Extra Cultivation

INCOME TAX NOTES PART - 08 PARTNERSHIP FIRMS INCOME TAX NOTES PART - 08 PARTNERSHIP FIRMS Scheme of taxation of partnership firms 1. Any salary, bonus, commission or remuneration (by whatever name called), paid/ payable to partners is allowed as deduction to the firm subject to some restrictions in the hands of firm. The amount which is allowed as deduction to the firm is taxable in the hands of partners. 2. The firm can claim deduction in respect of interest paid to the partners subject to a maximum of 12% p.a. This amount of interest, allowed as deduction in the hands of the firm, is taxable in the hands of partners. 3. The income of the firm is taxed at a flat rate of 30% plus surcharge @ 12% (if taxable income is more than Rs. 1 crore) plus cess @ 4%. When remuneration/ interest is deductible Payment of remuneration and interest is deductible if the following conditions are satisfied – 1. Conditions of section 184; and 2. Conditions of section 40(b) In other wo

Income Tax Notes Part - 07 SET OFF AND CARRY FORWARD OF LOSSES INCOME TAX NOTES PART - 07 SET OFF AND CARRY FORWARD OF LOSSES Steps to be applied for set-off and carry forward The process of setting off of losses and their carry forward is covered in the following three steps: Step 1: Inter-source (Intra-head) adjustment under the same head of income. Step 2: Inter-head adjustment in the same assessment year (Step 2 is applied only if a loss cannot be set off under step 1). Step 3: Carry forward of a loss (Step 3 is applied only if a loss cannot be set off under step 1 and 2). Inter-source (Intra head) adjustment If the net result for any assessment year, in respect of any source under any head of income, is a loss, the assessee can set-off this loss against his income from any other source under the same head of income for the same assessment year subject to the following provisions – House property Loss from a house property can be set-off against profits of other house

Income Tax Notes Part - 06 Income from other Sources Income Tax Notes Part - 06 Income from other Sources The following ten incomes are always taxable under the head “Income from other sources”: 1. Dividend income; 2. Income from winnings from lotteries, crossword puzzles, races including horse races, etc.; 3. Any sum received by the assessee from his employees as contributions to any staff welfare schemes, if the same is not taxed as business income; 4. Income by way of interest on securities, if the same is not taxed as business income; 5. Income from letting out machinery, plant or furniture, if the same is not taxed as business income”; 6. Income from letting out of machinery, plant or furniture along with letting out of building and the two lettings are not separable (if the income is not taxed as business income); 7. Any sum received under a Keyman insurance policy (including bonus), if such income is not taxable as salary income or business income; 8. If any sum of mone

Capital Gains INCOME TAX NOTES PART - 05 CAPITAL GAINS Basis of Charge [Sec. 45] Income is taxable under the head “Capital Gains” if the following conditions are satisfied: 1. There should be a capital asset. 2. The capital asset is transferred by the assessee during the previous year. 3. Any profit or gains arises as a result of such transfer. 4. Such profit or gains is not exempt from tax under section 54, 54B, 54D, 54EC, 54EE, 54F, 54G, 54GA and 54GB. If the aforesaid conditions are satisfied, then capital gain is taxable in the assessment year relevant to the previous year in which the capital asset is transferred. Capital Asset [Sec. 2(14)] “Capital asset” means – 1. Property of any kind held by an assessee (whether or not connected with his business or profession). 2. Any securities held by a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under the SEBI Act. However, “capital asset” does

INCOME TAX NOTES PART - 03 HOUSE PROPERTY When income is not taxable under the head “House Property” In the following cases, income is not taxable under the head “Income from house property”: 1. If letting is only incidental and subservient to the main business of the assessee, rental income is not taxable under the head “Income from house property” but is chargeable under the head “Profits and gains of business and profession”. 2. Composite Rent: If apart from recovering rent of the building, in some cases, the owner gets rent of other assets (like furniture, plant and machinery etc.) or he charges for different services provided in the building (for instance, security, charges for lift, air conditioning, electricity, water etc.), the amount so recovered is known as “composite rent”. Following is the tax treatment of “composite rent”: a. Where composite rent includes rent of building and charges for different services: In such situations, composite rent is to be split up and

INCOME TAX NOTES PART-01 INCOME TAX NOTES PART-01 BASIC CONCEPTS Computation of Total Income Taxable income of any assessee is computed as per the format given below - Computation of net taxable income/ total income of an assessee for the assessment year 20XX-20XX: Particulars Amount (in Rs.) Income under the head “Salaries” XX Income under the head “House Property” XX Income under the head “Profits and gains of business or profession” XX Income under the head “Capital Gains” XX Income under the head “Income from other sources” XX Gross total income (GTI) XX Less: Deductions under chapter VIA [Sec. 80] XX Net taxable income or Total income (NTI) XXX Computation of tax Tax to be paid by any assessee is computed as per the format given below – Computation of tax liability of an assessee for the assessment year 20XX-20XX: Particulars Amount (in Rs.) Income-tax on net taxable income XX Less: Rebate under section 87A XX XX Add: Surcharge (% of income

  E-COMMERCE UNIT - 5 LESSON - 3 Duties of Subscribers Duties of Subscribers The IT Act, 2000 stipulates that any subscriber may authenticate an electronic record by affixing his digital signature. This act lays down the following duties of the subscribers who have obtained the Digital signature Certificate from some certifying authority. It further states that any person can verify an electronic records by use of a public key of the subscriber. Generating key pair (Sec. 40) : A subscriber is required to generate a key pair that corresponds to the private key of that subscriber which is to be listed in the Digital Signature Certificate. This implies that the subscriber must generate an appropriate private key which matches the public key being allotted to him or Her. Duties of subscriber of Electronic Signature Certificate (Sec. 40A) : In respect of Electronic Signature Certificate the subscriber shall perform such duties as may be prescribed. Acceptance of Digital Signature Certificat