Income Tax (India)

Section 46: Distribution of assets on liquidation of Company Where the assets of a company are distributed to its shareholders on liquidation of a company, such distribution shall not be regarded as transfer in the hands of the company. Section 47: Transactions which are not considered as Transfer The following transactions are exempt from chargeability to Capital gains, subject to the satisfaction of conditions stipulated: 1- Distribution of a capital asset on total or partial partition of a HUF. 2- Transfer of a capital asset by way of gift or under a will or an irrevocable trust. (This clause hall not apply to transfer under a gift / irrevocable trust of a capital asset being share, debentures or warrant allotted by a company to its employee under ESOP of the company as per guidelines of CG. i.e.ESOP are not covered over here.) 3- Transfer of a capital asset by holding company to its subsidiary company or vice versa is exempt if the following two conditions are fulfilled: a...

In relation to a Transfer, includes: i) Sale, exchange or relinquishment of a capital asset; or ii) Extinguishment of any rights therein; or iii) Compulsory acquisition of a capital asset under any law; or iv) Conversion or treatment of a capital asset into/as stock-in-trade; or v) The maturity or redemption of a zero coupon bond; or vi) Any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in Sec. 53A of the Transfer of Property Act, 1882; or vii) Any transaction whether by way of acquiring shares in or by way of becoming a member of a co-operative society, company or other association of persons or by way of any agreement or arrangement or in any other manner which has the effect of transferring, or enabling the enjoyment of any immovable property. The expression “transfer” includes disposing of or parting with an asset or any interest therein, or creating any interest in...

Explanation 2 to section 28 specifically provides that where an assessee carries on speculative business, that business of the assessee must be deemed as distinct and separate from any other business. This becomes necessary because section 73 provides that losses in speculation business unlike other business, cannot be set-off against the profits of any business other than a speculation business. Profits and losses resulting from speculative transaction must be treated as separate and distinct from profits and gains of business and profession from any other business. (1) Meaning of Speculative Transaction “Speculative transaction” means a transaction in which a contract for the purchase or sales of any commodity including stocks and shares, is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips [Section 43(5)]. Where any part of the business of a company consists in the purchase and sale of the shares of other companies, suc...

Agriculture is said to be the primary occupation in India. It is usually the only source of income for the large rural population in India. The country as a whole is entirely dependent on agriculture for its basic food requirements. The government has numerous amount of schemes, policies and other measures to promote growth in this sector – one of them being an exemption to income tax. Let us take a look at the provisions of the law in this regard. What is agriculture income? Agriculture income constitutes the following 3 main activities: 1. Income derived from agriculture land as below: (A)  Agriculture: Agriculture has been explained to consist of two types of operations.   Basic agriculture operations would include cultivation of the land and consequently tilling of the land , sowing of seeds, planting and all such operations that require the human skill and effort directly on the land itself.     S ubsequent operations   would include operations that are c...

The Government of India has adopted several fiscal and non-fiscal measures to move towards a less cash economy, to reduce the generation and circulation of black money and to promote the digital economy, The GOI with a vision to transform India into a digitally empowered society and knowledge economy introduces various flagship digital Programs. “Faceless, Paperless, Cashless” is one of professed role of Digital India. Cashless payments are taking off in India, growing faster than in other countries around the world. Digital transactions in India increased by 55% last year, compared with 48% in China and 23% in Indonesia, according to data from the Bank for International Settlements (BIS). As per the Report of RBI Digital transactions set to rise four times by 2021. As part of promoting cashless transactions and converting India into less-cash society, various modes of digital payments are available. The Government to encourage digital economy and move towards a less-cash economy, ...

 Budget 2021 update :It has been proposed to exempt the senior citizens from filing income tax returns if pension income and interest income are their only annual income source. Section 194P has been newly inserted to enforce the banks to deduct tax on senior citizens more than 75 years of age who have a pension and interest income from the bank.   Budget 2021 Live Update will be announced on 1st February 2021 addressed by FM Nirmala Sitharaman   Income tax is levied on the income earned by all the individuals, HUF, partnership firms , LLPs and Corporates as per the Income tax Act of India. In the case of individuals, tax is levied as per the slab system if their income is above the minimum threshold limit (known as basic exemption limit ).  Income Tax Slab Rates for F.Y 2020-21 (A.Y 2021-22)     a. Income tax slab rate for new tax regime F.Y 2020-21 - Why it is optional?        In this new tax regime, tax payers...