INCOME TAX

The Central Government has been empowered by Entry 82 of the Union List of
Schedule VII of the Constitution of India to levy tax on all income other than
agricultural income (subject to Section 10(1)).[1] The Income Tax Law comprises The
Income Tax Act 1961, Income Tax Rules 1962, Notifications and Circulars issued
by Central Board of Direct Taxes (CBDT), Annual Finance Acts and Judicial
pronouncements by Supreme Court and High Courts.
The government imposes a tax on taxable income of all persons including
individuals, Hindu Undivided Families (HUFs), companies, firms, association of
persons, body of individuals, local authority and any other artificial judicial person.
Levy of tax is different on each individual. The levy is governed by the Indian Income
Tax Act, 1961. The Indian Income Tax Department is governed by CBDT and is part
of the Department of Revenue under the Ministry of Finance, Govt. of India. Income
tax is a key source of funds that the government uses to fund its activities and serve
the public.
The Income Tax Department is the biggest revenue mobilizer for the Government. The
total tax revenues of the Central Government increased from ₹1,392.26
billion (US$21 billion) in 1997-98 to ₹5,889.09 billion (US$88 billion) in 2007-08.

Administrative set-up[edit]
Central Board of Direct Taxes

Backend job

Public handling

Principal Director General, Director General

Principal Chief Commissioner of Income Tax, Chief Commissioner of Income Tax

Principal Director, Director

Principal Commissioner of Income Tax, Commissioner of Income Tax, CIT (Appeals)

Principal Additional Director, Additional Director

Principal Additional Commissioner, Additional Commissioner

Principal Joint Director, Joint Director

Principal Joint Commissioner, Joint Commissioner

Deputy Director, Additional Director

Deputy Commissioner, Assistant Commissioner

Income Tax Officer

Tax Recovery Officer
Inspector
Senior tax assistant
Tax assistant
Residential status
For all purposes of Income tax Tax payers are classified into 3 categories
1. Resident and Ordinarily Resident
2. Resident but Not Ordinarily Resident
3. Non-Resident
Scope
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it. (October
2015)
Charge to income-tax
An entity whose income exceeds the "maximum amount", which is not chargeable to
the income tax, is an assessee, and shall be chargeable to the income tax at the rate or
rates prescribed under the finance act for the relevant assessment year, shall be
determined on basis of his residential status.
Income tax is a tax payable, at enacted by the Union Budget (Finance Act) for every
Assessment Year, on the Total Income earned in the Previous Year by every Person.
The chargeability is based on nature of income, i.e., whether it is revenue or capital.
The rates of taxation of income are-:
Income Tax Slabs and Rates for the Assessment Year 2016-17 (applicable on income
earned during 01.04.2015 to 31.03.2016) for various categories of Indian Income Tax
payers.[4]
1. Individual resident aged below 60 years

Senior Citizen 3. Less : Tax Rs.but does not exceed Rs. if applicable) .2.50. Surcharge : 12% of the Income Tax.e. 10. Any NRI / HUF / AOP / BOI / AJP 5.00. 2000/-. 2. where taxable income is more than Rs.00.50.000/- Rs. 1 crore.+ 30% of the amount by which the taxable income exceeds Rs.50. 10.000/. iii.00. Firm 7. Where the taxable income exceeds Rs. #Senior Citizen (Individual resident who is of the age of 60 years or more but below the age of 80 years at any time during the previous year i.000/Credit u/s 87A . Where the taxable income does not NIL exceed Rs. 10% of the amount by which the taxable ii.000/-.000/. (Marginal Relief in Surcharge. 120.00. 2. (Marginal Relief in Surcharge.00.000/.000/- Rs. Local Authority 8.000/-. Where the taxable income exceeds Rs. Co-operative Society 6. Domestic Company 9.+ 20% of the amount by which iv.00.000/-. the taxable income exceeds Rs. 2.10% of taxable income up to a maximum of Rs.000/-. born on or after 1 April 1936 but before 1 April 1956) Income Slabs Tax Rates i. 5. if applicable) Education Cess : 3% of the total of Income Tax and Surcharge.but does not exceed income exceeds Rs. 1 crore. Where the taxable income exceeds Rs. born on or after 1 April 1956) Surcharge : 15% of the Income Tax. 10. 25. 5. Other Company #Individual resident aged below 60 years (i.000/. where taxable income is more than Rs.e. 5. Super Senior Citizen 4.

000/-. 5.000/- Rs.50.the taxable but does not exceed Rs. 10. 2.000/-.+ 30% of the amount by which the taxable income exceeds Rs.000/-. 25.00. 2. 100.000/.00.000/. 10.00. Where the taxable income exceeds Rs. 1 crore. if applicable) Education Cess : 3% of the total of Income Tax and Surcharge.e.00. iii. Where the taxable income exceeds Rs.000/-.00. Where the taxable income exceeds Rs.000/. 2. 5.00. born before 1 April 1936) Income Tax :Tax Calculator : AY 2016-17 Income Slabs i. Rs.+ 20% of the amount by which the taxable income exceeds .50.00.000/-.000/but does not exceed Rs. #Super Senior Citizen (Individual resident who is of the age of 80 years or more at any time during the previous year i.00. iii. 10.10. Tax Rates NIL 20% of the amount by which ii. where taxable income is more than Rs. Where the taxable income does not exceed Rs. 5. Surcharge : 12% of the Income Tax.000/-.000/but does not exceed Rs. #Any NRI or HUF or AOP or BOI or AJP Income Tax :Tax Calculator : AY 2016-17 Income Slabs i. ii.00.000/-. Tax Rates NIL 10% of amount by which the taxable income exceeds Rs. Where the taxable income exceeds Rs.000/income exceeds Rs. 5. 5. (Marginal Relief in Surcharge. Where the taxable income does not exceed Rs.50.Education Cess : 3% of the total of Income Tax and Surcharge.

