PAPER 4

TAXATION
VOLUME I
PART - I: INCOME TAX
Assessment Year 2013-14
(As amended by the Finance Act, 2012)

BOARD OF STUDIES
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

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 This Study Material has been prepared by the faculty of the Board of Studies. The
objective of the Study Material is to provide teaching material to the students to enable
them to obtain knowledge and skills in the subject. Students should also supplement their
study by reference to the recommended text books. In case students need any
clarifications or have any suggestions to make for further improvement of the material
contained herein, they may write to the Director of Studies.
All care has been taken to provide interpretations and discussions in a manner useful for
the students. However, the Study Material has not been specifically discussed by the
Council of the Institute or any of its Committees and the views expressed herein may not
be taken to necessarily represent the views of the Council or any of its Committees.
Permission of the Institute is essential for reproduction of any portion of this material.

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All rights reserved. No part of this book may be reproduced, stored in retrieval system, or
transmitted, in any form, or by any means, Electronic, Mechanical, photocopying, recording, or
otherwise, without prior permission in writing from the publisher.

Revised Edition : November, 2012

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Published by : The Publication Department, The Institute of Chartered Accountants

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 A WORD ABOUT STUDY MATERIAL

In the syllabus for Chartered Accountancy course, taxation constitutes a core competence
area for the students. A thorough knowledge of taxation helps the students to increase their
analytical abilities. In the Intermediate (Integrated Professional Competence) Course,
“Taxation” constitutes Paper-4. Students are expected to acquire working knowledge in
income-tax, service-tax and value added tax after undergoing this course.
Volume I of this Study Material deals with the provisions of income-tax and Volume II is the
Practice Manual, containing the questions on income-tax from past examinations, adapted and
solved on the basis of the provisions applicable for A.Y.2013-14. The subject matter in the
Study Material is based on the law as amended by the Finance Act, 2012 and relevant for
A.Y.2013-14. Efforts have been made to present the complex law of income-tax in a lucid
manner. Care has been taken to present the chapters in a logical sequence to facilitate easy
understanding by the students. The various illustrations will help in understanding the
application of income-tax law to practical situations and stimulate analytical thinking by the
students. The latest amendments have been given in bold italics. Further, the
amendments made by the Finance Act, 2012 and incorporated in this study material
have been tabulated chapter-wise with the corresponding section reference and given
as “Significant Amendments Incorporated in this Edition”. The illustrations which have
undergone changes due to these amendments as well as the new illustrations have
been given in a shaded background.
The Finance Act, 2012 has extended the scope of transfer pricing to specified domestic
transactions and made consequential amendments in sections 40A, 80A & 80-IA. Though
sections 40A, 80A & 80-IA are included within the scope of syllabus of Intermediate (IPC)
Course Paper 4: Taxation, the amendments made in these sections consequent to the
extension of scope of transfer pricing have not been discussed in this Study Material, since
the provisions relating to transfer pricing are outside the scope of syllabus Intermediate (IPC)
Course Paper 4: Taxation.
The taxation laws in our country undergo many changes. The Board of Studies brings out
every year, a “Supplementary Study Paper” explaining all the amendments in taxation, with
the aid of illustrations and tabular presentations. This is an essential read for all our students.
Another useful medium by which the students can keep themselves abreast is the monthly
students’ journal – “The Chartered Accountant Student”.
Finally, we would welcome suggestions to make this book more helpful and ‘student-friendly’.
In case of any doubt, students are welcome to write to the Director, Board of Studies, The
Institute of Chartered Accountants of India, “ICAI Bhawan”, A-29, Sector 62, Noida – 201 309.

