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VRS and Income Tax
What is Voluntary Retirement Scheme? VRS is a monetary facility provided by the corporates for the retrenchment of some of its employees due to various reasons related to employees and the company. It is opted by an employee that wishes ...
PENSION AND INCOME TAX
Pension is a kind of retirement benefit that is provided to the retired employees of an organization as compensation for past employment with that organization. It is paid over a regular, fixed period of time and in form of an ...
Income Tax on Encashment of Leave
Income Tax on Leave Salary The basic knowledge An employee is allowed various types of leaves like Casual Levees, Earned Leaves, Medical Leave, Gazetted Holidays, etc. Generally, the employee is allowed to either avail of these leaves or carryforward to ...
What is HUF? Can other than Hindus also form a HUF?
HUF means Hindu Undivided Family. You can save taxes by creating a family unit and pooling in assets to form a HUF. HUF is taxed separately from its members. Mainly A Hindu family can come together and form a HUF. And Buddhists, Jains, and Sikhs can also form a HUF. And also HUF has its own PRead more
HUF means Hindu Undivided Family. You can save taxes by creating a family unit and pooling in assets to form a HUF. HUF is taxed separately from its members.
Mainly
A Hindu family can come together and form a HUF. And Buddhists, Jains, and Sikhs can also form a HUF.
And also HUF has its own PAN and files tax returns independent of its members.
See lessWhat is security transaction tax?
STT is a kind of financial transaction tax which is similar to tax collected at source (TCS). STT is a direct tax levied on every purchase and sale of securities that are listed on the recognized stock exchanges in India. STT is governed by Securities Transaction Tax Act (STT Act) and STT ActRead more
STT is a kind of financial transaction tax which is similar to tax collected at source (TCS). STT is a direct tax levied on every purchase and sale of securities that are listed on the recognized stock exchanges in India. STT is governed by Securities Transaction Tax Act (STT Act) and STT Act has specifically listed down various taxable securities transaction i.e., transaction on which STT is leviable.
Taxable securities include equity, derivatives, unit of equity oriented mutual fund. It also includes unlisted shares sold under an offer for sale to the public included in IPO and where such shares are subsequently listed in stock exchanges. STT is an amount to be paid over and above transaction value and hence, increases transaction value.
See lessCan I take cash payment on sale of goods?
In order to put check on use of cash in high value transactions, the government has put a blanket ban on acceptance of cash beyond 2 lakhs by any person under Section 269ST. It is for each occasion like marriage, birthday party etc. or for each transaction like sale of gold, immovable property, holiRead more
In order to put check on use of cash in high value transactions, the government has put a blanket ban on acceptance of cash beyond 2 lakhs by any person under Section 269ST. It is for each occasion like marriage, birthday party etc. or for each transaction like sale of gold, immovable property, holiday package, renovation/furnishing of property etc. for which this restriction will apply. It may happen that the payer does not claim tax deduction for it but the restriction on recipient will still apply.
Unlike business expenditure, here the restriction is all pervasive for the whole transaction as a whole and not necessarily for payment made in a single day. For example, a caterer cannot accept two lakhs or more in aggregate for marriage reception form a single payer, whether on a single day or spread over several days. Law, generally, does not have any restrictions for payment of cash for transaction of purchase/sale of jewellery or immovable property etc. but if the value of a single transaction exceeds two lakhs, then seller is prohibited from accepting any cash beyond two lakhs for such transactions.
See lessWhat is the penalty for accepting cash more that Rs 2 Lakh
If a person receives any sum in contravention of the provisions of section 269ST, he will be liable to pay a penalty of a sum equal to the amount of such receipt under Section 271DA. However if a person proves that there were good and sufficient reasons for the contravention, no penalty will be impoRead more
If a person receives any sum in contravention of the provisions of section 269ST, he will be liable to pay a penalty of a sum equal to the amount of such receipt under Section 271DA.
However if a person proves that there were good and sufficient reasons for the contravention, no penalty will be imposed.
See lessHow much TDS is deducted on withdrawal of Cash from Bank
TDS @ 2% on cash withdrawal u/s 194N of the Act is applicable starting 1st September 2019, or FY 2019-2020. TDS will be deducted at a rate of 2% on cash withdrawals in excess of ₹ 1 crore if the person withdrawing the cash has filed income tax return for any or all three previous AYs. TDS will be deRead more
TDS @ 2% on cash withdrawal u/s 194N of the Act is applicable starting 1st September 2019, or FY 2019-2020.
TDS will be deducted at a rate of 2% on cash withdrawals in excess of ₹ 1 crore if the person withdrawing the cash has filed income tax return for any or all three previous AYs.
