As per sections 44AA of the Income-tax Act, 1961, a person engaged in business or profession is required to maintain regular books of account under certain circumstances. To give relief to small taxpayers from this tedious work, the Income-tax Act has framed the presumptive taxation scheme under sections 44AD, sections 44ADA, sections 44AE., Section 44BB […]
Which businesses are not eligible for presumptive taxation scheme of section 44AD?
The scheme of section 44AD is designed to give relief to small taxpayers engaged in any business, except the following businesses: Business of plying, hiring or leasing goods carriages referred to in sections 44AE. A person who is carrying on any agency business. A person who is earning income in the nature of commission or […]
Who is eligible to take advantage of the presumptive taxation scheme of section 44ADA?
The presumptive taxation scheme of sections 44ADA can be adopted by a resident assessee being individual or HUF, carrying on specified profession whose gross receipts do not exceed fifty lakh rupees in a financial year. Following professions are specified profession: 1) Legal 2) Medical 3) Engineering or architectural 4) Accountancy 5) Technical consultancy 6) Interior […]
What provision will apply if a person opt for the presumptive taxation scheme of section 44ADA and declares his income from profession at lower rate (i.e. less than 50%)?
A person can declare income at lower rate (i.e. less than 50%), however, if he does so, and his income exceeds the maximum amount which is not chargeable to tax, then he is required to maintain the books of account as per the provisions of sections 44AA and has to get his accounts audited as […]
If a person adopts the presumptive taxation scheme of section 44AE, then is he liable to pay advance tax in respect of income from business covered under section 44AE?
There is no concession as regards payment of advance tax in case of a person who is adopting the presumptive taxation scheme of section 44AE and, hence, he will be liable to pay advance tax even if he adopts the presumptive taxation scheme of section 44AE.
Is the residential status of a person relevant for determining the taxability of the income in his hands?
Yes, the residential status of a person earning income is very much relevant for determining the taxability of such income in his hands. Taxability of any income in the hands of a person depends on the following two things : (1) Residential status of the person as per the Income-tax Law; and (2) Nature of […]
Will a person holding Indian citizenship be treated as a resident in India for the purpose of charging Income-tax?
The Finance Act, 2020 has introduced new section 6(1A) to the Income-tax Act, 1961. The new provision provides that an Indian citizen shall be deemed to be resident in India only if his total income, other than income from foreign sources, exceeds Rs. 15 lakhs during the previous year. For this provision, income from foreign […]
What are the different classes of residential status prescribed under the Income-tax Law for a Hindu Undivided Family (HUF)?
For the purpose of Income-tax Law, a HUF can have any one of the following residential status: (1) Resident and ordinarily resident in India (2) Resident but not ordinarily resident in India (3) Non-resident Every year the residential status of the taxpayer is to be determined by applying the provisions of the Income-tax Law designed […]
How to determine the residential status of a company?
With effect from Assessment Year 2017-18, a company is said to be resident in India in any previous year, if: (i) it is an Indian company; or (ii) its place of effective management, at any time in that year, is in India. For this purpose, the “place of effective management” means a place where key […]
What is the objective of FEMA?
The main objective of FEMA is to facilitate external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India. FEMA deals with provisions relating to procedures, formalities, dealings, etc. of foreign exchange transactions in India. The transactions relating to foreign exchange have been classified under FEMA into two […]