Income from business

12/12/2007 1

Income from Income from business/Professionbusiness/Profession

By By

Prof. Augustin AmaladasProf. Augustin Amaladas

M.Com., AICWA.,PGDFM., M.Com., AICWA.,PGDFM., B.Ed.B.Ed.

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Charging Charging Section[Sec.28]Section[Sec.28]

Profits and gains of any Profits and gains of any profession/professionprofession/profession

Any compensation received related Any compensation received related businessbusiness

Income received from members of Income received from members of similar professionsimilar profession

Any benefit or perquisites from Any benefit or perquisites from business /professionbusiness /profession

Export incentives from governmentExport incentives from government

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Charging -Charging -ContinueContinue

Any interest, salary, bonus, Any interest, salary, bonus, commission or remuneration commission or remuneration received by a partner from firm.received by a partner from firm.

Sum received(compensation) from Sum received(compensation) from other company not to carry on any other company not to carry on any business for know how, patent, copy business for know how, patent, copy right, trademark.right, trademark.

Profits and gains of managing Profits and gains of managing agencyagency

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Meaning of Meaning of businessbusiness

Profit motiveProfit motive Business and rendering services to Business and rendering services to

othersothers Business cannot be carried on with Business cannot be carried on with

oneselfoneself

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Export Export incentivesincentives

Duty drawback import entitilement Duty drawback import entitilement licenceslicences

Are taxable u/s Are taxable u/s 28-Business/profession28-Business/profession

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Business income not Business income not taxable u/s 28taxable u/s 28

1. Rental income in case of dealer in 1. Rental income in case of dealer in property taxable under the head property taxable under the head income from house property[u/s22].income from house property[u/s22].

2. Dividend on shares in case of a 2. Dividend on shares in case of a dealer in shares- taxed under dealer in shares- taxed under income from other sources [u/s 56].income from other sources [u/s 56].

3. winning from lotteries (lottery 3. winning from lotteries (lottery business) taxed u/s 56-income from business) taxed u/s 56-income from other sources.other sources.

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Losses deductible from Losses deductible from business incomebusiness income

Loss due to natural calamityLoss due to natural calamity Loss due to non acceptance of goodsLoss due to non acceptance of goods Reduction in value of foreign currency Reduction in value of foreign currency

which is meant for purchase of stock.which is meant for purchase of stock. Loss of cash/goods due to Loss of cash/goods due to

embezzelment, burglary, forfeiture of embezzelment, burglary, forfeiture of deposits.deposits.

Loss of forgoing advance given by sugar Loss of forgoing advance given by sugar industries to formers due to monsoon industries to formers due to monsoon failurefailure

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Loss not deductible from Loss not deductible from businessbusiness

Loss due to destruction of Capital asset.Loss due to destruction of Capital asset. Loss on sale of investments held as Loss on sale of investments held as

investment.investment. Loss of advance to set up a business but Loss of advance to set up a business but

business could not be started.business could not be started. Depreciation in value of foreign currency Depreciation in value of foreign currency

for capital purposefor capital purpose Anticipated future losses.Anticipated future losses. Loss of discontinued businessLoss of discontinued business Loss from illegal Loss from illegal

business[T.A.Qureshiv.CIT(2006)SC]business[T.A.Qureshiv.CIT(2006)SC]

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Computation of assessable Computation of assessable profits/loss for taxprofits/loss for tax

Net profit as per P/L AccountNet profit as per P/L Account AddAdd: Amount debited to P/L A/c in : Amount debited to P/L A/c in

respect of the followingrespect of the following Loss of earlier yearsLoss of earlier years Capital lossesCapital losses Personal expenses (such as drawings)Personal expenses (such as drawings) Income tax, surtax, wealth tax, gift Income tax, surtax, wealth tax, gift

tax, estate duty[Direct taxes], tax tax, estate duty[Direct taxes], tax penalty, penal interest, fine.penalty, penal interest, fine.

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ContinuesContinues

Add:Add: Charity and donation Charity and donation Gifts and presents to othersGifts and presents to others All reserves/provisions such as tax All reserves/provisions such as tax

provision, Reserve for dividend, provision, Reserve for dividend, provision for bad debts except provision for bad debts except provision for depreciationprovision for depreciation

All expenses related to other heads All expenses related to other heads of incomeof income

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ContinuesContinues

AddAdd: Expenses not deductible u/s 40 : Expenses not deductible u/s 40 and 40Aand 40A

Expenses debited to P/L A/C not Expenses debited to P/L A/C not admissible u/s 30 to 40Aadmissible u/s 30 to 40A

AddAdd: Amount not credited to P/L A/c: Amount not credited to P/L A/c Deemed incomeDeemed income DeductDeduct :Income credited to P/L A/c :Income credited to P/L A/c

but not chargeable under other headsbut not chargeable under other heads

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ContinuesContinues LessLess::

Salary income( income from salary(u/s 15)Salary income( income from salary(u/s 15) Rental incomeIncome from House Rental incomeIncome from House

property(u/s22)property(u/s22) Capital gain(u/s 45)Capital gain(u/s 45) Dividend[ Income from other sources(56)]Dividend[ Income from other sources(56)] Direct taxes refund such as Income tax, Direct taxes refund such as Income tax,

Wealth tax, estate duty, surtax refundsWealth tax, estate duty, surtax refunds Bad debts, excise duty recovered not allowed Bad debts, excise duty recovered not allowed

as expenditure preceding previous yearsas expenditure preceding previous years Deduct:Deduct: Expenses not debited to P/L A/c but allowed Expenses not debited to P/L A/c but allowed

u/s 30 to 40Au/s 30 to 40A Depreciation u/s 32Depreciation u/s 32

Income chargeable under income from Income chargeable under income from business/profession.business/profession.

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Specific deductions Specific deductions expressly allowed u/s 30 to expressly allowed u/s 30 to

3737 1.Rent (Sec.30)1.Rent (Sec.30) Repairs(including painting of a Repairs(including painting of a

house )house ) Land revenue, local taxes and Land revenue, local taxes and

municipal taxesmunicipal taxes Insurance against risk of damage or Insurance against risk of damage or

destructiondestruction Not allowed: a) arrears of rent b) Not allowed: a) arrears of rent b)

share of profit instead of rent c.share of profit instead of rent c.

