195A

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Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2010 Can any 1 explain the provisions of Sec 195A of Income Tax Act?

Also, Gift in monetary terms- to what extent is it exempted for the AY 2010-11?

Aditya Maheshwari

Aditya Maheshwari (Expert)

15 July 2010 Income payable “net of tax”.

195A. In a case other than that referred to in sub-section (1A) of section 192, where under an agreement] or other arrangement, the tax chargeable on any income referred to in the foregoing provisions of this Chapter is to be borne by the person by whom the income is payable, then, for the purposes of deduction of tax under those provisions such income shall be increased to such amount as would, after deduction of tax thereon at the rates in force for the financial year in which such income is payable, be equal to the net amount payable under such agreement or arrangement.]

This means that if you have to pay a person Rs. 100,000/- and have to deduct TDS on the same say Rs. 10,000/- then net Rs. 90,000/- should only be paid.

Also in case advance of Rs. 100,000/- has been paid without TDS dedcution then TDS deductible @ 10% would Rs. 11,111/- on Rs. 111,111/- and not Rs. 10,000/- i. e. the payment should be grossed up.

Aditya Maheshwari

Aditya Maheshwari (Expert)

15 July 2010 Gift in monetary terms upto Rs. 50,000/- in cash or in kind is exempt.

Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2010 Thank u

Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2010 Suppose a person recived Rs.50,000 each from his father & mother? So what amount is taxable?

Aditya Maheshwari

Aditya Maheshwari (Expert)

16 July 2010 Gift received from close relatives is exempt any amount.