Where the taxable income exceeds Rs. where taxable income is more than Rs.000/-. 20. ii.000/-. if applicable) Education Cess : 3% of the total of Income Tax and Surcharge. #Firm Income Tax : 30% of taxable income. iv.+ 30% of the amount by which the taxable income exceeds Rs.00. Surcharge : 12% of the Income Tax.+ 20% of income in excess of Rs. 1 crore.Body of Individuals.  Abbreviations used : NRI .Rs. 1 crore. 3. 10. Rs.000/but does not exceed Rs.+ 30% of the amount by which the taxable income exceeds Rs. Surcharge : 12% of the Income Tax. where taxable income is more than Rs. 20. iii.00. 10.000/-. AJP .Non Resident Individual.000/-.000/.000/- Rs.000/-. 1 crore. (Marginal Relief in Surcharge. where taxable income is more than Rs.000/. Surcharge : 12% of the Income Tax. if applicable) Education Cess : 3% of the total of Income Tax and Surcharge.Association of Persons. Tax Rates 10% of the income.000/-.Hindu Undivided Family.000/-. BOI .00. 10. Where the taxable income does not exceed Rs.000/. if applicable) . 5.Artificial Judicial Person #Co-operative Society Income Tax : Income Slabs i. Where the taxable income exceeds Rs. 10. (Marginal Relief in Surcharge. 10. Where the taxable income exceeds Rs. (Marginal Relief in Surcharge. HUF . Rs. 1. 20. AOP . 125.

1961 but before the 1st day of April. Surcharge : The amount of income tax as computed in accordance with above rates. 1 crore less income tax on income over Rs.000/1. Surcharge @12% of Income Tax Rs. 10 crores. if applicable) At the rate of 5% of such income tax. if applicable) Education Cess : 3% of the total of Income Tax and Surcharge.01. #Local Authority Income Tax : 30% of taxable income.00. 1.Education Cess : 3% of the total of Income Tax and Surcharge. 3. i)Company other than a Domestic Company Income Tax : @ 50% of on so much of the taxable income as consist of (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March. 1 crore.25. #Domestic Company Income Tax : 30% of taxable income. he is liable to pay Surcharge at prescribed rates mentioned above on Income Tax payable by him. if applicable) At the rate of 12% of such income tax. and after being reduced by the amount of tax rebate shall be increased by a surcharge At the rate of 7% of such income tax. been approved by the Central Government. 1976. provided that the taxable income exceeds Rs. Surcharge : 10% of the Income Tax. provided that the taxable income exceeds Rs. and after being reduced by the amount of tax rebate shall be increased by a surcharge as under At the rate of 2% of such income tax. However. (Marginal Relief in Surcharge. 1964 but before the 1st day of April. Maximum Surcharge payable (Income over Rs. 10 crores. the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of Rs. in either case.036 3. Income Tax on income of Rs. or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February.25. 1 crore Rs. Education Cess : 3% of the total of Income Tax and Surcharge. Education Cess : 3% of the total of Income Tax and Surcharge. 1 crore. 1976. provided that the taxable income exceeds Rs. 1 crore. 700/. 1 crore) Rs. Income Tax Rs. 28.(1000 . 1 crore by more than the amount of increase in Example In case of an individual assessee (< 60 years) having taxable income of Rs. @ 40% of the balance Surcharge : The amount of income tax as computed in accordance with above rates. 1 crore. where taxable income is more than Rs. Marginal Relief in Surcharge When an assessee's taxable income exceeds Rs.300 2. 28. and where such agreement has.39. provided that the taxable income exceeds Rs. (Marginal Relief in Surcharge.000 4. (Marginal Relief in Surcharge.

But. About 1% of the national population. It grew 22% annually on average during 2000-10 to 0..300) 5.336/. 3. grew 7% annually on average to 2. complete and up-to-date statement of law out of ignorance or otherwise. Marginal Relief in Surcharge Rs.26.78 million income taxpayers. called the upper class. Income Tax + Surcharge payable Rs. this site does not make any claim regarding the information provided on its pages as correct and up-to-date. fall under the 30% slab. this site will not be liable in any manner whatsoever for such loss or damage. In case.000 6. Themiddle class. 28.700) Disclaimer : All efforts are made to keep the content of this site correct and up-to-date.(339036 . any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct.[5] Residential status Residential status of a person other than an individual Control & management of affairs of the taxpayer is wholly in India Control & management of affairs of the taxpayer is wholly outside India Control & management of affairs of the taxpayer is partly in India partly outside India HUF1 Resident Non-Resident Resident Firm Resident Non-resident Resident Association of persons Resident Non-resident Resident Indian company2 Resident Resident Resident Foreign company3 Resident Non-resident Non-resident Any other Resident person except Non-resident Resident Type of person .58 million income taxpayers.38. The contents of this site cannot be treated or interpreted as a statement of law. who fall under the 10% and 20% slabs.

