. . Income-tax – Page 3 – Tax Questions and Answers

Category: Income-tax

  • Reassessment – Reopening of assessment – S. 147, 148

    Section 149 provides that no notice under section 148 shall be issued for the relevant assessment year – i) If four years have elapsed from the end of the relevant assessment year. ii) If four years but not less than six years, have elapsed from the end of the relevant assessment year unless income chargeable to tax which has escaped assessment amount to or likely to amount to one lakh rupees or more for that year.

  • Reassessment – Share application money -Chargeability of share application money

    The broad scheme of the Act is to charge all income to tax but only in the hands of the same person. So share application money received by Private Limited Company has to be taxed in whose hands? The Supreme Court in CIT v. Steller Investment Ltd. [251 ITR 263] has given answer by stating that even if it be assumed that the subscribers to the increased capital are not genuine, under no circumstances could the amount of share capital be regarded as undisclosed income in the hands of the company.

  • Method of Accounting vis-a-vis ICDS – 2016

    The Finance Act, 1995 amended section 145 of the Income-tax Act, 1961 with effect from assessment year 1997-98 to provide that income chargeable under the heads “Profits and Gains of Business or Profession” or “Income from Other Sources” must be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. The hybrid system of accounting viz mixture of cash and mercantile is not permitted from assessment year 1997-98 and own wards. However, assessee may adopt mercantile system of accounting for business and cash system of accounting for income from other sources.

  • Assessment – Certified copies

    You should ask authority under which law or rule or circular it is confidential, when you are seeking details about your own assessment records.

  • Inquiry before assessment– Special audit– Reference to Valuation Officer

    CIT v. Bhavani Shankar Vyas [311 ITR 8] the Uttarakhand High Court held that, section 142A was inserted in the Income-tax Act, 1961 by the Finance Act of 2004, with retrospective effect from November 15, 1972. Under section 142A of the Act, full power has been given to the Assessing Officer to call for a report from Valuation Officer. A perusal of section 144 read with sections 145, 142A and 131(1)(d) make it clear that it is not mandatory for the Assessing Officer to reject the books of account first before making reference under section 131(1)(d) of the Act or calling for a report of the valuer under section 142A

  • PAN card or Aadhaar Card necessary for genuineness-S.139AA

    If a charitable trust give donation to a hospital for a particular patient, then, the hospital would issue receipt for the said amount with its PANo.. In such case, it is not necessary for the trust to produce a copy of the PAN card or Aadhaar card of the patient.

  • Return of income PAN is not required when Income is not chargeable

    The Supreme Court in GE India Technology Centre Pvt. Ltd. [327 ITR 456] has held as under: “The most important expression in section 195(1) of the Income-tax Act, 1961 dealing with deduction of tax at source consists of the words “chargeable under the provisions of the Act”. A person paying interest on any other sum to a non-resident is not liable to deduct tax if such sum is not chargeable to tax under the Act. Section 195 contemplates not merely amounts, the whole of which are pure income payments; it also covers composite payments which have an element of income imbedded or incorporated in them. The obligation to deduct tax at source is, however, limited to appropriate proportion of income chargeable under the Act forming part of the gross sum of money payable to the non-resident. It is for this reason that the CBDT has clarified in Circular No. 728 dated October 31,1995, that the tax deductor can take into consideration the effect of the DTAA in respect of payments of royalties and technical fees while deducting tax at source. The expression “chargeable under the provisions of the Act” in section 195(1) shows that the remittance has got to be a trading receipt, the whole or part of which is liable to tax in India. If tax is not so assessable, there is no question of tax at source being deducted”. Thus, it is clear that if income is not chargeable to tax in India in the hands of payee, then, no tax is required to be deducted. Therefore, payee need not obtain PAN under section 206AA of the Act. The aforesaid view gets support from the judgment of Karnataka High Court in Smt. A. Kowsalya Bai & Others [346 ITR 156]. Wherein, it has been held that it is not necessary for such persons whose income is below the taxable limit to obtain permanent account number. Section 139A and section 206AA are made inapplicable to such persons.

  • Return- Form – Amount deposited in bank

    ITR, details of all bank accounts held in India at any time during the previous year (excluding dormant accounts) are to be given, wherein details in respect of cash deposited during November 9, 2016 to December 31, 2016 of aggregate cash deposits during the period Rs. 2/- lakh or more is required to be given.