Many humans had been posting queries associated with their income tax returns, refunds, etc., at the Income Tax department’s official Twitter handle. In reaction to this, a few days ago, the Income Tax department tweeted the link to a web shape that may be crammed in by the taxpayer with their queries that allows you to then get replied by way of the department.

So, if you have any questions associated with ITR filing, processing, and many others., you could immediately technique the income tax department by way of filling up a simple online shape. This way no longer handiest will your question get responded on time from a tax expert, your queries can even remain private, not like asking a query via the Department’s Twitter handle.

While filling up the shape, you are required to go into your call, Permanent Account Number (PAN), assessment year, mobile quantity, electronic mail ID, your question situation, and social media person ID.
Once you have entered all the info correctly, you need to click on on ‘Submit’ tab. You will then get a price ticket ID (reference code) on the display. You may also get hold of an SMS for your cell telephone that you have entered inside the online form.
Be cautious!

The earnings tax branch also tracks your IP address so make certain you do no longer input any wrong info in the form.
If you are making a mistake at the same time as coming into details, you get the following message displayed on your screen whilst you put up the shape. “You are seeing this web page due to the fact we’ve got detected Suspicious interest originating out of your IP. If you consider that there has been some mistake, please name the e-Filing helpdesk for assistance.”

Tax question: How is the interest paid on borrowings taxed?

I am in the commercial enterprise of manufacturing readymade garments. I also regularly invest in IPOs in addition to indexed securities. My supply of funds includes very own budget, borrowing from commercial banks, NBFCs and private parties. The price range borrowed is used for making funding which earns dividend income and capital profits. The borrowed budget also is used for the reason of business. Is the interest paid on borrowings will be allowed as a deduction in computing taxable enterprise earnings and capital gains? -Satish Shah

You can declare deduction of interest price on borrowings as consistent with usa36(1)(iii) of I.T. Act 1961 whilst computing enterprise profits provided you prove that the borrowing is used for the reason of business. The interest paid on borrowing that is used for making direct investments in IPO or buy of listed stocks on inventory alternate will now not be allowed as a deduction in opposition to capital profits united states36(1)(iii) of I.T. Act 1961. In computing capital profits the deduction of fee of acquisition and expenditure incurred on transfer of property is allowed u.S.48 of I.T. Act 1961.

Interest paid will no longer qualify under any of the above items. Section 36(1)(iii) lets in deduction most effective while loans are used for the motive of enterprise and career and no longer while computing capital profits.

Dividend income could be exempt usa10 of the I.T. Act 1961. Section 14A of the I.T. Act 1961, offers that no deduction will be allowed for any expenditure incurred for earning income that isn’t chargeable to tax. On this floor, interest paid on borrowing may also now not be allowed as deduction. In case of the mixed supply of finances, depending upon the truth of the case, the interest paid on the apportioned portion of borrowing will no longer be allowed as a deduction against dividend earnings and capital gains.

The problem as to whether or not the hobby paid on borrowing can be capitalized to the fee of acquisition of indexed shares purchased on the trade.
The said hobby will not qualify as part of the price of acquisition in recognize of indexed stocks bought on the inventory exchange as the shares are in life and the borrowing is used to gather existing stocks.
As regards funding made in IPO there is an opening between the date of borrowing and making application and date of allotment. Shares come into lifestyles handiest at the date of allotment and all through intervening length shares aren’t in lifestyles, from the investor factor of view.

It is feasible to argue that the interest paid from the date of creating utility till the date of allotment is to bring the asset into life and can be allowed to be introduced to the price of the acquisition. This view isn’t loose from doubt as the provision of Section 36(1)(iii) is not applicable to investment interest. There is a distinction between the cost of acquisition and acquisition value. If the hobby is capitalized and handled as cost of acquisition it’s going to end result into litigation with tax branch.

Leave a comment

Your email address will not be published. Required fields are marked *