Heads of income[edit] The total income of a person is segregated into five heads: Income from salaries  Income from house property . For resident (in case of firm. If such an income satisfies one or none the above conditions then it is an Indian income. ^1 Foreign income is the one which satisfies both the following conditions: Income is not received (or not deemed to be received under section 7) in India. ^3 Foreign company is the one which satisfies the conditions as laid down under section 2(23A) of the Act. and  Income doesn't accrue (or doesn't deemed to be accrued under section 9) in India. the additional conditions (as laid down for an individual) should be checked for the karta to determine whether the HUF is ordinary or not-ordinary resident. For resident but not ordinarily resident foreign income is taxable only if it is business income and business is controlled wholly or partly in India or it is a professional income and profession is set up in India. Scope of total income[edit] Indian income1 is always taxable in India not withstanding residential status of the taxpayer. company and every other person) or resident & ordinarily resident (in case of an individual or an HUF). association of persons.Type of person Control & management of affairs of the taxpayer is wholly in India Control & management of affairs of the taxpayer is wholly outside India Control & management of affairs of the taxpayer is partly in India partly outside India an individual ^1 HUF is resident or non-resident. ^2 An Indian company is the one which satisfies the conditions as laid down under section 2(26) of the Act. foreign income is always taxable. Foreign income1 is not taxable in the hands of a non-resident in India.

whichever arises earlier. The Act contains exemptions including (the list isn't exhaustive):Particulars Relevant section for computing exemption Leave travel concession 10(5) Death-cum-Retirement Gratuity 10(10) Commuted value of Pension (not taxable for specified Government employees) 10(10A) Leave encashment 10(10AA) Retrenchment Compensation 10(10B) Compensation received at time of Voluntary Retirement 10(10C) Tax on perquisite paid by employer 10(10CC) Amount received from Superannuation Fund to legal heirs of employee 10(13) House Rent Allowance 10(13A) . and provide their employees with a Form 16 which shows the tax deductions and net paid income. Profits and gains of business or profession  Capital gains  Income from other sources Income from salaries[edit] All income received as salary under employer-employee relationship is taxed under this head. Employers must withhold tax compulsorily (subject to Section 192). on due or receipt basis. if income exceeds minimum exemption limit. as Tax Deducted at Source (TDS).

The balance is added to taxable income. all interest is deductible. the Net Annual Value (as explained below) will be nil. Professional Tax and Entertainment Allowance (the latter only available for specified government employees). [show]Computation of exemption for gratuity [Section 10(10)] [show]Computation of exemption of House Rent Allowance(HRA) [Section 10(13A)] [show]Computation of exemption for pension [Section 10(10A)] [show]Computation of exemption for Leave encashment [Section 10(10AA)] [show]Computation of exemption for Retrenchment compensation [Section 10(10B)] [show]Computation of exemption for Voluntary Retirement Scheme [Section 10(10C)] [show]Computation of deduction for Entertainment Allowance [Section 16 (ii)] and Professional Tax [Section 16 (iii)] Income from house property[edit] Income under this head is taxable if the assessee is the owner of a property consisting of building or land appurtenant thereto and is not used by him for his business or professional purpose.Particulars Some Special Allowances Relevant section for computing exemption 10(14) The Act contains list of perquisites which are always taxable in all cases and a list of perquisites which are exempt in all cases (List I). with no upper limits. Such a benefit can only be claimed for one house property. viz. An individual or an Hindu Undivided Family (HUF) is eligible to claim any one property as Self-occupied if it is used for own or family's residential purpose. However. In that case.000 for A/Y 2014-15 and before) (if loan is taken on or after 1 April 1999 and construction is completed within 3 years) and ₹30. For let-out property.50. subject to some conditions. All other perquisites are to be calculated according to specified provision and rules for each.000(1. the individual (or HUF) will still be entitled to claim Interest on borrowed capital as deduction under section 24.00. . Only two deductions are allowed under Section 16.000 (if the loan is taken before 1 April 1999). In the case of a self occupied house deduction on account of interest on borrowed capital is subject to a maximum limit of ₹2.

i. However. 44DB. Specific disallowance Sections 40. 41.. ^2 Only two deductions are allowed under this head by virtue of section 24.e. 44AE 55. 44BBB.The computation of income from let-out property is as under:Gross annual value (GAV)1 Less:Municipal Taxes paid Net Annual value (NAV) Less:Deductions under section 242 Income from House property xxxx (xxx) xxxx (xxx) xxxx ^1 The GAV is higher of Annual Letting Value (ALV) and Actual rent received/receivable during the year. which contain the computation completely within itself. there are few more sections under this Chapter. but restricted to standard rent fixed by Rent Control Act. the sections relating to computation of business income can be grouped as under: Specific deductions Sections 30 to 37 cover expenses which are expressly allowed as deduction while computing business income. In summary. 44BBA. 44DA. Sections 44 to 44DA (except sections 44AA. 43D. 44B.. 44. 44A. the incomes chargeable as "Income from Business or Profession" shall be computed in accordance with the provisions contained in sections 30 to 43D. 44BB. 44AB & 44C). 40A and 43B cover inadmissible expenses. Deemed Incomes Sections 33AB. Special provisions Sections 42. construction. . viz. Presumptive Income Sections 44AD. repairs. The ALV is higher of fair rent and municipal value. 43C. Profits and Gains of business or profession The income referred to in section 28.   30% of Net annual value as Standard deduction Interest on capital borrowed for the purpose of acquisition.. 33AC. Section 44AA deals with maintenance of books and section 44AB deals with audit of accounts. renewals or reconstruction of property (subject to certain provisions). viz. 35ABB. 33ABA. 35A. Section 44C is a disallowance provision in the case non-residents.