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 TAXATION
PART I : INCOME TAX
SIGNIFICANT ADDITIONS IN THE EDITION
Chapter Particulars Section
No.
Income-tax
1. Basic Concepts
Rates of tax
Unexplained share capital, share premium etc. credited 68
in the books of account of a closely held company to be
treated as income of such company
Unexplained money, investments etc. to attract maximum 115BBE
marginal rate of tax @30%
2. Residence and scope of total income
Gains from offshore transactions to be taxed if underlying 9(1)(i), 2(14),
assets are located in India 2(47) & 195(1)
Consideration for use or right to use of computer 9(1)(vi)
software is royalty
3. Incomes which do not form part of total income
Exemption of income of Prasar Bharati (Broadcasting 10(23BBH)
Corporation of India)
Removal of sectoral restrictions on VCUs 10(23FB)
Exemption in respect of income received by certain 10(48)
foreign companies in India in Indian currency from sale of
crude oil to any person in India
Exemption to be denied to a charitable trust having its 10(23C) & 13
main object as “advancement of any other object of
general public utility” if its trading receipts exceed the
specified threshold irrespective of withdrawal of approval
or cancellation of registration or rescindment of
notification
4. Unit 3: Profits and gains of business or profession
Benefit of additional depreciation@20% extended to new 32(1)(iia)
plant and machinery acquired and installed in power
sector undertakings

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 Extension of sunset clause for claiming weighted 35(2AB)
deduction@200% of expenditure on in-house scientific
research and development incurred by a company
Expansion of scope of “specified business” for provision 35AD
of “investment-linked tax deduction”
Weighted “investment-linked” tax deduction for certain 35AD(1A)
specified businesses
Owner of a hotel eligible for “investment-linked” tax 35AD(6A)
deduction even if he transfers the operation of the hotel
to another person
Weighted deduction in respect of expenditure incurred on 35CCC
notified agricultural extension project
Weighted deduction in respect of expenditure incurred by 35CCD
companies on notified skill development project
Increase in threshold limits of total sales/ turnover/ gross 44AB & 44AD
receipts for applicability of tax audit
Presumptive taxation provisions not to apply to 44AD(6)
profession, brokerage or commission income and agency
business
Unit 4: Capital Gains
Modification in the conditions to be satisfied in case of 47(vii) & 2(19AA)
amalgamation and demerger for not being regarded as
transfer
Cost of acquisition of the capital asset transferred by a 49
sole proprietorship or firm to a company on succession,
to be taken as cost to the previous owner i.e. the
predecessor proprietor or firm, where such succession is
not regarded as transfer under section 47
Fair market value of the capital asset on the date of 50D
transfer to be taken as sale consideration, in cases
where the consideration is not determinable
Extension of capital gain exemption under section 54B to 54B
a Hindu Undivided Family
Exemption of long-term capital gains on transfer of 54GB
residential property if the sale consideration is used for
subscription in equity of a new start-up manufacturing SME
company to be used for purchase of new plant and
machinery

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 Assessing Officer enabled to make a reference to the 55A
Valuation Officer in case the assessee has taken the fair
market value as the cost of acquisition of the asset in
accordance with the estimate made by the Registered
Valuer
Non-residents and foreign companies to be subject to tax 112
at a concessional rate of 10% (without indexation benefit
or currency fluctuation) on long-term capital gains arising
from transfer of unlisted securities
Unit 5: Income from other sources
Any sum of money or property received by a HUF without 56(2)(vii)
consideration or for inadequate consideration from its
members exempt from tax
Consideration received in excess of FMV of shares 56(2)(viib)
issued by a closely held company to be treated as
income of such company, where shares are issued at a
premium
7. Deductions from Gross Total Income
Life insurance premium up to 10% of minimum capital 80C & 10(10D)
sum assured to qualify for deduction under section 80C,
in respect of insurance policies issued on or after
1.4.2012
One time deduction for investment by a resident 80CCG
individual in listed equity shares as per notified scheme
Eligible age for senior citizen reduced from 65 years to 80D & 80DDB
60 years for availing increased deduction
Deduction for expenditure on preventive health check-up 80D
No deduction in respect of cash donation exceeding of 80G & 80GGA
` 10,000
Extension of sunset clause for tax holiday for power- 80-IA(4)(iv)
sector undertakings
Deduction in respect of interest on deposits in savings 80TTA
accounts
9. Provisions concerning advance tax and TDS
Tax not to be deducted at source in case aggregate of Proviso to
interest which is payable to an individual or HUF on section 193
debentures does not exceed ` 5,000
Tax to be deducted under section 194J on any 194J
remuneration paid to a director, other than in the nature
of salary on which tax is deductible under section 192