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Repairs and insurance of Repairs and insurance of machinery, plant and machinery, plant and

furniture(sec.31)furniture(sec.31) Revenue repair-allowed Revenue repair-allowed Capital expenditure – not allowedCapital expenditure – not allowed Quantum of expenditure is not Quantum of expenditure is not

importantimportant

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Depreciation Depreciation Allowances(sec.32)Allowances(sec.32)

Conditions:Conditions: Asset must be owned by the assessee(Registration Asset must be owned by the assessee(Registration

is not important),full control over asset,right to is not important),full control over asset,right to retain the possession and defend are retain the possession and defend are characteristics of ownership.characteristics of ownership.

Used or ready to useUsed or ready to use for business purpose for business purpose Used in the previous yearUsed in the previous year Both tangible and intangible assetsBoth tangible and intangible assets Right on occupancy on Lease property is entitled Right on occupancy on Lease property is entitled

for depreciationfor depreciation If hirer purchaser has right over asset and hire If hirer purchaser has right over asset and hire

seller will loose all rights- Depreciation is allowed.seller will loose all rights- Depreciation is allowed.

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Depreciation-ContinuesDepreciation-Continues

Insurance premium, repairs and Insurance premium, repairs and other expenditure incurred on other expenditure incurred on leased business asset are deductible leased business asset are deductible in the hands of lessor.in the hands of lessor.

If any asset is fully controlled such If any asset is fully controlled such as lease the capital expenditure as lease the capital expenditure incurred by lessee can provide incurred by lessee can provide depreciation[32(1)(ii).depreciation[32(1)(ii).

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Lease Lease propertyproperty

Registered ownership is not necessary Registered ownership is not necessary Sec. 53A of the transfer of property Act.Sec. 53A of the transfer of property Act.

If the assessee can be the co-owner to If the assessee can be the co-owner to claim depreciationclaim depreciation

Any capital expenditure incurred by the Any capital expenditure incurred by the person who takes building can provide person who takes building can provide depreciation on capital expenditure.depreciation on capital expenditure.

Rules of Accounting Standard (AS19) not Rules of Accounting Standard (AS19) not applicable for depreciation as per IT Act.applicable for depreciation as per IT Act.

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Hire purchaseHire purchase

Conditions:Conditions: Hire purchaser can provide Hire purchaser can provide

depreciation if hire purchaser has depreciation if hire purchaser has uninterrupted right over the asset.uninterrupted right over the asset.

The seller looses his rightThe seller looses his right Who can provide depreciation?Who can provide depreciation? Hire purchaser.Hire purchaser.

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Residential Residential quartersquarters

If used by the assessee’s If used by the assessee’s employees –depreciation is employees –depreciation is

allowed.allowed.

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50% of rate of 50% of rate of depreciationdepreciation

If an asset acquired during the previous year.If an asset acquired during the previous year. Put into use or Put into use or ready to useready to use for less than 180 for less than 180

days.days. Exceptions:1. Put into use for less than 180 Exceptions:1. Put into use for less than 180

days days butbut ready to use for more than 180 daysready to use for more than 180 days – –full rate of depreciationfull rate of depreciation

If asset purchased in the preceding year to If asset purchased in the preceding year to current previous year but put into use for less current previous year but put into use for less than 180 days during the current previous than 180 days during the current previous year what is the rate of depreciation rate?year what is the rate of depreciation rate?

If an asset is not used at all-No depreciation If an asset is not used at all-No depreciation not only for first year but also for subsequent not only for first year but also for subsequent periodperiod

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Full rate of depreciation.Full rate of depreciation.

Can depreciation be provided on Can depreciation be provided on intangible assets such as know- how, intangible assets such as know- how, patent rights, copy right, trade patent rights, copy right, trade mark, licences, franchises etc. mark, licences, franchises etc. depreciation?depreciation?

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Meaning of Building and Meaning of Building and PlantPlant

Building means: Super structure only. Building means: Super structure only. It does not include site.It does not include site.

Plant : Includes ships, vehicle, books, Plant : Includes ships, vehicle, books, technical know-how report, scientific technical know-how report, scientific apparatus and surgical equipment.apparatus and surgical equipment.

It does not include tea bushes or It does not include tea bushes or livestock or building or furniture and livestock or building or furniture and fittings.fittings.

If assessee does not claim depreciation If assessee does not claim depreciation whether is depreciation available?whether is depreciation available?

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Method of depreciationMethod of depreciation

Yes.Yes.Block asset method.Block asset method.What is block asset method?What is block asset method?Similar nature of asset having Similar nature of asset having

the same rate of depreciation the same rate of depreciation are clubbed together.are clubbed together.

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100% 100% depreciation?depreciation?

1. Building acquired on or after 1. Building acquired on or after September 1, 2002 forming part of September 1, 2002 forming part of water supply projectwater supply project

2. Pollution control equipments2. Pollution control equipments 3. waste control equipment3. waste control equipment 4.wooden parts used in artificial silk 4.wooden parts used in artificial silk

manufacturing machinemanufacturing machine 5.cinimatograph films5.cinimatograph films 6. Books6. Books

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Commercial vehicleCommercial vehicle

If acquired and used If acquired and used before 31,March before 31,March 2002. -Rate of 2002. -Rate of depreciation is 50% .depreciation is 50% .

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calculation of calculation of depreciationdepreciation

Block value in the beginningBlock value in the beginning Add:- Purchase of asset of the same Add:- Purchase of asset of the same

blockblock Less:- Net sale value of the Less:- Net sale value of the

consideration received/receivable in consideration received/receivable in cash /cheque/draft if any of the block cash /cheque/draft if any of the block of assets sold during the yearof assets sold during the year

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ContinuationContinuation

Calculate depreciation of the Calculate depreciation of the balance amount.balance amount.

If it reaches to Zero value no more If it reaches to Zero value no more depreciation is allowed.depreciation is allowed.

If net sale consideration exceeds the If net sale consideration exceeds the block it amounts to short term block it amounts to short term capital gain.capital gain.

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continuescontinues

Once asset is depreciated the Once asset is depreciated the gain on sale of block never be a gain on sale of block never be a long term gainlong term gain

Index can not be used for the Index can not be used for the calculation of capital gain.calculation of capital gain.

If all assets of the assets sold out If all assets of the assets sold out but block continues it amounts to but block continues it amounts to short term capital loss.short term capital loss.

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###Intangible ###Intangible assetsassets

Depreciation is allowed Depreciation is allowed at the rate of at the rate of 25%25%

Include: know- how, Include: know- how, patent rights, copy patent rights, copy rights, trade mark, rights, trade mark, licenses, franchises etc. licenses, franchises etc.

Depreciation is allowed Depreciation is allowed at the rate of at the rate of 25%25%

Include: know- how, Include: know- how, patent rights, copy patent rights, copy rights, trade mark, rights, trade mark, licenses, franchises etc. licenses, franchises etc.

