Bhalla started with a grocery shop. Any income arises from any business or any profession is chargeable to tax under the head of “Profit and Gains from Business and Profession”. Now, here, Mr. Bhalla is a businessman, engaged in grocery business so his income is chargeable to tax under the same head. But there are some conditions to it. 1. It is possible that he is exempted from tax means his business income doesn’t exceed the specified limit. In that case, no tax liabilities have to furnish. 2. It is possible that he doesn’t keep records and pay taxes on estimated basis or may not pay and also his business income exceeds to the exempted limit. In that case: a) According to section 44AA of the income tax act, Mr. Bhalla, being an individual, has to maintain and furnish all books of accounts, records, documents, evidences, traces, if his business income exceeds ₹150,000 or gross receipts or total sales or turnover (whichever term is being in force) is equal to or more than ₹25,00,000 in any three immediately or consecutive preceding the previous year. So …show more content…
Bhalla opts for section 44AD, then, he has to consider certain points:- i.) He shall not be allowed to claim any expenses or depreciation or any other expenses covered under section 30 to 38. ii.) He shall not be allowed to deduct any remuneration, salary, or interest paid to his partner (if any) under section 40(b). iii.) Now, the above two sections i.e. section 44AA (Maintenance of books of accounts) and section 44AB (Furnishing of Tax Audit) is not required. iv.) He is liable to pay Advance Tax and follow the prescribed rules which will apply. However, he may opt to pay Advance Tax by 15thMarch of Financial Year. v.) If he finds any disallowance of any expenses, in that case, it will be assumed that it has been already under taken and made in calculation of estimated profit. Now, while calculating the taxable income from the grocery some principals are to be considered by assesse (here, Mr.
ARB43, Ch.4, Par.9 ?Where evidence indicates that cost will be recovered with an approximately normal profit upon sale in the ordinary course of business, no loss should be recognized...?
In analyzing the common-size balance sheet for Applebee’s, it is noted that the total current assets has jumped from 11% to 14% of the total assets. The total assets for Applebee’s has jumped 6% from 2000 to 2001 driven by increased in the total current assets of 28%. Of those 28% increase, they consisted of 88% increase in the Cash & Equivalents (increased of $10.6 millions) caused by the decreased in the Capital Stock repurchasing in 2001 by Applebee’s. The repurchase of capital stock has decreased by 31% as noted from the year-to-year percentage changes of the Statement of Cash Flow which equivalent to about $11 million dollars. The other current assets increased was from the other Current Assets category; there was an increase of 92% from 2000 to 2001. Due to the higher earnings for Applebee’s, there was an increase in income tax due. A significant component of the increase of other Current Assets was from increased in prepaid income taxes with net deferred income tax asset of $6.7 millions dollars.
(ii) only the periods the property was held by the person acquiring the property (or any related person) shall be taken into account under subparagraph (B)(ii).
Section 183(d) allows a deduction to a taxpayer who engages in for business. The taxpayer must earn a profit for any three years or more. If he does not meet the profit test, his activity is hobby. The gross income should be greater than the deduction in order to qualify for tax deduction under section 183(b)(1).
Ms. Read reported the interest income from the installment promissory note in her 1988, 1989, and 1990 tax returns. However, she did not report any principal income from the stock transfer transaction in her tax return. Mr. Read also
Robertson, John, Tina Quinn, and Rebecca C Carr. “Unreported Tip Income: A Taxing Issue.” The CPA Journal 76.12 (2006): 30-39. Print.
People go into business to make money. Unfortunately, not everyone considers the proper way to structure his or her business so that it can make money in an optimal way while operating within the framework of the law. Failing to select a structure for a business carefully can mean the loss of that business and of its associated assets. I will discuss various types of business entities that exist and the pros and cons of each. Specifically, I will explore
Income Taxes: Monies generated from sales or services rendered are considered normal personal income to the owner and as such, are only taxed once, but are often subject to the highest rate of taxation.
In pursuit of procedural justice, Tyler and Lind, (1992, cited in Barbuta-Misu 2011, P.74) stated that the components essential for perceived fairness are neutrality of the procedure, trustworthiness of the tax authorities and polite, dignified, and respectful treatment. In this case, taxpayers’ considers the simplicity of the tax laws, the extent of the fines, penalties and related cost of compliance, tax related information and education and the treatment of KRA.
-Income Taxes: As a sole proprietorship, the income flows directly through the business to the owner. This means that any income the business generates is considered income for the individual, and said individual will be responsible to pay taxes as such. Again no difference between business and owner.
In the above given case we can say that Miss Priya is the seller while Mr. Ravil is the customer or purchaser of goods. Miss Priya has sold jewelry worth 6 lacs to Mr. Ravil and in exchange received a cheque for the full amount. This cheque on presentment to the bank, was dishonored. Therefore Miss Priya becomes an ‘unpaid seller’.
taxes have to be paid from their night job, and they can keep all of the money. Although this is
It is troublesome to make a proficient tax administration without an overall instructed and generally prepared staff, when cash needs to pay great wages to tax authorities and to modernize the operation, and when taxpayers have restricted capacity...
Double taxation arises when an individual or business acquiring income in a foreign country is required to pay taxes on that income in both the foreign country as well as the country of origin. For example, an American company operating in a developing country, in the absence of a tax treaty between the two countries may have to pay a withholding tax to the government of the developing country, as well as corporation tax to the United States government (Howard, 2001, p. 259).