “Profits and Gains of Business or Profession” cannot be carried forward to subsequent years if the ITR is filed late.
Interest on Refunds: Delayed filing may result in reduced or no interest on refunds due, as interest is calculated from the date of filing the return.
Prosecution and Penalty for Concealment
In cases where the taxpayer willfully fails to file the return, the Income Tax Department may initiate prosecution, leading to penalties and possible imprisonment, depending on the amount of tax evaded.
Recent Changes Post Budget 2025
The Budget 2025 introduced provisions for filing Updated Returns to encourage voluntary compliance:
Extended Timeframe: Taxpayers can now file updated returns within 48 months from the end of the relevant assessment year.
Additional Tax Liability: Filing an updated return attracts an additional tax on the unpaid liability:
Within 12 months: Additional tax of 25% on the due tax and interest.
Beyond 12 months but up to 24 months: Additional tax of 50% on the due tax and interest.
Beyond 24 months but up to 36 months: Additional tax of 60% on the due tax and interest.
Beyond 36 months but up to 48 months: Additional tax of 70% on the due tax and interest.
The Income Tax Act offers tax relief under several subsections of Section 80. Here’s a breakdown of the key investment options: Investment Option Description Relevant Section Life Insurance Premium Premiums paid on life insurance policies for self, spouse, and children. Section 80C Employee ProvidenRead more
The Income Tax Act offers tax relief under several subsections of Section 80. Here’s a breakdown of the key investment options:
Investment Option
Description
Relevant Section
Life Insurance Premium
Premiums paid on life insurance policies for self, spouse, and children.
Section 80C
Employee Provident Fund (EPF)
Contributions made to your EPF account as part of your employer’s scheme.
Section 80C
Public Provident Fund (PPF)
Deposits in the government-backed PPF scheme.
Section 80C
National Savings Certificate (NSC)
Investment in NSCs issued by post offices.
Section 80C
Tax-Saving Fixed Deposits
Fixed deposits with a lock-in period of 5 years offered by banks and financial institutions.
Section 80C
Equity Linked Savings Scheme (ELSS)
Tax-saving mutual funds with a lock-in period of 3 years.
Section 80C
Principal Repayment on Home Loan
The principal component of home loan repayments.
Section 80C
Tuition Fees for Children
Payments made for the education of your children (for up to 2 children).
Section 80C
Sukanya Samriddhi Yojana
Deposits made into the Sukanya Samriddhi Account for a girl child.
Section 80C
Tax-Saving Bonds (Infrastructure Bonds)
Investments in bonds notified under Section 80CCF (with a cap of ₹20,000).
Section 80CCF
Pension Fund Contributions (Other than NPS)
Premiums paid for certain pension funds are deductible.
Section 80CCC
National Pension System (NPS)
Contributions toward NPS are eligible for a deduction under Section 80CCD. An additional deduction of ₹50,000 is available under Section 80CCD(1B) over and above the limit available under Section 80CCD(1).
Section 80CCD(1) & 80CCD(1B)
Key Points to Remember:
Section 80C is the most widely used deduction and covers a variety of investments up to an overall limit (currently ₹1,50,000).
Section 80CCF provides additional benefits for investments in notified infrastructure bonds (with a separate cap).
Section 80CCD offers benefits on contributions toward pension schemes, with an extra ₹50,000 available exclusively under Section 80CCD(1B).
Ensure that you have proper documentation (receipts, certificates, statements) for each of these investments when filing your Income Tax Return.
These deductions help in reducing your taxable income and can significantly lower your tax liability.
Investments in the NPS offer attractive tax benefits under the Income Tax Act through two key provisions: 1. Deduction Under Section 80CCD(1) Who Can Claim: All individual taxpayers (both salaried and self-employed). What It Offers: You can claim a deduction on your contribution to the NPS, which isRead more
Investments in the NPS offer attractive tax benefits under the Income Tax Act through two key provisions:
1. Deduction Under Section 80CCD(1)
Who Can Claim:
All individual taxpayers (both salaried and self-employed).
What It Offers:
You can claim a deduction on your contribution to the NPS, which is calculated as a percentage of your salary:
For salaried individuals: Up to 10% of salary.
For self-employed individuals: Up to 20% of their gross income.
Note:
This deduction is available in addition to the standard deduction under Section 80C (though some NPS contributions may already be included in the overall 80C limit in certain cases).
