Spreading Positivty

 A gricultural income is exempt from income tax. However, the Income-tax Act has laid down a method to  indirectly tax such income.  This method or concept may be called the  partial integration of agricultural income with non-agricultural income . It aims at taxing the non-agricultural income at higher rates of tax.  Applicability: This method is applicable to individuals, HUFs, AOPs, BOIs, and artificial juridical persons, when the following conditions are met: Net agricultural income is greater than Rs. 5,000 during the year; and Non-agricultural income is above the basic exemption limit: Greater than Rs 2.5 lakh for individuals below 60 years of age and all other applicable persons Greater than Rs 3 lakh for individuals between 60 – 80 years of age Greater than Rs 5 lakh for individuals above 80 years of age In simple terms, the non-agricultural income should be greater than the maximum amount not chargeable to tax (as per the slab rates). Thus companies, fi...

The Income-tax Act has its own  definition of agricultural income  which constitutes the following 3 main activities: I. Rent or revenue earned from agricultural land situated in India: Rent is the amount received to grant the right to use the land. The scope of the possible sources of income that can be derived from land is many. An example would be fees received for renewal of grant of land on lease. However, the amount received on the sale of land is not covered under the definition of agricultural income. II . Income from agricultural land in the following ways: Agriculture:  The meaning of agriculture though not covered in the Act, has been laid down by the Supreme Court in the case  CIT v. Raja Benoy Kumar Sahas Roy  where agriculture has been explained to consist of two types of operations – basic operations  and  subsequent operations . The  basic operations  would include cultivation of the land and consequently tilling of the land, ...

Income tax paid by citizens constitutes a major chunk of the government’s revenue. It is imperative to pay taxes for the smooth functioning of the economy. Often a tedious expense, taxation also has perks to it. Income tax deductions are a relief offered by tax authorities that help individuals lower their taxable income and ultimately reduce their tax outgo in any given financial year. These deductions are in the form of expenses or investments made by the taxpayer during the year. Deductions also inculcate a healthy savings routine. But, what types of deductions under  Income Tax  are most suitable for you? The most popular provisions of income tax deductions include investments made under Section 80C of the Income Tax Act, 1961. These are typically made in  Equity Linked Savings Scheme (ELSS)  funds, Public Provident Fund (PPF), National Pension Scheme (NPS), etc. With these types of deductions, you not only save tax but also earn profit on your investment. Let’s ...

  As per Section 14 of the Income Tax Act, for the purpose of charging of tax and computation of total income, all incomes are classified under the following   5 Heads of Income:- Salaries House Property Profits and Gains of Business or Profession Capital Gains Other Sources The total income under all these 5 heads of Income is then added and disclosed in the Income Tax Return. The tax on the total taxable income (after allowing deductions) is then calculated as the Income Tax Slab Rates of the taxpayer. Different Heads of Income Although there is only one tax on the income calculated under various heads, but, there are  different rules of computation of income under each head  and income has to be computed under that head of income after applying the rules applicable to that head only. The  5 Heads of Income  have been briefly explained here under 1. Income from Salaries An Income can be taxed under head Salaries if there is a relationship of an emplo...

  Every taxpayer always look for   difference between tax evasion and tax avoidance   as these both terms look similar but can either save taxpayer from tax liability or can impose heavy tax penalties. According to  Article 265 of the Constitution of India , tax can only be levied and collected by the authority of law. Collection of tax is the major source of revenue for every country’s government. Government uses this fund for the welfare of the general public at large. In India, government majorly collects two types of taxes i.e. Direct Tax and Indirect Tax. In this blog we will only be discussing about  Direct Taxes . Direct tax  is a tax that a person pays directly to the government. For example,  Income Tax , which is paid directly to the government. These taxes cannot be transferred to any other entity or person. However, the payment of tax becomes burden on tax payers thus, they always look forward to the methods and ways to either escape or red...