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You are here: Home / Archives for January 2009

Institutes Run By Even Trusts , Non Profit Organisation Are Liable To Service Tax Clarifies CBEC Circular.

January 31, 2009 By taxworry Leave a Comment

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Excerpt: CBEC issues circular F.No137/23/2007-CX.4 dt 28/01/2009 stating that even institutes run by no profit organization or Trusts are liable to Service Tax . Only colleges approved by AICTE or deemed university and vocational courses institutes are out of service tax .The excerpt of circular is given below COMMERCIAL NATURE OF INSTITUTE Service tax is leviable on services provided by ‘commercial training and coaching centers’, since the year 2003. As the phrase ‘commercial training or coaching center ‘has been defined in a statute, there is no scope to add or delete words while interpreting the same. The definition…

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Filed Under: Service Tax Tagged With:

Whether Proceeds From Jeevan Aastha Policy Tax Exempt?

January 31, 2009 By taxworry Leave a Comment

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Excerpt: Whether maturity proceeds under LIC’s Jeevan Aastha policy are eligible to earn exemption u/s 10(10)d. if yes,under which circular.Salunkhe j b , Jalgaor Jeevan Aastha policy is single premium and period is 5 or 10 Years. The sum assure is six times of first years premium and two times of second year premium.   The  provision u/s 10(10D ) says any sum received under a Life Insurance Policy is free from tax except certain types given there in – i.                     keyman insurance policy and ii.                    insurance policy where premium in a year…

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Filed Under: Exemption Tagged With:

Why Is Salary Taxed on Due Basis Whereas TDS On Salary Is Only On Payment Basis ?

January 30, 2009 By taxworry 1 Comment

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Excerpt: For a salaried employee, please let me know whether income tax is to be deducted by the employer on the salary paid or on the accrued salary ? Leeladhar B , Chennai The provision u/s 192 deals with the deduction of tax at source from salary. The said provision is as under 192. (1) Any person responsible for paying any income chargeable under the head Salaries shall, at the time of payment, deduct income-tax on the amount payable at the average rate of income-tax computed on the basis of the rates in force  for the…

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Filed Under: Salary

What Are Direct Tax Implications if Foreign Company Transfer Shares of Indian Company To Its Subsidiary Company Without Consideration?

January 30, 2009 By taxworry Leave a Comment

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Excerpt: A Foreign company hold the share of Indian company (22%), and foreign company transfer the share to the subsidiary company without any consideration. tell me what are the tax implication of this case. Mukesh Gupta, New Delhi The share is an asset and when the asset is transferred to another person , there is certainly a question of capital gains or loss shall arise. A foreign company is legally a different company than the subsidiary company. So, the transfer of shares of Indian company to its subsidiary company shall be covered u/s 45 .However, since the…

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Filed Under: Company Tagged With:

Can I Claim Exemption u/s 54 For House Bought More Than A year Ago?

January 30, 2009 By taxworry Leave a Comment

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Excerpt: I had purchased a residential house in 2003 and now I wish to sell it. I had purchased a second house in March 2007 but it is under construction as possession is not given . Can I claim a deduction under section 54 ?” Leena Kavthekar , Pune Section 54 states 54. (1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of a long-term capital asset  being buildings or lands appurtenant thereto, and…

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Filed Under: capital gains

CBDT Notifies Enhanced Depreciation and Changes Due Date For Filing Quarterly Statements of TDS in Case Of Non Residents

January 29, 2009 By taxworry Leave a Comment

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Excerpt: Two News you can use1. Enhanced Depreciation on Commercial VehicleEnhanced depreciation @ 50% on new commercial commercials purchased and put to use on or after 01.01.09 and before 01.04.09 for the purpose of business or profession have been allowed vide notification S.O. 197(E) dated, 19th January, 2009 of CBDT which can be downloaded from here.(via) New commercial vehicle which is acquired on or after the 1st day of January, 2009 but before the 1st day of April, 2009 and is put to use before the 1st day of April, 2009 for the purposes of business or profession [See paragraph 6…

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Filed Under: A NEWS u can USE

Taxation Effect On Not Getting Interest On Money Borrowed On Interest And Advanced To Firm Without Any Interest!

January 28, 2009 By taxworry Leave a Comment

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Excerpt: Mr. A is having income from business amounting Rs. 4.00 laksh for the year 2007-08. He has taken a loan of Rs. 50.00 lakhs during the year 2007-08 from a bank and invested that amount as his capital contribution in the firm XYZ & Co. The firm has not paid any interest on the capitals of the partners for the year 2007-08, since it has incurred loss. The Bank has charges Rs. 5.00 lakhs towards interest on loan taken by him for the year 2007-08. Can Mr. A adjust the interest on Bank loan amounting to Rs. 5.00 lakhs against…

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Filed Under: Business Income Tagged With:

Is Deduction u/s 80C For Payments To LIC Not Allowable Only if Paid In Cash?

January 28, 2009 By taxworry Leave a Comment

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Excerpt: Please confirm if LIC premium towards a child when paid by the parent is allowed as deduction under sec 80c if within the overall limit and when paid by cash. I have been told that it is eligible for deduction ONLY if paid by cheque. Vidut Saklani , DehradunThe said provision regarding the deduction under Chapter VI-A is only in case of section 80D and not section 80C as far as payments for insurance is concerned. An amendment was done in section 80D by inserting the phrase “ paid by him by any mode of payment other than cash” by…

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Filed Under: Deductions Tagged With:

Why Is Recruitment As Consultant Not Preferable ?

January 23, 2009 By taxworry 3 Comments

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Excerpt: Recently while during switching of jobs , today to the next potential employer at Mumbai , I asked for , higher take home,the HR Mgr told that , within the offer which they provided , they have another option , to show me as a Consultant , that will attract Income tax of only 12.5% , where as if you want to show status as regular employee , the normal tax treatment of 33% will be applicable.. so being a consultant , you can save 20% , from tax payment.I asked him for 1 day time to think, i.e. time…

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Filed Under: Salary

Is Deduction u/s 80DDB Allowed If Relative Is Not Dependant On You?

January 20, 2009 By taxworry Leave a Comment

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Excerpt: I have a small query. my father’s brother who is aged above 45 is suffering from brain tumour and I paid his hospital expenses such as operation, medical expenses. can i claim for an exemption for this from our income tax. Please clarify me this query. Sandhya Rani Guntupalli , Hyderabad First of all, deduction u/s 80DDB does not require a patient merely to be relative but a dependent relative. Because the words used in section 80DDB is dependant and no where the term relative has been used. The dependents are defined under section 80DDB in following words…

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Filed Under: Deductions Tagged With:
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