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Cryptocurrency Tax and Accounting Services. We clarify crypto taxation doubts to those who currently trade and hold cryptocurrency.

FAQs related to ITR Filing

Following are common FAQs related to ITR Filing Unable to fill the details in Schedule FA or Schedule FA is grayed out in ITR? Answer: Select the appropriate option from the drop down in sheet Part B -TI-TTI at serial number 19 (Do you at…

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Rectification Request for your Income Tax Return

A rectification request for your Income Tax Return can be made under section 154(1) which is allowed by the Income Tax Department. It is allowed for correcting mistakes when there is an apparent mistake in your Income Tax Return. The following errors can be taken care of…

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FAQs on Income from House Property

This section will cover all FAQs one can think around Income from House Property Is rental income from sub-letting chargeable to tax under the head “Income from house property”? Rental income in the hands of owner is charged to tax under the head “Income from…

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Home Loan Processing Service

Home is dream of every Indians and without home loan it is not possible. Home Loan is very important part to make funding of home cost. It is seen that people are not very much educated about home loan in respect of interest rate, prepayment,…

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Taxation on crypto currencies in 2021

Regulations on cryptocurrencies are different in different countries across the globe. Even the trading process is regulated differently by the financial authorities of the various countries. In India, there is very little clarity about how to deal with crypto. India is still undecided on whether…

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India 2021 - Beginner Bitcoin FAQs

India 2021 - Beginner Bitcoin FAQs - Frequently Asked Questions: Basics Explained If you've stumbled across this page in search of answers around Bitcoin, welcome! There is a lot we can teach you. For this post, we have collated questions about cryptocurrency and answered the…

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Indian Investors gain from price arbitrage in Cryptos

Cryptocurrency traders have began making positive aspects by way of price arbitrage on Indian and overseas platforms as costs turned volatile over the previous few days. Trading volumes doubled at some exchanges as costs of Bitcoin and different cryptocurrencies fluctuated. While some exchanges are cautious of…

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Crypto Swing Trading for you?

In this post,we will discuss if Crypto Swing Trading will work for you? Swing Trading is a common investment strategy and one quite different from day trading or position trading. As you’re likely aware already, day trading is perhaps the most well-known trading approach and…

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Cryptocurrency Redefining the Future of Finance?

Cryptocurrency Tax Consultant | CA India | Chartered Accountant India

Cryptocurrency is a thriving ecosystem, quietly encroaching on conventional finance’s territory.

Over the last five years, Bitcoin users and transactions have averaged a growth rate of nearly 60% per year. Similarly, private and public investors have deepened their commitment to cryptocurrencies including Ethereum, Ripple (XRP), and Stellar—and a number of others across the industry.

Today’s infographic unpacks a cross-section of cryptocurrencies, stakeholders, and core applications across a sector that’s continuing to grow in importance.

The Evolution of Cryptocurrency

Cryptocurrency has erupted into a $200 billion industry, sparking a wave of global disruption.

At the heart of cryptocurrency is a rich history of innovation. It extends back to the 1980s with advances in the field of cryptography—eventually leading to the technology that forms encryption techniques designed to protect the network.

Since then, a series of key events have continued to shape the sector.

YearEvent
2009Satoshi Nakamoto mines the first Bitcoin on a decentralized network
2011Litecoin launches
2012Ripple is founded
2013The price of a single Bitcoin reaches $1,000
2015Ethereum launches, introducing smart contracts into the crypto ecosystem
2017Over 1,000 cryptocurrencies listed
2017Bitcoin's price rockets past $10,000, reaching a peak just shy of $20,000
2018EOS offers a blockchain-based infrastructure for decentralized apps (DApps)

 

Now, there are over 5,000 cryptocurrencies in circulation, with many built on innovative applications and use-cases as the ecosystem rapidly evolves.

The Value of Cryptocurrencies

Today, crypto offers cutting-edge advances that are diverse and transformative. In addition, it could also be considered an investment in tomorrow’s financial system—decentralized finance (DeFi).

DeFi is an emerging alternative financial system that is built on a public blockchain, which enables greater accessibility because anyone has the ability to connect to it. Additionally, transactions are publicly visible, enabling greater transparency across the system.

Here is a refresher on some of the practical advantages being applied across cryptocurrencies.

