ANM Sir Chartbook DT - Volume 2

www.dpclasses.
org ANM Sir Chart Book - DT
Dec 2021
exams
onwards
CA DEEPAK PANDIAN & CA ANEESH NOOR MOHAMMAD

www.dpclasses.org ANM SIR CHARTBOOK - DT
INDEX Page
No.
1. MAT & AMT 2

2. Assessment of Various Entities 21
3. Taxation of Special Entities 68

4. Taxation of Other Entities 104
5. Transfer Pricing & Advanced Issues in TP 109
6. DTAA 139
7. Non - Resident Taxation 147
8. Tonnage Income 173
9. Assessment Procedure 177
10. Appeals & Revision 217
11. Advance Ruling 239
12. Settlement Commission 244
13. Penalties & Prosecutions 249

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 1

PREVIEW
MAT for Companies AMT for other than companies

S.115JB S.115JC
115JC
Introduction to MAT
AMT payable
MAT for IndAS 115JD

companies AMT Credit
115JE
MAT in special cases Application of other
provisions of Act
115JEE
MAT Credit u/s 115JAA
Applicability of AMT

1. INTRODUCTION TO MAT
115JB(1) - MAT ROUTE
MAT is Normal Tax

more is less
MAT RATE
 Then, Book profit u/s 115JB will be  MAT rate for

Incase of Company If the tax payable under
treated as Deemed Total Income companies - 15%
(Domestic and Normal route is less than tax
 And tax payable will be MAT  For companies in
Foreign) payable under MAT route
Payable IFSC - 9%
115JB(2) – P&L a/c
While preparing Annual accounts,

Normal Companies - As
per Schedule III of
Companies Act,2013 Methods &
Accounting Accounting
Rates for
Policies Standards
depreciation
Specific Companies -
Inaccordance with Shall be the same as adopted in preparing such
Every Company shall provisions of Act accounts laid before the company at its Annual
prepare P&L a/c as per- governing such Company General meeting.

NON APPLICABILITY OF S.115JB

115JB(3) 115JB(4)
Form
29B
MAT
 Every Company under
Explanation 4 Sec 115JB shall this section should
not affect the C/f furnish a report
of losses
115JB not apply to 2 foreign co. certifying correctness
of Book profit in Form
29B from CA.
Normal provisions
apply as if MAT  Before 1 month prior
FC is a resident of a FC is a resident to the due date of filing
not been there
country or specified of a country ROI
territory where where India not
India having DTAA having DTAA
115JB(5) 115JB(5A)
FC does not have PE FC not require MAT not applicable to-
in India as per that to take
DTAA registration in
India
MAT
Explanation 4A All other provisions
of IT shall apply for Life insurance
Company paying business
Total income 44B
Sec MAT (like Advance
solely 115BAA route
115JB 44BB
comprises of tax, Interest u/s
not apply
Profit & Gains 44BBA 234A, 234B, 234C 115BAB route
to foreign
from business
co. where 44BBB and Penalty and so.)
referred in

 MAT FORMAT
Net profit as per p&L a/ c
Add: Items covered under Expl 1 to 115JB Less: Items covered under Expl 1 to 115JB
1 Income tax paid / payable xxx 1 Tonnage Tax Income (xxx)

2 Reserves created by whatever name called xxx
3 Set aside for unascertained liability xxx 2  Income covered u/s 10 / 11 / 12 (xxx)
 Income earned by a Foreign
3 (xxx)
Company on account of IFRS & CG
 Income earned from AOP / BOI
4 (xxx)
4  Dividend paid or payable xxx covered u/s 86
 Income earned from royalty covered
5  Diminution in the value of the asset xxx 5 (xxx)
u/s 115BBF
6  Depreciation xxx
7  Deferred Tax xxx 6 Reserves withdrawn (xxx)
Depreciation excluding Revaluation

8  Expenditure incurred u/s 10/ 11/ 12 xxx 7 (xxx)
reserve
 Expenditure incurred by a Foreign Company
9 xxx
on account of IFRS & CG
 Expenditure incurred to earn income from

10 xxx 8 Deferred tax (xxx)
AOP / BOI covered u/s 86
 Expenditure incurred to earn royalty income
11 xxx
covered u/s 115BBF
BFBL / BF Depreciation as per books
9 (xxx)
Whichever is lower
12 Provision for loss of subsidy debited to P&L xxx
Sub total xxxx Sub total (xxxx)
= Book profit u/s 115JB

 ANALYSIS OF CERTAIN ITEMS IN MAT FORMAT
INCOME / EXPENSES ACCRUING TO FOREIGN REVALUATION RESERVE

COMPANY
 The amount of income accruing or arising to a Foreign
company from -
CG from Fees for
transfer of Interest Technical
securities Services Taxed Depreciation debited to P&L a/c xxx
@ 115A Less: Depreciation excluding
Such (xxx)
rates Revaluation Reserve
Royalties other
sums Less: Amount withdrawn from
Revaluation Reserve to the
(xxx)
 If such income is credited to the Statement of P&L and extent of Depreciation on
the income tax payable thereon in accordance with the account of Revaluation
provisions of this Act, is at a rate less than 15% Refer Below*
Withdrawal from
Reserve
Withdrawal from
Reserves
Revaluation
Any Reserve
Reserve
To the extent of
if Already added Not added back
Depreciation on Not credited
back while earlier while
Revaluation to P&L
calculating MAT calculating MAT
credited to P&L
Reduce while Reduce while

No
calculating Book No adjustment calculating
adjustment
profit Book profit

B/F LOSS OR UNABSORBED DEPRECIATION
Company and its subsidiary Other Companies - as per

Company admitted for CIRP books of accounts
and Subsidiaries of such
i.e, Corporate Insolvency
subsidiary, where Tribunal
Resolution Procedure by
suspended BOD u/s 241 and
Adjudicating Authority u/s
appointed new directors u/s
7,9,10 of IBC,2016 Brought
242 of Companies Act
forward Loss
W.e.
or Less
Aggregate Brought Unabsorbed
Unabsorbed
of: forward Loss depreciation
depreciation

2. MAT FOR INDAS COMPANIES
115JB (2A) & (2B) – ANNUAL ADJUSTMENT
115JB(2A)
OCI adjustment (Items

not reclassified to Demerger adjustment
P&L)
Debited to P&L Credited to P&L Distribution of Distribution of

and credited to and debited to Non-cash asset Non-cash asset
OCI OCI to SH and to SH and
Debited to P&L Credited to P&L
Added to Book Reduced from Added to Book Reduced from

profit Book profit profit Book profit
s.115JB(2B) are recorded at values

Such difference be
Incase of Resulting Co., different from values in
ignored for computing
where the assets & the BOA of the demerged
Book profits of Resulting
liabilities of the company immediately
company
undertaking received by it before the demerger

Exceptions & Time of taxation for certain Items in 115JB(2A)
Items and their time

of taxation
Changes in
revaluation surplus Gain or losses from
Remeasurements of
of PPE and investment in Equity
defined benefit Any other item
Intangible assets instrument
plans (Ind AS 19)
(Ind AS 16 and Ind designated @ FV
AS 38)
At the time of At the time of

Every year as the re
realization / disposal realization / disposal Every year as the
– measurements
/ retirement or / retirement or gains and losses
gains and losses
otherwise otherwise arise
arise
transferred transferred

115JB (2C) – TRANSITIONAL ADJUSTMENT
eg: If first time adoption is in FY 2016-17, 5 years = FY of:

 Book profits of 5 years (including year of
convergence) can be increased or 2017-18 2019-20
decreased by 1/5th of the Transition
Amount. 2016-17 2018-19 2020-21
Transition amount means Aggregate of amount adjusted on other equity on convergence date but does not include the
following items below which are adjusted on the convergence date:
A. Items in OCI re -classified to the

profit or loss B. Revaluation surplus of assets
D. Property, plant and equipment

C. Gains or losses from the and intangible assets recorded at
investments in equity instruments
fair value as deemed cost as per
designed at FV through OCI
IndAS 101
E. Investment in subsidiaries, joint

ventures and associates recorded F. Cumulative translation difference
at fair value as deemed cost as per of a foreign operation as per IndAS
IndAS 101 101

 MAT IND-AS FORMAT
Bp computed iN accordaNce with expL.1 to sec.115JB

Add: Adjustment contemplated:
1 Items credited to OCI and not to be reclassified to statement of P/L a/c – Sec. 115JB (2A)
(a) Gain from changes in fair value of equity instruments through OCI & revaluation
xxx
surplus from assets on retirement, disposal, realization or transfer
(b) Gain from changes other than (a) mentioned above xxx
Amount debited to statement of P/L by way of distribution of non - cash asset to shareholder
2 xxx
in a demerger Sec. 115JB (2A)
3 1/5th of transition amount – Sec. 115JB (2C) xxx

Sub total xxx
Less: Adjustments contemplated:

1 Items debited to OCI and not to be reclassified to statement of P/L – Sec.
115JB (2A)
(a) Loss from changes in fair value of equity instruments through OCI and Revaluation
(xxx)
surplus from assets on retirement, disposal, realization or transfer
(b) Loss from changes other than (a) mentioned above (xxx)
2 Amount credited to statement of P/L by way of distribution of non - cash asset to the
shareholder in a demerger. Sec.115JB(2A) (xxx)
3 1/5th of transition amount – Sec. 115JB(2C) (xxx)

Sub total (xxx)
= Book profit for iNd as compLiaNt compaNy

3. MAT IN SPECIAL CASES
UNITS OF BUSINESS TRUST

While Computing Book profit, the Profit shall be increased/ reduced by the following amounts if debited or credited to P&L
ADD: LESS:
1) Notional Loss on Units of Business 1) Notional Gain on Units of Business
Trust being: Trust being:
(a) Notional Gain on transfer of capital
(a) Notional Loss on transfer of capital
asset, being Shares of SPV, to a
asset, being Shares of SPV, to a
business trust in exchange of units
business trust in exchange of units
allotted by trust
allotted by trust
(b) Notional Gain resulting from any
(b) Notional loss resulting from any
change in carrying amount of said
change in carrying amount of said
units or
units or
(c) Gain on transfer of such units
(c) Loss on transfer of such units
2) Actual gain on transfer of units (as the 2) Actual loss on transfer of units.
notional gain was earlier deducted
while computing the Book profit)

4. MAT CREDIT u/s 115JAA
MAT Tax under

normal The excess of tax paid i.e,
Payable
is more route is
Here the tax
less
payable = Normal MAT
MAT
Tax credit
Tax under MAT paid
payable 115JAA
route
The MAT credit is allowed to be c/f for

succeeding 15 AYs.
MAT credit can be allowed to set off in the AY in which:
Tax under normal

provisions of Act Foreign tax credit
> Amount of MAT credit shall
not be allowed to be c/f to the
Tax payable under extent, such credit relates to
MAT route 115JB difference between “Amount
of FTC allowed against MAT
and FTC allowable against
MAT credit to be allowed = Normal provisions”
= MAT
Normal tax Less: MAT
credit
payable payable
allowed

AMT – s.115JC
18.5%
AMT Payable Tax under
is more normal route
is less
AMT RATE
 Then, Adjusted Total Income u/s  AMT Rate for

If the tax payable under 115JC will be treated as Deemed Assessee-
Incase of other than
Normal route is less than tax Total Income 18.50%
Company
payable under AMT route  And tax payable will be AMT  For Assessee in
Payable IFSC - 9%
AMT shall apply to person claimed deduction under However, AMT is not payable for
above person if:
Adjusted Total
Ch VI-A Heading 'C' Sec 10AA Sec 35AD Income does
(o/than 80P) not exceed
Rs.20Lakhs

115JD – AMT CREDIT

FURNISHING OF
REPORT The excess of tax paid i.e,
 Every Assessee under this section Normal AMT

AMT
shall furnish a report in prescribed Tax credit
paid
form from a CA. payable 115JD
 Before 1 month prior to the due date
of filing ROI
The AMT credit is allowed to be c/f for succeeding 15 AYs.
NON-APPLICABILITY OF AMT
AMT not applicable to Assessee
adopting- AMT credit can be allowed to set off in the AY in which:
115BAC route
Tax under normal
115BAD route
provisions of Act
>
Tax payable under
AMT route 115JC
115JB(JE) AMT credit to be allowed =
All other provisions of IT shall apply = AMT

Normal tax Less: AMT
for Assessee paying AMT (like credit
payable payable
allowed
Advance tax, Interest u/s 234A, 234B,
234C and Penalty and so.)

AMT FORMAT U/S 115JC
Step - I:
Compute total income as per the normal provisions of the Income Tax Act xxx
Compute tax at the rates applicable to the assessee (A) xxx
Step - II:
Total Income computed as per normal provisions (as above) xxx
Add: Adjustments contemplated u/s 115JC xxx
Adjusted Total Income xxx
Compute tax @ 18.50% of Adjusted total income (B) xxx
Higher of (A) & (B) shall be the taxable payable u/s 115JC (C) xxx
Add: Surcharge payable xxx
Income Tax Liability xxx
Add: Education Cess @ 4% xxx
Total tax payable xxx
ADJUSTED TOTAL INCOME

Total Income as per Normal Route xxx
Add Deductions Claimed u/s 10AA(SEZ Units) xxx
Deductions Claimed U/s 35 AD as reduced by deduction allowable u/s 32 (as
Add xxx
if 35AD not allowed)
Deductions claimed u/s Chapter VI –A(Heading C - Deduction in respect of

Add xxx
certain incomes except 80P
Adjusted Total Income xxxx

SEC 10AA

ELIGIBLE ASSESSEE
Undertaking which
on or after
begins to manufacture
01.04.2006 but
or produce articles or
before 01.04.2021
things or computer
in any SEZ
software
AMOUNT OF 10AA deduction

DEDUCTION
First 5 years Next 5 years Next 5 years
Lower of:
100% of Export 50% of Export - 50% of Export profit or
profits profits - Amount deposited in
SEZ a/c
UTILISATION OF Amount should be utilised for purchase of new plant & machinery
AMOUNT IN SEZ A/c
If such amount It shall be
deemed to be
Not utilised within profit of that year
Misutilised
3 years

COMPUTATION OF No. Particulars Amount

DEDUCTION 1 Export Profit A xxx
2 Export Turnover of SEZ Unit B xxx
3 Total Turnover of SEZ Unit C xxx
4 Percentage of deduction % D xxx
5 Deduction u/s 10AA (A x B / C) x D xxxx
Deduction 𝑬𝒙𝒑𝒐𝒓𝒕 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓 𝒐𝒇 𝑺𝑬𝒁 𝒖𝒏𝒊𝒕

u/s 10AA
= Export profit x
𝑻𝒐𝒕𝒂𝒍 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓 𝒐𝒇 𝑺𝑬𝒁 𝒖𝒏𝒊𝒕
DEFINITION OF Export Turnover

EXPORT TURNOVER doesn't include
Expenses if any CCS, Duty

Freight, Telecom
incurred in Forex drawback and
charges, Insurance profits on sale
attributable to delovery in providing
technical services of imports
of articles or things or
outside India entitlement
software outside India licenses
OTHER PROVISIONS Depreciation Losses

While calculating Depreciation u/s
32 , WDV of asset of this 10AA Sec 10AA is a deduction and not an
undertaking shall be computed as if exemption. Hence, Losses and
depreciation is actually allowed for depreciation of SEZ unit shall be
each RAY. carried forward normally.

Individual / HUF AOP / BOI
Co-operative Society Firm / LLP

ASSESSMENT OF
INDIVIDUAL & HUF

1. ASSESSMENT OF INDIVIDUAL / HUF
PREVIEW
Individual / HUF
Income Income
Residential Scope of Total Deemed to be Deemed to Tax rate &
Status Income Received in accrue & arise Surcharge
India in India

I – RESIDENTIAL STATUS –
OVERALL
Residential
Status - Section 6
Firm / AOP /
Individual / Local
HUF Authority /
Company etc.
Deemed
Resident Resident Non-Resident Resident Non-Resident
(Individual)
Resident and Resident but

ordinarily not ordinarily
resident resident

DETERMINATION OF RESIDENTIAL
STATUS OF INDIVIDUAL
Conditions
Basic Conditions Additional Conditions
First Basic Condition Second Basic Conditions 2 Additional Conditions
He must be in India for 60 Stay in India for

Resident in India 730 days or more
days or more during the PY in any 2 PYs out of
He must be in India for 182 and 365 days or more during 7 PYs
days or more 10 PYs preceding preceding the
during the 4 years the Relevant PY
preceeding the PY Relevant PY
Atleast one basic condition BOTH Additional Conditions to

to be satisfied to be be satisfied to be treated as
treated as Resident Resident & Ordinarily Resident

EXAMPLE: BASIC CONDITIONS
Consider the case of Mr. D, who is business head for Asia Pacific regions
for a private firm. Mr. D was born and brought up in India. He has to travel
to various locations of the continent for business purposes. He has spent
200 days travelling in the current financial year. Also, he has been
travelling abroad from the past two years and has stayed out of India for
about 400 days in this period.
Answer
Condition I – Not satisfied Condition II – Satisfied

To figure out the resident status of Mr. D, you However, It is given that Mr. D has been travelling only
will understand that he has only spent 165 from the past two years. Also, it is said that he has
days in India during the current financial year. travelled for 400 days in the past two years. That
Hence, he does not satisfy the first condition. means, in the past four years, Mr. D has stayed in India
for more than 365 days (1061 days).
Hence, Mr. D has resided for atleast 60 days in the
165 days
165 days < 182 days current financial year and for more than 365 days in the
immediately preceding four financial years. Therefore,
Mr. D satisfies the second condition
Hence, if any one of the above two condition is satisfied

he is a resident taxpayer.
Therefore, Mr.D is resident Tax payer

EXAMPLE : ADDITIONAL CONDITIONS
In above example Mr. D has satisfied as resident of India. Let us further

classify whether Mr. D is Resident and Ordinarily Resident (ROR) or
Resident but Not Ordinarily Resident (RNOR)
Answer
Additional Conditions:
 He has resided in India for at least 2 out of 10 730 days or more
2 out of 10 years immediate previous years. in 7 PYs preceding
as Resident  He has resided in India for at least 730 days the PY
in seven immediately previous years
If both the additional conditions are If any one of the additional conditions is satisfied
satisfied then Mr. D is ROR then Mr. D is RNOR.
Considering the example, Mr. D was travelling Alternatively, consider that he had to work from the
out of India since past 2 years only. Hence, the headquarters of his firm, located in Malaysia for the
first condition is satisfied as he resided in past seven years. He has only visited his parents for a
India for atleast 2 years out of the immediate week, twice a year during this time. That means, he has
previous 10 years. Also, he has fulfilled the resided in India for 98 days in the past seven years
criteria of residing for at least 730 days in (7days x twice a year x 7 years = 98 days). In this case,
seven immediately preceding years. first condition is satisfied but not the second.
Therefore, he can be considered as ROR. Therefore, Mr. D is RNOR.

