Recent posts

#51

Discussion / Income tax question? How is th...

Last post by johnwalker1 - April 04, 2020, 07:55:24 PM

As you would all be aware that there would be many teachers, retired teachers and in some cases older students or home makers who would supplement income through tuition.

I just realized that many of them don't file IT for it.

In one such case, there was a home maker who used to give math tuition for 7-10 grade. There were 2 batches for each (weekend and weekdays): 1-1.5 hours (3 days or 2 days). Each batch had 4-6 students. The costs were from 500 to 1200 a month per student.

Thus if there were 5 students, 2 batches each, 4 grades (7,8,9,10) with a conservative average of 700 rupees a month:

This works out to 5*2*4*700 = 28,000 a month.

The overhead was nothing: old books, home as the center, white board and some regular ink supply.

If my understanding is correct, they would plug this in with the monthly financial requirements (groceries, transport, bills) the husbands salary is entirely saved and can be put for investment (in case of teachers, their school salary)

I've seen this being the case for so many years and so many times, it seems to be working like a well oiled machine with no one catching up or consequences!

How does this work out without the I-T department catching up on it? (i'm just curious as to how it works out)

#52

Discussion / A reality check on tax rates

Last post by baiselmareo6 - March 28, 2020, 01:47:24 PM

So many people I know have a very poor understanding of marginal tax rates. They think that if you fall in the 20% bracket, ALL your income is taxed at 20%

Here is a reality check. In these calculations, I'm assuming that you have maximized 80c savings of 1.5L

If you make 12L/year, you would pay 1.32L as tax. Your effective tax rate is just ~11%

If you make 20L/year, you would pay 3.82L. Your effective tax rate is just 19.1%

If you make 40L/year, you would pay 10L. Your effective tax rate is just 25.1%

You would have to make 60L/year to get close to 30% tax rate

If you're making 60L per year, you're well off in most of the world (barring outliers like San Francisco) and fabulously well off in India. Does 30% tax rate really hurt you that much?

I'm personally within this tax range and I don't mind paying the money. It's a standard practice across the world for independent contractors like me to keep 30% of any money made aside for taxes.

Keep this in mind. The last majority of people would cap out under 20% tax rate

#53

Discussion / Re: Loss on sale of pledged sh...

Last post by vopima2188 - February 22, 2020, 07:07:46 PM

my client had pledged some listed shares to a financial institution for availing a loan. On failure to repay the loan the lender invoked the pledged shares and sold the shares thru stock exchange in their name and credited the proceeds in the loan account. My query is that whether the loss incurred on such sale is allowable to be set off with capital gain arising on sale of other shares on which STT is not paid.

Hi buddy, following up on this. Did you get any update regarding this?

Regards,
V. Smith

#54

Collection of important & evergreen judgements, circulars, articles etc / Section 115BAC Option of New T...

Last post by sujittalukder - February 11, 2020, 11:59:19 PM

After the introduction of new section 115BAC on the new taxation regime for Individuals, there is confusion on whether the employer should deduct the income tax from the salary income as per the old regime or as per the new regime. How the employee will decide the option at the beginning of the year? Does the employee need to communicate his option to the employer? And so on.
https://www.taxcorner.co.in/2020/02/section-115bac-option-of-new-tax-to-employee-and-tds-by-employer.html

Read the clarification from the CBDT on the matter here-

https://www.taxcorner.co.in/2020/04/cbdt-issues-circular-to-clarify-option-under-section-115bac-and-tds-by-employer.html

#55

Discussion / Re: Interview calls for the po...

Last post by vijih - February 07, 2020, 07:31:13 PM

On 6th July 2018, the Ministry of law and Justice issued a Notification, by virtue of which it has invited applications from professionals for the post of ITAT Members. As per this Notification the members who have completed 10 years of profession and have age between 35 to 50 are entitled for the post of member after facing an interview.
In response to this advertisement around 750 applications were received out of which 600 candidates have been shortlisted for interview.
Now on 3rd May a new development has happened that is only 150 candidates have been filtered out of 600. When the undersigned has enquired the things from reliable sources then it is emerge that only those candidates who have completed 20 years of profession and have some reasonable income are being called for interview. And the rest of the professionals have been out rightly rejected. Now my question to the legal luminaries of the Bar, a bar which has been founded by Great Shri Nani Palkhiwala, that is not injustice to those candidates whose candidature has been rejected out rightly without any interview. Whether it is not violation of fundamental rights of the professional who are eligible as per the provisions of Act and Rules of ITAT.
My humble request is that necessary action in this regard may be initiated otherwise days are not far when only revenue side and judicial services side persons would be appointed. And no body aware that under GST, the area where I am practicing, the new provisions have no space for advocates or CA. Similarly slowly and gradually this practice would come under Income Tax Tribunal also and then only God knows what would happen to a poor assessee who visit ITAT in hope of justice. Since I am a Chartered accountant and not possessing much knowledge of law. I don't know where the remedy lies