Use CasesNameDescription
PaymentsBitcoin
Ripple (XRP)
Stellar
Dash
Used for purchasing goods without the need of a trusted third-party
Value StorageBitcoin
Litecoin
As the total supply of many cryptocurrencies are limited, this scarcity influences their value
StablecoinsDAI
USDC
GeminiUSD
Digital money that is typically pegged to a currency or commodity, such as gold
PrivacyMonero
Zcash
Cryptography, the technology behind crypto, can enable the anonymity of its owners
Digital OwnershipBitcoin
Ripple (XRP)
Stellar
Can empower those without access to a bank to enter the financial system
Digital GoldBitcoinBitcoin shares similar attributes to money: a medium of exchange, unit of account, and store of value
Decentralized Apps (DApps)EOS
Tezos
Ethereum (ETH)
Enable individuals to create apps without a central authority, directly connecting the user and creator

 

The Key Players in the Crypto Landscape

The cryptocurrency ecosystem is growing rapidly. Worldwide, private and public actors recognize its potential across many domains.

Who are the primary participants in the field today?

Private Actors

  1. Institutional Investors
    Harvard Endowment Fund, Crypto Hedge Funds
  2. Cryptocurrency Exchanges
    Coinbase, Bitstamp
  3. Banks & Finance
    J.P. Morgan, Fidelity Investments, Swissquote
  4. Tech
    IBM, Microsoft
  5. Power & Utilities
    RWE

Public Actors

  1. Governments
    Venezuela
  2. Central Banks
    China, Sweden, Saudi Arabia
  3. Organizations
    Crypto Valley Association, Global Digital Finance

The rising popularity of crypto is bolstering new policies and adoption, as evidenced by the many players trying to break into the space.

The Big Picture:

As crypto continues to gain momentum, its longer-term implications will come into focus. Crucially, its cryptographic foundation sets the stage for future advances in finance.

  1. Privacy
    Anonymized transactions protect users data through cryptographic techniques
  2. Access
    Providing a new financial model for 1.7B unbanked individuals around the world
  3. Efficiency
    Steep reductions in settlement time and efficacy could save consumers $16 billion annually
  4. Security
    Providing immutable, traceable records of security-rich transactional networks
  5. Programmable Money
    Smart contracts could drastically eliminate manual and administrative work⁠— ultimately bypassing them altogether

Rooted in decentralized and autonomous systems, cryptocurrencies are creating second-order effects in the financial world. Ultimately, cryptocurrencies are helping to transform finance as we know it—unlocking countless investment opportunities across the global economy.

DISCLAIMER

The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that we are not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. CA Mitesh and Associates is Mumbai's leading Cryptocurrency Taxation Firm which is committed to helping people navigate complex tax laws and banking regulations. Our main aim is to assist the individuals with applicable laws & regulations compliance and providing support at each & every level to make sure that they stay compliant and grow continuously. For any query, help or feedback you may get in touch here - Appointment with CA

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Budget 2020 Highlights

Another Year - Another Budget and we are here with Budget 2020 Highlights for you. 

 

Individual / HUF / AOP / etc Rate Applicable
 Taxable Income upto Rs. 2.5 lakhs Nil
  INR 2,50,001 to INR 5,00,000 5%
  INR 5,00,001 to INR 10,00,000 20%
 More than INR 10,00,000 30%

You may have noticed the slabs given at the top of this page - yes, these still apply. Read on to find out how.

Our first impressions - the budget looked to continue with the structural reforms that have been getting announced in recent times, including easing of taxpayer compliances. So much so that they have introduced a new section 119A in the Income Tax Act, to notify a Taxpayer’s charter, which shall be adopted by the CBDT in some time.

However, we feel that the execution, especially of the idea of simplification of personal income tax - of reducing the deductions / exemptions and reducing the tax rates, could have been better. We shall cover the key highlights first, and then explain why we feel so.

Key Highlights:

  • Corporate tax cut in Sep 2019: As most readers would be aware by now, there was a structural change in September 2019, in the way corporations are taxed. The corporate tax rate for new companies in the manufacturing sector was slashed to 15%. This concessional rate is available for companies that start their activities on or before 31 March 2023. For the existing companies, the tax rate is 22%. This reduced rate will be applicable for companies that do not avail any other exemptions / deductions as specified. Such companies will also be exempted from the Minimum Alternate Tax provisions.

