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    11 views11 pages

    IR Notes

    Uploaded by

    Arun Sasi

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 11
    Act Computation of NOTES ecounting yeu relating to bonus, ” ‘eyrecition, tna or development rebate or development liowance sovemment orty any body corporate ig force ory anyother apency ‘or specified purposes andthe Toto tem No.6 7] Gross Potts for purposes of Doman — Rs Explanation + In sub-item (aa) of Item 3, “approved gratuity fund” hes the same meaning, assigned to iin clause (5) of section of the Income Tax Act, "If and to the extent, charged to Profit and Loss Account ** Tf, and to the exten, credited to Profit and Loss Account. ‘*+ Inthe proportion of Indian Gross Profit (Hem No, 7) 40 Total Word Gross Profit (as per consolidated profit and loss account, adjusted asin Item No, 2 above only) 2. Calculation ofavailable surplus (@ Gross Profit=X (b) Depreciation admissible w/s 32 of the Income Tax Act=A (©) Development rebate or investment allowance or development allowance=B (@ Direct Taxes which the employers liable to pay in the accounting vyear=C (©) Such further Sums specified in the Third Schedule = D Available Surplus =X -(A+B+C+D) Table 1.3 Third Schedule of the Payment of Bonus Aet, 1965 {ae ponent ons mien toa tale sett Banking company ‘The dividends payable oa ts prtorence hare caphad forthe accounting year aleulated atthe ate at which such dividends a payabe ; (Gi) 75 per centof is paid up equity share capital asa the ommeneementof the accounting Year (Gi) 5 percent ofits eserves shown ins balance sheets a the commencement ofthe accoumting yea, nclding ‘ny profits camied forward from the previous assouning (Go) any sum which, in respect of theaccounting year, is transfered by {@)toa reserve fund under sub-setion (1) of section 17 of the Banking Regulation Act, 1949 (10 0f 1949}, oF (b) toany reserves ix Indian pursuance of any dection bradvice given bythe Reserve Bankof India ‘whichever high PROVIDED that whore the banking company s 3 foro company within the meaning of section $91 ofthe Companss Act, 1986 (Lof 1956), th amountto be deductedunder this gem shall be the aggregate of (the dividends payable tos preference shareholders for the accounting yeaa the rate at which such dividends ate payable on such amounts bears the sameproportion to 1s total preference share captal ass total working funds in India boar oa total world working funds (Gi) 75 percentof suchamount a bears the same propertion os tou paid up equity share capital ss toil working fans it Ind bear to is total working finds (i) § percent ofsuch amount as bears the same propetion to its total disclosed reserves ats total working fonds in India beat ois total word working finds (6) any sum which, in respect of theaccounting yer, is deposited by it with the Reserve Baak of nd undet sub-clause i) of clause () of sub-section 2) af section ofthe Bankng Regulation Act, 1949 (10 of 1949) ,not exceeding the amount equced under the aforesaid provision to besa deposted. | Corporation (© 85 perceatof is paid up capialasat he ‘commencement ofthe accountng ye UG 6 per centof Rs eserves, fay, shown in ts balance shoot ata the commencement of the accounting you, including any profits camed forward from the previous accounting ye Coapenive (0 85 percentof the capialimvedted by such soc mh is estaishmentas evidenced from is books of aeounts at the commencement of the accoumting yes {Ga such sums asihas been cared forward in spect of ‘theaccounling year toa reserve fund undet any lw lating to co-operative societies forthe time being in Payment of Bors Ace Campton of Swe NOTES Suftnsraconal Payment of Boas ct Computation of Sepha NOTES ‘Sei tnsiracionl 1 Mara! Thay other ES per con of he capial mvesied by hin A employer not | establshmentas evidenced from his Books of accounts at Taling under any | the commencement ofthe account year ‘ofthe aforesait | PROVIDED that where such employer ia person to categories ‘whom Chapter XXII-A ofthe income Tax Act applies, ‘theannuity deposit payable by him under the provisions ‘ofthatChapter dunng the accountng year shall also be deducted PROVIDED FURTHER tht where such mplayerss & im, an amooat equa 1025 per cent ofthe gross profs decved by it fom the establsiment in cespec ofthe accounting year afer deducting deproviaton accordance with the provisions of clause (a) of section 6 by way of remuneration toa the partner taking pat the conduit of business ofthe esablshment shal ako be deducted, but where the partnership agement, whether ‘fal or wraten, proves forthe payment of remuncaton twany such partner, and- (0 the total remuneration payable to all such partners is less than he said 25 per cent the amount payable, subject toa maximum of fonyeight thousand pees parser oF (a) the tom emoneraon payable to all such parners is