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Imported CarsImported Cars

Purchased between March 1, 1975 Purchased between March 1, 1975 and March 31, 2001 for hire for and March 31, 2001 for hire for tourist- tourist- no depreciation is allowed if no depreciation is allowed if used in India for business purposes used in India for business purposes other than for hire for touristother than for hire for tourist

Used outside india for business-Used outside india for business-alowedalowed

For hire for tourist-allowedFor hire for tourist-allowed After 31After 31stst March 2001- all purposes March 2001- all purposes

depreciation is alloweddepreciation is allowed

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Change in the ownership in any Change in the ownership in any part of the year due to part of the year due to

amalgamation , absorption or amalgamation , absorption or demergerdemerger

Calculate depreciation for Calculate depreciation for the previous year as if no the previous year as if no amalgamation/re-amalgamation/re-organization taken place organization taken place

Apportion between the Apportion between the companies on time basis.companies on time basis.

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###Computation of ###Computation of additional depreciationadditional depreciation

Manufacture or production of any articleManufacture or production of any article Purchased entirely new machinery Not Purchased entirely new machinery Not

used any part of the worldused any part of the world Acquired and installed after March 31, Acquired and installed after March 31,

20052005

Rate-20%Rate-20% If used less than 180 days-Half of the rateIf used less than 180 days-Half of the rate Excludes ships and aircrafts, used in the Excludes ships and aircrafts, used in the

guest house, or office road transport guest house, or office road transport vehiclesvehicles

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Actual Cost Actual Cost

Total cost-subsidyTotal cost-subsidyIncludes: interest on Includes: interest on money borrowed before money borrowed before the asset is put into usethe asset is put into use

Bank chargesBank chargesLoading Loading UnloadingUnloading

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Actual cost-continuesActual cost-continues

Modification before first put Modification before first put into useinto use

Training of staff to operate the Training of staff to operate the machine machine

Other related expenses Other related expenses required such as cold storage.required such as cold storage.

Traveling expenses to acquire Traveling expenses to acquire the assetthe asset

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Un-absorbed Un-absorbed depreciationdepreciation

Deduct the depreciation of the Deduct the depreciation of the previous year from income from previous year from income from business or professionbusiness or profession

Deduct it from other heads of Deduct it from other heads of income except salaryincome except salary

If not able to absorb-carry over to If not able to absorb-carry over to subsequent assessment year (s) – subsequent assessment year (s) – No time limit.No time limit.

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Subsequent assessment Subsequent assessment yearsyears

Order of priority to set off:Order of priority to set off: 1. current depreciation1. current depreciation 2.Brought forward business losses2.Brought forward business losses 3. Un-absorbed depreciation3. Un-absorbed depreciation

Note: Continuity of business is not Note: Continuity of business is not relevant.relevant.

The same assessee only can The same assessee only can carry forwardcarry forward

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Depreciation on Straight Depreciation on Straight Line basis/WDVLine basis/WDV

Applicable to Power Applicable to Power units(generating and units(generating and distribution of power)distribution of power)

Assets acquired after 31Assets acquired after 31stst march 1997.march 1997.

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Terminal depreciationTerminal depreciation

If straight line depreciation method If straight line depreciation method followed on power generating units followed on power generating units

sold after the use of such asset more sold after the use of such asset more than one previous yearthan one previous year

Terminal Terminal depreciation=WDV> Net depreciation=WDV> Net Sale considerationSale consideration

Capital gain=Net sale>WDVCapital gain=Net sale>WDV

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Tea, coffee and rubber Tea, coffee and rubber development development

account[Sec.33AB]account[Sec.33AB] Deposit with NABARD or Deposit Deposit with NABARD or Deposit

account of tea, coffee or rubber Boardaccount of tea, coffee or rubber Board With in 6 months With in 6 months from the end of thefrom the end of the

previous yearprevious year or before the last date of or before the last date of filing of returns filing of returns whichever earlierwhichever earlier

Exemption: Exemption: Amount deposited or 40% of profit Amount deposited or 40% of profit

whichever is lesswhichever is less Can amount be withdrawn?Can amount be withdrawn?

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withdrawalwithdrawal Only for the purpose statedOnly for the purpose stated If unutilised within the previous year it is If unutilised within the previous year it is

treated as income treated as income If business closed or dissolved-treated as If business closed or dissolved-treated as

taxable profittaxable profit If death of the taxpayer/partition of If death of the taxpayer/partition of

HUF/liquidation of company will not be treated HUF/liquidation of company will not be treated as incomeas income

Purpose: installed in plant and machinery in Purpose: installed in plant and machinery in low priority sector or entitled to get 100% low priority sector or entitled to get 100% depreciation.depreciation.

Maximum 8 yearsMaximum 8 years

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Site restoration Site restoration fund[sec.33ABA]fund[sec.33ABA]

Production of Petroleum /Natural gas Production of Petroleum /Natural gas in Indiain India

Deposit with SBI/account opened as Deposit with SBI/account opened as per petrolem and Natural Gas per petrolem and Natural Gas Commission In a scheme specifiedCommission In a scheme specified

Before the end of the previous yearBefore the end of the previous year Amount withdrawn should be used Amount withdrawn should be used

for low priority sector/100% for low priority sector/100% depreciated and utiled within 8 years depreciated and utiled within 8 years at the end of previous year.at the end of previous year.

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###Scientific ###Scientific research[Sec.35]research[Sec.35] In house researchIn house research

All Revenue expenditure and Capital All Revenue expenditure and Capital expenditureexpenditure related to one’s business related to one’s business during the during the current previous year or even current previous year or even

3***3*** preceding previous yearspreceding previous years

allowed allowed [Except[Except Land]Land] Even asset is not put into use –it is allowed.Even asset is not put into use –it is allowed. No depreciation is allowed on such capital No depreciation is allowed on such capital

assetasset If such asset is sold what could be the If such asset is sold what could be the

consequences?consequences?

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If scientific asset sold?If scientific asset sold?

If not used for any other purpose:If not used for any other purpose:***Sale or deduction already ***Sale or deduction already

allowedallowed whichever is lesswhichever is less taxed taxed as business profit.as business profit.

Capital gain=Sale-Cost (index if Capital gain=Sale-Cost (index if required)required)

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Contribution to National Contribution to National laboratorylaboratory

Including Including University, IITUniversity, IIT

Weighted deduction= Weighted deduction= 1.251.25 times of contribution can be times of contribution can be treated as Expenditure.treated as Expenditure.

