Section 145 of Income tax is common to both PGBP and Income from Other Sources

 

PGBP

Income from Other Sources

As per Section 145

PGBP Income to be computed using Method of Accounting regularly employed by Assessee

 

Assessee can either use

1. Cash System of Accounting

Incomes are recorded when received, expense are

booked when paid

or

2. Mercantile System of Accounting

In this, income or expense are booked when due even

though not yet paid

 

 

 

 

 

 

 

 

 

 

As per Section 145

Income from Other Sources is to be computed using Method of Accounting regularly employed by Assessee

 

Assessee can either use

1. Cash System of Accounting

Incomes are recorded when received, expense are booked when paid

or

2. Mercantile System of Accounting

In this, income or expense are booked when due even though not yet paid

 

 

Exception

However for Deemed Dividend under Section 2 (22) (e)

Only Payment basis can be used i.e. We can use only Cash System of Accounting and it is taxable only when dividend received

(Loan Given by Company to person who is substantially interested is deemed to be dividend as per this Section)

 

  1. Income Tax
  2. Income from Other Sources
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides GST Training in Delhi. Register now.