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 Threshold limit for non-deduction of tax at source on 194LA
payment of compensation on compulsory acquisition of
immovable property increased
Concessional rate of tax on interest on borrowings in 194LC & 195
foreign currency by Indian companies
Specified class or classes of persons, making payment to 195(7)
the non-resident, to mandatorily make application to
Assessing Officer to determine the appropriate proportion
of sum chargeable to tax
Eligible age for senior citizen reduced from 65 years to 197A(1C)
60 years for the purpose of section 197A(1C)
No tax to be deducted in case of payment made to 197A(1F)
notified institutions, associations etc.
Payer not to be treated as an assessee-in-default for non- 40(a)(ia) & 201
deduction of tax at source, if such tax is paid by the resident
payee & due date of filing the return of the payee would be
deemed as the date of payment of taxes
Time limit for passing an order, declaring an assessee to 201
be assessee-in-default under section 201, extended in
certain cases
“Drawing or Disbursing Officer” to be “the person 204
responsible for paying” in case of payment by Central
Government or State Government
Senior Citizens, not having profit and gains of business 207
or profession, exempt from payment of advance tax
No reduction of ‘tax deductible but not deducted’ while 209
computing advance tax liability
10. Provisions for filing of return of income
Extension of due date for filing of return of income and 44AB & 139(1)
tax audit report in case of all assessees undertaking
international transaction
Mandatory filing of ROI by every resident having any 139(1)
asset (including financial interest in any entity) located
outside India
Note: In the above table, the amendments/additions have been indicated against the
chapters where they have been primarily dealt with at length. Some of the amendments
may have also been referred to or discussed in other related chapters. In addition, the
illustrations in each chapter have been modified to give effect to the amendments by
the Finance Act, 2012. New illustrations have also been added to explain the application
of some of the amendments.

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 SYLLABUS
PAPER – 4 : TAXATION
(One paper ─ Three hours – 100 Marks)

Level of Knowledge: Working knowledge

Objectives:

(a) To gain knowledge of the provisions of Income-tax law relating to the topics
mentioned in the contents below and
(b) To gain ability to solve simple problems concerning assessees with the status of
‘Individual’ covering the areas mentioned in the contents below.
Contents:

PART – I : INCOME TAX (50 MARKS)

1. Important definitions in the Income-tax Act, 1961

2. Basis of charge; Rates of taxes applicable for different types of assessees
3. Concepts of previous year and assessment year
4. Residential status and scope of total income; Income deemed to be received /
deemed to accrue or arise in India
5. Incomes which do not form part of total income
6. Heads of income and the provisions governing computation of income under different
heads
7. Income of other persons included in assessee's total income
8. Aggregation of income; Set-off or carry forward and set-off of losses
9. Deductions from gross total income
10. Computation of total income and tax payable; Rebates and reliefs
11. Provisions concerning advance tax and tax deducted at source
12. Provisions for filing of return of income.

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 PART – II : SERVICE TAX AND VAT (Service tax 25 Marks and VAT 25 Marks)
Objective:

To gain knowledge of the provisions of service tax as mentioned below and basic
concepts of value added tax (VAT) in India.

Contents:

1. Service tax – Concepts and general principles

2. Charge of service tax and taxable services
3. Valuation of taxable services
4. Payment of service tax and filing of returns
5. VAT – Concepts and general principles.
6. Calculation of VAT liability including input tax credits
7. Small dealers and composition scheme
8. VAT procedures

Note: If new legislations are enacted in place of the existing legislations the syllabus
will accordingly include the corresponding provisions of such new legislations in the place
of the existing legislations with effect from the date to be notified by the Institute.
Students shall not be examined with reference to any particular State VAT Law.