paintings.T. The transferor is entitled to challenge the stamp duty valuation before the Assessing Officer. etc. bonds. exchange. equity shares. Certain transactions are not regarded as 'Transfer' under section 47. art etc. A Capital asset is defined under section 2(14) of the I. relinquishment of asset extinguishment of rights in an asset. jewellery. if regular books of accounts have been maintained and profit and loss account has been prepared. Computation of Capital Gains:Full value of consideration1 Less:Cost of acquisition2 Less:Cost of improvement2 Less:Expenditure pertaining to transfer incurred by the transferor xxx (xx) (xx) (xx) ^1 In case of transfer of land or building. . Transfer has been defined under section 2(47) to include sale. but does not include some items like any stock-in-trade for businesses and personal effects.[6] If regular books of accounts are not maintained. ^2 Cost of acquisition & cost of improvement shall be indexed in case the capital asset is long term. then such stamp duty value shall be taken as full value of consideration by virtue of Section 50C. 1961 as property of any kind held by an assessee such as real estate. Act. if sale consideration is less than the stamp duty valuation.The computation of income under the head "Profits and Gains of Business or Profession" depends on the particulars and information available. then the computation would be as under: Income (including deemed income) chargeable as income under this head Less: Expenses deductible (net of disallowances) under this head xxx (xx) However. then the computation would be as under: Net Profit as per profit and loss account xxx Add : Inadmissible expenses debited to profit and loss account xx Add: Deemed incomes not credited to profit and loss account xx Less: Deductible expenses not debited to profit and loss account (xx) Less: Incomes chargeable under other heads credited to Profit & Loss A/c (xx) Income from capital gains Transfer of capital assets results in capital gains.

 In all other cases. which are taxed as such:  Under section 111A. therefore. In case of all other long term capital gains. indexation benefit is available and tax rate is 20%. If the period of holding is more than 36 months. All capital gains that are not long term are short term capital gains. tax rate is 10% from Assessment Year (AY) 2005-06 as per Finance Act 2004. in the below mentioned cases. As per Section 10(38) of Income Tax Act. There are different scheme of taxation of long term capital gains. it is part of gross total income and normal tax rate is applicable. In case of other shares and securities.For tax purposes. the capital asset held for more than 12 months will be treated as long term: Any share in any company  Government securities  Listed debentures  Units of UTI or mutual fund. otherwise it is short term. STT has been applied on all stock market transactions since October 2004 but does not apply to off-market transactions and company buybacks. the higher capital gains taxes will apply to such transactions where STT is not paid. indexation benefit is not be available even though the capital asset is long term. 3. no tax is payable. . The benefit of indexation is available only for long term capital assets. 1961 long term capital gains on shares or securities or mutual funds on which Securities Transaction Tax (STT) has been deducted and paid. or pay 10% of non indexed gains. The cost inflation index rates are released by the I-T department each year. Slump Sale (Section 50B). the capital asset is long term. there are two types of capital assets: Long term and short term. Such cases include depreciable asset (Section 50). With effect from AY 2009-10 the tax rate is 15%. However. These are: 1. for shares or mutual funds where STT is paid. 2. Transfer of long term assets gives rise to long term capital gains. and  Zero-coupon bond Also. in certain cases. Bonds/debentures (other than capital indexed bonds) and certain other express provisions in the Act. person has an option to either index costs to inflation and pay 20% of indexed gains.

Section 54 Sectio Section Section n 54B 54D 54EC Any perso Any perso n n Section 54F Section 54G Section 54GA Section 54GB Who is eligible to claim Individual/HUF Individual exempti Individual/HUF Any person Any person Individual/H UF on Agricultur al land (if used by individual or his Which asset is eligible for exempti on parents A residential for house property or agricultur land appurtenant al thereto (long purpose term) during at least 2 years immediat ely prior to transfer) Land/buildi ng forming part of an industrial Long-term Any long term undertakin residential capital asset g which is property if (other than house compulsori ly acquired Any long by the term Governme capital nt & which asset is used property) provided Land/building/plant/mac that on the date of hinery in order to shift transfer the an industrial assessee does undertaking from urban not own more area to rural area than one during 2 Land/building/plant/mac transfer hinery in order to shift takes place an industrial between if undertaking from urban transfer area to any Special takes place Economic Zone during 1 April 2012 residential house years for and 31 property industrial March 2017 purposes prior to acquisition Bonds ofNational Highways Authority Which of asset India or Ru should Agricultur be al land in acquire d to Residential house property claim rural or urban area Land/buildi ng for industrial purpose ral Electrificati on Corporatio Land/building/plant/mac A residential hinery in order to shift house property undertaking to rural area n Limited.Constructi forward. 10(37) & 10(38) certain specific exemptions are available under section 54. 54EC.Constructi company to g the on:3 years on:3 years be acquired new forward forward on or before asset due date of filing return . 54D. 54G & 54GA. Besides exemptions under section 10(33). 54F. the tax liability is 20% of such gains suitably indexed (since STT is not paid). 54B. exempti Maximum on exemption Land/building/plant/mac hinery in order to shift undertaking to any SEZ Equity shares in eligible company in one financial year is ₹ 5 million What is Purchase: 1-year 2 years 3 years 6 months Purchase: 1-year 1-year backward or 3 1-year backward or 3 Equity the time backward or 2 forward forward forward backward or 2 years forward years forward shares in an limit for years years eligible acquirin forward.For companies abroad.

whicheve whichever r is lower is lower (The new (The new asset asset should should not not be be transferre transferred d within 3 within 3 years of years of its its acquisition acquisitio ) n) Investment in the in the new asset new asset÷Net asset × should not sale capital gain be consideration×Ca ÷ net sale transferred pital gain. The consideratio within 3 assessee should n. whichever is lower (The whichever is lower (The new asset should not be new asset should not be transferred within 3 transferred within 3 years of its acquisition) years of its acquisition) revoked if equity shares are sold/transfer red within 5 years from acquisition acquisition) . whichever is lower Investme Investment in the new asset or capital gain. (The years of its not complete exemption is acquisition construction of ). How whichever is lower much is (The new asset exempt should not be transferred within 3 years of its acquisition) nt in the Investmen new t in the asset or new asset capital or capital gain.Section 54 Sectio Section Section n 54B 54D 54EC Section 54F Section 54G Section 54GA Section 54GB of income as under section 139(1). asset or capital gain. The new another asset residential house should not property within 3 be years from the converted date of transfer of into money original asset nor or any should he or the new loan/advan purchase within 2 asset is ce should years from the sold/transfer not be date of transfer of red by the taken on original asset company the another house within 5 security of property years from the new asset within 3 years from the date of its acquisition Income from other sources Investment (The new Investment in the new Investment in the new asset or capital gain. gain. The eligible company should utilize this amount for the purchase of a new asset within one year from the date of subscription in equity shares Investment in the new asset or capital gain.