  • On similar lines, the tax rate applicable for co operative societies has been reduced to 22% to ensure that they have a tax burden at par with corporates.

  • There is a similar thought process attempted in the current budget, on the Personal Income Tax front - there are concessional tax rates available for assessees who are willing to forgo of some of the specified deductions *.

Below are the revised slabs applicable for assessees willing to 'opt in' for this regime.

Taxable Income Slab

Existing Tax Rates

New Tax Rates

0 - 2.5 Lakh

Exempt

Exempt

2.5 - 5 Lakh

5%

5%

5 - 7.5 Lakh

20%

10%

7.5 - 10 Lakh

20%

15%

10 - 12.5 Lakh

30%

20%

12.5 - 15 Lakh

30%

25%

Above 15 Lakh

30%

30%

* Assessees opting for this scheme will forgo below key items of focus of this article, amongst other items (Refer the footnote 1 for full list verbatim):

A. Deductions / Exemptions:

(1) Leave Travel Assistance (LTA) (Section 10(5));

(2) House Rent Allowance (HRA) (Section 10(13A));

(3) Any other receipts in the nature of reimbursements, other than perquisites (Section 10(14));

(4) Standard deduction of INR 1,500 per minor child whose income has been clubbed in the return (Section 10(32));

(5) Standard deduction from Salary income of INR 50,000 and a deduction of INR 2,500 pa from Salary income (subject to actuals) (Section 16);

(6) Deduction in respect of Interest paid on Housing Loan, taken for Self Occupied Property (or the additional allowable Self Occupied Property) (Section 24 (b) read with section 23(2));

(7) All Chapter VIA deductions (Sections 80A upto 80VV). This includes deductions like Life Insurance and Health Insurance premia, tax saver FDs and Mutual funds, PPF contributions by employee, Savings account interest deduction, deductions towards interest expense on loans availed for affordable housing as well as buying electric vehicles, etc.

(8) However, 80CCD(2) and 80JJAA deductions are still allowed - Employer contribution to NPS and Deduction in respect of employment of new employees.

 

B. Loss setoffs will need to be foregone - under the head “Income from house property” with any other head of income.

We shall cover some more analysis on this later on in the article.

  • Additional deduction towards interest paid on loan availed for buying affordable house has been extended upto 31 March 2021 (Section 80EEA) - of course, this applies only for assessees continuing under the existing tax regime.

  • Measures have been initiated to prefill the income tax return, including pre filling of donation related data, so that an individual who opts for the new regime would need no assistance from an expert to file his return and pay income tax.

  • Currently, businesses having turnover of more than INR 1 Crore are required to get their books of accounts audited by an accountant (section 44AB). This limit is now revised to INR 5 Crores. In order to boost less cash economy this limit is applicable only to businesses which carry out less than 5% of their business transactions in cash.

  • Dividend Distribution Tax has been removed, and the dividend will now be taxed in the hands of the recipient - important to note here, that till now, Dividend earned on Equity shares of Indian companies was tax free. Henceforth, this will be taxable as per the slab rates.

  • As a next step to faceless assessments, faceless appeals are being introduced to further improve transparency in the assessment proceedings and improve ease of compliance.

  • A simplified way of sms based filing for nil GST return is also in a pilot mode currently.

  • A system of cash reward is envisaged to incentivise customers to seek invoice.

  • Deposit insurance coverage is increased to INR 5 lakhs from current INR 1 lakh per depositor.

  • Government will also be looking to undertake some key divestments. This includes the balance stake in IDBI Bank via stock exchange and a part of its stake in LIC via the IPO route. Our own view (which may be different for others) is that ideally the government should not be looking to run businesses. They should be facilitators rather than running a business. This is another right step towards that ideal state, and it will also ensure more efficiency in day to day operations of these entities.

 

Apart from these, there are few other marquee announcements, which are worth a mention here:

  • There is an increased focus on use of solar energy which can be seen from some of the measures announced. The PM-KUSUM scheme is being expanded to provide 20 lakh farmers with pump sets linked to solar energy, to reduce their dependence on diesel and kerosene. In addition, a scheme to enable farmers to set up solar power generation capacity on their fallow / barren lands and to sell it to the grid would be operationalized.

  • Indian Railways will be setting up a large solar power capacity alongside the rail tracks, on the land owned by the railways.

