The Taxability of Crime

An oft quoted aphorism states that the only two things certain in life are death and taxes. The truth of this statement comes out from the fact that under the Income Tax Act of India, profits derived from illegal activities of an assessee are also taxable. However, this brings to another interesting conundrum -  if … Continue reading The Taxability of Crime

The Heart of the Matter

More often than not, income tax cases can devolve into sordid matters involving deceit, dishonesty and general distasteful behavior. But once in a while, you may stumble upon a heart-warming (pun fully intended) story in tax, like I did when I chanced upon the case of Shanti Bhushan vs. CIT on Riverus. Shanti Bhushan, an … Continue reading The Heart of the Matter

Income from Agriculture: 5 Questions and their Answers

Agricultural income in India is categorised as a valid source of income and includes: income from sources that comprise agricultural land, income from buildings on or related to an agricultural land and commercial produce from an agricultural land.  Agricultural income is defined under section 2(1A) of the Income Tax and Act and such income earned by a … Continue reading Income from Agriculture: 5 Questions and their Answers

Income from House Property: 4 Questions and their Answers

Income from house property is chargeable to tax under Section 22 of the Income Tax Act. As per Section 22, tax on house property is chargeable on the annual value of any property, consisting of any buildings or lands connected to it, owned by the assessee. The determination of annual value in this case is done on … Continue reading Income from House Property: 4 Questions and their Answers

Deductions for Co-operative Societies: 5 questions and their answers

Section 80P of the Income Tax Act, 1961 provides for deduction in respect of income of co-operative societies. These incomes and the respective conditions are briefly as follows- 100% of the profit and gains attributable to certain businesses. 100% of the profit and gains of primary society carrying out supply of milk, oilseeds, fruits or … Continue reading Deductions for Co-operative Societies: 5 questions and their answers

Capital Expenditure vs Revenue Expenditure

The question about the nature of expenditure has always been a highly contested issue in tribunals and courts in India. Characterising an expenditure as revenue or capital has tax implications. Revenue expenditure is taken into account while computing taxable profits and would be eligible for a tax deduction whereas on capital expenditure only depreciation can … Continue reading Capital Expenditure vs Revenue Expenditure

A Question Of Strategy

If you have been following this blog, you know what a question of law is. Much of the outcome of an important case hinges on it. The entire judicial system in a sense revolves around what is the best way to interpret questions of law. Another question The question to ask though is: As a … Continue reading A Question Of Strategy

Anatomy of an Indian Tax Case

A judgment, ideally, is a prime example of how one should structure any piece of text, especially legal texts. It is supposed to be coherent and concise, and importantly, follow a trail that takes the reader smoothly from one point to the other. While a judgment may simply seem like a collection of legalese to … Continue reading Anatomy of an Indian Tax Case

Unexplained cash credits: 5 questions and their answers

Section 68 is one of the few sections in the Income Tax Act of 1961 which has largely remained unchanged. Apart from addition of provisos to cover corporate taxpayers, the purpose of the section has remained unchanged. So what does section 68 say? Amounts credited to an assessee are taxable unless the Act has specifically … Continue reading Unexplained cash credits: 5 questions and their answers

Capital gains exemption for investment in residential house: Top 5 Issues & their answers

  Sale and purchase of house property: Capital gains exemption If buying and selling a house property, Section 54 allows an individual to be exempted from payment of capital gains tax on the profit, if: The seller is an individual or HUF. Asset needs to be classified as a long-term capital asset, being a residential house. … Continue reading Capital gains exemption for investment in residential house: Top 5 Issues & their answers