Can a person be taxed in respect of income of other person?
Sometimes, a taxpayer may have to pay tax on the income of another person. Clubbing provisions in the I-T Act include reporting such income as the taxpayer’s income. As per the Indian Income Tax laws, every person is liable to pay taxes on his/ her income, if the taxable income exceeds the basic exemption limit.
In what circumstances is the income of one person treated as income of another?
Taxation Question. Clubbing of income means Income of other person included in assessee’s total income. For example: Income of husband which is shown to be the income of his wife is clubbedin the income of Husband and is taxable in the hands of the husband.
What is the criteria for paying income tax?
According to the Income Tax Act, it is mandatory to file income tax returns if: If your gross total income is over ₹ 2,50,000 in a financial year. This limit exceeds to ₹ 3,00,000 for senior citizens and ₹ 5,00,000 for citizens who are above 80 years.
Under what circumstances income of other person can be clubbed with the income of the assessee?
Ans. As per section 64(1)(iv), if an individual transfers (directly or indirectly) his/her asset (other than house property) to his or her spouse otherwise than for adequate consideration, then income from such asset will be clubbed with the income of the individual (i.e., transferor).
What is tax free salary?
# Salary paid tax free – Tax free salary means the salary on which income tax is borne not by the employee but by the employer. Tax free salary is also taxable in the hands of the employee. Salary is taxable in the year of receipt or in the year of earning of the salary income, whichever is earlier.
Who can gift money tax free?
1) Gifts up to Rs 50,000 in a financial year are exempt from tax. However if you receive gifts higher than this amount, the entire gift becomes taxable. For example, if you receive Rs 75,000 as a gift from your friend, the entire amount of Rs 75,000 would be added to your income and taxed at your slab rate.
Which income alone is transferred without transferring the assets which generates the income if?
In this case, because Mr P has transferred the income without transferring the asset. Hence, as per section 60 of the income tax act, Mr P must include the rental income while computing his total income.
Can husband give wife salary?
Thus, it is very clear that if the husband makes payment of commission or salary, etc. to his wife from his proprietary concern or a partnership firm or a corporate entity, then such payment of either a salary or commission paid to the wife would not be treated as the income of the wife because the same would be …
What is tax on total income?
How to Calculate Taxable Income on Salary?
|Net Income||Income Tax Rate||Secondary and Higher Education Cess|
|Up to Rs.5 lakhs||Nil||Nil|
|Rs.5 lakhs to Rs.10 lakhs||20% of (Total Income – Rs.5 lakhs)||1% of income tax|
|Above Rs.10 lakhs||Rs.1 lakh + 30% of (Total income – Rs.10 lakhs)||1% of income tax|
What is the new rules of income tax?
LTC scheme: The central government in Budget 2021 has proposed to provide tax exemption to cash allowance in lieu of Leave Travel Concession (LTC). The scheme was announced by the government last year for individuals who were unable to claim their LTC tax benefit due to covid-related restrictions on travelling.
Do we need to pay tax every month?
Income tax is applicable to be paid by individuals, corporates, businesses, and all other establishments that generate income. … Even though income tax is paid every month from the monthly earnings, it is calculated on an annual basis. The amount of income tax an individual has to pay depends on a number of factors.
Which month is tax deductible?
“The employer is required to deposit the tax deducted within 7 days of next month and for the month of March, tax shall be deposited by 30 April of the next financial year, informs Dr. Surana. In case an employee wants no deduction of TDS or deduction at a lower rate, it is still possible.
What is the clubbing of income?
Clubbing of income means including the income of any other person in Assessee’s total income. … For Example, if a husband diverts some part of his income to his wife to reduce his tax burden. Then, such transferred income of a wife is added and taxed as income of husband only and not his wife.
What are the major deemed incomes?
As per sec 68 of Income Tax Act where any Company other than Company in which Public is Interested credit any sum of money against Share Application Money or Share Capital or Securities Premium or any other etc. …
What is income from other sources?
Income from Other Sources is one of the heads of income chargeable to tax under the Income tax Act. … All the incomes excluded from salary, capital gains, house property or business & profession (PGBP) are included in IFOS, except those which are exempt under the Income Tax Act.