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10 COMPANY

rahul (CA Final student) (76 Points)

04 November 2007

HI ALL

SINCE 10 B CO'S EXPORT INCOME IS EXEMPT FROM TAX

WHAT DIFFERENCE DOES IT MAKE BY NOT DEDUCTING TAX ON RENT,PROF.FEES ETC SINCE IT'LL BE ADDED BACK TO ITS INCOME WHILE COMPUTING TOTAL INCOME & THEN EXEMPT FROM TAX...

PLS CORRECT ME IF M WRONG...

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2 Replies

Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 05 November 2007

other interest , penal and prosecution provisions are also there for violation of TDS provisons

Ankit Dangayach (Chartered Accountant) (691 Points)
Replied 05 November 2007

Hi Although Income of 100% EOU is exempt u/s10B for a period of 10 years but income tax department wants to know that how much income is earned by the assessee during the tax holiday period so that after the tax holiday period is over and any unexplained income is fouund ,assessee does not disguise the department that it belongs to tax holiday period.Moreover assessee may understate his income during tax holiday period if no TDS is deduted from his income during tax holiday period and try to show loss during such period ,as such loss{U/s72(1),74(1)} can be carried forward and set off against income earned after tax holiday period is over resulting in less tax payment even after the tax holiday period. The logic behind deduction of TDS is to catch the assessee who do not disclose his complete income.Thus act imposes the responsibility on the person who makes certain payment to deduct TDS and file its Quaterly return.Assessee has an option that he can obtain a certificate of lower or nil tax deduction from CIT. If he provide such certificate to the person responsible for making payment then no or tax at lower rate will be deducted.