April 25, 2023

Introduction Are you looking to understand about Unlocking Tax Benefits Under THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961 ?  This detailed article will tell you all about Unlocking Tax Benefits Under THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. Paying taxes is an essential obligation of every citizen, and we all want to make sure that we are paying the right amount of tax. Fortunately, the Indian government has introduced various tax-saving provisions to encourage people to invest in certain sectors and industries. One such provision is THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961. Under this section, eligible companies can avail of tax benefits by setting up and operating new manufacturing units in certain areas. In this blog, we will discuss the benefits of THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961, the eligibility criteria, application process, and FAQs. Benefits of THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961 Tax holiday for eligible companies The most significant benefit of THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961 is the tax holiday provided to eligible companies. Companies that set up new manufacturing units in certain areas are eligible for a tax holiday for a specific period. The tax holiday is for a period of five years from the year in which the manufacturing unit starts its production. The period of tax holiday can be extended for another five years if the company meets the prescribed conditions. Deduction from profits In addition to the tax holiday, eligible companies can also claim a deduction from their profits. The deduction is equal to 100% of the profits derived from the eligible business. The deduction is available for five years from the year in which the manufacturing unit starts its production. The deduction can be extended for another five years if the company meets the prescribed conditions. No minimum alternate tax Another significant benefit of THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961 is that eligible companies are not liable to pay minimum alternate tax (MAT). MAT is a tax levied on companies that have claimed deductions or exemptions under the Income Tax Act but have not paid any tax on their profits due to various tax incentives. Eligibility Criteria To avail of the benefits under THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961, a company must meet the following eligibility criteria: The company must be registered as a company under the Companies Act 1956 or Companies Act 2013. The company must set up a new manufacturing unit in any of the following areas: States of North Eastern Region, including Sikkim State of Jammu and Kashmir State of Himachal Pradesh State of Uttarakhand State of Uttar Pradesh State of Bihar State of West Bengal State of Odisha State of Jharkhand State of Chhattisgarh State of Madhya Pradesh State of Rajasthan State of Gujarat State of Maharashtra State of Andhra Pradesh State of Telangana State of Tamil Nadu State of Karnataka State of Kerala The company must not have been formed by splitting up or reconstructing an existing business. The manufacturing unit must start production on or before 31st March 2023. The company must not have been formed by transferring machinery or plant from any other existing unit. Application Process To avail of the benefits under THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961, a company must follow the below-mentioned application process: The company must first obtain a certificate from an authorized officer in the state government or union territory where the manufacturing unit is located. The certificate must confirm that the company has set up a new manufacturing unit in the eligible area and that it meets the prescribed conditions. The company must then file an application with the assessing officer of the Income Tax Department, along with the certificate obtained in step 1. The application must be filed in Form 10-IE. The assessing officer will then verify the details mentioned in the application and the certificate. If the assessing officer is satisfied with the details mentioned in the application, he/she will issue an order allowing the company to claim the benefits under THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961. FAQs Can a company avail of the benefits under THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961 if it sets up a new manufacturing unit in an area not mentioned in the eligibility criteria? No, a company can only avail of the benefits under THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961 if it sets up a new manufacturing unit in one of the eligible areas mentioned in the section. Can a company claim a deduction under THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961 if it does not make any profits? No, a company can only claim a deduction under THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961 if it makes profits from the eligible business. Can a company claim both the tax holiday and deduction under THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961? Yes, a company can claim both the tax holiday and deduction under THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961, provided it meets the prescribed conditions. Conclusion THE FOURTEENTH SCHEDULE section 80-IC(2) of Income Tax Act 1961 provides significant tax benefits to eligible companies that set up new manufacturing units in certain areas. The benefits include a tax holiday, deduction from profits, and exemption from minimum alternate tax. To avail of these benefits, a company must meet the prescribed eligibility criteria and follow the application process. If you are planning to set up a new manufacturing unit in one of the eligible areas, make