35 or 25 percent of the income as the case may be. raised or received as rent-in-kind so as to render it fit for the market or sale of such produce.This is a residual head. 3.  Income attributable to a farm house (subject to some conditions). 2. Section 2(1A) defines agricultural income as : Any rent or revenue derived from land. Interest on securities (debentures.  Income derived from saplings or seedlings grown in a nursery.  Any income derived from such land by agricultural operations including processing of agricultural produce. 7. Government securities and bonds). Family pension received by family members after the death of the pensioner. Income by way of Dividends. 40. received from the employees by the employer. Agricultural income Agricultural income is exempt from tax by virtue of section 10(1). 5. 6. Interest on compensation/enhanced compensation. 9. 8. There are also some specific incomes which are to be always taxed under this head.Income by way of interest on other than securities. Gifts (subject to certain conditions and exemptions). Income from renting of other than house property. is treated as business income. Employees' contribution towards staff welfare scheme/ provident fund/ superannuation fund or any fund set up under the provisions of ESIC Act. Income partly agricultural and partly business activities Income in respect of the below mentioned activities is initially computed as if it is business income and after considering permissible deductions. Income from horse races/lotteries. and the rest is treated as agricultural income. Any amount received from keyman insurance policy including the sum allocated by way of bonus on such policy. . 10. which is situated in India and is used for agricultural purposes. Thereafter. 4. underthis head income which does not meet criteria to go to other heads is taxed. 1.

You also have the option to contribute additional amounts through voluntary contributions (VPF). 1. Current rate of interest is 8.e. should be deducted. Public Provident Fund (PPF): Among all the assured returns small saving schemes. A point worth noting is that interest rate is assured but not fixed.50. It is not necessary to have the insurance policy from Life Insurance Corporation (LIC) – even insurance bought from private players can be considered here. cured. While employer’s contribution is exempt from tax. Deductions can be claimed for: Provident Fund (PF) & Voluntary Provident Fund (VPF) : PF is automatically deducted from your salary. roasted & grounded by seller in India 40% 60% Sale of latex or cenex or latex based crepes or brown crepes manufactured from field latex or coalgum obtained from rubber plants grown by a seller in India ^a For apportionment of a composite business-cum-agricultural income. Equity Linked Savings Scheme (ELSS): There are some mutual fund (MF) schemes specially created for offering you tax savings.5% per annum (p. the market value of any agricultural produce. The total deduction under this section is limited to Rs.70% tax-free (Compounded Yearly) and the normal maturity period is 15 years. raised by the assessee or received by him as rent-in-kind and utilized as raw material in his business. your spouse or your children can also be included in Section 80C deduction. Both you and your employer contribute to it. Life Insurance Premiums: Any amount that you pay towards life insurance premium for yourself. Current rate of interest is 8. other than the above-mentioned.. Permissible deductions from Gross Total Income Ministry of Finance has notified certain deductions from Gross Total Income of an assessee.Incomea Growing & manufacturing tea in India Business Agricultural income income 40% 60% 35% 65% Sale of coffee grown & cured by seller in India 25% 75% Sale of coffee grown. and these are called REMARKS . 2005. Broadly speaking.000. Please note that life insurance premium paid by you for your parents (father / mother / both) or your in-laws is not eligible for deduction under section 80C. If you are paying premium for more than one insurance policy. No further deduction is permissible in respect of any expenditure incurred by the assessee as a cultivator or receiver of rent-in-kind. employee’s contribution) is counted towards section 80C investments. Public Provident Fund (PPF) is one of the best. your contribution (i. 2015 SECTIO N 80C NATURE OF DEDUCTION This section has been introduced by the Finance Act. all the premiums can be included.) and is tax-free. Below are deductions as updated by finance act.a.50 lakh only. Minimum amount of contribution is Rs 500 and maximum is Rs 1. this section provides deduction from total income in respect of various investments/ expenditures/payments in respect of which tax rebate u/s 88 was earlier available.