higher than the sand 25 percent such percentage or sum calelated a the rato forty ~ eight thousand rupees tweach such partner, whichever les shall be deducted under this proviso PROVIDED ALSO that where such employer an individual ora Hindy Undivided Family ch such (7) anamount equal to 25>pereentof the grow profs derived by such employer fiom the establshment in respect ofthe accountng year afer deducing depreciation in aovordance wit the provsions of clause (@)ofsection 6; or (a) foryight thousand mupees, ‘whicheveris less by way of remuneration to such ‘employer, shall ao be deducted ©_[ Any empyer faling under Item No orltem No, or em No, 40F Tem No. Sand bengalicensee swithin the smearing ofthe lectin (Supply) Act, Tas 4 of 1948) Th ation othe sms deductible under any of e aforstai ems, Such sims a are required tobe appropriated’ lcensce my expecta the accounting Year toa reserve under the Sith Schedule to that Act shall also be deducted Explanation : The expression “reserves” oecurring in column (3) against Item Nos. 1), 2G) and 3) shall not include any amount set apart forthe purpose of,- (© payment of any direct tax which, according tothe balance-sheet, would be payable; i) meeting any deprecation admissible in accordance withthe provisions of lause (a) of section 6; i payment of dividends which have been declared, but shal inc (@) any amount, over and above the amount referred fo in clause-() ofthis Explanation, set apart as specific reserve for the purpose of payment of any direct tex; and (any amount et apart for meeting any depreciation in excess ofthe amount amisibe in accordance withthe provisions of clause (a) af section 6 3. Calculation Allocable Surplus Allocable Surplus ~67 per cent of Available Surplus in case of company other than Banking Company; 60 percent in other cases. 4, Make adjustment for ‘Set-on’ and ‘Set-of!”. For calculating the amount of ‘bonus in respect of an accounting year, allocable surplus is computed after considering the amount of set-on and set-off from the previous years, as illustrated in the Fourth Schedule, ‘This concept will be dealt in Unit 4 Table 14 Fourth Schedule of the Payment of Bomus Act, 1965 oe Payment of Bors set Computation of Supe NOTES Act Computation of NOTES * Maximum amount admissible, +# Minimum amount admissible #8 The Balance of Rs 1,10,000 set on from year? lapses; 5. The allocable surplus so computed is distributed among the employees in proportion to the salary or wages received by them during the relevant ‘accounting year. 6. Inthe case of an employee receiving salary or wages between 2,500 and. 00 per month, the bonus payable to him is to be calculated as if his salary or wages were 82,500 per month only. Calculation of Direct Tax Payable by the Employer As per Se The following provisions are to be considered while calculating the direct ax payable by the employer: (@) The following items are not be taken in account while calculating such tax: (© any oss incurred by the employer in respect of any previous accounting ‘year and carried forward under any law for the time being in force relating to direct taxes; (i) any arrears of depreciation which the employer is entitled to add to the amount of the allowance for depreciation for any following accounting year or years under sub-section (2) of section 32 ofthe Income Tax Act, (i any exemption conferred on the employer under section 84 of the Income Tax Act or of any deduction o which he isentitled under sub section (1) of section 101 of that Act, as in force immediately before the commencement ofthe Finance Act, 1965 (10 of 1965); (b) Where the employer isa religious ora charitable institution to which the provisions of section 32 do not apply and the whole or any part of its income is exempt from tax under the Income Tax Act, then, with respect to the income so exempted, such institution shall be treated as ifit were a ‘company in which the public are substantially interested within the meaning ofthat Act; (©) where the employer an individual ora Hindu Undivided Family, the tax payable by such employer under the Income Tax Act shal be calculated on the basis that the income derived by him from the establishment is his only income; jon 7 ofthe Payment of Bonus Act: (@) where the income of any employer includes any profits and gains derived from the export of any goods or merchandise out of India and any rebate ‘onstuch income allowed under any law for the time being in force relating to direct taxes, then, no account shall be taken of such rebate; (©) no account shal be taken of any rebate [other than development rebate or investment allowance or development allowance] or credit or relief or {eduction (not hereinbefore mentioned in tis section) inthe payment of any direct tax allowed under any law forthe time being in force relating to

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