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BASICS OF INCOME TAX
Section 87A Rebate

✓ If Assesse is Individual
✓ He is Resident
✓ Total Income Exceed 5Lakh
✓ Rebate = lower of a) Tax payable b) 12500.
Changes in Domestic Companies Tax Rate
Particulars Tax rates

If total Turnover or Gross Receipt in PY 18-19 is less than 25% of total Income
400 crore
Other Companies 30% of Total Income
Options for Domestic Companies

Section Particulars Tax Rate
115BAB New Domestic Manufacturing Companies 15% of Income
registered between 1/10/2019 to 31/03.2023 derived from or
incidental to
manufacturing or
production of any
article or thing.
115BAA Other Domestic Companies 22%
Companies opting the above sections shall not be eligible to claim following deduction
10AA, 32AD, 33AB, 33ABA, 35AD, 35CCC, 35CCD, 80-IA, to 80RRB[except
80JJAA or 80M], Additional Depreciation and without setoff of brought forward
losses and unabsorbed depreciation [Sections dealt in Finals]
By CA. CS. VIJAY SARDA +91 8956651954 Page 1.1 | BASIC

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Surcharge- on Income Tax computed as per slab rate or 111A or 112 or 112A
Rate of Example
Particulars surcharge Components of Applicable rate of surcharge
on income- total income
tax
(i) Where the 10% Example
total • Dividend ₹ Surcharge would be levied@10% on
income 10 lakhs; income-tax computed on total
(including • STCG u/s 111A income of ₹ 95 lakhs.
dividend
₹ 20 lakhs;
income and
• LTCG u/s
capital
112A
gains
₹ 25 lakhs;
chargeable
and
to tax u/s
111A and • Other income
112A) > ₹ 40 lakhs
₹50 lakhs
but ≤ ₹ 1
crore
(ii) Where 15% Example

VSMART ACADEMY
total • Dividend Surcharge would be levied@15% on
income income ₹ income-tax computed on total
(including 10 lakhs; income of ₹ 1.85 crores.
dividend • STCG u/s 111A
income and ₹ 60 lakhs;
capital
• LTCG u/s 112A
gains
₹ 65 lakhs; and
chargeable
to tax u/s • Other
111A and income
112A) > ₹ 50 lakhs
₹ 1 crore but
≤ ₹ 2 crore
(iii) Where total 25% Example
income
• Dividend Surcharge@15% would be levied on
(excluding
income ₹ income-tax on:
dividend
60 lakhs; • Dividend income of ₹60
income and
• STCG u/s 111A lakhs;
capital gains
₹ 54 lakh; • STCG of ₹ 54 lakhs chargeable
chargeable
• LTCG u/s 112A to tax u/s 111A; and
to tax u/s
111A and ₹ 55 lakh; and • LTCG of ₹ 55 lakhs chargeable
112A) > • Other to tax u/s 112A.
income Surcharge@25% would be leviable

₹ 2 crore
but ≤₹ 5 ₹ 3 crores on income-tax computed on other
crore income of ₹ 3 crores included in
total income
The rate of 25%
surcharge
on the
income-tax
payable on
the
portion
of dividend
income and
capital gains
chargeable
to tax u/s

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111A and
112A
(iv) Where total 37% Example
income
(excluding • Dividend Surcharge@15% would be levied
dividend income ₹ on income-tax on:
income and 60 lakhs; • Dividend income of ₹ 60
capital gains • STCG u/s 111A lakhs;
chargeable ₹ 50 lakhs; • STCG of ₹ 50 lakhs
to
• LTCG u/s 112A chargeable to tax u/s 111A;
tax u/s 111A and
₹ 65 lakhs; and
and 112A) >
• Other • LTCG of ₹ 65 lakhs
₹ 5 crore chargeable to tax u/s 112A.
income
₹ 6 crore Surcharge@37% would be leviable on
the income-tax computed on other
income of ₹ 6 crores included in
total income.
Rate of Not
Surcharge exceeding
on 15%
the income-
tax payable
on the
portion of
dividend
income and
capital gains
chargeable
to tax u/s
111A and
112A
(v) Where 15% Example

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total • Dividend Surcharge would be levied@15% on
income income ₹ income-tax computed on total
(including 55 lakhs; income of ₹ 2.80 crore.
dividend • STCG u/s 111A
income and ₹ 60 lakhs;
capital
• LTCG u/s 112A
gains
₹ 55 lakhs; and
chargeable
to tax u/s • Other
111A and income
112A) >₹ ₹ 1.10 crore
2 crore in
cases not
covered
under(iii)
and (iv)
above
SECTION 115BAC option to pay Tax on Concessional rate
From AY 21-22, Individual & HUF tax payers have an option to opt for taxation
under newly inserted Sec 115BAC. [on Income Other than 11A,112,112A,115BB]
1. Conditions to be satisfied:
A. the option to pay tax at lower rates shall be available only if the total income of
individual or HUFs is computed without claiming following exemptions or deductions:
1. leave travel concession [Section 10(5)]
2. House rent allowance [Section 10(13a)]
3. Official and personal allowances (other than those as may be prescribed)
[Section 10(14)]
4. allowances to MPs/MLAs [Section 10(17)]

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5. allowances for income of minor [Section 10(32)]
6. deduction for units established in Special economic Zones (SEZ) [Section
10aa];
7. Standard deduction [Section 16(ia)]
8. entertainment allowance [Section 16((ii)]
9. Professional tax [Section 16(iii)]
10. interest on housing loan [Section 24(b)]
11. additional depreciation in respect of new plant and machinery [Section
32(1)(iia)];
12. Deduction for investment in new plant and machinery in notified backward
areas [Section 32AD];
13. Deduction in respect of tea, coffee or rubber business [Section 33AB];
14. deduction in respect of business consisting of prospecting or extraction or
production of petroleum or natural gas in India [Section 33aBa];
15. Deduction for donation made to approved scientific research association,
university college or other institutes for doing scientific research which may or
may not be related to business [Section 35(1) (ii)];
16. Deduction for donation made to approved scientific research association,
university college or other institutes for doing scientific research which
may or may not be related to business [Section 35(1) (ii)];
17. Deduction for payment made to an Indian company for doing scientific research
which may or may not be related to business [Section 35(1)(iia)];
18. deduction for donation made to university, college, or other institution for
doing research in social science or statistical research [Section 35(1) (iii)];
19. Deduction for donation made for or expenditure on scientific research [Section
35(2AA)];
20. Deduction in respect of capital expenditure incurred in respect of
certain specified businesses, i.e., cold chain facility, warehousing facility, etc.
[Section 35ad];
21. deduction for expenditure on agriculture extension project [Section 35CCC];
22. deduction for family Pension [Section 57(iia)]
23. Deduction in respect of certain incomes other than specified under
Section 80JJAA, 80CCD(2) and deduction under section 80la for unit
located in IFSC [Part C of Chapter Vi-a]
Amendments to the Income Tax Rules, 1962 (the Rules), allow only following allowances

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notified u/s 10(14) of the Act to Individual/ HUF exercising option under this sec:
• Transport allowance granted to a divyang employee to meet expenditure for the
purpose of commuting between place of residence and place of duty;
• Conveyance allowance granted to meet the expenditure on conveyance in performance
of duties of an office
• Any allowance granted to meet the cost of travel on tour or on transfer
• Daily allowance to meet ordinary daily charges incurred by an employee on absence
from his normal place of duty
Further amendment to Rule 3, removes exemption in respect of free food and beverage
through vouchers provided to employee being the person exercising option under this
section by the employer.
B. Without set off of any losses carried forward or depreciation from an earlier AY, if
the same is attributable to any of the deductions referred above. Also without setting
off any loss under the head House Property with any other head of income. Both the
losses mentioned cannot be carried forward.
C. By claiming depreciation u/s 32 except additional depreciation.
D. Without any exemption or deduction for allowances or perquisites, by whatever name

called, provided under any other law for the time being in force.
2. Time Limit for choosing the option

A. Where such individual/HUF has no business income, along with return of income
furnished u/s 139(1).
B. In any other case, on or before the due date specified u/s 139(1) for furnishing
the ROI for any PY relevant to AY commencing on or after 1 st April,2021 and
such option once exercised shall apply to subsequent AYs.
3. Provisions of Sec 115JC, AMT, shall not apply to individual/ HUF having such business
income. Similarly, provisions of Sec 115JD relating to carry forward and set off of AMT
credit, if any, shall not apply to such individual/ HUF having business income.
4. The option shall be exercised for every PY where the Individual/ HUF has no business
income, and in other cases the option once exercised for a PY shall be valid for that
PY and all subsequent PYs. The option can be withdrawn only once where it was
exercised by the assessee having business income for a PY other than the year in which
it exercised and thereafter, the assessee shall never be eligible to exercise the option