Introduction Are you looking to understand about Demystifying THE THIRTEENTH SCHEDULE sections 80-IB(4) and 80-IC(2 of Income Tax Act 1961?  This detailed article will tell you all about Demystifying THE THIRTEENTH SCHEDULE sections 80-IB(4) and 80-IC(2 of Income Tax Act 1961. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. As a taxpayer, you want to optimize your tax liability and minimize your tax burden. To achieve this, you need to be aware of the various tax-saving provisions available under the Income Tax Act 1961. One such provision is THE THIRTEENTH SCHEDULE sections 80-IB(4) and 80-IC(2), which offer tax incentives to eligible businesses. In this blog, we will delve deeper into these provisions, their eligibility criteria, benefits, and FAQs. Eligibility Criteria for THE THIRTEENTH SCHEDULE sections 80-IB(4) and 80-IC(2) To avail of the benefits of THE THIRTEENTH SCHEDULE sections 80-IB(4) and 80-IC(2), a business must meet certain eligibility criteria. These include: Eligibility criteria for section 80-IB(4) The business must be engaged in manufacturing, production, or processing of goods. The business must have commenced production or manufacture of goods on or after April 1, 2007. The business must not have claimed deduction under any other section of Chapter VI-A of the Income Tax Act 1961. Eligibility criteria for section 80-IC(2) The business must be engaged in manufacturing or production of goods, computer software, or hotel services. The business must have commenced operations on or after April 1, 2007, but before March 31, 2012. The business must not have claimed deduction under any other section of Chapter VI-A of the Income Tax Act 1961. Benefits of THE THIRTEENTH SCHEDULE sections 80-IB(4) and 80-IC(2) Now that we know the eligibility criteria for these provisions, let’s look at the benefits they offer to eligible businesses. Benefits of section 80-IB(4) The business is eligible for a deduction of 100% of profits and gains derived from the eligible business for the first five assessment years. The business is eligible for a deduction of 25% of profits and gains derived from the eligible business for the next five assessment years. The deduction is available only if the profits and gains are derived from the eligible business. Benefits of section 80-IC(2) The business is eligible for a deduction of 100% of profits and gains derived from the eligible business for the first five assessment years. The business is eligible for a deduction of 50% of profits and gains derived from the eligible business for the next five assessment years. The deduction is available only if the profits and gains are derived from the eligible business. FAQs about THE THIRTEENTH SCHEDULE sections 80-IB(4) and 80-IC(2) Q1. Can a business claim deduction under both sections 80-IB(4) and 80-IC(2)? A1. No, a business can claim deduction under either section 80-IB(4) or section 80-IC(2), but not both. Q2. What is the maximum deduction that a business can claim under these sections? A2. The maximum deduction that a business can claim under section 80-IB(4) is 100% of profits and gains for the first five assessment years and 25% of profits and gains for the next five assessment years. The maximum deduction that a business can claim under section 80-IC(2) is 100% of profits and gains for the first five assessment years and 50% of profits and gains for the next five assessment years. Q3. Is there a limit on the amount of deduction that a business can claim under these sections? A3. Yes, the total deduction that a business can claim under these sections cannot exceed the total amount of profits and gains derived from the eligible business. Q4. Can a business claim deduction under section 80-IB(4) or section 80-IC(2) if it has claimed deduction under any other section of Chapter VI-A of the Income Tax Act 1961? A4. No, a business cannot claim deduction under section 80-IB(4) or section 80-IC(2) if it has claimed deduction under any other section of Chapter VI-A of the Income Tax Act 1961. Q5. Can a business claim deduction under these sections if it has incurred losses in the previous year? A5. Yes, a business can claim deduction under these sections even if it has incurred losses in the previous year, subject to the conditions specified in the sections. Conclusion In conclusion, THE THIRTEENTH SCHEDULE sections 80-IB(4) and 80-IC(2) of the Income Tax Act 1961 offer attractive tax incentives to eligible businesses engaged in manufacturing, production, or processing of goods, computer software, or hotel services. To avail of these benefits, a business must meet the specified eligibility criteria and comply with the conditions specified in the sections. It is advisable to consult a tax expert or chartered accountant to ensure compliance with the provisions of the Income Tax Act 1961 and optimize tax savings. THE THIRTEENTH SCHEDULE sections 80-IB(4) and 80-IC(2), of Income Tax Act, 1961 THE THIRTEENTH SCHEDULE sections 80-IB(4) and 80-IC(2), of Income Tax Act, 1961 states that S. No. Article or thing 1. Tobacco and tobacco products (including cigarettes, cigars and gutka, etc.) 2. Aerated branded beverages 3. Pollution-causing paper and paper products PART B FOR THE STATE OF HIMACHAL PRADESH AND THE STATE OF UTTARANCHAL S. No.   Activity or article or thing   Excise classification   Sub-class under National Industrial Classification (NIC), 1998 1.   Tobacco and tobacco products including cigarettes and pan masala   24.01 to 24.04 and 21.06   1600 2.   Thermal Power Plant (coal/oil based)       40102 or 40103 3.   Coal washeries/dry coal processing         4.   Inorganic Chemicals excluding medicinal grade oxygen (2804.11), medicinal grade hydrogen peroxide (2847.11), compressed air (2851.30)   Chapter 28     5.   Organic chemicals excluding Provitamins/ vitamins, Hormones (29.36), Glycosides (29.39), sugars* (29.40)   Chapter 29   24117 6.   Tanning and dyeing extracts, tannins and their derivatives, dyes, colours, paints and varnishes; putty, fillers and

Introduction Are you looking to understand about Understanding the Twelfth Schedule of Income Tax Act 1961: What You Need to Know ?  This detailed article will tell you all about Understanding the Twelfth Schedule of Income Tax Act 1961: What You Need to Know. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. The Twelfth Schedule of Income Tax Act 1961 is a crucial part of the Indian taxation system. It provides a detailed list of activities that qualify as ‘charitable purposes’ and are therefore eligible for tax exemptions. As per the Schedule, any income earned by charitable institutions is exempt from tax, subject to certain conditions. In this blog, we will explore the various aspects of the Twelfth Schedule of Income Tax Act 1961 and how it affects taxpayers. Understanding the Twelfth Schedule of Income Tax Act 1961 The Twelfth Schedule of Income Tax Act 1961 lays down the various activities that are considered ‘charitable purposes’. These purposes are divided into various categories, including: Relief of the poor Education Medical relief Preservation of the environment (including watersheds, forests, and wildlife) Preservation of monuments and places of historical importance Advancement of any other object of general public utility Each of these categories includes specific activities that qualify as charitable purposes. For example, under the category of ‘Relief of the poor’, activities like providing food, clothing, and shelter to the poor, or establishing schools or