Deduction of main office expenses for non-residents

Despite anything to the contrary stated in sections 28 to 43A, in the case of a taxpayer who is a non-resident, no allowance shall be made in computing the income chargeable under the head "Profits and gains of business or profession" in respect of a significant portion of the expenditure in the nature of main office outlay as is in excess of the amount computed as per the following:-

  (a) a percentage of the adjusted total revenue equal to 5%;

  (b) the amount of the portion of the assessee's head office expenses that can be traced back to either their company or profession in India, whichever is less.

Easily read about the benefits of deduction under section 80g.

The amount under subsection (a) will be calculated at a rate of 5% of the assessee's average adjusted total income, provided that the adjusted overall revenue of the assessee represents a loss in that case. 12a is  must for any NGO.

The term "adjusted total income" refers to the total income calculated in accordance with the provisions of this Act, excluding the effects of any allowance mentioned in this section, sub-section (2) of section 32, deduction mentioned in sections 32A, 33, 33A, or the first proviso of sub-section (1) of section 36, any loss conducted forward under sub-section (1) of section 72, sub-section (2) of section 73, sub-section (1) or sub-section (3) of section 74.

According to "average adjusted total income":-

  (a) if the assessee's total income is taxable for each of the three years of assessment that came just before the applicable assessment year, one-third of the entire amount of the adjusted total income for those prior years that applied to those three assessment years;

  (b) one-half of the entire amount of the adjusted total income for the prior years relevant to the aforementioned two years of assessment in the event that the assessee's overall revenue is only assessable for two of the aforementioned three years of assessment;

  (c) if only one of the aforementioned three assessment years is applicable to the assessee's total income, the amount of the applicable assessment year's applicable adjusted total income for the prior year. Easily know about the 80g deduction.

"Head office expense" refers to executive and general administration costs that the assessee incurs outside of India, including costs related to:-

  (a) any premises outside of India utilised for the purposes of the enterprise or profession's rent, rates, taxes, repairs, or insurance;

  (b) salaries, pay, annuities, pensions, fees, commissions, gratuities, perquisites, or profits paid or permitted to any employee or other person working in, or managing the activities of, any office outside of India;

  (c) travel by any worker or other individual employed by, or in charge of, any office outside of India; and

  (d) any additional items relating to executive and general management that may be required.

The wait is over for 12a registration.