IMPORTANT NOTES:
Term – Stay in India
Stay in India includes

Not necessary
Stay in territorial waters

of India (12nm from Not essential that
coastline) stay should be at
Period of stay need
not be Continuous or usual place of
12nm residence, business
Even if stay in a ship or Active
boat moored in territorial or employment of
waters individual
For counting No. of days stayed in India- include

both The residence has hence a person
no relation with can be resident in
citizenship, place India even if he is
of birth or not an Indian
Date of domicile citizen
Departure Date of
Arrival Eg:
US Citizen
can be
Note: If stay is for a part of a day, then a total of
Indian
24 hours stay shall be considered equivalent to
Resident
one day

EXCEPTION TO SECOND BASIC CONDITION:
Terms in detail:
The period of 60 days is substituted in
following cases Income from foreign source
Income which
Indian Citizen Indian Citizen Indian Citizen accrues or
leaves India leaves India or Indian Origin arises outside
and which is not
India (except
deemed to
income derived
accrue or arise
from a business
in India
As a crew controlled in or
for Employment member of Comes on visit a profession set
o/s India Indian ship to India up in India)
Person is deemed to be of
182 days or 182 or 120 days
182 days or Indian origin:
more more or more as case
maybe
When 120 days? He Either of Or his grand

his parents parents
If such person is having total income
(other than foreign sources) exceeding
Rs.15 lakh during the PY
Was born in undivided India
FA 2020 Amendment CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 29

Special Provisions for Determining Period of stay for Crew Members
Incase of Indian citizen being a

crew member of Foreign bound
ships
Period of Stay shall not include:
Period commencing from: Period Ending on:
The date entered into the The date entered into the
Continuous Discharge Continuous Discharge
Certificate in respect of Certificate in respect of
joining the ship by the said Signing off by that
individual for the eligible individual from the ship in
voyage respect of such voyage

SEC. 6(1A) DEEMED RESIDENT IN INDIA FA 2020 Amendment
TI other than foreign

Not liable to pay tax
Citizen of India source exceeds
outside India
15Lakhs
If all conditions satisfied, Then Deemed to be

Not ordinarily Resident in India
RESIDENT BUT NOT ORDINARILY RESIDENT
A not-ordinarily person is one who satisfies any one of the following conditions
Indian citizen or Person

If such individual has
If such individual been of Indian origin having TI
been Non-resident in
in India for 729 days or (o/than foreign source) > Deemed Resident u/s
India in any 9 out of 10
less during the 7 PYs 15Lakhs, been in India 6(1A)
PYs preceding Relevant
preceding Relevant PY for 120 days or more but
PY
less than 182 days

SUMMARY
Individual
First basic
condition
Stay in India for 182 days or more

during the PY
Additional
conditions YES NO Second basic
condition
Resident in India in any 2 PYs

Stay in India for 60 days or
out of 10 PYs preceding the
more during the PY
Relevant PY
+
+
Stay in India for 365 days
Stay in India for 730 days or
or more during the 4
more during 7 PYs preceding
immediately preceding PYs
the Relevant PY
YES NO YES NO
Resident Resident Not

Non
Ordinarily Ordinarily
Resident
Resident Resident

RESIDENTIAL STATUS OF HUF
Control & Management of

HUF
Wholly or partly in India Wholly outside India
Is Karta a Resident &

HUF is Non-Resident
Ordinarily Resident
YES NO
HUF is
Resident HUF is Resident
Ordinarily Not Ordinarily
Resident Resident

II - SCOPE OF TOTAL INCOME
No. Particulars ROR R NOR NR
Income Received or Deemed to be received in India

1 YES YES YES
whether earned in India or elsewhere
Income Accrue or arise or Deemed to accrue or YES YES YES

2
arise in India
Income Accrue or arises to him or received outside

3 India from a Business controlled from India or YES YES NO
profession setup in India
4 Income Accrue or arise received outside India YES NO NO

III - INCOME DEEMED TO BE

RECEIVED IN INDIA
Contribution by the CG or other employer

Contribution in excess of 12% of Salary to
under a pension scheme referred u/s 80
RPF or interest in excess of 9.5% p.a
CCD
Amount transferred from unrecognised PF

to RPF (being the employer's contribution Undisclosed Income
and interest)
Tax deducted at source in the hands of Deemed profits chargeable to tax under the
payee Act

IV - INCOME DEEMED TO
ACCRUE OR ARISE IN INDIA
Part 1
Sec 9(1)(i), (ii), (iii), (iv)
Salary
Payable by
Income Salary earned Government Dividend paid
accruing or for services to Indian by Indian
arising directly rendered in Citizen for Company O/s
or indirectly India services India
through or from rendered o/s
India
Any asset or Transfer of

Any Business capital asset
Connection in Any property source of
in India income in situated in
India India
India

Part 2
Sec 9(1)(v), (vi) &
(vii)
Interest , Royalty, Fees for Income arising

Techincal Service payable by o/s India
Gift > Rs.50,000

Resident of by Resident to
Govt Non resident
India Non Corporate
NR/ FC
Exception If technical or
if money borrowed royalty services
is used for used for business /
business / profession carried
profession carried on in India or
If money borrowed on in India making income from
If money borrowed or or technical or any source in India
technical or Royalty Royalty services are
services are used for used for making
business / profession income from any
carried o/s India source o/s India

V - RATES OF INCOME TAX
In case of every Individual, HUF, In case of Resident Individual In case of Resident Individual
AOP, BOI, and every AJP of age 60 years or more of age 80 years or more
No Total Income Rate No Total Income Rate No Total Income Rate
1 Up to Rs.2,50,000 Nil 1 Up to Rs.3,00,000 Nil

1 Up to Rs.5,00,000 Nil
2 Next Rs.2,50,000 5% 2 Next Rs.2,00,000 5%
2 Next Rs.5,00,000 20%
3 Next Rs.5,00,000 20% 3 Next Rs.5,00,000 20%
3 Balance 30%
4 Balance 30% 4 Balance 30%

Individuals and HUFs have an option to pay tax at concessional rates Sec 115BAC
Rates Notes
No Total Income Rate

1 Up to Rs.2,50,000 Nil  For special rate incomes the
2 Next Rs. 2,50,000 5% special rate shall prevail.
3 Next Rs.2,50,000 10%  AMT not apply to person exercising
4 Next Rs.2,50,000 15% this option.
5 Next Rs.2,50,000 20%  There are certain conditions to be

6 Next Rs.2,50,000 25% fulfilled for availing this section.
7 Balance Income 30%
Manner of computation of TI u/s 115BAC

Below 18 Deductions cannot be claimed
10(32)
10(5) - Leave 10(14) - 10(17)
Clubbed Without claiming
travel 10(13A) HRA Other Payment to
income of set-off of any
concession Allowance MPs MLAs
minor loss
S.16 - 24(b) - 32(1)(iia) 33AB - Tea

10AA - SEZ Deduction Interest on Additional Coffee
from salary housing loan Depreciation Rubber Can claim
Depreciation but
not additional
33ABA - Site 35(1)(i)/ (ii)/ 35AD- 35CCC - Agri depreciation
35(2AA) -
Restoration (iia)/ (iii) - Specified extension
Contribution
Fund Contribution business programme
without claiming
exemption or
57(iia) - deduction for
Family 80C to 80U allowance and
pension perquisite

SURCHARGE FOR BOTH NORMAL & 115BAC ROUTE
Total income
Rebate u/s 87A
For Resident
>50L upto > 1 cr > 2 cr More
< 50 L Individual having TI
1 cr upto 2cr upto 5 cr than 5 cr
≤ 5,00,000, Rebate
allowed at 100% of
Nil 10% 15% 25% 37% tax or 12,500, w.e.l
Where Income includes 111A or 112A income
Rate of
No Particulars
surcharge
Where the total income (including income u/s 111A and 112A) exceeds Rs.50 lakhs but does not
1
exceed Rs.1 crore 10%
2 Where the total income (including income u/s 111A and 112A) exceeds Rs.1 crore upto Rs.2 crores
15%
Where the total income (excluding income u/s 111A and 112A) exceeds Rs.2 crores upto Rs.5 25%
crores
3
The rate of surcharge portion of income u/s 111A and 112A 15%
Where the total income (excluding income u/s 111A and 112A) exceeds Rs.5 crores 37%
4
The rate of surcharge portion of income u/s 111A and 112A 15%
Where total income (including income u/s 111A and 112A) exceeds Rs.2 crore in cases not covered
5 15%
under (iii) and (iv) above

ASSESSMENT OF
AOP / BOI

2. ASSESSMENT OF AOP / BOI
PREVIEW
Assessment of
AOP / BOI
Residential Tax rate &

S. 40(ba) S. 167B
Status Surcharge

DISTINCTION BETWEEN AOP / BOI
No. AOP – Association of Persons BOI - Body of Individuals

1 It is voluntarily created by 2 or more persons It is created by operation of law.
Its members may consist of companies, firms, HUFs

2 Only individuals can be the members of BOI.
or individuals
In order to constitute an association, persons must BOI merely receives the income jointly and is assessable
3 join in for a common purpose and common action in the like manner and to the same extent as the
and their object must be to produce income beneficiaries.
It is assessed in own capacity and not as a

4 It is assessed as a representative assessee.
representative assessee.
Co - heirs, co - legatees or co - donee are examples

5 Co - executors or co - trustees are examples of BOI
of AOP

RESIDENTIAL STATUS TAX RATES
Control & 1 Up to Rs.2,50,000 Nil

Management of
AOP/BOI
2 Next Rs.2,50,000 5%
3 Next Rs.5,00,000 20%

4 Balance 30%
Surcharge:
Resident Non resident
1 Up to Rs.50L Nil
2 >50L upto 1 crore 10%
3 >1crore upto 2 crore 15%
4 >2 crore upto 5 crore 25%
5 More than 5 crore 37%
(Subject to max 15% surcharge for 111A, 112A income)

40(ba)-DISALLOWANCE
Interest
Incase of AOP/BOI any Salary shall be disallowed
payment made to Bonus under PGBP in hands of
members of Commission AOP/BOI
or Remuneration
Explanation to Sec. 40(ba)
Explanation 1 - Net Interest Explanation 2 – Individual as Explanation 3 – Individual not

representative capacity in representative capacity
Interest paid
Where Individual is Member Where an individual is a
by AOP/BOI of AOP/BOI on behalf or for member in a AOP / BOI
AOP benefit of any other person otherwise than as member in
/ BOI Members a representative capacity
Interest paid
by Member Interest paid by the AOP / BOI
to such individual or by such Interest paid by the AOP /
individual to the AOP / BOI BOI to such individual on
Amount of Interest to be otherwise than as member in behalf of, or for the benefit
disallowed = representative capacity of any other person
Limited to Payment of interest

by AOP/BOI exceeds interest
paid by member shall not be taken in to shall not be taken in to
account for the purpose of account for the purpose of
disallowance disallowance

EXAMPLES:
Explanation 2 HUF is Member of AOP through its Karta Mr.X
Loan given by Mr.X out

of his self-acquired
asset
Interest paid by AOP to Mr.X

Interest paid to Individual otherwise than
in representative capacity allowed as
deduction. No disallowance u/s 40(ba) in
hands of AOP.
Explanation 3
Interest paid to Individual on
behalf of HUF is allowed u/s
36(1)(iii). No disallowance u/s
40(ba)
AOP pays Interest on loan given by HUF. The said

interest is paid to Mr.X to be passed on to HUF
SEC 167B – CHARGE OF TAX IN

HANDS OF AOP/ BOI
Taxability of AOP/BOI
Members Share Not

Members Share
Determinate
Determinate S.167B(2)
S.167B(1)
Any Member No Member Any Members

Taxable at Taxable at Total Income All Members Determinable
Not Determinable Higher Rate Higher Rate Exceeds BEL Total
Income
does not
exceed BEL
Entire Entire Any

Income of Income of No Member
Member
AOP / BOI AOP / BOI Taxable at
Taxable at
Taxable at Taxable at Higher
Higher Rate
Higher Rate MMR Rate AOP
(i.e > MMR)
Taxable at
Individual
Rate
Share of the
Member Income of
MMR = Taxable @
Higher Rate,
AOP
Taxable @
Balance at MMR
42.744 MMR

NOTES:
In computing the Loss of AOP/BOI And shall not be

total income of the shall be c/f by allocated to the
member AOP/BOI members
His share of income

from this AOP/BOI
shall be excluded
Sec 167 rates shall not apply to special

incomes, They are taxed at respective rates: Benefit of slab of
Rs.2,50,000 shall
LTCG u/s be available
112
20% Basic
Exemption
Limit
LTCG u/s
10%
112A
Where members
share are not
STCG u/s determinable as
15%
111A per sec.167B(1)

SEC 67A - METHOD OF COMPUTING A MEMBER’S SHARE

S. 67A(1) - Computation of TI in the hands of Member where members’ share are determinate & known
Computation of apportionable share of Computation of income of member of

income of AOP/BOI: AOP/BOI:
No Particulars Amt No Particulars Amt

1 Total income of such AOP/BOI XXX Share apportioned to each member XXX
1
Less: Interest, Salary, Bonus, in his profit sharing ratio
Commission or remuneration by XXX Add: Interest, Salary, Bonus,
2 whatever name called, (or Commission or remuneration by XXX
incurred) paid to any member in 2 whatever name called, (or incurred)
respect of the previous year paid to any member in respect of the
Balance to be apportioned XXX previous year
3 among members in their agreed Member’s share in the income of the XXX
3
profit sharing ratio AOP/BOI
Apportionment of member’s share under Deduction from member’s share Sec.67A(3)

various heads Sec.67A(2)
Members' share in same manner Any interest paid by

in income or loss in which the shall be
member on capital
will be income or loss of allowed as
borrowed by him for
apportioned the AOP/BOI deduction from
purpose of
under various been determined his share of
investment in
heads of income under each head PGBP income
AOP/BOI

TAXABILITY OF MEMBER’S SHARES

IN INCOME OF AOP/BOI
Where the AOP / BOI is chargeable at the MMR or at any higher rate:
The share of a member shall not be included

computed as per Section – 67A in his total income
Where the AOP/ BOI is taxable at normal rates applicable incase of Individual:
Include the share income from the AOP / BOI in the hands of the members and total income
A
shall be computed accordingly
B Compute the tax payable on the above total income
C Compute average rate of tax = (Tax on total income / Total income) x 100
Tax rebate for share income of AOP = Share income u/s 67A included in his total income x
D
average rate of tax
E Tax payable = (Tax payable as per (b) above – Tax rebate as per (d) )

OTHER PROVISIONS
Chargeable in
No income tax for AOP Member’s Assessment
Loss can be carry forward only by AOP Section – 86 contemplates positive

income, not loss
Loss can be c/f by the same person who As a second proviso to section – 86,
has incurred the loss where no income tax is chargeable on
total income of AOP
Since AOP is a separate person distinct Member’s share in income of AOP

from its member, Members of AOP computed as per provisions of section –
cannot c/f the loss of AOP in their own 67A shall be chargeable in their
assessment assessment
Hence loss suffered by AOP can be Thus, the above provision is applicable
carried forward by AOP and not by its when member’s share in positive and
members not when their share is loss

ASSESSMENT OF
CO-OPERATIVE SOCIETY

3. ASSESSMENT OF CO-OPERATIVE SOCIETY
PREVIEW
Assessment of
Co-operative Society
Residential Status Tax rate & Surcharge Deduction u/s 80P Principle of Mutuality

I - RESIDENTIAL STATUS
Non -
Resident
Control & Management of Co-operative

Society

Resident

II - TAX RATE & SURCHARGE
Tax rate for Co-operative

society
Normal tax Regime Alternate Tax Regime
NORMAL TAX REGIME
Tax rate Surcharge
If Total Income
Total Up to >Rs.10,000 Above

Income Rs.10,000 upto Rs.20,000 Rs.20,000 ≤ Rs.1 crore > Rs.1 crore
10% 20% 30% Nil 12%

ALTERNATE TAX REGIME: 115BAD
Rate of tax 22%

Normal tax Alternate
Regime tax regime Rate of
10%
Surcharge
Cess 4%
Co-operative society shall have the option to choose Sec.

115BAD Effective Rate - 25.168%
Total income shall be computed as per below: Other provisions

1) The Assessee shall not claim deduction under
specified sections- once the option
It has to opt for
is exercised,
115BAD on or
10AA - then it would
32(1)(iia) 33AB 33ABA before due date
SEZ apply to
u/s 139(1)
subsequent AYs
35(1)(ii)/ 80C to
35(2AA) 35AD 35CCC
(iia)/ (iii) 80U
Option shall
If there is And other
2) Without set-off of any losses c/f attributable to any become
violation provisions
deduction above. invalid for
of of the Act
that PY and
conditions shall
3) Can claim depreciation u/s 32. However, additional subsequent
in any PY apply
depreciation u/s 32(1)(iia) is not allowed (even set-off years
of any additional depreciation c/f not allowed)

III - DEDUCTION U/S 80P
Primary Co-Operative
Primary Agricultural
Co-operative Banks agricultural and rural
Deduction u/s 80P Credit society
development Banks
Availability
*Specified Business Activities:
Deduction under 80P

Purchasing of
Agricultural produce
Specific Deduction General Deduction
Processing it without aid
of power
IFHP PGBP IFOS Consumer Other Co- Marketing it

Co-operative operative
society society
Collective disposal of
Letting of Business Interest & labour
Godowns income BI of Dividend
to either from other 3 from Banking or credit to
members Specified credit investment Rs.50,000 members
Business society Rs.1,00,000
or non in another
members Activity* CS
Cottage Industry
Fishing or allied activities

IV - PRINCIPLE OF MUTUALITY
Taxability of Transfer fee
The members of Co-operating Housing society pay transfer

fees which will be exclusively used for the benefits of the
members and there is no commerciality in it.
Applying High court ruling as in “Sind Co-operating Housing

Society” caselaw,
Co - operative housing society is not a trade or professional
association, So transfer fees is not liable to tax on account
of the “Principle of Mutuality”

ASSESSMENT OF
PARTNERSHIP FIRM / LLP

4. ASSESSMENT OF PARTNERSHIP FIRM / LLP
PREVIEW
Partnership firm
Special
Residential Tax rate & Set off & C/f of
Provisions to Section 40(b)
Status Surcharge losses
firm

I - RESIDENTIAL STATUS
Non -
Resident
Control & Management of Partnership
Firm/LLP
Resident
II - TAX RATES & SURCHARGE
Tax rate Surcharge if

irrespective of Total income
Total income exceeds
30% Rs.1crore 12%

III - SPECIAL PROVISIONS TO FIRM
S.184 – ASSESSMENT AS A S.185 – ASSESSMENT WHEN S.187 – CHANGE IN

FIRM S.184 NOT COMPLIED WITH CONSTITUTION OF FIRM
Where at the time of making

The Firm shall be assessed as Where a firm doesn't comply an assessment u/s 143 or
a firm if following conditions with Sec 184 for the AY 144 or 147 or 153A, a change
are satisfied- has occurred in constitution
of the firm
1 Then no deduction by way of

Payment by firm to partner of The assessment shall be
- Interest, made on the firm as
Partnership is - Salary, constituted at the time of
evidenced by making the assessment.
- Bonus,
an instrument
-Commission or
Eg:
- Remuneration
2
is not allowed while  Mr.D retires from M/s ABCD firm
computing the PGBP income on 30.04.2021.
Individual of Firm
 Assessment u/s 143(3) for AY21-
shares of
22, shall be made on the
partners are
Reconstituted firm M/s ABC.
specified in the
And hence not taxed in hands  But as per sec 188A, all
instrument
of Partners partners(incl Mr.D) are liable for
AY 21-22

Continued..
S.188A – JOINT & SEVERAL S.189 – FIRM DISSOLVED OR

S.188 – SUCCESSION OF
LIABILITY BUSINESS DISCONTINUED
FIRM BY ANOTHER FIRM
Where firm dissolved or

Where a firm is succeeded business discontinued
by another (o/than s.187
case)
AO shall make assessment

of Total Income as if no such
Separate assessment shall dissolution or
be made on the predecessor discontinuance had taken
firm and the successor firm place
Period Every person who was a

Assessed in PY Partner during the PY ( Legal
of succession representative incase of
Deceased partner)
Predecessor Successor
firm firm Every person who was a
partner (or Legal
Shall be jointly & severally Representative of Deceased
liable along with the firm for Partner) at the time of
Income upto Income After tax, penalty or other sums Dissolution or Discontinuance
Date of the date of payable by the firm for that AY shall be Jointly & Severally
Succession Succession
liable.

IV - SEC 40(b)
INTEREST & REMUNERATION TO

PARTNERS OF FIRM Sec 40(b)
Interest on Partner’s
Remuneration to Partners
capital
Conditions: Conditions:
Payment should be Payment should be

authorized by deed authorized by deed
Max rate of interest

allowable is 12% Simple Payment should be to a
Interest p.a. working partner (Limits*)
It should be for the period It should be for the period

falling after the date of falling after the date of
partnership deed partnership deed
Deduction of Remuneration to partner shall not exceed :
Book Profit Deduction

For a partner, the
On the first Rs 3,00,000 of Rs 1,50,000 or 90% of the book share of income
bookprofit or in case of a loss profit, whichever is more from firm is
exempt u/s 10(2a)
On the balance of book profits At the rate of 60%

Explanation to SEC 40(b)
Explanation 1 – Individual is a partner in Representative capacity
Interest paid on Loan given by

Mr.X out of his self-acquired asset
Mr.X is a partner
in firm on
behalf of HUF Interest paid to Mr.X on capital of HUF
Interest paid to Individual otherwise than in Interest paid to Individual in Representative

representative capacity shall not be taken into capacity is taken into account for purpose of
account for purposes of S.40(b) S.40(b)
Explanation 2 – Individual is a partner otherwise in Representative capacity
Interest paid to Individual on

behalf of HUF is allowed u/s
36(1)(iii) and shall not be
taken into account for S.40(b)
Firm pays Interest on loan given by HUF.

The said interest is paid to Mr.X to be
passed on to HUF

V - SET-OFF & C/F OF LOSSES – SEC 78(1)
Where a change in
B/f loss Proportionate to
constitution of firm takes
share of retired or deceased Cannot be carried forward
place on account of
partner as it exceeds his and set off by the firm
retirement of partner or
share of profits for that PY
death of the partner
Example:
There were four partners A, B, C, D sharing profits and
losses equally
On 30th June,2020 Partner D retires.
Particulars Amount
PGBP income of firm AY 21-22 8,00,000
B/f losses AY 2015-16 3,00,000
B/f Depreciation AY 2015-16 1,00,000
Share of Retired Partner Mr.D in Share of Mr.D in Current Profits

B/f Loss (Rs.2,00,000 x 3 month/12 months) Rs.25,000
cannot be c/f
and set-off by
firm
75,000 50,000
Note:- Section 78(1) is not applicable for b/f Depreciation, so it can be fully set-off while calculating Income of firm.

Business Trust Investment Fund
Securitisation Trust IFSC

TAXATION OF
BUSINESS TRUST

1. TAXATION OF BUSINESS TRUST
PREVIEW
Business Trust
Introduction to Business Special Incomes to Exemptions & TDS

Trust Business Trust Provisions

1. INTRODUCTION TO
BUSINESS TRUST
Business trust Developmental

Unit holders SPV
(REIT/InVIT) Properties
Notes:-
Prior to FA 2020, As per FA, 2020,

STT
For units of Business
the preferential (w.e.f 01.04.2021) trust, the Holding period
regime of taxation the preferential
was available only regime shall also should be more than
if units of be applicable if 36months to qualify as
business trust units of business Long term capital asset
were listed on a trust are not listed
stock exchange on stock exchange STT is leviable when
Period of the units of business
Holding 36 months trust are sold on
stock exchange.

