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Messages - Bhumin

Discussion / ESOP Query
January 03, 2014, 08:09:15 PM
Dear All,

I have query on ESOP.

If Mr x who has granted ESOP option from ABC Ltd. in FY 2010-11
But before excercising the same, he dies in Fy 2011-12 and now legal heir of Mr X is exercising the option in FY 2012-13 & purchase shares at discounted price.

Now Issue is about taxability of ESOP option.

Whether Taxable to Legal heir??

Capital gain on sale in future is any way taxable to them whenever they sold the same shares.

So whether it is taxable  as ESOP as it is taxable when option is exercised as per CBDT's guideline but at that time there is no Employer -Employee relationship existing so not chargeble as per charging section 15.

Require your opinion as soon as possible.

Thanks in advance.
Bhumin A Mehta
Discussion / Can HUF give Gift to its members?
August 07, 2012, 03:21:56 PM
Dear All,

I have query regarding Gift by HUF Issue:

Can HUF give gift to Male member at the time of His marriage?

Awaiting quick Reply from you all.

Thanks &  Regards,
Bhumin Mehta
Discussion / TDS on Canteen Service
May 28, 2012, 05:09:48 PM
Dear All,

My client ABC Co. has entered into contract with Mr X for letting out half floor for running Canteen business.

Mr X providing Canteen facility and providing Tea & Snacks to Employee for which payments made by ABC Co on behalf of Employee.

Now question is that Should ABC liable to deduct TDS on Canteen Service provided by Mr X?

Whether It is service or Sale ?

Provided that there is no agreement between ABC Co. and Mr X for providing Services.

Bhumin Mehta.
Discussion / TDS Deducted on ENVIRO VIGIL EXPENSE
May 25, 2012, 05:08:04 PM
Dear All,

I Have query regarding TDS.

My client is Hospital Co.
They have to pay Sum amount to Enviro Vigil (Local Govt body) to disposse off the hazardous wastages safely.

They have to Purchase Special Bag from the EV and also has to pay Amount(Per KG) For disposal.

Now query is,

we can not deduct TDS on Purchase of Bags since it is not Expense.
But whether we have to deduct TDS on service provided by EV?

As there is no particular contract between Hospital and EV but it is mandatory for those who running these business.

Thanks And Waiting for Quick Reply,
Bhumin Mehta.
Discussion / Issues on Discount Cards
May 09, 2012, 03:38:23 PM
Dear All,

I have query on Discount cards.

A company(say ABC Ltd) sells Discount cards which is Main business of the co.
Co has patch up with all big company which allows the card holder to avail the discount facility.
Thus ABC Ltd selling Card or Providing Discount Services?

SO accordingly my query is there is VAT levied or Service Tax ?

Is the case is similar to Co providing SIM CARD.(SC Verdict on Idea Mobile is applicable here?)

Waiting for quick reply.....

Bhumin Mehta.
Dear All,

Whether credit of DDT availed by foreign Investor?

Mr John is foreign investor who is investing in Indian Co Ltd(ICL)  through FDI and earned income on which ICL paid 33.33% Tax plus DDT on distribution of Dividend.

So Mr John can avail DDT Credit in his home country?
Same Dividend income is taxfree in hands of Mr John.

Bhumin Mehta.
Discussion / Can Minor open DEMAT or Trading A/c??
April 19, 2012, 05:08:42 PM

Dear All,

1) Can Minor open Demat A/c?
2) Can Minor open Trading A/c?
3) What if minor received share by way of gift or inheritance - How to hold those shares or how to transfer those shares ?


Bhumin Mehta.
Dear Gaurav Sir ,

Thank you for your prompt reply.

I have heard that there can be tax planning through
converting into LLP/buyback of shares/bonus/restructuring of companies
for utilization of reserves.

Is it  possible ?

waiting for your reply.

Thanks & Regards,
Bhumin Mehta.
Dear All,

I have stake in pvt ltd co. i want to get money from reserves. ie want to free reserve without affecting tax liability of individual stakeholders.

Is it possible?

Expecting good suggestions from you.

Thanks  & Regards,
Bhumin A Mehta.
Discussion / Re: PPF Deduction
November 08, 2011, 04:02:09 PM
In the same case,

Father wants to claim deduction u/s 80C Instead of daughter .
Can he claim said deduction u/s 80C ?
Discussion / PPF Deduction
November 08, 2011, 12:29:52 PM

Dear All,

I have query regarding PPF Deduction.

Father had deposited cheque into his daughter PPF A/c who is not minor.

Deduction u/s 80C available to whom Father Or daughter ?
If entire transaction shown as gift to daughter then what is effect on tax liability of both of them?
& if shown as gift then is it taxable gift for daughter?

IS your answer diffrent if this transaction shown as Loan to daughter?

Thanks in advance.

Discussion / ULIP redemption
November 04, 2011, 01:25:01 PM

Dear All,

I have one query regarding ULIP.

Redemption of ULIP Units is amount to capital gains or exempt u/s 10(10)(d) ?

Thanks in advance.
Discussion / Re: Sec 44AD
July 28, 2011, 12:42:36 PM
Dear Members,

I have a query:

1)If assesee has 5 business and 2 shows 25% profit while other business showing net loss.
Then assessee has to file return on the base of 8% NP of total of 5 business sales? or
  Presumptive taxation of  8% NP of each business?
hi Vyakul,
According to me unabsorbede depre can be setoff against salary.
I am also in same view as you are looking for.

Apparently, there is another software - WINMAN, which allows the unabsorbed depreciation to be set off against salary & set off has been accepted by department as well.

Clarification of section 32(2)

The words no profits or gains chargeable for that year in section 32(2) of the Income-tax
Act, 1961, are not confined to profits and gains derived from business. They refer to the totality
of the profits or gains computed under the various heads and chargeable to tax. It is, therefore,
clear that effect must be given to depreciation allowance first against the profits and gains of
the particular business whose income is being computed under section 28 and if the profits of
that business are not sufficient to absorb the depreciation allowance, the allowance to the
extent to which it is not absorbed would be set off against the profits of any other business and
if a part of the depreciation allowance still remains unabsorbed, it would be liable to be set off
against the profits and gains chargeable under any other head and it is only if some part of
the depreciation allowance still remains that it can be carried forward to the next assessment
year. But where any part of the depreciation allowance remains unabsorbed after being set off
against the total income chargeable to tax, it can be carried forward to the following year and
set off against the year's income and so on for succeeding years. The method adopted by the
statute for achieving this result is that the carried forward depreciation allowance is deemed to
be part of and stands on exactly the same footing as the current depreciation for the assessment

There is wrong belief that unabsorbed depreciation cannot be set off against salary. But, this comment is to explain my view that it can be set off against salary. Business Loss cannot be set off against salary income (As per Section 71(2A)). However, unabsorbed depreciation is covered under section 32(2).

My conclusion is:
•   Unabsorbed depreciation is covered under an independent section 32(2).
•    The section gives a link to Section 72(2) and 73(3). It does not give a link to section 71(2A)(where it is said that business loss cannot be set off under salaries).
•    Hence, it can be inferred that the statute does not intend to restrict the set off of unabsorbed depreciation against salaries had there been an intention to do so, it would have specified the same in 32(2)(As in case of 72(2A).