2. Additional Deduction Under Section 80CCD(1B)
What It Offers:
An extra deduction of ₹50,000 is available exclusively for contributions to the NPS.
Key Point:
This additional deduction is over and above what you claim under Section 80CCD(1) or Section 80C.
It is available irrespective of your other investments and does not form part of the overall 80C limit.
Summary Table
Section
Eligible Contributions
Deduction Limit
Notes
80CCD(1)
NPS contributions (for salaried or self-employed individuals)
Up to 10% of salary (salaried) or 20% of gross income (self-employed)
Available along with regular deductions, may form part of 80C limits in certain cases
80CCD(1B)
Additional NPS contributions
Additional ₹50,000 deduction
Over and above deductions under Section 80CCD(1) and 80C; not affected by other limits
Key Takeaways
Investing in NPS can significantly reduce your taxable income.
You can enjoy a deduction based on your salary/income under Section 80CCD(1) plus an extra ₹50,000 benefit under Section 80CCD(1B).
Keep proper records of your NPS contributions and ensure that your investment is made through eligible channels to claim these deductions.
In recent updates, the method to compute income from futures and options (F&O) trading (treated as speculative business income) has shifted from the traditional mark-to-market approach to a turnover-based method. Here's how it works: Step 1: Determine Your Turnover Turnover Calculation:For FRead more
In recent updates, the method to compute income from futures and options (F&O) trading (treated as speculative business income) has shifted from the traditional mark-to-market approach to a turnover-based method. Here’s how it works:
Step 1: Determine Your Turnover
Turnover Calculation: For F&O trading, the turnover is now defined as the aggregate sale consideration of all contracts you traded during the financial year.
This means you add up the sale prices of all the futures and options contracts sold (closed positions) during the year.
Even if the positions are not delivered (i.e., contracts are closed out), the sale consideration is included in your turnover.
Step 2: Deduct the Purchase Cost
Purchase Cost: From the total turnover, subtract the total cost of acquiring these contracts (the purchase price paid when entering the contracts).
Step 3: Deduct Direct Expenses
Direct Trading Expenses: Deduct all direct expenses incurred in trading, such as:
Brokerage fees
Transaction charges
Clearing and settlement fees
Any other costs directly attributable to the trading activity
Step 4: Arrive at Your Net Profit or Loss
Net Speculative Business Income: The result after these deductions is your net profit (or loss) from F&O trading. This figure is treated as speculative business income and is taxed at your applicable business income slab rates.
Summary Table
Calculation Step
Description
Formula
Turnover
Sum of sale consideration of all F&O contracts traded
Total Sale Consideration
Less: Purchase Cost
Total cost incurred to buy the contracts
Sum of Purchase Prices
Less: Direct Expenses
Expenses directly related to trading (brokerage, transaction fees, etc.)
Total Direct Expenses
Net Income
This is the taxable speculative business income from F&O trading
Turnover – Purchase Cost – Direct Expenses
Key Points to Remember
Revised Method:
The revised approach focuses on the actual sale consideration (turnover) rather than solely relying on the mark-to-market adjustments.
Business Expense Approach:
This method is similar to computing turnover in a typical business: you start with gross sales (in this case, sale consideration) and then deduct the cost of goods sold (purchase cost) and other direct expenses to arrive at net profit.
Taxation:
The resulting net profit or loss is considered speculative business income and is subject to tax according to the applicable slab rates for business income.
When it comes to intra-day trading (buying and selling shares on the same day), the Income Tax Act does not treat the profits as capital gains. Instead, such trading is classified as speculative business income. This means the traditional capital gains computation method doesn’t apply. Key Points NoRead more
When it comes to intra-day trading (buying and selling shares on the same day), the Income Tax Act does not treat the profits as capital gains. Instead, such trading is classified as speculative business income. This means the traditional capital gains computation method doesn’t apply.
Key Points
Not Capital Gains: Intra-day transactions are considered speculative because the shares are not actually delivered; they are bought and sold within the same day. Thus, the profits or losses from these transactions are treated as business income.
Calculation as Speculative Business Income: To compute your net income from intra-day trading, follow these steps:
Calculate Turnover: Sum up the sale consideration of all intra-day trades (i.e., the total amount received from selling shares).
Deduct Purchase Cost: Subtract the total purchase cost of those trades (i.e., the total amount paid to buy the shares).
Deduct Direct Trading Expenses: Also deduct any brokerage fees, transaction charges, and other direct expenses incurred while trading.
