MEANING of two words-

This query is : Resolved

Share Report Follow Query Ask a Query

Jyoti

Jyoti (Querist)
Follow

06 February 2011 what is the meaning of diversion of income and application of income?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

06 February 2011 Diversion of income which income not used for the purpose of receipt

Application means the using the income for any purpose

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

06 February 2011 Diversion of Income:

Diversion of income means to divert income to other person(s) under a pre-existing title.

Suppose A & B are Co-owners of a house which is given on Rent to C for10000/ pm.

Now C issues a cheque for Rent payment for one month to A of10000/-, even though A is entitled for only5000/-. He has to give5000/- to B. So, in this case it can be said that A has to divert5000/ to B. The amount taxable in the hands of A will be only5000/-.

Application of Income:
----------------------
Now out of10000/ diversion of5000/ has been made to B. The amount left with A is his own income. He wants to give you a party and spends1000/- on it. This will be called application of income. As the income of Rs.5000/- has been once taxed so application of income will also not be taxable.

Jyoti

Jyoti (Querist)
Follow

09 February 2011 Thanks Experts.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Leena Rachh

Govind Mundada

svgovindaraju

venkanna setty

YARRAMREDDY M

Subscribe Now

MEANING of two words-

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA