Any property, whether movable or immovable, tangible or intangible, which has been the subject matter of a Benami transaction, is a Benami property. This would also include the consideration received from such property. Benami property would also include the right or such other document evidencing title or interest in such property.
Benamidar: the other person on whose name the property is shown with or without his/her consent.
Benami Transaction: is a transaction or an arrangement where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person and the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration.
1. It should be ensured that, under the terms of employment, dearness allowance and dearness pay form a part of basic salary. This will minimise tax incidence on House Rent allowance, Gratuity, Commuted Pension and Employer’s contribution to Provident Fund.
2. Commission payable as per terms of employment at a fixed
percentage of turnover achieved by an employee falls within the expression
“Salary”. So that tax incidence on House Rent allowance, Gratuity,
Commuted Pension would be lesser if commission is paid at a percentage of
turnover achieved by the employee.
3. As uncommuted pension is always taxable, employees should get
their pension commuted. Commuted pension is fully exempt in case of government
employee and partly exempt from tax in case of non government employee who can
claim relief under section 89.
4. An employee being member of recognised provident fund who
resign before completing 5 years of continuous service, should ensure that he
joins a concern which maintains a recognised provident fund for the simple
reason that accumulated balance of the provident fund with the former employer
will be exempt from tax, provided same is transferred to the new employer, who
also maintains a recognised provident fund.
5. Employer’s contribution towards a recognised provident fund is
exempt from tax upto 12 percent of salary, employer may give extra benefit to
their employees by raising their contribution to 12 percent of salary without
increasing any tax liability.
6. While medical allowance payable in cash is taxable, provision
of medical facilities in certain hospitals is not taxable if some conditions
are satisfied. Therefore employee should go in for free medical facilities
instead of a fixed medical allowance.
7. Since incidence of tax on retirement benefits like gratuity,
commuted pension, accumulated balance of an unrecognized provident fund is
lower if they are paid in beginning of the financial year, employers and
employees should mutually plan their affairs in such a way that retirement,
termination or resignation, as the case may be, takes place in the beginning of
8. An employee should take the benefit of relief available under
section 89 wherever possible. Relief can be claimed even in case of a sum
received from unrecognized provident fund so far as it is attributable to the
employer’s contribution and interest thereon. Although gratuity received during
the employment is not exempt from tax under section 10(10), relief under
section 89 can be claimed. It should be however, be ensured that the relief is
claimed only when it is beneficial.
9. Pension received in India
by a non resident assessee from abroad is taxable in India. If however such pension is
first received by or on behalf of the
employee in a foreign country and later on remitted to India, it will
be exempt from tax.
10. As the perquisite in respect of leave travel concession is not
taxable in the hands of employees if certain conditions are satisfied, it
should be ensured that the travel concession should be claimed to the maximum
possible extent without attracting any incidence of tax.
11. As the perquisite in respect of residential telephone, providing
use of computer/laptops, gifts of movable assets (other than computer,
electronic items, car) by employer after using for 10 years or more and free
refreshments during office hours, are not taxable, employees can claim these
benefits without adding to their tax bill.
12. Since the term salary include basic salary, bonus, commission,
fees and all other taxable allowances for the purpose of valuation of rent free house, it would be advantageous if
an employee goes in for perquisites rather than for taxable allowances. This
will reduce valuation of rent-free house.
14. If rent-free furnished or unfurnished accommodation is provided
by the employer at concessional rent, deduction under section 80GG can be
claimed if certain conditions are satisfied.
Tax audit is an examination or review of accounts of any business or profession carried out by taxpayers from an income tax viewpoint. It makes the process of income computation for filing of return of income easier
a case where a person carries business
The section 44AB(a) says that the person carrying business, would required to get his accounts audited if his Total sales/turnover/gross receipts exceeds Rs. 1 crore in the previous year.
that this section shall not be applicable to the person who declares profit
under Section 44AD and has the total sales/turnover/gross receipts less than
Rs. 2 crore.
now the question arises that when a person is required to get his accounts
audited. The answer to this question is as under.
First of all, the person having the Turnover less than 1 crore is not required to get his accounts audit.
Secondly, if the turnover exceeds the limit of Rs.1 crore but up to Rs. 2 crore is having an option to avail the benefit of Section 44AD (1) and avoid the audit, if he don’t want to avail the option of Section 44AD (1), then he required to get his accounts audited.
Thirdly, the person having the Turnover more than Rs.2 crore is required to get his accounts audited.
In a case where a person carries profession
section 44AB(b) says that where a person carries profession is required to get
his accounts audited if the gross receipts in the previous year exceeds Rs. 50
The section 44AB (d) says that where a person carries profession, declares profit U/S 44ADA, and declares the profit less than the deemed profit and his total income exceeds the limit which is not chargeable to tax, then he requires to get his accounts audited U/s 44AB (d).
Individuals with their total income below the taxable limit can submit Form 15H and Form 15G to the bank and ask them to not deduct TDS on the amount of interest.
have to deduct TDS when
the interest income of an individual is more than Rs.40,000 a year. The bank
includes deposits held in all branches to determine this limit. In case an
individual’s total income is below the taxable limit, he/she can submit a Form
15G and Form 15H to the bank to request them not to deduct TDS on the interest
Double taxation is a tax principle referring to income taxes paid twice on the same source of income. It can occur when income is taxed at both the corporate level and personal level.
Double taxation also occurs in international trade or investment when the same income is taxed in two different countries.
A tax treaty between two or more countries to
avoid taxing the same income twice is known as Double Taxation Avoidance
Agreement (DTAA). This means that there are agreed rates of tax and
jurisdiction on specified types of income arising in a country. When a
tax-payer resides in one country and earns income in another country, he is
covered under DTAA, if those two countries have one in place. DTAAs can be
either comprehensive, i.e. covering all types of income or specifically target
certain types of income. This depends on the types of businesses/holdings of
citizens of one country in another.