In case of twins this facility will be extended to third child  Minimum deposit amount for this account is ₹ 1. 1.1% per annum. Interest rate for this account is 9. and the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C in the year of purchase of the house. and not the government. The notification details are Notification No. However.000 p.80% Per Annum on 10 year NSC. Section 80CCC investment limit is clubbed with the limit of Section 80C – it means that the total deduction available for 80CCC and 80C is Rs.50 Lakh can be claimed as deduction u/s 80CCC.50 Lakh.Equity Linked Savings Scheme. From FY 2014-14 the interest earned on account will be tax exempted. Interest is Compounded Half Yearly. 2014’. Furthermore. Parents can open this account for maximum two girl child. the interest income is chargeable to tax in the year in which it accrues. there is no maximum amount. Premature withdrawals are permitted only in specific circumstances such as death of the holder. the total deduction u/s 80C and 80CCC can not exceed Rs. the interest is paid @ 8. These are issued by infrastructure companies.50% p.000/.50. on 5 year NSC and 8. under Section 80C.000/. The scheme of Sukanya Samriddhi Account came into effect via notification of Ministry of Finance.R.  Per girl child only single account is allowed. Yearly compounded. National Savings Certificate (NSC) (VIII Issue): NSC is a time-tested tax saving instrument with a maturity period of Five and Ten Years. Please read “Income Tax (IT) Benefits of a Home Loan / Housing Loan / Mortgage”. Pension Funds – Section 80CCC: This section – Sec 80CCC – stipulates that an investment in pension funds is eligible for deduction from your income.a.12. 5-Yr bank fixed deposits (FDs): Tax-saving fixed deposits (FDs) of scheduled banks with tenure of 5 years are also entitled for section .The principal component of the EMI qualifies for deduction under Sec 80C. Scheme will be governed by ‘Sukanya Samriddhi Account Rules. G. Home Loan Principal Repayment: The Equated Monthly Installment (EMI) that you pay every month to repay your home loan consists of two components – Principal and Interest.863(E) Dated 02. calculated on yearly basis. 1.and maximum is ₹ 1. Infrastructure Bonds: These are also popularly called Infra Bonds. However. Presently. Investments in NSC are eligible for a deduction of up to Rs 150. The amount that you invest in these bonds can also be included in Sec 80C deductions. The investments that you make in ELSS are eligible for deduction under Sec 80C. 1.a. as mentioned earlier.50 Lakh. Stamp Duty and Registration Charges for a home: The amount you pay as stamp duty when you buy a house.This also means that your investment in pension funds up to Rs.S. or ELSS.   Passbook facility is available with Sukanya Samriddhi account. Even the interest component can save you significant income tax – but that would be under Section 24 of the Income Tax Act.2014.per year   Money to be deposited for 14 years in this account. While the minimum investment amount is Rs 100. Sukanya Samriddhi Account : Sukanya Samriddhi Account meaning Girl Child Prosperity Scheme is a special deposit scheme launched by Prime Minister Narendra Modi on 22 January 2015 for girl child. As per Finance Bill 2015-16. the accrued interest which is deemed to be reinvested qualifies for deduction under Section 80C. which presents a full analysis of how you can save income tax through a home loan.

Interest income is chargeable to tax. 01. a deduction up Development Authority.20. unclaimed interest on these deposits won’t earn any further interest.20% per annum payable quarterly. Deduction is available up to Corporation of India & approved by the Central Govt. Subscription made by individual or HUF to the extent of Rs.” for person with severe disability to Rs. whichever is less.04. contributions made to the Central Government Health Scheme is also covered under this section.Budget 2015 has proposed deduction of Rs.Further.Y.and The handicapped dependent should be a dependent relative suffering from a permanent disability (including blindness) or mentally retarded.000 with effect from A. 2016-17 to Rs.04.50.000/ — In respect of (a) expenditure incurred on medical treatment. 01. 80EE Deduction in respect of interest on loan taken for residential house property Vide Finance Act 2013.Y.50. 1 Lakh. 80000/. 01 . The diseases have been specified in Rule 11DD. In case of senior citizens. 1.000/.1. 20. 15. an individual is allowed a deduction up to a limit . Please note that the interest is payable quarterly instead of compounded quarterly. w. board or university.000/- annuity plan of the LIC or any other insurer for receiving pension from the fund. whichever is lower. 2011-12 onwards. The Finance Act.. (including nursing).80C deduction.40. 20000/- insurance premium paid by the assessee towards his parent/parents. Deduction of Rs.f.000 to Rs. (b) Payment or deposit to specified scheme for maintenance of dependent handicapped relative.f. 2016-17 Where the Central Government makes any contribution to the pension account.000/– shall be available under this section Budget 2015 has Further Proposed to hike the limit from A.or the amount actually paid. 1. if the dependent is a person with severe disability a deduction of Rs.e. W.15.f.shall be available under this Section. 50.000/.60. Senior Citizen Savings Scheme (SCSS) is the most lucrative scheme among all the small savings schemes but is meant only for senior citizens. 2013 25.Y. 2016-17 Expenditure must be actually incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. Act.f. Current rate of interest is 9. not being a Central Government employee.00.2004 the 80DD deduction under this section has been enhanced to Rs. The Finance Act 2015 has enhanced the ceiling of deduction under Section 80CCC from Rs. The premium should be paid in respect of health to Rs. by Finance 80E Deduction in respect of payment in the previous year of interest on loan taken from a financial institution or approved charitable institution for higher studies. 01. 75000 from existing Rs. deduction of such contribution to the extent of 10% of salary 80CCD Deposit made by an employee in his pension account to the extent of 10% of his salary.e.e. Insurance premiume of insurance of the assessee or his family members. 1.in respect of medical expenditure incurred.100. The benefit is in addition to deduction available u/s Sec 80C. The premium is to be paid by any mode of payment other than cash and the insurance scheme should be framed by the General Insurance 80D Payment of medical insurance premium. Senior Citizen Savings Scheme 2004 (SCSS): A recent addition to section 80Clist.2010 higher education means any course of study pursued after passing the senior secondary examination or its equivalent from any recognized school.000/. W.2004.40. training and rehabilitation of handicapped dependent relative. In case of senior citizens. 50.00.for senior citizen aged 80 year or More from A. Further.000/.000/. as certified by a specified physician or psychiatrist. or Scheme framed Rs. Protection of Rights and Full Participation) Act. 2007 deduction under this section shall be available not only in respect of loan for pursuing higher education by self but also by spouse or children of the assessee.Y. 2009 has extended benefit to any individual assesse. The Finance Act 2008 senior citizen parent/ parents of the assessee also eligible for enhanced has also provided deduction up to Rs. in any year where any amount is received from the pension account such amount shall be charged to tax as income of that previous year.e.25 lakh from existing Rs.in respect of health deduction of Rs.000 to 80CCF Subscription to long term infrastructure bonds notified long term infrastructure bonds is exempt from A. 15. A. The premium must be deposited to keep in force a contract for an 80CCC Payment of premium for annuity plan of LIC or any other insurer Deduction is available up to a maximum of Rs.shall be available under this Section . This deduction is discontinued w. The payment of the interest thereon will be allowed as deduction over a period of up to 8 years. Deduction of Rs. The maximum Investment permissible for claiming deduction under RGESS is Rs.000/. deduction under this section shall be available to the extent of 80DDB Rs. This provision has been introduced to provide relief to students taking loans for higher studies.Y.04. A certificate in form 10I is to be furnished by the assessee from a specialist working in a Government hospital.000. Thus.000/.Note: A person with severe disability means a person with 80% or more of one or more disabilities as outlined in section 56(4) of the “Persons with Disabilities (Equal opportunities. The deduction was 50% of amount invested in such equity shares or ₹ 80CCG Investment under Rajiv Gandhi Equity Savings Scheme. shall be allowed. 2013-14.2011.40.f. W. a deduction up to Rs.e.04. Further.000.Budget 2015 has Proposed for the purpose of claiming deduction under the section assessee will be required to obtain a prescription from a specialist doctor instead of Certificate.000/.for insurance in respect by any other insurer and approved by the Insurance Regulatory & of parent/parents of the assessee.000/ for self/ family and also up to Rs.