WORKING OF BUSINESS TRUST
Cash received can be

invested in Real Estate
Properties & Infrastructure
facility, yielding income
Issue unit or bonds of

REIT/InVIT for cash to
Give loan to SPV holding
Public (Resident or Non-
Real Estate properties &
Resident)
Infrastructure facility
Invest some permissible

Business Trust
amount in shares, FDRs
(REITs or InVITs) and other assets
Buy controlling state from

Issue Unit of REIT / InVIT for
consideration other than Shareholders & promoters of SPV
holding Real Estate Properties &
Cash to Sponsors
Infrastructure facilities

CHARGING SECTION – S.115UA
115UA
Taxability in hands of Taxability in hands of

Investors Business trust
115UA(3)
Interest / Dividend income 115UA(2) 115UA(4)
115UA(1)
from SPV or Rental Other incomes will be Prescribed
Same nature & in Same
income from Real Estate taxed @ MMR in hands statements to be
proportion
Property are taxed in of BT furnished by BT
hands of Investor
MMR

2. SPECIAL INCOMES TO
BUSINESS TRUST
Income of
Business Trust
5
Rental Income
Dividend from Directly
Interest Income
Income from Capital Gains owned Other Income
from SPV
SPV Developmental
property

INTEREST INCOME FROM SPV
1
SPV Business Unit

Trust holders
Interest from SPV Interest distributed

to Unitholders
No TDS for SPV

Exempt in hands Taxable in
SPV is not required
of Business hands of Unit
to deduct TDS u/s
Trust u/s holders u/s
194A while paying
10(23FC) 115UA(3)
Interest to Business
Trust
TDS Compliance Tax rate

TDS u/s 194LBA has to be deducted
TDS by Business Trust.
Resident Non-resident
Normal S.115A -
Unit holder Rates Unit holder
rates 5%
10% (7.5%) 5%

DIVIDEND INCOME FROM SPV

2
SPV Business Unit

Trust holders
Dividend from SPV Dividend distributed

to Unitholders
SPV
SPV is not required Exempt in hands Taxable in

to deduct TDS while of Business hands of Unit
paying dividend as it Trust u/s holders u/s
is exempt for BT 10(23FC) 115UA(3)
In this case, It is TDS Compliance Tax rate

assumed that SPV TDS u/s 194LBA has to be deducted
is exercising option by Business Trust.
u/s 115BAA (paying Resident Non resident
Resident Non-resident
tax at concessional Normal S.115A -
Unit holder Rates Unit holder
rate) rates 10%
10% (7.5%) 10%

FA 2020 AMENDMENT
ANALYSIS OF DIVIDEND Effect of Amendment on TDS
Dividend Dividend from SPV

received from
SPV exercises SPV does not

SPV option to pay exercise the
Company other tax under option u/s
than SPV 115BAA 115BAA
SPV does not

SPV exercises
exercise the
option to pay tax Exempt in
option u/s Since Exempt in
u/s 115BAA Taxable in hands of BT
115BAA hands of both
hands of and taxable in
hands of UH UH and BT
Business Trust
at MMR
Such Dividend Such Dividend
is Exempt in is Exempt in
hands of hands of So TDS u/s So No TDS u/s
Business Trust Business Trust Exempt in hands 194LBA @ 10% 194LBA by BT
10(23FC) 1023(FC) of Unit holders to be deducted while
10(23FD) by BT while distributing
distributing to such income to
UH UH
Taxable in
Exempt in hands
hands of unit
of Unit holders
holders Note:- Revised rate of 3/4th of TDS shall
as well 1023(FD)
115UA(3) apply from 14.05.2020 to 31.03.2021

CAPITAL GAINS FOR BUSINESS TRUST

3
Capital gains
distributed to UH
Business Unit
Trust holders
Taxable in hands of No TDS Compliances by

Business trust u/s BT as CG is exempt in TDS
115UA(2) hands of Unit holders
Tax rates for Capital Gains
CG from sale of CG from sale of Exempt in hands of

properties shares
Unitholders u/s
10(23FD)
LTCG STCG LTCG STCG
Taxable @ Taxable @ Taxable @ 10% Taxable @

20% u/s 112 MMR u/s 112A 15% u/s 111A

RENTAL INCOME FROM REAL ESTATE
4 PROPERTY DIRECTLY HELD BY BT
Developmental Business Unit

Properties Trust holders
Rental income from DP Rental income

distributed to UH
No TDS for DP
Exempt in hands Taxable in
Developmental of Business hands of
properties is not Trust u/s Unit holders
required to deduct 10(23FCA) u/s 115UA(3)
TDS u/s 194I while
paying Rent to
Business Trust TDS Compliance Tax rate
TDS u/s 194LBA has to be deducted
by Business Trust.
TDS Resident
Unit holder Rates
Non-resident
Unit holder
Normal
rates
Rates in
force
10% (7.5%) Rate in force

OTHER INCOMES OF BUSINESS TRUST

5
Other incomes
distributed to UH
Business Unit
Trust holders
Taxable in
hands of
Business trust
u/s 115UA(2)
Tax rate = MMR
@ 42.744%
Exempt in hands of
Unitholders u/s 10(23FD)
No TDS Compliances for

Business trust as income is
exempt in hands of Unit
TDS
holders

SUMMARY TABLE
Rental Income
Interest Income Capital Gains To From
In Hands Of Dividend From Spv Other Incomes
From Spv Reit Developmental
Properties
No TDS for DP u/s
SPV/DP No TDS u/s 194A No TDS - -
194I
Exempt u/s
Exempt u/s 10(23FC) Exempt u/s 10(23FC) Taxable u/s 10(23FCA) Taxable @ MMR
Pass through to UH Pass through to UH 115UA(2) Pass through to UH u/s 115UA(2)
(However exemption
not available to InVIT)
TDS u/s 194LBA TDS u/s 194LBA TDS u/s 194LBA

REIT
TDS TDS TDS
No TDS No TDS
Resident Non Resident Resident NR
NR
10% resident 10% 10% Rate in
10%
(7.5%) 5% (7.5%) (7.5%) force
Taxable u/s Taxable u/s Taxable u/s

115UA(3) 115UA(3) 115UA(3)
Tax rate Tax rate Tax rate
Exempt u/s Exempt u/s
UNIT HOLDER
10(23FD) 10(23FD)
Resident Resident Resident NR
NR NR
Normal Normal Normal Rate in
5% 10%
rates rates rates force

OTHER PROVISIONS
INTEREST PAID BY BUSINESS TRUST TO TRANSFER OF LISTED UNITS OF BT BY

UNIT HOLDER UNITHOLDER
Business Non Transfer of Listed units

Deduct
Trust resident or of BT by UH
TDS @ 5%
paying Foreign
u/s 194LC
Interest to company
STCG covered LTCG covered

u/s 111A u/s 112A
Interest
Taxed @ 10% in
Taxed @ 15%
excess of 1L
TDS @ 5%
u/s 194LC
EXCHANGE OF SHARES IN SPV BY SPONSOR FOR

UNITS OF BT
Cost of shares
COA
of SPV - 49(2AC)
Transfer of units
of BT by UH (by
Exchange)
POH from shares
POH
of SPV - 2(42A)

3. EXEMPTIONS & TDS

PROVISIONS
EXEMPTIONS:
S.10(23FC) S.10(23FCA) S.10(23FD)
In hands of Business trust In hands of REIT (InVIT) In hands of Unit holders

(REIT/InVIT)
Any distributed income

Interest Income & Dividend Rental income from
received from Business
Income from SPV shall be directly held trust [o/than income
exempt from tax developmental properties referred u/s 10(23FC) &
shall be exempt from tax
10(23FCA)] exempt from tax
TDS:
194-A 194-I 194LBA
No TDS is required to be No TDS is required to be TDS u/s 194LBA to be

deducted by SPV u/s 194A deducted by Developmental deducted by Business Trust
while paying interest to Properties u/s 194A while while distributing income to
Business Trust paying Rent to Business Unit holders (both Resident
Trust and Non-Resident)

TAXATION OF
INVESTMENT FUND

2. TAXATION OF INVESTMENT FUND
Taxation of
Preview
Investment
Fund
Provision for
Charging Taxability & Return of
TDS Set-off & Carry
Section Exemptions Income
forward

COMPONENTS & PROCESS
Unit holders Investment fund Various investment

1. CHARGING SECTION
In Hands of
Unit Holders
S.115UB(1) 115UB(3)
Any income accruing, arising or received by Unit In hands of the investor, the Income shall be
holders out of investments in Investment fund shall deemed to be of-
be chargeable to tax in same manner as it accrues
or arises or received by Investment fund.
Same nature
Same
Income- proportion
Same
Manner As it had accrued or arise or received by
Investment fund

In the hands of
Investment Fund
S.115UB(4) S.115UB(5)
Income paid by Investment

Company or Finance Act fund to its Unit Holders would
a firm Rates not be subject to DDT or tax on
distributed income
Tax rates for
Investment Fund
being
O/than
MMR @
DTT
Company or
42.744%
a firm

Procedural
Aspects
S.115UB(6) S.115UB(7)
 The income of investment fund, even if not paid or
credited to the accounts of unit holders, it shall be
deemed to be credited on the last day of PY and taxed The Investment fund shall
on due basis. furnish a statement with
 Such taxed income shall not be again taxable on year details of income paid etc.
of actual payment to the Unit holders and the
Income tax Authority
within such time, form and
manner prescribed.

2. TAXABILITY & EXEMPTIONS
Income earned by Investment

fund Distributed to Unit
holders
INVESTMENT FUND UNIT HOLDERS
Taxable in hands of
Investment fund u/s Exempt in
115UB hands of Unit
holders u/s
TDS u/s 194LBB 10(23FBB)
to be deducted
Exempt in hands of Unit

holders u/s 10(23FBA) Taxable in
hands of Unit
holders u/s
NO TDS 115UB
Compliance

3. TDS
INVESTMENT FUND UNIT HOLDERS
Income Received by Income distributed

Investment fund to Unit Holders
TDS Compliance
TDS provisions would not be TDS u/s 194LBB has to be deducted by
attracted in respect of the Investment fund For Non
income received by the Resident, No
investment fund. [(Sec 197A(IF)] TDS rate
deduction to
be made for
any income
Resident Non resident that is not
TDS 10% (7.5%) Rates in force chargeable
to tax

4. SET-OFF & CARRY

FORWARD
To be carried
forward for set-off
at the fund level
Not passed on to
investors / Unit
holders
Loss arisen Not allowed to be

from Unit not carried forward by
held by UH for the unit - holder. He
a period cannot set - off such
atleast losses against his
12Months income.
Unit - holder can

Loss arisen
carry forward and
from Unit held set - off such losses
by UH for a
against his income
period atleast & Not by the
12Months
Investment fund

5. FILING RETURN OF
INCOME
Every investment fund has to

The provisions of the Act would apply as
compulsorily file its return of income or
if such return of income or loss were a
loss u/s 139(4F), if it is not required to
return required to be furnished u/s
do so under any other provision of
139(1)
section 139

TAXATION OF
SECURITIZATION TRUST

3. TAXATION OF SECURITIZATION TRUST
SECURITIZATION
PROCESS
Sale of Asset / Issuance of Debt

Receivables securities
LOAN
Securitisation Unit
Originator
Trust Holders
Consideration for Subscription to

Asset Purchased such Securities

TAXABILITY
Income from
activity of Income distributed to
Securitisation Unit holders
Securitisation Unit
Trust Holders
TDS Compliance Taxable in hands of Unit

TDS u/s 194LBC has to be deducted by holders u/s 115TCA
Business Trust.
Rates
Non
Resident
resident
Exempt in hands
of Securitisation
trust u/s Individual Others Rate in
25% 30%
10(23DA) force
(18.75%) (22.5%)

CHARGING SECTION 115TCA
In Hands of Unit Holders
115TCA(1) 115TCA(2) 115TCA(3) & (5)

Income of investor out In hands of the investor, the  Even if accrued income has
of the investment in Income shall be deemed to be not been paid to investor, it
Securitisation trust of- shall be deemed to have been
shall be taxable in credited to the account on the
hands of investor in Same nature last day of PY and taxed.
same manner as if the
investment was made Same proportion
by him directly in the
underlying asset and As it had accrued or arised or  Such taxed income shall not
not through trust. received by Securitisation Trust be again taxable on year of
actual payment

In Hands of Securitisation Trust
Furnish
Statement
Time-limit
30th June of FY
Unit Holders following the
PY in which
the income is
distributed.
Time-limit
115TCA(4)
30th November
The Securitisation Trust shall furnish Income tax of FY following
Statement providing breakup Authority the PY in which
regarding Nature and Proportion of the income is
Income to - distributed.

TAX REGIME FOR IFSC

INCENTIVES PROVIDED TO UNITS SET UP IN IFSC
LEVY OF STT & CTT
STT Exemption from levy of STT

and CTT to Transactions in
INCENTIVE
NORMAL
CTT securities & commodities

entered by any person on a
Recognised Stock
Exchange in IFSC where
For transaction made in For transaction in STT transaction is in Foreign
taxable securities, STT taxable commodities, currency
shall be levied. CTT shall be levied. CTT
112A & 111A
Exemption of Levy of For Income from

LTCG up to Rs.1 transactions on RSE in
INCENTIVE
STCG @
NORMAL
Lakh and 15% u/s IFSC undertaken in foreign

taxability @ 10% 111A currency, Such benefit of
u/s 112A on LTCG available taxing LTCG & STCG at
exceeding Rs.1 only if STT concessional rate u/s 112A
(I)Lakhs only if paid & 111A shall be available
STTs is Paid. even if STT not paid
STT

MAT LEVY @ 9%
For a Company being

15% an unit situated in IFSC
INCENTIVE
NORMAL
deriving its income

solely in Convertible
Book profits shall be
In case of Company, Foreign exchange,
deemed as Total
Where Tax payable
income and MAT MAT rate shall be 9%
under Normal
payable @ 15% of
provisions is less instead of 15%
Book profit u/s
than MAT payable
115JB 9%
AMT LEVY @ 9%
18.5% Where such person is a
INCENTIVE
NORMAL
unit located in IFSC and

deriving income solely in
For person other Adjusted total convertible foreign
than Company, income shall be exchange,
Where Regular deemed as Total
Income
(I) Tax payable income and AMT AMT rate shall be 9%
is less than AMT
payable
payable @ 18.50%
of ATI u/s 115JC
9% instead of 18.50%

80LA
For Offshore banking unit

in SEZ, 100% of income is 10/ For income of unit of IFSC
INCENTIVE
allowed as deduction for 5 from its business setup in
NORMAL
consecutive AYs 15 SEZ, 100% deduction of

income for any 10
consecutive AYs out of 15
AYs at the option of
For next 5 Consecutive
AYs, 50% of income is Assessee is allowed.
allowed as deduction
115A
Condition of non -
80LA
availability of deduction
INCENTIVE
under chapter VI-A shall not
NORMAL
Section 115A (1) be applicable to deduction

provides special rate of Section 115A (4)
tax on interest & prohibits any u/s 80LA allowed to a unit of
dividend income arising deduction under IFSC. i.e, 80LA deduction
to(I)
non - corporate non - chapter VI - A can be claimed against
resident and foreign from such income Interest & Dividend income
company

194LC
Concessional rate of TDS

@ 4% u/s 194LC for
INCENTIVE
interest payable by way of
NORMAL
long-term bond or rupee

An Indian company or a denominated bond
to a non-corporate
business trust paying between 1st April 2020 and
Non Resident or to
interest on money
a Foreign Company 30th June 2023 listed only
borrowed in foreign
is liable to deduct on a recognized stock
currency from a source
tax @5% u/s 194LC exchange in any IFSC
outside India
115BAA & 115BAD
CHAPTER
INCENTIVE
VI-A Deduction u/s 80LA
80LA
NORMAL
to be available to
units set up in an
Option to pay tax at IFSC, even if option
subject to not
concessional rate to u/s 115BAA /
claiming
domestic companies
(I) 115BAD is exercised
deductions under
or Resident
Chapter VI A
cooperative society

SUMMARY
No Security
Transaction Tax Eligible for Sec. 112A Eligible for Sec. 111A
@ 10% Eventhough no @ 15% eventhough no
No Commodity STT paid STT paid
Transaction Tax
80LA - Deduction @
Concessional MAT Rate Concessional AMT Rate 100% for 10
of 9% of 9% Consecutive years out
of 15 AYS
Deduction u/s 80LA to

Deduction u/s 80LA is
be allowed against
Concessional Rate of allowed even if option
Interest or Dividend
TDS @ 4% u/s 194LC claimed u/s 115BAA or
income chargeable u/s
115BAD
115A

Political Party Electoral Trust
Income of units VPA

1. TAXATION OF POLITICAL PARTIES
A Political party registered

u/s 29A of Representation of
Political
People Act, 1951 can claim party 13A
exemption u/s 13A subject to exemption
conditions
EXEMPT INCOME CONDITIONS TO BE SATISFIED TO CLAIM THE EXEMPTION
Maintains a Record of name and

Maintains BOA and other address of people making
documents to enable the A.O to voluntary contribution (other
properly deduce its income than by way of electoral bonds)
exceeding Rs.20,000
Income from Income from
House Other
property Sources
No donation exceeding Rs.2000
Exemption Audit of accounts of the political
to be received otherwise than
u/s 13A is party by a CA is mandatory
prescribed modes (NO CASH)
available for
Capital Gains Voluntary

contribution
received
Submission of report u/s 29C(3) Furnishing of return of income
of the Representation of People for the PY in accordance with
Act, 1951 for the FY S.139(4B)

2. TAXATION OF ELECTORAL TRUST
Exemption u/s 13B is available for Electoral

Contribution / Donation received by Trust 13B
Electoral trust if conditions are exemption
satisfied.
If it distributes to any
Registered Political Party,
at least 95% of aggregate
Any Voluntary
donations received during
contribution /
PY along with surplus, if
Donation received by any b/f from earlier PYs
Electoral trust
And if it functions in
accordance with Rules
Shall not be includible in Total
made by CG
Income if 2 conditions are satisfied:
OTHER POINTS
Sec 80GGB and 80GGC If Electoral trust invests the

deductions are available to donation in Bank FDR, then
the Donor only if sum is the interest from such
contributed by any mode investment is not exempt u/s
other than cash 13B and shall be taxable

3. TAXATION OF INCOME OF UNITS
Income distributed to
Unit Holders
Mutual Fund / Unit Trust Unit Holders
Taxable in hands Only Interest deduction not

of Unit Holders exceeding 20% of the
Exempt in hands Subject to dividend income or income
of Mutual fund & deduction u/s 57 from units is allowed u/s 57
Unit trust u/s
10(23D)
CG from redemption
or Sale of
Units of Equity
Other than EOF
TDS u/s 194K @ 10% shall Oriented Mutual Funds
be deducted on payment of
income to Resident UH if: LTCG STCG STCG LTCG
1) It exceeds Rs.5,000 &
2) is not of Capital nature
112A @ 111A @ Normal 112 @
10% 15% rates 20%

4. TAXATION OF VARIOUS
PROFESSIONAL ASSOCIATION (VPA)
Applicability: Exemption:
Applies to trade, the income of which is not Any income (other than IFHP
professional or distributed to its members and Income for rendering
similar association except as grants to any specified service or Interest
[other than association or institution or Dividend) of an
10(23A)] affiliated to it association is exempt
Deficiency that is eligible for Deduction of Deficiency:

deduction: Notes:-
 Where there is no profit or
Particulars Amt
Particulars Amt less profit from business
PGBP before allowing deficiency XXX or profession for set off,
Subscription or otherwise from balance deficiency, can
Less: Any set off of other
members. (not being be set –off under any
allowance or loss c/f from earlier
remuneration received for XXX XXX other head.
AYs
rendering any specific services  However deficiency
to such members) Less:
remaining unabsorbed
Deficiency to the extent of lower
cannot be c/f.
Less: Expenditure incurred of:
a) Amount of Deficiency; or  Sec 44A provides that
solely for protection or XXX
(XXX) b) 50% of the total income (before Eventhough income is not
advancement of common
interests of its members allowing the deficiency) taxable, Deficiency is
allowed as deduction


CHAPTER PREVIEW 6
INTRODUCTION COMPUTATION PENALTY FOR
SAFE GUARDING PROCEDURAL
TO TRANSFER OF ARMS TRANSFER
RULES ASPECTS
PRICING LENGTH PRICE PRICING
Sec 92C Sec 92CA Sec 92D Sec 270A

Sec 92
Computation of Reference to Maintenance of Under reporting
Applicability & ALP Transfer Pricing Records
Non Applicability or mis-reporting
Officer of income
of TP Provisions
Sec 92E
Sec 92CB Furnishing of Sec 271AA
Sec 92A
Reference to Report Failure to keep
Associated Board to make
Enterprises & and maintain
Safe Harbour information &
Deemed Rules
Associated documents
Sec 92F
Enterprises
Relevant
Definitions Sec 271BA
Sec 92CC
Sec 92B
Advance Failure to furnish
International report from
Pricing
transactions & accountant
Arrangements
Deemed
International
transactions
Sec 92CD Sec 271G
Effect of Failure to furnish
Sec 92BA Advance information or
Specified Pricing document
Domestic Arrangements
Transaction

1. INTRODUCTION TO TRANSFER PRICING
SEC 92- APPLICABILITY & NON APPLICABILITY OF TP PROVISIONS
92(1) 92(2) 92(3)
Any Allowance
shall be for
Any income* computed Where in -Expense Shall be
arising from Having an IT, Two For Allocation / computed
apportionment -Interest
International regard to or more with
transactions Arm's AE of Expense -Allocation regard to
Length Price entered Shall be done In relation to ALP
into Mutual with ALP Specified
Agreement Domestic
*Allowance of Expenses / Interest
Transactions
arising from an such transaction also
NON APPLICABILITY
Provisions of TP shall Reducing the income or Increasing the loss

not apply where Application of TP
results in effect of
TP
SEC 92A - ASSOCIATED ENTERPRISES
One Enterprise A
A B C One or more
Associated having CCM Ltd
person having
Enterprises (Control, Capital,
CCM in other AE
Management) in A controls B and B controls
S.92A(1) other Enterprise
enterprise
C, Here, Both B Ltd and C either directly
either directly or Ltd are AE of A Ltd as A B
or indirectly
indirectly indirectly controls C. Ltd
DEEMED ASSOCIATED ENTERPRISES (DAE)- SEC 92A(2)
BASED ON CAPITAL BASED ON MANAGEMENT
Shareholding ≥ Shareholding ≥ 26%

