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....

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...

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....

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...

Section 73: Nature of Activity Important For Deciding Principal Busienss !

The assessee-company , engaged in the business of financing by way of granting loans and advances and earning interest therefrom and also dealing in stock and shares , filed a return declaring a total loss after adjusting the business income of interest from loans and advances. In view of the provisions of Explanation to section...

Explanation to Section 73: Nature of Principal Business Important !

The assessee-company was daling in shares as well as earning income from business of trading in steel, yarn, fabrics as also from service charges.Its computation of gross total income showed loss under the head business wherease dividend was poistive income under the head ” income from other sources”.The dividend income was earned on shares held...

No 14A Disallowance if Dividend Received on Stock-in-Trade

The assessee a dealer in shares and securities earned dividend income from shares. The assessee claimed expenditure on brokerage of arranging interest free loan which was for payment of conversion cost of its stock of partly paid shares into fully paid shares. The Assessing Officer disallowed this amount on the ground that it was spent...

No 14A Disallowance , If No Interest Bearing Fund Used For Earning Exempt Income

The assessee-company was engaged in the manufacturing of cycles and parts of two-wheelers in multiple units. It earned dividend income. The Assessing Officer disallowed certain expense under section 14A(3).The CIT (Appeals) although partly upheld the addition, the Tribunal allowed assessee fully on its finding that the entire investment had been made by the assessee out...

ANDHRA PRADESH HC: Compensation for Land Acquisition Busienss or Investment?

The government acquired the land bought by the assessee and awarded the compensation which was unsatisfactory for the assessee.Therefore ,an appeal before the Civil Court was filed .The court enhanced the compensation . TheA.O treated the assessee’s share in the said compensation amount as income from business. However ,the assessee filed an appeal to the...

BOMBAY HC: Premium Received on Work For Sublease Land

The assessee-company, Toy an agreement, took on sub-lease certain land on payment of premium and annual lease rent. Subsequently, it entered into agreements with two of its sister concerns, for giving on sub-lease some land out of the land taken earlier. It was also agreed between the parties that the assessee would undertake to lay...