hospitals for the poor, qualify as charitable purposes. The Twelfth Schedule also specifies that any income earned by a charitable institution that is used solely for charitable purposes is exempt from tax. However, the exemption is subject to certain conditions, such as: The institution should be registered under Section 12A of the Income Tax Act. The income should be applied solely for charitable purposes. The institution should maintain proper books of account and get them audited annually. FAQs Q. What is the purpose of the Twelfth Schedule of Income Tax Act 1961? A. The Twelfth Schedule of Income Tax Act 1961 provides a list of activities that qualify as ‘charitable purposes’ and are therefore eligible for tax exemptions. Q. What are the categories of charitable purposes listed in the Twelfth Schedule? A. The categories of charitable purposes listed in the Twelfth Schedule include Relief of the poor, Education, Medical relief, Preservation of the environment, Preservation of monuments and places of historical importance, and Advancement of any other object of general public utility. Q. Is all income earned by a charitable institution exempt from tax? A. No, only income earned by a charitable institution that is used solely for charitable purposes is exempt from tax. Conclusion In conclusion, the Twelfth Schedule of Income Tax Act 1961 is an essential part of the Indian taxation system. It provides a comprehensive list of activities that qualify as ‘charitable purposes’ and are therefore eligible for tax exemptions. As a taxpayer, it is essential to understand the various categories of charitable purposes listed in the Schedule and the conditions that need to be met to avail of tax exemptions. If you are associated with a charitable institution, it is important to ensure that it is registered under Section 12A of the Income Tax Act, and the income is used solely for charitable purposes. The Twelfth Schedule, of Income Tax Act, 1961 The Twelfth Schedule, of Income Tax Act, 1961 states that (i) Pulverised or micronised—barytes, calcite, steatite, pyrophyllite, wollastonite, zircon, bentonite, red or yellow oxide, red or yellow ochre, talc, quartz, feldspar, silica powder, garnet, sillimanite, fire clay, ball clay, manganese dioxide ore.  (ii) Processed or activated—bentonite, diatomaceous earth, fullers earth. (iii) Processed—kaolin (china clay), whiting, calcium carbonate. (iv) Beneficiated-chromite, fluorspar, graphite, vermiculite, ilmenite, brown ilmenite (lencoxene) rutile, monazite and other mineral concentrates.  (v) Mica blocks, mica splittings, mica condenser films, mica powder, micanite, silvered mica, punched mica, mica paper, mica tapes, mica flakes. (vi) Exfoliated-vermiculite, calcined kyanite, magnesite, calcined magnesite, calcined alumina. (vii) Sized iron ore processed by mechanical screening or crushing and screening through dry process or mechanical crushing, screening, washing and classification through wet process. (viii) Iron ore concentrates processed through crushing, grinding or magnetic separation. (ix) Agglomerated iron ore.  (x) Cut and polished minerals and rocks including cut and polished granite. Explanation.—For the purposes of this Schedule, “processed”, in relation to any mineral or ore, means—  (a) dressing through mechanical means to obtain concentrates after removal of gangue and unwanted deleterious substances or through other means without altering the mineralogical identity;  (b) pulverisation, calcination or micronisation;  (c) agglomeration from fines;  (d) cutting and polishing;  (e) washing and levigation;  (f) beneficiation by mechanical crushing and screening through dry process;  (g) sizing by crushing, screening, washing and classification through wet process;  (h) other upgrading techniques such as removal of impurities through chemical treatment, refining by gravity separation, bleaching, floata-tion or filtration.

Introduction Are you looking to understand about Demystifying the Eleventh Schedule of Income Tax Act 1961?  This detailed article will tell you all about Demystifying the Eleventh Schedule of Income Tax Act 1961. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. The Indian Income Tax Act, 1961 is a comprehensive tax law that governs the taxation of individuals, businesses, and other entities in India. It consists of various schedules that provide a detailed framework for the computation and payment of taxes. One such schedule is the Eleventh Schedule of Income Tax Act 1961, which is often misunderstood and misinterpreted by taxpayers. In this blog, we aim to demystify the Eleventh Schedule and help you understand its implications in taxation. What is the Eleventh Schedule of Income Tax Act 1961? The Eleventh Schedule of Income Tax Act 1961 contains the rules for calculating the income of co-operative societies. A co-operative society is a voluntary association of persons who come together to promote their common economic interests. These societies are regulated by the Co-operative Societies Act, 1912. Why was the Eleventh Schedule introduced? The Eleventh Schedule was introduced to provide a specific framework for the taxation of co-operative societies. Before the introduction of this schedule, co-operative societies were taxed under the general provisions of the Income Tax Act, which did not take into account the unique nature of these societies. The Eleventh Schedule provides a separate set of rules for the computation of income, which takes into account the specific characteristics of co-operative societies. How is the income of co-operative societies calculated under the Eleventh Schedule? The income of a co-operative society is calculated under the Eleventh Schedule by taking into account the following components: Income from members: This includes the income received from members in the form of membership fees, share capital, and other contributions. Income from non-members: This includes the income received from non-members in the form of interest on loans, rent on leased property, and other sources. Other income: This includes any other income earned by the co-operative society, such as income from investments, grants, and subsidies. Once these components are identified, the income of the co-operative society is calculated by subtracting the allowable deductions from the gross income. The allowable deductions include expenses incurred for the purposes of the co-operative society, such as salaries, rent, and other overheads. What are the tax implications of the Eleventh Schedule? The tax implications of the Eleventh Schedule depend on the income earned by the co-operative society. Co-operative