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 PART I – INCOME TAX

CONTENTS

CHAPTER 1 : BASIC CONCEPTS

Unit – 1: Income tax law: An introduction
1.1 What is a tax ................................................................................................. 1.1
1.2 Why are taxes levied ..................................................................................... 1.2
1.3 Overview of income tax law in India ................................................................ 1.2
1.4 Levy of income tax......................................................................................... 1.3
1.5 Concept of income ......................................................................................... 1.3
1.6 Total income and tax payable ......................................................................... 1.4
1.7 Return of income ........................................................................................... 1.7
Unit – 2 : Important definitions in the Income tax Act, 1961
2.1 Assessee [Section 2(7)] ................................................................................. 1.8
2.2 Assessment [Section 2(9) .............................................................................. 1.8
2.3 Person [Section 2(31)] ................................................................................... 1.8
2.4 Income [Section 2(24) .................................................................................. 1.13
2.5 Dividend [Section 2(22)] ............................................................................... 1.18
2.6 India [Section 2(25A)] .................................................................................. 1.21
2.7 Infrastructure capital company [Section 2(26A)] ............................................ 1.21
2.8 Infrastructure capital fund [Section 2(26B)] ................................................... 1.22
2.9 Manufacture [Section 2(29BA)] ..................................................................... 1.22
Unit – 3 : Basis of charge and rates of tax
3.1 Charge of income tax ................................................................................... 1.23
3.2 Rates of tax ................................................................................................. 1.23
Unit – 4 : Concept of previous year and assessment year
4.1 Meaning of assessment year and previous year ............................................ 1.28

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 4.2 Previous year for undisclosed sources of income .......................................... 1.28
4.3 Certain cases when income of a previous year will be assessed in
the previous year itself ................................................................................. 1.30

CHAPTER 2 : RESIDENCE AND SCOPE OF TOTAL INCOME

Unit – 1 : Residential status and scope of total income
1.1 Residential status [Section 6] ......................................................................... 2.1
1.2 Scope of total income .................................................................................... 2.6
Unit – 2 : Deemed receipt and accrual of income in India
2.1 Meaning of “Income received or deemed to be received” ................................ 2.8
2.2 Meaning of income ‘accruing” and “arising’ .................................................... 2.9
2.3 Income deemed to accrue or arise in India [Section 9] ..................................... 2.9

CHAPTER 3 : INCOMES WHICH DO NOT FORM PART OF TOTAL INCOME

1. Incomes not included in total income [Section 10] ........................................... 3.1
2. Tax holiday for newly established units in special economic
zones [Section 10AA] .................................................................................. 3.57
3. Charitable or religious trusts and institutions [Sections 11 to 13] ................... 3.61
4. Tax Exemption to Political Parties [Section 13A] ........................................... 3.81
5. Exemption for Voluntary Contributions received by
Electoral Trusts [Section 13B] ...................................................................... 3.82

CHAPTER 4 : HEADS OF INCOME

Unit – 1 : Income from salaries
1.1 Salary ........................................................................................................... 4.1
1.2 Definition of salary ......................................................................................... 4.2
1.3 Basis of charge ............................................................................................. 4.3
1.4 Place of accrual of salary ............................................................................... 4.3
1.5 Profits in lieu of salary ................................................................................... 4.4
1.6 Advance salary .............................................................................................. 4.5

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 1.7 Loan or advance against salary ...................................................................... 4.5
1.8 Salary arrears ............................................................................................... 4.5
1.9 Annuity ......................................................................................................... 4.5
1.10 Gratuity [Section 10(10)] ................................................................................ 4.6
1.11 Pension ........................................................................................................ 4.6
1.12 Leave salary [Section 10(10AA)] .................................................................... 4.6
1.13 Retrenchment compensation [Section 10(10B)] ............................................... 4.6
1.14 Compensation received on voluntary retirement [Section 10(10C)] ................... 4.6
1.15 Provident fund ............................................................................................... 4.7
1.16 Approved superannuation fund ..................................................................... 4.11
1.17 Salary from United Nations Organisation ...................................................... 4.11
1.18 Allowances .................................................................................................. 4.11
1.19 Perquisites .................................................................................................. 4.13
1.20 Valuation of perquisites ............................................................................... 4.19
1.21 Deductions from salary ................................................................................ 4.39
1.22 Deduction under section 80C ....................................................................... 4.40
1.23 Relief under section 89 ................................................................................ 4.40

