Applicability of Section 44AB Section 44AB mandates a tax audit for companies if their turnover exceeds the specified threshold. For corporates engaged in business, the audit applies if gross receipts exceed ₹1 crore. If cash transactions are limited to 5 percent of...
Definition and Tax Status of Branch Offices A branch office is an extension of a parent company operating in another location. It is not a separate legal entity and operates under the control of the head office. For tax purposes, income earned by a branch in India is...
Selection of Appropriate Business Structure Choose a tax-efficient entity type such as private limited company, LLP, or public company. Consider tax implications of ownership structure, liability, and capital requirements. Evaluate startup incentives and tax holidays...
No Change in Corporate Tax Rates The Union Budget 2025-26 maintains existing corporate tax rates to ensure stability and predictability for businesses. No alterations have been proposed to the concessional tax regimes under sections 115BAA and 115BAB. This continuity...
Meaning of GAAR GAAR stands for General Anti-Avoidance Rules under the Income-tax Act, 1961. It empowers tax authorities to deny tax benefits arising from impermissible avoidance arrangements. GAAR is intended to counter aggressive tax planning strategies used to...
Purpose and Scope of ICDS Income Computation and Disclosure Standards (ICDS) are notified under section 145(2) of the Income-tax Act. They apply specifically to the computation of income under the heads “Profits and Gains of Business or Profession” and “Income from...
Accounting Standards under Companies Act Companies must follow accounting standards notified under the Companies Act, 2013. These standards are issued by the Ministry of Corporate Affairs in consultation with ICAI. The applicable standards include recognition,...
Understanding the Applicable Tax Structure Identify the correct tax rate applicable to the company based on its turnover and chosen tax regime. Consider the regular tax regime or concessional rates under section 115BAA or 115BAB. Verify eligibility and conditions for...
General Rule Under Income Tax Law Fines and penalties are generally not deductible under corporate tax provisions. Section 37(1) of the Income-tax Act disallows any expenditure incurred for an offense or prohibited act. The law clearly distinguishes between business...
Eligibility to File Revised Return A revised return can be filed if the original return had any omission or wrong statement. It is allowed under section 139(5) of the Income-tax Act, 1961. The original return must have been filed within the due date under section...