TDS will be deducted at 2% on cash withdrawals of more than ₹ 20 lakh and 5% for withdrawals exceeding ₹ 1 crore if the person withdrawing the cash has not filed ITR for any of the preceding three AYs.
Whereas,
TDS on cash withdrawal u/s 194N will not apply to withdrawals made by the following persons:
See lessIs there any interest applicable on payment of less advance tax?
Delay in Advance Tax Payment Taxpayers who are having a tax liability of more than Rs.10,000 should remit Advance Tax to the government before the due date. However, senior citizens who are not having any business income need not pay advance tax. The due date for advance tax payment and procedure foRead more
Delay in Advance Tax Payment
Taxpayers who are having a tax liability of more than Rs.10,000 should remit Advance Tax to the government before the due date. However, senior citizens who are not having any business income need not pay advance tax. The due date for advance tax payment and procedure for remitting advance tax payment is reckoned as per the provisions of the Income Tax Act. In this article, we look at Section 234B and Section 234C of the Income Tax Act which deals with penalty for delay in advance tax payment.
Due Date for Advance Tax Payment
The due date for advance payment of tax is as follows:
Taxpayer Type By 15th June By 15th September By 15th December By 15th March
All types of taxpayers (other than those who opted for presumptive taxation scheme) Upto 15% of advance tax Upto 45% of advance tax Upto 75% of advance tax Upto 100% of advance tax
Taxpayers who opted for the presumptive taxation scheme NIL NIL NIL Upto 100% of advance tax
Section 234B – Penalty for Not Paying Advance Tax Payment
The penalty under Section 234B of the Income Tax Act is applicable if:
A taxpayer has failed to pay advance tax though he is liable to pay advance tax; or
The advance tax paid by the taxpayer is less than 90% of the assessed tax.
Penalty for Default in Advance Tax Payment
Under section 234B, interest for default in payment of advance tax is levied at 1% simple interest per month or part of a month. The penalty interest is levied on the amount of unpaid advance tax. If there is a shortfall in payment of advance tax, then interest is levied on the amount by which advance tax is short paid.
The penal interest for default in advance tax payment will be levied from 1st April of the relevant financial year till the date of determination of income under Section 143(1) or when a regular assessment is made, then till the date of such a regular assessment.
In case the taxpayer has paid any tax before the completion of the assessment, then interest will be levied as follows:
Upto the date of payment of self-assessment tax, interest will be computed on the amount of unpaid advance tax.
From the date of payment of self-assessment tax, interest will be levied on the unpaid amount of advance tax after deducting the self-assessment tax paid by the taxpayer.
In case income is increased due to an income tax assessment or recomputation, interest will be levied on the differential amount from the first day of the assessment year till the date of assessment/re-computation.
Section 234C – Penalty for Short Payment of Advance Tax
Section 234C is applicable if a taxpayer has paid advance tax which is less than the required amount. Since the advance tax is paid based on estimated tax liability, only tax payment that falls below the threshold below will be liable for a penalty for Section 234C of the Income Tax Act.
Penal interest under Section 234C is levied only if:
Advance tax paid on or before 15th June is less than 12% of advance tax payable.
Advance tax paid on or before 15th September is less than 36% of advance tax payable.
Advance tax paid on or before 15th December is less than 75% of advance tax payable.
Advance tax paid on or before 15th March is less than 100% of advance tax payable
See lessWhat are the conditions of section 40b for getting deduction of remuneration in a firm?
Section 40b determines the maximum amount of remuneration and interest on capital payable to a partner under Income Tax Act. The amount over the specified limit is not allowed as a deduction to a partnership firm. Remuneration To Partners Remuneration includes salary, bonus, commission .RemunerationRead more
Section 40b determines the maximum amount of remuneration and interest on capital payable to a partner under Income Tax Act. The amount over the specified limit is not allowed as a deduction to a partnership firm.
Remuneration To Partners
Remuneration includes salary, bonus, commission .Remuneration in partnership firm is allowed as a deduction if following conditions are satisfied
Calculation of book profit
Profit as per Profit & Loss a/c – xxx
Add- Remuneration to partners if debited to Profit and loss a/c
Add- Brought forward business loss, deduction under section 80C
to 80U if debited to profit and loss a/c
Less – Income under house property, capital gain, other
sources if credited to profit and loss a/c
Book Profits xxx
Example-
Book profit = Rs. 9 Lakhs
Maximum allowed salary = 3,00,000*90% + 6,00,000*60% = Rs. 6.3 lakhs
Remuneration which is allowed as expenses in the hands of partnership firm will be taxable in the hands of receiving partner as “Income from Business or Profession”.
If such remuneration is not allowed as expense in hands of partnership firm then it will not be taxable in the hands of partners.
See less