Search Results For: deductions


QUERY: An assessee has constructed units in an industrial park approved by the Government. The said units were given on lease and rent collected from lessees. Is assessee eligible for deduction under section 80-IA(4)(iii)?
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Generally the income falling under sections 80-IA or 80-IB should be of business income. Where the assessee merely derives rental income. Such income may not be eligible. But an exception is possible where income is derived from lease, while supplying all infrastructure services of SEZ.

QUERY: Whether limit of Rs. 10,000/- for payment by cheque applies to each item of donation to the same trust or aggregate during one financial year?
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(i) The Explanation 5 to section 80G which is on statute book since assessment year 1976-77 which provides that “no deduction shall be allowed under this section in respect of any donation unless such donation is of a sum of money”.

QUERY: Assessee has bought insurance ULIP policy by paying one time premium on March 3, 2009. However no deduction was claimed u/s. 80CCC. On March 31, 2012 he surrendered the policy to insurance company and received the amount of 1½ times the amount initially paid. What would be tax treatment of the said receipts? Whether whole amount is taxable or only excess is taxable? If taxable, under which head of income?
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As per the query the assessee has not claimed the amount paid as a one time premium for ULIP policy. However, on surrender of the said policy the assessee has received amount in excess of the policy which would include

QUERY: A flat was sold. The AO adopted stamp duty value. The assessee invested full stamp duty value in another flat. Whether the assessee is entitled for deduction under section 54F?
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QUERY: Section 54EC caps exemption at Rs. 50 lakhs, whether caps of Rs. 50 lakhs:

(a) Is applicable qua assets sold?

(b) Whether assessee can claimed exemption only in one year

(c) Whether limit of Rs. 50 lakhs is applicable to each financial year, if yes, then can assessee invest Rs. 50 lakhs in two financial years, falling within a period of six months after date of transfer?
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(a) No, section applies to assets sold during the year and not the qua asset.

(b) The exemption should be claimed in the year in which long-term gain arises and invested in long-term specified assets within six months from the date of transfer.

QUERY: The assessee is a Co-Operative Society and maintaining accounts on mercantile system of accounting. During the financial year 2008-09 (Asst. yr. 2009-10) on the basis of actuary valuation made provisions of Rs. 80 lakhs towards employees gratuity fund and during the same financial year deposited full amount to the LIC under Group Gratuity Life Assurance Scheme. The AO wants to disallow as on the ground that it is not Approved Gratuity Fund. Assessee’s pleas is that the same is allowable u/s. 40A(7) read with section 43B. In past so many years the same was allowed by the AO though no specific reference was made.

Kindly let us know the legal view with case law if available.
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S. 29 of the Act reads as under:

“The income referred to in section 28 shall computed in accordance with the provisions contained in sections 30 to 43D”.

S. 43B reads as under:

QUERY: Employee’s contribution unpaid is disallowable u/s. 43B?
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Section 43B reads as under:

“Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under the Act in respect of –

(b) Any sum payable by the assessee as an employer by way of contribution

QUERY: Explanation 2 to Section 37 provides that any expenditure incurred by an assessee on the activities relating to corporate social responsibility shall not be deemed to be an expenditure incurred by the assessee for the purpose of business. According to the Memorandum explaining the provisions of the Finance Bill 2014, such expense, being an application of income, is not incurred wholly and exclusively for the purpose of carrying on business and, hence, not allowable as deduction. It also says that CSR which is of the nature described in Section 30 to 36 of the Act shall be allowed under those sections subject to fulfilment of the conditions, if any, specified therein. Which types of expenses can be allowed under these sections?
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As it is evident from section 37 of the Act, that it is subject to the provisions of sections 30 to 36. Further, the Finance Minister has clarified that deductions specifically allowable under sections 30 to 36 of the Income-tax Act, 1961 could be availed. In effect, Section 30 of the Act can be used for availing deductions against the expenditure incurred on rent, repairs and insurance in respect of building. Section 31 in respect of repairs and insurance of machinery, plant and furniture used for CSR activities.

QUERY: The assessee is a partnership firm carrying on medical profession. At present it is carrying on Gynic Branch only for the last several years. It decided to set up 200 bedded multi-specialty hospital and accordingly started the project in May, 2012 under the same partnership firm as a separate unit in order to avail under section 35AD @ 150% of eligible capital expenditure:

(a) Whether this unit can claim deduction under this section though the place of business and the nature of services will be different? No old machinery etc. will be transferred to new building/unit.

(b) Whether the income of both the units owned by the firm will be consolidated for the purpose of applicability of section 115JC or separate treatment?

(c) Can there be any difficulty to claim deduction under section 35AD in case if old unit (Gynic) is also shifted to new Hospital? The new unit may start operation by April-May, 2015.
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a) Yes, the partnership firm can claim deduction under section 35AD @ 150% on capital expenditure incurred for setting up and operating hospital anywhere in India with more than 100 beds for patients. From the fact, it is clear that no old machinery would be transferred to new building/unit, hence, it would not be set up by splitting up or the reconstruction of a business already in existence.

QUERY: Mr. X has let out his residential flat to a prestigious company. As per the requirement of the company and as is customary in the area, the flat, which was not in proper condition, was required to be repaired and refurbished with modern decor. Mr. X also has to install air conditioners in all the rooms. Mr. X also had to pay one month rent as commission / brokerage to a broker who arranged the deal. Mr. X also had to pay society charges and other maintenance / contribution charges to the society. Besides, Mr. X also has to incur various administrative costs. The rent is one single amount. What amounts are deductible from the rent income in the hands of Mr. X?

Will there be any difference if:

(i) Instead of Mr. X, a company was owner with one of its objects being dealing in immovable properties?

(ii) Instead of one, say, dozen properties are let out to different persons.

(iii) In case the company is owner, the company has also to incur expenses on audit fees, ROC filing fees, director fees, etc.
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In Tube Rose Estates (P) Ltd., v. ACIT [123 ITD 498] the Delhi Tribunal has held that the brokerage payable by an assessee for renting out the premises could neither be deducted from the rent under section. 23 nor it was allowable as a deduction under section 24 of the Income-tax Act, 1961.