Unit – 2 : Income from house property

2.1 Chargeability [Section 22] ............................................................................ 4.44
2.2 Conditions for chargeability .......................................................................... 4.44
2.3 Composite rent ............................................................................................ 4.45
2.4 Income from house property situated outside India ........................................ 4.46
2.5 Determination of annual value [Section 23] ................................................... 4.47
2.6 Deductions from annual value [Section 24] ................................................... 4.50
2.7 Computation of income from house property for different categories of
property ...................................................................................................... 4.52
2.8 Inadmissible deductions [Section 25] ............................................................ 4.61
2.9 Taxability of recovery of unrealised rent and arrears of rent received ............. 4.61
2.10 Treatment of income from co-owned property [Section 26] ............................. 4.61

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 2.11 Treatment of property owned by a partnership firm ........................................ 4.62
2.12 Deemed ownership (Section 27) ................................................................... 4.62
2.13 Cases where income from house property is exempt from tax ........................ 4.63

Unit – 3 : Profits and gains of business or profession

3.1 Meaning of ‘Business’, ‘profession’ and ‘profits’ ............................................ 4.64
3.2 Income chargeable under this head [Section 28] ........................................... 4.66
3.3 Speculation business ................................................................................... 4.68
3.4 Computation of income from business [Section 29] ....................................... 4.70
3.5 Admissible deductions ................................................................................. 4.71
3.6 Inadmissible deductions [Section 40] ........................................................... 4.133
3.7 Expenses or payments not deductible in certain
circumstances [Section 40A] ....................................................................... 4.138
3.8 Profits chargeable to tax [Section 41] .......................................................... 4.144
3.9 Special provisions for deduction in case of business for prospecting etc. for
mineral oil [Section 42] ............................................................................... 4.145
3.10 Changes in rate of exchange of currency [Section 43A] ................................ 4.146
3.11 Certain deductions to be only on actual payment [Section 43B] .................... 4.147
3.12 Special provision for computation of cost of acquisition of certain
assets [Section 43C] ................................................................................... 4.150
3.13 Special provision in case of income of public financial
institutions [Section 43D] ............................................................................ 4.151
3.14 Insurance business [Section 44] .................................................................. 4.151
3.15 Special provisions in the case of certain associations [Section 44A] .............. 4.151
3.16 Compulsory maintenance of accounts [Section 44AA] .................................. 4.152
3.17 Audit of accounts of certain persons carrying on business or
profession [Section 44AB] ........................................................................... 4.154
3.18 Special provisions for computing profits and gains of civil
construction etc. [Section 44AD].................................................................. 4.155
3.19 Special provisions for computing profits and gains of business of
plying, hiring or leasing goods carriages [Section 44AE] ............................... 4.156

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 3.20 Special provision for computing the profits and gains of shipping
business in case of non-residents [Section 44B] .......................................... 4.157
3.21 Provisions for computation of taxable income from activities connected with
exploration of mineral oils [Section 44BB] .................................................... 4.158
3.22 Special provision for computing profits and gains of the business
of operation of aircraft in the case of non-residents [Section 44BBA] ............. 4.158
3.23 Special provision for computing profits and gains of foreign
companies engaged in the business of civil construction etc. in certain
turnkey power projects [Section 44BBB] ...................................................... 4.160
3.24 Special provisions for computing income by way of royalties etc.
in case of non-residents [Section 44DA] ...................................................... 4.160
3.25 Method of computing deduction in the case of business reorganization of co-
operative banks .......................................................................................... 4.161
3.26 Computation of business income in cases where income is partly
agricultural and partly business in nature ..................................................... 4.165
Unit – 4 : Capital gains
4.1 Introduction ................................................................................................ 4.166
4.2 Capital asset .............................................................................................. 4.167
4.3 Short-term and long-term capital assets....................................................... 4.169
4.4 Transfer: what it means [Section 2(47)] ....................................................... 4.170
4.5 Scope and year of chargeability [Section 45]................................................ 4.171
4.6 Capital gains on distribution of assets by companies in
liquidation [Section 46] ............................................................................... 4.175
4.7 Capital gains on buyback, etc. of shares [Section 46A] ................................. 4.176
4.8 Transactions not regarded as transfer [Section 47]....................................... 4.176
4.9 Important definitions ................................................................................... 4.181
4.10 Withdrawal of exemption in certain cases .................................................... 4.183
4.11 Mode of computation of capital gains ........................................................... 4.184
4.12 Ascertainment of cost in specified circumstances [Section 49] ...................... 4.186
4.13 Cost of improvement [Section 55] ................................................................ 4.191
4.14 Cost of acquisition [Section 55] ................................................................... 4.194

