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Taxchopal Latest Questions

CA Vishnu Ram
Enlightened
Asked: In:

  1. Kirti Agarwal Beginner

    House Rent Allowance Salaried employees who receive house rent allowance as a part of salary and incurred payment towards rent can claim HRA exemption to reduce their taxable salary wholly or partially. The deduction of HRA can be claimed under section 10-13A of the Income Tax Act in the following mRead more

    House Rent Allowance

    Salaried employees who receive house rent allowance as a part of salary and incurred payment towards rent can claim HRA exemption to reduce their taxable salary wholly or partially.

    The deduction of HRA can be claimed under section 10-13A of the Income Tax Act in the following manner.

    The least of the below is allowed as HRA exemption:

    • Actual HRA received by the employee
    • 40 % of salary for non-metro city or 50 % of salary if the rented property is in Metro cities like Mumbai,Delhi, Kolkata and Chennai)
    • Actual rent paid minus 10% of salary.

    Important Points:

    1. Here Salary would include basic salary, dearness allowance and fixed percentage of commission.
    2. HRA in excess of the above exemption will be taxable under the heads of salary income.
    3. Documents like rent receipts and rental agreements will be required to be submitted to the employer for claiming the deduction for the house rent allowance.
    4. If the payment of rent is more than Rs 1 lakh per annum, then the PAN of the house owner will be required to be submitted. On the basis of these proofs, employers would provide a deduction for HRA in form 16.
    5. In case, HRA exemption has not been provided by the employer, the Employee, himself can claim exemption of such HRA at the time of filing of Income Tax Return, subject to the employer has mentioned the HRA amount separately in form 16A.

     

     

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    • 1
Ramesh Sharma
Enlightened
Asked: In:

  1. CA Manish Kumar Gupta Enlightened
    This answer was edited.

    Hi, If you are paying rent but not receiving HRA from your employer, then still you can take benefit in Income Tax for the amount of Rent paid. You need to satisfy the following conditions: You are self-employed or salaried You have not received HRA at any time during the year for which you are claiRead more

    Hi,

    If you are paying rent but not receiving HRA from your employer, then still you can take benefit in Income Tax for the amount of Rent paid.

    You need to satisfy the following conditions:

    1. You are self-employed or salaried
    2. You have not received HRA at any time during the year for which you are claiming 80GG
    3. You or your spouse or your minor child or HUF of which you are a member – do not own any residential accommodation at the place where you currently reside, perform duties of office, or employment or carry on business or profession.

    The deduction can be claimed under Section 80GG as follows:

     

    The lowest of the following can be claimed as a deduction:
    1 Rs 5,000 per month;
    2 25% of adjusted total income*;
    3 Rent paid minus 10% of adjusted total Income*
    *here Adjusted Total Income means Total Income minus long-term capital gain, short-term capital gain and deductions 80C to 80U.

    If you own any residential property at any place other than the place mentioned above, then you should not claim the benefit of that property as self-occupied. The other property would be deemed to be let out in order to claim the 80GG deduction.

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    • 1
CA Sanjiv Kumar
Enlightened
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    Yes, GST applicable on delayed charges recovered from client by a stock broker. UP - Authority on Advance ruling has made it clear that Charges on delayed payment of amount towards trading of securities are taxable under GST. Applicant is engaged primarily in business of providing services of stockRead more

    Yes, GST applicable on delayed charges recovered from client by a stock broker.

    UP – Authority on Advance ruling has made it clear that Charges on delayed payment of amount towards trading of securities are taxable under GST.

    Applicant is engaged primarily in business of providing services of stock broking i.e. purchasing and selling of shares on behalf of clients on exchange platform by virtue of being a recognized BSE/NSE appointed stock broker- Applicant is seeking advance ruling as regards taxability on delayed payments charges on reimbursement of amount by client to applicant, where client failed to pay amount paid to Stock Exchanges for purchase of securities with T+1 (Trading day plus one day) under SEBI Regulation norms and deducted by Stock Exchange from applicant’s account being purchase consideration of securities which are neither goods nor services under GST.

    According to Section 15 of the Central Goods and Services Tax Act, 2017/Section 15 of the Uttar Pradesh Goods and Services Tax Act, 2017  the service is Taxable supply.

    UP AAR held that delayed payment charges squarely get covered under GST for purpose of taxation.

    UP AAR held that applicant is regularly providing services of ‘trading of securities on behalf of customers’ which is a supply of services on which applicant is admittedly paying GST and delayed payments charges are also linked to said services of ‘trading of securities on behalf of customers’ and GST on same shall be payable in view of section 15(2)(d). Thus, applicant is liable to pay GST on delayed payment of charges which are overdue from client towards trading of securities and reimbursed to it.

    SPFL Securities Ltd., In re
    [2021] (AAR- UTTAR PRADESH)

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CA Vishnu Ram
Enlightened
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    The service of operating mini AC buses would classify under Heading No. 9966 & taxable at 12% Service of operating mini AC buses by applicant for Brihan Mumbai Electricity Supply Transport Undertaking (BEST) would not be exempt from payment of GST. It is covered under Heading No. 9966 i.e. 'servRead more

    The service of operating mini AC buses would classify under Heading No. 9966 & taxable at 12%

    Service of operating mini AC buses by applicant for Brihan Mumbai Electricity Supply Transport Undertaking (BEST) would not be exempt from payment of GST.

