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Whether Life Time Pension Arrear Taxable In The hands of Legal heir?

October 28, 2007 By taxworry Leave a Comment

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Excerpt: Whether Life Time Pension Arrears (LTPA) payable to a deceased employee is taxable in the hands of nominee. In a other way ,whether such amount should be included to the total income of the nominee and taxed. Please explain in detail to enable to guide one of friends in his tax planning.nominee’s own annual income is around Rs.3.2 lakhs and if he/she receives around Rs. 0.87 lakh as LTPA as a nominee of his/her deceased father, then whether this 0.87 lakh should be shown as ‘income from other sources’ and added to Rs.3.2 lakh to work out total income and…

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Filed Under: Salary

Is there Any Relief to Author Under Indian Income Tax Laws?

October 25, 2007 By taxworry Leave a Comment

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Excerpt: I am an Associate Professor in an University. I have co-authored two text books for Board of secondary education. The books are in Hindi. Do I have to pay tax on the income? I am getting confused even after going through section 80 QQB of I T Act. Please Help.Dr. Praveen Mathur Section 80QQB of the I T Act provides deduction up to Rs 3,00,000 to authors. The silent point of provisions are summarized below: The deduction is available to an Author who is resident of India.Author includes Joint Author. The book should be work of literary ,artistic…

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Filed Under: Deductions Tagged With:

Are the Gratuity & Leave Salary received by legal heir Exempt?

October 21, 2007 By taxworry Leave a Comment

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Excerpt: Whether gratuity and leave salary becoming due on the death of an employee are taxable in the hands of nominee/legal heir? Please explain in detail.M K L Chand First of all , it should be known that definition of Salary specifically mentions “Gratuity” .Therefore, gratuity is taxable whether being received by employee or his/her legal heir .However ,the leave salary received by the legal heir of an employee is totally exempt. . The detailed answer is as under: Gratuity The gratuity received by an employee is taxable as salary. But if it is received…

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Filed Under: Salary

Are 100 % Tax Exempt Companies Liable to Pay FBT?

October 19, 2007 By taxworry Leave a Comment

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Excerpt: We are having a Software Outsourcing IT enabled Company. This is approved by the Software Technical Park of India (STPI), Govt. of India and it is a STPI Unit. We are completely exempted from income tax since all our income is on foreign currency and no income in Indian currency as per rule.Now will you please let me know whether the Fringe Benefit Tax will apply to our Company since we are completely exempted from tax. P. Natarajan In my opinion , fringe benefit tax provision is applicable on you .This is on account of…

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Filed Under: FBT

Are You taxable for Research Remuneration Received In UK?

October 15, 2007 By taxworry 1 Comment

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Excerpt: I am working in Cambridge university as a researcher. I will be here from August 5, 2007, up to 2 years. I am in the service of Government of India and presently I am on leave. I get a salary of £26000 p.a in Cambridge (from UK project), with no remuneration in India. I was told that I am provisionally exempt from UK tax laws under double taxation agreement. What it means? (a) Do i need to pay taxes (~30%) in UK and get relief in India or vice verse(b) What kind of taxes I should pay in India once…

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Filed Under: non-resident

Can You Claim STT As Cost of Share Purchase?

October 14, 2007 By taxworry 2 Comments

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Excerpt: We are a company doing investments in shares i.e. we buy shares, take delivery and sell after few/many months. Our Assessing Officer says that we should add the Securities Transaction Tax paid on these transaction to the cost price ( just like service tax and education cess). Is he right? In our view, STT is a tax amount not to be used in any computation. Is there any circular/clarification on the matter by CBDT? Sanjeev The A.O , in my view , is absolutely incorrect in his advice. The computation of capital gains is done under section 48 of…

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Filed Under: capital gains

How Can You Prevent TDS on Rental Receipts?

October 13, 2007 By taxworry Leave a Comment

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Excerpt: I have rented out a property in Gurgaon and the lessee is asking me for a letter from the Income Tax Dept. stating that he does not need to deduct the tax at source. Is this correct? If so how and where do I get this letter? Vijay The TDS on rent is provided in section 194I of the I TAct. The TDS has to be made by any tenant if the total rent paid during the year is exceeding Rs 1. 2 lakhs. The exception is that the individuals and HUF are exempt from TDS on rent…

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Filed Under: TDS Tagged With:

Are You Liable to Tax Even If Your Total Income Is Below Exemption Limit?

October 9, 2007 By taxworry Leave a Comment

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Excerpt: For the Assessment year 2005-06, I was a full-time PG student with zero income. I had won a prize of Rs 30K in a quiz competition on which a TDS of Rs 9180 was collected. After filing for TDS refund, the Assessing Officer rejected my claim stating that “no refund is due in view of Section 115 BB”. Is his action justified? Can I go for an appeal against this?DevadasYes, there are certain income on which basic exemption of income tax rate does not apply. There is a common misconception that one is not liable to income tax if…

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Filed Under: A of Your Question

Is it compulsory to disclose exempted income in the income tax return?

October 7, 2007 By taxworry Leave a Comment

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Excerpt: Is it compulsory to disclose exempted income in the Indian income tax return? Can NRI ignore the direction given in the tax return to declare exempted incomes such as his foreign income? As there is no such specific provision in the Income Tax Act, and since no tax is sought to be avoided, non-disclosure of exempted income should not attract penalties/prosecutions. Right? Asked  By A Member on Linkedin.com First of all , contrary to your belief , the Income Tax Act clearly provides u/s 139(6) that assessee shall  furnish details of exempt income if such details are prescribed in the form of return…

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Filed Under: Filing of Return

When Should You Get Tax Audit Done In Case Of Day Trading of Shares?

October 7, 2007 By taxworry 3 Comments

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Excerpt: I do only day trading. When am I required to get my accounts tax audited ? Renesh Jain The day trading is definitely speculative in nature. The delivery is never taken or given.Therefore, confusion is created regarding what should be the turnover of day trading transaction .Should the value of purchase or sale or only difference between the purchase and sale be taken for computing turnover for the purpose of tax audit u/s 44AB of the I T Act. The issue had come up in case of Babulal Enterprise vs ACIT before Mumbai bench of ITAT [IT…

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