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 4.15 Computation of capital gains in case of depreciable
asset [Section 50] ....................................................................................... 4.200
4.16 Capital gains in respect of slump sales [Section 50B] ................................... 4.201
4.17 Special provision for full value of consideration in certain
cases [Section 50C] .................................................................................... 4.202
4.18 Fair Market Value of capital asset on the date of transfer to be taken as sale
consideration, in cases where the consideration is not determinable ............. 4.202
4.19 Advance money received [Section 51] ......................................................... 4.203
4.20 Exemption of capital gains .......................................................................... 4.205
4.21 Reference to valuation officer [Section 55A] ................................................. 4.216
4.22 Short term capital gains tax in respect of equity shares/units of an
equity oriented fund reduced to 10% [Section 111A] ..................................... 4.217
4.23 Tax on long-term capital gains [Section 112] ................................................ 4.218
4.24 Exemption of long term capital gains on sale of equity shares/units
of an equity oriented fund [Section 10(38)] ................................................... 4.218
Unit – 5 : Income from other sources
5.1 Introduction ................................................................................................ 4.220
5.2 Incomes chargeable under this head [Section 56] ........................................ 4.220
5.3 Bond washing transactions and Dividend stripping [Section 94] .................... 4.229
5.4 Applicable rate of tax in respect of casual income [Section 115BB] ............... 4.230
5.5 Deductions allowable [Section 57] ............................................................... 4.230
5.6 Deductions not allowable [Section 58] ......................................................... 4.232
5.7 Deemed income chargeable to tax [Section 59] ............................................ 4.232
5.8 Method of accounting [Section 145] ............................................................ 4.232

CHAPTER 5 : INCOME OF OTHER PERSONS INCLUDED IN ASSESSEE’S TOTAL

INCOME
1. Clubbing of income - An introduction .............................................................. 5.1
2. Transfer of income without transfer of the asset [Section 60] ........................... 5.2
3. Income arising from revocable transfer of assets [Section 61] .......................... 5.2

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 4. Exceptions where clubbing provisions are not attracted even in case
of revocable transfer [Section 62] ................................................................... 5.2
5. Clubbing of Income arising to spouse [Section 64(1)(ii)] .................................. 5.3
6. Transfer of assets for the benefit of the spouse [section 64(1)(vii)] .................. 5.5
7. Income arising to son’s wife from the assets transferred without adequate
consideration by the father-in-law or mother-in-law [Section 64(1)(vi)] .............. 5.6
8. Transfer of assets for the benefit of son’s wife [Section 64(1)(viii)] ................... 5.6
9. Clubbing of minor’s income [Section 64(1A)] ................................................... 5.6
10. Cross transfers .............................................................................................. 5.7
11. Conversion of self-acquired property into the property of a
Hindu undivided family [Section 64(2)] ............................................................ 5.8
12. Income includes loss ..................................................................................... 5.8
13. Distinction between section 61 and section 64 ................................................ 5.8
14. Liability of person in respect of income included in the income
of another person [section 65] ........................................................................ 5.8

CHAPTER 6 : AGGREGATION OF INCOME, SET-OFF AND CARRY FORWARD OF

LOSSES
1. Aggregation of income ................................................................................... 6.1
2. Concept of set off and carry forward of losses ................................................. 6.2
3. Inter source adjustment [Section 70]............................................................... 6.2
4. Inter head adjustment [Section 71] ................................................................. 6.3
5. Set-off and carry forward of loss from house property [Section 71B] ................ 6.4
6. Carry forward and set-off of business losses [Sections 72 & 80] ...................... 6.4
7. Carry forward and set-off of accumulated business losses and unabsorbed
depreciation allowance in certain cases of amalgamation/demerger, etc.
[Section 72A] ................................................................................................ 6.6
8. Set-off of losses of a banking company against the profits of a banking
institution under a scheme of amalgamation [Section 72AA] ............................ 6.9
9. Carry forward and set off of accumulated loss and unabsorbed depreciation
allowance in business reorganization of co-operative banks .......................... 6.10