societies are taxed at a flat rate of 30% on their income. However, certain deductions and exemptions are available, which can reduce the tax liability of the society. For example, co-operative societies are eligible for a deduction of up to 10% of their income for the creation of a reserve fund. They are also eligible for a deduction of up to 20% of their income for the contribution to the National Co-operative Development Corporation. In addition, co-operative societies are exempt from paying tax on the interest earned on government securities and other specified investments. What are the compliance requirements under the Eleventh Schedule? Co-operative societies are required to file their income tax returns by the specified due dates, failing which penalties may be imposed. In addition, they are required to maintain proper books of accounts, including cash books, ledgers, and balance sheets. The books of accounts should be audited by a qualified auditor, and the audit report should be submitted along with the income tax return. Conclusion The Eleventh Schedule of Income Tax Act 1961 provides a specific framework for the taxation of co-operative societies. Understanding the provisions of this schedule is essential for taxpayers who are members of co-operative societies or own such societies. By knowing the tax implications and compliance requirements of the Eleventh Schedule, taxpayers can ensure that they are fulfilling their obligations and avoiding penalties. In conclusion, the Eleventh Schedule of Income Tax Act 1961 is a crucial component of the Indian tax law that provides a separate framework for the taxation of co-operative societies. It is important for taxpayers to understand the provisions of this schedule to comply with the tax laws and avoid any penalties. If you have any further questions or doubts regarding the Eleventh Schedule, it is recommended to consult a qualified tax professional who can provide you with the necessary guidance and support.   The Eleventh Schedule, of Income Tax Act, 1961 The Eleventh Schedule, of Income Tax Act, 1961 states that  1. Beer, wine and other alcoholic spirits.   2. Tobacco and tobacco preparations, such as, cigars and cheroots, cigarettes, biris, smoking mixtures for pipes and cigarettes, chewing tobacco and snuff.   3. Cosmetics and toilet preparations.   4. Tooth paste, dental cream, tooth powder and soap.   5. Aerated waters in the manufacture of which blended flavouring concentrates in any form are used. Explanation.—”Blended flavouring concentrates” shall include, and shall be deemed always to have included, synthetic essences in any form.   6. Confectionery and chocolates.   7. Gramophones, including record-players and gramophone records.   8. [***]   9. Projectors. 10. Photographic apparatus and goods. 11-21. [***] 22. Office machines and apparatus such as typewriters, calculating machines, cash registering machines, cheque writing machines, intercom machines and teleprinters. Explanation.—The expression “office machines and apparatus” includes all machines and apparatus used in offices, shops, factories, workshops, educational institutions, railway stations, hotels and restaurants for doing office work and for data processing (not being computers within the meaning of section 32AB).  23. Steel furniture, whether made partly or wholly of steel.  24. Safes, strong boxes, cash and deed boxes and strong room doors.  25. Latex foam sponge and polyurethane foam.  26. [***]  27. Crown corks, or other fittings of cork, rubber, polyethylene or any other material.  28. Pilfer-proof caps for packaging or other fittings of cork, rubber, polyethylene or any other material.  29.

Introduction Are you looking to understand about Understanding the Importance of the Tenth Schedule of Income Tax Act 1961 ?  This detailed article will tell you all about Understanding the Importance of the Tenth Schedule of Income Tax Act 1961. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. Taxation is an important aspect of any economy, and India is no exception. The Income Tax Act, 1961 (ITA 1961) is the principal legislation governing the taxation of income in India. The Act has ten schedules, each dealing with a specific aspect of taxation. In this blog, we will focus on the Tenth Schedule of Income Tax Act 1961 and its implications for taxpayers. The Tenth Schedule of the ITA 1961 deals with the taxation of income from securities, i.e., income earned from shares, bonds, debentures, and other securities. The schedule specifies the tax rates applicable to different types of securities and the method of calculating the taxable income. It also lays down the compliance obligations for taxpayers who earn income from securities. Understanding the Provisions of the Tenth Schedule The Tenth Schedule of ITA 1961 is divided into four parts. Each part deals with a specific aspect of taxation. Part A: Tax Rates Part A of the Tenth Schedule specifies the tax rates applicable to income from securities. The tax rates vary depending on the type of security and the period for which the security is held. Shares and Mutual Funds: The tax rate for income from shares and mutual funds held for more than 12 months is 10%. For shares and mutual funds held for less than 12 months, the tax rate is 15%. Bonds and Debentures: The tax rate for income from bonds and debentures held for more than 12 months is 10%. For bonds and debentures held for less than 12 months, the tax rate is 15%. Other Securities: The tax rate for income from other securities, such as options and futures, is 15%. Part B: Method of Calculation of Taxable Income Part B of the Tenth Schedule specifies the method of calculating the taxable income from securities. The taxable income is calculated as follows: Taxable Income = Gross Income – Expenditure Gross income is the income earned from securities, and expenditure includes brokerage, commission, and any other expenses incurred in earning the income. Part C: Compliance Obligations Part C of the Tenth Schedule lays down the compliance obligations for taxpayers who earn income from securities. The compliance obligations include the following: Filing of Returns: Taxpayers earning income from securities are required to file their income tax returns on or before the due date. The due date for filing returns is usually July 31st of the assessment year. Tax Deduction at Source (TDS): If the income from securities exceeds a certain threshold, the payer is required to deduct TDS at the specified rates. The TDS deducted can be claimed as a credit while filing the income tax returns. Payment of Advance Tax: Taxpayers earning income from securities are