Business Daily from THE HINDU group of publications
Monday, May 12, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Monday, May 12, 2008 ePaper | Mobile/PDA Version | Audio |
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Income Tax Columns - For the Asking Assessment year vs financial year Please explain what an assessment year is and what a financial year is. Aswini Chadha, email The income-tax law requires assessees to follow a uniform previous year, that is April to March, which in our country is known historically as financial year. Thus for the current assessment year 2008-09, the previous year is 2007-08. That is one has to submit his return of income during the assessment year for the previous year starting from April and ending with March. Of course in case of new businesses starting during the course of the previous year, the duration of the previous year would be shorter. Tax on sale of farm landAre agricultural lands located within municipal limits used for cultivation during the last three years prior to sale liable to capital tax? S. N. Jayalakshmi Vankayala, email Yes, if they are located inside municipalities having a population of not less than ten thousand as per the latest census. Expenses definedHow is preliminary expense different from preoperative expense? H. R. Sampathkumar, email Preliminary expense is a term used in Section 35D of the Income-tax Act in a rather narrower sense which is understandable given the law’s anxiety to restrict the allowance to as few expenses as possible. It includes, for example, market survey expenses, public issue expenses, and so on. Preoperative expense, on the other hand, is a wider term, including the normal expenses such as salary and rent incurred by an enterprise prior to commercial production. Some of them are allowed to be capitalised if they have contributed to the creation of an asset which would be the case with salary of engineers and technicians engaged in installation of plant. S. MURLIDHARAN More Stories on : Income Tax | For the Asking
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