Net Speculative Business Income: The resulting amount is your net profit (or loss) from intra-day trading, which will be taxed as business income according to your applicable slab rates.
Example Calculation
Step
Description
Calculation
Turnover
Sum of sale prices for all trades
e.g., ₹500,000
Less: Purchase Cost
Sum of buying prices for all trades
e.g., ₹480,000
Less: Trading Expenses
Total expenses (brokerage, transaction charges, etc.)
e.g., ₹10,000
Net Income
Final profit (or loss) from intra-day trading
₹500,000 – ₹480,000 – ₹10,000 = ₹10,000
Additional Considerations
Set-Off & Carry Forward of Losses: Losses from speculative transactions can only be set off against speculative income and can be carried forward for one year.
Record-Keeping: It’s important to maintain detailed records (trade confirmations, brokerage statements, etc.) for each transaction to substantiate your calculations.
Under Section 80D of the Income Tax Act, you can claim a deduction on the premiums paid for medical insurance. Here’s how it works: 1. Who Is Eligible? Self, Spouse, and Dependent Children: For individuals below 60 years, you can claim a deduction of up to ₹25,000 on the premium paid. If you or anyRead more
Under Section 80D of the Income Tax Act, you can claim a deduction on the premiums paid for medical insurance. Here’s how it works:
1. Who Is Eligible?
Self, Spouse, and Dependent Children:
For individuals below 60 years, you can claim a deduction of up to ₹25,000 on the premium paid.
If you or any of these insured persons are senior citizens (60 years and above), the limit increases to ₹50,000.
Parents:
If you pay the premium for your parents, you can claim an additional deduction:
Up to ₹25,000 if your parents are below 60 years.
Up to ₹50,000 if your parents are senior citizens.
Preventive Health Check-Up:
You can also include expenses for preventive health check-ups (up to ₹5,000) within these limits.
2. Steps to Claim the Deduction
Keep All Premium Receipts:
Make sure to collect and safely store your premium payment receipts or bank statements as proof of payment.
Report in Your Income Tax Return (ITR):
When filing your ITR (using ITR-1, ITR-2, etc.), enter the details of the medical insurance premiums paid in the appropriate section (usually under “Deductions under Chapter VI-A”).
Include the amount paid for self, spouse, children, and parents separately, if applicable.
Verify Your Documentation:
Ensure that your insurance policy is active and that the premiums are actually paid in the relevant financial year.
Retain the documents in case of any future inquiries by the tax authorities.
3. Example Scenario
Let’s say you are below 60 years old and have paid the following in a financial year:
Premium for Self, Spouse, and Children: ₹20,000
Premium for Parents (who are senior citizens): ₹40,000
Preventive Health Check-Up Expenses: ₹5,000 (included within the above limits)
This amount is fully deductible from your taxable income, thereby reducing your tax liability.
Final Thoughts
Claiming a deduction on your medical insurance premium is a straightforward way to reduce your tax liability. Ensure you have the proper documentation and correctly report these amounts when filing your ITR.
In general, the Income Tax Act does not allow a blanket deduction for all medical expenses incurred on the health of a senior citizen. However, there are specific provisions that provide relief in certain cases: 1. Health Insurance Premium (Section 80D) What It Covers: You can claim a deduction forRead more
In general, the Income Tax Act does not allow a blanket deduction for all medical expenses incurred on the health of a senior citizen. However, there are specific provisions that provide relief in certain cases:
1. Health Insurance Premium (Section 80D)
What It Covers:
You can claim a deduction for the premium paid on health insurance for a senior citizen.
Deduction Limit:
Up to ₹50,000 is deductible if the insured person is a senior citizen.
Note:
This benefit is for the insurance premium, not the actual medical expenses incurred.
2. Medical Treatment for Specified Diseases (Section 80DDB)
What It Covers:
If a senior citizen is receiving treatment for certain specified diseases (such as cancer, chronic renal failure, Parkinson’s disease, etc.), you can claim a deduction for the actual medical expenditure incurred.
Deduction Limit:
For senior citizens, the maximum deduction available under Section 80DDB is ₹1,00,000.
Conditions:
Proper documentation (like prescriptions and medical bills) is required to support the claim.
Key Takeaways
General medical expenses (like hospital bills or doctor’s fees) incurred by a senior citizen are not deductible unless they are related to the treatment of specified diseases under Section 80DDB.
