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Synonyms
1
  
Approved

​​​​​​​​AAR means Authority for Advance Rulings set-up by the Central Government for pronouncing advance rulings in respect applications filed before them.​

​What does AAR stand for and what are its functions?|What are the functions of AAR?|What are the functions of Authority for Advance Ruling?|Which is the government agency for Advance Ruling?|Where to go for seeking Advance Ruling?​​

​​Authority for Advance Rulings | AAR | Advance Ruling | AR | Authorityfor AR|AAR meaning​

Yes7/6/2017 7:40 PM7/7/2017 2:59 PMYes

​Advance ruling|AAR:Authority for advance ruling|FunctionAAR|

2
  
Approved
​The purpose of Advance rulings is to provide clarity on important issues to taxpayers, so that they have a clear-cut idea of their tax liability in advance for a given set of transactions.​​
What is the purpose of Advance rulings?|Why is AAR formed?|Can advance rulings be delivered on issues other than Tax liability?

Purpose of advance rulings|AAR formed|​

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes

​​​​AAR|Advance ruling|

3
  
Approved
"​​Applicant" can be any person who is :-
  1. A non-resident desirous of setting-up a joint venture in India in collaboration with a non-resident or a resident; or.
  2. A resident desirous of  setting-up a joint venture in India in collaboration with a non-resident; or
  3. A resident;
  4. Public Sector Company. (PSU)
Who can apply for an advance ruling?|Can a Resident apply for an Advance Ruling?|Can a Non-Resident apply for an Advance Ruling?|Can a Private Limited Company apply for an Advance Ruling?

​AAR

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
4
  
Approved
​​A resident can apply to AAR for advance ruling in relation to his tax liability only if transaction(s) undertaken or proposed to be undertaken is equal to 100 crores or more​
When can a resident apply for an advance ruling?|Can I apply for an advance ruling on transaction which has already taken?|Can I apply for an advance ruling for a future transaction?|Is there is any threshold for applying to AAR? ​

​AAR

Yes7/6/2017 7:42 PM8/18/2017 3:38 PMYesForm 34DA
AR transaction|Future transaction|Transaction limit
5
  
Approved
Advance ruling means the determination of a question of law or fact specified in the application in relation to tax liability of an applicant arising out of transactions which have been undertaken or proposed to be undertaken
What is the meaning of advance ruling?|Can an advance ruling be taken on a Question of Law?|Can an advance ruling be taken on the Question of Facts? ​

​AAR

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYesForm 34EA

​AAR meaning| Defenition of AAR

6
  
Approved

An applicant desirous of obtaining an advance ruling may make an application in such form and in such manner as may be prescribed :-

  • Stating the question on which the advance ruling is sought.
  • Application should be in quadruplicate (4 Copy).
  • With prescribed fee.
What are requirements of an application for Advance Ruling?|What should be contents of application for Advance Ruling?|In how many copies application for Advance ruling should be made?

​AAR

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
7
  
Approved

​The fees to be paid along with application shall be as follows ​

Category of case Fee
Amount of transaction(s) does not exceed Rs. 100 crore.Rs. 2 Lacs
Amount of transaction(s) exceeds Rs. 100 crore but does not exceed Rs.300 crore.Rs. 5 Lacs
Amount of transaction(s) exceeds Rs. 300 crore.Rs. 10 Lacs
Other CasesRs. 10,000
What fees is to be paid along with application for advance ruling?|How much should I pay for an Advance Ruling?|What is the minimum payment for an Advance Ruling?|Is application fees based on the transaction amount?|How to calculate the fees for an Advance Ruling? ​

​AAR

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
8
  
Approved
No, the application fees payable should be in the form of a demand draft in favour of Authority for Advance Ruling.​
Can I pay the application fees in cash?|Can I pay the application fees by net banking?|Can I pay the application fees by net banking?|Can I pay the application ​fees by a Demand Draft?|In whose favour the Demand Draft is to be made?

​AAR

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
9
  
Approved

​Yes, you may withdraw the application within 30 days from the date of such application. If you withdrawl after such period, you can withdraw it only with the permission of the Authority.​

Can I withdraw the Application for Advance Ruling, once I have filed it ?|Is the application for advance ruling withdrawable?|When can I withdraw my application for Advance Ruling?|How can I withdraw the application after 30 days?

​AAR

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
10
  
Approved

An advance ruling pronounced by the Authority is binding on the follows :-

  • The Applicant.
  • The Commissioner.
  • Commissioner of Income-tax (Appeals).
  • Income-tax authorities who are subordinate to Commissioner
  • In respect of transaction for which ruling had been sought​ 
Are the Advance ruling, binding on taxpayers or tax authorities? |Can I disregard an Advance Ruling?|Can Tax Authority disregard an Advance Ruling?

​AAR

Yes7/6/2017 7:40 PM8/9/2017 3:50 PMYes
11
  
Approved

​As per Section 208 of the Income Tax Act,

  • Every person (individual, firm, company, etc.)
  • whose estimated tax liability for the year (i.e., for the year in progress such as FY 2016-17, FY 2017-18,  etc.)
  • after TDS (i.e., TDS which is deducted for the person by its payers/clients/banks, etc.)
  • Is Rs. 10,000 or more
  • shall pay its tax for the year in advance during the same financial year
  • Such tax shall be paid in instalments
  • Individuals, having only salary income are not required to pay advance tax as the liability to deduct and deposit tax is on the employer making such payment in the form of TDS​

Click here to calculate Advance Tax Liability

Who is liable to pay Advance tax?|​What do you mean by Advance tax?|Should I pay Advance tax on salary income?|Am I liable to pay Advance tax when my TDS is deducted by the employer? Can salaried  persoan pay advance tax? |Advance tax of salary person ? 

​Advance Tax

Yes7/6/2017 7:40 PM11/20/2017 5:50 PMYes
13
  
Approved

An assessee who has opted for computing business income under section 44AD on presumptive basis is not required to pay advance tax related to such business for the assessment years 2011-12 to 2016-17.

(b)   The due dates for payment of different instalments of advance tax are as follows :-

(i)                 For assessees (other than those covered under section 44ADA of the Income-tax Act, 1961)

 

On or before 15th June15% of advance tax
On or before 15th Sept45% of advance tax
On or before 15th Dec75% of advance tax
On or before 15th March100% of the advance tax

 

(ii)               For assessees covered under section 44AD (under presumptive taxation scheme) of the income-tax Act, 1961, are required to pay whole advance tax in one instalment on or before 15th Mar

On or before 15th JuneNil
On or before 15th SeptNil
On or before 15th DecNil
On or before 15th March100% of the advance tax

Click here to calculate Advance Tax Liability

When is Advance Tax paid?| In how many instalments advance tax is required to be paid?| What are the due dates for payment of advance tax by a company?| What are due dates for payment of advance tax by an individual?| Is Advance tax paid on a quarterly basis?| Is there any change in Advance tax rules?| Is there any change in Advance tax deadline?|How much Advance tax do I need to pay?

