Solution for Tax Problems of Business

A separate head of 'Profits and Gains of Business or Profession' are provided under Income Tax Act for taxation of business or profession income. The term "business" includes any (a) trade, (b)commerce, (c)manufacture, or (d) any adventure or concern in the nature of trade, commerce or manufacture. The term "profession" implies professed attainments in special knowledge as distinguished from mere skill; "special knowledge" which is "to be acquired only after patient study and application". The following types of income are chargeable to tax under the heads profits and gains of business or profession:-

  1. Profits and gains of any business or profession
  2. Any compensation or other payments due to or received by any person specified in section 28 of the Act
  3. Income derived by a trade, profession or similar association from specific services performed for its members
  4. Profit on sale of import entitlement licenses, incentives by way of cash compensatory support and drawback of duty
  5. The value of any benefit or perquisite, whether converted into money or not, arising from business
  6. Any interest, salary, bonus, commission, or remuneration received by a partner of a firm, from such a firm
  7. Any sum whether received or receivable in cash or kind, under an agreement for not carrying out any Activity in relation to any business or not to share any know-how, patent, copyright, franchise, or any other business or commercial right of similar nature or technique likely to assist in the manufacture or processing of good
  8. Any sum received under a keyman insurance policy
  9. Income from speculative transactions.

What Is The Rule Of Taxation Of Subsidies?

taxation of subsidies

The taxation of  subsidies depends upon the nature and circumstances under which the subsidy is given by governments from public accounts money. This is one issue where no fixed rule is possible because the issue has to be settled first is -whether the tax on capital subsidy is imposable depends whether it is actually a capital receipt or a revenue receipt. … [Read more...]

5 Situations Two Persons Can Claim Depreciation During the Same Year ?


The law of claiming depreciation on asset of business is regulated through section 32 of the Income Tax Act . Further Income Tax Rule provides depreciation rate for various class of assets. Now as it happens with businesses, one needs to reorganize through various ways like amalgamation, or changing the structure of the business etc. In those changing circumstances , the … [Read more...]

Postal & Insurance Agents :What Deductions Allowed ?

The persons who are insurance agent or postal agents who receives commission for selling various kinds of investments and insurance products of  insurance companies and postal department. One reader Vasantha , Trichy  has asked  "I am a mutual fund broker, LIC agent & Postal agent. I am getting income by way of commission for my agentship. Please guide me under which head I … [Read more...]

Private Trust :7 Tax Planning Tips You Can Actually Use !


Since every indivdiual is provided a basic exemption limit ,the central point of tax planning is to have more tax entities. Each entity gets basic exemption from tax which in aggregate exempts quite a substantial amount of income from tax. When you create a private trust,what you are doing is creating a separate tax entities. You should read first how a private trust is taxed … [Read more...]

Section 73: mututal Fund Units not Covered !

While it is clear that Explanation to Section 73 is applicable on shares of a company and units purchase and sale does not come within its purview, there can be sepculative trade in case of mutual fund units u/s 43(5) and if any loss arises from such trades in iunits, it can not be adjusted with business income. This issue was before Kerala High Court in CIT vs Periakaramalai … [Read more...]