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Section 44A - Special provision for deduction in the case of Trade professional or similar association - Income Tax - Ready Reckoner - Income TaxExtract Section 44A : Special provision for deduction in the case of Trade professional or similar association Applicable only to that trade, professional or similar associations, the income of which is not distributed to its members. Amount received by the association from its members by way of contribution or otherwise (other than amount received from performing specific services) i.e. General receipts from members. Less: Expenditure incurred for the purposes of protection or advancement of interest of members (other than expenditure which is otherwise deductible under the Act and other than capital expenditure), i.e. General expenditure on member If negative call it deficiency If positive surplus exempt from tax such deficiency will be allowed as a deduction in computing the income under the head PGBP If deficiency is greater than income under the head PGBP , then the balance deficiency will be allowed as deduction in computing income under the other heads of income. Before setting off the deficiency, effect shall be first given to the deductions under this Act and brought forward losses and allowances. The total deficiency which can be set off shall not exceed 50% of the Total income computed before giving deduction of deficiency. The aforesaid deduction is allowed first from the income of the association chargeable under the head PGBP and for the balance amount, if any from the assessable income of the association under any other head. This deduction is allowable from the net assessable income of the association as computed after giving effect to the provisions in the Act for the carry forward of depreciation, investment allowance, development rebate and past business losses.
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