​Advance Tax

Yes7/6/2017 7:41 PM8/9/2017 3:50 PMYes
14
  
Approved

​​Advance tax is liable to be paid by estimating the current year's income and then applying the tax rates as per the income-tax slab rates for the particular year. The computation of advance tax can be done in the following manner:

  1. ​Computation of advance tax by an assessee

    Income under all heads of income (Salary, HP, Business, Other sources, etc.)                   xxxx

    Less: (Bought forward losses from the previous years)                                                       (xxx)

    Gross Total Income                                                                                                               xxx 

    Less: (Deductions under section 80C (upto Rs. 1,50,000) & any other Chapter VI -A deduction)       (xxx)

    Estimated total Income                                                                                                       xxx

    Income Tax on Estimated Total Income                                                                                xxx

    Add: Surcharge, if any                                                                                                           xxx

    Total tax payable                                                                                                                    xxx

    Less: Relief under section 89                                                                                                (xxx)

    Tax Liability                                                                                                                           xxx

    Add: Education Cess @ 2%                                                                                                   xxx

    Add: Secondary and Higher Education Cess @1%                                                               xxx

    (The tax calculator is available on https://incometaxindiaefiling.gov.in/)

    Less: (MAT Credit), for companies                                                                                        xxx

    Less: TDS deducted (as shown in form 16/16A)                                                                   xxx

    Advance Tax Liability                                                                                                         xxx

Click here to calculate Advance Tax Liability

How is the advance tax to be computed by an assessee?| What are the rates applied for calculating advance tax?| Can I claim deductions while computing advance tax?| What is the procedure for computing advance tax?| What incomes are included while calculating advance tax?| Please help us with a few examples how to compute Advance tax?

​Advance Tax

Yes7/6/2017 7:41 PM8/9/2017 3:50 PMYes
15
  
Approved
  • ​​If a taxpayer who has a legal obligation to pay advance tax fails to make payment for advance tax or advance tax is lower than the correct amount AO may pass an order asking the taxpayer to pay tax on assessee's current year income
  • Such order shall clearly specify the amount payable and in number of instalments the same needs to be paid
  • Such order should be passed anytime during the previous year but before 1st March, i.e., by 28th February

Computation by the Assessing Officer

  • Assessing Officer can serve an order requiring the assesse to pay advance tax if he is of the opinion that such person is liable to pay advance tax or the tax paid is lower 
  • In such cases, the Officer will take the higher of following incomes and calculate the tax as per prevailing rate of income-tax:-​

(a)The total income of the latest previous year in respect of which Officer has assessed income, i.e., the year for which an assessment has been completed by the Income-tax Officer,

or

(b)   The total income declared by the assesse in any returnafter the year of assessment by officer., i.e., Any income furnished by the assessee in Income-tax return for any previous year after

Click here to calculate Advance Tax Liability

How is advance tax liability computed by the Assessing Officer?| When is Assessing Officer supposed to determine the Advance tax liability?| By which date can the Officer pass an order asking for deposit of Advance tax?

​Advance Tax

Yes7/6/2017 7:41 PM7/6/2017 7:41 PMYes
16
  
Approved

​​For computing the advance tax liability of the prevailing tax rates or the rates in force of the previous year for which the advance tax is to be computed are to be used.

Click here to calculate Advance Tax Liability

Which tax rates are to be used for computing advance tax liability?

​Advance Tax

Yes7/6/2017 7:41 PM7/6/2017 7:41 PMYes
17
  
Approved

Assessing Officer can serve an order requiring the assesse to pay advance tax, if he is of the opinion that such person is liable to pay advance tax.

 

-          However, if you feel that year advance tax liability is lower than the liability calculated by the income-tax officer; you may file an estimation of the income and amount of tax payable thereon

-          Such information should be submitted in Form No. 28A to the Assessing Officer

-          Alternatively, In case the tax demand calculated by the Income-tax officer is lower than the tax liability computed by you, you should pay the advance tax as per your own computation.

-          No intimation to Income-tax officer is required to be made in such cases.

 ​

What are the steps to be followed by an assesse on receiving the order for the payment of advance tax?| What should I do on receiving the notice from income-tax department for the payment of advance tax, if my actual income is less than what is determined by the tax officer?| I have received an order from Income Tax officer asking me to pay advance tax. What should I do now?| What should I do on receiving the notice from income-tax department for the payment of advance tax, if my actual income is more than what is determined by the tax officer?

​Advance Tax

Yes7/6/2017 7:42 PM7/11/2017 7:31 PMYes
18
  
Approved

Click he​re to view the prevailing Income-tax rates.

Click here to calculate Income-tax using Income-tax Calculator

What are the prevailing Income-tax rates for the AY 2018-19 (FY 2017-18)?| What are the rates of Income tax for AY 2017-18 (FY 2016-17)?

Income tax rates

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
19
  
Approved

​In case the Assessing Officer's estimation of current income is more than the assesse's estimate then he is required to send an intimation in Form no. 28A giving estimate of such reduced income and advance tax.

The form is prescribed under Rule 39 of the Income-tax Rules (Form No. 28A).​

How to file an estimation of income if the tax/Assessing Officer’s estimation of income is more than the current income ?| Which is form required to be filed for intimating the tax officer?| What is Form 28A?

​Advance Tax

Yes7/6/2017 7:42 PM7/11/2017 7:31 PMYes
20
  
Approved

​In case  the Assessing Officer's estimation of current income is more than the assesse's estimate then the assessee is required to file an intimation in Form no. 28A giving estimate of income and advance tax.

The estimation is required to be filled and signed by a person who is authorized to sign a return of income.

  • In case of a registered firm, the firm has to submit the estimate of advance tax payable, if any.

  • The individual partners have also to submit an estimate of the advance tax payable by eachpartner including therein the share of income from the registered partnership firm.​

  • In case of an HUF, which has no member and whose total income of the previous year is likely to exceed the maximum amount not chargeable to income-tax then a declaration is required to be filed from all members.​
Who is responsible to file Form 28A?| What is the responsibility of partners of firm for filing the Form 28 A?| What are the special provisions in case of an HUF?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
21
  
Approved

A person engaged in business is required to maintain regular books of account under certain circumstances. To give relief to small taxpayers from this tedious work, the Income-tax Act has framed the presumptive taxation scheme.

A person adopting the presumptive taxation scheme can declare income @ 8% and, in turn, he is relieved from tedious job of maintenance of books of account.

The presumptive taxation scheme of section 44AD can be adopted by following persons:

1) Resident Individual

2) Resident Hindu Undivided Family

3) Resident Partnership Firm (not Limited Liability Partnership Firm)

In other words, the scheme cannot be adopted by a non-resident and by any person other than an individual, an HUF or a partnership firm (not Limited Liability Partnership Firm).​

What is the meaning of Presumptive taxation Scheme for certain businesses?| Which businesses can take advantage of Presumptive taxation Scheme?| Who can file the return under section 44AD?|

Presumptive Taxation

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
22
  
Approved

The scheme of Presumptive taxation is designed to give relief to small taxpayers engaged in any business, except the following businesses:

  • Business of plying, hiring or leasing of goods carriages.
  • A person who is carrying on any agency business.
  • A person who is earning income in the nature of commission or brokerage
  • Any business whose total turnover or gross receipts exceed two crore rupees.

     ​
Which businesses are not covered under Presumptive taxation Scheme?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
23
  
Approved

​​As per section 208 of the income-tax Act, 1961, every person whose estimated tax liability for the year is INR 10,000 or more, after TDS (taxes deducted at source), shall pay advance tax.

Therefore, credit of TDS is to be taken while calculating the advance tax liability.