    It is covered under Heading No. 9966 i.e. ‘services by way of giving on hire to a state transport undertaking a motor vehicle meant to carry more than twelve passengers’ in terms of Notification No. 12/2017-CT(R), dated 28-6-2017.

    Said case is clearly covered by Sl. No. 10 of Notification No. 11/2017-CT (Rate), dated 28-6-2017 in as much as there is a Rental services of transport vehicles with or without operators and therefore for period up to 13-10-2017, applicant’s activity would attract GST at rate of 18 per cent and after Sl. No. 10 has been amended w.e.f. 13-10-2017, applicant will have to pay GST at rate of 12 per cent

     

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    • 0
Ramesh Sharma
Enlightened
Asked: In:

  1. CA Manish Kumar Gupta Enlightened

    Here the relationship of employer and employee exists between the seconded employee and subsidiary Company and thus the same is out of the meaning of service. Accordingly GST is not leviable on secondment of employees. In a similar case, Comm. Appeal Jaipur EXCISEST/VAT  held that no Service Tax wouRead more

    Here the relationship of employer and employee exists between the seconded employee and subsidiary Company and thus the same is out of the meaning of service.

    Accordingly GST is not leviable on secondment of employees.

    In a similar case, Comm. Appeal Jaipur EXCISEST/VAT  held that no Service Tax would be levied on reimbursement made by the Indian Company to its parent company for employee secondment. It was held that there exists an employer and employee relationship between the seconded employee and Indian Company and thus the same is out of the meaning of service as defined under section 65B(44) of the Finance Act, 1994 and thus not exigible to Service Tax. Please refer below case laws

    Imasen Manufacturing India (P.) Ltd.
    [2021] 128 taxmann.com 255 (Commissioner Appeals – GST- Rajasthan)

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    • 2
CA Vishnu Ram
Enlightened
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    interest earned on account of funds borrowed for specific purpose shall not be taxed but  interest received on investment of surplus funds is taxable in other income. In the matter of HP Power Transmission Corporation Ltd Vs DCIT, ITAT gave order. Assessee company HP Power Transmission Corporation LRead more

    interest earned on account of funds borrowed for specific purpose shall not be taxed but  interest received on investment of surplus funds is taxable in other income.

    In the matter of HP Power Transmission Corporation Ltd Vs DCIT, ITAT gave order.

    Assessee company HP Power Transmission Corporation Limited (HPPTCL), a Government undertaking, was yet to start commercial operation. As per details of “Other income”, assessee had earned interest on bank deposit during period relevant to AY. Interest was earned on surplus funds available with assessee company but it was not offered for taxation. AO rejected assessee’s submission in that regard and interest was assessed to tax in hands of assessee as ‘income from other sources”. As CIT (A) upheld AO’s order, assessee filed present appeals. Both AO and CIT (A) had held that issue had been decided against assessee by ITAT in preceding years and facts of relevant AY were not different from preceding AYs.

    On Appeal, ITAT held that,

    Whether interest earned on account of funds borrowed for specific purpose can be taxed – NO: ITAT.

    Regarding interest income earned, the relevant fact was nature and composition of interest income earned, i.e, surplus funds and specific purpose funds and not factum of loan. For earlier AY in assessee’s case, when interest was earned by assessee on surplus funds available with it, issue was decided against assessee. For AY in case of HP Power Corporation, assessee had borrowed certain amount from Asian Development Bank (ADB) for specific project and on account of delay in project, parked the amount in temporary investments in FDRs. Interest earned thereon was held by ITAT to be not taxable. Thus, facts during the year were partly different with funds having been borrowed for specific purpose and parked in FDRs as temporary investments on account of delay in project. Thus, distinction in facts in the aforestated two orders was that while in case of assessee in earlier years, interest was found to be earned on surplus funds and hence held taxable, in case of HP Power corporation, interest was earned on specific purpose funds deposited in FDRs on account of delay in execution of projects and therefore, held not taxable. It was thus held that interest received to extent of ADB loan parked in investments in FDRs was not revenue in nature and not liable to be taxed under the head “income from other sources”.

    • ITA No. 789/Chd/2019
    • ITA No. 790/Chd/2019
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    • 0
CA Sanjiv Kumar
Enlightened
Asked: In:

  1. Ramesh Sharma Enlightened

    GST registration is required for Charitable Trust running medical store to give medicines without profit. Since charitable Trust is running a medical store, and selling medicines to customers at a lower rate with no profit, sale of medicine by Trust would be a taxable supply of goods; aggregate turnRead more

    GST registration is required for Charitable Trust running medical store to give medicines without profit.

    Since charitable Trust is running a medical store, and selling medicines to customers at a lower rate with no profit, sale of medicine by Trust would be a taxable supply of goods; aggregate turnover exceeding threshold limit, Trust would have to obtain registration

     

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