VSMART ACADEMY
under this section, except where such Individual/ HUF ceases to have any business
income.
5. On satisfying above mentioned conditions, assessee will be eligible to pay tax w.r.t.
total income at following rates:
Total Income (₹) Rat
e
Up to 2,50,000 Nil
From 2,50,001 to 5,00,000 5%
From 5,00,001 to 7,50,000 10%
From 7,50,001 to 10,00,000 15%
From 10,00,001 to 12,50,000 20%
From 12,50,001 to 15,00,000 25%
above 15,00,000 30%

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RESIDENTIAL STATUS
Residential Status of Individual
Deemed Resident:
Notwithstanding anything contained in Sec 6(1), an individual, being citizen of India,
having total income, other than the income from foreign sources, exceeding 15,00,000
during the PY shall be deemed to be resident in India in that PY, if he is not liable
By CA. CS. VIJAY SARDA +91 8956651954 Page 2.1 | RS

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RESIDENTIAL STATUS
to tax in any other country/ territory by reason of his domicile/ residence/ any other
criteria of similar nature [FA’20]
As per Sec 6(6), if a person is deemed Resident as per Sec 6(1A) he shall deem to
be RNOR.
Other points:
If a person is resident as per Sec 6(1), then Sec then Sec 6(1A) shall not apply.
Sec 6(1A) does not apply to an individual who is not a citizen of India but a person
of Indian Origin.
Person of India Origin:

A person is deemed to be of Indian origin if he, or either of his parents or any of
his grandparents, was born in Undivided India. It may be noted that grandparents
include both maternal and paternal grandparents.
Resident & Ordinarily Resident (ROR):

An individual may become a ROR in India if he satisfies both following conditions given
u/s 6(1) besides satisfying any one of the above mentioned conditions:
a) he is a resident in at least any two out of the ten PYs immediately preceding
the relevant PY, and
b) he has been in India for 730 days or more during the 7 PYs immediately preceding
the relevant PY.
Resident but Not Ordinarily Resident (RNOR):

An individual is RNOR in any PY if –
a) He has been a NR in India in 9/10 PYs preceding that year, or
b) He has during the 7 PYs preceding that year been in India for period of, or
periods amounting in all to 729 days or less
c) A citizen of India, or a person of Indian Origin having total income other than
income from foreign sources exceeding 15 lakhs during the PY, who has been
in India for a period or periods amounting in all to 120 days or more but less
than 182 days; or
d) A citizen of India who is deemed to be resident in India – clause(1a)

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RESIDENTIAL STATUS
Non-resident:
If an individual does not satisfy any of the above basic condition then, he will be
treated as Non-resident. It must be noted that the fulfillment of any one of the
above conditions a/ b as applicable will make an individual resident in India for tax
purposes. Further, it is to be noted that these conditions are alternative and not
cumulative in their application.
Sec 9(1)- Income from Business Connection
Explanation 3—Where a business is carried on in India through a person referred to

in clause (a) or clause (b) or clause (c) of Explanation 2, only so much of income as
is attributable to the operations carried out in India shall be deemed to accrue or
arise in India.
Explanation 3A—For the removal of doubts, it is hereby declared that the income
attributable to the operations carried out in India, as referred to in Explanation 1,
shall include income from—
(i) such advertisement which targets a customer who resides in India or a customer
who accesses the advertisement through internet protocol address located in India;
(ii) sale of data collected from a person who resides in India or from a person who
uses internet protocol address located in India; and
(iii) sale of goods or services using data collected from a person who resides in India
or from a person who uses internet protocol address located in India.
Provided that the provisions contained in this Explanation shall also apply to the
income attributable to the transactions or activities referred to in Explanation 2A.
Amendment 2- Amendment in the definition of Royalty
Explanation 2 Definition of Royalty —For the purposes of this clause, "royalty"

means consideration (including any lump sum consideration but excluding any
consideration which would be the income of the recipient chargeable under the head
"Capital gains") for—
(i) the transfer of all or any rights (including the granting of a licence) in
respect of a patent, invention, model, design, secret formula or process or
trade mark or similar property ;

VSMART ACADEMY
RESIDENTIAL STATUS
(ii) the imparting of any information concerning the working of, or the use of,
a patent, invention, model, design, secret formula or process or trade mark
or similar property ;
(iii) the use of any patent, invention, model, design, secret formula or process
or trade mark or similar property;
(iv) the imparting of any information concerning technical, industrial, commercial
or scientific knowledge, experience or skill;
(v) (iva) the use or right to use any industrial, commercial or scientific
equipment but not including the amounts referred to in section 44BB;
(vi) the transfer of all or any rights (including the granting of a licence) in
respect of any copyright, literary, artistic or scientific work including films
or video tapes for use in connection with television or tapes for use in
connection with radio broadcasting but not including consideration for the
sale, distribution or exhibition of cinematographic films; or [FA’20]
(vii) the rendering of any services in connection with the activities referred to
in sub-clauses (i) to (iv), (iva) and (v).
Simplified; Consideration of sale, distribution, exhibition of Cinematographic films is

now covered within the definition of royalty. w.e.f. AY 2021-22

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RESIDENTIAL STATUS

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INCOME FROM HOUSE PROPERTY
Deduction of 30,000/ 2,00,000 w.r.t. IOBC u/s 24(b) is not allowed in case of
Self- occupied property, if assessee opts for Sec 115BAC
[FA’20]
Impact of SEC 115BAC under HP
Finance Act,2020 has introduced a new optional tax system for Individuals AND HUF
u/s 115BAC of the Income Tax Act, 1961, w.e.f. AY 21-22 to provide concessional
slab rates to be applied on Total Income calculated without claiming specified
deductions and exemptions. Hence, from AY 21-22 or FY 20-21, there are 2
operative tax systems:
i) Existing tax system where all the applicable deductions and exemptions are allowed
and the tax rates are as per the slab rates of tax specified in the Finance Act,
2020.
ii) Section 115BAC which is optional tax system and under which many deductions
and exemptions have not been allowed but lower slab tax rates are provided in the
Sec 115BAC itself. Individual and HUF opting for optional tax regime u/s 115BAC –
the deduction under Chapter VI-A other than the provisions of Sec 80CCD(2)/
80JJAA not available to the Individual and HUF opting for the same.
Many exemptions and deductions are not allowed under the new tax system. The
below chart contains exemptions and deductions not available under the new system
related to income under the head House Property.
Nature of Exemption/ Deduction Relating to Head HP New Existing
System System
Deduction of Municipal tax from GAV  
Standard deduction u/s 24(a) from NAV  
Interest deduction u/s 24(b) from NAV

a) let out properties u/s 23(1)
b) Self residential property u/s 23(2)  
 
c) Property which is stock in trade u/s 23(5)  
Set off of brought forward House Property losses &  
If related
brought forward depreciation from Current year House
to dis-
Property Income
By CA. CS. VIJAY SARDA +91 8956651954 Page 3.1 | HP

VSMART ACADEMY
allowed &
exempt
Set off current year House Property loss from other  
heads

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INCOME FROM SALARY
Change in Date of payment of Tax in Case of Sweat equity share
Tax on perquisite of specified securities and sweat equity shares is required to be paid
in the year of exercising the option, however where such shares are allotted by
employer being eligible startup u/s 80-IAC, the perquisite is taxable in the year
[after 14 days from]
a) After the expiry of 48 months from the end of relevant AY.
b) In which sale of such securities are made.
c) In which assessee cease to be employee of Employer
Whichever is earlier/
PROVIDENT FUND
Overall Cap Limit Introduced By Finance Act 20

The amount or the aggregate of amounts of any contribution made to the account
of the assessee by the employer –
(a) in a recognized provident fund
(b) in the scheme referred to in sec 80CCD(1); and
(c) in an approved superannuation fund,
To the extent it exceeds ₹ 7,50,000 in a PY;
Shall be Taxable as Perquisite
✓ the annual accretion by way of interest; dividend or any other amount of

similar nature during the PY to the balance at the credit of the fund or
scheme referred to in sub-clause (vii) to the extent it relates to the Employers
contribution & included in total income [on account of the same having exceeded
750000]
Impact of Sec 115BAC under the head “Salaries”
Finance Act, 2020 has introduced a New Optional Tax System for Individuals and
HUFs u/s 115BAC of the Income Tax Act, 1961 w.e.f. A/Y 21-22 to provide for
concessional rate of Slab Rates to be applied on Total Income calculated without
claiming specified deductions and exemptions.
By CA. CS. VIJAY SARDA +91 8956651954 Page 4.1 | SALARY

