Profits chargeable to tax

When a loss, expense, or trade responsibility incurred by the taxpayer and afterwards during any prior year has been taken into account in the assessment for any year:-

  (a) The aforementioned individual has received some advantage in relation to such trading responsibility by means of remission or termination of such liability, whether in cash or in another manner. Regardless of whether the business or profession in regard to which the allowance or deduction has been made was active in that year or not, the sum obtained by such person or the value of the profit accruing to him shall be regarded to be profits and gains of business or profession and, as such, chargeable to income-tax as the income of that previous year; or

  (b) The business successor has received some advantage in relation to the trading liability indicated in the preceding article by means of remission or cessation, whether in cash or in any other form, in relation to any amount in which loss or expense was incurred by the first-mentioned person. The proceeds received by the successor in enterprise or the value of the benefit accruing to the successor in business will be considered earnings and profits of the business or profession and will be taxed as income for the prior year. Are you curious about 80g deduction limit?

"Successor in business" is defined as follows for the purposes of this subsection:

(i) the combined firm in cases when one company and another have merged;

(ii) if any other person succeeds the first-mentioned person in such business or profession, the other person;

(iii) when another firm succeeds a firm that is already engaged in a trade or profession.

When an asset used to represent a capital investment in scientific research is sold off without being put to any other use and the proceeds of the sale combined with all deductions created under clause (i), (ia) of sub-section (2), clause (c) of sub-section (2B), of section 35,  exceed the amount of the capital investment, the amount of the excess or the sum of the deductions made in this manner, whichever is smaller, shall be taxable as income from the business or profession of the year prior to the year the sale occurred.

Don't wait more to see content on 80g donation.