Firm/ AOP/ BOI
26% of Voting of Voting power by
holding not less
power of other same person of two
than 10 interest%.
Enterprise enterprise
Appointing More than
A firm/ AOP/ - Half of BOD or Members of Board or
A Inc. UK A Inc, UK
BOI - One or more of Executive Director or
≥26% VP ≥26% ≥26% Executive Members
≥10% Interest Of the other enterprise
B Ltd India C Ltd B Inc, Other firm/
India Africa Same person appointing above
AOP/ BOI
people of two other enterprises.
A & B = DAE A, B, C = DAE Both are DAE

BASED ON CONTROL
Loan advanced ≥ 51% of Purchase of ≥ 90% of Raw

Book value of Assets of materials are from other
other enterprise enterprise
Sales of goods to one

enterprise, where prices
are influenced by other
Guarantees ≥ 10% of total
borrowings of other
enterprise
Control by Individual or
through relative
Enterprise is wholly
dependent on use of
Know-how, patents, other
intangibles
Control by HUF or through
Member

SEC 92B – INTERNATIONAL TRANSACTIONS
92B(1) - INTERNATIONAL TRANSACTION
Note:
If both AE are
For a AE Non-Resident,
transaction to then TP shall
be International apply only if
transaction, it income of one of
should satisfy 1 2 Non-Resident is
two conditions assessable
It must be a transaction between Atleast one of the two enterprise under IT Act
Two Associated Enterprises and must be a Non-Resident
92B(2) – DEEMED INTERNATIONAL TRANSACTIONS
A transaction entered with a person other than AE, shall be deemed Example
International transaction if:
>30% shares
There exist a prior agreement
between AE and such other
person
X in India (AE) Y in Australia (AE)
Terms of Relevant
X and Z are Associated
transactions are Irrespective of whether
determined in such other person is a if transaction of X and Z
substance between non-resident or not is as per agreement
them between Y and Z
Z in Singapore (unrelated)

SEC 92BA – SPECIFIED DOMESTIC TRANSACTIONS
80A(6) 80A-IA(8) 80IA(10)

Any transaction of transfer of Any transaction of transfer of Transactions between
goods or services between goods or services between undertakings u/s 80-IA and other
Specified business and Non- Eligible business and in-eligible person where AO is of view that
Specified business not at MV business not at MV due to close connection between
them, more than ordinary profits
Specified
80-IA Eligible arises to assessee.
business
business / unit
MV MV
Other Other
Business / unit Business / unit
Any transactions referred to in Any transaction between

sections below: 115BAB concessional rate
companies and others However, TP is
applicable only when
80-IAB 80-IAC 80-IB AGGREGATE value of
Specified Domestic
Transaction in PY
80IC 80IE 10AA exceeds Rs.20 Crores
for whom provisions of 80-IA(8) or

80-IA(10) are applicable

2. COMPUTATION OF ALP – S.92C
Computation
of ALP
Rule 10B Rule 10AB Rule 10CA

Determination of Other Methods of Computation of ALP in
ALP u/s 92C determination of ALP certain cases
Rule 10B – METHODS u/s 92C
Comparable
Sale and Purchase of products, Loans, Royalties, Services, Transfer of tangibles,
Uncontrolled Price
Reimbursement of Expenses
(CUP) Method
Sale and marketing operations of finished products carried out by distributor (Not
Re-sale Price Method
applicable where there is significiant value addition to product)
Sale of Raw material or Semi-finished products. Can be applied where Joint facility or
Cost Plus Method
Long term buy or supply agreements are involved
Transaction involves provision of integrated services by more than one enterprise,

Profit Split Method
unique intangibles
Transactional Net Transfer of Semi – finished goods and finished goods & services where Resale price &
Margin Method Cost plus method are inappropriate

COMPUTATION OF ALP UNDER EACH METHOD – S.92C(1)
CUP Method
Uncontrolled International
transaction transaction
Compare
• Determine the price charged in a comparable uncontrollable

transaction
Step 1
• Adjust any functional differences which affects the price in Open

market
Step 2
• Adjusted price is the ALP

Step 3

COST PLUS METHOD
• Determine the direct and indirect cost of production

Step 1
• Determine the normal gross profit margin in an uncontrolled

transaction
Step 2
• Adjust the above GP margin with any functional differences

Step 3
• The Cost in Step 1 is increased with the Adjusted GP margin

Step 4
• The sum so arrived is the ALP

Step 5

PROFIT SPLIT METHOD
• Determine the Combined Net profit of AE as a whole

Step 1
• Proportion of Relative contribution of each AE is evaluated

based on functions performed, assets employed, risks
Step 2 assumed
• Combined Net profit is split amongst the enterprises based on

such proportions
Step 3
• Apportioned profit is taken to arrive at ALP

Step 4

RESALE PRICE METHOD
• Resale price to an unrelated enterprise is determined

Step 1
• Such Resale price is reduced by Normal GP margin of similar

goods in comparable uncontrolled transaction
Step 2
• Reduce Expense incurred for purchase

Step 3
• To the Price arrived in Step-3 Adjust any fuctional differences

affecting the GP
Step 4
• Adjusted Price is the ALP

Step 5

TRANSACTIONAL NET MARGIN METHOD
• Net profit margin of the Enterprise is calculated

Step 1
• Net profit margin of a unrelated enterprise is calculated regard to

same base
Step 2
• Net profit margin in Step 2 is adjusted for any functional

differences
Step 3
• The Adjusted Net profit margin is taken to arrive at ALP

Step 4

OTHER PROVISIONS
92C(2)- MOST APPROPRIATE METHOD PROVISO TO 92C(2)-TOLERABLE BAND

Out of the 6 methods, MAM shall be applicable
Variation between ALP
as prescribed for such situation. & Transaction price
does not exceed
If More 1% 3%
ALP =
than one
Arithmetic
price in
Mean
MAM for
wholesale in other
trading cases
92C(3)- POWER OF AO 92C(4)- TOTAL INCOME BY AO

During Course of Proceedings AO is of opinion that:
AO, After determining ALP

Price of IT is not BOA not kept or shall rework Total income
at ALP maintained as per
92D(1)
ALP computation Failed to furnish Provided,

is not reliable or Info/Docs u/s
correct  No deduction u/s 10AA or Ch VI-A shall be
92D(3)
allowed on enhanced income.
Then AO may proceed to determine ALP on his own with
 No Re-computation of Income of the other
available records, after giving ROBH. Associated Enterprise.

RULE 10AB – OTHER METHODS PRESCRIBED BY BOARD
It shall be any method which takes into account the price which has been
charged or paid, or would have been charged or paid, for the same or similar
Other Method
u/s 92C(1)(f) uncontrolled transaction, with or between non - associated enterprises,
under similar circumstances, considering all the relevant facts
RULE 10CA – ALP COMPUTATION IN CERTAIN CASES
Data set
Constitute
Range concept is applicable only to
- Resale Price Method
- Cost Plus Method
Less than 6 - Transactional Net Margin Method
6 or more entries
entries
For Profit split Method and Any Other

Method, Irrespective of No. of entries
ALP = Range in dataset, ALP = Arithmetic Mean.
ALP =
concept between
Arithmetic
35th Percentile &
Mean
65th Percentile

3. SAFEGUARDING PROVISIONS
SEC 92CA – REFERENCE TO TRANFER

PRICING OFFICER
ACTIONS TAKEN BY TPO

92CA(1) – AO REFERS TO TPO
TPO Serves notice to TPO can also determine ALP
Incase of International Assessee to Furnish of any other transaction not
transactions or Specified Domestic Evidences referred by AO
transaction 92CA(2) 92CA(2A)
AO considers it is necessary or
expedient to do so, After Prior TPO may pass an order in TPO has power to determine
Approval of Commissioner writing, determining ALP ALP of international
and send a copy to AO transaction not reported by
and Assessee Assessee u/s 92E
92CA(3) 92CA(2B)
Refer to TPO to compute the ALP
Such order to be passed

atleast 60 days prior to
Timelimit of completion of
Assessement
92CA(3A)

92CA(4) – ACTIONS TO BE TAKEN BY AO 92CA(5)/ (6) – RECTIFICATION OF TPO ORDER

 By Adhering the order passed by TPO
 AO Should complete the Assessment taking the 92CA(5)-
ALP determined by TPO
 Thus, Order of TPO is Binding on the Assessee
Mistake apparent can be rectified by
from Record TPO u/s 154
92CA(6)-
AO shall also in conformity with

amend order of the rectified order
assessment of TPO
92CA(7)- POWERS OF TPO

TPO may exercise powers u/s 131, 133, 133A, which enables the TPO to issue summons and can do survey
TPO means Joint Commissioner/

Deputy Commissioner / Assistant
Commissioner authorised by
Board

SEC 92CB – SAFE HARBOUR RULES
Two things are subject to Safe Harbour Rules
9(1)(i)- Determination of Income of NR for operations in India or POEM

ALP u/s 92C & 92CA
established in India
NOTIFIED SAFE HARBOUR RULES
Provision of Software Provision of Information- Provision of Knowledge

Development Services to NR AE Technology enabled services Process Outsourcing services
to NR AE to NR AE
Operating Profit Margin to be Where value of Int Transaction not

Operating Profit Margin to be
declared by Assessee in relation to exceed Rs.200 crores
declared by Assessee in relation to
Operating Expenses
Operating Expenses
Employee cost Minimum
Minimum to Operating Operating
Minimum Transaction
Transaction Operating Expense Profit margin
Operating value
value Profit margin
Profit margin At least 60% 24%
≤ 100 crores 17%
≤ 100 crores 17%
> 100 crores upto ≥ 40% to 60% 21%
> 100 crores upto 18%
18% 200 crores < 40% 18%
200 crores

Advancing Intragroup loan, Advancing Intragroup loan, Providing Corporate

denominated in INR denominated in Foreign Guarantee
currency
Interest rate declared not to be less Interest rate declared not to be less
than One - year marginal cost than 6 months LIBOR rate of
lending rate of SBI as on 1st April of Commission
relevant Foreign currency as on
Where the Amount or fees is at
RPY (+) 30th September of RPY (+) guaranteed rate not
less than
CRISIL Rating of AE % CRISIL Rating of AE %
≤ 100 crores
Between AAA to A 1.75%
Between AAA to A 1.50%
BBB -, BBB, BBB+ 3.25% >100 crores and 1% p.a on
BBB -, BBB, BBB+ 3.00%
Between BB to B 4.75% credit rating of AE the amount
Between BB to B 4.50%
C to D 6.25% done by agency guaranteed
C to D 6.00 %
No credit rating and regd in SEBI is of
No credit rating and
Loan < Rs.100 crores 4.25% the adequate to
Loan < Rs.100 crores 4.00%
as on 31st Mar of RPY highest safety
as on 31st Mar of RPY
OTHER TRANSACTIONS
Operating margin to be declared
R&D services
R&D services wholly or
wholly or partly Manufacure and Receipt of low value
partly relating to Manufacture and
relating to export of Non- adding intra-group
Generic export of core
software core auto services (Value of IT
Pharmaceutical drugs auto components
departmebt (Value components ≤ 10 crores)
(Value of IT < 200cr)
of IT<200cr)
Mark up not
not less than 24% not less than 24% not less than 12% not less than 8.5%
exceeding 5%

SEC 92CC – ADVANCED PRICING

ARRANGEMENTS (APA)
APA PROVISIONS
92CC(1) - Purpose of APA - 92CC(6) - APA shall not be binding

Board can enter into APA either to determine
If there is change in law or facts having
ALP or Manner of determining ALP or Income
bearing on agreement entered
determined u/s 9(1)(i)
92CC(7) - APA to be void in certain cases

92CC(2) - Manner of determining ALP/ Income
If APA obtained by fraud / misrepresentation,
As per methods specified in S.92C or Methods Then Board, after approval of CG declare
provided by Rules under this Act APA as void-ab-initio
92CC(3) - After entering APA - 92CC(8) - Consequences of APA to be void

Income and ALP can be determined only in All provisions of Act shall apply as if APA not
accordance with APA made at all
92CC(4) - APA Validity 92CC(9) - Scheme by Board

Agreement of APA valid for such period not Board may prescribe a scheme specify
exceeding 5 Consecutive PYs manner, form, procedure to move with APA
92CC(5) - APA to be binding on- 92CC(9A) - Rollback Provisions

 Only to that Assessee of agreement & Assessee can opt for Rollback for
 On Commissioner & IT Authority immediately preceding 4 PYs

ROLL BACK MODIFICATION OR REVISION OF APA

Roll back to be mandatorily applied for ALL 4 PYs. APA once entered can be revised or modified only in
Meaning , Assessee has to opt either for none or for all below circumstances
the 4 PYs
Change in critical
assumptions or failure to
meet a condition as in
agreement
Notes:
If there is Incase of Bilateral/

Rollback possible only
disqualification in a Multilateral agreements
for those PYs whose Change in law that
rollback years, then -Request from
return was filed by modifies any matter
rollback apply for less competent Authority in
due date u/s 139(1) covered in APA
than 4 years other country to revise
agreement
Application of
Rollback is not Rollback cannot result
possible a year for in reduction of income
which order has been below Returned
passed by ITAT income in the Rollback
year

SEC 92CD – EFFECTS OF APA
92CD(1)- MODIFIED RETURN 92CD(2)
Such modified
return
If any person has entered treated as

Then such assessee Can
into APA and prior to the Return
Modify the Return within 3
date of entering into furnished u/s
months from End of Month
agreement,any ROI has 139
in which agreement entered
been furnished to adher to
into
Timelimit u/s 139
92CD(3)- ASSESSMENT 92CD(4) - ASSESSMENT 92CD(5)- TIMELIMIT FOR

COMPLETED PENDING MODIFIED ORDER BY AO
If Assessement / Re- Where the Assessment or Re-
assessment for a PY to 1 Year of
assessment for a PY to which Assessment
which agreement applies EOFY in which
agreement applies, is pending on already
has been completed before modified
date of filing Modified Return completed
Modified Return filed return filed
Then AO shall complete the Extension of

Then AO should pass a Assessment in accordance with Pending 12 months to
Modifying order in APA and take into consideration Assessement sec 153 or
accordance with APA the Modified Return 153B or 144C

4. PROCEDURAL ASPECTS
92E – FURNISHING OF REPORT

92D – MAINTENANCE OF RECORDS
Every person who have entered into
92D(1) - Who Should? 92D(2) - Period International transaction or Specified
Domestic transaction
Person who entered into
international transaction
or Specified Domestic
Transaction Shall obtain a Report from CA
The Board may prescribe the
Person being a constituent period for which the
entity of an international information or documents to
Group be kept and maintained & furnish it 1 Month prior to Due date
of filing ROI (Due date - 30th Nov)
92D(3) 92D(4)
During the course of 92F – RELEVANT DEFINITION
proceeding, AO or
CIT(Appeals) may issue
notice to assessee ALP means
requiring to furnish the
information or documents
Within 30 days of from Constituent entity shall A price which is applied or

date of notice [ further proposed to be applied in a
furnish Info/ Doc in such transaction between persons
extended by 30 days by manner, on or before such
AO / CIT(A) ] other than Associated enterprise
date as prescribed in a uncontrolled conditions

5. PENALTY
270A- Misreporting 271AA- Failure to keep and maintain info/ doc
Failure by
By person entered into

By Constituent
International or Specified
Entity
Failure to Domestic transaction
report any 200 % of tax
international payable on
transaction or such mis–
any specified reported 2% of value of international
domestic income transaction or specified Rs 5,00,000
transaction domestic transaction
271BA 271G
2% of value of
Failure to furnish report Failure to furnish international
from an Chartered information or transaction or
Rs 1 lakh
Accountant as required document u/s 92 D specified domestic
under section 92E transaction

PLINJA ( S.94A ) Limitation of Interest

paid to AE ( S.94B )
Secondary Report inrespect of

Adjustment ( S.92CE ) International Group
1. PLINJA S.94A
94A(1) Non Jurisdictional Area (NJA) means, 94A(6) PLINJA - Person Located
After entering into CG of India in NJA includes
DTAA with another announces such  Person Resident of NJA
country, that country as NJA  Person (o/than Individual)
country is not specified by established in NJA
exchanging Notification in  Permanent Establishment in
Infomation Official Gazette
NJA
CONSEQUENCES NO DEDUCTION IN CERTAIN DEEMED INCOME

All Parties are All transactions CASES
Deemed as Deemed as Where in a PY, Assessee
Associated International If want to claim expenses received or credited any sum
Enterprise u/s Transaction u/s from NJA as deduction from a PLINJA
92A 92B
Payment Any other
Tolerance band (1% made to expenses
or 3%) Not apply. So Financial or
ALP computed for All institution in allowance And Assessee doesn't provide
transactions NJA satisfactory explanation about
Source in hands of such
person
Assessee Assessee
TDS to be deducted authorises maintains
@ higher of : Board or IT documents
 Rates in force Auth to collect and
information furnishes then, Such sum deemed as
 Rates in Relevant from such FI such Income of the Assessee for
Provision on behalf of information that PY
 At rate of 30% Assessee

2. LIMITATION ON INTEREST PAID

TO AE Sec 94B
LoaN
AE
Indian company or PE Non resident being
of Foreign co. in India Associated Enterprise
iNterest
The Indian Co. or PE of Foreign COMPUTATION OF EXCESS INTEREST

Co. incurs interest exceeding
Rs.1 crores
Interest paid / Actual
Shall not be Excess Excess payable in Interest
deductible interest Interest or
excess of 30% paid /
to the extent specified payable
of u/s 94B(2) of EBITDA
Person lending is a
CARRY FORWARD OF EXCESS INTEREST
Not
banking company
Apply to and allowed as Carry forward
deduction against allowed for 8 AYs
Excess interest
PGBP to extent of immediately
or If Indian Co. or PE disallowed shall be
Maximum succeeding AY for
of FC is engaged in c/f to next AYs
allowable interest which excess
banking business u/s 94B interest computed

3. SECONDARY ADJUSTMENTS 92CE
Secondary Adjustment means incorporating the primary adjustment in the Assessee’s BOA and it's AE
Amount treated as Excess Money = Such Excess Money

Arm’s Length Price determined in Primary to be re-patriated
xx into India w/in 90
Adjustment
Less: Price at which international transaction days from Relevant
xx date.
actually been undertaken
RELEVANT DATE
Where Primary
adjustment to TP
Arising as a
Suo-moto by Determined Made as per Made by AO & Made by AO & result of Mutual
Assessee in by APA u/s SHR as per accepted by subject to Agreement
his ROI 92CC 92CB assessee Appeal to AA procedure u/s
90 & 90A
Date of giving
Due date of Due date of Due date of
Date of order Date of final effect by the AO
filing ROI u/s filing ROI u/s filing ROI u/s
by AO order by AA to the
139(1) 139(1) 139(1)
Resolution

OPTIONS
*Where primary adjustment made

*Secondary adjustment to be done in BOA
*and within 90 days, such excess money to Rate of Interest*
be repatriated to India
Where International
transaction
denominated in
Three options are available
Foreign
INR
Currency
1 year
Marginal 6 month
Any other AE of A'ee who Not repatriated by AE. cost lending LIBOR as
AE must repatriate the Assessee has option to
money within 90 days from is a Non resident can rate of SBI on 30th
repatriate within 90 days pay Additional tax @
prescribed date 20.9664% as on 1st Sept (+)
April (+) 3.00%
3.25%
Where no Repatriation is done, then Excess Money is This is Final Levy and
treated as “ADVANCE” and “INTEREST*” is calculated Assessee need NOT do
accordingly Second Adjustment.