required to pay advance tax if the tax liability for the year exceeds Rs. 10,000. The advance tax is payable in installments during the year. Part D: Miscellaneous Provisions Part D of the Tenth Schedule contains miscellaneous provisions, such as the provision for the carry-forward of losses and the provision for set-off of losses against other income. FAQs Q1. What is the Tenth Schedule of Income Tax Act 1961? A1. The Tenth Schedule of the Income Tax Act, 1961 deals with the taxation of income from securities, such as shares, bonds, debentures, and other securities. It specifies the tax rates applicable to different types of securities and lays down the compliance obligations for taxpayers who earn income from securities. Q2. What is the tax rate for income from shares and mutual funds? A2. The tax rate for income from shares and mutual funds held for more than 12 months is 10%. For shares and mutual funds held for less than 12 months, the tax rate is 15%. Q3. What is the method of calculating taxable income from securities? A3. The taxable income from securities is calculated as gross income minus expenditure. Gross income is the income earned from securities, and expenditure includes brokerage, commission, and any other expenses incurred in earning the income. Q4. What are the compliance obligations for taxpayers earning income from securities? A4. The compliance obligations for taxpayers earning income from securities include filing of income tax returns, deduction of TDS, and payment of advance tax if the tax liability for the year exceeds Rs. 10,000. Q5. Can losses from securities be carried forward and set off against other income? A5. Yes, losses from securities can be carried forward for up to 8 years and set off against other income. Conclusion The Tenth Schedule of Income Tax Act 1961 is an important piece of legislation that governs the taxation of income from securities. It lays down the tax rates applicable to different types of securities, specifies the method of calculating taxable income, and sets out the compliance obligations for taxpayers earning income from securities. Taxpayers who earn income from securities should be aware of the provisions of the Tenth Schedule and ensure that they comply with the requirements. Failure to comply with the provisions can result in penalties and interest, and can also lead to a loss of reputation. Therefore, it is important to understand the Tenth Schedule and stay compliant with its provisions. The Tenth Schedule, of Income Tax Act, 1961 The Tenth Schedule, of Income Tax Act, 1961 states that [Omitted by the Finance Act, 1999, w.e.f. 1-4-2000.]

Introduction Are you looking to understand about The Ninth Schedule of Income Tax Act 1961: Understanding the Scope and Significance ?  This detailed article will tell you all about The Ninth Schedule of Income Tax Act 1961: Understanding the Scope and Significance. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. Income Tax Act 1961 is the backbone of the Indian tax system. It regulates the collection, assessment, and distribution of taxes in the country. The Ninth Schedule of Income Tax Act 1961 is a crucial component of this Act, which provides for exemption of certain taxes from the purview of income tax. In this blog, we will explore the scope and significance of The Ninth Schedule of Income Tax Act 1961 and its impact on the Indian tax system. So, let’s get started. Understanding The Ninth Schedule of Income Tax Act 1961 The Ninth Schedule of Income Tax Act 1961 was introduced in 1956 as a means to provide exemptions to certain taxes from the purview of income tax. The taxes exempted under this schedule are referred to as “Listed Entries.” There are currently 285 Listed Entries under the Ninth Schedule of Income Tax Act 1961. The Listed Entries under The Ninth Schedule of Income Tax Act 1961 include various taxes such as land revenue, stamp duty, agricultural income tax, and many others. These taxes are exempted from the purview of income tax, and taxpayers are not required to pay tax on them. Significance of The Ninth Schedule of Income Tax Act 1961 The Ninth Schedule of Income Tax Act 1961 has significant importance in the Indian tax system. It helps in promoting social welfare and economic development by providing exemptions to certain taxes. Here are some of the key benefits of The Ninth Schedule of Income Tax Act 1961: Promotes Social Welfare: The exemptions provided under The Ninth Schedule of Income Tax Act 1961 are aimed at promoting social welfare. Taxes such as land revenue and agricultural income tax are exempted to encourage farmers to invest in agriculture and promote agricultural growth. Encourages Economic Development: The exemptions provided under The Ninth Schedule of Income Tax Act 1961 also help in encouraging economic development. For instance, stamp duty exemptions are provided to promote investments in real estate and boost the construction sector. Reduces Tax Liability: The Ninth Schedule of Income Tax Act 1961 provides a relief to taxpayers by exempting certain taxes from the purview of income tax. This helps in reducing the tax liability of taxpayers and promotes compliance with tax laws. FAQs Q. What are the taxes exempted under The Ninth Schedule of Income Tax Act 1961? A. The taxes exempted under The Ninth Schedule of Income Tax Act 1961 are referred to as “Listed Entries.” They include various taxes such as land revenue, stamp duty, agricultural income tax, and many others. Q. How many Listed Entries are there under The Ninth Schedule of Income Tax Act 1961? A. There are currently 285 Listed Entries under The Ninth Schedule of Income Tax Act 1961. Q. What is the significance of The Ninth Schedule of Income Tax Act 1961? A. The Ninth Schedule of Income Tax Act 1961 provides exemptions to certain taxes from the purview of income tax, promoting social welfare and economic development, reducing tax liability of taxpayers, and promoting compliance with tax laws. Conclusion The Ninth Schedule of Income Tax Act 1961 plays a crucial role in promoting social welfare and economic development in India. It provides exemptions to certain taxes from the purview of income tax, which encourages investments in various sectors and promotes compliance with tax laws. As taxpayers, it is important to understand the scope and significance of The Ninth Schedule   The Ninth Schedule, of Income Tax Act, 1961 The Ninth Schedule, of Income Tax Act, 1961 states that [Omitted by the Taxation Laws (Amendment & Miscellaneous Provisions) Act, 1986, w.e.f. 1-4-1988. Original Ninth Schedule was inserted by the Direct Taxes (Amendment) Act, 1974, w.e.f. 1-4-1975.]

