What is a tax benefit rule?
Legal Definition of tax benefit rule : a tax rule requiring that if an amount (as of a loss) used as a deduction in a prior taxable year is recovered in a later year it must be included in the gross income for the later year to the extent of the original deduction.
What is income tax rules?
Any Indian citizen aged below 60 years is liable to pay income tax, if their income exceeds Rs 2.5 lakhs. If the individual is above 60 years of age and earns more than Rs 2.5 lakhs, he/she will have to pay taxes to the Government of India.
What is the tax arbitrage rule?
The ‘tax arbitrage rule’ reduces the allowable deduction for interest expenses by 33% of the interest income subjected to final tax. Mergers and consolidations are tax-free exchange transactions. However, gain or loss shall be recognized on subsequent transfers of properties subject to the merger or consolidation.
What are taxable recovery items?
A recovery is a return of an amount you deducted or took a credit for in an earlier year. The most common recoveries are refunds, reimbursements, and rebates of itemized deductions.
Do you get AMT tax back?
The Prior-Year Minimum Tax Credit lets you get back money you paid as an AMT in a prior year. You can only claim this credit in a year when you don’t have to pay AMT. However, AMT credit carryforward is granted for unused portion of the credit to future years.
What is the tax sparing rule?
The credit is equivalent to a particular amount representing the difference between the regular corporate income tax rate and the reduced 15% tax rate. This preferential tax rate is still present in the current Tax Code and is popularly known as the “tax sparing rule”.
What is a recovery exclusion?
The term “recovery exclusion” as used in this section means an amount equal to the portion of the bad debts, prior taxes, and delinquency amounts (the items specifically referred to in section 111), and of all other items subject to the rule of exclusion which, when deducted or credited for a prior taxable year, did …
What is cost recovery deduction?
2021-01-07 Cost recovery refers to the deduction of a portion of the cost of an asset, used in a business or for the production of income, over its useful life through depreciation, amortization, or depletion.