4. REPORT IN RESPECT OF
INTERNATIONAL GROUP
Shall furnish to the prescribed Income tax

The Parent entity who is Authority a REPORT containing details of
The Report to be
resident in India (or) -Revenue,Capital, Assets, Employees etc furnished within a
Alternate Reporting of each country in which group operates period of 12 Months
Entity (or) -Details of each constituent entity from end of
Constituent Entity -Nature and details of Main business Reporting
resident in India activity of group Accounting year
-Other info as prescribed
However the provisions of this The IT Authority to check Accuracy of

section shall not apply if the Total Report, may issue notice & call for
Consolidated Group Revenue Information and Documents within 30
doesn't exceed Rs.6,400 crores days from Date of notice (+) 30 days
(Amendment from 01.04.21) extension
PENALTY FOR FAILURE

271GB
Failure to furnish report Failure to produce Continuing failure after Furnishing

u/s 286 information when prescribed service of order inaccurate
authority asked for directing to pay penalty information in report
Rs.5,000 everyday upto

1 month, Rs.50,000 everyday from
Rs.5000 every day till failure Rs.5,00,000
date of service of such
Rs.15,000 every day continues
order
beyond 1 month


INTRODUCTION
Relief available to Residents
Bilateral Relief (90,90A) Unilateral Relief (91)
Both Countries together Only 1 country gives relief

give relief.
No DTAA
DTAA Exist
Exemption Method Tax credit Method Deduction to the extent

of Average rate of tax is
allowed
Particular income is Income taxable in

taxed in only one of both countries & later
two countries credit allowed in
country of residence

1. IF DTAA EXIST
90(1) - PURPOSE OF DTAA
Exchange of Information
Avoidance of Double for prevention of
Granting Relief Recovery of tax
taxation Avoidance of tax
90(2)- CHARGE OF TAX IF DTAA EXIST
In relation to Assessee to whom DTAA

applies
The provisions of this Act shall apply to

the extent more beneficial to that
assessee
Exception: Provisions of GAAR shall apply

even if is not beneficial to the Assessee. DTAA Which is more Beneficial Income tax Act

90(3) – TERMS USED 90(4)- TAX RESIDENCY CERTIFICATE
Non resident to whom DTAA apply
Any terms Shall have same Cannot claim relief unless a "Tax
used but not meaning as Residency Certificate" is obtained
defined in IT assigned to it in by such NR from that country where
Act or in Notification by he is a resident
DTAA CG
Explanation:- “Meaning” deemed to have However Indian Govt cannot question the
effect from date when agreement came validity of TRC nor the residential status of NR
into force
90A- AGREEMENTS BETWEEN SPECIFIED ASSOCIATION
Any Specified any Specified

Association in India Association in
may enter into Specified territory
agreement with outside India
Provisions of Section 90 applies same for sec 90A

2. IF NO DTAA EXIST
SEC 91 Rebate/ Relief shall be available to A’ee if no DTAA Exist and below conditions are satisfied:
1 2 3 4
The income Income not That income
Assessee is deemed to
accrue / should be
a Resident accrue or arise
in India arise to him taxed in foreign
outside India in India country
There is no DTAA between India

5 Assesse has paid such tax
6 and that country
Calculation of Rebate allowed on Doubly taxed Income:

Rebate

3. RECOVERY OF TAX UNDER DTAA
SEC 228A-FOR MUTUAL HELP
Where an agreement The Govt of that country

BOARD forwards a
entered into by CG with sends the BOARD a TRO may proceed
copy to Tax
Govt of any country o/s certificate for recovery to recover amount
Recovery officer
India for recovery of tax of tax from a Resident or and remit to
having Jurisdiction
in IT Act, or Act of that person having property BOARD
over the resident
country in India
Similarly if Assessee in Default is a

resident of a country o/s India for Tax Recovery Officer may And Board may take action
which agreement entered or has forward a certificate to the with regard to the
property there Board agreement

4. PERMANENT ESTABLISHMENT
What is Permanent Establishment (PE)?
Place of
management DTAAs provide that Income from NR/FC
received from India shall be taxed only
if NR/FC is having PE in India
Mine/ Oil / or Gas

Branch
well
The above rule doesn’t apply to

Workshop Office
 Royalty
 Fees for technical service
 Interest
(Meaning IFRS earned in India is taxable

Factory
in India even if No PE in India)

SUMMARY
Income arising to Non-resident or Foreign company

from India
If there is no
If there is DTAA
DTAA
If business if no business
If there is PE in If there is no PE
connection is connection is
India in India
there there
Income is taxable Income is not

Income is taxable Income not
in India as per taxable in India
in India taxable in India
DTAA as per DTAA*
Note : *Even if there is Business connection but there is no PE,

then sec 9(1)(i) shall not apply since DTAA provides that in
absence of PE, no tax. As per sec 90, DTAA or Income tax which
is more beneficial to the Assessee shall apply


PREVIEW
6 Special Tax rates
115A 115AB 115AC 115ACA 115AD 115BBA
Tax on income
Dividend, OFO - Tax on Tax on income or CG from
Tax on income Tax on NR
Interest, income or CG & CG from GDR
from Foreign sportsman or
Royalty, FTS from units Bonds or GDR purchased in
Institutional NR Sports
received by purchased in purchased in For.Currency
Investor Association
NR For.Currency For.currency by Resident
Individual

1. SEC 115A
115A(1)(b) – Royalty & FTS
Eligible Assessee Nature of Income Rate:

 Non Resident (not being a Royalties or Fees for Technical services (Other than 10%
company) or sec 44DA) received from Government or an Indian (plus Surcharge as
 a Foreign company concern in pursuance of an agreement applicable & HEC)
Any Deductions available? Should he file Return of income?

The Assessee need not file ROI if:
PGBP Not
Deduction alllowed  If his income consists of above
income only and
IFOS Not
Deduction allowed  The tax has been deducted
from such income and the rate
of such deduction is not less
Ch VIA than the rate specified above
Allowed
Deduction

115A(1)(a) – Special Incomes
Nature of Income & Rates
Dividend 20%
Interest from Govt or Indian

20%
Concern
Interest from Infrastructure
5%
Debt fund u/s 10(47)
Special income
covered u/s Interest covered u/s 194LC S.194LC rates
115A(1)(a)
Interest covered u/s 194LD S.194LD rates
Eligible Assessee
Interest covered u/s 194LBA 194LBA rates
 Non Resident (not being a
company) or
 a Foreign company Income from units u/s 10(23D) 20%
Any Deductions available? Set off & C/f Should he file Return of income?
of losses:
PGBP Not Allowed but The Assessee need not file ROI if:
Deduction alllowed set-off of  If his income consists of
unabsorbed this section income only
IFOS Not depreciation and
Deduction allowed not allowed
 The tax has been
Ch VIA Not deducted from such
Deduction allowed income at specified rates

2. SEC 115AB - OFO
Overseas Financial Established Which has entered in to

Organisation means, under the an arrangement for
Any Fund, laws of a Investment in India with
Institution, country any Public sector bank
Association or Body outside India or PFI or Mutual Fund
Whether & (Approved by SEBI)
Eligible Assessee Nature of Income & Rates of tax:

Overseas Financial Organisation Income covered Sec 112A doesn’t
(Offshore Fund) u/s 115AB Rate apply for LTCG on
Where Units of UTI & Mutual Fund EOMF for OFO as
purchased in Foreign Currency (Both Income Sec.115AB is a
LTCG specific section
Equity & Debt Oriented Mutual Funds) from units
Following Proviso & Deduction are Not Allowed TDS – 196B
1st Proviso 2st Proviso PGBP Any person

to S.48 to S.48 Deduction paying to OFO
Set-off & C/f

possible Deduct TDS @
IFOS Ch VI A subject to 10% u/s 196B
Deduction Deduction Ch VI

3. SEC 115AC - GDR
Global Depository Issued to Investors against issue of

Receipts means an
 Shares of Listed companies or
instrument created by
Overseas Depository
 Foreign Currency Convertible
bank o/s India
Bonds of Companies
Eligible Nature of Income & Rates of tax: S.47

Assessee If GDR
Non Resident Income covered u/s transfered
115AC
Rate
purchasing the
GDR or Bond in From NR to NR
Foreign Interest on Dividend LTCG on transfer
Currency Bonds on GDR of Bonds / GDR no CG as per
S.47
Following Proviso & Deduction are Not Allowed TDS – 196C
1st Proviso 2st Proviso PGBP Income/ LTCG

to S.48 to S.48 Deduction payment to NR
Set-off & C/f

possible Deduct TDS @
IFOS Ch VI A subject to 10% u/s 196C

4. SEC 115ACA - GDR
Information Information
Entertainment
technology technology
service;
Specified knowledge software services
based industry or
service‛ Means
Pharmaceutical Bio - technology Any other as may
industry industry be specified
Nature of Income & Rates of tax:

Eligible Assessee
Resident individual, being an Income covered Rate
u/s 115ACA
employee of an Indian company or its
Subsidiaries engaged in specified
knowledge based industry or service Dividend on GDR issued as ESOP LTCG on
purchased in Foreign Currency transfer of GDR
Following Proviso & Deduction are Not Allowed
1st Proviso 2st Proviso PGBP

to S.48 to S.48 Deduction
Set-off & C/f

possible
IFOS Ch VI A subject to

5. SEC 115AD - FII
Eligible Assessee FII means such Specified Fund‛ means a

investor as the fund established or
Foreign Institutional
CG may notify incorporated in India in the
Investor or Specified
in the Official form of trust or company or
fund (if Fund’s Unit is
Gazette LLP or a body corporate
held by NR)
Nature of Income & Rates of tax:

Rates:
Interest & Dividend of FII 20%
Income covered
u/s 115AD Interest & Dividend from Specified fund 10%
LTCG u/s 112A (excess of 1L) 10%
Other LTCG u/s 115AD 10%
Interest From STCG u/s 111A 15%
STCG LTCG
Securities Other STCG u/s 115AD 30%
Following Proviso & Deduction are Not Allowed TDS-196D
1st Proviso 2st Proviso PGBP Income payment to

to S.48 to S.48 Deduction NR (not Capital gains)
Set-off & C/f

possible Deduct TDS @ 10%
IFOS Ch VI A subject to u/s 196D

6. SEC 115BBA – NR SPORTSMEN OR

SPORTS ASSOCIATION
Non resident
Sportsman Non-resident Non-resident
(including an Entertainer Sports
athlete) with with Foreign Association or
Foreign Nationality Institution
Nationality
Income from:- Income received or receivable Income by way of amount

from any performance in India guaranteed to be paid or payable
Participation in any game or
sport in India (o/than 115BB) in relation to any game or sport
played in India ( o/than 115BB)
Advertisement
Contribution to articles
relating to any sports or
game in India
No deduction of Rate of tax = 20% Payer has to deduct Should he file Return of income?
any expenditure ( Plus surcharge TDS u/s 194E @ 20% +
No ROI required to be filed if :
and HEC ) HEC = 20.8% while
paying above income  Total income includes only
115BBA income and
 TDS deducted on such income


TAXABILITY OF INCOME
Who is a Non-Resident Indian? Foreign Exchange Asset (FEA) includes:

An Individual, being a Citizen of India Specified Asset:
or a person of Indian origin who is not Shares of Indian Co.
a Resident.
Debenture of Public Ltd Indian Co.
Deposits in Public Ltd Indian Co.
Any Asset as may be notified
Any Security of CG
Investment Income LTCG from such FEA LTCG of an asset, Other income
from FEA other than a FEA
Normal
Rate 20% 10% 20% Rates
Deduction Allowable. But Allowable. And

Not allowable Allowable
of Expenses benefit of indexation benefit of indexation
is not available is available
Ch VI-A Not allowable Not allowable Not allowable Allowable

Deduction

115F – EXEMPTION from LTCG 115G – FILING ROI
Exemption = Capital
NRI invests the Net
gains X Cost of
consideration in any No ROI required to be filed if :
Acquistion of new Asset/
Specified Asset
Net consideration
 Total income includes only this
Incase of transfer of New asset within 3 years of acquisition section income and
- Exempted LTCG Deemed to be income chargeable to tax in
 TDS deducted on such income
year of transfer
115H – Benefit under the chapter available in certain 115I – CHAPTER NOT TO APPLY IF
cases even after the assessee becomes resident THE ASSESSEE SO CHOOSES
 NRI Should furnish a declaration NRI may elect not to be

governed by this Chapter
for any AY
 The provisions of this Chapter shall apply in
respect of the investment income derived from
foreign exchange assets Then income will be
computed as per normal
provisions


1. SEC 44B – SHIPPING BUSINESS
Such Assessee
has no option
to declare low
profits
Specified sum
includes demurrage
A Non-Resident engaged in Declare minimum 7.5% of specified sum or handling charges
Shipping Business as deemed to be Presumptive Income and similar sum
Amount paid or payable, whether in India or The amount received or deemed to be

Specified outside India, for the carriage of received in India for carriage of passengers,
passengers, livestock, mail or goods, livestock, mail or goods shipped at any port
Sum? shipped at any port in India outside India

2. SEC 44BBA -AIRCRAFT
Such Assessee
has no option
to declare low
profits
A Non-Resident engaged in Declare minimum 5% of specified sum as

operation of Aircraft can deemed to be Presumptive Income
Amount paid or payable, whether in India or The amount received or deemed to be

Specified outside India, for the carriage of received in India for carriage of passengers,
passengers, livestock, mail or goods, from livestock, mail or goods from any place
Sum? any place in India outside India

3. SEC 44BB – HIRING OF P&M
Assessee has option

to declare low profits
if he keeps &
maintains BOA u/s
44AA and gets
audited u/s 44AB
A Non-Resident engaged in providing Declare minimum 10% of specified

services, facilities or supplying P&M on hire sum as deemed to be Presumptive
of Extraction, production of Mineral Oils Income
Amount paid or payable, whether in India or Amount received or deemed to be received

Specified outside India, for providing services/ in India for providing services/ facilities/
facilities/ hiring P&M used in Extraction/ hiring P&M used in Extraction/ Production
Sum? Production in India outside India

4. SEC 44BBB – TURNKEY

POWER PROJECTS
Assessee has option

to declare low profits
if he keeps &
maintains BOA u/s
44AA and gets
audited u/s 44AB
A Foreign Company engaged in civil

Declare minimum 10% of specified
construction, or erection of P&M, or testing
sum as deemed to be Presumptive
& commissioning for Turnkey project
Income
approved by CG
Specified Sum paid / payable to the assessee or any person on his behalf in this connection whether
in India or outside India.
Sum?

5. SEC 44C – HEAD OFFICE

EXPENSES
Deduction of Head office

expense of Non-residents
Lower of
5% of Adjusted Actual Head office

total income or expenses incurred for
5% of average ATI business or profession
in case of loss in India
Adjusted total income = Meaning of HO Expenses =
Total income before giving effect to: Executive & General Admin Expenses
incurred by NR o/s India, including:
 HO expenses allowable u/s 44C
 Rents, Rates, Taxes, Repairs or Insurance of
 Unabsorbed depreciation
premises o/s India
 Capital Expenditure on Family planning
 Salary, wages or Perqs to employees o/s India
 Losses c/f
 Travelling expenses by Employees o/s India
 Ch VI A deductions
 Such Other prescribed


SEC 112- OVER VIEW
NOTES:
Resident
Domestic Company
Individual / HUF
Tax payable in case of listed securities
(other than a unit) or zero coupon
bonds, shall be lower of:
a) 10% (without indexation)

Without giving b) 20% (with indexation)
effect to 1st & 2nd
`
Proviso of Sec 48
The deduction under Chapter VI – A

cannot be availed in respect of
Non Resident LTCG included in the total income of
(o/than Co.) & the assessee.
Foreign Company

Sold on stock exchange Sold off market (Purchased in Sold - off market (Purchased
(purchased in INR or For. For. Currency) or a case of in INR)
Currency) reinvestment
Listed
Equity
Shares
No 1st and 2nd Proviso to 1st Proviso to s.48 available 2nd proviso to s.48 available
sec.48 benefit
Proviso to 112
112A @ 10% in excess of Taxable @ 10% (Proviso to 10% without indexation or 20%
Rs.1 lakh Sec 112 available) with indexation, w.e.lower
Unlisted shares purchased in FC Sold through public offer subsequently

or INR listed (Bought In FC or INR)
Unlisted
Equity
No 1st and 2nd Proviso to No 1st and 2nd Proviso to sec.48
Shares sec.48 benefit benefit
Proviso to 112 @ 10% 112A @ 10% in excess of Rs.1 lakh

Mutual funds and

Business trust units
Mutual funds and Business trust units whether purchased in
INR or FC
Equity Oriented Mutual

Other Mutual Funds
Funds, Units of BT
2nd Proviso to sec.48

STT paid on sale No STT paid on sale
available
No 1st and 2nd Proviso to 2nd Proviso to sec.48

sec.48 benefit available
20% with indexation
112A @ 10% in excess of

112 @ 20% with indexation
1 lakh

Bonds or
Bonds or debentures
Debentures
Listed Unlisted
Purchased in FC or a Purchased in FC or a
case of Purchased in INR case of
reinvestment reinvestment
No 1st and 2nd No 1st and 2nd

1st proviso to s.48 Proviso to s.48
available Proviso to s.48
benefit benefit
Proviso to 112 Proviso to 112

112
@10% @10%
@ 10%
Other Whether
Indexation is 112 @ 20% with
Other Assets purchased in INR
Assets or FC
available indexation

Fees for Such

Interest technical Royalty other
services sums

Sec 9 ( in view of Non resident)
Income deemed to
accrue or arise in India
Clause (v), (vi) & (vii) of
Section 9(1)
Interest Royalty Fees for Technical

payable by payable by service payable
NR NR by NR
If money is borrowed Services are utilised for the

and used for the purpose of business or
purpose of business or profession carried on India or
profession carried on in making income from any
India
source in India
Taxation of Royalty and Fees

for Technical Services
PE in India No PE in India
Normal provisions
115A(1)(b)
of S.44DA

PROVISIONS
Particulars Section 44DA Section 115A
Where Non Resident or Foreign Company has

Where Non Resident or a Foreign
PE in India or a fixed place of profession
Applicability Company No PE or No Fixed place of
situated in India
Profession in India
Allowability of Income shall be computed under PGBP after No expenses shall be allowed in
Expenses allowing all expenses computing such income.
Chapter VI - A Allowed Allowed
Maintenance of Compulsory Maintenance of Books of Account

No Such requirement
Books of Accounts and other documents
Compulsory audit requirement and report if

Audit of BOA No Such requirement
audit
Foreign company – 40% (plus surcharge+HEC)

Tax Rate Tax @ 10% (Plus surcharge& HEC
Non Resident – Normal Rates
Carry Forward of Such Income can result in a loss which shall be Since expenses are not allowed, such
Losses set - off and carried forward as per Chapter VI. income cannot result in a loss
Set off of Losses Allowed Allowed


TONNAGE TAX INCOME
APPLICABILITY QUALIFYING SHIP
Fishing vessels
and pleasure
crafts are not to
Company is be regarded as
POEM is in India
registered in India qualifying ship
It shall own atleast

one qualifying ship
It should be a sea-going ship or vessel
of capacity atleast 15 net tonnage
A valid certificate specifying the net

tonnage shall be in force
It shall be registered under the

Merchant Shipping Act
Its main object shall be to

If registered outside India, get licence
carry on the business of
from the Director - General (Shipping)
operating qualifying ship

PRESUMPTIVE INCOME UNDER CHAPTER XII – G:
Ascertain the daily tonnage income of each

qualifying ship operated during the relevant PY
A qualifying company
on presumptive
can opt for tonnage
basis based on Multiply 1 with the number of days for which the
taxation scheme under
the tonnage
Chapter XII - G for qualifying ships are operated during the relevant PY
capacity of the
computation of
qualifying ships
income from operating
operated by it
of ships
Tonnage business income
How to ascertain Daily tonnage income inaccordance with Net tonnage of Qualifying ship (Rounded off)*?
Above 1000 tons but

Up to 1000 Above 10,000 tons but
not more than 10000 Above 25,000 tons
tons not more than 25000 tons
tons
Rs. 70 per Rs. 700 + (Rs.53 per Rs. 5,470 + (Rs.42 per Rs. 11,770 + (Rs.29 per
100 tons 100 tons thereafter) 100 tons thereafter) 100 tons thereafter)
*If Net tonnage has part of 100 tons and part is more than 50 tons – Rounded off to next multiple of 100

OTHER PROVISIONS
IMPACT OF PRESUMPTIVE TAXATION PROCEDURE FOR ADOPTION OF TONNAGE

TAXATION SCHEME - S. 115VP
No depreciation
No deduction
allowed, but WDV is
allowed u/s 30 to
updated as if
S.38
allowed
No disallowance u/s No loss is set-off

37(2B), 40A, 40, against Presumptive
43B income The Qualifying Co.
if JCIT sanctions,
has to make an
the Scheme shall
application to the
apply for 10 years
Normal tax rates JCIT
applicable
If sanction denied, order of JCIT is appealable
EXIT FROM THE SCHEME MAT PROVISIONS NOT

APPLY
If the scheme
There will be
is mis-used or
bar on re-
abused to Profits of
entry for next
evade tax, AO tonnage tax
10 years and
with sanction business shall
thereafter
of CCIT can
normal not be subject
expel the
provisions to tax under
company from
shall apply
the scheme the Book profit
route
Company can appeal to ITAT if aggrieved by order


TYPES OF ASSESSMENT
There are 8
Types of Self Assessment
Summary Scrutiny
Assessment u/s Assessment u/s
Assessment u/s 139
143(1) 143(3)
Best Judgement Income escaping Post-search

Protective Accelerated
Assessment u/s Assessment u/s Assessment u/s
Assessment Assessment
144 147 153A

PREPARATORY WORK BY AO
6
142(1)
Notice
144C
142(2A)
Reference to
Special Audit
DRP
Preparatory Works
by AO
144BA 142A
Impermissible Reference to
Avoidance Valuation
Agreement officer
144A
Powers of Joint
Commissioner

NOTICE U/S 142(1)
NOTICES IMPORTANT NOTES:
142(1)(i) Can be issued Can be issued

only after expiry after end of RAY
of 139(1) due date also
Assessee has not filed ROI within
139(1) Time limit or before RAY
142
142(1)(ii) If AO wants to (1)(i) After receipt of
make BJA u/s 144, notice, A’ee
not mandatory to mandatorily files
AO can ask to furnish accounts, issue notice u/s return even if TI
documents, various other 142(1)(i) is less than BEL
information for 3 Preceding FY
142(1)(iii)
By issuing 142(1)(ii) notice alone, AO cannot make an
assessment,
Seeking information on Specified
points as written submissions It is issued after issuing notices under Assessment i.e,
with prior approval of JC 143(2), 144, 148, 153A.
Consequences of
Penalty u/s 272A -
Non-Compliance of May result in BJA u/s
Rs.10,000 for each
Prosecution u/s 276D
142(1)(i) or (ii) , 144 with or without fine
failure
143(2) or 142(2A)

SPECIAL AUDIT U/S 142(2A)
Circumstances for AO ordering Special Audit u/s 142(2A):

6
Nature & Multiplicity of Doubt about Specialized nature

Volume of Interest of
Complexity of transactions in correctness of of business
Accounts Revenue
accounts accounts accounts activity of A'ee
IMPORTANT NOTES:
Audit done only with Prior Audit period should be

SCN has to be issued
approval of CCIT/CT max 180 days
Audit remuneration is No appeal against 142(2A)

determined by CCIT / CIT direction be made. Only
and shall be paid by CG file WRIT petition in HC

REFERENCE TO VALUATION OFFICER U/S 142A
NOTES:
VO must send a report

to AO within 6 months
from End of Month in
which reference made
AO may, on receipt of
While doing to Estimate the whether or not he the report and after
assessement or value of asset, is satisfied about giving the assessee an
reassessment, property or the correctness / OBH, take in to account
AO may make investment (incl completeness of for assessment
reference to VO FMV) Accounts
POWER OF JC TO ISSUE DIRECTIONS - S.144A
Call for and examines the Action by JC

JC may records and having regard to:
• may issue direction for
• On his own motion • Nature of case completion of Assessment
• Reference by AO • Amount involved and
• Application by Assessee • Other reasons • it shall be binding on AO/ DC/
ITO

REFERENCE TO DISPUTE RESOLUTION PANEL - S.144C
Eligible Assessee
 Any person in whose
case variation arises
as a consequence of
1 2
order of TPO u/s AO may forward a draft order of Eligible assessee shall within 30
92CA(3) Assessment to Eligible Assessee days of receipt of order
 Any foreign Co or if he proposes to make any
any NR not being a - file his acceptance or
variation prejudicial to Interest
company - file his objection to DRP or AO
of Revenue
3 4 5
If Acceptance made or no If objection filed to DRP Such direction issued by DRP
response, then DRP shall after considering shall be binding on AO.
AO shall pass assessment Records, and making enquiry, Where the direction is
order within 1 month from end issues direction within 9 months prejudicial to Assessee or
of month of receipt or period from end of month in which draft Revenue, DRP must give OBH
expires order forwarded to Assessee before issuing it.