  • Four station redevelopment projects and operation of 150 passenger trains would be done through PPP mode. The process of inviting private participation is underway. And more Tejas type trains will connect iconic tourist destinations.

  • It is proposed to provide an outlay of INR 8000 crore over a period of 5 years for the National Mission on Quantum Technologies and Applications.

 

Dissecting the structural changes to personal income tax regime:

Let us see 2 scenarios, where the assessee has an income of INR 16,00,000 (majorly salary income, to enable factoring in the Standard Deduction), and the availed deductions are as mentioned:

 

Scenario A: 

Assessee availing only 80C deductions, alongwith standard deduction:



Particulars

New regime

Existing regime

Income From multiple sources

1,600,000.00

1,600,000.00

Exempt Incomes

  

Petrol allowance

0.00

0.00

Food Coupons

0.00

0.00

Standard Deduction

0.00

50,000.00

Net taxable income

1,600,000.00

1,550,000.00

Income from House Property

0.00

0.00

Total Income

1,600,000.00

1,550,000.00

Deductions:

  

80C

0.00

-150,000.00

80D

0.00

0.00

80CCD(1B)

0.00

0.00

Gross Total Income

1,600,000.00

1,400,000.00

Tax on total income:

  

Upto 2,50,000

0.00

0.00

2,50,001 - 5,00,000

12,500.00

12,500.00

5,00,000 - 7,50,000

25,000.00

50,000.00

7,50,000 - 10,00,000

37,500.00

50,000.00

10,00,000 - 12,50,000

50,000.00

75,000.00

12,50,000 - 15,00,000

62,500.00

45,000.00

Beyond 15,00,000

30,000.00

0.00

Total Income tax

217,500.00

232,500.00

Cess

8,700.00

9,300.00

Total taxes payable

226,200.00

241,800.00

Net advantage / (disadvantage)

 

15,600.00



Scenario B: 

Assessee availing more deductions:

 

Particulars

New regime

Existing regime

Income From multiple sources

1,600,000.00

1,600,000.00

Exempt Incomes

  

Petrol allowance

0.00

0.00

Food Coupons

0.00

0.00

Standard Deduction

0.00

50,000.00

Net taxable income

1,600,000.00

1,550,000.00

Income from House Property

0.00

-200,000.00

Total Income

1,600,000.00

1,350,000.00

Deductions:

  

80C

0.00

-150,000.00

80D

0.00

-50,000.00

80CCD(1B)

0

-50000

Gross Total Income

1,600,000.00

1,100,000.00

Tax on total income:

  

Upto 2,50,000

0.00

0.00

2,50,001 - 5,00,000

12,500.00

12,500.00

5,00,000 - 7,50,000

25,000.00

50,000.00

7,50,000 - 10,00,000

37,500.00

50,000.00

10,00,000 - 12,50,000

50,000.00

30,000.00

12,50,000 - 15,00,000

62,500.00

0.00

Beyond 15,00,000

30,000.00

0.00

Total Income tax

217,500.00

142,500.00

Cess

8,700.00

5,700.00

Total taxes payable

226,200.00

148,200.00

Net advantage / (disadvantage)

 

-78,000.00

 

This shows that in some of the instances, where assessees are claiming lesser deductions, they will have an advantage in the form of tax savings. Else, this new regime is expected to increase the tax liability substantially. However, it is worth noting that this is currently an optional scheme. The assessees not having business income, can make a selection every year. And those having business income, can make the selection only once, and it shall apply for all subsequent years.

 

Also, as mentioned by the honorable Finance Minister during her ensuing press conference, it is aimed that gradually they will be moving towards this new regime, with lower income tax rates and lower deductions - again in line with simplification of Corporate taxation. There is a high probability of having only 1  option some years from now - of less deductions and less taxes.

 

Due to these factors, we feel that this particular reform, could have been implemented in a better way. Its intent is clear - to reduce complexity in filing tax returns, however it is not incentivising enough, or at the risk of stating the obvious - disincentivizing for an average taxpayer to adopt this scheme, since more often than not, it may end up increasing the tax burden.

 

Economic performance:

Lastly, but importantly, the fiscal deficit for FY 2019-20 is revised upwards to 3.8% as against an estimate of 3.3%. This deviation has been taken to accommodate the “structural reforms in the economy with unanticipated fiscal implications” as defined in the FRBM Act - which is nothing but the reforms on corporate and to an extent, personal income tax front.

A return path for fiscal consolidation has been laid out already - including the divestment targets and also partly by achieving a targeted nominal GDP growth rate of 10%. It is important to note here, that Nominal GDP is different from real GDP numbers that are usually seen in the macro data. Real GDP is nothing but Nominal GDP, after eliminating the inflation effect.

 

Conclusion:

We largely see this budget as a continuation of the intent of the government towards modernising and digitising the economy, and improving the ease of compliances. However, certain aspects of the implementation, like the reform on personal income tax, could have been better. Also, we would like to see some more aggressiveness on the divestment part, and further modernising the railways.

 

For any queries/feedback/suggestions, feel free to reach out to us at mitesh@mnpartners.in.

If you wish to avail any of our services, you can view Our Services.

 

Footnotes:
  1. The total income of the individual or Hindu undivided family shall be computed,—

(i) without any exemption or deduction under the provisions of clause (5) or clause (13A) or prescribed under clause (14) (other than those as may be prescribed for this purpose) or clause (17) or clause (32), of section 10 or section 10AA or section 16 or clause (b) of section 24 (in respect of the property referred to in sub-section (2) of section 23) or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii), of sub-section (1) or sub-section (2AA), of section 35 or section 35AD or section 35CCC or clause (iia) of section 57 or under any of the provisions of Chapter VI-A other than the provisions of sub-section (2) of section 80CCD or section 80JJAA;

(ii) without set off of any loss,— (a) carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); (b) under the head “Income from house property” with any other head of income;

(iii) by claiming the depreciation, if any, under any provision of section 32, except clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed; and

(iv) without any exemption or deduction for allowances or perquisite, by whatever name called, provided under any other law for the time being in force.

 

Heads of Income

Income is classified under five Heads of Income in the Indian Income Tax Act. Under chapter 4 of Income Tax Act, 1961 (Section 14), income of a person is calculated under various defined heads of income. The total income is first assessed under heads of income and then it is charged for Income Tax as under rules of Income Tax Act. According to Section 14 of Income Tax Act, 1961 there are following heads of income under which total income of a person is calculated:

  1. Income From Salary
  2. Income From House Property
  3. Income From Capital Gain
  4. Income From Business/ Profession
  5. Income From Other Sources
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Income from Salary

What is Salary:

Income under heads of salary is defined as remuneration received by an individual for services rendered by him to undertake a contract whether it is expressed or implied.

According to Income Tax Act there are following conditions where all such remuneration are chargeable to income tax:

  • When due from the former employer or present employer in the previous year, whether paid or not
  • When paid or allowed in the previous year, by or on behalf of a former employer or present employer, though not due or before it becomes
  • When arrears of salary is paid in the previous year by or on behalf of a former employer or present employer, if not charged to tax in the period to which it

What Income Comes Under Head of Salary:

Under section 17 of the Income Tax Act, 1961 there are following incomes which comes under head of salary:

  • Salary (including advance salary)
  • Wages
  • Fees
  • Commissions
  • Pensions
  • Annuity
  • Perquisite
  • Gratuity
  • Annual Bonus
  • Income From Provident Fund
  • Leave Encashment
  • Allowance
  • Awards

The aggregate of the above incomes, after exemptions available, is known as Gross Salary and this is charged under the head income from salary.

Basic salary along with commissions and bonuses is fully taxable.

Allowances :

An allowance is a fixed monetary amount paid by the employer to the employee for expenses related to office work. Allowances are generally included in the salary and taxed unless there are exemptions available.

The following allowances are fully taxable : dearness allowance, city compensatory allowance, overtime allowance, servant allowance and lunch allowance.

Form 16

The employer will give the employee Form 16 which will contain all the earnings, deductions and exemptions available.

Particulars
Amount

Basic Salary

Add:

1. Fees, Commission and Bonus

2. Allowances

3. Perquisites

4. Retirement Benefits

5. Fees, Commission and Bonus

Gross Salary

Less: Deductions from Salary

1. Allowance u/s 16

2. Professional Tax u/s 16

Net Salary

Quick Note about the difference between Exemption and deduction?

If an income is exempt from tax, then it is not included in the computation of income. However, the deduction is given from income chargeable to tax. Section 80 C to 80 U deals with deduction.

Exempt income will never exceed the amount of income. However, the deduct may be less than or equal to or more than the amount of income. Section 10 deals with exemptions.


Income From House Property

 According to Chapter 4, Section 22 - 27 of Income Tax Act, 1961 there is a provision of income under head of house property. In every section from 22-27 there are detail specification of house property income. It is defined as income earned by a person through his house or land.

 

What Income Comes Under Head of House Property:

Annual value of building or land owned by assessee. There is a charge on the potential of property to generate income not on the rent received. But if property is used for making profit in business then it will be taxable not under this head but will be taxable under head of profit in business/ profession. The building can be house, office building, go downs etc.

Points to be remembered

Assessee should be Owner of the Property

Should be not be used for Business or Profession by the assessee In case of dispute regarding title

Any residential or commercial property that you own will be taxed as well. Even if your piece of real estate is not let out, it will be considered earning rental income and you will need to pay tax on it. The income tax blokes are a bit easy going on this – they tax you on the capacity of the real estate to earn income and not the actual rent. This is called the property’s Annual Value and is the higher of the fair rental value, rent received or municipal rent.

Fair Rent – The rent which a similar property will fetch at the same or nearby similar locality Municipal Rent – The value fixed by municipal or local authority

Fair Rent or Municipal Rent whichever is higher taken into consideration Standard Rent – Rent which a owner can claim maximum from his tenant Actual Rent – Rent for which property has been let out.

Standard Rent or Actual Rent whichever is lesser is taken into Consideration

The Annual Value can go through a standard deduction of 30% and if you reduce the interest on borrowed capital, then you get the value which is charged under the head income from house property.

 

Income From Business / Profession

 Income earned through your profession or business is charged under the head “profits and gains of business or profession”. The income chargeable to tax is the difference between the credits received on running the business and expenses incurred.

According to Income Tax Act, 1961 income under this head is defined as the income earned by assessee as a profit or gain in his business or profession. Income under this head must follow these conditions:

  • There must be a business/ profession
  • Business/ profession is being carried by assessee
  • Business/ profession have been carried out by assessee in assessment year for which income tax is filling

What Income Comes Under Head of Profit in Business

 

  • Profits and gains of assessee from any business or profession during assessment year
  • Any payment or compensation due or received by a person for his services to organization as a part of his business
  • Making profit in trade Income of professional or organization against services provided by that professional/organization
  • Profits on sale of a license granted under the Imports (Control) Order, 1955, (EXIM control Act, 1947)
  • Cash received or due by any person against exports under government schemes
  • Any benefit whether it is not in cash coming from business/ profession
  • Any profit, salary, bonus or commission received by company partners

 

Income from Capital Gain

 What is Capital Gain:

According to Income Tax Act,1961 heads of capital gain is defined as gains derived on transfer of capital asset. Capital Gain is the profit or gain of an assessee coming from the transfer of a capital asset effected during the previous year or assessment year. "Capital Asset" and transfer are predefined in income tax act.

What is Capital Asset:

Under section 2(14) of the Income Tax Act,1961 Capital Asset is defined as property of any kind held by assesse including property held for his business or profession. It includes all type real property as well as all rights in property. It is also defined as gains on transfer of assets in which there in no cost of acquisition like:

  • Goodwill of business generated by assessee
  • Tenacy rights
  • Stage carriage permits
  • Loom hours
  • Right to manufacture
  • Processing & production of any article or things

 

Assets Which Don't Come Under Heads of Capital Assets

 According to Income Tax Act,1961 there are few assets which don't form a part of Capital Assets, which are as follows:

  • Stock of goods and raw materials used by assessee for his business or profession
  • Those properties which are movable like wearing apparel, furniture, automobile, phone, household goods etc. Held by assessee. But Jewelry which is also an movable assets comes under heads of Capital Assets
  • Few Gold Bonds issued by government
  • Few special bonds issued by central government like Special Bearer Bonds, 1991

 

Income from other Sources

 Every type of income comes under a specified heads. But there are few incomes, which don't come under any of following heads:

  • Salary
  • House Property
  • Profit In Business/ Profession
  • Capital Gains

Any income that does not fall under the four heads above is taxed under the head “ Income From Other Sources”.

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