******Even approval is withdrawn Even approval is withdrawn after the payment to such after the payment to such institution the assesssee who institution the assesssee who contributed can enjoy the benefitcontributed can enjoy the benefit

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Expenditure on Patent Expenditure on Patent rights and copy rights[35A]rights and copy rights[35A] Capital ExpenditureCapital Expenditure incurred incurred

before before 11stst April 1998 April 19981414 instalmentsinstalments After 1After 1stst April 1998- April 1998-DepreciationDepreciation

can be claimed-25%can be claimed-25% Revenue expenditure-Revenue expenditure-Fully Fully

allowed expenditure in the year such allowed expenditure in the year such expenditure incurred.expenditure incurred.

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Technical know howTechnical know how

Only depreciationOnly depreciation

25%25% allowed allowed

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Amortisation of telecom Amortisation of telecom license fees[35ABB]license fees[35ABB]

ConditionsConditions Capital ExpenditureCapital Expenditure Acquiring any right to operate Acquiring any right to operate

telecommunication servicestelecommunication services Incurred before or after commencement Incurred before or after commencement

of Businessof Business Mainly incurred to obtain license.Mainly incurred to obtain license. If conditions fulfilled claim can be done If conditions fulfilled claim can be done

u/s 35ABB otherwise u/s 37(1) as business u/s 35ABB otherwise u/s 37(1) as business expenditure.expenditure.

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Payment to associations and Payment to associations and institution for rural institution for rural

development programdevelopment programInstitutions approved Institutions approved before 1before 1stst March March 19831983

Deduction up to the Deduction up to the amount paidamount paid

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Amortisation of preliminary Amortisation of preliminary expensesexpenses

Indian Company or resident non Indian Company or resident non corporate assesseecorporate assessee

Foreign company excludedForeign company excluded Legal charges on MOA, Legal charges on MOA,

AOA,printing of MOA, AOA,printing of MOA, AOA,Registration fees,expenses AOA,Registration fees,expenses connected to issue of shares or connected to issue of shares or debenturesdebentures

Is there any limit?Is there any limit?

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Limit of preliminary Limit of preliminary expensesexpenses

Corporate assesseeCorporate assessee Non-Corporate Non-Corporate assesseeassessee

5% of cost of project 5% of cost of project or or

5% of capital 5% of capital employedemployed

Whichever is Whichever is

More(dil More(dil monge more)monge more)

5% of the cost of the 5% of the cost of the projectproject

Actual cost= costs incurred initially and additional costs after commencement

Of business

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Preliminary Exp. Preliminary Exp. ContinueContinue

The value on the last day of the The value on the last day of the previous year in which the business previous year in which the business of the assessee commences.of the assessee commences.

Deduction: Deduction: 1/51/5 of the qualifying of the qualifying expenditureexpenditure

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Expenses on issue of Expenses on issue of shares/Debenturesshares/Debentures

New company New company even Old industrialeven Old industrial company issue shares - u/s 35 Dcompany issue shares - u/s 35 D

Old company-- u/s 37(1) except issue of shares)Old company-- u/s 37(1) except issue of shares) Old industrial company issue shares-35DOld industrial company issue shares-35D Non industrial company – All expenses related to Non industrial company – All expenses related to

bonus issue, issue of debentures or raising of bonus issue, issue of debentures or raising of long term or short term loanslong term or short term loans

NoteNote: : old non industrial company- old non industrial company- Expenditure related to issue of Expenditure related to issue of shares shares can not becan not be claimed claimed

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Amortisation of expenditure Amortisation of expenditure incurred for incurred for

amalgamation[35DD]amalgamation[35DD]Indian companyIndian companyDeductions in Deductions in five five successive successive installmentsinstallments

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Amortisation of expenditure under Amortisation of expenditure under voluntary retirement voluntary retirement

scheme[35DDA]scheme[35DDA] Any assesseeAny assessee

Deduction Deduction 1/51/5 every year every year

Voluntary retirement scheme Voluntary retirement scheme need need not benot be accordance with guidelines accordance with guidelines prescribed under section 10(10C)prescribed under section 10(10C)

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Amartisation of expenditure on Amartisation of expenditure on development of certain minerals[35E]development of certain minerals[35E]

Indian companies Indian companies and Resident and Resident assesseeassessee

I/10 every year I/10 every year allowedallowed

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Insurance premium to Insurance premium to protect the asset or protect the asset or employees[36(1)(i)]employees[36(1)(i)]

AllowedAllowedBonus to Bonus to employees[36(1)employees[36(1)(ii)](ii)]

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Interest on borrowed capital[36 Interest on borrowed capital[36 (1)(iii)(1)(iii)

Interest on Interest on own capitalown capital is is notnot allowed.allowed.

Interest paid by a firm to partner is Interest paid by a firm to partner is

deductible- deductible- 12% per annum12% per annum Simple interestSimple interest

Interest paid to wife and daughter- Interest paid to wife and daughter- allowedallowed

Interest before the asset is put into Interest before the asset is put into

use to be use to be capitalisedcapitalised

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Interest paid outside India Interest paid outside India without deducting TDSwithout deducting TDS

Not allowedNot allowed

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Discount on Zeeero coupon Discount on Zeeero coupon Discount Bonds[36(1)(iiia)]Discount Bonds[36(1)(iiia)] Issued after June 1, 2005Issued after June 1, 2005 Minimum 10 years and Maximum 20 Minimum 10 years and Maximum 20

yearsyears Deduction on pro rata basis.Deduction on pro rata basis.

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***Unpaid liabilities***Unpaid liabilities

Includes:Includes:1.1. Local taxes, duty cess or fee under Local taxes, duty cess or fee under

any lawany law2.2. Sum payable to employees such PF, Sum payable to employees such PF,

Gratuity, superannuation fund to Gratuity, superannuation fund to employees, BONUS, OR COMMISSIONemployees, BONUS, OR COMMISSION

3.3. Interest on loan borrowed from public Interest on loan borrowed from public financial institution such as financial institution such as ICICI,IFCI, IDBI,LIC AND UTI ONLYICICI,IFCI, IDBI,LIC AND UTI ONLY

DEDUCTION ALLOWED ON PAYMENT DEDUCTION ALLOWED ON PAYMENT BASIS OR ACCRUAL BASIS?BASIS OR ACCRUAL BASIS?

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Payment/ Accrual?????Payment/ Accrual?????