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INCOME FROM SALARY
Nature of Exemption/ Deduction Relating to Head HP New Existing
System System
115BAC
RETIREMENT BENEFITS EXEMPTIONS:
Leave Salary u/s 10(10AA)  
Gratuity u/s 10(10)  
Commutation of Pension u/s 10(10A)  
Retrenchment Compensation u/s 10(10B)  
VRS Compensation u/s 10(10C)  
Leave Travel Concession u/s 10(5)  
ALLOWANCES
Exemption u/s 10(13A) and Rule 2A from House Rent  
Allowance
Exemption u/s 10(14)(i) and Rule 2BB
Travelling Allowance  
Conveyance Allowance  
Daily Allowance  
Helper Allowance  
Any allowance granted for encouraging the academic, research  
and training pursuits in educational and research institutions

Uniform Allowance  
Exemption u/s 10(14)(ii) and Rule 2BB

Children Education Allowance  
Hostel Expenditure Allowance  
Tribal Area Allowance  
Transport Allowance to Handicapped/Deaf/Dumb/Blind  
employee
Transport Allowance to other than above employees  
Perquisites
Free food and beverage through vouchers provided to the  
employee upto 50/meal/Tea & snacks

Other Exemptions from perquisites e.g. Use of Computers,  
Laptops etc
DEDUCTIONS u/s 16  
Standard Deduction u/s 16(ia)  
Entertainment Allowance u/s 16(ii)  

VSMART ACADEMY
INCOME FROM SALARY
Professional Tax u/s 16(iii)  

VSMART ACADEMY
INCOME FROM SALARY

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INCOME FROM OTHER SOURCES
Sec.56[2][x] Provisions of Gift received from Inadequate consideration
If Immoveable property received from Inadequate consideration and SDV –

Consideration exceeds 50000 and 10% consideration the whole difference is Taxable.
SEC 56(2) – TAXATION OF DIVIDENDS
The FA 2020 has abolished the DDT and has moved to the Traditional System of
Taxability of Dividend.
Sec 2[24] Income

Dividend Income is treated Income and Chargeable to Tax at Normal rate.
Sec.8 Taxability of Income

Dividend Taxability
Interim Dividend Taxable in the year when it is made
availed to Shareholder.
Final Dividend Taxable in the year in which AGM is
declared
Deemed dividend 2[22][a]-2[22][e] Taxable in the year of distribution, or
paid.
Sec.57 Deduction from Dividend Income

Out of Dividend Income following is allowed as Deduction – Lower of
a) Actual Interest Paid or
b) 20% of Dividend Income
Surcharge on Dividend:
Enhanced Surcharge is not applicable to Dividend.
SEC 80M – Deductions in respect of certain intercorporate dividends
Sec 80M (1): Where the gross total income of a domestic company in any previous
year includes any income by way of dividends from any other domestic company or a
By CA. CS. VIJAY SARDA +91 8956651954 Page 5.1 | IFOS

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foreign company or a business trust, there shall, in accordance with and subject to
the provisions of this section, be allowed in computing the total income of such
domestic company, a deduction of an amount equal to so much of the amount of
income by way of dividends received from such other domestic company or foreign
company or business trust as does not exceed the amount of dividend distributed by
it on or before the due date.
Sec 80M (2): Where any deduction, in respect of the amount of dividend distributed
by the domestic company, has been allowed under sub-section (1) in any previous
year, no deduction shall be allowed in respect of such amount in any other previous
year.
Explanation —For the purposes of this section, the expression "due date" means the
date one month prior to the date for furnishing the return of income under sub-
section (1) of section 139.
Simplified: Actual Dividend Received and Dividend Paid whichever is lower.
194 TDS on Dividend paid by Domestic Company
Who will deduct Principal officer of domestic company on dividend distributed or

paid by it to resident shareholder. [ If paid to NR then TDS
u/s 195]
Rate of TDS 10% [between 14.05.2020 to 31.03.2021- 7.5%] on amount

beyond Rs 5000.
Time of Before making payment by any mode or before making

deduction distribution u/s 2[22][a-e]
Non Applicability No TDS in case shareholder being an Individual where,

of TDS a) The dividend is made by any mode other than cash &
b) Dividend does not exceed Rs 5000.
c) Dividend credited or paid to LIC, GIC, subsidiaries of GIC,
or other insurer provided the shares are owned by them
or have full beneficial Interest.
194 TDS on Dividend paid by Mutual Funds
Who will deduct Any person responsible for paying in respect of any

VSMART ACADEMY
a) Units of Mutual Fund
b) Units from Administrator of specified undertaking
c) Units from specified company.
paid by it to resident shareholder. [ If paid to NR then TDS
u/s 195]
Rate of TDS 10% [between 14.05.2020 to 31.03.2021- 7.5%] on amount

beyond Rs 5000.
Time of At the time of payment or credit whichever is earlier.

deduction
Non Applicability No TDS in case shareholder being an Individual where,

of TDS a) Dividend does not exceed Rs 5000.
b) Income is in the nature of capital gains.
Impact of Sec 115BAC under the head IFOS [FA’20]
claiming specified deductions and exemptions.
Hence, from AY 2021-22 or FY 2020-21, there are two operative tax system:
1. One is the Existing tax system where all the applicable deductions and exemptions
are allowed and the tax rates are as per the Slab rates of tax specified in the Finance
Act, 2020.
2. The second one is section 115BAC which is a Optional Tax System and under which
many deductions and exemptions have not been allowed but lower slab tax rates are
provided in the section 115BAC itself.
Individual and HUF opting for connectional tax regime under section 115BAC: The
deduction under Chapter VI-A other than the provisions of sub-section (2) of section
80CCD or section 80JJAA; not available to the Individual and HUF opting to pay
tax under connectional tax regime under section 115BAC of the Income Tax Act, 1961.
Many exemptions & deduction are not allowed under the new tax system. The below
chart contains the exemptions and deduction not available under the new system
related to Income under the head Other Sources. Similarly, deductions & exemptions

VSMART ACADEMY
not available under the new tax system and which are related to other heads are
provided in other chapters.
Nature of exemption / deduction New System of Tax u/s Existing System of

relating to head Other Sources 115BAC Tax
Deduction u/s 57 Allowed except section Allowed
57(ii)(a) i.e. Standard
dedn from Family Pension

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CAPITAL GAINS
SECTION 50C- FULL VALUE OF CONSIDERATION – LAND & BUILDING
If value adopted by Stamp Value Authority exceed 110% of consideration received or

accruing, the only Stamp Value is adopted as FVC otherwise consideration so received
shall be FVC.
Transaction which are not registered with Stamp Duty Authority & executed through
Agreement to sell or power of attorney are also included in Sec 50C.
Different Value by VO > SVA C= SVA
Situation in Value by VO < SVA but more than C= VO Value
ref to VO assessee
Value by VO < than value by Assessee C= Assessee Value
SECTION 50CA- FVOC FOR TRANSFER OF SHARE OTHER THAN QUOTED
Where the consideration received or accruing as a result of the transfer by an assessee

of a capital asset, being share of a company other than a quoted share, is less than
the fair market value of such share determined in such manner as may be prescribed,
the value so determined shall, for the purposes of section 48, be deemed to be the
full value of consideration received or accruing as a result of such transfer:
Provided that the provisions of this section shall not apply to any consideration
received or accruing as a result of transfer by such class of persons and subject to
such conditions as may be prescribed. [FA’ 20]
SECTION 55(2) – COST OF ACQUISITION
In case of Immovable property, IF SDV as on 01.04.2001 is available then FMV

cannot exceed Stamp Duty Value.
Cost Inflation Index -301 for PY 20-21
SECTION 50B – SLUMP SALE
Sec 50B (3): Every assessee, in the case of slump sale, shall furnish in the prescribed
form a report of an accountant as defined in the Explanation below sub-section (2)
of section 288 before the specified date referred to in section 44AB
By CA. CS. VIJAY SARDA +91 8956651954 Page 6.1 | CG

VSMART ACADEMY
CAPITAL GAINS
[FA’20] indicating the computation of the net worth of the undertaking or division,
as the case may be, and certifying that the net worth of the undertaking or division,
as the case may be, has been correctly arrived at in accordance with the provisions
of this section.
Impact of Sec 115BAC on Capital Gains
claiming specified deductions and exemptions. Hence, from AY 2021-22 or FY 2020-
21, there are two operative tax system: 1. One is the Existing tax system where all
the applicable deductions and exemptions are allowed and the tax rates are as per
the Slab rates of tax specified in the Finance Act, 2020. 2. The second one is
section 115BAC which is a Optional Tax System and under which many deductions and
exemptions have not been allowed but lower slab tax rates are provided in the section
115BAC itself. Individual and HUF opting for connectional tax regime under section
115BAC: The deduction under Chapter VI-A other than the provisions of sub-section
(2) of section 80CCD or section 80JJAA; not available to the Individual and HUF
opting to pay tax under connectional tax regime under section 115BAC of the Income
Tax Act, 1961. Under the new tax system, Many deductions & exemptions are not
allowed but under the head Capital Gains, all exemptions and deductions are allowed
even under the New tax system. So computation of Capital Gain Income will not be
effected under the new tax system.