1 - SELF ASSESSMENT u/s 139
139
5
139(1) 139(3) 139(4) 139(5) 139(9)
Voluntary Return Loss Return Belated Return Revised Return Defective Return

139(1) – VOLUNTARY RETURN
Who is required to file return of income? When ? – due date for filing ROI
u/s 139(1)
Who should file ROI
139(1)
Company/ Timelimit
Others
Firm
Corporate
Any income Resident assessee, or a For all assessee
If total subject to
or loss Ordinarily Any other person or partner
income submit Transfer
Mandatorily Resident Assessee of firm subjected
file ROI to Tax audit or pricing report
is a audit under any u/s 92E
Exceeds Beneficial law
maximum owner or
amount not beneficiary 31st July of 31st October of 30th November
chargeable of asset o/s RAY RAY of RAY
to tax india
7th Proviso to sec 139(1)

An A’ee other than Corporate assessee is Mandatorily required to file ROI irrespective of BEL if in a PY aggregate in:
Expense for
Deposits > travel to Such other
foreign Electricity bill
Rs.1crore in conditions
country > > Rs.1Lakh
current a/c prescribed
Rs.2Lakh

SPECIAL RETURNS
6 Special Returns
139(4A) 139(4B) 139(4C) 139(4D) 139(4E) 139(4F)
University
Charitable or Investment
Various College or other
religious Political party Business trust
Associations Institution u/s Fund
institution
35
 ROI need to be filed if GTI (before exemption  ROI need to be filed irrespective of BEL or
under each sec) exceeds BEL exemption.
 Due date for filing ROI = 31st October  Due date for filing ROI = sec 139(1) TL
All ROI filed shall be treated as 139(1)

return and can be revised u/s 139(5)

EXCEPTION FOR FILING ROI

Following person not required to file ROI even if income exceeds Basic Exemption Limit:
115A 115AC 115BBA 115G

Tax on Interest from Tax on NR Tax on
Dividend, bonds of Sportsman or Investment
Interest, Indian Co. Sports income or
Royalty for NR Association LTCG to NRI
DEFAULT IN FILING ROI

Sec 234A - Interest @ 1% p.m or
5 Consequences are involved if there is default part thereof on the outstanding
in filing ROI- tax payable from due date till
date of delayed filing or
Interest u/s 234A completion of Assessment
Fees u/s 234F

Fees/ Penalty
Penalty u/s 272A(2) Fees u/s 272A(2)

234F for
139(4C)
cases
Prosecution u/s ROI filed on Any
276CC or before 31 other
Dec of RAY case Rs.100/ day
till failure or
till
Silent Killer 80AC completion
Rs.5,000 Rs,10,000
of BJA

139(3) – RETURN OF LOSS
Return of Loss has to be filed within due date specified in CONDONATION OF DELAY
139(1), C/f of Loss even if no ROI filed on
Sec 80 says, If not filed, then following losses cannot be c/f: time incase of genuine hardship
condoned by:
72 – Normal Business Loss Exception: upto 10L CIT

 Loss from HP
73 – Speculative Biz Loss
 Unabsorbed
Amount > 10L
73A – Specified Biz Loss depreciation CCIT
of Loss upto 50L
74 - Capital loss Can be c/f even if return
filed after due date > 50L CBDT
74A – Loss from race horses
139(4) – BELATED RETURN
Timelimit: Earlier of:

Person not filed ROI w/in TL -End of RAY (or) Interest u/s 234A , Fees u/s
u/s 139(1) may file ROI -Before completion of 234F shall apply
Assessement

139(5) – REVISED RETURN
ROI filed within

Time limit of Such Revised Assessee can
139(1), 139(3), Return replaces Timelimit revise a return
139(4), 139(5) the Original Earlier of: any no. of
can be revised if Return and a)End of RAY times w/in the
any omission or treated as filed on b)Before time limit
wrong date of original completion of
statement in return Assessement
those returns
139(9) – DEFECTIVE RETURN
If there is no accompanying of
-Prescribed form with all AO will intimate A'ee respond or
annexures, columns, statement If not, then ROI is
defect to rectify w/in 15
Defective
-Computation statement Assessee days of intimation
-Proof of deduction, tax paid

139A 139AA 139B 140A
PAN PROVISIONS – S.139A
WHEN SHOULD PAN BE APPLIED? NON APPLICABILITY TO QUOTE PAN

No Particulars Time – limit
Quoting of PAN is mandatory in all
a) If Total income exceeds the BEL On or before 31st May of AY documents like Returns, challans etc.
b) Business or profession total Sales /T/O or
Before the end of that FY Exception:
GR are likely to exceed Rs. 5,00,000
c) Who is liable to file a return u/s 139(4A) Before the end of that FY Minor - not having PAN or taxable
income, shall quote PAN of Parents/
d) Resident, other than an individual, enters On or before the 31st May of Guardians
into a financial transaction ≥ Rs. 2,50,000 immediately following such
in a FY FY Person not having PAN- can make
e) Managing Director, director, partner, On or before the 31st May of declaration in FORM 60
trustee, author, founder, Karta, CEO, that AY he enters into
CG/SG or Consular Offices
principal office or office bearer. financial transactions
Non resident in certain cases
f) Transaction entered in the interest of revenue.
AADHAR PROVISIONS – S.139AA
NON APPLICABILITY TO QUOTE AADHAR

CG notified individuals:
Residing in the States of Assam, Jammu &
Kashmir and Meghalaya
A non-resident as per IT Act, 1961;
On /after 1st Application Of the age of 80 years or more at any time during
July 2017 , form for And Return of the PY;
Quote Aadhar allotment of Income
Not a citizen of India
number in: PAN

139B- RETURN THROUGH TAX 140A- SELF ASSESSEMENT TAX

RETURN PREPARERS
Computation of Amount of Self-Assessment tax:
An Income Tax return Income Tax (Incl. Less:

preparer is a professional Surcharge , if any and
approved by the Income  Relief of Tax u/s 90 /
education cess) on
Tax Department to help 90A / 91
the returned income
taxpayers to file income  MAT Credit / AMT
tax returns Add: Credit
 TDS / TCS
 Interest u/s 234A,
 Advance Tax
234B & 234C
 Relief of tax claimed
 Fee u/s 234F
u/s 89
 Tax and interest
Only specified classes
thereon, payable u/s
of person as notified by
191(2)
CBDT are permitted to
file return through tax
return preparers
Adjustments of tax
Person not allowed to file paid u/s 140A
through Tax Return
Preparers
If self assessment tax short-
- Companies Tax paid,
- Persons required
Fees Interest u/s 220 & Penalty
to audit u/s 44AB
Interest u/s 221 shall be levied

2. SUMMARY ASSESSMENT u/s 143(1)
ADJUSTMENTS MADE TO ROI FILED U/S 139 OR 142(1)
Any arithmetical error in the return
An incorrect claim apparent from any information in the

Return.
ADJUSTMENTS
Dis - allowance of loss claimed , if return of the previous

year is furnished beyond the due date specified u/s 139(1)
(for which set-off is claimed)
Dis allowance of expenditure indicated in the Audit report

but not taken into account in computing the total income in
the return
5
Dis allowance of deduction claimed u/s 10AA and income
based deduction under chapter VI - A (80IA - 80IE) , if the
return is furnished beyond the due date specified u/s 139(1)
No such adjustments shall be

Assessee should respond within
made unless an intimation is
Proviso thirty days of the issue of such
given to the assessee of such
intimation , else adjustments
adjustments in writing or in E–
shall be made
Mode

NOTES:
No revision u/s 263/264 possible.

Only appeal to CIT(A) can be Intimation can be rectified u/s 154
done against the intimation
6 Demand in intimation shall be

Intimation shall not be sent after
expiry of 1 year from EOFY in
paid w/in 30 days of date of which return is made (except
receipt of intimation issue of cheque of refund)
If refund is payable u/s 143(1), it sec 241A provides that refund

shall be processed , eventhough can be withheld if it is likely to
143(3) is selected adversely affect the Revenue
INTIMATION U/S 143(1)

Intimation u/s
143(1)
In any other case ,
Acknowledgement of
filing of return of income
Where Adj have been
Where tax or Where any tax made resulting in is deemed as an
interest or fee or interest is increase / reduction intimation u/s 143(1)
u/s 234F is found of loss declared by
found payable refundable the assesee

ASSESSMENT & NOTICES
Notices for various

assessment
Summary Scrutiny Best Judgement Income escaping Post Search

Assessment Assessment Assessment Assessment Assessment
143(1) 143(3) 144 147 153A
Intimation/
Notice u/s 143(2) SCN u/s 144 Notice u/s 148 Notice u/s 153A
Acknowledgement
ABOVE NOTICES ARE DEEMED TO BE VALID IN CERTAIN CIRCUMSTANCES (SEC 292BB)
AO issues late notice
Assessee appeared in Assessee objects that Notice is

proceedings and co-operated in invalid before appearing to
inquiry proceeding
Sec 292BB, says Notice is Sec 292BB Deemed provision

Deemed Valid and no objections cannot be applicable and notice be
by assessee can be taken later INVALID

SCRUTINY ASSESSMENT S.143(3)
Notice is
Income has not mandatory,
been understated if not issued,
Assessment
shall be
Loss has not considered
been overstated illegal
Where Return of AO considers it is Notice u/s 143(2) shall be

Income is filed u/s necessary and Tax has not served within 6 months from
139(1) or 142(1) expedient to ensure that been under paid EOFY in which Return filed
Provisos
1st and 2nd Proviso-
Incase of Organisations u/s
139(4C)/(4D), AO cannot himself
Order can be Penalty for
withdraw exemption under
Favourable to failure to
respective sections.He has to
Assessee also comply with
inform to CG
notice u/s
Incase of 10(23C) series
143(2)
According to Evidence AO shall in writing, make order organisations, AO can himself
produced by A'ee or of Assessment u/s 143(3) withdraw exemption if the S.272A =
Relevant material within Time limit u/s 153(1) i.e, Commercial Receipts exceeds Rs.10,000
gathered by AO 12 months from the EORAY 20% of total receipts

Where assessment
u/s 143(3) or u/s 144
is made
If no refund is due or amount

Tax or Interest paid u/s 143(1) refunded > amount refendable
on regular assessment
Whole or excess amount so

Deemed to have been paid
refunded shall be deemed to be
towards regular assessment
tax payable by the assessee
143(3) vs 144
Assessee
Non co-operating
Co-operating Assessee
Assessee
Assessment u/s 143(3) Assessment u/s 144

BEST JUDGEMENT ASSESSMENT S.144
CIRCUMSTANCES LEADING TO BJA U/S 144: (MANDATORY) IMPORTANT POINTS
BJA u/s 144 5 AO shall not make

assessment unless he
issues SCN u/s 144
(other than cases
ROI not
Fails to Fails to where 142(1) has
furnished Not Method of
comply comply already issued to A'ee)
u/s 139(1), responded accounting
with with all
139(4) up to notice u/s 145(1) & Department is
direction terms of
to the date served u/s not responsible for validity
for special notice
of issue of 142(1)(i), regularly of notice
audit u/s issued u/s
SCN u/s 143(2)(ii) followed
142(2A) 143(2)
144
The BJA order shall

always be Favourable
to the Department.
AO can’t higher loss
or lower the income
of Assessee.
shall make assessment to the

The AO after taking into BJA u/s 144 is called
best of his judgement and
account the gathered
determine tax payable by as ex-parte
relevant material
A'ee assessment since
this assessment will
be completed
Sec 153(1) Time limit for passing without assessee
order - shall be made before the being present.
expiry of 12 months from the EORAY

INCOME ESCAPING ASSESSMENT
SECTION REFERENCE
147 151
150 152
Income 148 149 Permission
Relaxation to Certain
escaping Notice Timelimit from Higher
149 Timelimit clarification
Assessment Authority
S.147 INCOME ESCAPING ASSESSMENT
Proviso -
AO cannot assess or
reassess such income
involving subject matter of
any appeal, reference or
revision
Explanation –
Where AO has "REASON TO AO may access or re-assess such AO may assess or

BELEIVE" that any income income and also any other income that reassess issues that come
chargeable to tax for any AY has has escaped assessment and which to his notice during
escaped assessment. comes to his notice during course of proceeding, even if it is not
proceeding mentioned in notice

CIRCUMSTANCES WHERE INCOME IS DEEMED ESCAPED ASSESSMENT
Where ROI filed, but no

Assessment made by AO. Later Where Assessee has not
Where Total Income > BEL but no furnished Report u/s 92E
AO noticed A'ee has understated
ROI filed
the Income or claimed excess
loss, deduction in Return
Where ROI filed under search

Where Assessment made but
case but income was
Under assessment of tax or Where ROI not filed under search
understated or claim of excess
income or Excessive relief been cases
loss, deduction, allowance in
given
return

S.148 NOTICE FOR ASSESSMENT

OR RE-ASSESSMENT
RULES OF GUIDANCE OF WHAT TO DO WHEN NOTICE

Before making Assessment IS ISSUED
or Re-Assessment, AO has
to serve a notice (reasons As per GKN drive shafts (India) Ltd case law:-
recorded in writing)
requiring to file ROI of the
AO passes notice u/s 148
RAY w/in time specified in
the notice
A'ee first files ROI and then seeks

reasons for issue of notice
Separate Notice u/s 148 has
to be issued for each AY
AO is obliged to respond to
Assessee
Assessee has to file ROI

again even if already filed u/s
On receipt of reasons, Assessee
139(1) or 142(1) can file his objections
AO should answer the objections

Return filed u/s 148 cannot be and then only proceed with
revised Assessment Procedure

S.149 TIMELIMIT FOR ISSUE OF NOTICE
EXCEPTIONS TO TIMELIMIT U/S 149(1)
FIRST PROVISO :
Income in relation to such Where Assessment has been made earlier u/s 143(3)
assets (including financial or 147, then Notice u/s 148 shall not be issued after
interest in any entity) located the expiry of 4 years from EORAY if both conditions
outside India has escaped satisfied:
assessment
if Assessee Assessee has
has filed disclosed fully
ROI and truly all
material facts
Where the income that has

escaped assessment
amounts or is likely to amount
to Rs 1 Lakh or more SECOND PROVISO
First Proviso (4 for any income
years restriction) from asset situated
shall not be o/s India has
applicable escaped tax
In any other case Section 149(3) – Notice to Agent of Non – Resident

Notice U/s 148 shall not be issued after the expiry of 6
years from the end of the RAY

S.150 TIMELIMIT OF SEC 149 NOT

APPLY IN CERTAIN CASES
But to enjoy 150(1), Conditions u/s

150(2) should be satisfied
Condition = On date of passing original

order which was subject matter of
appeal/ revision/ reference, 149 Time
Limit should be alive.
If any order
then inorder to
passed u/s (Note: 150(2) not apply to HC / SC order
give effect to that AO can issue 148
250,254, 260A,
finding or at any time u/s 260A & 262)
262, 263, 264 or
direction
court
S.151 PERMISSION FROM HIGHER AUTHORITY S.152 - TAX RATE & DROPPING OF
ASSESSMENT
Authority
152(1) Tax applicable @
rate of
Tax rate respective year
upto 4 years More than 4 years

sec 152
If A'ee shows
152(2) that he has
AO below rank by AO, with prior Dropping of income not lower
of JC, with approval of assessment than alledged
approval of JC PCC/CC/PC/C income

SUMMONS, SEARCH & SEIZURE
SEC 131- SUMMONS NOTICE
WHO CAN ISSUE SUMMONS NOTICE 131(1A)

Authorised officer has "Reason To
Assessing Joint Suspect" that
CIT (Appeals)
Officer commissioner
Principal income has been or likely to be

Chief Principal
chief concealed by any person in his
Commissioner commissioner
Commissioner jurisdiction
Commissioner DRP then for making enquiry or

investigation, call for any person as per
this section
Authorities have Same Power as of Civil Court Even if no proceeding is pending for that person
DTAA CASES POWER TO IMPOUND BOOKS PENALTY

Any authority referred above can impound & Retain If AO or Authority issues
Issue of summons u/s 131 can be BOA or Docs. Summons notice, and
exercised for inquiry & investigation Assessee does not appear
of any person in relation to DTAA also Condition: AO or an Assistant Director Deputy in person
(sec 90 or 90A) Director shall not –
a) Impound BOAs / Docs without recording reasons
Not mandatory that proceedings (or) Penalty u/s
should be pending before any b) Retain such BOAs for a period exceeding 15 days 272A(1)(c) =
authority without prior approval of the Rs.10,000 for
PCC/CC/PDG/DG/PC/C/PD/D as the case may be. such failure

SEC 132- SEARCH & SEIZURE
POWER TO AUTHORIZE A SEARCH POWER OF AUTHORISED OFFICER
Authorising Officer Authorised Officer

Additional Director / Enter & Search
Principal Director General /
Additional.Comm/ Joint Director /
Director General / Principal
Joint Comm/ Assistant Director /
Director / Director / Principal
Assistant Comm/ Deputy Director
Chief Comm/ Chief Comm / Break open the lock (only when
/ Deputy Comm/ Income Tax keys not available)
Principal Comm/ Comm
Officer
Addl.D/ Addl.C/ JD/ JC
(provided they are Asst.D/ Asst.C/ Dep.D/ Dep C/ ITO
Search any person
empowered by Board)
CONDITIONS TO BE SATISFIED Require any person to afford

the necessary facility
To issue a warrant of authorization of search u/s 132
Reason to believe u/s 132 Seize any such BOA or MBJAT

(except Stock in trade)
If A'ee possesses
A'ee fails to IT Auth beleives any Money,
that even if Bullion,
produce BOA
or Docs after summon or Jewellery,or Place identification marks
summon u/s notice served, valuable Article or
131 or notice A'ee wont thing (MBJAT)
u/s 142(1) comply which represent
undisclosed
income Make a note of Stock in trade

OTHER PROVISIONS OF SEARCH
The Reason to believe or Presumptions:

Reason to suspect as recorded Where any BOAs or MBJAT is
by the IT Authority shall not be found in possession or control of
disclosed to any person/ any person, it is presumed that
Authority/ ITAT -it belongs to such person and
-the contents are true and
-sign or handwriting is of him
PCC/CC/PC/C may authorise

the authorised Officer to
Search or Seize of BOA from a Time limit for detention of Seized
building other than the one things
specified in Search Warrant - Not be retained beyond 30 days
from passing of 153 order without
prior permission from Higher
Authorities
In order to search in a better
way, Authorised Officer may
take help of Police officer and /
or any officer of CG. Assessee can take copies /
extracts from seized BOAs
Authorised officer may during

Authorised Officer may within 60
the course of search/ seizure,
days of LASE, make reference to
examine on oath any person
VO for estimation of FMV of any
and can use their statement as
asset and VO shall submit report
evidence (even for
w/in 60 days of such reference
investigation)

CERTAIN POWERS
DEEMED OR CONSTRUCTIVE SEIZURE RESTRAINT ORDER

Deemed seizure means - Where it is not practical to seize BOAs,
If is not practical to seize or take MBJAT other than for reasons
physical possession of any things (not mentioned in Deemed Seizure
a stock)
AO serve order on owner not to part/

due to - Volume, Weight, Physical dispose with the asset w/o prior
characteristics, Dangerous in nature permission of such officer
then Instructions given to Assessee not such order shall not be in force for a
to part with or dispose item w/o period exceeding 60 days from date of
permission of Authorised officer order
PROVISIONAL ATTACHMENT Where during Search of person who doesn't fall with
Jurisdiction of Authorised Authority, any Seized books or
 With prior approval of money etc. shall be handed over to AO having Jurisdiction over
PDG/DG/PD/D, during the Assessee within 60 days of LASE
search or w/in 60 days of
LASE, can provisionally
any property attach if
Prejudicial for Interest of
Revenue
 And can hold for only 6

months
LASE – Last of Authorisations
of Search Executed

PENALTY
PENALTY IN SEARCH CASES s.271AAB

PENALTY IN OTHER CASES s.270A
Penalty u/s 271AAB for AO or CIT(A) or PC or Commissioner during the
search initiated on or course of any proceedings, direct that any person
after 15-12-2016 who has misreported his income shall be liable to
pay a penalty in addition to tax, if any, on the
misreported income.
Co-operating Non co-operating
Assessee Assessee
PROSECUTION / PUNISHMENT
30% of undisclosed 60% of undisclosed
income income
When 30% apply?

