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 »

Prosecution for making false statements in verification [Section 277] Nature of Default Prosecution shall be initiated where a person: Makes a false statement in any verification under the Act, or Delivers an account or statement which is false and which he knows or believes to be false, or does not believe to be true. Such… Read More »

Prosecution for failure to produce accounts and documents [Section 276D] Nature of Default Prosecution may be initiated if a person wilfully: Fails to produce, or causes failure in producing, books of accounts or documents as required under a notice issued under section 142(1); or Fails to get accounts audited or inventory valued in compliance with directions… Read More »

Prosecution for non-filing of return post-search/requisition on or after 01-09-2024 [Section 276CCC] Nature of Default If a search is initiated under Section 132 or a requisition is made under Section 132A on or after 01-09-2024, and the assessee fails to file a return in response to a notice issued under Section 158BC(1)(a), prosecution can be launched under this section. Period… Read More »

Prosecution for failure to furnish return of income [Section 276CC] Nature of Default Prosecution may be initiated if a person fails to furnish return of income: Under section 139(1); In response to a notice under section 142(1)(i); In response to a notice under section 148 for reassessment; In response to a notice under section 153A in case of search. Such offence… Read More »

Wilful attempt to evade payment of tax [Section 276C(2)]  Nature of Default Prosecution shall be initiated where there is wilful attempt to evade payment of tax, penalty, or interest.  Period of Imprisonment Punishable with rigorous imprisonment of 3 months to 2 years and with fine. Non-cognizable Offence The offence is non-cognizable under section 279A, meaning FIR,… Read More »