Business Income Part 1

Question 1

what if the liability for expense claimed in tax has not been paid and what is the maximum duration allowed for it to remain unpaid?

Answer 1

Under section 34
If not paid within 3 years then added to the income
for example if expense payable has been claimed in 2025 then it shall be allowed under 2028 and added to income in year 2029

Question 2

Can we deduct foreign expense against local income?

Answer 2

No, Foreign expense can only be deducted against foreign income and local expense against local income only

Question 3

what type of notional expenses are not allowed in Business income

Answer 3

Under section 18
Only real profits And not national profits are deductible against business income. The expenses like revaluation or impairment of fixed assets, investments or unrealized gain or loss arising from revaluation of foreign currency related debtors and creditors is not taxable as these are not real profits and can only be taxed when these are actually realized.

Question 4

Can we adjust the loss of non speculation business against profits of speculation business?

Answer 4

Yes

Question 5

Withholding tax not applicable on sale of goods section?

Answer 5

Section 153 (5)
Clause 46AA + Clause 47A of second schedule Part IV

page 348 in bare acts of second schedule

Question 6

what are the exceptions to the withholding of tax on the sale of goods/services/execution of contracts?

Answer 6

in case of payment to companies operating trading houses

sale of goods dedicated for use in renewable sources of energy like solar and wind etc even if locally manufactured

Sale of good and services of accommodation or both by hotels and restaurants of payment is made in case

Sale of goods < 75000 services < 30000

Sale of live chickens and egges

carriage of goods by an owner of one Good transport vehicle

insurance premiums