However, if the amount is given or credited by payer without deduction of tax then the benefit of TDS cannot be given while calculating the advance tax liability.

Whether the benefit of tax deducted at source (TDS) is taken into consideration while computing the advance tax payable?| When is TDS not taken into account while calculating the advance tax liability?

​Advance Tax

Yes7/6/2017 7:42 PM8/9/2017 3:50 PMYes
24
  
Approved

  • Any taxes paid till 31st March will be treated as advance tax.
  • If the last day for the payment of advance tax is the day on which the banks are closed, then one should pay the advance tax on the immediately following working day and no interest shall be charged on such payments of advance tax.

​ 

Can we pay advance tax after 15th March?| I have paid all the taxes till 15th March, but there is some income which I received post that date. Can I still pay advance tax?| What should we do if the bank is closed on the last day for payment of advance tax?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
25
  
Approved

​​For the purpose of advance tax, an assesse will be considered as assesse-in-default if he:-

  1. does not pay the advance tax on receiving the order from Income-tax officer as per the due dates, or
  2. does not file an intimation in Form 28A before the instalment due date.
In case of advance tax, when is assesse considered as assesse-in-default?

​Advance Tax

Yes7/6/2017 7:42 PM8/9/2017 3:50 PMYes
26
  
Approved

Advance tax is payable on total income which includes capital gains and casual income (i.e., income from lotteries, crossword puzzles, etc.).

However, it is practically not possible to estimate the income from capital gain and casual income in advance. Therefore, in such cases it is provided that if any such income arises after the due date of any instalment, then the remaining tax calculated on capital gain and casual income shall be paid in remaining instalments of capital gains which are due.

If the entire amount of tax is so paid then no interest for late payment is levied.

 

How to compute advance tax on capital gains income?| I am planning to sell my house property. How to estimate income from sale of house property?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
29
  
Approved

​While making payment of tax, apart from other things, one should clearly mention following details :

  • Head of payment, i.e., Corporation Tax/Income-tax (other than companies)
  • Amount and mode of payment of tax
  • Type of payment [i.e., Advance tax/Self-assessment tax/Tax on regular assessment/Tax on Dividend/Tax on distributed Income to Unit holders/Surtax]
  •  Assessment year – this is a general error that assessees commit as AY is different from Financial year
  • The unique identification number called as PAN [Permanent Account Number] allotted by the IT Department.
  • The details are displayed on screen and should be confirmed before proceeding with payments.

     ​
What are the precautions that one should take while filling up the tax payment challan?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
30
  
Approved

​Once the Advance Tax is paid, it will be reflected on assessee's Form 26AS within 3-4 working days of making the payment.

  • The banks upload challan details to TIN in 3 working days after the realization of the tax payment online.
  • After the bank uploads the details of self -assessment/advance tax to TIN, it is automatically posted into assessee's Form 26AS.
How to verify the advance tax that has been paid?| Is there any online record available to check the advance tax paid?| How do my taxes get reflected in Form 26AS when I pay advance tax?

​Advance Tax

Yes7/6/2017 7:42 PM8/9/2017 3:50 PMYes
31
  
Approved
  • Showing the total tax liability as Income tax, Education cess, Surcharge, etc., is advisable.
  • However, in the event the bifurcation of tax payment like, income-tax, surcharge, Cess, etc., is not done due to any reason, there is no need to panic.
  • While filing the income-tax return just mention the total amount. in income-tax column and that would be  sufficient. However, at the time of filing income-tax return, you should fill up the correct bifurcation details and then CPC will check it properly at the time of processing.​
I paid advance tax of Rs. 20,000 and Rs. 600 as Cess but the bank has recorded the entire amount in tax as Rs. 20,600 and Cess as 0. Do I need to pay the Cess again?| What to do if I forgot to bifurcate the amount of tax, surcharge and Cess while making the online payment?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
32
  
Approved

Advance Tax is not an expense.

  • It is considered as an asset and adjusted against one's tax liabilities at the time of finalization of the Balance Sheet.
  • It is a charge on income and not considered as an expenditure.
  • It is shown under Loans and Advances in the Balance Sheet.​
Can I claim the deduction of Advance tax payments against my profits?| Is Advance tax payment a revenue expenditure or a capital expenditure?| How is Advance Tax treated in books of account?| Is Advance tax deductible from the profit and Loss account?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
33
  
Approved
  • ​​​​​Filing of the income tax return is mandatory for every person who has income higher than the taxable income.
  • Even when the advance taxes have been paid, the same need to be reported to the Department through Income-tax return filing procedure.
  • This completes the self-assessment of income and taxes are computed on the same.
  • Failure to file the income tax return will attract levy of penalty.
  • Form 26AS reflects the taxes which have been reported by the third party to whom the taxes have been deposited or by whom the taxes have been deducted.
  • Income-tax return helps in reconciling the records as submitted by assessee and as per Income-tax department records.​
  • Assessee claims refund.
Do I need to file the income-tax return even when I have paid all the taxes in advance?| Why we need to report the advance tax payment in Income-tax return when it is already in Form 26AS? | Does a nil tax payer need to file return?​

​Advance Tax

Yes7/6/2017 7:42 PM12/7/2017 10:22 AMYes
34
  
Approved

Form 26AS can be verified and seen by different modes as below: -

Option 1: 

Through Net Banking Account of the assessee

  1. Login to your net banking
  2. Click on Form 26AS
  3. Enter Your PAN & Assessment Year details
  4. View Your Form 26AS

Option 2: 

Through Logging in at  www.incometaxindiaefiling.gov.in

  1. Login
  2. Go to my account
  3. View Form 26AS (Tax Credit)
  4. Confirm to redirect to TDS TRACES CPC website
  5. Click on View Tax Credit (Form 26AS)
  6. Select Assessment year and Download format
  7. Click to View/Download

Option 3: 

Through Traces login at  http://www.tdscpc.gov.in

  1. ​Create your Login credentials and Register as new user and choose TaxPayer
  2. Login to your Traces
  3. Enter Your Login Details.
  4. View Your Form 26AS
     

    Password to open Form 26AS (pdf format) – is your date of birth in ddmmyyyy format without any space and special characters. For example – an assessee's date of birth/incorporation is 01/01/1980 the password shall be 01011980
How should I access my Form 26AS?| What is the password for opening Form 26AS?| Where can I get my Form 26AS?| My TDS is deducted and I have made excess advance tax payment as applicable. How can I verify the records? | How to download Form 26AS? |How to get 26AS?| How can i see total tax paid by me? |How and where can i see  my TDS deducted? |How  to reset password to check Form 26AS? |How to reset password for Traces?|​

​Advance Tax

Yes7/6/2017 7:42 PM8/18/2017 3:38 PMYes
35
  
Approved

Form 26AS is a tax credit statement with respect to a financial year which includes the following details:

a) Tax deducted at source (TDS)

b) Tax collected at source (TCS)

c) Advance tax/self- assessment tax/regular assessment tax, etc., deposited in the bank by the taxpayers (PAN holders)

d) Refund details, if issued by the Income Tax Department.

e) Details of AIR (Annual Information Report) Transactions.

f) TDS on sale of immovable Property (both for buyer & seller)​

What is Form 26AS?| Are all my taxes reflected in Form 26AS?| Can I verify my taxes via Form 26AS? |How can a person view TDS deposited in his PAN? | How can a person get details of TDS deposited in its PAN?​

​Advance Tax

Yes7/6/2017 7:42 PM12/7/2017 10:22 AMYes
36
  
Approved
  • A resident senior citizen (i.e., an individual of the age of 60 years or above during the financial year) not having any income from business or profession is not liable to pay advance tax.
  • Taxpayer who poted for presumptive taxation scheme of section 44AD or section 44ADA is liable to pay 100% of advance tax by 15th March.
Who is not required to pay Advance tax?| Who are exempted from Advance tax payments?| I am a Non Resident. Am I also liable to pay advance tax?| I am running my general store with a turnover of 75 Lakhs and have no other source of Income. I want to disclose profits on presumptive taxation basis. Do I need to pay advance tax?| Who are exempted from paying Advance tax?

​Advance Tax

Yes7/6/2017 7:42 PM12/14/2017 1:37 PMYes
37
  
Approved

​Where advance tax is payable due to the notice of demand issued by Assessing Officer then whole or part of the advance tax is payable in the remaining instalments, i.e., instalments due during the financial year after the date of notice.

What will be the due date for the payment of advance tax if the same is payable by virtue of an order from the Assessing Officer/ Income Tax Officer?| I have received an order from Income-tax office to pay the advance tax. What will be the due date for the payment in this case?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
38
  
Approved
  • It is not necessary to make the payment of taxes from assessee's own account in an authorized bank.
  • An assessee can make the payment from account of any person.
  • However, the challan for making such payment must clearly indicate the Permanent Account Number of assesse on whose behalf the payment is made.​
Is it mandatory to make the payment of advance tax from the bank account of assesse?| Can I make the payment of advance tax through any bank account?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
39
  
Approved
​In case the assesee wants to revise the estimate of income after making first/ second instalment of advance tax, the assesse can revise the remaining instalment of advance tax in accordance with his revised es​timate of current income and pay the advance tax accordingly.​
Can I revise the estimate of income for the purpose of advance tax?| I forgot to consider some portion of my income. Can I revise my income and pay the next instalment of advance tax on revised income?

​Advance Tax​

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
40
  
Approved

​​An assessee can revise the estimation of income and pay the taxes accordingly without any requirement of filing the estimation of income with the department.​

Is there any compliance if an assessee revises its estimate of income for advance tax?| Do I need to file my revised estimate of income for the purpose of advance tax?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
41
  
Approved
    ​If you fail to pay Advance Tax or pay at a rate less than stipulated rates you will be required to pay Interest under sections 234B & 234C of the Income Tax Act, 1961.
    Interest under sections 234B – Interest @1% is payable if 90% of the tax is not paid before the end of the Financial year. This is for "Default in payment of Advance tax".
    Interest under section 234C- Interest @1% is payable if the tax is not paid as per the instalments schedule. This is for "Deferment in Instalments of Advance tax". ​
What would be consequence If I fail to pay advance tax?| Is there any penalty for non- payment of advance tax?| Do I need to pay interest if I have not paid advance tax installments?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
42
  
Approved

​For a corporate and non-corporate assesse the interest for the late payment/deferment of advance tax instalment is as follows"-

  1. For Non Corporate Assessee (upto Assessment Year 2016-17)
Due date of instalment Amount on which interest is payable Rate of Interest Period of Interest
On or before September 15 30% 1% 3 months
On or before Dec 15 60% 1% 3 months

 

On or before March 15

100% 1% 1 month

For corporate and non-corporate assessee( from Assessment year 2017-18)

Due date of instalment Amount on which interest is payable Rate of Interest Period of interest
On or before June 1515%1% per month3 months
On or before September 1545%1% per month3 months
On or before Dec 1575%1% per month3 months

 

On or before March 15

100%1% per month1 month

 

For Assessee covered by section 44AD (from the assessment year 2017-18)

Due date of instalment Amount on which interest is payable Rate of Interest Period of interest
On or before March 15100%1% per month1 month​

 

For Assessee covered by section 44ADA

On or before March 15100%1% per month1 month​


Click here to calculate Advance Tax Liability

How much interest is required to be paid under section 234C?

​Advance Tax

Yes7/6/2017 7:42 PM8/9/2017 3:50 PMYes
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Approved
  • ​If you fail to pay Advance Tax or pay at less than stipulated rates, you will be required to pay Interest & Penalty under section 234B & 234C of the Income Tax Act, 1961.
  • Therefore, even if assesse pays advance tax as per the order under section 210, he shall still be liable to pay interest under section 234B and 234C if advance tax is not paid as per section 234B and 234C.

 

Whether interest for short and late payment of advance tax is applicable if it is paid in pursuance of an order issued by the Assessing Officer?| I have paid the advance tax upon receiving an order from Assessing Officer for the payment of advance tax. Do I still need to pay the interest under section 234 B and 234C?

​Advance Tax​​

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
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Approved

In order to take the credit of advance tax while filing the return an assessee is required to fill up the necessary details (BSR Code, Date of deposit, Serial no. of challan and total tax paid) under the tab TDS as shown below:-

Details of Advance Tax and Self Assessment Tax Payments
Sl.No BSR Code Date of Deposit
(DD/MM/YYYY)
Serial Number of Challan Tax Paid
​​
(1)

(2)

(3)

(4)
1    
2    
3    
4    
Total0​
How to take credit of advance tax paid while filing the income-tax return?| Under which tab advance tax is to be shown while filing income-tax return?

​Advance Tax

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
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Approved

An assessee can earn taxable income which can be classified under the following heads:-

  • Income from Salary
  • House property
  • Profits from Business or Profession
  • Capital gains
  • Other sources

The aggregate of the above mentioned taxable income (aft​er adjusting /clubbing of income, set off of losses) is Gross Total Income. The benefit of tax saving investments under Chapter VI-A (e.g., Insurance premium, PPF, etc.)is given/deducted from Gross Total Income. Therefore, Gross Total income ​ minus deductions u/Chapter-VI-A is Taxable Total Income.​

What is the difference between Gross Taxable Total Income and Taxable Total Income? |What is Gross Total Income (GTI)?
Deductions
Yes7/6/2017 7:42 PM10/10/2017 4:53 PMYes
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Approved

As per Sec 92A of the Act, an enterprise is called as an associated enterprise of another entity if such an entity directly or indirectly participates in the management, control or capital of an enterprise.

Further, Sec 92(2) of the Act has laid down following guidelines as per which an enterprise can be deemed to an associated enterprise of another enterprise:

  • Direct/ indirect holding of 26% or more  of voting power in an enterprise by another enterprise or in both the enterprises by the same person
  • Advancement of a loan by an enterprise that constitutes 51% or more of the total book value of the assets of the borrowing enterprise
  • Guarantee by an enterprise for 10% or more of total borrowings of the other enterprise
  • Appointment by an enterprise of more than 50% of the Board of Directors or one or of the Executive Directors of the other enterprise or the appointment of specified directors of the both enterprises by the same person
  • Complete dependence of an enterprise (in carrying out its business) on the intellectual property licensed to it by the other enterprise
  • Substantial purchase of raw material/ sale of manufactured material by an enterprise from/ to the other enterprise at prices and conditions influenced by the latter one
  • 90% or more of raw material/ consumables required for manufacturing of goods by an enterprise is purchased by another enterprise
  • Where one enterprise is controlled by an individual and the other enterprise is also controlled by such an  individual or his relative singly or jointly
  • One enterprise is controlled by an HUF and the other enterprise is controlled by a member of such an HUF or a relative of such a member
  • Where one enterprise is a firm, association of persons or body of individuals and the other enterprise holds not less than 10% interest in such firm, an AOP or body of individuals
  • The existence of any prescribed relationship of mutual interest​
What is an associated enterprise?