No payment- Not allowedNo payment- Not allowed

If depositedIf depositedEVENEVEN before before the the

last date oflast date of filing of filing of

returnsreturns with Proof with Proof forfor payment- payment-fully fully allowed(page 336)allowed(page 336)

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****Employees****Employees’’ contribution towards contribution towards staff welfare scheme such as PF[36(1)(va)]staff welfare scheme such as PF[36(1)(va)]

Amount received by employer- Amount received by employer-

Included with the Included with the assessee’s Incomeassessee’s Income

If Paid to the If Paid to the employees’s employees’s account???account???

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If paid !!!!!If paid !!!!!

Due date ####Due date ####as per the PF as per the PF rules or Gratuityrules or Gratuity rules rules Usually Usually with in a month of deduction from with in a month of deduction from employees.employees.

*****not as per IT *****not as per IT rulesrules

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Written off of allowance for Written off of allowance for animals animals [36(1)(vi)][36(1)(vi)]

If died /uselessIf died /useless Used as capital assetUsed as capital asset Allowed lossAllowed loss = Original cost- = Original cost-

Carcasses Carcasses or or ( sale of animals( sale of animals) )

No depreciation is No depreciation is allowed any time on allowed any time on animalsanimals

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Bad debts Bad debts [36(1)[36(1)

(vii)] (vii)] !!!!!! If actual- allowedIf actual- allowedProvision –Never allowed Provision –Never allowed If recovered[41(4)]-----If If recovered[41(4)]-----If

earlier allowed earlier allowed it is taxableit is taxable If earlier deniedIf earlier denied - not - not

taxabletaxable

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Provision for Bad and doubtful debts to Provision for Bad and doubtful debts to rural branches of scheduled and non rural branches of scheduled and non

scheduled commercial banks[36(1)(vii)]scheduled commercial banks[36(1)(vii)]

bank and Institutionbank and Institution bank bank

Non scheduledNon scheduled Scheduled Financial Scheduled Financial

ForeignForeign

7.5% of income 5%7.5% of income 5% 5% 5%

10% of advances ---10% of advances --- ------

made by rural made by rural

branchs branchs

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Transfer to SPECIAL Transfer to SPECIAL RESERVERESERVE [36(1)(viii)][36(1)(viii)]

Long term (5 years or more) financial Long term (5 years or more) financial corporation/public company/government corporation/public company/government companycompany

Finance for industry/agriculture/infrastructure Finance for industry/agriculture/infrastructure facilities in India.facilities in India.

Deduction: Whichever is lessDeduction: Whichever is less 1. amount transferred to such account or1. amount transferred to such account or 2. 40% of profit from business activities before 2. 40% of profit from business activities before

such such deductionsdeductions 3. 200% of paid up capital and reserve on the 3. 200% of paid up capital and reserve on the

last day of PY(- )amount in special reserve last day of PY(- )amount in special reserve account in the beginning of the PYaccount in the beginning of the PY

12/12/2007 68

Family planning Family planning expenditure expenditure [36(1)(ix)][36(1)(ix)]

For Company assesseeFor Company assessee Revenue expenditure- Fully allowedRevenue expenditure- Fully allowed

Capital Expenditure - Capital Expenditure - 1/51/5thth every yearevery year

Non-corporate assessee can claim u/s Non-corporate assessee can claim u/s 32(Depreciation on capital 32(Depreciation on capital expenditure) and 37(1)(Revenue expenditure) and 37(1)(Revenue expenditure)expenditure)

12/12/2007 69

Advertisement Advertisement Expenditure[37(2B)]Expenditure[37(2B)]

Advertisement In publication ofAdvertisement In publication of

political political partyparty------------Not Not allowedallowed

All advertisements --All advertisements --AllowedAllowed

12/12/2007 70

Expenses incurred by Expenses incurred by commission agent from commission agent from

insurance UTI agents etc.If insurance UTI agents etc.If commission less than commission less than

60,00060,000commissioncommission Adhoc Adhoc deductiondeduction

Max. Max. deductiondeduction

11 22 33

LIC –first LIC –first yearyear

Renewal Renewal commissioncommission

First & First & renewal renewal CommissionCommission

Bonus Bonus commission commission

UTI/agents UTI/agents of specified of specified securities, securities, mutual mutual funds funds authorised authorised agentagent

50% of 50% of commission commission 15% 15% OF THE OF THE COMMISSIONCOMMISSION

33 1/3%33 1/3%

No deductionNo deduction

50%50%

20,00020,000

12/12/2007 71

Contribution towards Contribution towards Exchange risk Exchange risk

Administration fund Administration fund [36(1)(x)][36(1)(x)]By Public financial By Public financial institutioninstitution

Deductible upto the Deductible upto the assessment year assessment year 2007-082007-08

12/12/2007 72

Benefits to public financial Benefits to public financial institutionsinstitutions

12/12/2007 73

General General deductions[37(1)]deductions[37(1)]

It should not be a capital expenditure It should not be a capital expenditure oror

Not personalNot personal Not prohibited by law such as fine, Not prohibited by law such as fine,

penaltypenalty Not be an illegal expenditureNot be an illegal expenditure

Can we see some of the expenditures Can we see some of the expenditures allowed as per various case laws?allowed as per various case laws?

12/12/2007 74

Expenses allowedExpenses allowed

*Litigation expenses to protect the trade or *Litigation expenses to protect the trade or business /asset/or to retain title of assetbusiness /asset/or to retain title of asset

*Legal expenses to receive loan*Legal expenses to receive loan *Litigation expenses in restoring trade mark*Litigation expenses in restoring trade mark ***Legal expenses to alter the AOA in ***Legal expenses to alter the AOA in

conformity with the changes brought aboutconformity with the changes brought about

in the companies ACTin the companies ACT

****Damages paid to workers/fulfil the ****Damages paid to workers/fulfil the contractcontract

***Damages for breach of contract ***Damages for breach of contract

12/12/2007 75

Expenses allowedExpenses allowed **Contribution to the union formed to **Contribution to the union formed to

oppose the nationalisation of assessee’s oppose the nationalisation of assessee’s businessbusiness

**Expenses incurred during festival**Expenses incurred during festival ***Premium paid for loss of profit***Premium paid for loss of profit *Professional tax paid*Professional tax paid All maintenance expenditureAll maintenance expenditure **Expenses incurred to register trade **Expenses incurred to register trade

marksmarks *****Entertainment expenses*****Entertainment expenses **Periodical payment for the use of **Periodical payment for the use of

goodwillgoodwill

12/12/2007 76

Expenses allowed-case Expenses allowed-case lawslaws

###Estimated probable liability for free ###Estimated probable liability for free maintenance CIT vs Modi Olovetti ltd.(2004)maintenance CIT vs Modi Olovetti ltd.(2004)

***Expenditure to car even it is huge[CIT vs ***Expenditure to car even it is huge[CIT vs Mangalchand premchand& co.[2004]Mangalchand premchand& co.[2004]

**Repairs to maintain building taken on **Repairs to maintain building taken on lease [Sumitomo Corpn. India (p) ltd.lease [Sumitomo Corpn. India (p) ltd.

