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When a trader is liable to deduct TCS on sale of goods?
A trader is liable to deduct TCS (Tax Collected at Source) on the sale of goods under Section 206C(1H) of the Income Tax Act, subject to the following conditions: 1️⃣ Applicability of TCS on Sale of Goods (Sec 206C(1H)) ✔️ The seller must have a turnover exceeding ₹10 crore in the previous financialRead more
A trader is liable to deduct TCS (Tax Collected at Source) on the sale of goods under Section 206C(1H) of the Income Tax Act, subject to the following conditions:
1️⃣ Applicability of TCS on Sale of Goods (Sec 206C(1H))
✔️ The seller must have a turnover exceeding ₹10 crore in the previous financial year.
✔️ TCS applies when the buyer purchases goods worth more than ₹50 lakh in a financial year.
✔️ TCS is applicable only on the amount exceeding ₹50 lakh.
2️⃣ TCS Rate on Sale of Goods
✔️ 0.1% of the amount exceeding ₹50 lakh (If PAN is available).
✔️ 1% if the buyer does not provide a PAN or Aadhaar.
3️⃣ When to Collect & Deposit TCS?
✔️ TCS should be collected at the time of receipt of payment from the buyer.
✔️ It must be deposited with the government by the 7th of the next month.
4️⃣ Exemptions from TCS on Sale of Goods
❌ TCS is NOT applicable if:
✅ Example:
If a trader has a turnover of ₹12 crore in the last financial year and sells goods worth ₹60 lakh to a customer, TCS will be applicable on ₹10 lakh (₹60 lakh – ₹50 lakh).
TCS Calculation:
See less👉 TCS @0.1% on ₹10 lakh = ₹1,000 (if PAN is available).
What are the conditions of section 184 for claiming deduction of remuneration and interest by a firm?
Under Section 184 of the Income Tax Act, a partnership firm can claim deduction for remuneration and interest paid to partners, but it must fulfill the following conditions: Conditions for Claiming Deduction under Section 184 1️⃣ The Firm Must Be a Valid Partnership Firm The firm must be a genuine pRead more
Under Section 184 of the Income Tax Act, a partnership firm can claim deduction for remuneration and interest paid to partners, but it must fulfill the following conditions:
Conditions for Claiming Deduction under Section 184
1️⃣ The Firm Must Be a Valid Partnership Firm
2️⃣ Partnership Deed Must Be in Writing
3️⃣ Remuneration & Interest Must Be Authorized in the Partnership Deed
4️⃣ Interest and Remuneration Should Be Within the Prescribed Limits
5️⃣ The Firm Must File a Valid Income Tax Return
6️⃣ Changes in the Partnership Deed Must Be Reported
✅ Conclusion:
See lessTo claim deductions for remuneration and interest paid to partners, ensure that:
✔️ A valid partnership deed exists and is filed with the Income Tax Department.
✔️ Interest and remuneration are within the prescribed limits of Section 40(b).
✔️ The firm is assessed as a partnership firm and files its return on time.
What are the conditions of section 40b for getting deduction of remuneration in a firm?
Under Section 40(b) of the Income Tax Act, a partnership firm can claim a deduction for remuneration paid to partners, but it must satisfy the following conditions: 1️⃣ Remuneration Must Be Paid to "Working Partners" Only Only working partners (actively engaged in business) are eligible for remuneraRead more
Under Section 40(b) of the Income Tax Act, a partnership firm can claim a deduction for remuneration paid to partners, but it must satisfy the following conditions:
1️⃣ Remuneration Must Be Paid to “Working Partners” Only
2️⃣ Must Be Authorized by the Partnership Deed
3️⃣ Payment Should Be Within the Prescribed Limits
✅ Book profit ≤ ₹3 lakh → 90% of book profit or ₹1.5 lakh (whichever is higher)
✅ Book profit > ₹3 lakh → 60% of book profit
4️⃣ Remuneration Must Be Paid to an Individual Partner
5️⃣ The Partnership Deed Must Be in Effect
6️⃣ Firm Must Be Assessed as a Partnership Firm
✅ Conclusion:
See lessTo claim a deduction for partner remuneration, ensure it is paid to a working partner, authorized in the deed, within Section 40(b) limits, and in a firm recognized as a partnership under the Income Tax Act.