Health insurance premiums paid for a senior citizen are deductible under Section 80D, with a limit of up to ₹50,000.
Always ensure you have the required receipts and documents to support any deduction claims
The Income Tax Act offers benefits for electric vehicle (EV) purchases—but the benefits vary depending on whether you’re an individual or a business. For Individuals Under Section 80EEB, if you take a loan to purchase an electric vehicle, you can claim a deduction on the interest paid on that loan.Read more
The Income Tax Act offers benefits for electric vehicle (EV) purchases—but the benefits vary depending on whether you’re an individual or a business.
For Individuals
Under Section 80EEB, if you take a loan to purchase an electric vehicle, you can claim a deduction on the interest paid on that loan. The maximum deduction allowed is ₹1,50,000. This benefit helps lower the effective cost of borrowing and encourages the use of environmentally friendly vehicles.
For Businesses
If a business purchases an electric vehicle for commercial use, the EV is treated as a fixed asset and is eligible for depreciation under Section 32. In addition, the government may offer accelerated or additional depreciation benefits (for example, an extra 15% of the purchase cost) to promote green investments. This means you can reduce your taxable income by writing off a larger portion of the asset’s cost in the early years.
Quick Comparison
Category
Relevant Section
Benefit
Notes
Individuals
Section 80EEB
Deduction on interest paid on EV loan up to ₹1,50,000
Benefit applies only to the interest portion, not the purchase price.
Businesses
Section 32
Standard depreciation on the EV, plus additional depreciation (e.g., extra 15%) on green investments
EV used for business purposes qualifies as a fixed asset.
Key Points to Remember
Section 80EEB: Only available for interest on loans taken for purchasing an EV—direct purchase cost isn’t deductible.
Depreciation: For business use, claim depreciation as per normal provisions plus any additional rates offered for green investments.
Always keep proper documentation (loan agreements, interest receipts, purchase invoices) to support your claims.
These benefits are subject to updates with each budget, so it’s wise to check the latest notifications or consult a tax professional.
If a director of a company requests for participation in a meeting through video conferencing, is it mandatory for the company to provide the video conferencing facility, especially where all the other directors are participating in person?
As per Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014, a director has the right to participate in a Board Meeting via video conferencing (VC) or other audio-visual means (OAVM) unless specifically restricted by the Articles of Association (AoA) of the company. Is it MandatoryRead more
As per Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014, a director has the right to participate in a Board Meeting via video conferencing (VC) or other audio-visual means (OAVM) unless specifically restricted by the Articles of Association (AoA) of the company.
Is it Mandatory for the Company to Provide VC Facility?
✅ Yes, if a director requests it in advance
🚫 No, if the Articles of Association prohibit it
Key Compliance Points:
Conclusion
If a director requests participation through video conferencing in advance, the company is required to provide the facility—unless restricted by the AoA. This ensures corporate governance, inclusivity, and compliance with the law.
See lessWhat is the interest in section 184(2) of the Companies Act, 2013 that has to be disclosed by the director?
Under Section 184(2) of the Companies Act, 2013, every director is required to disclose their interest in any company, body corporate, firm, or other entity in which they hold a stake. This is to ensure transparency and prevent conflicts of interest. When is the disclosure required? At the first BoaRead more
Under Section 184(2) of the Companies Act, 2013, every director is required to disclose their interest in any company, body corporate, firm, or other entity in which they hold a stake. This is to ensure transparency and prevent conflicts of interest.
When is the disclosure required?
What needs to be disclosed?
A director must disclose their direct or indirect interest in:
How should the disclosure be made?
What happens if a director fails to disclose?
If a director does not disclose their interest as required under Section 184(2), they may face:
Key Takeaway: If you are a director in a company, always ensure timely disclosure of your interests to avoid legal consequences and maintain corporate governance compliance.
See lessWhat are the consequence of late filing of return after due date or say late return?
Filing your Income Tax Return (ITR) after the due date can lead to several consequences under the Income Tax Act, 1961. It's essential to be aware of these implications to avoid unnecessary penalties and interest charges. Interest on Outstanding Tax – Section 234A If there's any unpaid tax after theRead more
Filing your Income Tax Return (ITR) after the due date can lead to several consequences under the Income Tax Act, 1961. It’s essential to be aware of these implications to avoid unnecessary penalties and interest charges.
If there’s any unpaid tax after the due date, interest is levied at 1% per month or part thereof on the outstanding amount. This interest accrues from the day immediately following the due date until the actual filing date or full payment of tax, whichever is earlier.