VSMART ACADEMY
CAPITAL GAINS

VSMART ACADEMY
PROFITS & GAINS FROM BUSINESS & PROFESSION
SECTION 32[1] - Additional Depreciation
Assesse setup manufacturing unit in notified area of specified state of Telangana ,

Andra Pradesh, west Bengal, Bihar Additional depreciation was 35% if P&M is installed
and acquired between 01.04.2015 to 31.03.2020
Therefore P&M installed after 01.04.2020 deduction u/s 32 Ad is not allowed
further additional depreciation shall be 20% now instead of 35% [ if put to use for
less than 180 days than 10% and balance 10% in subsequent years].
SECTION 35E- DEDUCTION FOR EXPENDITURE ON PROSPECTING, ETC., FOR CERTAIN
Sec 32AB (5):

The deduction under sub-section (1) shall not be admissible unless the accounts of
the business or profession of the assessee for PY relevant to the AY for which the
deduction is claimed have been audited an accountant as defined in the Explanation
below sec 288 (2) before the specified date referred to in sec 44AB & assessee
furnishes by that date [FA’20] [ 1 month prior to the due date of filling ROI u/s
139[1]] the report of such audit in the prescribed form duly signed & verified by
such accountant.
SECTION 35E- DEDUCTION FOR EXPENDITURE ON PROSPECTING, ETC., FOR CERTAIN
MINERALS
Audit-
Where the assessee is a person other than a company or a co-operative society, no
deduction shall be admissible unless the accounts of the assessee for the year(s) in
which the expenditure specified is incurred have been audited by an accountant as
defined in the Explanation below sec 288(2), before the specified date referred to
in section 44AB and the assessee furnishes for the first year in which the deduction
under this section is claimed, the report of such audit by that date [FA’ 20] [ 1
month prior to the due date of filling ROI u/s 139[1]] in the prescribed form duly
signed and verified by such accountant and setting forth such particulars as may be
prescribed.
By CA. CS. VIJAY SARDA +91 8956651954 Page 7.1 | PGBP

VSMART ACADEMY
SECTION 35- EXPENDITURE ON SCIENTIFIC RESEARCH
In house research Capital[other than Land ] or revenue expenditure – 100%

Donation to others National Laboratory , IIT
Approved Institution,
Notified college and
university 100% of sum paid.
For approved institution for
social and statistical research
Companies whose main object
is research
SECTION 35[2AB] – Company engaged in business of bio technology or
manufacturing of any article or thing
Instead of 150% earlier 100%
SECTION 35CCC – EXPENDITURE ON AGRICULTURAL EXTENSION
Sec 35CCC(1) – Where an assessee incurs any expenditure on agricultural extension

project notified by the Board in this behalf in accordance with the guidelines as may
be prescribed, then, there shall be allowed a deduction of a sum equal to such
expenditure. [FA’ 20] [100%]
SECTION 35CCD – EXPENDITURE ON SKILL DEVELOPMENT PROJECT
Sec 35CCD (1) – Where a company incurs any expenditure (not being expenditure in
the nature of cost of any land or building) on any skill development project notified
by the Board in this behalf in accordance with the guidelines as may be prescribed,
then, there shall be allowed a deduction of a sum equal to such expenditure. [FA’20]
[100%]

VSMART ACADEMY
SECTION 35AD – DEDUCTION IN RESPECT OF EXPENSE ON SPECIFIED BIZ.
Sec 35AD (4):

No deduction in respect of the expenditure referred to in sub-section (1) shall be
allowed to the assessee under any other section in any PY or under this section in
any other PY, if the deduction has been claimed or opted by the assessee and allowed
to him under this section. [FA’20]
SECTION 35D – AMORTISATION OF CERTAIN PRELIMINARY EXPENSES
SEC 35D (4):

Where the assessee is a person other than a company or a co-operative society, no
deduction shall be admissible under sub-section (1) unless the accounts of the assessee
for the year or years in which the expenditure specified in sub-section (2) is incurred
have been audited by an accountant as defined in the Explanation below sub-section
(2) of section 288, before the specified date referred to in section 44AB and the
assessee furnishes for the first year in which the deduction under this section is
claimed, the report of such audit by that date [FA’ 20] [ 1 month prior to the due
date of filling ROI u/s 139[1]] in the prescribed form duly signed and verified by such
accountant and setting forth such particulars as may be prescribed.
SECTION 33ABA – SITE RESTORATION FUND
Sec 33ABA (2):

The deduction under sub-section (1) shall not be admissible unless the accounts of
such business of the assessee for the previous year relevant to the assessment year
for which the deduction is claimed have been audited by an accountant as defined in
the Explanation below sub-section (2) of section 288 before the specified date
referred to in section 44AB and the assessee furnishes by that date [FA’ 20] [ 1

VSMART ACADEMY
month prior to the due date of filling ROI u/s 139[1]] the report of such audit in
the prescribed form duly signed and verified by such accountant.
SECTION 43CA – Stamp duty value of land and building held as stock in
If SDV exceed 110% of consideration then SDV shall be full value of consideration.[
Similar to 50C]
SECTION 44AB – AUDIT OF ACCOUNTS OF CERTAIN PERSONS CARRYING ON
BUSINESS OR PROFESSION
Assessee Engaged in Business

Person carrying Business If total sales or Gross receipt exceed 1crore in relevant
PY
Note: for person declaring Income u/s 44AD and his

sales does not exceed 2crore he is not require to undergo
Audit.
Is such person carrying on a) aggregate of all amounts received including amount
business received for sales turnover or gross receipts during the
PY, in cash, does not exceed 5% of the said amount;
and
b) aggregate of all payments made including amount
incurred for expenditure in cash.
Then tax audit is not required till turnover exceed

5crore.
Person covered in sec If Assessee declares a lower profit then Specified under
44AE Good Transport section 44AE
agency
Person shoeing 1. If assessee do not disclose Income as per 44AD
presumptive Income u/s for continues 5 years then he would not be
44AD and 44ADA eligible to claim deduction u/s 44Ad for next five
years then he would have to maintain accounts

VSMART ACADEMY
u/s 44AA and do audit 44AB if total Income

Exceed Basic Exemption limit.
2. If assessee do not disclose Income as per 44ADA
then he would have to maintain accounts u/s
44AA and do audit 44AB if total Income Exceed
Basic Exemption limit.
Assessee Engaged in profession

General If Gross receipt of profession exceed 50lakh
Assessee carrying notified Tax audit is mandatory if Income exceed Basic exemption
profession and declares limit.
Income u/s 44ADA and
declare a lower profit
then
Explanation – “specified date”, in relation to the accounts of the assessee of the PY

relevant to an AY, means date one month prior to [FA’ 20] the due date for
furnishing the return of income u/s 139(1). [ 30th Sep Now.]
SECTION 43(5) – SPECULATIVE TRANSACTIONS
Explanation 2 — For the purposes of clause (e), the expressions—

(i) "commodity derivative" shall have the meaning as assigned to it in Chapter VII
of the Finance Act, 2013;
(ii) "eligible transaction" means any transaction,—
(a) carried out electronically on screen-based systems through member or an
intermediary, registered under the bye-laws, rules and regulations of the recognised
association recognised stock exchange for trading in commodity derivative in accordance
with the provisions of the Forward Contracts (Regulation) Act, 1952 (74 of 1952)
and the rules, regulations or bye-laws made or directions issued under that Act on
a recognised association recognised stock exchange [FA’ 20]; and
(b) which is supported by a time stamped contract note issued by such member or
intermediary to every client indicating in the contract note, the unique client identity
number allotted under the Act, rules, regulations or bye-laws referred to in sub-

VSMART ACADEMY
clause (A), unique trade number and permanent account number allotted under this
Act;
SECTION 32AD – Investment allowance – not relevant now.