275A 275B
 If an Assessee, in course of Search, in a
Contravention of Failure to provide
Statement in examination of oath u/s 132(4) order of Deemed necessary facility u/s
admits the undisclosed income & Seizure/ Restraint 132(1).
 Substantiates the manner in which income is order
derived Rigorous Rigorous
 On/ before specified date (i.e, 139(1) due date imprisonment which imprisonment which
or 153A notice time specified) may extend to 2 years may extend to 2 years
 And pays tax, interest, penalty & furnish ROI of and fine. and fine.
Specified year with such undisclosed income

132A - REQUISITION
Already 131 Summons /

Then the Income tax And the other Authorities
142(1) is issued and BOAs of
Authorities requests the shall deliver the BOAs/ Docs
Asssessee is with other
other parties or Authorities to the IT Department
authorities
SEC 292C – PRESUMPTIONS

Where any BOAs or MBJAT is found in possession or control of any person in course of Search u/s 132 or Survey u/s
133A or Requisition u/s 132A , it is presumed that :
It belongs to such person and The contents are true and sign or handwriting is of him

132B- PROVISIONS REGARDING SEIZED ASSET
LIABILITY AGAINST WHICH SEIZED

MANNER OF APPLICATION
ASSET BE APPLIED
towards amount of Assets can be

existing liability applied as under
Liablilty arising if the assets

because of 153A consist solely Assets other
Assessment of money, than money
Apply such Asset will be

Liability of PY in money in sold and out of
which search is discharge of recovered
conducted liability money liability
be discharged
RELEASE OF SEIZED ASSET REFUND OF EXCESS PROCEEDS
If Concerned person Any Asset/ Proceeds in excess of liability shall be

explains source of AO after paid to A’ee along with Interest @ 0.5% p.m or part of
acquisition of asset satisfaction and
permission from month from expiry of 120 days of LASE till ending on
and makes
application to AO principal group, date of completion of Assessment u/s 153A.
within 30 days from Release w/in 120
EOM in which asset is days of LASE u/s Amount on which Interest in payable is -
seized 132/ 132A
Money Seized xxx
(+)Proceeds of excess in case of Assets xxx
(-) Amount of money released to Assessee (xxx)
(-) Aggregate amount of liability (xxx)
Amount for interest calculation xxx
.

POST SEARCH ASSESSMENT S.153A
AO shall issue notice ->

Notwithstanding anything seeking Assessee to
contained in sec 139, 147, furnish ROI for 6 AY
immediately preceding AY as if ROI is required
148, 149, 151, 153 to be furnished u/s
relevant to PY in which
incase of person, search search initiated or 139
is initiated u/s 132, additional 4 AYs if
conditions satisfied*
Assessment/ Re-Assessment, if Appeals/ Revision/ Rectification, if

any relating to AY pending on any relating to AY pending on date of
date of Initiation of Search u/s Initiation of Search u/s 132 shall
132 shall abate abate
FOURTH PROVISO
Issue of Notice beyond 6 AYs upto 10AYs in case of 132, 132A initiated on/after 01.04.2017
Conditions (4)*
AO is in possession of BOA/ Docs/

It is a case covered u/s 132 or
Evidence which reveal that income /
Requisition u/s 132A
asset escaped assessment
Income escaped >Rs.50 Lakhs either Income not subject to tax at those
in one year or Aggregate of years years

153A(2)- REVIVAL OF ABATED ASSESSMENT
If any order of the assessment or Shall stand revived

assessment or reassessment relating with effect from the
reassessment made to any AY which has date of receipt of the
u/s 153A(1), has been abated under the order of such
annulled in any second proviso to annulment by the
Appeal section 153A(1) Commissioner
Note: Revival shall cease to have effect, if such order of annulment is set aside.
153C- ASSESSMENT OF INCOME OF 153D- PERMISSION FROM

OTHER PERSON HIGHER AUTHORITY
 During search of one person,

 Any Money, Jewellery, Article, things, BOAs/
Documents or any information,
AO shall pass
 Relates to any other person,
153A order
 Then Seized items shall be handed over to AO
having Jurisdiction over such other persons,
 And that AO shall follow 153A procedures
Only with prior

approval of Joint
Commissioner

TIMELIMIT FOR COMPLETION
OF ASSESSMENT
Normal cases
153(1) 153(2) 153(3) 153(4)
Order of Assessment U/s Fresh Assessment ordered by Reference to TPO u/s

TL for 147 Cases Cancelling or Set Aside 92CA
143(3) or 144
12 Months from the end of

12 Months from the end of the 12 Months from the end of the Financial Year in which In all the 3 cases,
Assessment year in which the the Financial Year in the said order is received or Additional 12 months will
Income was first Assessable which the Notice is served passed as case maybe be applicable

Special cases
153(5) 153(6)(i) 153(6)(ii) 153(8)
Appeal Effect or Assessment as per Completion of

Revision Effect to be Assessment in hands of TL for Revived Assessment
Appellate authority or Cases
given by AO Courts direction Partner
3 months from the end 12 Months from the end 1 year from the end of the
of the month in which 12 Months from the end of
of the month in which the month in which the month of such revival or
order received or the order is received or within Sec 153 or
passed (+) Additional 6 Assessment order in the
passed by the PC or case of the Firm is passed Sec.153B(1) Timelimit,
months by PC / CIT CIT whichever is later
Sec 153B
153B 153B Proviso

Time limit for 153A cases ( for
In case of Reference made
6/10AYs + Year of initiation of Time limit for 153C Cases
to TPO ( in last two cases)
search)
 12 months from EOFY in
 12 Months from the end of the
which LASE executed (or)
FY in which the last of the
 12 months from EOFY in  Additional 12 months will
authorizations for search u/s
which BOAs / docs are be applicable
132 or for requisition u/s132A
handed over
was executed
(w.e.later)

PROTECTIVE ASSESSMENT
AO to assess a And include the

When the owner particular income in same income in
ship of the income the case of the case of another
is in dispute or it’s person who is person also, as a
a matter of doubt considered as liable protective
to tax measure
ACCELERATED ASSESSMENT
Certain cases when income of a previous year will be assessed in the previous year itself:-
AOP / BOI / AJP Persons likely to

Shipping business Persons leaving formed for a transfer property Discontinued
of a non-resident India particular event to avoid tax business
or purpose

POWERS OF IT AUTHORITIES
133- POWER TO CALL FOR

133A- SURVEY
SPECIFIED INFORMATION
AO or CIT(A) may call for

specified information
with prior approval of JC,

even if no proceeding
pending before Authority
Assessee shall
IT Authorities may enter any
provide information
place within his jurisdiction
Eg:Details of partner & PSR, Details of Karta / facility
& Members etc
Time of survey
TDS/ TCS
133B- POWER TO COLLECT -During hours of conduct of
verification can be
Business/ profession
CERTAIN INFORMATION done but no
(business)
impound of such
-After sunrise or sunset (other TDS / TCS-BOAs
IT Authority can cases)
directly go to And ask to
Assessee’s furnish
premises / any information as ITA can place identification
place w/in prescribed marks,
Jurisdiction ITA cannot remove
Can't impound and retain any cash or stock or
books w/o permission of article
Penalty for Assessee not co-operating = upto Higher Authorities
Rs.1,000 u/s 272AA

133C- POWER TO CALL FOR INFORMATION 134: POWER TO INSPECT REGISTER OF

COMPANIES
Prescribed income-tax authorities
empowered to call information
-Register of
members;
IT Authority has
-Register of
On receipt of such information, The power to inspect
debenture holders;
ITA may process and utilize such and take copies of
information and document any entry in- -Register of
mortgagees of any
company.
Centralized issuance of notice and If assessee not co-operating, Then Penalty u/s
processing of information u/s 133C 272A(2)(d) = Rs.100/day till failure continues
SECTION 135 & 136: OTHER POWERS SECTION 138- DISCLOSE OF INFO ABOUT
ASSESSEE
An income tax
authority shall be
deemed to be a civil
court
 CBDT/ Any other authority authorised

 Can share details of Assessee to any authority
levying any tax
in case investigating
officer is denied  CG may place restriction on some matter
entry into the
premises
Penalty – Imprisonment upto 6 months with fine


APPEALS
INTRODUCTION
ITR
Summary Assessment Scrutiny Assessment Assessee got

Assesse filed Return of
u/s 143(1) order u/s 143(3) or 144 aggrieved
Income
3
Remedies to Assessee
Rectification
Application U/s 154 Travel through Revision
for Mistake Appellate petition
Apparent from Route under 264
Records

4 Remedies to
Department
Income
Travel through Revision
Rectification Escaping
Appellate petition
Application U/s 154 Assessment
Route under 263
u/s 147
APPELLATE AUTHORITIES ARE: POWERS OF APPELLATE AUTHORITIES
Appellate
Authorities Once appeal is filed,
Authority has to dispose of,
by one of following ways
CIT High Supreme

ITAT Set aside
Appeals Court Court Confirm Enhance Reduce Annul
/ Cancel
Note: CIT(Appeals) does not have the power to set -aside

TIME LIMIT FOR APPEAL
Days for
Appeal
HC ( Only
CIT (A) ITAT SC
QOL)
30 Days 60 Days 120 Days 90 Days
ORDERS APPEALABLE
Orders Appellable
HC ( Only
CIT (A) ITAT SC
QOL)
Orders Orders
Covered Covered Order of Orders of
ITAT ITAT or HC
U/s 246A u/s 253

APPEALS TO CIT(A)
ORDERS APPEALABLE BEFORE CIT(A) – S.246A FORM, FEES – s.249
200A(1) 206CB(1) 143(3) Documents in duplicate :

143(1) / (1B)
TDS TCS Scrutiny
Intimation  Form 35
intimation intimation Assessment
 MOA
 Statement of Facts
147 153A
144 92CD(3)  Grounds of Appeal
Income Post Search
BJA APA  Copy of Order appeal
escaping Assessment
against
154/155  Notice of Demand
163 170(2), (3)
Enhance 171 Refusing  Copy of Challan for
assessment/ Order to Order to HUF partition payment of fees
Reduce loss agent of NR successor
201 206C(6A) 237 270- 275

TDS penalty TCS penalty Refund order Penalty FEES FOR APPEAL
Fees
115VP3 Total Income
271 Series (Rs.)
Tonnage ≤ Rs. 1,00,000 250
Penalty order
income
>Rs.1,00,000 upto 500
Rs.2,00,000
> Rs.2,00,000 1,000
Where subject matter not 250
covered above

OTHER PROVISIONS
Appeal shall be presented

within 30 days  Appeal once
filed cannot be
withdrawn
30 days to be reckoned from

 Condonation of delay allowed
by CIT(A) if he is satisfied that
TIME LIMIT Section Assessment / Any other appellant has sufficient
FOR APPEAL 248 Penalty Case cause
30 days 30 days from 30 days from

from date date of date of
of Service of Intimation or
payment Notice of order is
of tax Demand served
 Conditions to be fulfilled for

filing appeal:
(i) Where ROI filed by A’ee,
the tax due shown in return
has been paid
(ii) Where no ROI filed, A’ee
has paid the Advance tax
Exclusion in days calculation
146 From Date of Till date of service of

Reopening application made order to A’ee
From Date of Date of service to A’ee

270AA (1) application an order rejecting the
made application

PROCEDURE IN APPEAL S.250
CIT(A) allows assessee to raise

CIT(A) shall fix a day & place of new grounds in Appeal if he is
hearing and give notice to satisfied that the omission of that
appellant and AO ground from the form of appeal
was not wilful or unreasonable
At the hearing of the appeal,

the appellant and the AO shall The order of CIT(A) shall be in
have the right to be heard writing and shall state the points
either in person or by an of determination, decision thereon
authorized representative and the reasons for the decision
The CIT(A) shall have the CIT(A) may try to decide such
power to adjourn the hearing appeal within a period of 1 year
of appeal from time to time. from the end of the FY in which
such appeal is filed before him
CIT(A) themselves or through CIT(A) shall communicate the

AO shall make inquiry before order to the assessee and to the
disposal PCC/CC/PC/C

251 – POWERS OF THE RULE 46A – PRODUCTION OF

COMMISSIONER (APPEALS) ADDITIONAL EVIDENCE
CIT(A) may Any additional evidence can be produced before

Appellant in following circumstances:
Assessment Any other

Penalty order
order case
Confirm / Appellant was

Reduce / Confirm / As Deemed AO refused to admit prevented by
Enhance / Cancel/ Vary Appropriate evidence which sufficient cause from
Annul ought to have been producing the
admitted evidence called by
AO
Appellant was
prevented by AO passed order w/o
sufficient cause giving OBH to
from producing Appellant to adduce
Note: evidence which is evidence
relevant to grounds
 Not only question passed by
A’ee, CIT(A) can go through
whole appeal
 Whatever AO can do, CIT(A)

can do, Whatever AO didn’t do,
CIT(A) can direct him to do CIT(A) shall Record in writing the reasons for
admitting such additional evidence and give OBH to
AO

APPEALS TO ITAT
ITAT is the Final Fact
finding Authority
ORDERS APPEALABLE BEFORE ITAT – 253
FORM, FEES
Orders passed by CIT(A)

Appeal to
272A
250 270A 154 271A ITAT made in
Failure 271J
CIT(A) Penalty Rectificat Failure to FORM 36 by
to Incorrect The Respondent
Appellate for mis- -ion of maintain Appellant
furnish certificate can file
order reporting mistake BOAs with fees
info
Memorandum of
Cross Objections
Orders passed by PC / Commissioner (MOCO) in Form
36A.No fees
80G(5)(vi)
12AA
Order 263 154/ 270A 272A
Order passed by
declining Revision of Failure to FEES
declining PC/C
approval of orders furnish info
Reg of trust Total Income Fees (Rs.)
fund
≤ Rs. 1,00,000 500
Orders passed by AO >Rs.1,00,000
1,500
upto 2,00,000
115VZC Order u/s 143(3)/147/ Order made 1% of
Order excluding a Co. 153A / 153C issued in u/s Assessed
from Tonnage tax pursuance of DRP's 10(23C)(iv)/(v) > Rs.2,00,000
income (max
scheme direction /(vi)/(via)
10,000)
Any other case 500
By Prescribed Authorities Appeal by Department Application for
500
Order declining approval of CIT can direct AO to appeal to stay of Demand
Organisation u/s 10(23C) ITAT on orders passed by CIT(A) Appeal by
No fees
Department
Filing of MOCO No fees

TIME LIMIT FOR APPEAL POWERS OF ITAT
Power to admit Power to Power to allow

additional award cost of to raise a new
evidence any appeal ground
Timelimit
Appeal by Appeal by
Assessee MOCO
Department
filed within
60 days within 30
filed within 60
from date of days from Power to
days from date All powers of
order date of consider a
of order is Power to grant IT authorities
sought to be receipt of question of law
communicated order of stay shall apply to
appealed is Notice by arising for the
to PC/C ITAT also
served ITAT first time
Power to remand
to the authority
competent to
make the
requisite order

ORDERS OF APPELLATE AUTHORITY – S.254
Appellate • The Appellate Tribunal may, after giving both the parties to
order the appeal an opportunity of being heard, pass such orders
Time Limit for • ITAT may hear and decide every such appeal, if possible
disposal of within a period of 4 years from the end of the FY in which
appeal such appeal is filed,
• If stay granted for 180 days, then appeal disposed off w/in
Time limit for 180 days
disposal of
• If stay extended to 365 days. the appeal disposed w/in 365
appeal in case
days
of stay
• If can't dispose after 365 days - order of stay will be vacated
• ITAT can rectify & amend mistakes u/s 254 itself, within 6
Rectification
months from the end of the month in which the order was
of mistake
passed. Fees = Rs.50
Costs of • The cost of any appeal to the Appellate Tribunal shall be at

Appeal the discretion of the tribunal.
• ITAT shall send a copy of any orders passed to the assessee

Copy of order
and the Principal Commissioner or Commissioner.

PROCEDURE OF APPELLATE TRIBUNAL - SEC 255
≤
The powers and functions of the AT
Single member bench to dispose
are exercised and discharged by A Bench shall consist of one judicial
of appeal if total income does not
benches constituted by the President member and one accountant member
exceed Rs. 50 lakhs.
of the AT from among the members
The President may, for disposal of any In case there is difference in opinion of the
The Appellate Tribunal shall
particular case, constitute special bench members of Bench, then
have power to regulate its own
of 3 or more members, one of whom shall - Point shall be decided based on majority
procedure and the procedure
be a judicial member and one an - If equally divided, then case referred to
of benches
accountant member President

APPEALS TO HIGH COURT S.260A
Matters appealable Time Limit appeal Formulation of substantial

question of law
• Filed within 120 days from • Where the High Court is
• Every order of ITAT if it date of order received by
involves substantial satisfied that a substantial
appellant question of law is involved
question of law
• in the form of a in any case, it shall
Memorandum of Appeal formulate that question
Determination of issue Judgment Hearing of appeal

• It is mandatory that before • High court may determine • Only Question of law
Question heard by HC, first the formulated question formulated is heard
is should be heard by ITAT and Deliver such Judgment • Respondent be allowed to
argue on the question
• HC has the power to hear
other Question of law not
formulated also, if its
satisfied
Note: Case before High Court should be heard by not less than two judges
APPEAL TO SUPREME COURT- S. 261
Appeal to Supreme Timelimit for Hearing before SC Costs of appeal

Court Appeal • The Supreme Court, on
• Order of High Court for hearing the case, shall • The costs of the
appeal filed u/s 260A, • Shall be filed decide the question of appeal shall be
provided that the case within 90 days of law and at the discretion
is certified by HC to be order of • give its decision thereon of the Supreme
a fit one for appeal to Highcourt along with the reasons Court.
SC for such decision.

MONETARY LIMITS FOR FILING OF

APPEAL BY DEPARTMENT
Appeals at various levels shall be filed by the Department only in cases where the tax effect involved in the case exceeds
the limits
Monetary Limit
ITAT HC SC
50 Lakhs 1 crore 2 crore
Sec 286A
the Board may from time to Because of the monetary limit, if the IT
time, fix monetary limits for Authority has not filed an appeal or
regulating the filing of appeal application in one case, shall not
or application by any IT preclude such authority from filing
Authority appeal for similar issue in other cases
ITAT/ Court shall have regard No person, being a party in appeal or

to the circumstances to application shall contend that the
consider orders, etc. issued Authority has acquiesced in the
and circumstances under decision on the disputed issue by not
which appeal not filed filing an appeal or application

REPETITIVE APPEALS -
158A, 158AA
158A: PROVISION FOR AVOIDING REPETITIVE APPEALS
Then assessee,
Final Decision
rather than filing the
In case of an In the case of same passed by the
appeal once again,
assessee, for an assessee, but for Supreme Court or
he can furnish a
earlier assessment subsequent year, if High Court shall
declaration in Form
year, if appeal is the Identical apply to the present
No. 8 to A.O. / CIT (A)
pending before HC Question of law is case, and AO shall
/ ITAT, requesting
or SC on Question of pending before AO, amend the order in
them to apply
law CIT(A) or ITAT to confirm the
decision of HC / SC
decision
in current case

158AA: APPEAL BY REVENUE BEFORE SUPREME COURT
Then instead of filing appeal

In case if question of law is A same question of law in case to ITAT, AO may make an
pending against an order of of same assessee is decided by Application to ITAT that
High court in favour of CIT (A) in favour of Assessee Appeal against CIT(A) will be
Assessee. filed after SC order
When question of law is decided

Such appeal shall be filed within
by SC for other case, in the favour
60 days from the date of receipt
of department, then, CIT/PCIT
of copy of order of SC by
may direct A. O. to file appeal to
CIT/PCIT
ITAT against CIT (A)order

RECTIFICATIONS - S.154
Orders Rectifiable
Any order passed by IT Auth

Any intimation or deemed
intimation u/s 143(1)
Any intimation u/s 200A(1) Rectification can be done Opportunity of
Rectification can be done for
• Either on own motion being heard is
any matter other than the
Any intimation u/s 206CB(1) • Or application of Assessee/ necessary if
matter considered and
deductor, collector rectification results
decided in appeal/ revision
• Or by AO into enhancement
REFUND
DEMAND
Where an amendment is  If assessment results in Time limit for making

Time limit for disposal (filed
made under this section, an Refund, then it should be certificatory order
by Assessee/ Deductor/AO)
order shall be passed in processed (Suo-moto)
- w/in 6 months from EOM in
writing by the income - tax  If results in Demand, Notice - 4 years from EOFY in
which application made
authority u/s 156 issued which order is passed

OTHER POINTS:
In section 154 only Against rectification

Mistakes Apparent order Appeal can be
from Records can filed to CIT (A) or
be rectified revision application can
be made to CIT u/s 264
ITAT cannot
rectify u/s 154,
it can only do Rectification u/s 154
u/s 254(2) is also possible for
rectification already
passed u/s 154
If there is MAFR in
orders passed by
CIT u/s 63, 64 can be
rectified u/s 154
Rectification u/s
154 is not
possible as per
HC Judgment but
Refusal to make possible as per
rectification is also Supreme Court
done by passing a Judgment
rectification order

REVISION u/s 263,264
SECTION 263: REVISION OF ORDER

PREJUDICE TO REVENUE
AO
If the order passed by AO is Principal Commissioner or Then Commissioner will step in u/s 263
erroneous or prejudicial to the Commissioner will call for records and and he will revise the original order
Interest of Revenue. Eg. AO passed he is of an opinion that any Item should within 2 years from EOFY in which order
an order allowing all the items be disallowed while passing order sought to be revised was passed
Erroneous means,
- Order not passed in accordance to CIT has the power to confirm,
Decision of HC or SC Doctrine of Partial enhance or modify the
- Orders passed without making Merger is applied assessment or cancel & order
inquiries or verifications fresh assessment.
- Not passed in accordance with Board He has no power to Reduce the
- Order passed allowing any Relief w/o Income or tax payable
inquiring the claim
SECTION 264: REVISION OF OTHER
ORDERS
Application
Principal Commissioner or Then Commissioner will step in u/s

