PGBP sections

Profits and Gains of Business & Profession

• Section 28 – Charging Section
• Section 29 – Income from Profits & Gains of Business and Profession, How Computed
• Section 30 –  Rent, Rates, Taxes, Repairs And Insurance For Buildings
• Section 31 –  Repairs And Insurance Of Machinery, Plant And Furniture

Depreciation

• Section 32(1)(ii) – Depreciation
• Section 43(3) – Definition Of “Plant”
• Explanation 5 To Section 32(1) – Mandatory To Claim Depreciation
• Depreciation In Respect Of Imported Motor Car
• No Depreciation Where Actual Cost Allowed As Depreciation Under Section 42
• Proviso To Section 32(1) – 50% Depreciation When Asset Is Put To Use For Less Than 180 Days
• Explanation 1 To Section 32(1) – Deemed Building
• Proviso To Section 32(1) – Depreciation In Case Of Succession, Amalgamation And Demerger
• Section 32(1)(iia) – Additional Depreciation
• Section 43(6) – Written Down Value
• Section 50 –    Special Provisions For Computation Of Capital Gains In Case Of Depreciable Assets.
• Explanations To Section 43(1) – Determination Of Actual Cost In Special Cases Issue
• Section 32(2) – Set-Off And Carry Forward Of Unabsorbed Depreciation

Depreciation For Power Generating Undertakings

• Section 32(1)(i) – Depreciation For Power Generating Undertakings
• Section 32(1)(iii) – Terminal Depreciation
• Section 41(2) – Balancing Charge
• Section 50A – Special Provision for Cost Of Acquisition In Case Of Depreciable Asset.

Foreign Exchange Fluctuations

• Section 43A – Special Provision Consequential To Changes In Rate Of Exchange Of Currency.
• Arvind Mills Ltd. (Supreme Court)
• Tax Treatment Of Foreign Exchange Fluctuations
• CIT vs. Woodward Governor India (P.) Ltd. (Supreme Court)[2009]

Expenditure On Sceintific Research

• Section 35 –    Expenditure on Scientific research
• Summary of Section 35
• Section 35(2AA) – Higher Deduction On Payment Made To Approved Specified Persons For Scientific Research
• Section 35(2AB) – Higher Deduction To Companies Which Are Engaged In Business Of Bio Technology Or Manufacture Or Production Of Specified Articles For Conducting In House Scientific Research

Deduction Of Certain Specified Expenses

• Section 35A – Expenditure On Acquisition Of Patent Rights Or Copyrights
• Section 35ABB – Expenditure   For   Obtaining   Licence To Operate Telecommunication Services
• Section 35CCA – Expenditure By Way Of Payment To Associations And Institutions For Carrying Out Rural Development Program
• Section 35D – Amortisation Of Certain Preliminary Expenses

• Section 35DD – Amortisation Of Amalgamation Or Demerger Expenses
• Section 35DDA – Amortisation Of Expenditure Incurred Under Voluntary Retirement Scheme 

Section 35AD (Introduced by Finance Act, 2009)

• Deduction available to assessee carrying on specified business
• Capital Expenditure eligible for deduction
• Expenditure incurred prior to the commencement of operations also eligible for deduction
• Expenditure not eligible for deduction under section 35AD
• Conditions to be satisfied for claiming deduction
• Additional condition to be satisfied by assessee Laying Cross Country Pipeline
• No deductions allowed under any other provision of the Act
• Section 73A – Carry forward and set-off of losses by specified business
• Section 28 –  Charging Section
• section 50B –  Slump Sale
• Explanation 13 to Section 43(1) –  Actual Cost

Taxation of Mining of Coal , Limestone, Iron, Zinc, Gold, etc.

• Section 35E – Amortisation of expenditure on prospecting Etc. of certain minerals

Certain Deductions Under Section 36

• Section 36(1)(i) – Premium For Insurance Of Stock-In-Trade

• Section 36(1)(ib) – Premium For Insurance On Health Of Employees
• Section 36(1)(ii) – Bonus Or Commission Paid To Employees
• Section 36(1)(iii) – Interest On Borrowed Capital

• Section 36(1)(iiia) –  Discount On Zero Coupon Bond
• Section 36(1)(iv) – Employer’s Contribution Towards Recognised Provident Fund Or An Approved Superannuation Fund
• Section 36(1)(v) – Employer’s Contribution Towards Approved Gratuity Fund
• Section 36(1)(va) – Employees’ Contribution Towards Recognised Provident Fund Or An Approved Superannuation Fund
• Section 36(1)(vi) – Animals Used In Business Otherwise Than AS Stock-In-Trade
• SECTION 36(1)(vii) – Bad Debts

­   Section 41(4) – Bad Debt Recovery

• Section 36(1)(ix) – Expenditure On Promotion Of Family Planning
• Section 36(1)(xv) – Securities Transaction Tax

Special Provision for Taxation of Banks

• Section 36(1)(viia)- Provision for Bad and Doubtful Debts Relating to the Banks
• Deduction for Actual Bad Debts

Transfer to Special Reserve Under Section 36(1)(viii)

• Section 41(4) – Amount Withdrawn from Special Reserve Account under section 36(10(viii)

General Deduction Under Section 37

• Section 37(1) – General Clause For Deductions
• Explanation To Section 37(1) – Illegal Payments
• Section 37(2B) – Payments Made To Political Party

Amount Specifically Not Deductible Under Section 40

• Section 40(a)(i) – Non-Compliance Of Provisions Of TDS Where Payment Is Made To Non-Resident
• Section 40(a)(ia) – Non-Compliance Of Provision Of TDS Where Payment Is Made To A Resident
• Section 40(a)(ii) – Income Tax
• Section 40(a)(iia) – Wealth Tax
• Section 40(a) (iii) – TDS On Salary Payable Outside India Or To A Non-Resident
• Section 40(a)(iv) – Employer’s Contribution Towards Provident Fund Or Any Other Fund
• Section 40(a)(v) – Payment Of Tax On Behalf Of Employee
• Section 40(ba) – Payment Of Interest, Salary, Bonus, Commission Or Remuneration Made By AOP/BOI To Its Members
• Section 40(b) – Payment Of Interest, Salary, Bonus, Commission Or Remuneration Made By Firm To Its Partners

Expenses Not Deductible Under Certain Circumstances

• Section 40A(2) – Payments To Specified Persons Not Deductible Under Certain Circumstances
• Section 40A(3)& (3A) – Payments Made Otherwise Than By Account Payee Cheque Or Account Payee Bank Draft

­   Rule 6DD – Cases And Circumstances In Which Payment In A Sum Exceeding Twenty Thousand Rupees May Be Made Other­wise Than By An Account Payee Cheque Drawn On A Bank Or Account Payee Bank Draft.

­   Attar Singh Gurmukh Singh (Supreme Court)

­   Vijay Kumar Ajit Kumar

• Section 40A(4) – Payments Made By Account Payee Cheque In Voilation Of A Contarct
• Section 40A(7) – Employer’s Contribution To Gratuity Fund
• Section 40A(9) – Employer’s Contribution To Approved Gratuity Fund, Recognized Provident Fund Or Approved Superannuation Fund

Certain Deductions On Actual Payment Basis

• Section 43B – Certain Deductions On Actual Payment Basis
• Circular No. 7/2006, Dated 17-07-2006
• Employees' Contribution To Provident Fund, Superannuation Fund And Other Funds For The Welfare Of Employees.
• Section 2(24) clause (x)
• Section 36(1)(va)
• Employer's Contribution To Provident Fund, Superannuation Fund And Other Funds For The Welfare Of Employees.
• Exception To Section 43B

Recovery Of Expenditure & Remission And Cessation Of Trading Liability

• Section 41(1) – Recovery Of Expenditure & REMISSION And Cessation Of Trading Liability
• Principles Governing Remission Or Cessation Of Trading Liabilities

­   Remission Can Take Place By Unilateral Act

­   Time Barred Liabilities Not Written Off 

§  M. R. Dhawan

­   Time Barred Liabilities Written Off

­   Section 41(1) Applies To Trading Liabilities Only

§  J.K. Synthetics Ltd. (SC) – Remission Takes Place When Matter Is Finally Decided

­   Polyflex India (P) Ltd. V. CIT [2002] 124 Taxman 373 (SC)

Employer’s Contribution To Provident Fund, Superannuation Fund, Gratuity Fund And Other Funds

• EMPLOYER'S CONTRIBUTION TO GRATUITY FUND

­   Section 36(1)(v) – Employer’s Contribution Towards Approved Gratuity Fund

­   Section 40(a)(iv) – Employer’s Contribution Towards Provident Fund Or Any Other Fund

­   Section 40A(7) –         Employer’s Contribution To Gratuity Fund

­   Section 40A(9) – Employer’s Contribution To Approved Gratuity Fund, Recognized Provident Fund Or Approved Superannuation Fund

­   Section 43B – Certain Deduction On Actual Payment Basis

• EMPLOYER'S CONTRIBUTION TO PROVIDENT FUND AND OTHER WELFARE FUNDS

­   Section 36(1)(iv) – Employer’s Contribution Towards Recognised Provident Fund Or An Approved Superannuation Fund

­   Section 40(a)(iv) – Employer’s Contribution Towards Provident Fund Or Any Other Fund

­   Section 40A(9) – Employer’s Contribution To Approved Gratuity Fund, Recognized Provident Fund Or Approved Superannuation Fund

­   Section 43B – Certain Deduction On Actual Payment Basis

Income From Manufacture Of Tea, Coffee And Rubber

• Section 33AB – Tea Development Account, Coffee Development Account And Rubber Development Account
• Rule 7A – Income From The Manufacture Of Rubber
• Rule 7B – Income From The Manufacture Of Coffee
• Rule 8 – Income From Manufacture Of Tea
• CIT v. Mahavir Plantations Ltd. [2004] 269 ITR 552 (Ker.)

Miscellaneous Issues

• Section 14A – Expenditure Incurred In Relation To Income Not Includible In Total Income
• Rule 8D: Method of Determining Amount of Expenditure in Relation to Income Not Includible in Total Income
• Section 33ABA – Site Restoration Fund
• Section 43D – Interest Income On Bad And Doubtful Debts
• Section 68  – Cash Credit
• Section 69  – Unexplained Investments
• Section 69A – Unexplained Money, Etc.
• Section 69B – Amount of Investments, Etc., Not Fully Disclosed in the Books of Account
• Section 69C  – Unexplained Expenditure
• Section 69D  – Amount Borrowed or Repaid on Hundi
• Section 269SS – Mode of Taking or Accepting Certain Loans And Deposits
• Section 269T – Mode of Repayment of Certain Loans or Deposits
• Section 271D – Penalty For Failure to Comply With the Provisions of Section 269SS
• Section 271E – Penalty For Failure to Comply With the Provisions of Section 269T
• Section 44AA – Maintenance of Accounts by Certain Persons Carrying on Profession or Business
• Section 271A – Penalty For Failure to Keep or Maintain Books of Accounts, Documents, Etc.

Presumptive Taxation

• Section 44B – Special Provision For Computing Profits And Gains Of Shipping Business In Case Of A Non-Resident.
• Section 172 – Shipping Business Of Non-Residents
• Section 44BBA – Special Provision For Computing Profits And Gains Of Business Of Operation Of Aircraft In Case Of A Non-Resident.
• Section 44BBB – Special Provision For Computing Profits And Gains Of Foreign Companies Engaged In The Business Of Civil Construction Etc. In Certain Turnkey Power Projects.
• Section 42 – Special Provision in Case of Assessees in the Business of Prospecting or Extraction or Production of Mineral Oil.
• Section 293A – Power to Make Exemption, etc. in Relation to Participation in the Business of Prospecting for Extraction, etc, of Mineral Oil.
• Section 44BB – Special Provision For Computing Profits & Gains In Connection With Business Of Exploration, Etc. Of Mineral Oils In Case Of Non-Residents.
• Section 33AC – Reserves for Shipping Business
• Section 44AD – Special Provision For Computing Profits And Gains Of Business Of Civil Construction Etc.
• Section 44AE – Special Provision For Computing Profits And Gains Of Business Of Plying, Hiring Or Leasing Goods Carriages
• Section 44AF – Special Provisions For Computing Profits And Gains Of Retail Business