TaxTonic #23: Vagaries of Sec.37 - A Deep Dive into Business Expenditures!
- Year of Publication: 2023
- ISBN: 0
Episode Duration:
100 minutes
Episode Background:
'TaxTonic', a 'subscriber only' thought leadership series, is Taxsutra's endeavour to consistently deliver top notch technical content to it's readers. The labyrinth of tax rulings on convoluted transactions keeps the world of taxation unpredictable and ever-evolving. This series will feature engrossing presentations, incisive analyses and a deep-dive by the tax experts on burning issues & controversies. So, gear up for a 'tonic' to chisel your tax mind and challenge your wit.
Speakers:
- Mr. N. C. Hegde (Deloitte Haskins & Sells)
Moderator:
Mr. Sachin Sastakar (Chartered Accountant)
What shall the episode cover?
Chapter IV of the Income Tax Act deals with computation of taxable income arising from business or profession. While numerous expenditures are specifically allowed under various provisions of this Chapter, Section 37 is a saviour for all unspecified expenditures incurred in a business or profession. Allowability of expenditure under Section 37 has its own challenges because of the various carve outs which invariably keep the taxpayers and the Revenue at loggerheads. The judicial precedents are galore that guide the allowability of an expenditure under Section 37, yet a nuanced fact is seldom sufficient to change the fate of the taxpayer.
In this episode of TaxTonic, Taxsutra presents a multifarious discussion to understand what does not ordinarily meet a naked eye vis-a-vis allowability or disallowability of business expenditures. This episode covers the challenges in claiming the following expenditures while computing the income from business or profession:
1. Employee Stock Option (ESOP) expenditure
2. Provision for Inventory obsolescence
3. Payment for lease premium including advance lease payments
4. Prior period expenses
5. Expenditure related to Setting up of business
6. Loss on sale/write off of investment in subsidiary
7. Expenditure of software acquisition
8. Non-compete fees
9. Royalty expenditure
10. Depreciation – Right to use v. Put to use
Taxsutra is considered the most credible source of tax news in the tax fraternity. What started as a fledgling start-up has now become a leading brand in the tax world not only in India, but across the globe. Taxsutra's diverse customer set includes Fortune 500 Companies, large Indian Business Groups, Global Conglomerates, Tax Judges, IRS Officers, CBDT, Tax Lawyers & thousands of tax practitioners.
Taxsutra suite of portals :
1. Real time tax news & analysis for Corporate Tax (www.taxsutra.com/dt)
2. Transfer Pricing Portal (www.taxsutra.com/tp)
3. GST and Central Indirect Taxes Portals (www.taxsutra.com/gst - www.idt.taxsutra.com)
4. "Taxsutra Database" - Powerful Online Direct Tax Reference and Search Tool (www.database.taxsutra.com)
5. LawStreetIndia (LSI) (www.lawstreetindia.com) contains sub-modules on Company law, Securities law (SEBI/SAT), FEMA, IP laws & Competition Law
6. Taxsutra Accounting Standards portal (Ind-AS) (www.greentick.taxsutra.com)
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- Year of Publication: 2023
- ISBN: 0
Episode Duration:
100 minutes
Episode Background:
'TaxTonic', a 'subscriber only' thought leadership series, is Taxsutra's endeavour to consistently deliver top notch technical content to it's readers. The labyrinth of tax rulings on convoluted transactions keeps the world of taxation unpredictable and ever-evolving. This series will feature engrossing presentations, incisive analyses and a deep-dive by the tax experts on burning issues & controversies. So, gear up for a 'tonic' to chisel your tax mind and challenge your wit.
Speakers:
- Mr. N. C. Hegde (Deloitte Haskins & Sells)
Moderator:
Mr. Sachin Sastakar (Chartered Accountant)
What shall the episode cover?
Chapter IV of the Income Tax Act deals with computation of taxable income arising from business or profession. While numerous expenditures are specifically allowed under various provisions of this Chapter, Section 37 is a saviour for all unspecified expenditures incurred in a business or profession. Allowability of expenditure under Section 37 has its own challenges because of the various carve outs which invariably keep the taxpayers and the Revenue at loggerheads. The judicial precedents are galore that guide the allowability of an expenditure under Section 37, yet a nuanced fact is seldom sufficient to change the fate of the taxpayer.
In this episode of TaxTonic, Taxsutra presents a multifarious discussion to understand what does not ordinarily meet a naked eye vis-a-vis allowability or disallowability of business expenditures. This episode covers the challenges in claiming the following expenditures while computing the income from business or profession:
1. Employee Stock Option (ESOP) expenditure
2. Provision for Inventory obsolescence
3. Payment for lease premium including advance lease payments
4. Prior period expenses
5. Expenditure related to Setting up of business
6. Loss on sale/write off of investment in subsidiary
7. Expenditure of software acquisition
8. Non-compete fees
9. Royalty expenditure
10. Depreciation – Right to use v. Put to use
Taxsutra is considered the most credible source of tax news in the tax fraternity. What started as a fledgling start-up has now become a leading brand in the tax world not only in India, but across the globe. Taxsutra's diverse customer set includes Fortune 500 Companies, large Indian Business Groups, Global Conglomerates, Tax Judges, IRS Officers, CBDT, Tax Lawyers & thousands of tax practitioners.
Taxsutra suite of portals :
1. Real time tax news & analysis for Corporate Tax (www.taxsutra.com/dt)
2. Transfer Pricing Portal (www.taxsutra.com/tp)
3. GST and Central Indirect Taxes Portals (www.taxsutra.com/gst - www.idt.taxsutra.com)
4. "Taxsutra Database" - Powerful Online Direct Tax Reference and Search Tool (www.database.taxsutra.com)
5. LawStreetIndia (LSI) (www.lawstreetindia.com) contains sub-modules on Company law, Securities law (SEBI/SAT), FEMA, IP laws & Competition Law
6. Taxsutra Accounting Standards portal (Ind-AS) (www.greentick.taxsutra.com)
