i have a query on tax calculation
WHEN A PERSON SELLS HIS KIDNEY WHAT WILL BE ITS EFFECT ON ITR?
VL THE INCOME BE TAXABLE?
IF YES UNDER WHICH HEAD ?
15 Replies
Sumit Jain
(CA)
(4760 Points)
Replied 25 April 2009
i thought selling ur blood or any body part is illegal
vijay
(.)
(212 Points)
Replied 25 April 2009
Hi Vaishali
Even its illegal but illegal income is also chargeable under the head income from other sources and illegal expendiutre will not be allowed
CIT v K. Thangamani CIT v K. Thangamani December 5, 2008, it was held by Madras High Court that
illegality tainted with the earning has no bearing on its taxability; the assessee having acquired income by unethical manner or by resorting to acts forbidden by law, cannot be heard to say that the State cannot be a party to such sharing of ill-gotten wealth; even if the assessee was prosecuted by Law Enforcing Authorities for commission of offence, the income earned by the offender still would be an income liable for assessment.
I Hope that you will find this information helpful.
Regards
Vijay Kumar
v@m$h!
(CA - Final and CS - Final)
(1473 Points)
Replied 25 April 2009
I think Income tax act does not consider the legality of the income. It may be legal or illegal. I think it will be treated as Income from other sources. Because it doenot fall under the head Salaries, HP, Business or Profession and capital gains.
RAJU CHANDAK
(ACCOUNTS MANAGER)
(66 Points)
Replied 25 April 2009
Hi Vamshi
I do agree with u that the Income tax act does not consider the legality of the income. and the compensation recd by some one to part out ones body part fall under the head of Salaries, HP, Business or Profession and capital gains. and therefore residuary head is Income from other Source... but even in that the prerequisite is INCOME as defined under Section 2 (40) of the Income tax Act. Is this qualify under that is a concern.....
Vrnanda
(auditor)
(110 Points)
Replied 26 April 2009
I dont much about this is topic.
I can be with Mr.Raju. Whether such proceeds can be treated as income.
CMA KNVV Sri Vidya - Sri Kanth
(C.A.Final (New) ICWAI FINAL (New))
(11269 Points)
Replied 26 April 2009
I agree with Mr Vijay
shailesh agarwal
(professional accountant)
(7642 Points)
Replied 26 April 2009
| Originally posted by :bhumika | ||
| " | vamshi n vijay r rite.. | " |
Jatin Jindal
(CA)
(82 Points)
Replied 26 April 2009
Quiet an interesting as well as strange question. In my opinion the tax would be levied under the head other source. But the question is would this be treated as sale of good. If yes then what would be the cost of purchase. Further would the cost of acquiring it be allowed as deduction while computing the income. Also whether the expenses of doctor and medicines would be allowed as deduction under section 57.
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