if the individual is a person with severe disability.2000 per monthiii. who are in lower income bracket. whichever is lower. The deduction is restricted to Rs 10.00.shall be available 80U u/s 80U. 80RRB 80QQB Deduction in respect of any income by way of royalty in respect of a patent The assessee who is a patentee must be an individual resident in India. resident in India. the book shall be available to the extent of Rs. If the Income of a Salaried Individual is less than ₹ 500.f.to Rs. or 30 September of the Assessment -If the assessee is any person other than a company whose books of accounts are required to be audited under any law. registered on or after 01. In any other case.W.Y.000 and he has earned income through salary or Interest or both. 75. 3 lacs or the income received. 2014-15.(2) He should not be in Rs. such Individuals are exempted from filing their Income Tax return provided that such payment has been received after the deduction . 30 November of the AY 31 July of the AY If the assessee is a company and it is required to furnish report under section 92E pertaining to international transactions.75. The amount of rebate is Rs 2000/.2003 under the Patents Act 1970 shall be The assessee must furnish a certificate in the prescribed form duly available as :-Rs. Finance Act 2013 has provided relief in the form of rebate to individual taxpayers.50.Budget Certificate should be obtained on prescribed format from a notified 2015 proposed to amend section 80U to raise limit of deduction in respect of ‘Medical authority’. 80G are eligible for deduction 80G Donation to certain funds. Deduction in respect of royalty or copyright income received in consideration The assessee must be an individual resident in India who receives such for authoring any book of literary. accommodation at the place of employment. 80G (1) Assessee or his spouse or minor child should not own residential 80GG Deduction available is the least of(i) Rent paid less 10% of total incomeii. sanctioned during the period 01-04. deduction of Rs.000/.or the amount of tax payable. assessee must furnish a certificate in the prescribed form along with the whichever is less. 01. Deduction of Rs.of Rs 1. signed by the prescribed authority along with the return of income.00. artistic or scientific nature other than text income in exercise of his profession.000 being paid as interest on a loan taken from a Financial Institution.Y. charitable institutions etc.(3) He should not have a self-occupied residential premises in any other place Section 80TTA is introduced wef A.e. The various donations specified in Sec.000 and for person with severe disability from one lakh rupees to one hundred and twenty five thousand rupees. 1 lakh. To avail of this deduction.000/-. However the deduction is available if the assessee does not own any residential house property on the date of sanction of the loan.000/. 3 lacs or income received. Year(AY) or -If the assessee is a working partner in a firm whose books of accounts are required to be audited under any law.000/.2010 this limit has been raised to Rs. a person with disability from Rs. 87A Rebate Of Rs 2000 For Individuals Having Total Income up to Rs 5 Lakh having total income not exceeding Rs 5. Due date of submission of return The due date of submission of return shall be ascertained according to section 139(1) of the Act as under:-If the assessee is a company (not having any inter-nation transaction). WEF A. return of income. cooperative banks and post office. 25% of total income receipt of house rent allowance. up to either 100% or 50% with or without restriction as provided in Sec. whichever is less. e.04.000 or actual interest whichever is lower.04.2013 to 31-03-2014 (loan not to exceed Rs 25 lakhs) for acquisition of a residential house whose value does not exceed Rs 40 lakhs. i.to an individual who suffers from a physical disability (including blindness) or mental retardation. 2013-14 to provide deduction to an individual or a Hindu undivided family in respect of interest received 80TTA Deduction in respect of interest on deposits in savings account on deposits (not being time deposits) in a savings account held with banks. 50. Further.

every assessee is required to pay tax in a particular financial year. (To be used for reference only. The due dates of payment of advance tax are:In case of corporate assessee Otherwise On or before 15 June of the previous year Up to 15% of advance tax payable Up to 15% of advance tax payable On or before 15 September of the previous year Up to 45% of balance of advance tax payable Up to 45% of advance tax payable On or before 15 December of the previous year Up to 75% of balance of advance tax payable Up to 75% of advance tax payable On or before 15 March of the previous year Up to 100% of balance of advance tax payable Up to 100% of advance tax payable Any default in payment of advance tax attracts interest under section 234B and any deferment of advance tax attracts interest under section 234C. income-tax is recovered from the assessee in the previous year itself by way of TDS. The relevant provisions therein are listed below. Such a person should not have changed jobs in the financial year. if such estimated tax liability for an individual who is not above 60 years of age at any point of time during the previous year and does not conduct any business in the previous year. However.[7] Advance tax Under this schemes. on an estimated basis. preceding the assessment year. advance tax will not be payable. However. and the estimated tax liability is below ₹ 10. Tax deducted at source (TDS) The general rule is that the total income of an assessee for the previous year is taxable in the relevant assessment year.) Sectio n Nature of payment 192 Salary to any person 193 2 Interest on securities to any resident Threshold limit (up to which no tax TDS to be deducted is deductible) Exemption limit Subject to detailed provisions of given section As specified for individual in Part III of I Schedule 10% .of TDS and this person has not earned interest more than ₹ 10. However.000 from all source combined. The detailed provisions therein are not listed below.[7] CBDT has announced that all individual/HUF taxpayers with income more than ₹ 500.000 are required to file their income tax returns online. digital signatures won't be mandatory for such class of taxpayers.000.

