Profits and benefits of plying, hiring, or leasing goods

Profits and benefits from the business of plying, hiring, or leasing goods carriages are subject to a special provision.

S-44AE of IT Act, 1961

The income of an assessee who owns up to 10 goods carriages and is engaged in the business of plying, hiring, or leasing such goods carriages is liable to tax under section PGBP, notwithstanding anything contained in sections 28 to 43C.

How Do You Calculate Gains?
  • I For large goods vehicles (with a gross vehicle weight exceeding 12 tonnes) – Rs. 1000 per tonne of gross vehicle weight/unladen weight (for each month/part of a month OR the amount actually received from such vehicle, whichever is higher.
  • For non-heavy goods vehicles (up to 12 tonnes) – Rs. 7500 per month (or portion of a month) OR the amount actually generated from such goods carriage, whichever is greater.

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Sections 30 to 38 provide for deductions that are presumed to be permissible, but no further deductions are allowed under those sections.

If the assessee is a corporation, the pay and interest paid to its partners are deducted from the income computed, subject to the requirements and restrictions set forth in S – 40. (b).

The WDV of any asset is deemed to have been calculated as if the assessee sought and was really given the depreciation deduction for each of the relevant assessment years.

Though the assessee is not required to keep books, he must compute WDV of FA and keep FA records for each fiscal year.

S-44AA (audit) and 44AB (keeping of books of accounts) do not apply.

If the assessee keeps and maintains such books of account (S-44AA) and has his accounts audited u/s 44AB, he may be able to claim reduced earnings.

An assessee who is in possession of a goods carriage, whether purchased on hire purchase or in instalments, and for which the entire or a portion of the sum due is still owing, is deemed to be the owner of the goods carriage.

Even if the assessee chooses this provision, he will still be obligated to pay advance tax.

Tax Return Filing

Tax Return Filing – Common Mistakes And Anomalies

1. Non reporting of interest income from savings/ fixed deposits account:

These amounts can be sent directly from the individual bank account data and the 26AS model. “Non-reporting / reporting of these amounts is clear cases of tax evasion and calls for further investigation. In addition, taxes on interest income are sometimes deducted, and therefore the income mismatch is determined by non-reporting Easily.

2. Counterfeit invoices for HRA claims

Common fraudulent practices by staff requiring false HRA invoices without sufficient support, such as a lease, etc. In addition, there are not enough flows from their bank account to the extent of the claimed rent payments. Such apparent fraud will now call for punishment under the provisions of the Income Tax Act on the basis of recent advice.

Tax Return Filing

3. Claiming false 80C discounts

It is very easy for employees to claim false 80C discounts such as LIC bills, Medicaid deductions etc. The value of fixed deposits is inflated without the actual flow of these investments.

4. Income derived from all employers shall not be considered

Persons who change the job must make sure that they consider the income from all employers when filing their tax returns. The  Income Tax Deptt. has this information already based on return TDS submitted by the employer and missing persons to report any such income that could lead to an investigation against them.

5. Claiming the wrong deduction under Chapter VI.A

There are a few tax professionals who try to lure taxpayers by promising to return the high funds and collect them 10 to 25% of the amount recovered. These professionals indulge in inflating or making false claims under various divisions of Chapter VIA, such as investing in the provision of u / w 80C taxes, interest loan education – u / w 80E, form of conclusion Medicaid policies – u / w 80D, Scheme – 80CCG u / s, donations – 80GGA / 80GG, 80GGC or other disability-related discounts or medical treatment for certain diseases – 80DD, 80DD, 80U.

With Aadhaar and PAN connected to all your bank accounts, loan account, demat account, and insurance policies, I-T management may be able to verify many of your claims digitally with the data available with it. In the event of any discrepancy, the investigation against the taxpayer may commence.

6. Submission of false allegations under article 10

Many taxpayers pay while filing tax returns indulged in making false claims under Article 10, viz. HRA, LTA, medical reimbursement, etc. Since last year the Tax Department began comparing data in tax returns with income as stated in model 16, model 16A, model 26AS.

7. Making false claims about capital gains

In the past, a few taxpayers attempted to provide taxes on their capital gains by filing false claims 54, 54F, 54EC, etc. A new ITR form requires submission of investment details that have been made under these sections. Furthermore, with the connection between Aadhaar and PAN with real estate transactions and financial account, it will be easy for the tax department to verify your claim electronically.

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GST Transitional Claims

GST Transitional Claims of Over Rs 1 Cr to be Scrutinised

While tax collections in July were Rs 95,000 cr, transitional credit claims are Rs 65,000 cr

As much as Rs 65,000 crore out of the nearly Rs 95,000 crore tax collections in July -the first month of GST -have been claimed as transitional credit by taxpayers, prompting the apex indirect taxes body the Central Board of Excise and Customs to order a scrutiny of all cases above Rs 1 crore.

The Goods and Services Tax (GST) regime, which kicked in from July 1, allows tax credit on stock purchased during the previous tax regime. This facility is available only up to six months from the date of GST rollout.

Central Board of Excise and Customs (CBEC)

The Central Board of Excise and Customs (CBEC), the body which deals with formulation and implementation of policy concerning the levy and collection of indirect taxes, in a letter dated September 11 has asked tax officials to verify GST transitional credit claims of over `1 crore. In the transitional credit form TRAN-1  filed by taxpayers along with their maiden returns for July, businesses have claimed a credit of over Rs 65,000 crore for excise, service tax or VAT paid before the GST was implemented from July 1.

As per the GST law, carry forward of transitional credit is permitted only when such credit is permissible under the law.

“The possibility of claiming ineligible credit due to mistake or confusion cannot be ruled out… It is de sired that the claims of ITC (input tax credit) of more than Rs 1 crore may be verified in a time-bound manner,“ the CBEC emphasised. It asked the chief commissioners to send a report to the CBEC by September 20 on the claims made by these companies.

CBEC

To ensure only eligible credit is carried forward in the GST regime, the CBEC has asked field offices to match the credit claimed with closing balance in returns filed under the earlier law. They are also required to check if the credit is eligible under the GST laws.

Till last week, as many as 70 % of 59.57 lakh taxpayers had filed returns for July, amounting to maiden revenue of Rs 95,000 crore under the GST regime.

However, out of this, the input tax credit (ITC) data for Central GST (CGST) claimed in TRAN-1 has shown that registered businesses have claimed over Rs 65,000 crore as transitional credit.

The government, in late August, had come out with form TRAN-1for businesses to claim credit for taxes paid on transition stock.

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