Dear Sir,

My personal Income tax return is filed U/s. 44AD as Contract Income. My net profit before tax is of Rs. 3 lacs for F.Y. 2020-21.

My query is what amount of Personal Drawings in Cash can I show in my books as I want to reduce my cash in hand balance. Is there any limit for showing personal drawings. I am not claiming it as an expense to reduce profit.

Please help me regarding this matter.

Regards,
Divyesh Jain

SIR,
It assess purchases of new car value rs:13,45,298/- tcs deducted value rs:10340/-
Question:
Assess how to passed accounting entries in books and which amount for car value.

Four legal heirs have decided to sell an agricultural land in a small village away from any Municipality/Corporation (more than 20 Kms). The land was purchased by their ancesstors about 75 to 80 years back. The value of the land is not known as only a patta is available.
1. How will be the capital gains calculated?
2. If the sale proceed are to be equally divided, how will be the capital gains calculated for each leagal heir?
3. One legal heir is willing to forego his share of sale proceed in favour of the other three persons. Now, how will be the capital gains on each of them calculated?

Query on Deemed Dividend

Facts of the case:

A closely held Private Limited Company, engaged in real estate business (money lending is not the business of the company) having Authorized Capital of Rs.1 crore and paid up capital of Rs.10 lacs has 4 shareholders namely Mr. A (40%), Mrs. B (5%) Mr. C 50%) and Mr. D (5%). The Share Premium reserve is Rs.50 lacs and surplus in Profit and loss Account as on 31.03.2020 is Rs.154 lacs. Thus, total reserves and surplus amounted to Rs.204 lacs. Net Profit during the year 2020-21 before remuneration to the directors is Rs.534 lacs.

Mrs. B is wife of A, MR C and Mr. D are brothers of A. Mr. A, Mr. C and Mr. D are directors of the company.

The board has authorized payment of remuneration to the director but the resolution is silent about quantum of remuneration, and it is mentioned that the remuneration may be fixed by Mr. C for Mr.A and Mr.D who are looking after all the day-to-day affairs of the company.

Mr. A and D have given unsecured loan to the company in FY 2019-20. Their opening balances in loan accounts are Rs.7 lacs and Rs. 5 lacs respectively.

During the FY 2020-21 on 15.04.2020 Mr. A gave another loan of Rs.10 lacs to the company out of his own capital.

Later Mr. A made several transactions in loan account as he brought in loan and withdrawn money from the company from time to time during the year. As on 31.03.2021 the loan account shows a credit balance of Rs.3 lacs, but the peak debit balance in the loan account during the year was Rs.146 lacs. The details of transactions with Key Management Person will be disclosed in Notes to Accounts, in which the quantum of loan taken and repaid shall be appearing.

Auditor’s view:

In this scenario the statutory auditor who is also the tax auditor opined that the provisions of section
2(22)(e) of the Income Tax Act, 1961 may be attracted and the peak debit balance of Rs.146 lacs might be deemed as dividend and If the said sum of Rs.146 lacs is deemed dividend then the company shall be required to deduct Income Tax at Source i.e. TDS u/s 194 of The Income Tax Act, 1961 @10%.

Non deduction of Income Tax (TDS) shall not result in any disallowance u/s 40(a)(ia) even if the Tax
Auditor reports non deduction of Tax in clause 34(A) of Form 3CD but that may trigger the penalty u/s
271C and may also result in taking action against the director for mis-reporting and under reporting of income in the form of deemed dividend.
Director’s Opinion

The directors of company are of the opinion that at the year-end there is no debit balance and the fact that there was debit balance in the account of the director during the year shall not be reflected in the balance sheet as at 31.03.2021 and the balance appearing in the balance sheet shall be in credit as on the balance sheet date and the preceding balance sheet date therefore, there will be no possibility of the debit balance in books during the year against a director shall be treated as deemed dividend in terms of s.2(22)(e)of I. Tax Act.




Queries:

1. Can the director may plead that since at the year-end there is a positive balance in the loan account there is no case of deemed dividend?

2. From auditors perspective, in both the scenario i.e. treating the sum of Rs.146 lacs as deemed dividend as per the opinion of the auditor or not considered as deemed dividend a per the opinion of the Directors please advise as to reporting in Form 3CD clause 34(a) regarding non deduction of income tax at source u/s 194 on such deemed dividend, any qualification in report under CARO or Independent Auditors report if the directors are not ready to consider the sum of Rs.146 lacs as deemed dividend.

3. If the company does not make TDS not treating Rs.146 lacs as deemed dividend whether there will be any mis reporting from the perspective of Companies Act or Income Tax Act on part of the Company? What penal consequences shall follow upon the Company ?

4. What are the remedies to the company to save itself from the sum of Rs.146 lacs being deemed as dividend?

5. Can the company pay remuneration to the Director to the tune of Rs.180 lacs and making TDS on Rs.180 lacs u/s 194J @10% and whether such remuneration shall be permissible under provisions of Companies Act ?

Please advise. Thanks

Hi All

One of my clients is having income as only from capital gains.
Income is below taxable limit. Whether it is taxable?
Whether investments u/s. 54 is to be done to claim exemption?

Thanks in advance.

Hi
I am a teacher and filing tax returns u/s 44AD for couple of years with ITR of 3 Lakh by showing
> Tuition Income : Rs 2 Lakh
> FD Interest : Rs 50K
> commission : Rs 50K

This year i entered and started speculative transaction in Stock market for 5 months in Equity having
> Total Turnover - Rs 75 Lakh
> Equity Intra Day Delivery Loss - Rs 35K
> Equity Short Term capital loss - Rs 7000
> FnO Loss - Rs 50K
and thus after incurring heavy loss of Rs 92K stopped share trading

If I dont want to use this loss against my income. like it was speculative and share trading closed. can i still be allowed to file tax return u/s 44AD as regular tuition income and also any repurcursion of not showing losses in ITR.

Thanks pls guide

Hi Sir,
1. We are paid transport charges paid single payment Rs.50,000/- this applicable tds 194C @2% ?
2. Transporter provide 194C amended 2015 self declaration. Hence if the transporter owning not more than 10 goods carriages at any time during the year, provide his PAN alongwith the declaration then as a payer, you don’t have to deduct his TDS u/s 194C.
3. We need deduct or not to deduct this amount ?

hello everyone

i want to file monthly gstr 1 (iff) for october. We are having no sale in the month of october and

have only received advance against service.

how shall i show that in gstr 1 as no specified table of advance received is given.

kindly reply and thanks in advance.

WHAT ARE SFTs? DO WE NEED TO DISCLOSE IT AS INCOME FROM OTHER SOURCES??

An assessee purchased an immovable property for Rs.65,00,000. He has deducted TDS @1% and while filing Form 26QB by oversight the PAN and address of the Transferee (Buyer) was mentioned as Seller (Transferor) and vice versa. Challan was accordingly paid in the PAN and name of seller instead of buyer. Please suggest remedy. Thanks