equipment) & 10% (for land.₹ 10000 (for Bank/cooperative bank) & 194A 2 Interest (other than interest on securities) to any resident 194B Winning from lotteries etc. to any person ₹ 10000 30% 194BB Winning from horse races to any person ₹ 5000 30% 194C 2 Payment to resident contractors ₹ 5000 otherwise 10% ₹ 30000 (for single contract) & ₹ 75000 (for aggregate consideration in a 2% (for companies/firms) & 1% otherwise financial year) 194D 194E 194EE Insurance commission to resident Payment to non-resident sportsmen or sports association Payment of deposit under National Savings Scheme to any person ₹ 20000 10% Not applicable 10% ₹ 2500 20% 194G Commission on sale of lottery tickets to any person ₹ 1000 10% 194H 2 Commission/brokerage to a resident ₹ 5000 10% 194-I 2 Rents paid to any resident ₹ 180000 194IA Payment for Purchase of Immovable Property ₹ 5000000 1% 194J 2 Fees for professional/technical services. the tax deducted should be deposited within 7 days from the end of the month in which tax was deducted.furniture) ^1 At what time tax has to be deducted at source and some other specifications are subject to the above sections. In most cases.1961 in the immediately preceding financial year.building. Royalty ₹ 30000 10% - 5% Interest or other sums (not being salary. Corporate income tax .which is covered Amount as computed by the Assessing As per double taxation avoidance treaty or regular under section 192) paid to non-residents or foreign Officer on application made under provisions of Income Tax Act. ^2 In most cases.machinery. which is beneficial to company except under section 115O section 195(2) or 195(3) the recipient 194LB 195 Interest paid by Infrastructure Development Fund under section 10(47) to non-resident or foreign company 2% (for plant. these payments shall not to deducted by an individual or an HUF if books of accounts are not required to be audited under the provisions of the Income Tax Act.

Returns in response to notices . Tax returns Categories There are five categories of Income Tax returns. expenses. One has to rectify the defect within a period of fifteen days from. Normal return u/s 139(1) In business. belated return can be filed before the expiry of one year from the end of the relevant assessment year. electronic filing of company returns is mandatory. "normal" is any gained revenue that exceeds the cost. From 2005-06. Belated return In case of failure to file the return on or before the due date. income is taxed at a flat rate of 30% for Indian companies(24. An education cess of 3% (on both the tax and the surcharge) are payable.99% as per Budget 2015-16). Corporate Assessee : Particulars Taxable Income > 1 Crore Taxable Income > 10 Crore Domestic company 7% of income tax payable 12% of income tax payable Foreign company 2% of income tax payable 5% of income tax payable ^1 Applicable from assessment year 2015-16 onwards. he may intimate the defect. Defective return Assessing Officer considers that the return is defective. Revised return In case of any omission or any wrong statement mentioned in the normal return can be revised at any time before the expiry of one year from the end of the relevant assessment year.Income-wise number of corporate assessee in India For companies. Foreign companies pay income tax at the rate of 40%. and taxes needed to sustain the business or an activity. Surcharge Non Corporate Assessee : 10% of Income Tax where taxable income exceeds 1 crore.

The notices for such assessments are issued under section 143(2). Statements By producers Producers of a cinematographic film during the financial year shall.52A. Assessments Self-assessment is done by the assessee himself in his Return of Income. Statements by non-resident having a liaison office in India With effect from 01.Statistics As of January 2016. 148 and 153A respectively. maintaining books of account or other documents containing a record of any specified financial transaction.- .27 crore returns were e-filed for the financial year 2014-15. he may direct that such person shall pay by way of penalty. Non-Resident having a liaison office in India shall prepare and deliver a statement in Form No. 147 and 153A (search and seizure). "If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act. Tax penalties The major number of penalties initiated every year as a ritual by I-T Authorities is under section 271(1)(c) which is for either concealment of income or for furnishing inaccurate particulars of income. is satisfied that any person(b) has failed to comply with a notice under sub-section (1) of section 142 or subsection (2) of section 143 or fails to comply with a direction issued under sub-section (2A) of section 142. or (c) has concealed the particulars of his income or furnished inaccurate particulars of such income.June 2011. shall furnish an annual information return in Form No. 144 (best judgement). or.61A. The department assess the tax of an assessee under section 143(3) (scrutiny). whichever is earlier. Annual information return and statements Annual information return Those who are responsible for registering. prepare and deliver to the Assessing Officer a statement in the Form No. 49C to the Assessing Officer within sixty days from the end of such financial year. The time limits are prescribed under section 153.  within 30 days from the end of such financial year or  within 30 days from the date of the completion of the production of the film. a total of more than 3.

a sum which shall not be less than. a sum of ten thousand rupees for each such failure. The first level of appeals lies with the CIT (A). Appeal When taxpayers dispute the income tax demands raised on them. but which shall not exceed three times. (iii) in the cases referred to in clause (c). a structured appeal process has to be followed.an independent body. which is the final fact finding authority. The next level of appeal lies with the Income Tax Appellate Tribunal . the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income. . in addition to any tax payable by him. Courts can subsequently be approached by the aggrieved party only if a question of law is involved. in addition to any tax payable by him.(ii) in the cases referred to in clause (b).