If the order passed by AO is
Commissioner on his own motion or 264 and he will revise the original
erroneous or prejudicial to the
an application made by an assesse order within 1 year from EOFY in
Interest of Assessee. Eg. AO
within 1 year from date on which which such application is made
passed an order dis-allowing Item C
order was communicated
Appeal Revision
Revision u/s 264 is not passed
when - CIT has the power to set-aside,
Order has been a subject Confirm, Reduce and declare the
matter of Appeal before CIT Assessment void-ab-initio.
(appeals) or the ITAT (Doctrine He has no power to Enhance the
of Complete Merger) or Once an assesse chooses Income or tax payable
Assessee has not given up the Revisionary Route u/s 264, he
right to Appeal and time limit cannot travel through Appellate
for filing Appeal has not expired Route at the same time

SUMMARY
Particulars Section 263 Section 264
 Revision of order erroneous and prejudicial  Revision of orders passed by sub – ordinate
PURPOSE
to the interest of revenue passed by AO Authorities
Revision u/s 264 is not passed when
Any Order passed by the Assessing Officer is  Order has been a subject matter or Appeal
CONDITION  Erroneous; or before CIT(A) or the ITAT or
 Prejudicial to the Interest of Revenue  Assessee has not given up the right to Appeal
and time limit for filling Appeal has not expired
DOCTRINE OF
 Partial Merger  Complete Merger
MERGER
 CIT may call for and examine the records
 CIT either on his own motion or on an
and revise the orders after hearing the
application by the assessee can call for the
assessee
PROCEDURE records and revise the order
 Record shall include all records relating to
 Every application for revision should be
any proceedings available at the time of
accompanied by Fees of Rs.500
examination of the file by the CIT
 An order which is not prejudicial to the interest
Order can only be passed if it is
of the assessee can be passed. Commissioner
NATURE OF ORDER  Enhancing or Modifying the Assessment
declining to interfere will not amount to passing
 Cancelling or ordering fresh Assessment
of an order prejudicial to the assessee
 1 year from the date of the order, in case of Suo

 2 Years from the EOFY in which order moto revision by PC / Commisioner.
TIME LIMIT sought to be revised was passed  Where the assessee submits an application for
revision , the time limit is 1 year from the EOFY
in which the application is made
TIME LIMIT NOT  If order to be passed to effect to any finding
 If order to be passed to effect to any finding or
APPLICABLE IN or direction of order of the Appellate
direction of order of the Appellate Tribunal, the
CERTAIN Tribunal, the High Court or the Supreme
High Court or the Supreme court
CIRCUMSTANCES court
REMEDY  Appeal Can be Filed to the ITAT  There is no right of Appeal


ADVANCE RULING
Determination by the
Authority
Transaction
Tax liability of a Issue relating to
undertaken or Tax liability of In relation to an
resident Computation of
proposed to be non – resident arrangement
applicant Total Income
undertaken
Arising out of a undertaken by a

transaction Which is resident or a
Arising out of a
By a non - undertaken by a pending before non resident, is
transaction
CIRCUMSTANCE resident resident
undertaken by
any income tax an
applicant. applicant with authority or impermissible
such applicant
such non – ITAT avoidance
resident. agreement
Notified
APPLICANT Resident = TV Resident or Non
Non resident Resident PSU
Exceeds Rs. 100 Resident
Crores

AUTHORITY OF ADVANCE RULING
COMPOSITION OF AAR OTHER PROVISIONS
CHAIRMAN Location of AAR is in National

Capital Territory (Delhi)
T&C of Service and Salaries,

Allowances to Members be as may
be prescribed
Incase of any vacancy of Chairman,

Senior most Vice Chairman shall
VICE REVENUE LAW discharge the functions
CHAIRMAN MEMBERS MEMBERS
245Q- APPLICATION
Amount of transaction Fees (Rs.)

≤ Rs. 100 crores 2,00,000
>Rs.100 crores upto 300 crores 5,00,000
Applicant > Rs.300 crores 10,00,000
may file
desirous of to Authority of
application along
obtaining Advance Ruling All other cases 10,000
with fees
Advance Ruling

PROCEDURE ON RECEIPT NON-ACCEPTANCE OF

OF APPLICATION APPLICATION
By an non –resident applicant

CALL FOR RECORDS Is already pending either before
any Income Tax authority or ITAT
AAR shall forward a copy to the Principal
or any Court on the date of
CIT or CIT and call upon him to furnish Application
the relevant records and ASAP return it
By a resident applicant dealing

ALLOW OR REJECT with a non – resident is already
pending either before any Income
After examining records, AAR may Tax authority or ITAT or any Court
allow/ reject application. Rejection on the date of Application
to be made only after giving OBH
By a notified resident applicant is

pending before any court (Even
PRONOUCEMENT for PSU)
AAR shall pronounce advance ruling in
writing within 6 months of the receipt of
the application after giving OBH
Involves determination of fair
market value of any property
COPY OF RULING
Copy of Pronouncement duly Relates to a transaction entered

signed and certified shall be sent to into by an applicant other than
the applicant and PCIT/CIT notified residents which is
designed prima facia for the
avoidance of Income Tax

APPEALATE AUTHORITY NOT TO APPLICABILITY OF ADVANCE RULING

PROCEED IN CERTAIN CASES
Applicant who
A resident Assessee cannot had Sought Shall be binding
pursue both the remedies unless there is a
change in law or
Advance facts on the basis
Ruling of which the
i.e., an appeal or Revision
before Income tax Authority / binding on advance ruling has
Appellate Authority been pronounced
Transactions
PCIT / CIT in relation to
as well as an application for and the ITA which the
Advance Ruling to AAR, in Subordinate ruling had
respect of an issue been sought
RULING TO BE VOID POWERS OF AUTHORITY
Enforcing the
Discovery and attendance of
inspection any person arid
examining him
on oath
If ruling has Provisions of

AAR by
been obtained this Act shall Compelling
order,
by the apply to the production of
declare Issuing
applicant by applicant as if books of
such ruling commissions
fraud or mis- such advance account and
to be void –
representation ruling had never other records
ab – initio
of facts been made


SETTLEMENT COMMISSION
Arranged the recommendation of the

Wanchoo Committee, the Central
SC is not an IT
Government has constituted the
Authority
Settlement Commission (SC) for one
time settlement of cases pending
before AO
SECTION 245C – APPLICATION FOR FINANCIAL LIMIT TO

SETTLEMENT OF CASES APPROACH SC
An Assessee may at any stage of a

case, make an application in the No Particulars Amount
prescribed form to the SC containing- In case of person on whom
search is made, Proceedings u/s
1 Rs. 50
A full and true disclosure of his 153A or 153B or 153C have been
lakhs
income which has not been disclosed intiated
before the AO In case of relative of above
person: who has filed an
The manner in which such income 2 application; and Proceedings u/s Rs. 10
has been derived
153A or 153B or 153C have been lakhs
intiated
The additional amount of Income Tax Rs. 10
payable on such income 3 In any other case
lakhs
Note: Any tax on such undisclosed income should
Other prescribed particulars be paid on or before making the application

245D- PROCEDURE BY SC
SC may call for Report from

SC within 7 days of receipt, PCIT/CIT w/in 30 days from
The applicant (specified shall issue SCN and date of application to check
person) makes application to After that it has to either validity of case,
SC accept / reject application Within 15 days from Receipt
w/in 14 days of Report, SC may decide the
validilty
Assessee shall w/in 35 days If application is valid, SC

of receipt of order, pay tax calls for records form PCIT,
SC may pass order within 18 and if needed, order enquiry
payable , if not paid, then months from EOM when
Interest @ 1.25%p.m or part and investigation to be done
application is filed by PCIT/CIT and to submit
of month is levied after 35
days report w/in 90 days
If it is found that the order has been obtained by fraud or misrepresentation of facts, the
order shall be declared VOID and IT Authority may complete the proceedings within 2 years
from EOFY in which declaration made

MATERIALS & INFORMATION
The IT authority shall be entitled to use all the Unable to

material and other information produced by the Application Application dispose of case
rejected within declared as by whatever
assessee before the SC, when application made u/s 14 days invalid reason within 18
245C abated in the following situation- months
ABATEMENT OF PROCEEDING BEFORE SC
If SC was unable to dispose of case DATE OF ABATEMENT

by whatever reasons after 18
months
No Circumstances Date of Abatement
1 Where the application is rejected Date of rejection
the proceedings shall abate on the An application made is declared Last date of month of
2
expiry of time limit as invalid such declaration
Settlement order has not been Date on which time limit

3
passed within TL specified expired.
Settlement order has been
Then the AO before whom the Date of passing such
proceedings was pending, shall 4 passed not providing for terms of
order
dispose off the case as if no settlement
application has made u/s 245C

APPLICATION IN RELATION TO
RECTIFICATION OF ORDER
ANY OTHER MATTER
Where an application made by

a person to SC is allowed to be SC may rectify a MAFR within six
proceeded months from the end of month in
which-
- order passed or
- Application made by P CIT/
He/ any related person shall not CIT or Applicant
be entitled to make an
application for any other matter
POWERS OF SC
The Chairman shall SC shall attach

SC shall have all No provision of
have the Power to provisionally any
the powers which SC shall have appeal against the
transfer any case property belonging
are vested in an exclusive order of the SC but
pending before one to the applicant for
income tax jurisdiction writ petition before
bench, for disposal the period of 6
authority Court is allowed
to another bench months or more


INTRODUCTION
Penalties
270A -
Under-reporting or 271 series 272 series
Misreporting of Income
271 series
271 A 271 B 271 C 271 D 271 FA 271 G 271 H
271 AA 271 BA 271 CA 271 DA 271 FAA 271 GA 271 I
271 AAB 271 DB 271 FAB 271 GB 271 J
271 AAC 271 E 271 K
271 AAD
272 series
272A(1) 272AA 272B
272A(2) 272BB
272A(3)
272A(4)

PENALTIES u/s 270
Quantum
Penalty for under Penalty for Mis-

AO or CIT(A) or PCIT reported income reporting of Income
or CIT may direct a
person to pay penalty
50% of tax payable 200% of tax payable
on under-reported on under-reported
income income
MISREPORTING OF INCOME SEC 270A(9)
The cases of Misreporting of Income shall be the following:
Failure to record Claim of expenditure

Misrepresentation or
Investments in the not substantiated by
suppression of facts
books of Accounts any evidence
Failure to record any

Recording of any false Failure to report any
receipt in the BOAs
entry in the books of transactions under
having a bearing on
accounts Transfer pricing
total income

SITUATIONS LEADING TO EXCLUSIONS WHILE COMPUTING

UNDER-REPORTED INCOME UNDER REPORTED INCOME
Income assessed > Income Amount of Income for which Assessee offered a
(a) ROI filed satisfactory Explanation disclosing all material facts
u/s 143(1)
No ROI
(b) Income assessed > BEL
filed
Amount of URI determined on basis of an estimate but
method employed is such that income cannot be
properly deducted therefrom
Income reassessed >
Re-
(c) income assessed or
assessment
reassessed before
Amount of URI, if Assessee has estimated lower amount

Book profit u/s 115JB or of deduction/ allowance and has included in
(d) ROI filed
115JC > 143(1)(a) income computation of income and disclosed all facts
No ROI Book profit u/s 115JB or

(e)
filed 115JC > BEL
The amount of URI as any addition made by TPO, where
the assessee maintained records, declared international
transaction and disclosed all the material facts
Re- Book profit re-assessed >
(f)
assessment Book profit assessed before
The amount of undisclosed income as referred to in

Assessment/ Loss is reduced or Sec.271AAB, which deals with levy of penalty, where
(g)
Reassessment converted to income Search is initiated

MANNER OF COMPUTATION OF TAX PAYABLE ON UNDER

UNDER REPORTED INCOME REPORTED INCOME
Case Computation
Where no ROI filed or filed

Where the income has been for first time
Assessed income (-) Income Tax on Amount
assessed for the first time: ROI
determined u/s 143(1)(a) of URI + Basic
filed
Exemption limit
Where income has been

Assessed Income (-) Basic
assessed for the first time: No
Exemption Limit Where TI is assessed / reassessed
ROI filed
/ recomputed is a loss
Tax on URI as if it
Income reassessed or is Total income
recomputed (-)
All other cases Income assessed or
reassessed or recomputed in a
preceding order In any other case
(A-B) + (C-D)
Where the income arises out of A->TI as per normal provision Tax on URI Tax on TI u/s
deemed total income u/s 115JB B-> (A) less URI +Income u/s 143(1)(a)
& 115JC C-> TI as per 115JB/JC 143(1)(a) or + TI assessed
(-)
D->(C) less URI Income / reassessed /
reassessed/ recomputed
recomputed in PY
Where assessment or
Loss Claimed (-)
reassessment reducing loss
Loss assessed or reassessed

PENALTIES – 271 & 272 SERIES
1 271 SERIES
Failure to Keep, Maintain or retain Books of

271A Accounts u/s Rs. 25,000
44AA
Failure to Keep, Maintain or retain Books of 2% of value of each international

Accounts u/s 92D transaction
271AA
Failure to furnish information

Rs. 5,00,000
and the document as required u/s 92D(4)
a.30%; or
Penalty on undisclosed income in case of b.60% of undisclosed income, as the
271AAB
search
case may be.
Penalty for undisclosed income determined

271AAC 10% of tax payable u/s 115BBE
68, 69, 69A, 69B, 69C or 69D
Penalty for false entry etc., in BOA (w.e.f.1-4- Equal to the aggregate amount of such
271AAD
2020) false or omitted entry

2
Lower of :
Failure to get accounts audited or furnish a) 0.5% of Total Sales, T/O or Gross
271B
audit report us 44AB Receipt (or)
b) Rs.1,50,000,
Failure to furnish a report from a CA as

271BA Rs. 1,00,000
required by section 92E
271C Failure to deduct or pay TDS Amount of TDS failed to deduct or pay
271CA Failure to Collect Tax at Source Amount of TCS failed to collect

4
Amount of the Loan or deposit or
271D Penalty for violation of 269SS
Specified sum so taken or accepted.
A sum equal to the amount of such

271DA Penalty for violation of 269ST
receipt
Penalty of Rs. 5,000 per day of

271DB Penalty for violation of 269SU
continuing default
Amount of the loan or deposit or

271E Penalty for violation of 269T
specified advance so repaid
5
Failure to furnish SFTRA within the time A sum of Rs. 500 for every day during
prescribed u/s 285BA(2) which failure continues.
271FA
Failure to furnish SFTRA within the time u/s A sum of Rs. 500 for every day failure
285BA(5) continues
271FAA Furnishing inaccurate SFTRA Rs. 50,000
Failure to furnish statement or information by

271FAB Rs. 5,00,000
an eligible Investment Fund.

2% of value of each international

271G Failure to furnish info u/s 92D(3)
transaction
2% or value of transaction or
Failure by Indian concern to furnish info u/s
271GA
285A 5,00,000 as case maybe
Failure to furnish info u/s 286 Country by Refer below*

271GB
country report
271GB
Failure to furnish report Continuing failure after Furnishing inaccurate

Failure to produce information
u/s 286(2) service of order u/s information in report
& documents u/s 286(6)
286(1) / (2) u/s 286(2)
Rs.5,000 everyday upto 1

month, Rs.50,000 everyday from
Rs.5000 every day till failure Rs.5,00,000
date of service of such
Rs.15,000 every day continues
order
beyond 1 month

Failure to furnish Quarterly TDS/ TCS Rs. 10,000 to Rs.1,00,000

271H
Statement
Failure to furnish information or accurate

271I Rs. 1,00,000
information u/s 195
Furnishing of inaccurate info in reports or Rs. 10,000 for each report or

271J
certificates certificate
271K Failure to furnish statements u/s 35 or 80G Rs. 10,000 to Rs.1,00,000

272 SERIES
Sec PURPOSE PENALTY
 Refusal to answer when legally bound to state the truth or

 Refusal to sign any statement legally require him to sign; or Rs. 10,000 for each
272A(1) such failure or
 Omission to comply summons u/s 131(1).
default
 Failure to comply with a notice u/s 142(1),143(2),142(2A)
Failure to -
Comply with Give notice Furnish

Allow
a notice of statements
inspection of
issued u/s discontinuan 133, 206,
any register
94(6) ce u/s 176(3) 206C/ 285B;
Furnish ROI
Deliver Furnish a Deduct and
139(4A)/(4C)
declaration certificate u/s pay tax u/s Rs. 100 for every
within the
u/s 197A 203 or 206C 226(2)
time limit day during which
272A(2)
the failure
Deliver Deliver stt u/s continues
Furnish a stt Deliver stt u/s
declaration 200(3) or
u/s 192(2C) 206A(1)
u/s 206C(1A); 206(3)
Deliver stt u/s

200(2A) or
206C(3A)

Any penalty
Any penalty imposable u/s 272A(1) / (2) shall be imposed if
imposable u/s
272A(3) contravention occurs during proceedings of Authority not below JD/
272A(1) / (2) shall be
JC
imposed
No order under this section shall be passed by any income-tax authority unless Assessee is
272A(4)
given an opportunity of being heard.
Such amount as
determined by ITO
272AA Failure to comply with provisions of section 133B- Survey
but not exceeding
Rs. 1,000
Rs.10,000 for each

272B Failure to comply with the provisions of PAN & Aadhar
such default
272BB Failure to comply with the provisions of section 203A Rs. 10,000

PROSECUTIONS
Rigorous
Sec Particulars
imprisonment and fine
Contravention of Deemed seizure/ Restraint order in case of

275A Up to 2 years + fine
search and seizure
Failure to afford facility of inspection to authorized officer u/s

275B Up to 2 years + fine
132(1)(ii b)
Removal, Concealment, transfer or delivery of property to the

276 Up to 2 years + fine
tax recovery
Failure to comply with provisions of section 178(1) and (3) re:

276A company in liquidation or parts with assets of the company in
6 months to 2 years
contravention of the Act
Failure to comply with sec 269UC or 269UE or 269UL relating

276AB 6 months to 2 years
to surrender of property to CG

Failure to pay TDS chapter XVII – B (non – cognizable offence

276B 3 months to 7 Years + fine
u/s 279A)
Failure to pay the tax collected under the provisions of

276BB 3 months to 7 Years + fine
sec.206C
Willful attempt to evade tax, penalty or interest (non –

cognizable offence u/s 279A) –
276C(1)  Where amount sought to be evaded or tax on under  6 months to 7 Years + fine
reported income exceeds Rs.25L
 In other cases  3 months to 2 Years + fine
Willful attempt to evade payment of any tax penalty or interest

276C(2) 3 months to 2 Years + fine
(non – cognizable offence u/s 279A)
Willful failure to furnish return of income u/s 139(1) or in

response to notice u/s 142(1) or section 148 or section
276CC 153A(Non – cognizable offence u/s 279A)
 Where tax sought to be evaded exceeds Rs.25 Lakhs  6 months to 7 years + fine
 In other cases  3 months to 2 years + fine
Willful failure to produce accounts and documents u/s 142(1)

276D Up to 1 year and with fine
or to comply with a notice u/s 142(2A)

False statement in verification or delivery of false account

etc.
277  6 months to 7 years + fine
 Where tax sought to be evaded exceeds Rs.25 Lakhs
277A Falsification of books 3 months to 2 years + fine
 Abetment of false return, account , statement or  6 months to 7 Years + fine

declaration (non – cognizable offence) Where tax,
278 penalty or interest sought to be evaded exceeds Rs.25
Lakhs
Second and subsequent offences under section 276B,

278A 6 months to 7 years + fine
276C(1), 276CC, 277 or 278
Disclosure of particulars by public servants in contravention

280(1) of sec 138(2). Prosecution after previous sanction of CG u/s 6 months + fine
280(2)

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CA DEEPAK PANDIAN & CA ANEESH NOOR MOHAMMAD

1. MAT & AMT 2

3. Taxation of Special Entities 68

13. Penalties & Prosecutions 249

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 2

MAT for Companies AMT for other than companies

MAT for IndAS 115JD

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 3

115JB(1) - MAT ROUTE

MAT is Normal Tax

 Then, Book profit u/s 115JB will be  MAT rate for

115JB(2) – P&L a/c

While preparing Annual accounts,

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 4

NON APPLICABILITY OF S.115JB

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 5

1 Income tax paid / payable xxx 1 Tonnage Tax Income (xxx)

Depreciation excluding Revaluation

 Expenditure incurred to earn income from

Sub total xxxx Sub total (xxxx)

= Book profit u/s 115JB

INCOME / EXPENSES ACCRUING TO FOREIGN REVALUATION RESERVE

Reduce while Reduce while

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 7

Company and its subsidiary Other Companies - as per

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 8

2. MAT FOR INDAS COMPANIES

115JB (2A) & (2B) – ANNUAL ADJUSTMENT

OCI adjustment (Items

Debited to P&L Credited to P&L Distribution of Distribution of

Added to Book Reduced from Added to Book Reduced from

s.115JB(2B) are recorded at values

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 9

Exceptions & Time of taxation for certain Items in 115JB(2A)

Items and their time

At the time of At the time of

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 10

115JB (2C) – TRANSITIONAL ADJUSTMENT

eg: If first time adoption is in FY 2016-17, 5 years = FY of:

A. Items in OCI re -classified to the

D. Property, plant and equipment

E. Investment in subsidiaries, joint

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 11

Bp computed iN accordaNce with expL.1 to sec.115JB

3 1/5th of transition amount – Sec. 115JB (2C) xxx

Less: Adjustments contemplated:

3 1/5th of transition amount – Sec. 115JB(2C) (xxx)

= Book profit for iNd as compLiaNt compaNy

3. MAT IN SPECIAL CASES

UNITS OF BUSINESS TRUST

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 13

4. MAT CREDIT u/s 115JAA

MAT Tax under

The MAT credit is allowed to be c/f for

MAT credit can be allowed to set off in the AY in which:

Tax under normal

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 14

 Then, Adjusted Total Income u/s  AMT Rate for

CA DEEPAK PANDIAN AND CA ANEESH NOOR MOHAMMAD 15

115JD – AMT CREDIT

 Every Assessee under this section Normal AMT

115JB(JE) AMT credit to be allowed =