We have made a capital profit of Rs. 10 crores. Can we exclude it from MAT book profits for s. 115JB?
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11 responses to “We have made a capital profit of Rs. 10 crores. Can we exclude it from MAT book profits for s. 115JB?”
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For how many years a pvt ltd company can carried forward their profit/surplus in their profit & loss a/c without transferring to General Reserve a/c.
Please reply to my query
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The profit of the year after making appropriation towards dividends etc,., has necessarily to be transferred to General Reserve., without transferring them to reserved (general unless such transfer is supported by any resolution as intended for any specific purpose) There is no option to carry forward, ass it is without a transfer to reserve. Of-course reserves can be kept for certain years unless it is intended for any specific purpose like statutory reqwuirement such as replacement of assets., or devedlopmental work Otherwise it is mandated that such surplus would need to be declared as dividend to equity share holders.
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Capital gains is brought to tax by a deeming provision. The capital gains is not in the nature of income and hence the deeming provision was necessary.
The ICAI in its wisdom said Capital gains is to be treated as income and should be credited to Profit & Loss a/c. Deeming provision should be limited to taxing it under the head Capital Gains. I do not know whether the capital gains could be even if credited to Capital reserve could be taxed under 115JB if one views that the Capital Gains is not in the nature of income as such. If one looks at share premium this also could be taxed under sec.115JB if Capital Gains is to be credited to Profit & Loss a/c
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DOES THIS MEAN THAT A WRITE OFF OF A TERM LOAN ON A ONE TIME SETTLEMENT OF A TERM LOAN (NOT A WORKING CAPITAL LOAN) WITH THE BANK IF WHICH IS CREDITED TO THE PROFIT & LOSS ACCOUNT WILL ALSO ATTRACT THE PROVISIONS OF II5JB? WHEN THE NATURE OF THE INCOME ITSELF IS NOT THAT BEING AN INCOME HOW CAN IT BE TAXED? PLEASE CLARIFY
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Yes. There is latest direct judgement on the issue.The provisions of sec. 115JB have become a bit complicated. There are divergent opininon on the certain issue.
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The write off of a term loan should be correctly entered in the books. The prinicpal amount written off would be set off against the principal liability. The interest amount should be written off thru the P&L account and that would be taxable u/s 41(1).
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What would be the case if there was a brought forward LTCL from earlier years which could wipe off LTCG during the concerned financial year. Then if we include capital recipt in book profit and tax under 115JB , then the benifit of set off under Section 74 would be effectively lost for that year, which is very unfair to assessee. Surely this cannot be the intent of Section 115JB. Infact even subclause 3 of Section 115JB implies that the right would continue. Kindly provide your view on this.
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Is there any Form in IT Act for stay of demand
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Whether a Director of a company can be paid salary and remuneration both? If yes How? What about its taxability under the IT Act, whether under the head salary/business/othersources? This query is posted with reference to the newly inserted section 194J(1)(b). How a company has to make TDS?
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Sir Can You Tell Me ,
That Which Pension Are Fully Taxable And Which pension Are Tax Free -
What shall be the treatment from accounting point of view …
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