Expenditure on civil work on leased asset Expenditure on civil work on leased asset [Hero Honda motors vs CIT[Hero Honda motors vs CIT

***Interest on delayed payment of Provident ***Interest on delayed payment of Provident fund[CIT vs Ishwari Khetan Sugar Mills (P0 fund[CIT vs Ishwari Khetan Sugar Mills (P0 ltd.(2004)ltd.(2004)

12/12/2007 77

Important notes & Important notes & controversial issuescontroversial issues

Expenditure to issue of shares fees paid to Expenditure to issue of shares fees paid to Registrar to increase the authorised capital Registrar to increase the authorised capital

disallowed[Brook Bond India ltd Vs disallowed[Brook Bond India ltd Vs CIT(SC)CIT(SC)

Retrenchment compensation payable at Retrenchment compensation payable at the time of partial closure of business Is the time of partial closure of business Is deductible. But at the time of closure of deductible. But at the time of closure of industry is not deductible[CIT vs MGF industry is not deductible[CIT vs MGF India(2004)India(2004)

12/12/2007 78

Expenses allowedExpenses allowed

****Expenditure to ****Expenditure to issue of debenturesissue of debentures

bonus sharesbonus shares allowedallowed

12/12/2007 79

Controversial ContinuesControversial Continues

***Foreign study ***Foreign study expenses incurred by expenses incurred by the company even the company even though the employee is though the employee is a director’s son-allowed a director’s son-allowed [J.B Advani& co Vs CIT][J.B Advani& co Vs CIT](2005)(2005)

12/12/2007 80


Medical expenses of wife Medical expenses of wife employee of cine actor-Allowed employee of cine actor-Allowed [Ajay Singh Deol Vs CIT][Ajay Singh Deol Vs CIT]

Payment on account of Payment on account of membership fees for health club membership fees for health club and also paid membership fees and also paid membership fees for an another club-Allowed for an another club-Allowed [Sterlite Industries (India) Vs [Sterlite Industries (India) Vs CIT(2006)CIT(2006)

12/12/2007 81

Controversial- Controversial- ContinuesContinues

###Provision made for ###Provision made for contribution towards contribution towards Provident Fund maintained by Provident Fund maintained by Government of Tamilnadu Government of Tamilnadu sent on deputation to the sent on deputation to the assessee corporation-assessee corporation-allowed[ CIT Vs Kattabomman allowed[ CIT Vs Kattabomman Transport Corporation Ltd.Transport Corporation Ltd.(2004)(2004)

12/12/2007 82


***Interest on arrears of tax , ***Interest on arrears of tax , sales tax compensatory in nature sales tax compensatory in nature and not penal – and not penal – allowed(Lachmandas Vs CIT(SC) allowed(Lachmandas Vs CIT(SC) (2002)(2002)

***Interest paid for late payment ***Interest paid for late payment of tax is disallowed. Even of tax is disallowed. Even Income-tax itself disallowed.Income-tax itself disallowed.

12/12/2007 83

Disallowed ExpenditureDisallowed Expenditure

*****Interest paid on borrowed *****Interest paid on borrowed funds to pay Income tax is funds to pay Income tax is disalloweddisallowed

Interest paid on installment of the Interest paid on installment of the price of propertyprice of property

*****Expenditure to raise capital*****Expenditure to raise capital ***Expenditure on shifting of ***Expenditure on shifting of

registered officeregistered office

12/12/2007 84

Penalty/fine /interest on Penalty/fine /interest on penaltypenalty

*#*#*#*#*#*#DisallowedDisallowed

12/12/2007 85

Important question to be Important question to be asked!!!asked!!!

****Protecting Business ****Protecting Business or protecting the title to or protecting the title to capital asset.capital asset.

Capital Expenditure or Capital Expenditure or revenue expenditurerevenue expenditure

12/12/2007 86

Expressly disallowed Expressly disallowed expendituresexpenditures

Interest, Royalty, fees for Interest, Royalty, fees for technical services payable technical services payable outside Indiaoutside India

***TAX TO BE DEDUCTED ***TAX TO BE DEDUCTED AND PAID WITHIN AND PAID WITHIN 77 DAYS DAYS FROM THE LAST DAY OF FROM THE LAST DAY OF THE MONTH IN WHICH THE MONTH IN WHICH TAX WAS DEDUCTED ORTAX WAS DEDUCTED OR

12/12/2007 87

Expressly disallowed Expressly disallowed expendituresexpenditures

AMOUNT PAID TO GOVERNMENT AMOUNT PAID TO GOVERNMENT IN THE FINANCIAL YEAR IF NOT IN THE FINANCIAL YEAR IF NOT PAID WITHIN 7 DAYS FROM THE PAID WITHIN 7 DAYS FROM THE LAST DAY OF THE MONTH.LAST DAY OF THE MONTH.

Anything paid after the financial year Anything paid after the financial year and after the expiry of 7 days and after the expiry of 7 days FROM FROM THE LAST DAY OF THE MONTHTHE LAST DAY OF THE MONTH - -deductible only in the year of deductible only in the year of payment.payment.

12/12/2007 88

Fringe benefit taxFringe benefit tax

Fringe benefit tax, Income Fringe benefit tax, Income tax, wealth tax, securities tax, wealth tax, securities transaction tax- Not transaction tax- Not TaxableTaxable

12/12/2007 89

Salary payable outside Salary payable outside India without TDSIndia without TDS

Outside India both resident and non-Outside India both resident and non-residentresident

In India to NON-REDIDENTIn India to NON-REDIDENT

NOT ALLOWEDNOT ALLOWED

12/12/2007 90

Payment from provident Payment from provident fundfund

If TDS not done- Not If TDS not done- Not allowedallowed

12/12/2007 91

Tax on perquisites paid by Tax on perquisites paid by the employerthe employer

Tax paid by employer- Not taxable to Tax paid by employer- Not taxable to employeesemployees

Perquisites paid- Not deductible to Perquisites paid- Not deductible to employeremployer

(Non monetary)(Non monetary)

See illustration- para 82.1.8- page 328See illustration- para 82.1.8- page 328

12/12/2007 92

Payment to Payment to relatives[ Sec. 40A(2)]relatives[ Sec. 40A(2)]

Excess or Excess or unreasonable - unreasonable - disalloweddisallowed

Relative: husband, wife, brother or sister or lineal Relative: husband, wife, brother or sister or lineal ascendant or descendant of that individual.ascendant or descendant of that individual.

