Page 10 – Sailesh Bhandari & Associates

PROFESSIONAL TAX OR TAX ON EMPLOYMENT [SEC.16 (iii)]

Professional tax is a tax levied by the state governments in India on all persons earning an income by way of either practising a profession, employment, calling or trade. It is a direct tax, meaning that it is paid directly to the government. Professional tax is levied under Section 16(iii) of the Income Tax Act,

BASIS OF VALUVATION

The basis of valuation under income tax is the fair market value of the asset on the valuation date. Fair market value is defined as the price that the asset would fetch if sold in a willing buyer-willing seller transaction on the valuation date. The Income Tax Act and Rules provide specific methods for valuing

VALUVATION OF RENT FREE UNFRINISHED ACCOMNMODATION

The valuation of rent-free unfurnished accommodation under the Income Tax Act, 1961 depends on the following factors: The following are the specific valuation rules for rent-free unfurnished accommodationIncome Tax: For example, if an employee with a salary of Rs.10 lakhs is provided rent-free unfurnished accommodation in a city with a population of more than 25

IN THE CASE OF AN EMPLOYEE COVERED BY PAYMENT OF GRATUITY

Section 10(10) of the Income Tax Act, 1961 provides for exemption from income tax on gratuity received by an employee who is covered by the Payment of Gratuity Act, under income tax1972. The exemption is available for the least of the following amounts: For example, if an employee’s last drawn salary is Rs.100,000 and he

SALARY

The term “salary” under income tax is a comprehensive term that includes both monetary and non-monetary payments made by an employer to an employee. It is defined in Section 17(1) of the Income Tax Act, 1961 as follows: “Salary” means all remuneration, including any fees, commission, perquisite or profits in lieu of or in addition

EMPLOYERS CONTRIBUTION TO NATIONAL PENSION SYSTEM (NPS) [sec.36(1)(v)]

The employer’s contribution to the incometaxNational Pension System (NPS) is eligible for a deduction under Section 36(1)(v) of the Income Tax Act, 1961. The deduction is available up to 10% of the salary (basic salary plus dearness allowance) of the employee. This deduction is applicable from the assessment year 2012-13 onwards. For central government employees,

NATIONAL FUNDS FOR A RURAL DEVLOPMENT

The National Fund for Rural Development (NFRD) is a scheme under the Income Tax Act:1961 that allows donors to claim a 100% income tax deduction on the amount they donate to the fund. The NFRD is a donation-based scheme, which means that the government does not allocate any funds to it. The funds are collected

DEPRECIATION UNDER SECTION 32 NOT APPLICABLE

EXAMPLES It is important to note that these are just a few examples, and there may be other cases where depreciation under section 32 of Income Tax Act is not available in specific states in India. It is always advisable to consult with a tax advisor to determine whether depreciation is available in a particular

CONDITIONS

Section 35ABB of the Income Tax Act, 1961 allows a deduction for expenditure incurred for obtaining a licence to operate telecommunication services. The deduction is available in equal instalments over the period the licence remains in force. The following conditions must be satisfied for a deduction under Section 35ABB of the Income Tax Act to

AMOUNT TO AN APPROVED SCIENTIFIC RESEARCH COMPANY [SEC.35 (1)]

The amount approved for a scientific research company under section 35(1) of the Income Tax Act, 1961 is 100% of the expenditure incurred on scientific research. This means that the company can claim a deduction of 100% of the expenditure incurred on scientific research, subject to certain conditions. The conditions for claiming the deduction are

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