Provisions in relation to maintenance of books of accounts (Section 44AA)
1. Books or books of accounts includes ledgers, day books, cash books, account books and other books, whether kept in the written form or as print-outs of data stored in a floppy, disc, tape or any other form of electro-magnetic data storage device. 2. Document includes an electronic record as defined u/s 2(1)(t) of the […]
Read MoreAmounts not deductible in respect of expenditure exceeding Rs. 20,000 (Section 40A (3))
A. Nature of Expenditure: If an assessee incurs any expenditure in respect of which payment in excess of Rs.35, 000 in case of payment for plying, hiring or leasing goods carriages and Rs. 20,000 in any other case, is made otherwise than by an account payee cheque or an account payee bank draft, 100% of […]
Read MoreExpenditure that are not allowed as a deduction in the assessment of AOP/BOI u/s 40(ba)
Nature of expenditure disallowed: Interest, salary, bonus, commission, remuneration paid by an AOP/BOI to its members is not allowed as deduction in computation of income of AOP/BOI. If the AOP/BOI receives as well as pays interest to its members during the previous year, then the excess interest paid over and above the interest received shall […]
Read MoreProvisions for Amortization of Expenditure in case of Amalgamation / De-merger (Section 35DD)
Applicability: The assessee should be an Indian Company. Deduction: Expenditure incurred for the purpose of amalgamation or de-merger will be allowed as a deduction in 5 equal installments commencing from the previous year in which amalgamation or de-merger took place. Such expenditure will not be allowed as deduction under any other provisions of the Act. […]
Read MoreBLOCK OF ASSETS (SCTION 2(11)
The term “block of assets” means a group of assets falling within a class of assets, comprising- Tangible assets, being buildings, machinery, plant or furniture, Intangible assets, being know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature, In respect of which the same percentage of depreciation is prescribed. […]
Read MoreConditions for allowing provision for payment of gratuity to employee u/s 40A (7)
provision for gratuity in the books of accounts shall not be allowed as a deduction unless- The provision is made for any contribution towards an approved gratuity fund, or The provision is for gratuity, which has become due and payable during the previous year. Payment to any unrecognized welfare fund (Section 40A (9)) : Any […]
Read MoreSpecial provisions in the computation of income in case of business of prospecting or extraction of mineral oil (Section 42)
Applicability: Any assessee carrying on business of prospecting or extraction or production of mineral oil. Condition: The Government of India or any person authorized by it should have entered into an agreement with such an assessee and the same is duly approved by the parliament. Admissible expenditure: Allowance specified in the agreement in relation to- […]
Read MoreExchange rate fluctuations on Capital Assets u/s 43A
Applicability: The assessee has acquired any capital asset from abroad for the purpose of his business or profession. The purchase of capital asset is on credit or on deferred payment or on loan in foreign currency. Adjustment: If there is an increase or reduction in liability at the time of making payment- Towards the whole […]
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