Business and Profession

Comprehensive Guide to “Profits and Gains of Business or Profession” [Sections 28 to 44D]

Section 44ADA: Presumptive Taxation Scheme for Professionals

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Section 44ADA of the Income Tax Act, 1961 provides a simplified presumptive taxation scheme for eligible professionals, allowing them to declare income at a fixed rate without maintaining detailed books of accounts or undergoing a tax audit. 1. Applicability ✅ Eligible Professionals: Doctors(Physicians, Surgeons, Dentists) Lawyers(Advocates, Solicitors) Chartered Accountants (CAs) Architects Engineers Interior Designers Technical Consultants Film Artists(Actors, Directors, Musicians) Company Secretaries (CS) Other notified professionals […]

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Section 44AE: Presumptive Taxation Scheme for Goods Carriage Businesses

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Section 44AE of the Income Tax Act, 1961 provides a simplified presumptive taxation scheme for businesses engaged in plying, hiring, or leasing goods carriages. It allows taxpayers to declare income at a fixed rate without maintaining detailed books of accounts or undergoing a tax audit. 1. Applicability ✅ Eligible Businesses: Owners of goods carriages(trucks, trailers, lorries, etc.) Transport operators(hiring or leasing vehicles) Individuals, HUFs, or firms(not

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Tax Implications of Specific Management Decisions in Business

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1. Dividend Declaration vs. Retained Earnings Dividends: Taxable in shareholders’ hands (10% TDS if >₹5,000) No deduction for company (Dividend Distribution Tax abolished) Retained Earnings: No immediate tax impact Future capital gains tax when shares are sold Tax-Smart Approach: Retain earnings if shareholders are in high tax brackets; declare dividends if tax-efficient. 2. Lease vs.

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Chargeability/Scope/Meaning of Income [Section 28]-Profits and Gain of Business and Profession

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Chargeability/Scope/Meaning of Income under the head “Profits and Gains of Business and Profession” under Section 28 to 44D has been explained with practical examples for the AY: 2022-23 & 2023-24. 1.  Table showing how to compute “Profits and Gains of Business and Profession” A. Income from sources other than speculation business     1. Net

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Expenses allowed as a Deduction [Sections 30 to 35] -Profits and Gains of Business and Profession

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Section 30 to 35 covers the following expenses Allowed as Deduction while computing Profits and Gains of Business and Profession. Meaning of the term ‘paid’: Before we discuss the specific expenses, it is necessary to understand the meaning of the term ‘paid’, which will be used in relation to these expenses. According to section 43(2)

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Section 36-Other Deductions -Profits and Gains of Business and Profession

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List of all Other Deductions which are specified under section 36 of the Indian Income Tax Act,1961, for computing income arising from Business and Profession. Deductions which are specified under section 36 for computing income arising from Business and Profession include the following: 1.  Insurance premium of stocks [Section 36(1)(i)]: The amount of any premium

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General Deductions [Section 37(1)] -Profits and Gains of Business or Profession

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Any expenditure (not being expenditure of the nature described in sections 30 to 36) and not of capital or personal expenses are allowed as deduction under section 37(1) Any expenditure (not being expenditure of the nature described in sections 30 to 36) and not being in the  nature of capital expenditure or personal expenditure of

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Amounts Not Deductible [Section 40(a), 40(b), 40(ba)] -Profits and Gains of Business or Profession

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Notwithstanding anything contained in sections 30 to 38, the following amounts shall not be deducted under section 40(a), 40(b), 40(ba) in  computing the income chargeable under the head profits and gains of business or profession. 1.  Disallowance In the case of any assessee [Section 40(a)] (i)         Any interest, royalty, fees for technical services, or

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Expenses or Payments Not Deductible: [Section 40A] –Profits and Gains of Business or Profession

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The provisions, which are being discussed under various sub-sections of section 40A have overriding effect  over the provisions of any other section, because section 40A(1) clearly states that the provision of section 40A  shall have effect notwithstanding anything to the contrary contained in any other provisions of the Act. Therefore  any expenditure or allowance, though

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Section 43B- Deductions Allowed only on Actual Payment -Profits and Gains of Business and Profession

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Under Section 43B, some of the Expenses are allowed and can be claimed by the Assessee only in the year in which the payment is actually made for computing income under the head Business and Profession. Notwithstanding anything contained in any other provisions of Income-tax Act, in respect of certain  expenditure/ payments, the deduction is

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