Category: Business or Profession

Income under the head Profits and Gains of Business or Profession for the Assessmnet Year 2020-21 with all Tax Implication and new Amendment in Bill 2020.

Expenses expressly Allowed as Deduction (Section 30 to 37)

Deduction in respect of the following has been expressly allowed as Deduction against profits and gains of business or profession under Section 30 to 37. 1. Rent, Rates, Taxes, Repairs And Insurance for Building [Section 30] In respect of rent, rates, taxes, repairs and insurance for premises, used for the […]

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Section 37(1): General Deductions under Business or Professions

Section 37(1) says that any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be […]

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Expenses Not Deductible under Income Tax Act.

The following expenses given by Sections 40 40A and 43B are expressly disallowed by the Act while computing income chargeable under the head “Profits and Gains of Business or Profession”. 1. Interest, Royalty, Fees for Technical Services Payable Outside India or Payable to a Non-Resident [Section 40(a)(i)] – Disallowance of […]

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Deemed Profits and Gains of Business or Profession (Section 41)

By virtue of section 41, the following receipts are chargeable to tax as business income notwithstanding that the business or profession to which the receipts relate ceased to be in existence in the year in which they are received: 1. Recovery against any Allowance or Deduction Allowed earlier [Section 41(1)] […]

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Estimated or Presumptive Method for Computing Profits and Gains of Business or Profession

1. Computing Profits and Gains of any Business on Estimated Basis [Section 44AD] Notwithstanding anything to the contrary contained in sections 28 to 43C, there is a special scheme for estimating the profits and gains of assessees engaged in any business excluding the business of transport covered under section 44AE. […]

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Compulsory Audit of Accounts [Section 44AB]

1. Who has to get his Accounts Audited on Compulsory Basis The following persons are required to get their accounts compulsorily audited by a chartered accountant— (1) A Person carrying on Business Every person carrying on business shall, if his total sales, turnover or gross receipts, as the case may […]

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Maintenance of Accounts for carrying Business or Profession (Section 44AA and Rule 6F)

1. Person carrying on certain professions [Section 44AA(1)]: To understand the provisions of compulsory maintenance of books of account by certain persons, one must know the meaning of the terms “specified professions” and “non-specified professions”.  “Specified profession” – For the purpose of section 44AA and rule 6F legal, medical, engineering, […]

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‘Profits and Gains of Business or Profession’-Taxability

1. Business or Profession – Meaning & Definition  (A) Business The word ‘Business’ is defined in section 2(13) to include any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture.  The word business has a wider content than the word trade, commerce […]

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