Section 145 METHOD OF ACCOUNTING Section 145(1) provides that income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” shall be computed by either cash or mercantile system of accounting regularly employed by the individual who is paying taxes. #Section145METHODOFACCOUNTING

PROFITS AND GAINS OF BUSINESS/PROFESSION Profits and gains of any other business are taxable, unless such profits are subjected to exemption. Business or profession should be carried on by the assessee. It is not the ownership of business which is important , but it is the person carrying on a business or profession, who is chargeable to tax. #PROFITSANDGAINSOFBUSINESSPROFESSION

Owner / deemed owner Section 22/27 An individual who transferred his property without adequate consideration to his or her spouse (otherwise than in connection with an agreement to live apart) his minor child (not being married daughter) is deemed to be owner of that property #Ownerdeemedowner

Interest on borrowed capital is allowed as deduction under section 24(b) Section 24b of income tax act allows deduction of interest on home loan from the taxable income. Such loan should be taken for purchase or construction or repair or reconstruction of house property. ... In other words, the interest payable for the year is allowed as deduction whether such interest is actually paid or not #Interestonborrowedcapital

Treatment of unrealised rent Explanation to Section 23(1)/Rule 4 Income from house property Unrealised rent. 4. For the purposes of the Explanation below sub-section (1) of section 23, the amount of rent which the owner cannot realise shall be equal to the amount of rent payable but not paid #Treatmentofunrealisedrent

TREATMENT OF RETIREMENT BENEFITS Any amount received as leave encashment by the state or central government employees is exempt from tax . However, the bar is stricter when it comes to others. The amount of encashed leave that is exempt from tax is the lower of Rs 3 lakh and the amount paid according to a calculation specified by the Income Tax Act #TREATMENTOFRETIREMENTBENEFITS

TAXABILITY OF RETRENCHMENT COMPENSATION & VRS COMPENSATION Additional compensation/ severance pay given by employer is taxed as 'profits in lieu of salary'. But gratuity, retrenchment compensation or VRS is tax exempt in certain cases. With reduction in revenues due to Covid-19, many businesses are offering pink slips to employees. #TAXABILITYOFRETRENCHMENTCOMPENSATIONVRSCOMPENSATION

LEAVE TRAVEL CONCESSION/ASSISTANCE (LTC/LTA) LTA or Leave Travel Concession (LTC) is paid by the employer to employees, wherein they grant the employees leave while bearing all travel expenses, and additionally, the employee also gets to save tax. #LEAVETRAVELCONCESSIONASSISTANCE

MEDICAL TREATMENT OUTSIDE INDIA Any expenditure incurred by the employer on treatment of employee or or his family member outside India shall be tax free perqisite: Medical treatment of the employee or any family member: Exempt to the extent permitted by RBI. #TREATMENTOFMEDICALFACILITIES

TREATMENT OF MEDICAL FACILITIES (In India) - Proviso to Section 17(2) Perquisites Valuation of Medical Facilities [Proviso to Section 17(2)] Employer's hospital/Government hospital/approved hospital - The perquisite in respect of medical facility provided by an employer in the following hospitals/clinic is NOT Chargeable to Tax— ... Health insurance premium - ... Any other facility in India - #TREATMENTOFMEDICALFACILITIES

MISCELLANEOUS POINTS WRT PERQUISITES What are the taxable perquisites? While there are tax-free perquisites such as rent free accommodation, supply or water or gas, taxable perquisites include education for children, domestic help's service etc #MISCELLANEOUSPOINTSWRTPERQUISITES

Taxability of Furniture Provided to Employees along with ,Accommodation Accommodation, either rent-free, or with a minimal amount of rent, is one of the important p erquisites given to employees. ... These benefits are knows as perquisites and are taxable as per the provisions stated in the Income Tax Act. Perquisites are usually provided by the employee in kind rather than in monetary form #TaxabilityofFurnitureProvidedtoEmployeesalongwithAccommodation

What is Perquisites And its Taxability “Perquisite” may be defined as any casual emolument or benefit attached to an office or position in addition to salary or wages. “Perquisite” is defined in the section 17(2) of the Income tax Act as including: (i) Value of rent-free/concessional rent accommodation provided by the employer. #WhatisPerquisitesAnditsTaxability

CERTAIN DEDUCTIONS UNDER SECTION 16 Section 16, inter-alia, provides for certain deduction in computing income chargeable under the head “Salaries”. it is proposed to allow a standard deduction upto Rs 40,000/- or the amount of salary received, whichever is less. #CERTAINDEDUCTIONSUNDERSECTION16

Types of Official Allowances Some of the popular allowances that belong to this category are: Entertainment Allowance. ... Overtime Allowance. ... Dearness Allowance (DA) ... Meal Allowance. ... City Compensatory Allowance (CCA) ... Interim Allowance. ... Cash Allowance. ... Servant Allowance. #TypesofOfficialAllowances