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Concept of Hindu Undivided Family (HUF)

Concept of HUF The term 'Hindu Undivided Family' has not been defined under the Income Tax Act. It is defined under the Hindu Law as a family that consists of all persons lineally descended from a common ancestor, including wives and unmarried daughters. This means membership of a HUF does not come from a contract but from status of the person in such families. A HUF cannot be formed by a group of people who do not constitute a family. Lineal descendents with a common ancestor is a must Type of HUF There are two types of HUF Mritakshra sampraday Dayabhag sampraday Dayabhag Sampraday (दयाभाग संप्रदाय) The dayabhag law applies in West bengal and Assam . According to this law, the son doesn't acquired any right by birth in the ancestral property. The son's right arise for the first time on father death. All properties thus, devolve by inheritance and not by survivorship. Under this school of law, the coparcenary is formed only on death of the father. Fem

Diffrence between Previous year & Assessment years

Assessment Year [Sec. - 2 (9)] Meaning and Definition  Assessment year refers to a year in which financial year is assessed. Assessment year  is the evaluation year of the financial year. Or  Assessment year is the tax calculation year. Explanation If a person "A" earned income in financial year 2016-17, then he will pay income tax in assessment year 2017-18. Definition:- Assessment year may be defined as a year in which the income of the previous year is to be assessed. Previous year [Sec. -3] Meaning and Definition Previous year refers to the year in which income is generated. The income of the previous year is taxed in the immediately following assessment year. Definition:- Previous Year means financial year, which is immediately preceding  the assessment years.   Introduction to Income tax Act 1964 Sr. No.  Subjects Name  Links 1 Previous years & assessment years Click Here>>> 2 Assessee Click Here>>&

What is Capital ? ( Meaning, Definition and Type of Capital)

Capital is an investment which invested by Partners, Proprietor, or an Entrepreneur, in their businesses. The capital may be introduced in business as both monetary or assets form. The main purpose behind the capital investment in the business is to start the business properly and run there business smoothly. Definition of Capital. Capital refers to the financial resources used in business to fund their operations like plant & machinery, cash, equipment, and other resources. These resources allowed to produce products or services to sell to the customer. Type of Capital. There different types of Capital 1) Fixed Capital:-    It refers to the durable capital goods, which used in the production of goods again and again until they wear out. Like machinery, tools, factory, building, etc are fixed capitals.  2) Working Capital:- It refers to the amount which helps to run the business. The funds being constantly used to pay for core business operations, which are an

Creditor (Meaning, Definition,Types of Creditor)

What is Creditor? Any person or organization who sales goods or services in credit or grant money on credit to the other person or organization is known as a creditor. A business that provides suppliers or services to companies or an individual and does not demand payment immediately is also considered as a creditor. Who is Creditor? The creditor may be a person, supplier, or Bank that has provided credit to the company. The amount owed to the creditor is reported on the company balance sheets as liabilities. Creditors can be classified as personal or real. People who loan money to friends or families are known as personal creditors. Real creditors have a legal contract with borrowers, sometimes granting the lender the right to claim any of the debtor real assets (For example, bank or finance company). Types of Creditor There are two types of Creditor 1) Secured Creditor      2) Unsecured Creditor 1) Secured Creditor The Creditor or Lender who gives credit to any Company,

What is Tax Deduction at Source (TDS)? Meaning, Definition, and various tax deduction sources

What is TDS? TDS is the abbreviation of Tax deduction at sources. The concept of TDS was introduced with the aim to collect the tax from the very source of the income. As per this concept, a person (payer) who make a payment any specified nature to any other person (Payee), shall deduct tax at source and remit the same into the account of the central government.  For example, Mr. X make payment of ₹50000, to Y Ltd as a professional fee. So Mr. X will deduct TDS @10% (as per TDS Rate chart) i.e. ₹ 5000 and remit the ₹5000 into account of central government. Deduction of Tax at Source and Advance payment (Sec. 190) The total income of assessee which he or she earned in the previous year is taxable in relevant assessment years. For example,  Income earned in PY 17-18 are taxable in AY 18-19, but the income tax is recovered from the assessee in Previous years itself through:- Tax deduction at source (TDS) Tax collection at source (TCS) Payments of advance tax.

Residential Status of Hindu Undivided Family (HUF)

HUF is a short form of Hindu Undivided Family. HUF is under in categories of persons under income tax act. The main motive to create HUF is taxed separately from its members. A Hindu family comes together and forms a HUF. HUF is not only for Hindu, even the Jain, Buddhist, Sikh can also form a HUF. A HUF is taxed separately, therefore deductions under section 80 and exemption allowed under the tax law can claim separately. So before calculating tax of HUF, the most important step is to know the residential status of HUF. Residential Status of HUF       The residential status of persons other than the individual is based on the place. The HUF is said to be resident if the control and management of its affairs are wholly or partly in India. A HUF is said to be resident  If the control and management of its affairs are situated wholly or partly in India. A HUF is said to be Non-Resident If the control and management of its affairs are situated wholly outside of India. Res

Residential Status Under Income Tax Act, 1961

Hindi Income tax Accounting Before calculating taxable income first thing is the need that we should know about the residential status of persons. Residential Status plays important role in income tax act. Residential status determines the taxable income which generated from activity performing in India or another country. Types of Residential status Residents 1) Ordinary residents  2) Non-ordinary residents Non-residents Note:-Only individual and HUF can be ordinary or Non-ordinary residents.All other classes of assessees can be either a resident or non-resident. Primary Conditions:- The residential status of Individual/HuF An Individual is said to be Resident in India if he satisfies at least one basic conditions: He is in India at least 182 days in previous years (Financial Year) Or He is in India for 60 days or more during that financial year and has been in India for 365 days or more during 4 previous years immediately preceding the relevant financ

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