Substantial interest:- at least 20% of equity or 20% Substantial interest:- at least 20% of equity or 20% profits of a concern at any time during the yearprofits of a concern at any time during the year

12/12/2007 93

Expenditure exceeding Expenditure exceeding Rs. 20,000Rs. 20,000

Should be paid account payee crossed Should be paid account payee crossed cheque or account payee demand draft.cheque or account payee demand draft.

If not - 20% of such payment is If not - 20% of such payment is disallowed.disallowed.

Note: on the same day any number of Note: on the same day any number of cheques less than 20,000 each can be cheques less than 20,000 each can be givengiven

Partly cash, partly cheque without Partly cash, partly cheque without account payee crossed cheque without account payee crossed cheque without exceeding 20,000 each.exceeding 20,000 each.

12/12/2007 94

Payment to unapproved Payment to unapproved gratuity by employergratuity by employer

Not Not deductible deductible expenditure.expenditure.

12/12/2007 95

Recovery of earlier Recovery of earlier deductionsdeductions

If recovered in the If recovered in the subsequent assessment subsequent assessment years it is taxable even years it is taxable even

there isthere is nono business and business and taxed in the hands of taxed in the hands of

recepient.recepient.

12/12/2007 96

Undisclosed incomeUndisclosed income

Cash credit[sec.68]Cash credit[sec.68] Undisclosed investment[sec.69]Undisclosed investment[sec.69] Unexplained money [sec. 69A]Unexplained money [sec. 69A] Amount of investments not fully Amount of investments not fully

disclosed [sec.69B]disclosed [sec.69B] Unexplained expenditure [sec.69C]Unexplained expenditure [sec.69C] Amount borrowed or repaid on Amount borrowed or repaid on

hundi[sec.69D]hundi[sec.69D] They are deemed income of the current They are deemed income of the current

previous year.previous year.

12/12/2007 97

Maintenance of books Maintenance of books compulsory[Sec.44AA]compulsory[Sec.44AA]

Legal medical, engineering, architectural, Legal medical, engineering, architectural, accountancy, Film artist technical accountancy, Film artist technical consultancy, or interior decoration and other consultancy, or interior decoration and other notified profession [Specified professional]notified profession [Specified professional]

If If gross receiptsgross receipts exceed 1,50,000 in any of exceed 1,50,000 in any of the three years preceding the previous year.the three years preceding the previous year.

Non-specified professional- Income exceed Non-specified professional- Income exceed Rs. 1,20,000 and total gross receipts exceed Rs. 1,20,000 and total gross receipts exceed 10,00,00010,00,000

What are those books maintained? What are those books maintained?

12/12/2007 98

Specified Books to be Specified Books to be maintainedmaintained

Cash bookCash book A Journal on mercantile basisA Journal on mercantile basis LedgerLedger Carbon copies of machine numbered Carbon copies of machine numbered

bills exceeding Rs. 25 issued by the bills exceeding Rs. 25 issued by the personperson

Original bills if exceed Rs. 50. If bills Original bills if exceed Rs. 50. If bills are not issued payment vouchers are not issued payment vouchers signed by the personsigned by the person

Cash bookCash book A Journal on mercantile basisA Journal on mercantile basis LedgerLedger Carbon copies of machine numbered Carbon copies of machine numbered

bills exceeding Rs. 25 issued by the bills exceeding Rs. 25 issued by the personperson

Original bills if exceed Rs. 50. If bills Original bills if exceed Rs. 50. If bills are not issued payment vouchers are not issued payment vouchers signed by the personsigned by the person

12/12/2007 99

Medical practitioner Medical practitioner

Additional books required:Additional books required:Daily cash register showing Daily cash register showing date, patient’s name, nature of date, patient’s name, nature of professional services rendered, professional services rendered, fees received and date of fees received and date of receiptreceipt

Stock register for medicines Stock register for medicines and other consumable and other consumable accessoriesaccessories . .

12/12/2007 100

Audit of Audit of Accounts[sec.44AB] if Accounts[sec.44AB] if

crossed limitcrossed limitBusiness-Gross receipts Business-Gross receipts /sales exceed 40 lakhs/sales exceed 40 lakhs

Profession- gross Profession- gross receipts exceed 10 receipts exceed 10 lakhslakhs

12/12/2007 101

Audit compulsory with out Audit compulsory with out any limit of income/receiptany limit of income/receipt

Person engaged in:Person engaged in: 1. civil construction[44AD]- 8% of gross 1. civil construction[44AD]- 8% of gross

receiptsreceipts 2.Business of plying, leasing or hiring 2.Business of plying, leasing or hiring

trucks[44AE]- Heavy vehicles Rs. 3500 pm trucks[44AE]- Heavy vehicles Rs. 3500 pm (owned months), other vehicles- 3150 pm (not (owned months), other vehicles- 3150 pm (not owned more than 10 vehicles any time during owned more than 10 vehicles any time during the previous year.-the previous year.-No expenditure is No expenditure is deductible .deductible .

Retail traders[44AF]- 5% of turnover is Retail traders[44AF]- 5% of turnover is considered as incomeconsidered as income

12/12/2007 102

Important points to solve Important points to solve problemsproblems

Bonus-before last date of filingBonus-before last date of filing Depreciation- permitted as per income tax Depreciation- permitted as per income tax Direct taxes-disallowedDirect taxes-disallowed Indirect taxes-allowed if paid before due date Indirect taxes-allowed if paid before due date

of filingof filing Capital expenditure-disallowedCapital expenditure-disallowed Bad debts recovered-if allowed earlier taxableBad debts recovered-if allowed earlier taxable Income from other heads such as salary, house Income from other heads such as salary, house

property etc-if included in the P/L /A/c deduct.property etc-if included in the P/L /A/c deduct.

12/12/2007 103

Points to solve problemsPoints to solve problems

Outstanding statutory liability-Outstanding statutory liability-before due date to be paidbefore due date to be paid

statutory penalty-disallowedstatutory penalty-disallowedContractual penalty-allowedContractual penalty-allowedPersonal expenditure-disallowedPersonal expenditure-disallowed

12/12/2007 104


Entertainment expenditure-Entertainment expenditure-fully allowedfully allowed

Maintenance of guest house-Maintenance of guest house-fully allowedfully allowed

Revenue advertisement Revenue advertisement including gift to customers-including gift to customers-fully allowed.fully allowed.

12/12/2007 105


Capital expenditure on Capital expenditure on advertisement-depreciation is advertisement-depreciation is allowed.allowed.

Amount paid for expenses beyond Amount paid for expenses beyond 20,000 without crossed a/c payee 20,000 without crossed a/c payee cheque or draft -20% disallowedcheque or draft -20% disallowed

Any expenditure incurred (traveling) Any expenditure incurred (traveling) out side india –allowed to the extent out side india –allowed to the extent of RBI’s permissionof RBI’s permission

12/12/2007 106


paid on borrowing-Not paid on borrowing-Not allowed Expenditure to allowed Expenditure to audit-allowedaudit-allowed

Expenditure to prepare Expenditure to prepare accounts for IT –allowedaccounts for IT –allowed

interestinterest

12/12/2007 107


Interest on borrowing to pay direct Interest on borrowing to pay direct tax such as Income tax-disallowedtax such as Income tax-disallowed

Copy right , technical know how, Copy right , technical know how, patent right- amount paid disallowed patent right- amount paid disallowed but depreciation 25% only allowed.but depreciation 25% only allowed.

Employee’s contribution to PF- Employee’s contribution to PF- treated as incometreated as income

If such employee’s contribution is If such employee’s contribution is paid before due date as per the PF paid before due date as per the PF act- allowed.act- allowed.

12/12/2007 108


Capital expenditure on travelling-Capital expenditure on travelling-disalloweddisallowed

Traveling expenditure to buy stock-Traveling expenditure to buy stock-allowedallowed

Insurance to asset or employees-fully Insurance to asset or employees-fully allowed expenditureallowed expenditure

Profit on sale of capital asset which is Profit on sale of capital asset which is included in the P/L /a/c- disallowedincluded in the P/L /a/c- disallowed

12/12/2007 109


Rent received from outsider other Rent received from outsider other than employee- credited to P/L A/c-than employee- credited to P/L A/c-disallowed income-subtract from disallowed income-subtract from net profit-Income from House net profit-Income from House property.property.

Any payment to Any payment to workers/Government-Before the workers/Government-Before the last date of filing returns is allowedlast date of filing returns is allowed

12/12/2007 110


All reserves/provision except All reserves/provision except depreciation provision-disalloweddepreciation provision-disallowed

Interest on own capital-disallowedInterest on own capital-disallowed Direct taxes refund like It refund Direct taxes refund like It refund

shown in P/L A/C –disallowed shown in P/L A/C –disallowed income= subtract from profitincome= subtract from profit

Revenue repair to building , furniture Revenue repair to building , furniture even leasehold –allowed expenditureeven leasehold –allowed expenditure

12/12/2007 111


Capital expenditure on family Capital expenditure on family planning- 1/5 is allowedplanning- 1/5 is allowed

Loss of cash, goods-allowed.Loss of cash, goods-allowed. Donation and charity-disallowedDonation and charity-disallowed Fringe benefit tax-disalowedFringe benefit tax-disalowed Expenditure on issue of shares-Expenditure on issue of shares-

disallowed ;where as expenditure on disallowed ;where as expenditure on issue of debentures, arrangement of issue of debentures, arrangement of loan (borrowed capital)- allowedloan (borrowed capital)- allowed

12/12/2007 112


Income from other heads-inadmissible Income from other heads-inadmissible incomeincome

Advance payment of tax, provision for tax, Advance payment of tax, provision for tax, income tax refund-disalloed income tax refund-disalloed

Life insurance premium of owner paid from Life insurance premium of owner paid from business-disallowedbusiness-disallowed

Scientific Research (in house)-fully allowed Scientific Research (in house)-fully allowed including capital expenditureincluding capital expenditure

Family planning revenue expenditure-Family planning revenue expenditure-allowedallowed

12/12/2007 113


Unapproved statutory Unapproved statutory funds-disallowedfunds-disallowed

Closing stock and opening Closing stock and opening stock to be valued in the stock to be valued in the same mannersame manner

12/12/2007 114

particularsparticulars AmountAmount

RupeesRupeesparticularsparticulars AmounAmoun

tt

RupeesRupeesSalariesSalaries

Rent and ratesRent and rates

Office expensesOffice expenses

Stock destroyedStock destroyed

DepreciationDepreciation

DiscountDiscount

AdvertisementAdvertisement

Interest on loanInterest on loan

Scientific research Scientific research expensesexpenses

Bad debtsBad debts

RBDRBD

Insurance on Insurance on buildingbuilding

Insurance stockInsurance stock

Income taxIncome tax

Gross profitGross profit

Interest on bondsInterest on bonds

Dividend receivedDividend received

RentRent

Rent paid in advanceRent paid in advance

Profit on sale of Profit on sale of investmentinvestment

discountdiscount

10,00,10,00,000000

Profit and loss account

12/12/2007 115

Closing stock is 10% less than the actual valueOpening stock was over valued by 8%

Advance payment of taxAdvance payment of taxprovision for taxprovision for tax

income tax refundincome tax refundLoss of cash, goodsLoss of cash, goods

Capital expenditure on family planningCapital expenditure on family planningLoss of cash, goodsLoss of cash, goods

Donation and charityDonation and charityFringe benefit taxFringe benefit tax

Expenditure on issue of sharesExpenditure on issue of sharesexpenditure on issue of debenturesexpenditure on issue of debentures, ,

arrangement of loan on borrowed capitalarrangement of loan on borrowed capitalBonus paid on 2Bonus paid on 2ndnd september september

Copy rightCopy righttechnical know howtechnical know how

patent rightspatent rightsCash Amount paid for expenses 25000 Cash Amount paid for expenses 25000

12/12/2007 116

Bad debts written off recovered (earlier Bad debts written off recovered (earlier disallowed)disallowed)

statutory penaltystatutory penalty Contractual penaltyContractual penalty Personal expenditurePersonal expenditure Interest paid on borrowed funds to pay Interest paid on borrowed funds to pay

Income tax Income tax Interest paid on installment of the price Interest paid on installment of the price

of propertyof property Expenditure to raise capitalExpenditure to raise capital Expenditure on shifting of registered Expenditure on shifting of registered

officeoffice

12/12/2007 117

THANK YOUTHANK YOU

ALTERNATIVE WORK IS REST

Happiness by giving but not receiving

Learn every day

No bad day. It depends upon our mind set

Two sides in a coin. One is failure(50% )

Other is success(50%)

Accepting failure leads to success

Enjoy whatever you do

Everyone is good

Income from business

Economy & Finance

Transcript of Income from business