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Advance Salary and bonus become taxable in the year of actual receipt on the basis of the tax rates applicable in the year of receipt. However, Assess can claim relief under section 89(1) of the Income Tax Act.
Advance Salary and bonus become taxable in the year of actual receipt on the basis of the tax rates applicable in the year of receipt. However, Assess can claim relief under section 89(1) of the Income Tax Act.
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Leave encashment at the time of service is fully taxable. Leave encashment at the time of retirement is not taxable for Government Employees. Leve encashment received by the legal hair of deceased employee is fully exempted. But for other employees, an exemption is provided u/s 10(10AA)(ii) as per tRead more
Leave encashment at the time of service is fully taxable.
Leave encashment at the time of retirement is not taxable for Government Employees. Leve encashment received by the legal hair of deceased employee is fully exempted.
But for other employees, an exemption is provided u/s 10(10AA)(ii) as per the below method:
| Leave encashment received | 200000 |
| Average salary* of last 10 months | 180000 |
| Salary per day * Balance of earned leave for service span (Maximum 30 days leave per year for every year of completed service is allowed) | 250000 |
| Amount notified by the Government Rs 3,00,000 aggregate. | 3,00,000 |
| Leave encashment Exemption(Lower of above) | 180000 |
*Salary means basic salary, dearness allowance, and commission based on a fixed percentage of turnover secured by the employee.
So the taxable amount is Rs 2,00,000-1,80,000=20,000/-
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Clause (a)Â of the Proviso to Section 12A (2) clearly specify that if the existing Trusts / Institutions registered under Section 12A or 12 AA of the Act, apply for fresh registration u/s 12 AB of the Act before 30th June 2021, provisions of Section 11 and 12 shall apply to Trust/ Institution from thRead more
Clause (a)Â of the Proviso to Section 12A (2) clearly specify that if the existing Trusts / Institutions registered under Section 12A or 12 AA of the Act, apply for fresh registration u/s 12 AB of the Act before 30th June 2021, provisions of Section 11 and 12 shall apply to Trust/ Institution from the assessment year from which they were granted their earlier registration.
Section 12A (2) further clarifies that if the said time line of 1 st April to 30th June 2021 is not followed, the provisions of Section 11 and 12 shall apply to Trust/ Institution from the 1 st day of the financial year in which such application is made.
In short, within time application for fresh registration u/s 12 AB will register the Trust from the date on which it was originally registered u/s 12 A or Sec 12 AA. If the application for registration u/s 12 AB is made late that is after 30/06/2021, the registration u/s 12 AB will be granted for F Y 2021/22 and onwards.
See lessA Trust which does not have registration u/s 12A and 80G of the Act can apply for provisional 12AB and provisional 80G registration. The case will fall in Section 80G(5)(vi) and the clause iv of the first proviso to the said section. The application may be made in Form 10 A with the required enclosuRead more
A Trust which does not have registration u/s 12A and 80G of the Act can apply for provisional 12AB and provisional 80G registration. The case will fall in Section 80G(5)(vi) and the clause iv of the first proviso to the said section.
The application may be made in Form 10 A with the required enclosures as stated under Rule 11 AA of Income Tax Rules.
However, since Sec 80G (5) talks about the registrations to Charitable Trusts established in India whose income is not liable to be included in total income under section 11,12 or clause 23 AA or 23 C of section 10, the first registration granted would be provisional registration u/s 12AB of the Act.
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Hi, So you have received money, generally, people pay to leave a job. So let see the Income-tax treatment of money received in lieu of notice of resignation. This amount will be treated as "Salary" as defined in section 17(1) and will be chargeable to tax on a receipt basis as mentioned in section 1Read more
Hi,
So you have received money, generally, people pay to leave a job. So let see the Income-tax treatment of money received in lieu of notice of resignation.
This amount will be treated as “Salary” as defined in section 17(1) and will be chargeable to tax on a receipt basis as mentioned in section 15 of the Income Tax Act.
Thanks
See lessGolden Rules of Accounting To understand the Golden Rules of Accounting we must first understand the types of accounts. The account classification applies to all the types of general ledgers. In other words, every account will fall in one of the broad classifications given below. There are three typRead more
Golden Rules of Accounting
To understand the Golden Rules of Accounting we must first understand the types of accounts. The account classification applies to all the types of general ledgers. In other words, every account will fall in one of the broad classifications given below.
There are three types of accounts:
Real Account
Personal Account
Nominal Account
A Real Account is a general ledger account relating to Assets and Liabilities other than people accounts. These are accounts that don’t close at year-end and are carried forward. An example of a Real Account is a cash Account.
A Personal account is a General ledger account connected to all persons like individuals, firms and associations. An example of a Personal Account is a Ram’s Account.
A Nominal account is a General ledger account pertaining to all income, expenses, losses and gains. An example of a Nominal Account is an discount account.
Golden rules of accounting
As per the accounts type, the accounting rules have been defined. For each account there is a set of Golden Rules and hence there are three Golden Rules of Accounting. The Golden rules define the treatment of all transactions conducted by the business.
| Type of account | Golden rules |
| Real Account | Debit – what comes in to the business
Credit – what goes out from the business |
| Personal account | Debit – the receiver
Credit – the giver |
| Nominal Account | Debit – the expenses or losses of the business
Credit – the income or gain of the business |
Illustration An entity named Orange Ltd. has the following transactions.
First of all, let us identify the accounts involved in these transactions and classify them into the different types of accounts:
| Transaction | Accounts involved | Type of Accounts | Golden rules |
| Purchase goods worth Rs.50,000 from shyam Ltd. | Purchase Account
Shyam Ltd. Account |
Nominal Account – Expense account
Personal Account – Creditors account |
Debit the expense or loss
Credit the giver
|
| Deposit Rs.10,000 in Bank | Bank Account
Cash Account |
Real Account – Asset account
Real Account – Asset account |
Debit what comes into the business
Credit what goes out from the business
|
| Sale of goods worth Rs. 35,000 to Ram. | Sales Account
Ram Account |
Nominal Account -Income Account
Personal Account – Debtors Account |
Debit the receiver
Credit the income or gain |
| Pays Rs.10,000 as Salary | Salary Account
Bank Account |
Nominal Account
Real Account – Asset account |
Debit the expense or loss
Credit what goes out of business
|
| Earn Rs.3,000 as interest on Bank account | Interest received
Bank Account |
Nominal Account – Income Account
Real Account – Asset Account |
Debit what comes into the business
Credit the income or gain
|
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Hi, TDS on Payment to consultant is covered in section 194J of the Income Tax Act. Let's discuss the second part of this question i.e who is required to deduct TDS As per section 194 J, Every person (Service Recipient) needs to deduct TDS on consultancy charges, except Individual and HUF: In case ofRead more
Hi,
TDS on Payment to consultant is covered in section 194J of the Income Tax Act.
Let’s discuss the second part of this question i.e who is required to deduct TDS
As per section 194 J, Every person (Service Recipient) needs to deduct TDS on consultancy charges, except Individual and HUF:
Now let’s see the first part of the question i.e what happens if TDS is not deducted.
Following consequences need to face to the service recipient.
Thanks!
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