3 ms·
we have a few small "rules" in indian income tax calculation. * gifts to family members is tax-free. they incur no taxes and you can gift as much and as freque
by 2Gkashmiri 4y ago
we have a few small "rules" in indian income tax calculation.
* gifts to family members is tax-free. they incur no taxes and you can gift as much and as frequently (because it is already tax paid money)
* business expenditure has to be verified to have been actually paid and for business purpose. (doesnt matter if advertising budget is 90% of sales which has incurred losses. if you have paid that much for advertising, you will get a deduction on your profits.
* loss can be carried forward for only 8 years.
* "speculative loss" can be set off from that income only. ( no cross utilization of speculation loss from your regular business)
* corporations (limited ones) can only have 2 levels of hierarchy. no "shell" companies with webs and webs of orgs.
* the taxpayers are divided by geography and then by levels of income (currently 5) so level 1 will have the lowest income earners and 5 will have highest. cases are taken up and scrutinized accordingly. (hardly anyone from 1 will be picked up because those are slim pickings)
* automation is used to identify problems and correlate many things, like income to actual tax paid ratio. if it is too low, your case will be auto scrutinized.
i fail to understand (for lack of information), if trump is "incurring losses", how is his wealth increasing and not decreasing?
from wealth i mean say i have shares i purchased for $100 5 years ago and today they are worth $40,000. if i sell today, my income (wealth) will increase by $39900 and i will pay long term capital gains on this amount @ 10%. So net i will only get $31920 to invest for future. so on and so forth.
if i do not "sell" that share, in my books, i will only show the share as $100 because of historical price rule.
if i earn a dividend from my $100 cost price share (which is now $40k without selling), that dividend is also taxable as my income.
Now, if in the sale case, if i had $39900 gain but i had lost 50K in a second sale of a share, i would have a net LOSS of $10.1k so my wealth will decrease...