Direct Tax

There are 28 posts filed in Direct Tax (this is page 3 of 3).

TDS on Sale of Property

As we discussed in the basic concepts of Income Tax II regarding evasion of Income Tax that the main instrument adopted by tax evaders is non-reporting of capital gains on sale of capital assets and specifically real estate assets that’s why while presenting budget for FY 2013-14 he introduced new section 194IA relating to deduction of tax at the time of sale of property, which is reproduced below: –

 (1) Any person, being a transferee, responsible for paying (other than the person referred to in section 194LA) to a resident transferor Continue reading →

Basic Concept of Income Tax-II

In continuation of our earlier discussion regarding basic concept of income tax, now we will discuss about the three very interesting and very important concepts of income tax viz.

Tax Evasion, Tax Avoidance and Tax Planning. In common discussion it is very difficult to explain the difference between the three but in real sense they all are very different and have very important impact on the taxation of any person. We will discuss these terms in details in the following paragraphs,

Tax Evasion: – Reducing one’s tax liability by incorporating fake claims (of various expenses incurred for earning income) or by suppressing information relating to income Continue reading →

Basic Concept of Income Tax

Today we will discuss about some frequently used terms while talking about income tax and its applicability. We know all these terms and heard about them a lot of times but might not be knowing the exact meaning, so now we discuss about their general meaning as well as technical meaning.

Lets start our journey,

Income Tax: – Every person is liable to pay income tax if his total income exceeds the minimum exempted slab of income as prescribed by the Central Government for the previous year. Income Tax Act, 1961 deals with provisions of tax-ability of various types of income. Income tax is direct in nature meaning Continue reading →

TDS ON INTEREST OTHER THAN SECURITIES

TDS on Interest other than Securities: – Section 194A of the Income Tax Act, 1961 deals with the provisions related to TDS on Payment of Interest other than Interest on Securities

WHO IS LIABLE TO DEDUCT: –

Any person responsible for paying any sum to any resident in the form/shape of interest other than interest on securities is required to deduct tax Continue reading →

TDS ON CONTRACTUAL SERVICES

TDS — TAX DEDUCTED AT SOURCE: –

TDS is required to deducted at time of making payment and there are different types of payments viz. salary, professional services, contractual services, interest, rent etc. But here we will discuss only TDS on contractual services.

TDS on Contractual Services: – Section 194C of the Income Tax Act, 1961 deals with the provisions related to TDS on contractual Services.

WHO IS LIABLE TO DEDUCT: –

Any person responsible for paying any sum to any resident contractor for Continue reading →

ADVANCE TAX

Advance Tax:-   Section 208 of the Income Tax Act, 1961 deals with the provisions of payment of advance tax which provides that every assessee needs to pay advance tax where advance tax payable is more than Rs. 10000/- for all incomes including but not limited to capital gains, winning from lotteries, casual income etc. It is true that income of previous year is taxable in the immediately following assessment year but assessee is required to pay advance tax as per his own computation as per the provisions of section 208 of the said Act.

Exception: –        From AY 2013-14 onwards every senior citizen not having income from Business/Profession is not liable to pay advance tax. Continue reading →

House Rent Allowance

Today we will discuss about HRA (House Rent Allowance): –

House Rent Allowance given by the employer to employee towards meeting out the expenses on House Rent Paid by employee. It is part of salary and is taxable subject to section 10(13A) read with rule 2A

Continue reading →