Sign Up

Have an account?

Sign In

Don't have account,

Forgot Password

Lost your password? Please enter your email address. You will receive a link and will create a new password via email.

Have an account?

You must login to ask question.

Need An Account,
Search
Ask A Question

Share & grow the world's knowledge!

We want to connect the people who have knowledge to the people who need it, to bring together people with different perspectives so they can understand each other better, and to empower everyone to share their knowledge.

Earn while you learn Join as an expert

Taxchopal Latest Questions

Ramesh Sharma
Enlightened
Asked: In:

  1. CA Manish Kumar Gupta Enlightened

    Hi, Encashment of leave at the time of retirement is dealt with in Section 10(10AA) of the Income Tax Act. The exemption is available to the Government and other employees in below manner: A. Govt Employees(Central Govt and State Govt) : The amount of leave encashment received by govt employees on rRead more

    Hi,

    Encashment of leave at the time of retirement is dealt with in Section 10(10AA) of the Income Tax Act. The exemption is available to the Government and other employees in below manner:

    A. Govt Employees(Central Govt and State Govt) :

    The amount of leave encashment received by govt employees on retirement is fully exempt from tax. Means no tax liability on encashment of earned leave at the time of retirement.

    B. Other Employees:

    Least of the below is exempted other employees from the amount received towards Leave encashment at the time of retirement (whether on superannuation or otherwise):

    1. Leave encashment actually received
    2. 10 months “average salary”
    3. Cash equivalent of unveiled leave (Maximum 30 days leave X Completed Year of service).
    4. Maximum Amount as specified by the Govt i.e. Rs. 3,00,000

     

    Here we need to remember the following terms:

    1. “Salary” for the above purpose means “Basic + Dearness Allowance” including commission received if any based on a fixed percentage of turnover.
    2. “Average Salary” means the average salary drawn by the employee during the period of 10 months immediately preceding his retirement.
    3. Relief Sec 89: Employees in service can claim relief under section 89 of the Income Tax Act.

    Regards

    See less
    • 3
Ramesh Sharma
Enlightened
Asked: In:

  1. CA Manish Kumar Gupta Enlightened

    Yes, a taxpayer opting for the presumptive taxation scheme under Section 44ADA is required to pay advance tax. However, the payment schedule is different from regular taxpayers. Advance Tax Rule for Section 44ADA (Special Provision - Section 211(1)(b)) Entire advance tax (100%) must be paid in a sinRead more

    Yes, a taxpayer opting for the presumptive taxation scheme under Section 44ADA is required to pay advance tax. However, the payment schedule is different from regular taxpayers.

    Advance Tax Rule for Section 44ADA (Special Provision – Section 211(1)(b))

    • Entire advance tax (100%) must be paid in a single installment on or before March 15 of the financial year.

    • If advance tax is not paid by March 15, interest under Sections 234B & 234C will be levied.

    See less
    • 0
CA Vishnu Ram
Enlightened
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    Hostel Expenditure Allowance is partially exempt from tax under Section 10(14)(ii) of the Income Tax Act, 1961, read with Rule 2BB(2)(g) of the Income Tax Rules, 1962. Exemption Limit: As per Rule 2BB(2)(g): Hostel Expenditure Allowance is exempt up to ₹300 per month per child, for a maximum of 2 chRead more

    Hostel Expenditure Allowance is partially exempt from tax under Section 10(14)(ii) of the Income Tax Act, 1961, read with Rule 2BB(2)(g) of the Income Tax Rules, 1962.

    Exemption Limit:

    As per Rule 2BB(2)(g):

    Hostel Expenditure Allowance is exempt up to ₹300 per month per child, for a maximum of 2 children.

    ✅ Maximum exemption = ₹300 × 2 children × 12 months = ₹7,200 per annum

    See less
    • 0
Ramesh Sharma
Enlightened
Asked: In:

  1. CA Vishnu Ram Enlightened

    When a company incurs costs for issuing shares or debentures—such as underwriting fees, printing expenses, and other related costs—these expenses are generally considered capital in nature rather than revenue expenses. Key Points to Note: Capital Nature of the Expense:Costs incurred in raising capitRead more

    When a company incurs costs for issuing shares or debentures—such as underwriting fees, printing expenses, and other related costs—these expenses are generally considered capital in nature rather than revenue expenses.

    Key Points to Note:

    • Capital Nature of the Expense:
      Costs incurred in raising capital (by issuing shares or debentures) are treated as capital expenditure. They are part of the process of financing the company and are not directly linked to generating regular business income.

    • Non-Deductibility Under the Income Tax Act:
      Since these expenses are capital in nature, they are not allowed as a deduction when computing taxable income. In other words, you cannot reduce your current year’s taxable profits by the amount spent on issuing shares or debentures.

    • Treatment as Capital Expenditure:
      Instead of a direct deduction, such expenses may be capitalized. Depending on the applicable accounting and tax provisions, they might be written off over a period through amortization or depreciation if the law permits, but they are not deducted immediately as a revenue expense.

    Relevant Provisions:

    • Section 37 of the Income Tax Act, 1961:
      This section generally allows deductions for revenue expenses incurred wholly and exclusively for business purposes. However, since the issuance expenses are of a capital nature, they do not qualify under this provision.

    Conclusion:

    In summary, the expenditure incurred on issuing shares or debentures is treated as a capital expense and is not allowed as a deduction in the current year under the Income Tax Act. It does not directly reduce your taxable income.

