Method of Accounting Section 145

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)