Tuesday, 27 April 2010
Wednesday, 14 April 2010
Q.1 What is the meaning of Hindu Undivided Family?
Ans. tax planning with HUF.Undivided Family (“HUF”) which is same as Hindu family is a body consisting of persons lineally descendant from a common , including their wives and unmarried daughters, who are staying together jointly; joint in food, estate and worship. The daughter, on her marriage, ceases to be a member of her father’s HUF and becomes a member of her husband’s HUF. You can do better
Q.2 What is a Hindu Coparcenary? In what ways is it different from a HUF?
Ans. A Hindu Coparcenary is a much narrower body within Hindu Undivided Family. Generally speaking, it is a body of individuals who acquires interest by birth in the joint family property. They are the son, grandson and great grandson of the holder of the joint property taxation of HUF, to better know the taxation of HUF.. The coparcenary, therefore, consists of a common ancestor and his lineal descendants in the male line within 4 degrees, running from and including such ancestor. No coparcenary can commence without a commonmale ancestor though, after his death, it may consist of collaterals such as brothers, uncles, nephews etc. The essence of coparcenary is community of interest and unity of possession. You should also see the
Q.3 What is the difference between a co-parcener and a member?
Ans. A HUF, as such, can consist of a very large number of members including female members as well as distant blood relatives in the male line. However, out of this, coparceners are only those males who are within 4 degrees in lineal descendent from the common male ancestor. The relevance of concept of coparcenary is that only coparceners can ask for partition. The other male family members; i.e, other than coparceners in a HUF, have no direct claim over HUF property, but can claim only through the coparceners.
Q.4 What are the advantages of HUF under Tax Laws?
Ans. The Income-tax Act, 1961 as well as Wealth-tax Act, 1957 recognise HUF as an independent assessable or taxable entity. This is done by specifically including “Hindu Undivided Family” in the definition of “person”, in section 2(31) of the Income-tax Act. As such, the income earned by such HUF will enjoy all exemptions and deductions; including the basic exemption from income-tax, so far as applicable.
Q.5 How a HUF can be created ? Who can be members of a HUF?
Ans. HUF is a creature of law. It cannot be “created” by act of parties, except in rare cases of adoption and reunion. Birth of a son in a Hindu joint family automatically makes him a member of the HUF. In view of this, all male members automatically become members of the HUF. In addition to that, if a child is adopted, then he also becomes a member of the HUF. Similarly, in case of reunion of erstwhile HUF family members, such reunited members become members of the reunited HUF. Moreover, upon marriage, wife becomes a member of her husband’s joint family.
Q.6 Which are the states in which HUF is not recognized?
Ans. Kerala is the State in which the HUF is not recognized. This is done by Kerala Joint Family System (Abolition) Act, 1975 with effect from 01.12.1976.
Q.7 Is a HUF necessarily resident?
Ans. No. Section 6 of the Income-tax Act, 1961 clearly contemplates a situation where a HUF can be non-resident also. In fact, HUF can also be Not Ordinarily Resident. A HUF will be considered to be resident in India unless, during the previous year, the control and management of its affairs is situated wholly outside India. In such a case, it will be treated as non-resident HUF. Moreover, in case of a HUF whose manager has not been resident in India in nine out of ten previous years preceding the previous year or has, during the seven previous years preceding that year, been in India for a total 729 days or less, such HUF is to be regarded as Not Ordinarily Resident withinof the Income-tax Act, 1961. As such, it is not necessary for a HUF to be resident in India.
Q.8 An HUF is having all the properties in India. The Karta of the HUF is residing outside India permanently and the female members are staying in India and are managing the affairs of the HUF. What would be the status of such HUF?
Ans. As discussed in the earlier answer, the test is not where the Karta resides, the test is where the control and management of the affairs of HUF is situated. Even if a part of control and management is situated in India, such HUF will be treated as resident in India. Though, generally, Karta is supposed to manage the affairs of HUF, it is not an absolute rule and, by consent, the power of control and management may be delegated to other members of the family, either fully or partially.
As such, in this case, the status of HUF would be resident in India.
Since HUF is deemed to bea distinct entity, it is widely prevalent to transfer certain sources of incomeof HUF and small HUFs of the sons, in a legal manner, thereby more assessees are created to divide the tax burden. Besides, an HUF may be used as tax planning device in a number of other ways, like partitions, re-unions of the partitioned families, family settlements/arrangements, renunciations, releases by the existing HUFs, payment of salaries to KARTA/members of the family, etc.