Introduction Are you looking to understand about Understanding the Benefits of Section 80-IA(2)(iv)(b) of Income Tax Act 1961 for Industrially Backward States and Union Territories in the Eighth Schedule List ?  This detailed article will tell you all about Understanding the Benefits of Section 80-IA(2)(iv)(b) of Income Tax Act 1961 for Industrially Backward States and Union Territories in the Eighth Schedule List. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. India is a developing country that has made significant strides in various sectors of the economy. However, despite its growth, there are still certain regions in the country that are economically backward and require special attention. The government has recognized this and has implemented various policies to uplift these regions. One such policy is the Eighth Schedule List of Industrially Backward States and Union Territories under Section 80-IA(2)(iv)(b) of Income Tax Act 1961. This provision aims to encourage industries to invest in these economically backward regions by providing tax benefits. In this blog, we will discuss the eligibility criteria and benefits of this provision in detail. Eligibility Criteria To avail of the benefits of Section 80-IA(2)(iv)(b), a company must fulfill certain eligibility criteria. These criteria are as follows: The company must be engaged in the business of developing, maintaining, and operating an industrial park or special economic zone (SEZ) in the industrially backward state or union territory listed in the Eighth Schedule. The company must have obtained the necessary approvals and clearances from the relevant authorities. The company must commence its operations before March 31, 2023. The company must not have claimed any deductions or benefits under any other provisions of the Income Tax Act for the same assessment year. If a company fulfills all the above criteria, it can avail of the benefits under Section 80-IA(2)(iv)(b). Benefits of Section 80-IA(2)(iv)(b) The benefits of Section 80-IA(2)(iv)(b) are significant for companies operating in the industrially backward states and union territories listed in the Eighth Schedule. Let’s take a look at some of these benefits: Tax Holiday: Companies can avail of a tax holiday for any five consecutive assessment years out of the first eight years of operation. This means that the company will not have to pay any income tax on its profits for the specified years. Deduction of Profits: After the tax holiday period, the company can deduct 50% of its profits for the next five assessment years. Carry Forward of Losses: The losses incurred during the tax holiday period can be carried forward and set off against the profits of the next 15 years. No Minimum Alternate Tax (MAT): Companies operating in industrially backward states and union territories listed in the Eighth Schedule are exempted from paying Minimum Alternate Tax (MAT). These benefits are a significant incentive for companies to invest in these regions and contribute to their development. FAQs What is the Eighth Schedule List of Industrially Backward States and Union Territories? The Eighth Schedule List is a list of states and union territories that are considered economically backward and require special attention. Companies investing in these regions can avail of tax benefits under Section 80-IA(2)(iv)(b). What is the eligibility criteria for availing of benefits under Section 80-IA(2)(iv)(b)? To avail of the benefits under Section 80-IA(2)(iv)(b), a company must be engaged in the business of developing, maintaining, and operating an industrial park or special economic zone (SEZ) in the industrially backward state or union territory listed in the Eighth Schedule. The company must have obtained the necessary approvals and clearances from the relevant authorities, commence its operations before March 31, 2023, and not have claimed any deductions or benefits under any other provisions of the Income Tax Act for the same assessment year. What is a tax holiday? A tax holiday is a period during which a company is exempted from paying income tax on its profits. Under Section 80-IA(2)(iv)(b), companies can avail of a tax holiday for any five consecutive assessment years out of the first eight years of operation. What is Minimum Alternate Tax (MAT)? Minimum Alternate Tax (MAT) is a tax that companies must pay if their tax liability is lower than a certain percentage of their book profits. Companies operating in industrially backward states and union territories listed in the Eighth Schedule are exempted from paying MAT. Can losses be carried forward under Section 80-IA(2)(iv)(b)? Yes, companies can carry forward the losses incurred during the tax holiday period and set them off against the profits of the next 15 years. Conclusion The Eighth Schedule List of Industrially Backward States and Union Territories under Section 80-IA(2)(iv)(b) of Income Tax Act 1961 is a significant step towards promoting economic growth in underdeveloped regions of India. The tax benefits provided by this provision are a significant incentive for companies to invest in these regions and contribute to their development. By investing in these regions, companies not only help create employment opportunities but also boost the local economy. The tax benefits provided by Section 80-IA(2)(iv)(b) are an excellent opportunity for companies looking to expand their operations and contribute to the development of economically backward regions in India. In conclusion, we can say that the government’s efforts to uplift economically backward regions are commendable, and Section 80-IA(2)(iv)(b) is a step in the right direction. We hope that more companies will take advantage of this provision and invest in these regions to help accelerate their development.   Section 80-IA(2)(iv)(b), of Income Tax Act, 1961 Section 80-IA(2)(iv)(b), of Income Tax Act, 1961 states that  (1) Arunachal Pradesh  (2) Assam  (3) Goa  (4) Himachal Pradesh  (5) Jammu and Kashmir  (6) Manipur  (7) Meghalaya  (8) Mizoram  (9) Nagaland (10) Sikkim (11) Tripura (12) Andaman and Nicobar Islands (13) Dadra and Nagar Haveli (14) Daman and Diu (15) Lakshadweep (16) Pondicherry.

