PGBP

Question 1

business and profession

Answer 1

business
includes any trace ,commerce, manufacture or any venture in nature of trace ,commerce, manufacture

profession
occupation requiring some degree of learning incl vocation

Question 2

manner of accounting for PGBP or ifos u/s 145(1)

Answer 2

cash or mercantile system

Question 3

sec 28 Income chargeble under this head

Answer 3

income under PGBP includes
i. pgbp
ii. profit or sale of import entitlements license
iii. cash compensatory support or duty drawback
iv. compensation amt received for contravention of any contract
v. any amt received under key man insurance policy
vi. value of any benifit or perquisite
vii. sum due to or received by a partner of a firm
viii. any amt received under a ageement for non compete, or not sharing know how or patent etc
ix. fair market value of inventory on its conversion as capital asset
x. income from specified services for its members by a trade, profession, business

Question 6

sec 29 computation of PGBP

Answer 6

In accordance with sec 30 to 43D
i. admissible deductions sec 30-37
ii inadmissible deductions sec 40
iii. exp not deductible in some cases sec 40A
iv. profits chargeble to tax sec 41
v other provisions

Question 7

rent rates taxes repairs and insurance for building u/s 30

Answer 7

expenses. owner tenent

i rent no notional allowed
rent allowed

ii. repairs. allowed allowed
cost of repairs of capital nature is not allowed

iii other expenses rates and taxes and insurance allowed allowed

iv primises partly used for business and partly for other
only proportionate exp attributable to business is allowed

Question 8

repairs and insurance of machinery, plant and furniture u/s 31

Answer 8

expenses owner tenent

i rent. allowed allowed

i. repairs. allowed allowed
-to claim deduction asset must have been used in business
-assets owned but not used in previous year not allowed as deduction
-if asset used in part of PY, assessee entitled to claim full deduction (not proportionate to time)

ii capital repairs. NOT ALLOWED
repair include renewal or renovation
BUT NOT REPLACEMENT OR RECONSTRUCTION\

iii. Insurance premium ALLOWED if
-insurance against risk of damage or desstruction of plant machinery or furniture
-used im biz and prof
-premium actually paid