VSMART ACADEMY

VSMART ACADEMY
DEDUCTIONS
SECTION 80C – DEDUCTION W.R.T VARIOUS INVESTMENTS
Qualifying savings/ investments:

Any sums paid or deposited in PY by Individual HUF
assessee
Deposit by CG Employee as a Self NA
contribution to his Tier II A/c of
Pension Scheme
SECTION 80G – DONATIONS
Trust/ institution to which donation is Qualifying limit % of donation

made applies or not eligible for deduction
Prime Minister’s National Relief Fund / No 100
Prime Minister’s Citizen Assistance & Relief
in Emergency Situations Fund (PM Cares
Fund) [FA’20]
Amendment as per FA’20
➢ The institution/ fund must be approved by PCIT/CIT.
➢ The institution/ fund must prepare a statement & deliver to authority or
provide a correction statement as may be prescribed.
➢ The institution/ fund shall furnish the donor a certificate specifying the
amount of donation and other particulars as may be prescribed.
Procedure for grant of new approval:
a) Where the institution or fund is approved under clause vi (as it stood immediately
before its amendment by the FA’20), within 3 months from the date on which this
proviso has come into force.
b) Where the institution or fund is approved and the period of such approval
is due to expire, at least six months prior to expiry of the said period;
c) where the institution or fund has been provisionally approved, at least six months
prior to expiry of the period of the provisional approval or within six months of
commencement of its activities, whichever is earlier;
d) in any other case, at least one month prior to commencement of the previous
year relevant to the assessment year from which the said approval is sought:
By CA. CS. VIJAY SARDA +91 8956651954 Page 8.1 | DEDUCT

VSMART ACADEMY
DEDUCTIONS
Registration period:
New – provisional registration for 3 years and thereafter for every 5 years
Existing – for 5 years
(all applications pending before CIT on which no order is passed shall deemed to be
new application)
SECTION 80GGA – Deductions in respect of certain donations for scientific
research or rural development

Amendment as per FA’20 w.e.f. 01-06-2020
Explanation —For the removal of doubts, it is hereby declared that the claim of the
assessee for a deduction in respect of any sum referred to in sub-section (2) in the
return of income for any assessment year filed by him, shall be allowed on the basis
of information relating to such sum furnished by the payee to the prescribed income-
tax authority or the person authorised by such authority, subject to verification in
accordance with the risk management strategy formulated by the Board from time
to time.
Assessee Any assessee not having income from PGBP
Contribution to > A scientific Research Association, or to an Approved
University, or other institutions to be used for Scientific
Research/ Research in Social Science or Statistical Research.
> An Approved Association, Institution, Public Sector Co which
has as its object the training of persons for implementing
program of rural development.
> Sum paid to the National Fund for rural development set
up and notified by the Central Government for the purpose
of carrying out rural development programmers.
Deduction Any amount [100%]. However, if sum exceed ₹ 2000 [FA’
20]
Logics No withdrawal of deduction even if approval is withdrawn
Above deduction, shall not be denied merely on the ground
that subsequent to the payment of such sum by the assessee,
the approval of above mentioned institutions has been
withdrawn.

VSMART ACADEMY
DEDUCTIONS
SECTION 80EEA – Interest on self occupied property
Assessee Individual (Other than covered in 80EE) (R/NR)

Payment for Paid interest on loan borrowed for SOP
Amount of Additional benefit upto ₹ 1,50,000 apart from available in Sec
deduction 24(b). Benefit will be available till the date of repayment
Meaning & > Loan should be from bank/approved financial institute
Condition > Actual amount of interest paid is available
> The stamp value of the House does not exceed ₹ 45L
> Loan should be sanctioned between 2019-21 [FA’20]
> Should not own more any HP as on date of sanction
> If deduction is taken under this sec., deduction under other
sec is not allowed
Impact of Sec 115BAC on Deductions
HUFs u/s 115BAC of the Income Tax Act, 1961 and for Resident Co-operative Societies
u/s 115BAD w.e.f. A/Y 21-22 to provide for concessional rate of Slab Rates to be
applied on Total Income calculated without claiming specified deductions and
exemptions.
Hence, from AY 2021-22 or FY 2021-22, there are two operative tax system –
1. One is the Existing tax system where all the applicable deductions and exemptions
are allowed and the tax rates are as per the Slab rates of tax specified in the Finance
Act, 2020.
2. The second one is section 115BAC / 115BAD which is a Optional Tax System and
under which many deductions and exemptions have not been allowed but lower slab
tax rates are provided in the section 115BAC / 115BAD itself.
Individual and HUF opting for connectional tax regime under section 115BAC: The
deduction under Chapter VI-A other than the provisions of sub-section (2) of section
80CCD or section 80JJAA; not available to the Individual and HUF opting to pay
tax under connectional tax regime under section 115BAC of the Income Tax Act, 1961.
If assessee opts for Sec 115BAC the following deductions are not allowed:
Sec 80TTA
Sec 80TTB

VSMART ACADEMY
DEDUCTIONS
Sec 80GGC
Sec 80U
Sec 80DD
Sec 80DDB
Sec 80D
Sec 80EEB
Sec 80EE
Sec 80E
Sec 80EEA
Sec 80C
Sec 80CCC
Sec 80G
Sec 80GG
Sec 80GGA
Sec 80QQB
Sec 80RRB

VSMART ACADEMY
DEDUCTIONS

VSMART ACADEMY
TAX DEDUCTED AT SOURCE & TAX COLLECTED AT SOURCE
SECTION 192- TDS on Salary
Payer Employer
[Deductor]
Payee Employee
[Deductee]
Limit If Annual salary [after deduction & exemption] exceed Basic
exemption
Special points Sec 192(1C): For the purposes of deducting or paying tax under
sub-section (1) or sub-section (1A), as the case may be, a
person, being an eligible start-up referred to in section 80-IAC,
responsible for paying any income to the assessee being perquisite
of the nature specified in clause (vi) of sub-section (2)
of section 17 in any previous year relevant to the assessment
year, beginning on or after the 1st day of April, 2021, shall
deduct or pay, as the case may be, tax on such income within
fourteen days—
(i) after the expiry of forty-eight months from the end of
the relevant assessment year; or
(ii) from the date of the sale of such specified security or
sweat equity share by the assessee; or
(iii) from the date of the assessee ceasing to be the
employee of the person,
whichever is the earliest, on the basis of rates in force for the
financial year in which the said specified security or sweat equity
share is allotted or transferred. [FA’ 20]
SECTION 194A- TDS on Interest other than on Securities
Payer Specified Person being

[Deductor] Individual & HUF: total sales, gross receipts/ turnover exceeds ₹
1crore (biz) / ₹ 50 lakhs (profession) [FA’20] during FY
immediately preceding FY in which such interest is credited or
paid
By CA. CS. VIJAY SARDA +91 8956651954 Page 9.1 | TDS & TCS
VSMART ACADEMY
Others: If exceeds limit

Payee Any person being resident
[Deductee] Others :If payment exceeds
Limit ₹ 5000
Bank/ PO/ co-operative society :If payment exceeds ₹ 40,000
From 01.06.2015, if the bank has adopted core banking solution

then limit will be per Bank wise
Rate 10%
Time of dedn. At the time of credit or payment whichever is earlier
Special points No TDS of following
> any banking company/ any co-op. society engaged in banking
biz. (incl. co-op. society land mortgage bank)
> any financial Corp. established by/ under a Central, State or
Provincial Act, or
> the LIC of India est. under the LIC Act, 1956, or
> the UTI est. under the UTI Act, 1963, or
> any company / co-op. society carrying on the business of
insurance, or
> such other inst./ class of AOP/ BOI or class of inst. which CG
may, notify in this behalf in Official Gazette
Provided that no notification under this sub-clause shall be issued
on or after the 1st day of April, 2020; [FA’20]
Interest paid by Cooperative Society being a Bank:
Interest on FDR & RD exceeding ₹ 10,000 in a FY
Paid to member : TDS to be deducted
Paid to another co-operative : No TDS to be deducted
society
Paid to Others : TDS to be deducted
Provided that a co-operative society referred to in clause (v) or
clause (viia) shall be liable to deduct income-tax in accordance
with the provisions of sub-section (1), if—
(a) the total sales, gross receipts or turnover of the co-
operative society exceeds fifty crore rupees during the financial
VSMART ACADEMY
year immediately preceding the financial year in which the

interest referred to in sub-section (1) is credited or paid; and
(b) the amount of interest, or the aggregate of the amounts
of such interest, credited or paid, or is likely to be credited or
paid, during the financial year is more than fifty thousand rupees
in case of payee being a senior citizen and forty thousand rupees
in any other case.
Amendments of CBS software bank & Co-op. Bank
Where core banking solutions No TDS shall be deducted if

software not adopted interest payment by each
branch does not exceed ₹
10,000
Where core-banking solutions TDS shall be deducted on

software is adopted aggregate of interest paid by
all the branches of the bank,
exceed ₹ 10,000
Tax is not required to be deducted u/s 194A on payment of

interest on time deposits by banks following Core-Branch Banking
Solutions (CBS) software.
Sec 194A(5) - The Central Government may, by notification in

the Official Gazette, provide that the deduction of tax shall not
be made or shall be made at such lower rate, from such payment
to such person or class of persons, as may be specified in the
said notification. [FA’20]
SECTION 194C- TDS on Payments to Contractors
Payer Specified persons

