Transfer of Capital Asset Introduction “Transfer” refers to the passage of rights in a property from one person to another. It is defined inclusively under Section 2(47) of the Income-tax Act. Meaning of Transfer Transfer of a capital assets includes: Sale, exchange or relinquishment of the assets Extinguishment of any rights Compulsory acquisition under any law Conversion… Read More »
Capital Asset Introduction A capital asset includes movable and immovable property held by an assessee, excluding certain personal assets and rural agricultural land. Definition [Section 2(14)] A capital asset includes: Any kind of property held by an assessee (movable, immovable, tangible, or intangible), whether used for business purposes or not. Securities held by FIIs or Category I/II… Read More »
Improper Service of SCN and Order Vitiates Adjudication and Recovery Facts The Parties: The petitioner is a private company engaged in construction and logistics with a principal place of business in Mumbai and an additional place in Pune. The Conflict: A Show Cause Notice (SCN) issued in December 2020 led to an Order-in-Original (OIO) dated… Read More »
Chargeability of Capital Gains Introduction Section 45 of the Income Tax Act, 1961, governs the taxation of profits or gains arising from the transfer of a capital asset. Such income is generally taxable in the year of transfer unless specified otherwise. Key Provisions General Rule (Section 45(1)):Profits or gains from the transfer of a capital asset… Read More »
Exhausting Alternate Remedies: Writ Jurisdiction Not Maintainable Against Rejection of Time-Barred Appeals Facts Adjudication: The petitioner received a Show Cause Notice (SCN), filed submissions, and subsequently faced an adverse Order-in-Original (OIO). Initial Challenge: A rectification plea was filed and disposed of. The petitioner initially filed a writ petition but withdrew it to pursue the statutory… Read More »
Capital Gains Introduction Capital gain head is one of the five heads of income under the Income-tax Act, 1961, with its computation governed by the provisions in Part E of Chapter IV. Chargeability As per Section 45(1), profits or gains from the transfer of a capital asset are taxable in the year of transfer. However, not… Read More »
Recovery of Deceased’s Dues from Legal Heir: Strict Compliance with Section 93 and Due Process Facts The Deceased’s Business: The petitioner’s father operated a proprietorship, M/s. Oriental Facility, with a specific GSTIN. This registration was cancelled prior to his death. The Petitioner’s Business: The petitioner operated an independent labour supply business using the same trade… Read More »
Interest on Housing Loan Interest paid or payable on borrowed capital for the purchase, construction, repair, or renovation of a house property is deductible under section 24(b) from the income taxable under the head “Income from House Property.” The quantum of deduction depends on the use of the property (let-out, self-occupied, or deemed let-out). Quantum of Deduction… Read More »
Computation of Income from House Property Income from house property is computed by determining the annual value of the property and allowing deductions such as municipal taxes, standard deduction, and housing loan interest. Properties are categorized as let-out, self-occupied, or deemed let-out. Computation Process Categories: Let-Out Property: Annual value is based on the higher of… Read More »
Deemed owner of House Property Circumstances of Deemed Ownership Transfer to Spouse/Minor Child Without Adequate Consideration: If a person transfers house property to his spouse or minor child (excluding a married minor daughter) without adequate consideration, he is deemed the owner. However, if transferred to a spouse under a separation agreement, the recipient is considered… Read More »