Briefly state the various provisions of the Income Tax Act

Under the Income Tax Act different classes of assessees can claim Such of certain income/deductions in the assessment of income. ’11ch claim is however subject to the fulfilment of certain conditions and compliance with certain procedures. The assessee must get his accounts audited and submit a certificate from a Chartered Accountant to avail of these exemptions/deductions: In the following instances, certification for claiming exemptions/deductions has been made compulsory.

(1) Audit of Public Trusts Section 11 of the Income Tax Act exempts certain income of public Charitable and religious trusts or the institution from the purview of the levy of income tax. However, to avail of the exemptions certain conditions as laid down in section 12A must be satisfied. Section 12A states that where the total income of a public trust or institution exceeds Rs. 50,000 during the previous year:

(a) the accounts of the trust/institution have to be audited by a Chartered Accountant; (b) the certified audit report and a statement of particulars duly signed by the auditor must be submitted along with the return of income. (2) Deduction under Section 35D Section 35D provides that preliminary expenses incurred in setting up or extension of an industrial undertaking may be allowed to be deducted from taxable income over a period of 10 years if (a) the accounts of the undertaking are audited by a Chartered Accountant and (b) the audit report and a statement of particulars in the specified form are submitted along with the return of income to the Income Tax authority. (3) Deduction under Section 35E Section 35E provides that a company or a resident person engaged in any operation relating to prospecting for, or extraction or production of any mineral specified in the seventh schedule to the Act can claim deduction of expenditure incurred from the taxable income over a period of 5 years, if (a) the accounts of the undertaking are audited by a Chartered Accountant and (b) the audit report with the statement of particulars in the prescribed format is submitted to the Income Tax authority. (4) Deduction under Section 80HH Section 80HH provides that a person or a company setting up an  industrial undertaking or an approved hotel in a backward area can claim deduction for an amount equal to 20% of p r 0 ts and gains re. admissible if the accounts of the business are audited by deduction Chartered afrom the business for a period of 10 years. Such and the audit report along with the return of income are forwarded to the Income Tax Authority.

(5) Deduction under Section 80HHA Under Section 80HHA a small scale industrial undertaking call of Claim deduction from thegross total income for an amount equal to tt the 20% of profits and gains for a period of 10 years starting t e year-b: accounts ccounts are of production. The deduction is admissible only if tl audited by a Chartered Accountant and the audit report in the prescribed form is submitted along with the return of income to the I.T. authority.

(6) Deduction under Section 80HHB According to Section 80HHB, a resident Indian can claim deduction from gross total income for an amount equal to 50% of the profits and gains from the business of execution of foreign projects provided —(a) the assessee maintains separate accounts in respect of such business; (b) the accounts are audited by a qualified accountant; and

(c) the audit report in the prescribed format along with the return of income is submitted to the I.T. authority. (7) Deduction under Section 80HHC An Indian company or a person residing in India, engaged in th export of goods (as specified in Section 80HHC) can claim a deductio from his total income for an amount equal to the profits earned on export of such goods. The deduction will be allowed if the assessee furnishes in the prescribed form 10 CCAC, along with the return of income, report of the Chartered Accountant, certifying that the deduction has been correctly claimed in accordance with the Section.

(8) Deduction under Section 80-IA According to section 80-IA, a certain portion of profits (30% in cas of corporate assessees and 25% for non-corporate assessees) derive from business of an industrial undertaking or business of a Hote or of operating cold storage or ship is allowable for deduction provide the business has been started after April 1, 1991 but before Marc 31, 1995. The deduction is available for 10 years but 12 years to cooperative undertakings. The claim of deduction will be alloweA provided the accounts are audited and the assessee furnishes the aud report in the prescribed form along with the return of income to the authority. Selective Tax Audit

Updated: July 24, 2019 — 1:58 pm

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