Deduction for Telecom License Fees Introduction Assessees incurring capital expenditure for acquiring a license or spectrum for telecommunication services can claim deductions in equal installments over the license or spectrum term. Deduction for Spectrum Fees [Section 35ABA] Eligibility: Assessees who incur capital expenditure to acquire spectrum rights by paying spectrum fee will be allowed deduction… Read More »
Deduction for Expenditure on Scientific Research Introduction Section 35 provides deductions for expenses on scientific research, either conducted in-house or outsourced. It encompasses revenue and capital expenditures related to business, as well as contributions to approved external entities. Key Provisions Scientific Research Definition: Activities advancing knowledge in natural/applied sciences, agriculture, or medicine. Research must relate to business… Read More »
Depreciation as per Income-tax Act Introduction The term ‘depreciation’ means decrease or reduction in the value of an asset over a period of time due to wear and tear or obsolescence. Depreciation allows a business entity to allocate the cost of tangible and intangible assets (except goodwill) over their useful life. It is calculated using… Read More »
Rent, Repairs, Insurance, etc., of Building Introduction This provision allows deductions for revenue expenses incurred on premises used for business or profession, including rent, repairs, municipal taxes, and insurance. Only current repairs qualify for deduction. Deductible Expenditures Rented Premises Rent for premises used as offices, warehouses, or residential quarters. Current repairs by the tenant under… Read More »
Maintenance of Accounts Taxpayers are required to maintain books of accounts if their income, turnover, or receipts exceed prescribed thresholds. Books must be maintained at the place of business or profession for six years from the end of the relevant assessment year. Who Must Maintain Books of Accounts? Specified Professions:Legal, medical, engineering, architecture, technical consultancy,… Read More »
Computation of Income from Business or Profession Introduction Income from business or profession is computed under Section 29 of the Income-tax Act, 1961, following provisions in Sections 30 to 43D. These provisions determine allowable and disallowable expenses for calculating taxable income. General Principles Sections 30 to 43D are not exhaustive. Expenditures or losses incidental to business or profession may be deductible based on ordinary… Read More »
Profits and Gains of Business or Profession Introduction Income from business or profession is taxable under the head “Profits and Gains of Business or Profession” (PGBP) as per Chapter IV, Part D of the Income-tax Act, 1961. The business income shall be computed in accordance with the method of accounting regularly followed by the taxpayer.… Read More »
Compounding of Offence Introduction Compounding of an offence under the Income-tax Act, 1961 allows an assessee to avoid prosecution by paying a prescribed sum of money. Such compounding is permitted by the jurisdictional Principal Chief Commissioner/Chief Commissioner or Principal Director General/Director General of Income-tax, either before or after prosecution proceedings are initiated.
Prosecution for abetment to make a false return, etc. [Section 278] Nature of Default Prosecution under this section arises when a person: Abets or induces another to make and deliver a false account, statement, or declaration relating to taxable income, knowing it to be false or not believing it to be true; or Abets or… Read More »
Prosecution for falsification of books of account or document, etc. [Section 277A] Nature of Default Prosecution under this provision is initiated when the following conditions are met: A person makes or causes to make a statement or entry; The statement or entry is false, and the person knew or believed it to be false; It… Read More »