status : taxable ??

Page no : 2

karthikeyan.v (Chartered Accountant) (523 Points)
Replied 26 May 2010

hi divya

i too agree with every one

karthi

Riyaz Khan (CA CS (Exec) MBA (Fin) Asst. General Manager-SEBI Internal Auditor-British Certifications Inc.) (1315 Points)
Replied 26 May 2010

Originally posted by : Rachit
	Originally posted by : R.D Khan Dear Friend, ALWAYS REMEMBER THAT NOT ONLY INCOME TAX REFUND BUT ALSO REFUND OF ANY TYPE OF MONEY IS NOT TAXABLE. Because its refund. Its not your income but your own money that earlier you had paid and now getting back. However, if you receive anything above your own money (i.e, interest) is obviously taxable, because it was not part of your money :) Hope you'll remember this concept everytime while dealing with ANY TYPE OF REFUND Regards, R.D Khan I am of the view that: Since Income Tax paid is not allowed as a deduction; refund of income tax paid in excess is not taxed as income. Unlike Sales Tax; Sales tax is allowed as a deduction, hence sales tax refund when received is taxed as income.

Dear Ranchit,

Think in this way, that Sales Tax is not your own money but its already a tax that you are supposed to collect from customers on behalf of the government bcause ultimately you have to pay it to the govt.

But if you receive it as a refund, it means you are receiving the money that does not belong to you but belongs to government. It means it is your income because it was not your own money.

I believe you will agree with me. Although I am not denying that you are wrong my dear. You are also right, because the ultimate result is the same that you are liable to pay tax only on money which does not belong to you i.e, which is your income.

Warm Regards,

R.D Khan

kantijain (Chartered Accountant in Practice) (385 Points)
Replied 26 May 2010

Dear Divya,

I hope u would have seen all our friends replies and got the message. The government can tax only income as defined u/s 2(24) of the Income Tax Act, 1961. Since this is ur own hard owned money same is not taxable.

Regards

Kanti Jain