​TP

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
49
  
Approved

Section 92 of the Income Tax Act 1961 provides that income arising from any international transaction shall be computed having regard to the arm's length price. Further, allowance for any expense arising from an international transaction is also required to be computed having regard to the arm's length price.Further, any allowance for an expenditure or allocation of any cost or an expense or any income in relation to the specified domestic transaction shall also be computed having regard to the arm's length price.

 

What is the scope of transfer pricing provisions?

​TP

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
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Approved

​Section 92F of the Act defines the arm's length price to mean a price which is applied or proposed to be applied to a transaction between uncontrolled entities (persons other than associated enterprises) under uncontrolled circumstances.

What is arm’s length price ?

​TP

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
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Approved

​Any assessee who has entered into an international transaction of more than Rs. 1 crore (as recorded in books of account) is required to maintain transfer pricing documentation 

Who is required to maintain TP documentation?

​TP

Yes7/6/2017 7:42 PM9/16/2017 2:16 PMYes
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Approved

​Transfer pricing documentation is required to be kept and maintained for a period of eight years from the end of the relevant assessment year.

 

What is the period for which transfer pricing documentation is required to be kept and maintained by an assessee?

​TP

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
53
  
Approved

Section 92C(1) of the Act prescribes the following six methods for determination of the arm's length price:

(a) comparable uncontrolled price method;

(b) resale price method;

(c) cost plus method;

(d) profit split method;

(e) transactional net margin method;

(f) the Other method

 

What are the methods prescribed under the Indian TP regulations for determination of arm’s length price?

​TP

Yes7/6/2017 7:42 PM7/6/2017 7:42 PMYes
54
  
Approved

While applying CUP method a direct comparison is made between price charged in controlled transactions  and the price charged in uncontrolled transactions under similar circumstances.

Rule 10B(1)(a) explains the applicability of CUP method as under:

Step 1Price charged or paid for an identical property transferred or services provided in a comparable uncontrolled transactions, or a number of such transactions under comparable circumstances  is identified;
Step 2Such price is adjusted to account for differences, if any, between the controlled transaction and the comparable uncontrolled transactions which could have bearing on price in the open market;
Step 3The adjusted price arrived at under Step 2 is taken to be the arm's length price in respect of the property transferred or services provided in the controlled transactions 

Example:-

I Co and Indian company are subsidiaries of US based Co. I Co purchases certain raw materials from US based Co at USD 1,000 per unit on CIF basis.  US based Co also sells identical goods to another India entity, a third party at USD 950 per unit on FOB basis. Assuming that the two transactions can be considered as comparables in terms of credit period and volume of transaction and the cost of insurance and freight is USD 100, the arm's length price of transaction between I CO and US based Co can be computed as under:

Step 1: Price charged for identical property transferred in an uncontrolled transaction  :        USD 950

​Step 2: Adjustment in account for differences in delivery terms                                 :           USD 100

Step 3 :Arm's length price, i.e., Price charged under uncontrolled​ circumstances adjusted for differences in delivery terms                                :           USD 1050

Since the price at which transaction of purchase of material has been undertaken between associated enterprises, i.e., USD 1,000 is lower than the arm's length price of USD 1,050 no adjustment is required to be made in the taxable income of I Co.

What is comparable uncontrolled price (‘CUP’) method?

​TP

Yes7/6/2017 7:43 PM9/16/2017 2:16 PMYes
55
  
Approved

The RPM is generally applied as the most appropriate method while benchmarking the international transactions undertaken by a distribution entity.

Rule 10B(1)(b) explains the applicability of RPM as under(The RPM is applicable in cases where the arm's length price in respect of transaction of purchase of goods for distribution is required to be computed):

Step 1: Determine the gross profit margin earned in comparable uncontrolled transactions or gross margin earned by comparable uncontrolled entities engaged in performing similar distribution functions as the taxpayer or the controlled distribution entity

Step 2: Subtract the gross margin so computed from the re-sale price, i.e., from the price at which goods are sold by the distribution entity to the third party customers

Step 3: The remainder will be the arm's length price of the transaction of purchase of goods

 

What is Resale Price Method (‘RPM’)?

​TP

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
56
  
Approved

Under CPM arm's length Price is determined by adding arm's length gross profit mark-up (charged by the  independent sellers under uncontrolled transactions) to the controlled seller's cost of producing the property or provision of service          

Rule 10B(1)(c) explains the applicability of CPM as under:

Step 1The direct and indirect costs of production incurred by an enterprise in respect of property transferred or services provided to an associated enterprise are determined;
Step 2The amount of aarm's length gross profit mark-up on such costs is determined. For this purpose comparable companies undertaking similar transactions under uncontrolled circumstances are identified using public databases
Step 3The arm's length gross profit mark-up referred to in step 2 is adjusted to take into account the functional and other differences, if any, between the controlled and the comparable uncontrolled transactions
Step 4The costs referred to in Step 2 are increased by the adjusted profit mark-up arrived at under Step 3;
Step 5The sum so arrived at is taken to be the arm's length price in relation to the supply of the property or provision of services by the enterprise;


What is Cost plus method (‘CPM’) ?

​TP

Yes7/6/2017 7:43 PM9/16/2017 2:16 PMYes
57
  
Approved

PSM is applicable in cases where the transactions are highly integrated and one sided testing is not possible or where both transacting entities contribute non-routine intangibles. PSM is the most appropriate method in cases involving inextricably linked activities contributing to value chain.

Under the Indian Transfer Pricing regulations PSM can be applied by following either:  (i) contribution approach, or (ii) Residual profit split approach.

12.1 Contribution approach:-

Arm's length price may be determined applying PSM following a contribution approach in the following manner:

Step 1: Determining the combined net profit of the associated enterprises arising from the international transaction in which they are involved.Generally, the profit to be split is the operating profit, although occasionally it may be appropriate to carry out a splitting up of the gross profit and then deduct the expenses incurred by or attributable to each relevant party.

Step 2: The second step involves splitting up the profit by reference to the relative contribution of the parties in the transaction. In order to arrive at the key or basis for splitting up the profit, the relative contribution made by each of the transacting entities needs to be evaluated.These contributions are identified by taking into account the functions performed, the assets used and the risks assumed by each party and valuing them as far as possible by reference to independent market date.

Step 3: The combined profit is split up amongst the enterprises in proportion to their relative contribution as per evaluation above.

Step 4: The profit thus apportioned is used to arrive at arm's length price.

12.2 Residual profit split up approach:-

Arm's length price may be determined applying PSM following a Residual Profit Split up approach in the following manner:

Step 1: Identify profit to be split up under Profit Split Approach

Step 2: Partially allocate the combined net profit in the first instance to each enterprise as to provide it with a basic return. Such basis represents the routine functions performed by the transacting entities

Step 3: The residual profit after allocation above may be split up among the enterprises on the basis their relative contribution towards the earning of non-routine profit. The profit may be split up on the basis of factors such as expenditure on Marketing, development of brand name, research and development expenses, etc.

Step 4: The aggregate of net profit arrived at by allocation in step 3 and step 4 which pertains to an enterprise will be taken as its net profit from the international transaction.

What is Profit Split Method (‘PSM’) ?

​TP

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
58
  
Approved

PSM is generally applicable where:

    • transactions are inter-related to such an extent that they could take place within framework of a partnership, or
    • where no information is available at all regarding closely comparable transactions between unrelated parties is available as a yardstick
    • transactions involving transfer of intangibles
    • Significant differences between controlled and uncontrolled transactions are due to economies
Applicability of PSM:-

​TP

Yes7/6/2017 7:43 PM9/16/2017 2:16 PMYes
59
  
Approved

​The TNMM can be applied for determining the arm's length price of international transactions in the following manner:

Step 1: Compute the net margin realized by an enterprise from an international transaction with associated enterprise. The computation may be in relation to costs incurred or sales effected or assets employed or any other relevant base. Such profitability ratios are known as profit level indicators ('PLI').

Step 2: The net profit margin realized by the enterprise or by an unrelated enterprise from comparable uncontrolled transaction or a number of such transactions is computed having regard to the same base.

Step 3: The net profit margin in Step 2 is adjusted for differences between the transactions / enterprises involved in the transaction that could materially affect the amount of net profit margin in the open market.

Step 4: The net profit margin in step 3 is taken into account to compute arm's length price. 

What is Transactional Net Margin Method (‘TNMM’) ?

​TP​

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
60
  
Approved

The other method was introduced by CBDT vide notification dated 23.05.2012

The use of any methodology “which takes into account the price which has been charged or paid, or would have been charged or paid, for the same or similar uncontrolled transaction” is permitted under the other method

 

The other method provides flexibility for benchmarking unique transactions such as transfer of intangibles, etc.

 

Various valuation methodologies such as DCF, relief from royalty, etc, can be applied for benchmarking transactions applying other method.

 ​

What is the other method and how it is applied ?

​TP

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
61
  
Approved

​In terms of Section 92C of the Act the arm's length price shall be determined by applying one of the prescribed methods, being the most appropriate method having regard to the nature of transaction or class of transaction or class of associated persons or functions performed by such persons.

How is the most appropriate method selected for determining the arms length price?

​TP

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
63
  
Approved

​Anything received from employer in cash or kind due to employer-employee relationship is taxable under the head salary.  ​

Which income is liable to tax as Salary?|Whether amount received from employer is taxable?|In which head salary received from employer is taxable?|Whether amount received during the course of employment is taxable?|Whether anything received in kind from employer due to one’s employment is also taxable

​Salary​​

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
64
  
Approved

Anything received from employer in cash or kind due to employer-employee relationship is taxable under the head salary. The relationship will be termed as that of an employer-employee if there is control over the method of doing the work of other person. 

When will a relationship be considered as employer-employee relationship?|When would a person be called as my employer?|Whether any amount received from a person for the services rendered is called as salary income?|I am a freelancer. Can my receipts be termed as salary?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
65
  
Approved

​​Any salary or remuneration received from a partnership firm is taxable under the head Profits and Gains from Business and Profession; not under the head Salary. It is because there is no employer-employee relationship. ​

Whether salary received by partner of the firm is taxable under the head salary?|I am a partner in a partnership firm and receive remuneration from the firm. Will this remuneration be considered as salary income or business income?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
66
  
Approved

 Salary is taxable on receipt basis or due basis, whichever is earlier. This means that if salary is taxed by employer in the earlier years, then it will not be taxed again even if you have received it in the next year. If it has not been taxed in the earlier year, this shall be taxable in the year in which it is paid.

For example, Mr A earns bonus for his performance of FY 2015-16; the bonus is calculated after the financial year in the month of April-16. In this case, the bonus is taxable in FY 2016-17 even if it relates to performance of FY 2015-16. In the same case, if the bonus was calculated and announced in Mar-16 and tax was deducted by employer, then it will be taxed in FY 2015-16 even if it is received in April-16. ​

 Whether arrears of salary from earlier years are taxable? |I have received the salary for the month of March in April. Will it be taxable? |I have received the salary for the last year? Will it be taxable? |I have received salary for the last year now. Will it be taxable even if the tax has already been deducted by the employer during last year?| When does arrear salary taxable?| what is tax treatment of arrear salary?| taxability of arrear salary | taxability of advance salary| ary ?| taxability of arrear salary | taxability of advance salary|​

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes

​Arrear salary| arrears of salary |Taxabilty of arrear salary|

67
  
Approved

- Previous/Financial year covers the period of 1st April of certain year to 31st March of subsequent year. For example FY 2015-16 will be a period of April 2015 to March 2016.  Previous/Financial year is called as the year in which we earn the income. Assessment year is the period of next 12 months starting immediately after previous year. The income earned in previous year is reported to/assessed by Income tax department in the Assessment year.

​ 

What is previous year and Assessment year?|What is financial year and Assessment year?|What is the period of financial year?|What is the period of previous year?|What is the period of assessment year?|Have Financial year and previous year same meaning?​|What is previous year?|What is assessment?|When does previous year start?|When does previous year end?|When does assessment year start?|- When does assessment year end?|Can period of previous year more than 12 months?|Can period of previous year less than 12 months?|Can period of assessment year more than 12 months?|Can period of assessment year less than 12 months?|Can calendar year considered as assessment year?|Can calendar year considered as previous year?​

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
68
  
Approved

​Assessment year is the period of next 12 months starting immediately after previous/financial year. It covers the period of April of a year to March of the subsequent year. An income earned in previous/financial year is assessed in Assessment year 

What is the assessment year?|What is the period of assessment year?|In which year one’s income is assessed?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
69
  
Approved

Salary is taxable on receipt basis or due basis, whichever is earlier. Advance salary shall be taxed in the year in which it is received. Further, the salary will not again be taxed on due basis when it already taxed in the month when it is received.​

Whether salary received in advance is taxable?|I have received the salary for the next year in advance, i.e., April’s salary has been received in March. When will it be taxable?|I have received the salary for the next year in advance? Will it be taxable?|I have received advance salary after TDS. Why Should TDS not be deducted in next year?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
70
  
Approved

​As per section 16 of the Income tax Act , following two deductions are available from the salary income
(a) Entertainment Allowance – Only to Government employees (subject to the limit)
(b) Professional Tax/ Tax on Employment paid by employee​

Is there any deduction available from the salary income?|What is deduction under section 16 of the Income Tax Act?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
71
  
Approved

​ Entertainment allowance is taxable for all employees except government employees.

The deduction allowed to government employees shall be equal to the minimum of the following:-

(a)    1/5th of Salary (only basic salary)

(b)   Rs. 5,000

What is the limit of deduction available from Entertainment allowance to Government employees?|What is entertainment allowance?|Whether Entertainment allowance is taxable?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
72
  
Approved

As per section 16 of the Income tax Act 1956, entertainment allowance is allowed as deduction from salary income. Deduction shall be the least of the following amounts:-

  1. 1/5th of Salary (only basic salary)
  2. Rs. 5,000

Entertainment allowance in the hands of non-government employee is fully taxable.

