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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 assessment under section 143(1)?
All the income tax returns filed by the taxpayers are first processed online at the Centralised Processing Centre (CPC). After processing the return, the income tax department then issues intimation under section 143(1) to the taxpayers informing them about the results. If you have received an incomRead more
All the income tax returns filed by the taxpayers are first processed online at the Centralised Processing Centre (CPC). After processing the return, the income tax department then issues intimation under section 143(1) to the taxpayers informing them about the results.
If you have received an income tax notice, please do not worry, That May be just Information of ITR Process.
But Also,
An income tax return can be either filed voluntarily under Section 139 or on demand by the income tax department under Section 142(1). It is necessary to understand what happens after the taxpayer has filed the return of income. Income tax department carries out a preliminary assessment of all the returns filed and informs taxpayers of the result of such preliminary assessment. This assessment primarily includes arithmetical errors, internal inconsistencies, tax calculation and verification of tax payment. Such communication to the taxpayer post the preliminary assessment is called intimation under Section 143(1). The preliminary assessment is wholly computerised and does not have any human intervention and is delegated to Centralised Processing Center (CPC).
See lessDo the Statutory Auditors have a right to access all the Board Agenda and Minutes thereof?
All audits on behalf of the Comptroller and Auditor General are required to be conducted as per the auditing standards. In other words, auditing standards shall apply to all types of audit including financial audit, compliance audit and performance audit. In conjunction with obtaining an understandiRead more
All audits on behalf of the Comptroller and Auditor General are required to be
conducted as per the auditing standards. In other words, auditing standards shall apply to all types of audit including financial audit, compliance audit and performance audit.
In conjunction with obtaining an understanding of internal control over financial reporting, the auditor should obtain an understanding of the company’s process for:
- Identifying related parties and relationships and transactions with related parties;
- Authorizing and approving transactions with related parties; and
- Accounting for and disclosing relationships and transactions with related parties in the financial statements.
See lessHow much interest is liable on non filing of ITar or late filing of ITR?
There is not any direct interest on Late filling of ITR. (this may Impose Penalties) But, If you do not file income tax returns on or before the due date, you would be required to pay interest at the rate of 1% for every month, or part of a month, on the amount of tax remaining unpaid as per sectionRead more
There is not any direct interest on Late filling of ITR. (this may Impose Penalties)
But, If you do not file income tax returns on or before the due date, you would be required to pay interest at the rate of 1% for every month, or part of a month, on the amount of tax remaining unpaid as per section 234A.
It’s important to note that one’s ITR cannot be filed if one hasn’t paid the taxes.
Penalties :
Late Filing Fees u/s 234F
Effective from the FY 2017-28, a late filing fee will be applicable for filing your returns after the due date under section 234F. For instance after due date for FY 2020-21 which is 31st Dec 2021.
The maximum penalty is Rs. 10,000. If you file your ITR after the due date (30th Sep) but before 31 December, a penalty of Rs 5000 will be levied.
For returns filed later than 31 December of the relevant assessment year, the penalty levied will be increased to Rs.10,000.
There is a relief given to small taxpayers – the IT department has stated that if the total income does not exceed Rs 5 lakh, the maximum penalty levied for delay will be Rs 1000.
See lessHow to compute income of AOP or BOI under the Income Tax Act?
Tax liability of AOP/BOI depends on whether or not share of members of AOP/BOI are known. 1) Where share of members are known Where individual shares of members in AOP/BOI are known then tax liability of AOP/BOI shall be determined as under: a. Where income of none of the members exceeds the maximuRead more
Tax liability of AOP/BOI depends on whether or not share of members of AOP/BOI are known.
1) Where share of members are known
Where individual shares of members in AOP/BOI are known then tax liability of AOP/BOI shall be determined as under:
2) Where share of members are not known
In such a case income of the AOP/BOI shall be taxable at maximum marginal rate (i.e., 30% plus surcharge and HEC as applicable). But if income of any member of AOP/BOI is taxable at a rate higher than maximum marginal rate then total income of AOP/BOI shall be chargeable to tax at such higher rate of tax.
For the purposes of this section, the individual shares of the members of an AOP or BOI in the income of AOP/BOI shall be deemed to be indeterminate or unknown if such shares are indeterminate or unknown on the date of formation of such AOP or BOI or at any time thereafter.
