Meaning of Business and Profession Business simply means any economic activity carried on for earning profits. According to Sec 2(3) business is “any trade, commerce, manufacture or any adventure in the nature of trade commerce and manufacture”. Any transaction with a motive of selling at profits included under this concept. It is not necessary that there should be a series of transaction in a business and it should be carried on permanently. Profession is an occupation requiring purely intellectual skills or manual skills controlled by the intellectual skill of the operator. e.g. Lawyer, doctor, engineer etc. So profession refers to those activities where the livelihood is earned by the persons through their intellectual or manual skill. Continue reading
Abey Francis
Abey Francis, a freelance writer and a professional blogger who enjoys
the challenges of creativity and attention to detail. He has published
many articles and editorials regarding management on different blogs and online journals. His articles stimulate thinking of corporate managers
on key issues of organizations and management. His research interests
focus on international management, International trade finance,
Investment management, leadership, social capital and knowledge
management in enterprises and cross-culture studies.
Income from House Property
The annual value of any property comprising of building or land attached to the vicinity of the building of which the assessee is the owner, is chargeable to tax under the head income from house property. But if the assessee occupies the building or land attached to the vicinity of the building for the purpose of business or profession carried on by him, then it is not chargeable to tax. For income to be taxed as income from house property the following points should be noted 1. Building or land attached thereto. Building means a permanent constructed structure. Building includes residential house , bungalows, docks, warehouse, any block of bricks or stone work covered by a roof etc. The use of the building is immaterial. It may be let out for residential purpose, Continue reading
Income from Salary
DEFINITION According to [Sec 17 (1)] Salary includes (i) wages; (ii) any annuity or pension; (iii) any gratuity; (iv) any fees, commissions, perquisites or profits in lieu of or in addition to any salary or wages; Continue reading
Income exempt from Income Tax
Under Sec10 of income tax act the following incomes are exempt from tax 1. Agricultural Income [Sec 10(1)] Income from agricultural land situated within India is exempted from tax. 2. Share income of HUF [Sec 10(2)] Any sum received by an individual as a member of a Hindu Undivided Family either out of income of the family or out of income of estate belonging to family is exempt from tax. 3. Share of profit from partnership firm [Sec10 (2A)] Share of profit received by partners from a firm in which they are partners is not taxable in the hands of partners. 4. Gratuity [Sec 10(10)] Continue reading
Residential status and Tax liability
The scope of total income is determined on the basis of residential status of the assessee. For the purposes of this Act, there can be three residential status. Residential status is determined on the basis Basic conditions and Additional conditions Resident and ordinarily resident Resident but not ordinarily resident Non resident. RESIDENTIAL STATUS OF AN INDIVIDUAL Resident and Ordinarily Resident [ROR] An individual is said to be resident in India if he satisfies anyone of the basic conditions and both of the additional conditions. Resident but Not Ordinarily Resident [RNR] An individual is said to be resident but not ordinarily resident in India if he satisfies anyone of the basic conditions but does not satisfies both of the additional conditions. Continue reading
Introduction to Income Tax
The word tax was derived from the Latin word ‘taxore’ meaning to estimate, appreciate or value. Tax is a price which each citizen pays to the state to cover his share of the cost of the general public services which he will consume. It indirectly provides employment opportunities. Taxes are compulsory contributions imposed by the government on its citizens to meet its general expenses incurred for the common good, without any corresponding benefit to the tax payer. In 1860, the British government firstly introduced tax in India. The present law of income tax is contained in the income tax Act,1961 as amended up to date; the income tax rules 1962 as amended up to date and finance Act passed by the parliament every year. Income Tax Act came into force with effect from 1-4-1962 and extends to the whole of India. Assessee [Sec 2(7)] Assessee means a person by whom Continue reading