What is the treatment of entertainment allowance for non-government employee?|What is the taxability of entertainment allowance?|Whether entertainment allowance is taxable?|I work in a private limited company and receive entertainment allowance. Is it taxable?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
73
  
Approved

Profession tax is deduction available from salary income as per section 16 of the Income-tax Act.  As per Income-tax Act, it is tax which can be levied by the State on all employees working in a State under any law. 

What is Professional tax? 

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
74
  
Approved

​As per article 276(2) of the constitution of India, the total amount payable by one person to the State towards professional tax shall not exceed INR 2,500 per annum.​​

Is there any upper limit on Professional tax?|How much professional tax is required to be paid?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
75
  
Approved
Deduction under section 16 (professional tax and entertainment allowance) is allowed only from Salary Income, whereas deduction under Ch VI-A (Section 80, etc.) is allowed from the total income under all five heads (i.e., salary, house property, capital gains, profits and gains from  business and profession and other sources). ​
How deductions under section16 an different from deductions available under Chapter (ch)-VIA.|What is the difference between deduction from salary and deduction from total income?|Whether deduction under section 16 is allowed from total income?|Whether professional tax is deductible from total income?|Whether entertainment tax is deductible from total income?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
76
  
Approved

​Allowance is fixed amount of cash, substance or compensation given regularly in addition to salary

What is an allowance?|Whether allowance is fixed amount?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
77
  
Approved

Allowances form part of the salary income. They are fully taxable unless specifically exempted under the Income Tax Act.

Is an allowance received during the course of employment taxable?|What is the taxability of allowance?|Whether allowance received from employer is also taxable under the head salary?|Which allowances are taxable?|Which allowances are exempted?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
78
  
Approved

​An allowance given by Government to its employees is not taxable (fully exempt), if the employee is posted outside India for work and the employee is a citizen of India.

What is the treatment of allowances paid by the Government (Govt.) to its employees posted outside India?

​Salary

Yes7/6/2017 7:43 PM9/16/2017 2:16 PMYes
79
  
Approved

An allowance given by the United Nations Organisation (UNO) is fully exempt from tax (not taxable).

What is the treatment of allowance in the hands of an United Nations Organisation (UNO) employee?|I am an employee working for United Nations Organisation (UNO) and I receive allowance from my employer. Please clarify whether it is taxable?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
80
  
Approved

An allowance received by an employee to cope with increasing price is called as Dearness Allowance (DA). DA is fully taxable in the hands of the employee

What is the taxability of Dearness Allowance (DA)?|What is Dearness Allowance?|What is the taxability of allowance received for inflation/increase in prices?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
81
  
Approved

​Travelling allowance is an allowance granted to meet the cost of travel on tour or on transfer (other than the normal place of work) and includes any sum paid in connection with transfer, packing and transport  called as travelling allowance.

It is exempt to the extent of amount received or amount spent, whichever is less. For example, if amount received is Rs. 100 and amount spent is Rs. 80, then only Rs. 20 is taxable. However, if amount actually spent is Rs. 100, then nothing is taxable.

What is travelling allowance (TA)?|What is the taxability of travelling allowance?|What is the taxability of allowance received to bear travel cost on transfer?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
83
  
Approved

​ ​Conveyance allowance is granted to meet the expenses incurred on conveyance for official duties or for performance of duties of an office.​

What is conveyance allowance?|Which allowance is received for meeting expense on conveyance?|Is there any allowance available for meeting office related travelling cost?|Whether conveyance allowance is for official duties only?|Whether conveyance allowance includes personal conveyance also? 

​Salary

Yes7/6/2017 7:43 PM9/16/2017 2:16 PMYes
84
  
Approved

​​

Conveyance allowance is exempt to the extent of amount received or amount spent, whichever is less. For e.g., If amount received is Rs. 100 and amount spent is Rs. 80, then only Rs. 20 is taxable. However, if amount actually spent is Rs. 100; then nothing is taxable.

​ 

What is the taxability of Conveyance allowance?|Whether any exemption is available from Conveyance allowances?|Is there any tax benefit from conveyance allowance?|Whther conveyance alloawance is exempted?|Whether conveyance allowance is taxable?

​Salary

Yes7/6/2017 7:43 PM11/20/2017 5:50 PMYes
85
  
Approved

Academic allowance is an allowance granted for encouraging the academic, research and training pursuits in educational and research institution.

What is Academic allowance?|Is there any allowance available for studies?|Who can claim academic allowance?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
86
  
Approved

Academic allowance is exempt to the extent of amount received or amount spent, whichever is less. For e.g., If amount received is Rs. 100 and amount spent is Rs. 80, then only Rs. 20 is taxable. However, if amount actually spent is Rs. 100; then nothing is taxable.​

What is the taxability of allowance received from employer for academics/education?|What are the exemptions available from Academic allowance?|When is the academic allowance non-taxable?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
87
  
Approved

Uniform allowance is granted to meet expenditure on purchase or even maintenance of uniform for place of work. 

What is Uniform allowance?|Is there any allowance received for purchase of uniform?|I have to purchase uniform for my office. Is there any amount available for the same?​​|How much the uniform allowance is exempted?​| Is there any expention limit of uniform allowance?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
88
  
Approved

Uniform allowance is exempt (not taxable) to the extent of amount received or amount spent, whichever is less. For e.g., If amount received is Rs. 100 and amount spent is Rs. 80, then only Rs. 20 is taxable. However, if amount actually spent is Rs. 100; then nothing is taxable.

What is the taxability of Uniform allowance?|Is there any exemption available for Uniform allowance?|Whether the Uniform allowance is taxable?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
89
  
Approved

​Children’s Education allowance is an allowance granted by an employer to an employee for promoting education of employee’s children.  Children’s education allowance is exempt to the extent of (maximum)
(a) Actual amount received per child, or

(b)   Rs. 100 per month per child  - Upto maximum of 2 children

Click here to calculate taxability of Children Education Allowance

What is Children Education allowance?|I have received allowance for my Children’s education. Whether the same is taxable?| Is there any exemption available for allowance received for Children’s education? | Is children Education Allowance is fully exempt from tax?​

​Salary

Yes7/6/2017 7:43 PM12/7/2017 10:22 AMYes
90
  
Approved

​​​Hostel Expenditure allowance is given to employees to meet expenditure towards hostel expenses of children. The allowance can be claimed for maximum of 2 children.
Children's hostel allowance is exempt to the extent of (maximum)

(a) Actual amount received per child, or

(b) Rs. 300 per month per child  - Up to maximum of 2 children​

Click here to calculate taxability of Hostel Expenditure Allowance

What is Hostel Expenditure Allowance?|I have received allowance for my Children’s Hostel. Whether the same is taxable?|Is there any exemption available for the allowance for Children’s Hostel?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
91
  
Approved

​An Allowance is granted to an employee to meet expenses on commuting between place of residence and place of duty called as transportation allowance.

Transportation allowance is exempt to the extent of (maximum of) :

(a)    Actual amount received

​(b)   Upto Rs. 1,600 per month (Rs. 3,200 per month for blind, deaf, dumb and handicapped employees) is exempt​​​ 

Click here to calculate taxability of Transport Allowance

What is Transport allowance?|I have received the allowance for commuting from home to office and vice versa, whether the same is taxable?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
92
  
Approved

Transport allowance in transport business is given to meet personal expenditure in the course of running such transport from one place to another place. The exemption shall be lower of:-

  1. 70% of such allowance received, or
  2. Rs. 10,000 per month

Above exemption is available if the employee is not in receipt of daily allowance.