[Deductor]
Payee Any person resident in India
[Deductee]
Limit ₹ 30,000 for single payment/ aggregate amount ₹ 1,00,000
Rate > In individual or HUF: Upto 13.5.20 – 1% & 14.5.20 – 0.75%
> In other case: Upto 13.5.20 – 2% & 14.5.20 – 1.55%
VSMART ACADEMY
Special points Explanation - "specified person" shall mean —

(a) the Central Government or any State Government; or
(b) any local authority; or
(c) any corporation established by or under a Central, State or
Provincial Act; or
(d) any company; or
(e) any co-operative society; or
(f) any authority, constituted in India by or under any law,
engaged either for the purpose of dealing with and satisfying the
need for housing accommodation or for the purpose of planning,
development or improvement of cities, towns and villages, or for
both; or
(g) any society registered under the Societies Registration Act,
1860 (21 of 1860) or under any law corresponding to that Act
in force in any part of India; or
(h) any trust; or
(i) any university established or incorporated by or under a
Central, State or Provincial Act and an institution declared to
be a university under section 3 of the University Grants
Commission Act, 1956 (3 of 1956); or
(j) any Government of a foreign State or a foreign enterprise
or any association or body established outside India; or
(k) any firm; or
(l) any person, being an individual or a Hindu undivided family
or an association of persons or a body of individuals, if such
person —
(i) does not fall under any of the preceding sub-clauses; and
(ii) has total sales, gross receipts or turnover from business or
profession carried on by him exceeding one crore rupees in case
of business or fifty lakh rupees in case of profession during the
financial year immediately preceding the financial year in which
such sum is credited or paid to the account of the contractor;
[FA’20]
Explanation - "work" shall include—
VSMART ACADEMY
(a) advertising;
(b) broadcasting and telecasting including production of
programmes for such broadcasting or telecasting;
(c) carriage of goods or passengers by any mode of transport
other than by railways;
(d) catering;
(e) manufacturing or supplying a product according to the
requirement or specification of a customer by using material
purchased from such customer or its associate, being a person
placed similarly in relation to such customer as is the person
placed in relation to the assessee under the provisions contained
in clause (b) of sub-section (2) of section 40A
but does not include manufacturing or supplying a product
according to the requirement or specification of a customer by
using material purchased from a person, other than such
customer or associate of such customer.
[FA’ 20]
SECTION 194H- TDS on Commission or Brokerage
Payer All assessee (except those individual & HUF whose total sales,
[Deductor] gross receipts or turnover from the business or profession carried
on by him does not exceed 1 cr. in case of business/ 50 lakh in
case of profession during FY immediately preceding the FY)
[FA’ 20]
Payee Any person being resident
[Deductee]
Rate Upto 13.5.20 – 5% & 14.5.20 to 31.3.21- 3.75%
Limit > ₹ 15,000
SECTION 194I- TDS on Rent
Payer All assessee (except those individual & HUF whose total sales,
[Deductor] gross receipts or turnover from the business or profession carried
on by him does not exceed 1 cr. in case of business/ 50 lakh in
VSMART ACADEMY
case of profession during FY immediately preceding the FY)

[FA’ 20]
Payee Any person being resident in India
[Deductee]
Rate For use of P&M: Upto: 13.5.20 – 2% & 14.5.20 to 31.3.21 –
1.5%
For use of other asset: Upto 13.5.20- 10% & 14.5.20 to
31.3.21- 7.5%
Limit Exceeds ₹2,40,000 p.a. per co-owner (including Advance Rent
& Arrears of Rent)
SECTION 194J- TDS on Fees for professional/ technical services
Payer All assessee (except those individual & HUF whose total sales, gross receipts
[Deductor] or turnover from the business or profession carried on by him does not
exceed 1 cr. in case of business/ 50 lakh in case of profession during FY
immediately preceding the FY) [FA’ 20]
Payee Any person being resident in India
[Deductee]
Limit Exceeds ₹2,40,000 p.a. per co-owner (including Advance Rent & Arrears
of Rent)
Rate Technical services (not being a professional - 2%
services) or royalty where such royalty is in the nature
of consideration for sale, distribution or exhibition of
cinematographic films (upto 13.5.20)
& 14.5.20 to 31.3.21 – 1.5%
Other cases – Upto 13.5.20 – 10% & between 14.5.20 to 31.3.21 – 7.5%
[FA’20]
SECTION 194K- TDS on Income in respect of units [FA’20]
Payer Any person

[Deductor]
VSMART ACADEMY
Payee Any person (resident)

[Deductee]
Limit Exceeds ₹5,000
Rate 10%
Time of At the time of payment or credit whichever is earlier
deduction
Special points TDS shall be deductible on income in respect of units –
a) units of a Mutual Fund specified u/s 10(23D); or
b) units from the Administrator of the specified undertaking;
or
c) units from the specified company.
This section shall not apply –

a) where the amount of such income or, as the case may be,
the aggregate of the amounts of such income credited or paid
or likely to be credited or paid during the PY by the person
responsible for making the payment to the account of, or to,
the payee does not exceed ₹5000; or
b) if the income is of nature of capital gains.
SECTION 194N- TDS on Payment of certain amounts in cash
Every person being —

(i) a banking company to which the Banking Regulation Act, 1949 (10 of 1949)
applies (including any bank or banking institution referred to in section 51 of
that Act);
(ii) a co-operative society engaged in carrying on the business of banking; or
(iii) a post office,
who is responsible for paying any sum, being the amount or the aggregate of amounts,
as the case may be, in cash exceeding one crore rupees during the previous year, to
any person (herein referred to as the recipient) from one or more accounts maintained
by the recipient with it shall, at the time of payment of such sum, deduct an
amount equal to two per cent of such sum, as income-tax:
VSMART ACADEMY
Provided that in case of a recipient who has not filed the returns of income for all
of the three assessment years relevant to the three previous years, for which the
time limit of file return of income under sub-section (1) of section 139 has expired,
immediately preceding the previous year in which the payment of the sum is made
to him, the provision of this section shall apply with the modification that—
(i) the sum shall be the amount or the aggregate of amounts, as the case may
be, in cash exceeding twenty lakh rupees during the previous year; and
(ii) the deduction shall be—
(a) an amount equal to two per cent of the sum where the amount or
aggregate of amounts, as the case may be, being paid in cash exceeds
twenty lakh rupees during the previous year but does not exceed one
crore rupees; or
(b) an amount equal to five per cent of the sum where the amount or
aggregate of amounts, as the case may be, being paid in cash exceeds
one crore rupees during the previous year:
Provided further that the Central Government may specify in consultation with the
Reserve Bank of India, by notification in the Official Gazette, the recipient in whose
case the first proviso shall not apply or apply at reduced rate, if such recipient
satisfies the conditions specified in such notification:
Provided also that nothing contained in this section shall apply to any payment made
to—
(i) the Government;
(ii) any banking company or co-operative society engaged in carrying on the
business of banking or a post office;
(iii) any business correspondent of a banking company or co-operative society
engaged in carrying on the business of banking, in accordance with the guidelines
issued in this regard by the Reserve Bank of India under the Reserve Bank of
India Act, 1934 (2 of 1934);
(iv) any white label automated teller machine operator of a banking company or
co-operative society engaged in carrying on the business of banking, in
accordance with the authorisation issued by the Reserve Bank of India under
the Payment and Settlement Systems Act, 2007 (51 of 2007):
Provided also that the Central Government may specify in consultation with the
Reserve Bank of India, by notification in the Official Gazette, the recipient in whose
case the provision of this section shall not apply or apply at reduced rate, if such
recipient satisfies the conditions specified in such notification.
VSMART ACADEMY
SECTION 194O - Ecommerce Operator
Payer Any person (E-commerce operator)

[Deductor]
Payee Any person (Resident & E-commerce participant)
[Deductee]
Rate [FA’20] Upto 13.5.20 – 1% & 14.5.20 – 31.3.21 – 0.75%
Time of At the time of payment or credit whichever is earlier
deduction
Special points No TDS if ALL the following conditions are satisfied:
> Ecommerce participant is an Ind/ HUF
> Gross amount of such sale/ service/ both during the PY upto
5 lakhs
> Ecommerce participant has furnished his PAN or Aadhar
number to the Ecommerce operator.
TDS under this section is deductible on the gross amount of
such sale/ service.
SECTION 206C- Profits and gains from the business of trading in alcoholic
liquor, forest produce, scrap, etc.
Sec 206C(1G): Every person —

