PCC NOV,2010 INTEREST ON ENHANCE COMPENSATION

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mohd zafar iqbal (Querist)
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26 November 2010 QUEST WAS,

THAT WE HV RECVD 400000 AS INTEREST ON ENHANCE COMPENSATION IN 2009-10 P/Y

(RELATES TO TRANSFER 2004-05.

OUT OF THE ABOVE 65000 RELATES TO F/Y 2009-10 & BALANCE RELATES TO PRECEEDING YEARS)

SO WHAT ARE PROV. OF ITS TAXIBILITY AND

WHAT AMOUNT SHALL BE INCLUDED IN TOTAL INCOME.

KINDLY PROVIDE YOUR VALUABLE ASSISSTANCE......

Aditya Maheshwari

Aditya Maheshwari (Expert)
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26 November 2010 Method of accounting in certain cases.

145A. Notwithstanding anything to the contrary contained in section 145,—
(b) interest received by an assessee on compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received.

mohd zafar iqbal

mohd zafar iqbal (Querist)
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26 November 2010 FINE, BT I HEARED ITS APP. FRM 1-4-2009 AM I WRIT? ND WHAT WILL BE THE TAXABLE AMT IN THIS CASE......

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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26 November 2010 yes this is applicable w. e. f. 01.04.2009 i. e. from exam point it was applicable and full amount taxable.

mohd zafar iqbal

mohd zafar iqbal (Querist)
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26 November 2010 WHAT WILL BE THE TAXABLE AMT IN THIS CASE......
i feel only rs.65000 is taxable in 2009-10 p/y bcoz preceeding years int would hv bn taxable on due basis?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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26 November 2010 400000 - interest already offered for taxation in previous years.

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Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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26 November 2010 section 14s(b) interest received on compensation /enhanced compensation shall be taxable on receipt basis.

section 56(2)(vii) interest received on compensation /enhanced compensation shall be taxable as income from other sources.

section 57 standard deduction for exepnses shall be allowed @ 50 % from interest received on compensation /enhanced compensation.

so Rs. 400000 AS INTEREST ON ENHANCE COMPENSATION IN 2009-10 P/Y shall be taxable in Assessment year 2010-11 and 50% i.e. 200000 shall be allowed as deduction..

Net amount taxable Rs. 200000

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mohd zafar iqbal

mohd zafar iqbal (Querist)
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26 November 2010 SIR THANX FOR DETAILED ANS,

wd due respect but sir i feel that only 65000 should be taxable in 2009-10 p/y bcoz int. related to preceeding years before p/y 2009-10 would have been taxable in p/y in which it became due on accrual basis?

pz assisst.....

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Manmohan ACA, CS

Manmohan ACA, CS (Expert)
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27 November 2010 Actually his amendments is applicable from AY 2010- 11 so if you have already paid tax on the amount Es, 335000 (400000 - 65000), pay tax only on Rs 65000 i.e. 65000- 50% of 65000 = 32500.

[nothing can be taxed Twice]

or you can apply for Rectification of mistake u/s 154

mohd zafar iqbal

mohd zafar iqbal (Querist)
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27 November 2010 actually sir i did taxable 200000[400000-50%] in my exam.

and now i downloaded j.s.johar sir tax solution from ca club india in which he has also made taxable same 200000[400000-50%].

so its means i did wrong, only 65000-50% should have been made taxable.....??????