For example, If you are getting an amount of INR 15,000 as transportation allowance, then lower of the following amount shall not be taxable:-

  1. 70% of Rs. 15,000 = Rs. 10,500
  2. Rs 10,000 per month

So, Rs. 10,000 shall not be taxable and only Rs. 5,000 will be taxable. ​

What is the limit of tax free allowance granted to an employee working in transport business?|What is the taxability of allowance received by employee working for transportation business?|I work in a transportation company. Is the amount received as transportation allowance exempt?|I am a truck driver and work in a transportation company; I received Rs. 15000 as transport allowance. Please clarify if it is taxable?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
93
  
Approved

It is an allowance given to employees when the person is posted in tribal areas. ​

What is Special Compensatory Tribal Area Allowance?|What is Tribal Area Allowance?|What is Schedule Area Allowance?|What is Agency area allowance?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
94
  
Approved

This allowance is given when employees are posted in any of the following States in India:-
 

  1. Madhya Pradesh
  2. Tamil Nadu
  3. Uttar Pradesh
  4. Karnataka
  5. Tripura
  6. Assam
  7. West Bengal
  8. Bihar
  9. Orissa
Which States are eligible for Tribal Area allowance?|Which States are eligible for Special Compensatory Tribal Area Allowance?|Which States are eligible for Special Compensatory Schedule Area Allowance?|Which States are eligible for Special Compensatory Agency Area Allowance

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
95
  
Approved

Tribal Area/ Special Compensatory Schedule Area/ Agency Area Allowance is exempt (not taxable) to the extent of (maximum of):-

  1. Amount received

  2. Rs. 200 per month

 

How much exemption (tax free) is available for Tribal Area/ Special Compensatory Schedule Area/ Agency Area Allowance?|What is the taxability of Special Compensatory Tribal Area/ Special Compensatory Schedule Area/ Agency Area Allowance?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
96
  
Approved

An Underground allowance is granted to employees for working in uncongenial (unsuited, not agreeable), unnatural climate in underground mines.​

What is underground allowance?|Is there any allowance available for employees working in uncongenial areas?|Is there any allowance available for employees working in an environment which is not suitable for health?|Is there any allowance available for employees working in bad environment?|I am an employee working in underground mines. Is there any benefit/allowance available for the same?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
97
  
Approved

Underground allowance is exempt (not taxable) to the extent/maximum of: -
1. Amount received or
2. Rs. 800 per month​
How much exemption (tax free) is available from underground allowance?|What is the taxability of underground allowance?​|Is there any tax benefit available

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
98
  
Approved

Travelling allowance is granted to meet the expenses of travelling during period when an employee is on tour or transfer. Transport allowance is granted to meet the cost of commuting between the place of residence and place of duty.​

What is the difference between travelling and transport allowance?|Travelling allowance Vs. Transport allowance?|I have received allowance for commuting from office to home. Is it a travelling allowance or transport allowance?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
99
  
Approved

​Daily allowance is granted to meet the ordinary daily expenses incurred by an employee on account of absence from his normal place of duty. 

​​What is daily allowance?|I am receiving an additional allowance for working from a different location. Is there any tax applicable on than?

​Salary

Yes7/6/2017 7:43 PM7/6/2017 7:43 PMYes
100
  
Approved

Daily allowance is exempt to the extent of expenditure incurred for official purpose on account of absence from normal place of duty.

What is the taxability of daily allowance?|Is there any exemption available from Daily allowance?|Whether any tax is to be deducted from Daily allowance?

​Salary

Yes7/6/2017 7:40 PM7/6/2017 7:40 PMYes
101
  
Approved

​City Compensatory Allowance (CCA) is an allowance offered by companies to their employees to compensate them for the high cost of living in metropolitan and large cities. It is fully taxable in the hands of employees. ​

What is the taxability of City Compensatory allowance?|Is there any allowance available for meeting high cost of living in big cities?|Is there any allowance available for metropolitan/large cities?

​Salary

Yes7/6/2017 7:40 PM7/6/2017 7:40 PMYes
102
  
Approved

​​Medical allowance is a fixed allowance paid to the employees of a company on a monthly basis, irrespective of whether they submit the bills to substantiate the expenditure or not. It is fully taxable in the hands of employee.

What is the taxability of Fixed Medical allowance?|Do I need to submit any bills for a fixed monthly medical allowance granted by employer?|Can an employee get fixed medical allowance.|I get a monthly allowance as medical allowance. Whether it would be taxable?

Salary

Yes7/6/2017 7:40 PM7/6/2017 7:40 PMYes
103
  
Approved

​​​As per the Income Tax Act (ITA) if the allowance is not specifically exempt then it is considered as fully taxable. There is no exemption given for the monthly amount given as Holiday allowance. Therefore, Holiday allowance is fully taxable in the hands of employee.​

What is the taxability of Holiday Allowance?|What is the taxability of fixed Holiday allowance given by an employer?

Salary

Yes7/6/2017 7:40 PM7/6/2017 7:40 PMYes
107
  
Approved

Project Allowance is an amount of money paid to employees who are involved in projects or other specific work's in an organization.

As per Income Tax Act (ITA) if the allowance is not specifically exempt then it is considered as fully taxable. There is no exemption given for the monthly amount given as Project allowance.

It is fully taxable in the hands of employee.​

What is the taxability of Project Allowance?|Is there any project based allowance given by employer?

​Salary

Yes7/6/2017 7:40 PM7/6/2017 7:40 PMYes
108
  
Approved

​Overtime allowance is payable to employees to work beyond regular working hours.

As per Income Tax Act (ITA) if the allowance is not specifically exempt then it is considered as fully taxable. There is no exemption given for the amount given as Overtime allowance. It is fully taxable in the hands of employee.

What is the taxability of Overtime Allowance?|My employer has given me extra amount for working overtime (late sittings). Is it taxable?|I work in an MNC and often work extra hours and often get paid extra as overtime allowance. Will it be taxable?

​Salary

Yes7/6/2017 7:40 PM7/6/2017 7:40 PMYes
109
  
Approved

Telephone allowance is an allowance given to employees to meet telephone expenses.

As per Income Tax Act (ITA) if the allowance is not specifically exempt then it is considered as fully taxable. There is no exemption for the monthly amount given as Telephone allowance. It is fully taxable in the hands of employee.

What is the taxability of Telephone Allowance?|I am getting fixed monthly allowance for meeting my phone (telephone/cellphone/mobile) expenditure from employer. Is it taxable?

​Salary

Yes7/6/2017 7:40 PM7/6/2017 7:40 PMYes
110
  
Approved

Tiffin allowance is given to employees for meeting personal expenditure on lunch/Dinner/refreshment.

As per Income Tax Act (ITA) if the allowance is not specifically exempt then it is considered as fully taxable. There is no exemption for the monthly amount given as Tiffin/Lunch/Refreshment allowance. It is fully taxable in the hands of employee.​

What is the taxability of Tiffin/Lunch/Dinner/Refreshment Allowance?|I am getting food allowance from my employer. Is it exempt/Not taxable/taxable?

​Salary

Yes7/6/2017 7:40 PM7/6/2017 7:40 PMYes
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