Introduction Are you looking to understand about Understanding Expenses or Payments Not Deductible in Certain Circumstances Section 40A of Income Tax Act 1961?  This detailed article will tell you all about Understanding Expenses or Payments Not Deductible in Certain Circumstances Section 40A of Income Tax Act 1961. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. As a taxpayer, it’s important to understand the rules and regulations surrounding income tax. The Income Tax Act of 1961 lays out the guidelines for filing taxes and provides information about deductions, exemptions, and other tax-related matters. One of the sections of this act that taxpayers need to be aware of is Section 40A, which deals with expenses or payments not deductible in certain circumstances. Section 40A of the Income Tax Act, 1961, was introduced to ensure that taxpayers do not claim any expenses or payments that are not genuine or that have not been incurred for business purposes. This section deals with expenses that are not deductible in certain circumstances, and it specifies the conditions under which expenses can be claimed as deductions. Expenses or payments not deductible in certain circumstances Section 40A of Income Tax Act 1961 is an important section that every taxpayer should be aware of. Let’s take a closer look at what this section entails and how it can affect your taxes. What are Expenses or Payments Not Deductible in Certain Circumstances Section 40A of Income Tax Act 1961? Expenses or payments not deductible in certain circumstances Section 40A of Income Tax Act 1961 refers to the expenses that are not allowed as deductions in certain circumstances. The expenses that fall under this category include: Cash payments exceeding Rs. 10,000: As per Section 40A(3) of the Income Tax Act, cash payments exceeding Rs. 10,000 made for business purposes are not allowed as deductions. This is to ensure that taxpayers do not use cash to evade taxes. Cash payments to relatives: Any cash payments made to relatives for business purposes are not allowed as deductions. This is to prevent taxpayers from using their relatives to evade taxes. Cash payments for capital expenses: Any cash payments made for capital expenses such as buying property or machinery are not allowed as deductions. Cash payments for expenses exceeding Rs. 10,000: Any cash payments made for expenses exceeding Rs. 10,000 are not allowed as deductions. This is to ensure that taxpayers do not use cash to evade taxes. Expenses incurred for non-business purposes: Expenses incurred for non-business purposes are not allowed as deductions. How does it affect your taxes? Expenses or payments not deductible in certain circumstances Section 40A of Income Tax Act 1961 can affect your taxes in the following ways: Penalties: If you claim any expenses that fall under this category, you will be liable to pay penalties. The penalty amount is equal to the amount of expenses claimed. Disallowance of deductions: If you claim any expenses that are not allowed as deductions, the Income Tax Department can disallow the deductions claimed and add the amount to your taxable income. Scrutiny of returns: If you claim any expenses that are not allowed as deductions, your tax returns may be scrutinized by the Income Tax Department. How to avoid penalties and disallowance of deductions? To avoid penalties and disallowance of deductions, it’s important to follow the rules and regulations laid out in the Income Tax Act. Here are a few tips: Avoid cash payments: Try to avoid making cash payments exceeding Rs. 10,000. If you need to make a payment, use a cheque, demand draft, credit card, or online payment modes. Keep proper documentation: Keep proper documentation of all your expenses, including bills, invoices, and receipts. This will help you in case your tax returns are scrutinized by the Income Tax Department. Avoid claiming non-business expenses: Make sure that you only claim expenses that are incurred for business purposes. Expenses incurred for personal purposes are not allowed as deductions. Consult a tax professional: If you are not sure about the expenses that are allowed as deductions, consult a tax professional. They can guide you on what expenses can be claimed as deductions and what expenses cannot. FAQs Can I claim cash payments as deductions? No, cash payments exceeding Rs. 10,000 made for business purposes are not allowed as deductions. Can I claim expenses incurred for personal purposes as deductions? No, expenses incurred for personal purposes are not allowed as deductions. What happens if I claim expenses that are not allowed as deductions? If you claim expenses that are not allowed as deductions, you will be liable to pay penalties and the Income Tax Department can disallow the deductions claimed and add the amount to your taxable income. Can I avoid penalties and disallowance of deductions? Yes, you can avoid penalties and disallowance of deductions by following the rules and regulations laid out in the Income Tax Act. Conclusion Expenses or payments not deductible in certain circumstances Section 40A of Income Tax Act 1961 is an important section that every taxpayer should be aware of. It specifies the conditions under which expenses can be claimed as deductions and the expenses that are not allowed as deductions. To avoid penalties and disallowance of deductions, it’s important to follow the rules and regulations laid out in the Income Tax Act, keep proper documentation of all your expenses, and consult a tax professional if needed. By doing so, you can ensure that you file your taxes correctly and avoid any penalties or fines. Section 40A, of Income Tax Act, 1961 Section 40A, of Income Tax Act, 1961 states that (1) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act relating to the computation of income under the head “Profits and gains of business or