What is the limit of remuneration of partner as per Income Tax act?
The remuneration (salary, bonus, commission, etc.) paid to partners in a partnership firm is allowed as a deduction under Section 40(b) of the Income Tax Act, but only within prescribed limits based on the book profit of the firm. Maximum Allowable Remuneration (as per Section 40(b)) ✅ If Book ProfiRead more
The remuneration (salary, bonus, commission, etc.) paid to partners in a partnership firm is allowed as a deduction under Section 40(b) of the Income Tax Act, but only within prescribed limits based on the book profit of the firm.
Maximum Allowable Remuneration (as per Section 40(b))
✅ If Book Profit is ₹3 lakh or less → 90% of book profit or ₹1.5 lakh (whichever is higher)
✅ If Book Profit is above ₹3 lakh → 60% of book profit
🔹 Important Conditions:
📌 Example Calculation:
✅ Conclusion:
See lessPartner remuneration is deductible only if it follows Section 40(b) rules. If it exceeds limits, the extra amount is disallowed for tax purposes.
What is the penalty code no. 11C and N11C under Income Tax Act? Which code is used for payment of penalty on late filing of ITR?
Penalty codes 11C and N11C serve different purposes under the Income Tax Act: 11C is used for general penalties imposed by the Income Tax Department under various sections, such as under-reporting of income (Section 270A) or concealment of income (Section 271(1)(c)). If you have received a penalty dRead more
Penalty codes 11C and N11C serve different purposes under the Income Tax Act:
11C is used for general penalties imposed by the Income Tax Department under various sections, such as under-reporting of income (Section 270A) or concealment of income (Section 271(1)(c)). If you have received a penalty demand notice, you should use Code 11C when making the payment.
N11C is specifically for late filing fees under Section 234F. If you file your Income Tax Return (ITR) after the due date, you will need to pay a penalty of ₹1,000 (if total income < ₹5 lakh) or ₹5,000 (if total income > ₹5 lakh). For this, use Code N11C while making the payment through the Income Tax e-filing portal.
✅ Conclusion: If you’re paying a late filing fee for delayed ITR submission, use N11C. For other penalties issued by the tax department, use 11C. Always verify the payment details before proceeding.
See lessI have got a bill of for reimbursement of expenditure from my consultant, do I need to deduct TDS on the same?
Whether you need to deduct TDS on the reimbursement of expenditure to your consultant depends on the nature of the bill and the agreement with the consultant. Here’s how to determine it: 1️⃣ If the Reimbursement is Part of the Professional Fee: If the consultant has raised a single invoice coveringRead more
Whether you need to deduct TDS on the reimbursement of expenditure to your consultant depends on the nature of the bill and the agreement with the consultant. Here’s how to determine it:
1️⃣ If the Reimbursement is Part of the Professional Fee:
2️⃣ If the Reimbursement is Separate & on Actuals:
3️⃣ Best Practices:
✅ Ask the consultant to bill separately for professional fees and reimbursement.
See less✅ Maintain proper documentation (supporting invoices) to justify the non-deduction of TDS in case of scrutiny.
✅ If unsure, consult a tax expert to ensure compliance.
How much bank account should I open as an individual?
The number of bank accounts an individual should open depends on their financial goals, income sources, and spending habits. Here’s a practical approach: 1️⃣ Primary Savings Account (Must-Have) Used for salary credits, savings, and daily transactions. Choose a bank with good digital banking servicesRead more
The number of bank accounts an individual should open depends on their financial goals, income sources, and spending habits. Here’s a practical approach:
1️⃣ Primary Savings Account (Must-Have)
2️⃣ Secondary Savings Accounts (For Budgeting & Goals)
3️⃣ Investment accounts (For Wealth Growth)
4️⃣ Business or Freelance Accounts (If Self-Employed)
5️⃣ Joint Account (If Needed)
💡 Best Practice:
See less✅ 2-3 accounts are sufficient for most individuals.
✅ Avoid multiple accounts unless necessary (to prevent maintenance fees and complexity).