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Agriculture & Forest Allowance

Agriculture & Forest Allowance. Agriculture allowance a) Determination of Qualifying Agriculture Expenditure (QAE) b) Types of Agriculture Allowance c) Disposal of assets 2. Forest Allowance a) Determination of Qualifying Forest Expenditure (QAE) b) Types of Forest Allowance.

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Agriculture & Forest Allowance

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  1. Agriculture & Forest Allowance • Agriculture allowance a) Determination of Qualifying Agriculture Expenditure (QAE) b) Types of Agriculture Allowance c) Disposal of assets 2. Forest Allowance a) Determination of Qualifying Forest Expenditure (QAE) b) Types of Forest Allowance salmah muhamed act3152

  2. Agriculture allowance Include: • cultivation of crops or vegetable produce • animal farming • Aquaculture • Inland farming • Reafforestation of timber • Other agriculture or pastoral pursuits salmah muhamed act3152

  3. Determination of QAE (Para 7, Sch 3) Include • Clearing & preparation of land • Planting of crops • Construction on that farm of a road or bridge • Construction on a farm of a building -the working of the farm -for the welfare of person - as living accommodation -building is of little value if farm ceased operation salmah muhamed act3152

  4. Types of Agriculture Allowance • No initial allowance. • Clearing and preparing of land (50%) • New planting (50%) • Construction of road or bridge (50%) • Construction of farm and building - living accommodation - any other building . Smoke house, office (10%) salmah muhamed act3152

  5. Disposal of assets • Agriculture allowance is apportioned on a time basis up to the date of sale. • AE for the disposer: No of days from the beginning X agriculture allowance of the basis period to the day of disposal 365 days salmah muhamed act3152

  6. Disposal of assets • The purchaser will claim the balance of the AE due to the transferor regardless of the price paid for the asset salmah muhamed act3152

  7. Agriculture charge (AC) • Similar to balancing charge. It is the withdrawal of agriculture allowance previously given.AC arise in the following circumstances: -grant from government, state government or statutory authority -disposal within 6 years • Election for spread back give notice in writing to the DGIR to spread bacj the agriculture charge to the past YAs salmah muhamed act3152

  8. Forest Allowance • Person carrying on business of extracting timber salmah muhamed act3152

  9. Determination of Qualifying Forest Expenditure (QAE • No initial allowance • A road or building- 20% • Living accommodation for employee-10% salmah muhamed act3152

  10. Permanent cessation(para 31, Sch 3) • Where company ceases to extract timber, the remaining residual expenditure is available as forest allowance at the YA of cessation salmah muhamed act3152

  11. Forest charge (Para 32 Sch 30 • It is a withdrawal of the forest allowance previously claimed. • Election to spread back the forest charge taxpayer makes election in writing to the DGIR to spread back the forest charge to the past Yas, for which those allowances were made salmah muhamed act3152

  12. Transferee (Purchaser) • Would not get any forest allowance upon purchase. • Forest allowance would be given only on new qualifying expenditure incurred by the purchaser salmah muhamed act3152

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