Thank you and Jai Hind

#56

Discussion / Re: Conference of NATP(Nationa...

Last post by Cordon6 - February 06, 2020, 01:52:31 PM

Hello friends recently I have visited USA in order to attend conference of NATP, it was a great session, I am fully amazed, observing the respect to the verdicts of Highest Judicial Fora, the lower Judicial officers pay great respect to the mycfavisit observations made by the Apex Body, they completely bow down to the guidelines, irrespective of their personal benefits. When i hung around and took a survey, I found the reason behind this respect and that is the respect to the concept of Rule of Law, Rule of law is a concept developed by AV Diecy in his book Constitution of London way back. All the legal luminaries be the judicial officers and be the practitioners, follow the concept of rule of law. It is not merely in the interest of judicial system, they said, but also in the interest of nation, since FDI in those countries would not come where there is no rule of law. For example the present position of lndia, people think that judgments of ITAT r buried only here in India but I found that each and every judgment be it on penny stock be it on section 68, be it on transfer pricing have been analyzed at length by the in house legal brains of the Foreign players who explore the environment of a state before investing in that state, in fact i got a shock of 440 Volt when I found that are watching the transfer and posting of members at Important stations tellgamestop. One of them shown me the data of last 10 years transfer of posting and also the judgment of Ajay Gandhi. I was surprised to see this minuscule research of the professionals of foreign investors. They openly said why one would invest in such a country where there is no respect of rule of law, as ultimately the investor would suffer and incur losses. Similarly there are so many other things they have shown to me which would when confront to the Govt of India here then a chaotic situation may arise. They really appreciate the ITAT Bar of Bombay which a Committee of Ethics.   

Yes it is applicable. As the section 50C speaks of transfer. transfer from one person to another person. Here in the case cited, the transfer is from coperative society to its member. both are distinct and separate persons as per incometax Act. Therefore, sec 50C is applicable.

#57

Discussion / Re: Assessments in the year of...

Last post by Kasey00 - February 04, 2020, 01:16:33 AM

In the year of the death section 159 will comes into existence and along with it section 168 comes into existence if property is not distributed to legal heirs

Within three months of her appointment, the executor must give the probate court an inventory of the estate's finances. The inventory identifies all property and assets of the estate at the time of death.

#58

Discussion / Re: Penny stock and sebi penal...

Last post by Kasey00 - February 02, 2020, 09:30:34 PM

TA 631/2017, dated 28/8/17. Gautam Jhaveri GUJ H C

Held, Past penalty by SEBi has no relevance to evidence on record for year under consideration.

R K Patel

I remember Jordan Belfort by seeing this.Penny stocks are so much volatile.

#59

Discussion / Re: Whether cross gifting conc...

Last post by Kasey00 - February 01, 2020, 12:06:39 AM

There is no prohibition under Income Tax Act upon cross gifting thus it can also be used as measure for cash deposits made during  demonetization period.

As the said currency notes ceased to be a legal tender which made it obvious that no transaction in the demonetized currency notes can take place after the effective date of demonetization.

The answer to the question whether a transaction in the demonetized currency done by a party after the effective date of demonetization can be considered as a benami transaction or not, will depend upon the transaction and the intention of the parties.

#60

Collection of important & evergreen judgements, circulars, articles etc / Other Electronic Modes of Paym...

Last post by sujittalukder - January 31, 2020, 11:44:56 PM

Vide Notification No. 08/2020 dated 29.01.2020, the CBDT has amended the Income Tax Rules, 1962 and inserted new Rule 6ABBA to prescribe for other electronic modes of payments as prescribed for certain sections of the Act as per amendments introduced by the Finance Act, 2019.
https://www.taxcorner.co.in/2020/01/other-electronic-modes-of-payments-prescribed-under-the-income-tax-act.html