HUF funds may be invested in any source of income such as shares, securities, share in partnership Through KARTA, house property, etc. Deductions from gross total income of HUF are available as in case of an individual, generally.
Tuesday, 13 April 2010
Income tax department has changed the design of its websites. Antiquated plot of the website was not very well as comparison to the new design of the website. Now, website templates include flash files also to attract the attention of the visitors to some momentous points like faked email, TRPS, e-payment of taxes, and most important thing procedure to file an income tax return. Thanks to the website design and development company of the income tax department’s website for excellent designs. Hope it will be powerful at the server side on the last dates of income tax returns as in design. go to main website of income tax department : http://www.incometaxindia.gov.in/
Thursday, 8 April 2010
Sunday, 4 April 2010
What a chartered accountant does exactly is something of a mystery, which is of course if you’re not an accountant yourself. We know they can assist us with our yearly tax returns, but what else? An accountant is not only experienced to deal with the financial aspects of your business, they often have knowledge of the legal laws in many other areas and you can turn to them for assistance and direction.
Accountants can help out in your private life too. They should be aware of everything going on in your life, such as the arrival of a newborn in the family, as they can then use this information when dealing with your tax issues and areas of investment. If there is a baby born or your daughter is intending to get married it can help your accountant to know. If your accountant is well informed of the financial conditions that surround you, they can put this information to good use by making up strategies that will ultimately save you money present year and for following years to come.
The job of a good accountant is to design a long-term strategy aimed at helping you save money, for example, funds towards your children’s college fees or daughter’s future wedding or for your retirement.
Chartered accountants operate in various business and finance sectors. These can include the private sector, public practice work and government. In Australia they belong to the Institute of Chartered Accountants of Australia and use the elected letters CA, higher-ranking members of the Institute are nominated as Fellows and use the letters FCA.
Here are a few of the tasks you can expect a chartered accountant to perform.
Personal or business income tax returns can be prepared by accountants. Business tax returns for partnerships, trusts, companies, superannuation funds, rental properties and capital gains tax can all be assisted with. They also provide services to assist in legally decreasing tax payments and other related issues. Advice can be given on issues like sale of shares or property, business tax, business acquisitions or disposals and most suitable tax structure for you personally or your business.
Financial planning is an important concern for everyone, both for individuals and for businesses. It is about designing a strategy to safeguard you and your family’s future. An accountant will work trough certain areas and then devise a strategy that suit your needs. Financial planning is simply putting together a strategy and plan that will enable you to save towards costs of weddings, buying a house or retirement. Chartered accountants will look at your finances and outgoings and make a plan to suit you. A financial planning service should involve superannuation products for maximising retirement benefits, investments for building wealth together with shares, property, managed funds and fixed interest. Insurance should also be covered as protection from economic loss in the event of death, disablement, accident or illness.
Superannuation is a way to save and invest money whilst you are working for future use, the largest asset of most Australians after their home. Chartered accountants can offer advice on Self Managed Superannuation Funds (SMSF) and whether it is the right choice for you. For accounting services and for registering a new business, you might find chartered accountants very useful.
If you are already established business wise they can give you advice on how to increase profits by applying effective financial plans and systems. Strategic planning, business planning, business valuations, accounting services, payroll services and salary packaging, financial statement preparation and computer accounting software are other areas an accountant deals with.
Accountants today are computer friendly, meaning there is no need to make appointments to go into the accountancy office. Most things can be done online, communication and files the most common. Income tax returns can even be arranged from computerised accounting files, such as MYOB and Quickbooks. Personnel at the agency you decide for should also be informed and knowledgeable on any tax related issues and have the capacity to answer any queries you might have regarding your business or personal account.
Look for a chartered accounting firm offering professional financial planning services. If you are seeking a proficient financial planning service or want help setting up a small business then they can help you realise your goals.
Thursday, 1 April 2010
W.e.f. 1 April The 2009-10 had made it mandatory for and non-residents to quote this number or face a higher rate of withholding tax. It comes into effect from Thursday, April 1.
The idea behind the rule is to encourage more people to obtain PAN, a 10-digit alphanumeric tax payer identification number, and thereby become visible to tax authorities. Theof the country is a mere 3.3 crore because of massive underreporting of incomes and large-scale exemptions.
Quoting of PAN will allow income tax authorities to establish an audit trail and catch tax evaders.
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