(a) being an authorised dealer, who receives an amount, for remittance out of
India from a buyer, being a person remitting such amount out of India under
the Liberalised Remittance Scheme of the Reserve Bank of India;
(b) being a seller of an overseas tour program package, who receives any amount
from a buyer, being the person who purchases such package,shall, at the time
of debiting the amount payable by the buyer or at the time of receipt of
such amount from the said buyer, by any mode, whichever is earlier, collect
from the buyer, a sum equal to five per cent of such amount as income-tax.
Provided that the authorised dealer shall not collect the sum, if the amount or
aggregate of the amounts being remitted by a buyer is less than seven lakh rupees
in a financial year and is for a purpose other than purchase of overseas tour program
package.
Provided further that the sum to be collected by an authorised dealer from the
buyer shall be equal to five per cent of the amount or aggregate of the amounts in
excess of seven lakh rupees remitted by the buyer in a financial year, where the
VSMART ACADEMY
amount being remitted is for a purpose other than purchase of overseas tour program
package.
Provided also that the authorised dealer shall collect a sum equal to one half per
cent of the amount or aggregate of the amounts in excess of seven lakh rupees
remitted by the buyer in a financial year, if the amount being remitted out is a loan
obtained from any financial institution as defined in section 80E, for the purpose of
pursuing any education.
Provided also that the authorised dealer shall not collect the sum on an amount in
respect of which the sum has been collected by the seller.
Provided also that the provisions of this sub-section shall not apply, if the buyer
is,—
(i) liable to deduct tax at source under any other provision of this Act and
has deducted such amount;
(ii) the Central Government, a State Government, an embassy, a High
Commission, a legation, a commission, a consulate, the trade representation
of a foreign State, a local authority as defined in the Explanation to clause
(20) of section 10 or any other person as the Central Government may, by
notification in the Official Gazette, specify for this purpose, subject to such
conditions as may be specified therein.
Explanation —For the purposes of this sub-section —
(i) "authorised dealer" means a person authorised by the Reserve Bank of India
under sub-section (1) of section 10 of the Foreign Exchange Management Act,
1999 (42 of 1999) to deal in foreign exchange or foreign security;
(ii) "overseas tour programme package" means any tour package which offers
visit to a country or countries or territory or territories outside India and
includes expenses for travel or hotel stay or boarding or lodging or any other
expenditure of similar nature or in relation thereto.
Sec 206C(1H): Every person, being a seller, who receives any amount as consideration
for sale of any goods of the value or aggregate of such value exceeding fifty lakh
rupees in any previous year, other than the goods being exported out of India or
goods covered in sub-section (1) or sub-section (1F) or sub-section (1G) shall, at the
time of receipt of such amount, collect from the buyer, a sum equal to 0.1 per cent
of the sale consideration exceeding fifty lakh rupees as income-tax.
Provided that if the buyer has not provided the Permanent Account Number or the
Aadhaar number to the seller, then the provisions of clause (ii) of sub-section (1)
of section 206CC shall be read as if for the words "five per cent", the words "one
per cent" had been substituted.
VSMART ACADEMY
Provided further that the provisions of this sub-section shall not apply, if the buyer
is liable to deduct tax at source under any other provision of this Act on the goods
purchased by him from the seller and has deducted such amount.
Explanation —For the purposes of this sub-section —
(a) "buyer" means a person who purchases any goods, but does not include —
(A) the Central Government, a State Government, an embassy, a High
Commission, legation, commission, consulate and the trade representation
of a foreign State; or
(B) a local authority as defined in the Explanation to clause (20) of section
10; or
(C) a person importing goods into India or any other person as the Central
Government may, by notification in the Official Gazette, specify for this
purpose, subject to such conditions as may be specified therein;
(b) "seller" means a person whose total sales, gross receipts or turnover from
the business carried on by him exceed ten crore rupees during the financial
year immediately preceding the financial year in which the sale of goods is
carried out, not being a person as the Central Government may, by notification
in the Official Gazette, specify for this purpose, subject to such conditions as
may be specified therein.
Sec 206C (1-I): If any difficulty arises in giving effect to the provisions of sub-
section (1G) or sub-section (1H), the Board may, with the approval of the Central
Government, issue guidelines for the purpose of removing the difficulty.
Sec 206C(1J): Every guideline issued by the Board under sub-section (1-I) shall be
laid before each House of Parliament, and shall be binding on the income-tax
authorities and on the person liable to collect the sum.
Sec 206C(2): The power to recover tax by collection under this section [FA’20] shall
be without prejudice to any other mode of recovery.
Sec 206C(3): Any person collecting any amount under this section [FA’20] shall pay
within the prescribed time the amount so collected to the credit of the Central
Government or as the Board directs.
Provided that the person collecting tax on or after the 1st day of April, 2005 in
accordance with the foregoing provisions of this section shall, after paying the tax
collected to the credit of the Central Government within the prescribed time, prepare
such statements for such period as may be prescribed and deliver or cause to be
VSMART ACADEMY
delivered to the prescribed income-tax authority, or the person authorised by such

authority, such statement in such form and verified in such manner and setting forth
such particulars and within such time as may be prescribed.
Sec 206C(11): The Board may, having regard to the convenience of assessees and the
interests of revenue, by notification in the Official Gazette, make rules specifying the
cases in which, and the circumstances under which, an application may be made for
the grant of a certificate under sub-section (9) and the conditions subject to which
such certificate may be granted and providing for all other matters connected
therewith.
Explanation —For the purposes of this section —
(a) "accountant" shall have the meaning assigned to it in the Explanation to sub-
section (2) of section 288;
(aa) "buyer" with respect to—
(i) sub-section (1) means a person who obtains in any sale, by way of
auction, tender or any other mode, goods of the nature specified in the
Table in sub-section (1) or the right to receive any such goods but does
not include,—
(A) a public sector company, the Central Government, a State
Government, and an embassy, a High Commission, legation,
commission, consulate and the trade representation, of a foreign
State and a club; or
(B) a buyer in the retail sale of such goods purchased by him for
personal consumption;
(ii) sub-section (1F) means a person who obtains in any sale, goods of the
nature specified in the said sub-section, but does not include,—
(A) the Central Government, a State Government and an embassy, a
High Commission, legation, commission, consulate and the trade
representation of a foreign State; or
(B) a local authority as defined in Explanation to clause (20) of section
10; or
(C) a public sector company which is engaged in the business of carrying
passengers.
VSMART ACADEMY
(b) "scrap" means waste and scrap from the manufacture or mechanical working
of materials which is definitely not usable as such because of breakage, cutting
up, wear and other reasons;
(c) "seller" with respect to sub-section (1) and sub-section (1F) means the
Central Government, a State Government or any local authority or corporation
or authority established by or under a Central, State or Provincial Act, or
any company or firm or co-operative society and also includes an individual or
a Hindu undivided family whose total sales, gross receipts or turnover from
the business or profession carried on by him exceed one crore rupees in case
of business or fifty lakh rupees in case of profession [FA’ 20] during the
financial year immediately preceding the financial year in which the goods of
the nature specified in the Table in sub-section (1) are sold.
TCS Summary Chart
Nature of receipts Sec of the Existing Rate of Reduced rate from

Income Tax Act TCS 14/05/2020 to
31/03/2021
Sale of Alcoholic liquor 206C(1) 1.00% 1.00%
for human consumption
Sale of Tendu leaves 206C(1) 5.00% 3.75%
Sale of timber obtained 206C(1) 2.50% 1.88%
under a forest lease
Sale of timber obtained 206C(1) 2.50% 1.88%
by any other mode
Sale of any other 206C(1) 2.50% 1.88%
forest produce not
being timber/ tendu
leaves
Sale of scarp 206C(1) 1.00% 0.75%
VSMART ACADEMY
Sale of minerals, being 206C(1) 1.00% 0.75%

oak or lignite or iron
ore
Grant of license, lease, 206C(1) 2.00% 1.50%
etc. of Parking Lot
etc. of Toll plaza
etc. of Mining and
quarrying
Sale of motor vehicle 206C(1F) 1.00% 0.75%
above 10 lakhs
Sale of any other goods 206C(1H) 0.1% 0.075%
(w.e.f.
1.10.20)
TDS Summary Chart
Nature of payments Relevant Section TDS Rate till TDS rate from
of the Income May 13, 2020 14/05/2020 to
Tax Act 31/03/2021
Receiving accumulated 192A 10% 10%
taxable part of PF
Interest received on 193 10% 7.50%
securities
Dividend received from 194 and 194K 10% 7.50%
Mutual Funds and on
company’s shares
Interest other than 194A 10% 7.50%
Interest on Securities
e.g., Fixed deposit
interest
VSMART ACADEMY
Winnings from lottery, 194B 30% 30%

crosswords or any sort
of game
Winnings from horse 194BB 30% 30%
races
Insurance Commission 194D 5% 3.75%
received by an
Individual
Life Insurance Policies 194DA 5% 3.75%
not exempt under
section 10(10D)
Commission or 194H 5% 3.75%
brokerage received
except for insurance
commission
Payment made while 194IA 1% 0.75%
purchasing land or
property
Payment of rent by 194IB 5% 3.75%
Individual or HUF
exceeding ₹ 50,000
per month
Payment made to 194M 5% 3.75%
professional or
commission or
brokerage of more
than ₹ 50 lakh and
above
Cash withdrawal 194N 2% 2%
exceeding ₹ 20 lakh or
1 crore as the case
may be
VSMART ACADEMY
Payment of 194J 2% (FTS, 1.5% (FTS, certain

professional fees, etc. certain royalties, call
royalties, call centre)
centre) 7.5% (others)
10% (others)
Payment in respect of 194EE 10% 7.50%
deposits under
National Savings
Scheme
Rent for plant and 194-I (a) 2% 1.50%
machinery
Rent for immovable 194-I (B) 10% 7.50%
property
VSMART ACADEMY
VSMART ACADEMY
ALTERNATE MINIMUM TAX
Sec 115JC – Applicability
Sec 115JC(3): Every person to whom this section applies shall obtain a report, before
the specified date referred to in section 44AB, in such form as may be prescribed,
from an accountant referred to in the Explanation below sub-section (2) of section
288, certifying that the adjusted total income and the alternate minimum tax have
been computed in accordance with the provisions of this Chapter and furnish such
report by that date. [FA’20]
Sec 115JC(5): The provisions of this section shall not apply to a person who has
exercised the option referred to in section 115BAC or section 115BAD.
[FA’20]
Sec 115JD – Tax credit for AMT
Sec 115JD (7): The provisions of this section shall not apply to a person who has
exercised the option referred to in section 115BAC or section 115BAD.
By CA. CS. VIJAY SARDA +91 8956651954 Page 10.1 | AMT & MAT
VSMART ACADEMY
ALTERNATE MINIMUM TAX
By CA. CS. VIJAY SARDA +91 8956651954 Page 10.2 | AMT & MAT
VSMART ACADEMY
RETURN OF INCOME
SECTION 139(1)
SIXTH PROVISO TO SEC 139(1)

Provided also that every person,
• being an individual or a Hindu undivided family or
• an association of persons or a body of individuals, whether incorporated or
not, or an artificial juridical person, if his total income or the total income of
any other person in respect of which he is assessable under this Act during
the previous year, without giving effect to the provisions of clause (38)
of section 10 or section 10A or section 10B or section 10BA [or section
54 or section 54B or section 54D or section 54EC or section 54F or section
54G or section 54GA or section 54GB] or Chapter VI-A
• exceeded the maximum amount which is not chargeable to income-tax,
• shall, on or before the due date,
• furnish a return of his income or the income of such other person during the
previous year, in the prescribed form and verified in the prescribed manner and
setting forth such other particulars as may be prescribed.
Due date of filing of return:

Company Liable to TP report u/s 92E 30th Nov of AY
Others [FA ‘20] 31st Oct of AY
Others Liable to tax audit u/s 44AB 31st Oct of AY
Working Partner [FA’20]
Others
31st July of AY
Explanation:
Due date means –
a) Where the assessee is (other than assessee required to furnish TP report)-
i) a company
ii) a person (other than company) whose accounts are required to be audited under
Income Tax or any other law- 31st Oct of AY
iii) a working partner of a firm whose accounts are required to be audited under
Income Tax or any other law- 31st Oct of AY
By CA. CS. VIJAY SARDA +91 8956651954 Page 11.1 | ROI

VSMART ACADEMY
RETURN OF INCOME
SECTION 140A – Self assessment Tax
Where any tax and interest u/s 234A, 234B & 234C & fee u/s 234F is payable
by the assessee on the basis of the return of income required to be furnished u/s
139 or sec 142(1)/ sec 148 or sec 153A, after deducting
> advance tax;
> any tax deducted or collected at source;
> any relief of tax claimed u/s 89;
> any relief of tax u/s 90/ 91 of tax paid in country o/s India;
> any relief of tax claimed u/s 90A on account of tax paid in any specified territory
outside India referred to in that sec;
> any MAT credit u/s 115JAA or AMT credit u/s 115JD; and
> any tax or interest payable according to the provisions of sec 191(2) [FA’20]

VSMART ACADEMY
RETURN OF INCOME

VSMART ACADEMY

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STUDENT REVIEWS – CA FINAL

THANK YOU BACHOOOOO…

CA CS VIJAY SARDA │VSMART Academy │8956651954

THANK YOU BACHOOOOO…

CA CS VIJAY SARDA │VSMART Academy │8956651954

CA VIJAY SARDA III

CA CS VIJAY SARDA │VSMART Academy │8956651954

Section 87A Rebate

Changes in Domestic Companies Tax Rate

Particulars Tax rates

Options for Domestic Companies

By CA. CS. VIJAY SARDA +91 8956651954 Page 1.1 | BASIC

By CA. CS. VIJAY SARDA +91 8956651954 Page 1.2 | BASIC

112A) > ₹ 50 lakhs

income Surcharge@25% would be leviable

By CA. CS. VIJAY SARDA +91 8956651954 Page 1.3 | BASIC

(v) Where 15% Example

By CA. CS. VIJAY SARDA +91 8956651954 Page 1.4 | BASIC

112A) >₹ ₹ 1.10 crore

SECTION 115BAC option to pay Tax on Concessional rate

By CA. CS. VIJAY SARDA +91 8956651954 Page 1.5 | BASIC

By CA. CS. VIJAY SARDA +91 8956651954 Page 1.6 | BASIC

C. By claiming depreciation u/s 32 except additional depreciation.

D. Without any exemption or deduction for allowances or perquisites, by whatever name

2. Time Limit for choosing the option

By CA. CS. VIJAY SARDA +91 8956651954 Page 1.7 | BASIC

By CA. CS. VIJAY SARDA +91 8956651954 Page 1.8 | BASIC

By CA. CS. VIJAY SARDA +91 8956651954 Page 1.9 | BASIC

Residential Status of Individual

By CA. CS. VIJAY SARDA +91 8956651954 Page 2.1 | RS

Person of India Origin:

Resident & Ordinarily Resident (ROR):

Resident but Not Ordinarily Resident (RNOR):

By CA. CS. VIJAY SARDA +91 8956651954 Page 2.2 | RS

Sec 9(1)- Income from Business Connection

Explanation 3—Where a business is carried on in India through a person referred to

Amendment 2- Amendment in the definition of Royalty

Explanation 2 Definition of Royalty —For the purposes of this clause, "royalty"

By CA. CS. VIJAY SARDA +91 8956651954 Page 2.3 | RS

Simplified; Consideration of sale, distribution, exhibition of Cinematographic films is

By CA. CS. VIJAY SARDA +91 8956651954 Page 2.4 | RS

By CA. CS. VIJAY SARDA +91 8956651954 Page 2.5 | RS

Impact of SEC 115BAC under HP

Standard deduction u/s 24(a) from NAV  

Interest deduction u/s 24(b) from NAV

By CA. CS. VIJAY SARDA +91 8956651954 Page 3.1 | HP

By CA. CS. VIJAY SARDA +91 8956651954 Page 3.2 | HP

By CA. CS. VIJAY SARDA +91 8956651954 Page 3.3 | HP

Change in Date of payment of Tax in Case of Sweat equity share

Overall Cap Limit Introduced By Finance Act 20

✓ the annual accretion by way of interest; dividend or any other amount of

Impact of Sec 115BAC under the head “Salaries”

By CA. CS. VIJAY SARDA +91 8956651954 Page 4.1 | SALARY

Gratuity u/s 10(10)  

Commutation of Pension u/s 10(10A)  

Retrenchment Compensation u/s 10(10B)  

VRS Compensation u/s 10(10C)  

Leave Travel Concession u/s 10(5)  

Any allowance granted for encouraging the academic, research  

and training pursuits in educational and research institutions

Exemption u/s 10(14)(ii) and Rule 2BB

Hostel Expenditure Allowance  

Tribal Area Allowance  

Transport Allowance to Handicapped/Deaf/Dumb/Blind  

employee upto 50/meal/Tea & snacks

Standard Deduction u/s 16(ia)  