09-20-2010, 07:24 PM
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Safoora</i>
<br />in the financial statement of an AOP the following appear under the head other incomes..
1) accounting profit on disposal of fixed assets
2) reversal of provisions of doubtful debt pertaining to the previous year
3) dividend recvd from a listed company
4) profit on debt
now i m required to explain with the reason as to how the above items will be treated in the computation of taxable income S
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Dear,
The following are the respective replies, keeping in view the case of an AOP.
1. Accounting profit on disposal will be discarded from the net profit and taxable profit on disposal will be added to arrive at the taxable income.
2. Deduction on account of doubtful debt is not admissible expense, however, actual bad debts will be deductible or provision of bad debts will be admissible only if there is a reasonable certainty of that provision to be proved bad in future.
Doubtful debt will surely be reversed (in the case referred by you) but it will be shown in âincome from businessâ and not in âincome from other heads.
3. Dividend should be shown as separate block of income and not to be shown in other incomes.
4. Since your case is with regard to an AOP; If profit on debts has been received from the specified institution, then tax deduction will be treated as final tax.
Let me know if confusion still exists.
Best Regards,
Faisal.
<br />in the financial statement of an AOP the following appear under the head other incomes..
1) accounting profit on disposal of fixed assets
2) reversal of provisions of doubtful debt pertaining to the previous year
3) dividend recvd from a listed company
4) profit on debt
now i m required to explain with the reason as to how the above items will be treated in the computation of taxable income S
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Dear,
The following are the respective replies, keeping in view the case of an AOP.
1. Accounting profit on disposal will be discarded from the net profit and taxable profit on disposal will be added to arrive at the taxable income.
2. Deduction on account of doubtful debt is not admissible expense, however, actual bad debts will be deductible or provision of bad debts will be admissible only if there is a reasonable certainty of that provision to be proved bad in future.
Doubtful debt will surely be reversed (in the case referred by you) but it will be shown in âincome from businessâ and not in âincome from other heads.
3. Dividend should be shown as separate block of income and not to be shown in other incomes.
4. Since your case is with regard to an AOP; If profit on debts has been received from the specified institution, then tax deduction will be treated as final tax.
Let me know if confusion still exists.
Best Regards,
Faisal.
