Tax calculated on Profits & Gains

Tax calculated on Profits & Gains[edit]

  • Interest, salary, royalty and technical fees or other amount chargeable under this act but payable outside India and on which no tax has been deducted at source.
  • Adjustment of certain losses with income under other sources in the same assessment year is termed as set-off.
  • Unadjusted losses set-off in subsequent assessment years are called carry forward.
  • However loss sustained in speculative business can be adjusted only against profits earned in other speculative business.
  • Business los can be carried forward for a minimum of 8 assessment years and adjusted against business profits of the subsequent years.
  • Unabsorbed depreciation can be set-off even if business/ profession are discontinued & can be carried forward for unlimited number of years.
  • Following mentioned professionals are supposed to maintain books of accounts if their gross receipts from their profession exceed RS.1.5lakhs P.A.
  • Legal, interior decorator, film artist, engineer, accountant, medical Technical consultant.
  • However, for doctors dispensing drugs & medicines, the gross receipts limit is fixed at RS.80, 000.
  • All businessman whose business income has exceed RS.1, 20,000 P.A or gross receipt/ turnover exceeds RS.10,00,000 P.A in any 3 immediate preceding years will have to maintain books of accounts is per the act.
  • Auditing of the accounts becomes compulsory when the turnover of business man exceeds RS.40lakhs and in case of retail traders even when the turnover is less than RS.40lakhs, it is subjected to compulsory audit when their profit declared is less than 5% of the turnover and for professionals audit becomes compulsory as and when their gross receipts cross RS.10lakhs.

Advance income tax:

Payment of advance tax

1t installment 15thspetember 30% 2nd installment 15th December 30% 3rd installment 15th march 40%

  • Advance tax however need not be paid when tax payable is estimated at RS.5000 or less in case of TDS done to an employee, he need not pay any advance tax.

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