B. Alternate Minimum Tax:
Tax payable by AOP/BOI cannot be less than 18.5 per cent (increased by Surcharge and HEC) of “adjusted total income” as per section 115JC . However, provisions related to alternate minimum tax shall not apply to an AOP or BOI whose adjusted total income does not exceed twenty lakh rupees
See lessWhat is tonnage tax?
TONNAGE TAX In case of a company, the income from the business of operating qualifying ships, may, at its option, be computed in accordance with the provisions of Chapter XII-G. Thus, tonnage taxation is a scheme of presumptive taxation wherein notional income arising from operation of shipsRead more
TONNAGE TAX
Special provisions relating to income of shipping companies
- Section – 115V : Definitions.
- Section – 115VA : Computation of profits and gains from the business of operating qualifying ships.
- Section – 115VB : Operating ships.
- Section – 115VC : Qualifying company.
- Section – 115VD : Qualifying ship.
- Section – 115VE : Manner of computation of income under tonnage tax scheme
- Section – 115VF : Tonnage income.
- Section – 115VG : Computation of tonnage income.
- Section – 115VH : Calculation in case of joint operation, etc.
- Section – 115V-I : Relevant shipping income.
- Section – 115VJ : Treatment of common costs.
- Section – 115VK : Depreciation.
- Section – 115VL : General exclusion of deduction and set off, etc.
- Section – 115VM : Exclusion of loss.
- Section – 115VN : Chargeable gains from transfer of tonnage tax assets.
- Section – 115V-O : Exclusion from provisions of section 115JB.
- Section – 115VP : Method and time of opting for tonnage tax scheme.
- Section – 115VQ : Period for which tonnage tax option to remain in force.
- Section – 115VR : Renewal of tonnage tax scheme.
- Section – 115VS : Prohibition to opt for tonnage tax scheme in certain cases.
- Section – 115VT : Transfer of profits to Tonnage Tax Reserve Account.
- Section – 115VU : Minimum training requirement for tonnage tax company.
- Section – 115VV : Limit for charter in of tonnage
- Section – 115VW : Maintenance and audit of accounts.
- Section – 115VX : Determination of tonnage.
- Section – 115VY : Amalgamation.
- Section – 115VZ : Demerger.
- Section – 115VZA : Effect of temporarily ceasing to operate qualifying ships.
- Section – 115VZB : Avoidance of tax.
- Section – 115VZC : Exclusion from tonnage tax scheme.
See lessWhat is the limit of remuneration of partner as per Income Tax act?
Section 40b describes the maximum amount of remuneration and interest on capital payable to a partner under Income Tax Act. Excess to this amount will not be allowed as a deduction from the income of the firm. Remuneration in a partnership firm is allowed as a deduction if the following conditions aRead more
Section 40b describes the maximum amount of remuneration and interest on capital payable to a partner under Income Tax Act. Excess to this amount will not be allowed as a deduction from the income of the firm.
Remuneration in a partnership firm is allowed as a deduction if the 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
Such Remuneration will be taxable in the hands of receiving partner as “Income from Business or Profession” but If such remuneration is not allowed as an expense in hands of the partnership firm then it will not be taxable in the hands of partners.
See lessHow should a trust use its income to get deduction under Income Tax Act?
A trust can have the following types of Income: Donation Anonymous Donation Income from property held under trust for charitable or religious purpose Capital gain from an asset held under trust Now let's understand the taxability of these incomes S.no. Situation Income subject to tax Taxability 1 DoRead more
A trust can have the following types of Income:
Now let’s understand the taxability of these incomes
i) 5% of total donations received by trust or
ii) Rs 1,00,000
1. Purchase of capital asset for trust
2. Repayment of loan taken for the purchase of a capital asset for trust
3. Revenue Expenditure incurred for trust
4. Donation to other trust registered u/s 12AA or u/s 10(23C)
(B) Income deemed to be applied for charitable purposes in India
a. Income is applied for charitable purposes in India in the year of receipt or in the immediately succeeding year.
b. On the basis of declaration under form 10 to the Assessing Officer on or before the due date of filing of return as per section 139(1) that such income shall be applied for such purpose in the year of receipt or succeeding year.