Eligibility of R&D Expenses Research and Development (R&D) expenses are deductible under the Income-tax Act, 1961. Deduction is available to companies engaged in scientific research related to their business. Both revenue and capital expenditures on R&D...
Definition of Preliminary Expenses Preliminary expenses are costs incurred before the commencement of business or incorporation. These include expenses related to company formation, feasibility reports, legal charges, and project reports. Such expenses are capital in...
Definition of Fair Market Value (FMV) Fair Market Value refers to the price that an asset would fetch in an open market. It is determined between willing buyer and seller, both acting at arm’s length. FMV represents a realistic valuation of property or shares. It is...
Meaning of Slump Sale A slump sale involves the transfer of one or more undertakings as a going concern. It is transferred for a lump sum consideration without assigning individual values to assets and liabilities. Defined under section 2(42C) of the Income-tax Act,...
Definition and Recognition of Amalgamation Amalgamation refers to the merger of one or more companies into another company. It must meet the definition under section 2(1B) of the Income-tax Act, 1961. All assets and liabilities of the amalgamating company must be...
Availability of Tax Rulings Yes, tax rulings are available for corporate tax matters in India. They are issued in the form of advance rulings, clarifications, and circulars. These rulings help corporations understand the tax implications of proposed transactions. They...
Meaning and Authority of CIT(A) CIT(A) refers to the Commissioner of Income Tax (Appeals). It is the first appellate authority under the Income-tax Act, 1961. CIT(A) operates independently from the Assessing Officer. It is empowered to adjudicate appeals filed by...
When to File an Appeal An appeal is filed when a company disagrees with the assessment or order issued by the Income Tax Department. Orders under sections like 143(3), 147, 154, or penalty sections can be appealed. The appeal must be based on legal grounds or...
Meaning of CPC (Centralized Processing Centre) CPC stands for Centralized Processing Centre of the Income Tax Department. It is responsible for processing electronically filed income tax returns. CPC operates as an automated system without human intervention for...
Purpose of Rectification Request A rectification request is filed to correct mistakes apparent from the record. It is filed under section 154 of the Income-tax Act, 1961. Common issues include incorrect tax calculation, mismatch in TDS, or wrong credit. It is not used...