What are the basis of charges of income-tax?

Basis of Charge of Income Tax: Income tax is an annual tax on income. 2. Income of previous year is taxable in the next following assessment year at the rate or rates applicable to that assessment year. However, there are certain exceptions to this rule.

What is the basis of charges?

Basis of charge gives us a possible course of action on what basis income earned by an individual is chargeable to tax. It gives the basis whether a particular income earned is chargeable to tax as per accrual basis or actual basis or in case of variation in the method of calculation how should it be charged to tax.

What is the basic principle of charging income-tax as per Section 4?

INCOME TAX SECTION 4 – Basis Of Charge Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly.

What is the basis of charge on income from other sources?

These receipts are chargeable to tax under the head “Income from other sources”. Any sum received by the assessee from his employees as contribution to any provident fund, or any other welfare fund for the employees provided it is not taxable under the head ‘Profits and Gains of Business or Profession’.

What is the basis of charge of salary income?

Section 15 deals with the basis of charge. Salary is chargeable to tax either on ‘due’ basis or on ‘receipt’ basis, whichever is earlier. However, where any salary, paid in advance, is assessed in the year of payment, it cannot be subsequently brought to tax in the year in which it becomes due.

What are the basis of charging of income from house property?

Basis of Charge [Section 22]: a) The house property should consist of any building or land appurtenant thereto; b) The taxpayer should be the owner of the property; c) The house property should not be used for the purpose of business or profession carried on by the taxpayer.

What is the basis of charge for income from house property?

Basis of Charge The charge is not because of the letter of any income but is on the inherent potential of house property to generate income. The annual value is the amount for which the property would reasonably be expected to let from year to year.

What is meant by basis of charge under service tax?

It is charged to the individual service providers on cash basis, and to companies on accrual basis. This tax is payable only when the value of services provided in a financial year is more than Rs 10 lakh. This tax is not applicable in the state of Jammu & Kashmir.

What is section 41 of Income Tax Act?

Income Tax – Section 41(1) provides for taxing any amount benefit which was obtained by a person with respect to any loss, expenditure or trading liability incurred in any earlier Assessment Years.

What is due basis and receipt basis?

Cash basis means receipt basis. Due basis means accrued basis. If a Person has been employed on 1st Mar, the salary for the month becomes due on 31st Mar (Due Basis), but he receives the salary payment on 5th Apr(Cash or Receipt Basis).

When salary is taxable on due or receipt basis?

Salary is charged to tax on due or receipt basis whichever is earlier, hence, salary foregone by the employee is charged to tax on due basis, even though it is not received by him. In other words, salary foregone after its accrual is charged to tax, even though it is not received by the employee.

What is the basis of taxation in respect of house property?

The basis of Taxation in respect of House Property The owner of house property, legal or beneficial is liable to pay tax. In this regard, income must come from the house property and its adjacent premises which are not used for the purpose of business or profession or for personal purpose.

Can I show two houses as self occupied?

The choice of which property to choose as self-occupied is up to the taxpayer. For the FY 2019-20 and onwards, the benefit of considering the houses as self-occupied has been extended to 2 houses. Now, a homeowner can claim his 2 properties as self-occupied and remaining house as let out for Income tax purposes.

What is the basis of valuation of taxable service?

Valuation of services, in contrast to the valuation of goods, has been based on the simple principle of the gross amount that is charged by the service provider for provision of taxable services. Valuation of goods, on the other hand, both under the Central VAT and the State VAT, is based on different principles.

What is Section 40 A?

a) Disallowance of expenditure: As per section 40(a)(i) of the Income-tax Act, any sum (other than salary) payable outside India or to a non-resident, which is chargeable to tax in India in the hands of the recipient, shall not be allowed to be deducted if it is paid without deduction of tax at source or if tax is …

What is section 59 of Income Tax Act?

Section 59 of Income Tax Act “Profits chargeable to tax” (1) The provisions of sub-section (1) of section 41 shall apply, so far as may be, in computing the income of an assessee under section 56, as they apply in computing the income of an assessee under the head “Profits and gains of business or profession”.

What is the basis of the Income Tax Act of 1961?

BASIS OF CHARGE – Income-tax Act, 1961 Chapter: II BASIS OF CHARGE Section 4 Charge of income-tax Section 5 Scope of total income Section 5A Apportionment of income between spouses governed by Portuguese Civil Code Section 6 Residence in India Section 7 Income deemed to be received Section 8 Dividend income

When did the Income Tax Act come into effect?

Income Tax Act, 1961 Income Tax Rules, 1962 Notifications Circulars Forms Compute Income Tax Income Tax Case Laws Case Laws – Section Wise Acts – SEBI Rules – SEBI Regulations – SEBI Order – SEBI Guidelines – SEBI Notifications Circulars Master Circulars Advanced Search Discussion Forum What is New Recent Case Laws Latest Notifications

What are the different sections of the Income Tax Act?

Section 4 Charge of income-tax Section 5 Scope of total income Section 5A Apportionment of income between spouses governed by Portuguese Civil Code Section 6 Residence in India Section 7 Income deemed to be received Section 8 Dividend income Section 9 Income deemed to accrue or arise in India Section 9A

What is involved in income tax?

Income tax is a tax on the income of an individual or an entity. Income tax is the main source of income for the government to carry out its functions.