Introduction Are you looking to understand about Understanding Amounts Not Deductible Section 40 of Income Tax Act 1961 ?  This detailed article will tell you all about Understanding Amounts Not Deductible Section 40 of Income Tax Act 1961. Hi, my name is Shruti Goyal, I have been working in the field of Income Tax since 2011. I have a vast experience of filing income tax returns, accounting, tax advisory, tax consultancy, income tax provisions and tax planning. Taxes are an inevitable part of our lives, and understanding the provisions of the Income Tax Act is crucial for every taxpayer. One such provision is section 40, which defines the amounts not deductible from income. These provisions ensure that taxpayers do not claim undue deductions and exemptions, and thereby, pay their fair share of taxes. In this blog, we will take a closer look at section 40 of Income Tax Act 1961 and understand the amounts that are not deductible from income. We will also explore the implications of these provisions on taxpayers. What is Section 40 of Income Tax Act 1961? Section 40 of the Income Tax Act 1961 outlines the expenses that are not allowed as deductions while computing taxable income. The section is divided into four sub-sections, each of which specifies the types of expenses that are not deductible. These provisions apply to all taxpayers, whether they are individuals, companies, or firms. Let’s take a look at the various expenses that are not deductible under section 40 of Income Tax Act 1961. Types of Expenses Not Deductible 1. Personal Expenses Section 40(a)(i) of the Income Tax Act 1961 disallows the deduction of any expenditure that is of a personal nature. This includes expenses incurred for personal purposes such as entertainment, travel, and hospitality. The rationale behind this provision is that such expenses do not have any business connection and, therefore, cannot be claimed as a deduction. 2. Excessive or Unreasonable Expenses Section 40(a)(ia) of the Income Tax Act 1961 disallows the deduction of any expenditure that is deemed to be excessive or unreasonable. The provision is applicable when the expenditure exceeds the fair market value of the goods or services received. This provision is often used to disallow the deduction of payments made to related parties at a rate higher than the market rate. 3. Payments to Related Parties Section 40A(2) of the Income Tax Act 1961 disallows the deduction of any expenditure made to related parties if the payment exceeds a certain limit. The limit is currently set at Rs. 10,000, and any payment made in excess of this limit is not allowed as a deduction. The provision is aimed at preventing taxpayers from evading taxes by making payments to related parties at inflated rates. 4. Default in Payment of TDS Section 40(a)(ia) of the Income Tax Act 1961 disallows the deduction of any expenditure if the taxpayer has not deducted tax at source (TDS) or has deducted but not paid the TDS to the government. The provision is aimed at ensuring that taxpayers comply with the TDS provisions and pay their taxes on time. FAQs Q. Can personal expenses be claimed as a deduction? A. No, personal expenses cannot be claimed as a deduction under section 40(a)(i) of the Income Tax Act 1961. Q. What is the limit for payments made to related parties? A. The limit for payments made to related parties is Rs. 10,000 under section 40A(2) of the Income Tax Act 1961. Q. Can excessive or unreasonable expenses be claimed as a deduction? A. No, excessive or unreasonable expenses cannot be claimed as a deduction under section 40(a)(ia) of the Income Tax Act 1961. Conclusion In conclusion, section 40 of Income Tax Act 1961 defines the expenses that are not deductible from income, and its provisions apply to all taxpayers. The types of expenses that are not deductible include personal expenses, excessive or unreasonable expenses, payments made to related parties, and default in payment of TDS. Understanding these provisions is crucial for taxpayers as claiming deductions that are not allowed can attract penalties and interest charges. Therefore, taxpayers must maintain proper records and ensure that they comply with the provisions of section 40 while computing taxable income. Moreover, section 40 is not the only provision of the Income Tax Act that defines the expenses not deductible from income. Taxpayers must also be aware of other provisions such as section 43B, which disallows the deduction of certain payments if they are not paid within the due date. In conclusion, being aware of the provisions of the Income Tax Act is crucial for every taxpayer. Section 40 of Income Tax Act 1961 outlines the amounts not deductible from income, and understanding these provisions can help taxpayers compute their taxable income accurately and avoid penalties and interest charges. Section 40, of Income Tax Act, 1961 Section 40, of Income Tax Act, 1961 states that  Notwithstanding anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head “Profits and gains of business or profession”,— (a)  in the case of any assessee—  (i)  any interest (not being interest on a loan issued for public subscription before the 1st day of April, 1938), royalty, fees for technical services or other sum chargeable under this Act, which is payable,— (A)  outside India; or (B)  in India to a non-resident, not being a company or to a foreign company, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139 : Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax