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.

Despite 74% more direct tax collections, the government borrows 58% of its target.

Despite 74% more direct tax collections, the government borrows 58% of its target.

Despite the fact that the Centre has collected 74% higher direct taxes on an annualised basis this fiscal year, at Rs 5.70 lakh crore, it has also borrowed a staggering 58 per cent of the budgeted amount by selling Rs 7.02 lakh crore worth of debt instruments in the market during the same period.

While it mopped up Rs 31,000 crore in long-term and short-term debt at an average price of 6.15 per cent at the weekly auction of government securities earlier in the day on Friday, the revenue department said later in the day that net personal income tax and corporate tax collection jumped a full 74% to Rs 5.70 lakh crore so far this fiscal, driven primarily by advance tax and TDS payments.

The Central Board of Direct Taxes stated in a statement that the mop-up of net direct tax (after deducting refunds from gross collection) between April 1 and September 22 was Rs 5,70,568 crore, up 74.4 per cent from Rs 3.27 lakh crore collected in the same time last year.

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Furthermore, the net collection is 27% higher than the Rs 4.48 lakh crore it received in FY20, which was prior to the pandemic.

Furthermore, it has been collecting record amounts of indirect taxes in the form of GST (which has been exceeding Rs 1 lakh crore almost every month) and record duties on petroleum products, totaling Rs 94,181 crore in the first quarter on the back of a record tax on fuel that generated an 88 percent increase in revenue over the previous financial year.

According to Care Ratings, the government borrowed Rs 31,000 crore in today’s weekly auction by selling 5, 13, 14, and 30-year securities.

With this, the overall market borrowings so far this fiscal are Rs 7.02 lakh crore, down 8% from previous fiscal’s total of Rs 7.66 lakh crore at this time, and Rs 12,652 crore less than the auctions’ total disclosed amount.

To put it another way, the debt raised so far in FY22 accounts for 58% of the overall projected borrowing limit of Rs 12.05 lakh crore for the fiscal year, and 52% if the GST compensation to states of Rs 1.58 lakh crore is added to the borrowing limit for the year, according to the study.

According to the agency’s chief economist Madan Sabnavis, the weighted average yield across tenures fell 4 basis points to 6.15 per cent last week and is now 31 basis points lower than the peak reached in early August when it soared to 6.46 per cent on August 6.

The Finance Ministry will begin the budgetary process on October 12th.

It should be noted that the government has been collecting Rs 32.90 in excise duty on every litre of petrol (which has been selling for over Rs 100 a litre for months) and Rs 31.80 on a litre of diesel since April last year and had collected a whopping Rs 3.35 lakh crore in FY21 when the total excise mop-up was only Rs 3.89 lakh crore, up from Rs 1.78 lakh crore in FY20. Excise duty on fuel and gasoline was Rs 2.13 lakh crore in FY19.

The CBDT reported that gross direct tax collection so far this fiscal year has surpassed Rs 6.45 lakh crore, up 47 per cent from Rs 4.39 lakh crore in the same period last year and 16.75 per cent more than Rs 5.53 lakh crore in FY20.

Advance tax and tax deducted at source account for Rs 2.53 lakh crore of the entire mop-up. The mop-up was 74% higher than previous year’s levels, with self-assessment tax worth Rs 41,739 crore, regular assessment tax worth Rs 25,558 crore, dividend distribution tax worth Rs 4,406 crore, and tax under other minor areas around Rs 1,383 crore.

This fiscal’s advance tax collection is Rs 2,53,353 crore, up 56% from Rs 1,62,037 crore a year before. Corporation tax of Rs 1.96 lakh crore and personal income tax of Rs 56,389 crore have been collected in advance.

Govt’s excise collection jumps 48% in April-July; already 3x of full fiscal oil bond liability

Govt’s excise collection jumps 48% in April-July; already 3x of full fiscal oil bond liability

Official data revealed that the government’s revenue from the levy of excise duty on petroleum products increased by 48% in the first four months of the current fiscal year, with the incremental mop-up being three times the payback burden of legacy oil bonds for the entire fiscal year.

Excise duty collections increased to over Rs 1 lakh crore in April-July 2021, according to data from the Union Ministry of Finance’s Controller General of Accounts, up from Rs 67,895 crore in the previous fiscal.

Only petrol, diesel, ATF, and natural gas are subject to excise duty since the implementation of the Goods and Services Tax (GST) regime. All other goods and services, with the exception of these, are subject to the GST.

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The government’s incremental collections of Rs 32,492 crore in the first four months of the fiscal year 2021-22 (April 2021 to March 2022) are more than three times the Rs 10,000 crore liability it has for the entire year to repay oil bonds issued by the previous Congress-led UPA government to subsidise fuel.

The bulk of excise tax revenue comes from the levy on gasoline and diesel, and with sales going up as the economy improves, industry insiders estimate that incremental receipts in the current fiscal year might be over Rs 1 lakh crore higher than the previous year.

In total, the UPA government issued Rs 1.34 lakh crore in bonds (similar to a sovereign promise to pay in the future) to state-owned oil corporations to compensate them for selling fuels such as cooking gas LPG, kerosene, and diesel at below-cost prices.

According to the finance ministry, Rs 10,000 crore is due to be reimbursed in the current fiscal year.

The Finance Ministry distributes Rs 13,386 crore to 25 states as an RLB award.

Finance Minister Nirmala Sitharaman and then-Oil Minister Hardeep Singh Puri both criticised the oil bonds for limiting budgetary capacity to provide relief to people suffering from near-record-high fuel costs.

Last month, Sitharaman rejected out a reduction in excise duty on gasoline and diesel to lower prices, citing the restrictions of payments in lieu of previously subsidised fuel. She estimated the BJP government’s overall obligation to be Rs 1.3 lakh crore.

The bulk of the excise collections comes from petrol and diesel on which the Modi government had levied record taxes last year.

Last year, excise duty on petrol was raised from Rs 19.98 to Rs 32.9 per litre to recoup gains from international oil prices plummeting to multi-year lows due to decreasing demand.