    See less
    • 0
CA Vishnu Ram
Enlightened
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    Capital gain on compulsory acquisition of urban agricultural land is chargeable to tax unless it qualifies for exemption under Section 10(37).This exemption is available only to individuals or HUFs and only when land was used for agricultural purposes for 2 years before acquisition. Explanation in SRead more

    Capital gain on compulsory acquisition of urban agricultural land is chargeable to tax unless it qualifies for exemption under Section 10(37).
    This exemption is available only to individuals or HUFs and only when land was used for agricultural purposes for 2 years before acquisition.

    Explanation in Simple Terms:

    ✅ Urban Agricultural Land = Capital Asset

    • If it is in/near municipality (as per Sec 2(14)), it’s considered capital asset

    • Hence, capital gain is chargeable

    ✅ But Exemption Possible Under Section 10(37) if:

    1. Land was used for agricultural purposes in the 2 years before acquisition (by assessee or their parents)

    2. Assessee is an individual or HUF

    3. Compensation received on or after 1st April 2004

    ❌ If conditions NOT met, capital gains shall be taxable in the year of receipt of compensation (u/s 45(5))

    See less
    • 0
CA Vishnu Ram
Enlightened
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    ​Yes, under the Indian Income Tax Act, certain insurance claim receipts are treated as capital gains and are taxable accordingly. Here's a detailed breakdown: Taxability of Insurance Claims under Section 45(1A) Section 45(1A) of the Income Tax Act, 1961, addresses the tax implications of insurance cRead more

    ​Yes, under the Indian Income Tax Act, certain insurance claim receipts are treated as capital gains and are taxable accordingly. Here’s a detailed breakdown:

    Taxability of Insurance Claims under Section 45(1A)

    Section 45(1A) of the Income Tax Act, 1961, addresses the tax implications of insurance compensation received due to the damage or destruction of a capital asset. This section was introduced to tax such receipts as capital gains, even though there’s no actual transfer of the asset.

    ✅ Applicability Conditions:

    1. The insurance compensation is received due to the damage or destruction of a capital asset (e.g., building, machinery, land).​

    2. The cause of damage or destruction is one of the following:​

      • Natural calamities (e.g., flood, cyclone, earthquake)

      • Riot or civil disturbance​

      • Accidental fire or explosion

      • Action by an enemy or measures taken to combat such action​

    If both conditions are met, the insurance compensation is deemed as consideration received for the transfer of the asset, and capital gains tax is applicable. ​

    See less
    • 0
CA Vishnu Ram
Enlightened
Asked: In:

  1. CA Sanjiv Kumar Enlightened Chartered Accountant

    Step-by-Step Computation Let’s assume you sell a capital asset (other than a residential house) and want to compute the exemption on the long-term capital gain under Section 54F. Step 1: Compute the Long-Term Capital Gain (LTCG) LTCG = Sale Consideration – (Indexed Cost of Acquisition + Direct ExpenRead more

    Step-by-Step Computation

    Let’s assume you sell a capital asset (other than a residential house) and want to compute the exemption on the long-term capital gain under Section 54F.

    Step 1: Compute the Long-Term Capital Gain (LTCG)

    • LTCG = Sale Consideration – (Indexed Cost of Acquisition + Direct Expenses)

      • (Remember, for long-term assets, indexation is allowed under Section 55(2).)

    Step 2: Determine the Net Sale Consideration

    • This is the total amount received from the sale after subtracting any expenses directly attributable to the sale (such as brokerage).

    Step 3: Invest the Net Sale Consideration

    • Ensure that the entire net sale consideration is reinvested in a residential house property as per the prescribed timeline.

    Step 4: Calculate the Exemption

    • Exemption Amount = (Investment in Residential House × LTCG) / Net Sale Consideration

      • If the entire net sale consideration is reinvested, the exemption equals the entire LTCG.

      • If only a part is reinvested, then only the proportionate share of the gain gets exempted.

    Step 5: Tax on the Remaining Gain (if any)

    • The remaining capital gain (if any) that is not covered by the exemption is subject to tax at the applicable long-term capital gains rate (20% plus applicable surcharge and cess).

    See less
    • 0
Load More Questions

Latest News & Updates

Taxchopal Latest Articles

On: Comments: 0 Views: 24

Startup India Seed Fund Scheme (SISFS) – Get ₹50 Lakh for Your Startup

🟢 Startup India Seed Fund Scheme (SISFS) – Get ₹50 Lakh for Your Startup The Startup India Seed Fund Scheme (SISFS) is a powerful funding program launched by the Government of India to support early-stage startups. If you have an ...

On: Comments: 0 Views: 28

PMEGP Scheme: Get Up to ₹25 Lakhs Subsidy to Start Your Business

🟢 PMEGP Scheme Subsidy for New Business in India – Apply Now & Get ₹25 Lakh The PMEGP scheme subsidy for new business in India is a golden opportunity for entrepreneurs. If you’re planning to start your own business or ...

On: Comments: 0 Views: 15

Impact of Budget 2025 on Taxpayers: Key Changes You Should Know

Impact of Budget 2025 on Taxpayers: Key Changes You Should Know Introduction The Union Budget 2025 has introduced several key tax changes that affect individual taxpayers, businesses, and investors. Whether you’re a salaried employee, self-employed, or an investor, it’s crucial ...

Explore Our Blog