Example:
A late filing fee is imposed based on the date of filing and total income:
Note: No late filing fee is applicable if the total income does not exceed ₹2,50,000.
In cases where the taxpayer willfully fails to file the return, the Income Tax Department may initiate prosecution, leading to penalties and possible imprisonment, depending on the amount of tax evaded.
Recent Changes Post Budget 2025
The Budget 2025 introduced provisions for filing Updated Returns to encourage voluntary compliance:
Read:What are the due dates for filing Income Tax Returns?
What is the penalty If I fail to furnish my Income Tax return within the due date?
Can an Income Tax return be filed after the due date?
See lessWhat are the investment eligible for section 80 deductions under income tax act?
The Income Tax Act offers tax relief under several subsections of Section 80. Here’s a breakdown of the key investment options: Investment Option Description Relevant Section Life Insurance Premium Premiums paid on life insurance policies for self, spouse, and children. Section 80C Employee ProvidenRead more
The Income Tax Act offers tax relief under several subsections of Section 80. Here’s a breakdown of the key investment options:
Key Points to Remember:
- Section 80C is the most widely used deduction and covers a variety of investments up to an overall limit (currently ₹1,50,000).
- Section 80CCF provides additional benefits for investments in notified infrastructure bonds (with a separate cap).
- Section 80CCD offers benefits on contributions toward pension schemes, with an extra ₹50,000 available exclusively under Section 80CCD(1B).
- Ensure that you have proper documentation (receipts, certificates, statements) for each of these investments when filing your Income Tax Return.
- These deductions help in reducing your taxable income and can significantly lower your tax liability.
See lessWhat is the deduction of investment made in NPS scheme?
Investments in the NPS offer attractive tax benefits under the Income Tax Act through two key provisions: 1. Deduction Under Section 80CCD(1) Who Can Claim: All individual taxpayers (both salaried and self-employed). What It Offers: You can claim a deduction on your contribution to the NPS, which isRead more
Investments in the NPS offer attractive tax benefits under the Income Tax Act through two key provisions:
1. Deduction Under Section 80CCD(1)
2. Additional Deduction Under Section 80CCD(1B)
Summary Table
Key Takeaways
What are the investment eligible for section 80 deductions under income tax act?
See lessHow to calculate capital gain on future and options trading?
In recent updates, the method to compute income from futures and options (F&O) trading (treated as speculative business income) has shifted from the traditional mark-to-market approach to a turnover-based method. Here's how it works: Step 1: Determine Your Turnover Turnover Calculation:For FRead more
In recent updates, the method to compute income from futures and options (F&O) trading (treated as speculative business income) has shifted from the traditional mark-to-market approach to a turnover-based method. Here’s how it works:
Step 1: Determine Your Turnover
For F&O trading, the turnover is now defined as the aggregate sale consideration of all contracts you traded during the financial year.
Step 2: Deduct the Purchase Cost
From the total turnover, subtract the total cost of acquiring these contracts (the purchase price paid when entering the contracts).
Step 3: Deduct Direct Expenses
Deduct all direct expenses incurred in trading, such as:
Step 4: Arrive at Your Net Profit or Loss
The result after these deductions is your net profit (or loss) from F&O trading. This figure is treated as speculative business income and is taxed at your applicable business income slab rates.
Summary Table
Key Points to Remember
Read: How to calculate capital gain on intra-day trading of shares?
See lessHow to calculate capital gain on Intra day trading of shares?
When it comes to intra-day trading (buying and selling shares on the same day), the Income Tax Act does not treat the profits as capital gains. Instead, such trading is classified as speculative business income. This means the traditional capital gains computation method doesn’t apply. Key Points NoRead more
When it comes to intra-day trading (buying and selling shares on the same day), the Income Tax Act does not treat the profits as capital gains. Instead, such trading is classified as speculative business income. This means the traditional capital gains computation method doesn’t apply.
Key Points
Not Capital Gains:
Intra-day transactions are considered speculative because the shares are not actually delivered; they are bought and sold within the same day. Thus, the profits or losses from these transactions are treated as business income.
Calculation as Speculative Business Income:
To compute your net income from intra-day trading, follow these steps:
Calculate Turnover:
Sum up the sale consideration of all intra-day trades (i.e., the total amount received from selling shares).
Deduct Purchase Cost:
Subtract the total purchase cost of those trades (i.e., the total amount paid to buy the shares).
Deduct Direct Trading Expenses:
Also deduct any brokerage fees, transaction charges, and other direct expenses incurred while trading.
Net Speculative Business Income:
The resulting amount is your net profit (or loss) from intra-day trading, which will be taxed as business income according to your applicable slab rates.
Example Calculation
Additional Considerations
Set-Off & Carry Forward of Losses:
Losses from speculative transactions can only be set off against speculative income and can be carried forward for one year.
Record-Keeping:
It’s important to maintain detailed records (trade confirmations, brokerage statements, etc.) for each transaction to substantiate your calculations.
Read: How to calculate capital gain on future and options trading?
See lessHow to get deduction of medical insurance premium under income tax act?
Under Section 80D of the Income Tax Act, you can claim a deduction on the premiums paid for medical insurance. Here’s how it works: 1. Who Is Eligible? Self, Spouse, and Dependent Children: For individuals below 60 years, you can claim a deduction of up to ₹25,000 on the premium paid. If you or anyRead more
Under Section 80D of the Income Tax Act, you can claim a deduction on the premiums paid for medical insurance. Here’s how it works:
1. Who Is Eligible?
Self, Spouse, and Dependent Children:
Parents:
Preventive Health Check-Up:
2. Steps to Claim the Deduction
Keep All Premium Receipts:
Report in Your Income Tax Return (ITR):
Verify Your Documentation:
3. Example Scenario
Let’s say you are below 60 years old and have paid the following in a financial year:
Total Deduction Claimed:
This amount is fully deductible from your taxable income, thereby reducing your tax liability.
Final Thoughts
Claiming a deduction on your medical insurance premium is a straightforward way to reduce your tax liability. Ensure you have the proper documentation and correctly report these amounts when filing your ITR.
Read: Can we get deduction of medical expenditure incurred on the health of senior citizens under the income tax act?
See lessCan we get deduction of medical expenditure incurred on the health of senior citizen under income tax act?
In general, the Income Tax Act does not allow a blanket deduction for all medical expenses incurred on the health of a senior citizen. However, there are specific provisions that provide relief in certain cases: 1. Health Insurance Premium (Section 80D) What It Covers: You can claim a deduction forRead more
In general, the Income Tax Act does not allow a blanket deduction for all medical expenses incurred on the health of a senior citizen. However, there are specific provisions that provide relief in certain cases:
1. Health Insurance Premium (Section 80D)
2. Medical Treatment for Specified Diseases (Section 80DDB)
Key Takeaways
- General medical expenses (like hospital bills or doctor’s fees) incurred by a senior citizen are not deductible unless they are related to the treatment of specified diseases under Section 80DDB.
- Health insurance premiums paid for a senior citizen are deductible under Section 80D, with a limit of up to ₹50,000.
- Always ensure you have the required receipts and documents to support any deduction claims
See lessHow much deduction is allowed on purchase of electrical vehicle under income tax act?
The Income Tax Act offers benefits for electric vehicle (EV) purchases—but the benefits vary depending on whether you’re an individual or a business. For Individuals Under Section 80EEB, if you take a loan to purchase an electric vehicle, you can claim a deduction on the interest paid on that loan.Read more
The Income Tax Act offers benefits for electric vehicle (EV) purchases—but the benefits vary depending on whether you’re an individual or a business.
For Individuals
Under Section 80EEB, if you take a loan to purchase an electric vehicle, you can claim a deduction on the interest paid on that loan. The maximum deduction allowed is ₹1,50,000. This benefit helps lower the effective cost of borrowing and encourages the use of environmentally friendly vehicles.
For Businesses
If a business purchases an electric vehicle for commercial use, the EV is treated as a fixed asset and is eligible for depreciation under Section 32. In addition, the government may offer accelerated or additional depreciation benefits (for example, an extra 15% of the purchase cost) to promote green investments. This means you can reduce your taxable income by writing off a larger portion of the asset’s cost in the early years.
Quick Comparison
Key Points to Remember
- Section 80EEB: Only available for interest on loans taken for purchasing an EV—direct purchase cost isn’t deductible.
- Depreciation: For business use, claim depreciation as per normal provisions plus any additional rates offered for green investments.
- Always keep proper documentation (loan agreements, interest receipts, purchase invoices) to support your claims.
- These benefits are subject to updates with each budget, so it’s wise to check the latest notifications or consult a tax professional.
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