Complete change has now taken place in the sphere of taxation of salary income particularly after the provisions relating to Fringe Benefit Tax have been scrapped by the Finance (No.2) Act, 2009 which has recently been passed by the Parliament.
Where an assessee is not able to prove cash credits or satisfy the assess- - ing officer about the genuineness of a loan appearing in his books of account, assessing officer is entitled to treat the unproved cash credit or loan as the assessee’ s income even if it’s below ` 20,000.
In this tip, I have outlined some finer details of income tax planning as well as voluntary tax compliance provisions which would enable you to save both a good deal of tax on the one hand and also save money on penalty or penal interest which might become payable if proper compliance is not made with some of the important provisions of the income tax law.
In one case the assessee-company filed its return of income for the assessment year 2004-2005 on 1.11.2004, admitting an income of ` 78.23 lakh and claimed set-off of the entire income against the earlier years losses and claimed capital loss of ` 83.64 lakh.
There is a provision in the Wealth-tax Act for the prosecution of an assessee for willful failure to file Wealth-tax Return on time. But the prosecution has to be launched on the basis of proper evidence that the default in filing the Return was willful.
Disputes do arise between the tax payers and the IT department about the nature of income as to whether it is Capital Gain or Business Income. This is so in case of transactions relating to purchase and sale of shares.
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