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 10. Losses in speculation business [Section 73] ................................................. 6.12
11. Carry forward and set-off of losses by specified business [Section 73A] ......... 6.13
12. Losses under the head ‘capital gains’ ........................................................... 6.13
13. Losses from the activity of owning and maintaining race horses
[Section 74A(3)] .......................................................................................... 6.14
14. Carry forward and set off of losses in case of change in constitution of
firm or succession [Section 78] ..................................................................... 6.15
15. Carry forward and set-off of losses in case of closely held companies
[Section 79] ................................................................................................. 6.16
16. Order of set-off of losses ............................................................................. 6.16

CHAPTER 7 : DEDUCTIONS FROM GROSS TOTAL INCOME

1. General provisions......................................................................................... 7.1
2. Deductions in respect of payments ................................................................. 7.3
3. Deduction in respect of incomes ................................................................... 7.28
4. Other deductions ......................................................................................... 7.60

CHAPTER 8 : COMPUTATION OF TOTAL INCOME AND TAX PAYABLE

1. Meaning of total income ................................................................................. 8.1
2. Income to be considered while computing total income of individuals ............... 8.1
3. Special provision for spouses governed by portuguese
civil code [Section 5A] ................................................................................... 8.2
4, Computation of total income and tax liability of individuals ............................... 8.3

CHAPTER 9 : PROVISIONS CONCERNING ADVANCE TAX AND TAX DEDUCTED AT

SOURCE
1. Deduction of tax at source and advance payment [Section190] ........................ 9.1
2. Direct payment [Section 191] ......................................................................... 9.2
3. Deduction of tax at source. ............................................................................ 9.2
4. Certificate for deduction of tax at a lower rate [Section 197]. ......................... 9.26
5. No deduction in certain cases [Section 197A]................................................ 9.26

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 6. Miscellaneous provisions. ............................................................................ 9.27
7. Advance payment of tax [Sections 207 to 219] .............................................. 9.36

CHAPTER 10 : PROVISIONS FOR FILING OF RETURN OF INCOME

1. Return of income ......................................................................................... 10.1
2. Compulsory filing of return of income [Section 139(1)] ................................... 10.1
3. Interest for default in furnishing return of income [Section 234A] .................... 10.3
4. Option to furnish return of income to employer [Section 139(1A)] ................... 10.3
5. Income-tax return through computer readable media [Section 139(1B)] .......... 10.4
6. Specified class or classes of persons to be exempted from filing
return of income [Section 139(1C)] ............................................................... 10.4
7. Return of loss [Section 139(3)] ..................................................................... 10.4
8. Belated return [Section 139(4)] ..................................................................... 10.4
9. Return of income of charitable trusts and institutions [Section 139(4A)] .......... 10.5
10. Return of income of political parties [Section 139(4B)] ................................... 10.5
11. Mandatory filing of returns by scientific research associations, news
agency, trade unions, etc. [Section 139(4C)] ................................................. 10.6
12. Mandatory filing of returns by universities, colleges etc. [Section 139(4D)] ..... 10.6
13. Revised return [Section 139(5)] .................................................................... 10.7
14. Particulars required to be furnished with the return [Section 139(6)] ............... 10.7
15. Particulars to be furnished with return of income in the case of an
assessee engaged in business or profession [Section 139(6A)] ..................... 10.8
16. Defective return [Section 139(9)] .................................................................. 10.8
17. Permanent account number (PAN) [Section 139A] ........................................ 10.10
18. Scheme for submission of returns through tax return
preparers [Section 139B] ............................................................................ 10.13
19. Power of CBDT to dispense with furnishing documents etc. with the return
and filing of return in electronic form [Sections 139C & 139D] ....................... 10.14
20. Authorised signatories to the return of income [Section 140] ......................... 10.15

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