RETURN OF INCOME

139[1] - Company

139[4A] - Trust

139[4B]- Political party

139[4C]- Scientific research

139[4D]- University ( statutory body )

139[4E]- Business trust

5 Head of income
I. Salary
II. Capital gain
III. Company or firm
IV. House property
V. Other source

ITR
ITR1- SALARY

ITR2- CAPITAL GAIN SHARES PROFIT

ITR3- BUSINESS [WHO MAINTAIN BOOKS no. of pages – 36]

ITR4- BUSINESS [who don’t maintain books]

ITR5- FIRMS

ITR6- COMPANY

ITR7- SATUTORY BODY UNIVERSITY

ITR(V) – ACKNOWLEGMEMT
 DATE OF FILLING

15 JUNE – NORMAL FILLING

15 SEP/OCT – HAVING AUDIT FILLING

15 DEC – HAVING ANY INTERNATIONAL TRANSACTION

AMENDMENT
 More than 1CR transaction on current account
 1Lakh electricity bill annual then tax applicable
 2Lakhs spend in international travel

Section[139(3)]- loss Return{set off}

Section[139(4)]- Belated return
Section[139(5)]- Revised Return (if the return is filled but need to
be revised after filling)
Section[139(9)- Defective Return

INTREST AND FEES

(Interest) Section [234A]- For late submission of return of income.
(Interest) Section [234B]- For non-payment or short payment of
advance tax.
(Interest) Section [234C]- For non-payment or short payment of
different installment.
(Fee) Section [234F]- For late submission of return of income 
5000(December), 10000(March) and 1000(for under 5L income)
Section [140A] SELF ASSESMENT- Where any tax is payable (after
deducting relief, rebate, advance payment of tax or tax deducted or
collected at source or MAT or AMT credit, if any) on the basis of return
furnished the assessee is required to pay such tax before filing the return.

Section [142(1)]- Issue of notice to assessee.

i. Notice to submit return- in case if assessee doesn’t file return
than notice can be given by assessing officer.
ii. Notice for document by assessing officer *can’t ask for document
of more than 3years prior to the previous year.
iii. Notice to furnish info. Ager assessing officer chahe to bol sakta hai
asset liabilities tak info. Dene ko *only when approval is given by
joint commissioner.

Section [142(2)]- Making inquiry assessing officer want

Section [142(2A)]- Given direction to get account audited.
 If assessing officer fell like that ur account should be audited than
you have to.
 Such direction should only be given be PCC/PC/CC/COMMISINORE
TIME- Max period after order 180 days
Form of audit report- 6B submit by CA to assessee nd assessee will
submit to RoI.
Audit fees and expenditure will be provided by PC/PCC/CC
If assessee denies getting file audited then
SECTION 144- BEST JUDGMENT will be done
 RESIDENTIAL STATUS [Section 6]
Section 6[1] (a) - 182 days in previous year OR Section 6[1] (b) - 60 days in
previous year and 365 days in 4 years prior to previous year [then he is
resident of country]
Ordinary resident or Non-ordinary Section 6[6]
2yrs out of 10 years should be in country +* 730 days out of 7 years.
[both should be calculated after immediately preceding previous year]
* Then he will be ordinary resident.
Exception- If the person income is 15 Lakhs from country during relevant
previous year.
Section 6[2]- HUF can be classify as resident if KARTA of HUF is resident.
Section 6[3]- Company
POEM- Place Of Effective Management. Should be INDIA.
Or, foreign company turnover is 50Cr for previous year than it’ll be
resident.
Section 6[4]- Firm
AOP or BOI is partly or fully situated for previous year.
INDIAN INCOME
 Received or deemed to be received in india. Time of accrues
 Received in india but arises out side india.
 Received outside india but accrues india.
 INCOME UNDER HEAD OF OTHER SOURCES
Incomes under this head are:-
Lottery, Beating, Aurthrace, Cards, Puzzles, etc……
Director’s Fee, fees of paper checking, Invigilation, Family Pension,
Dividend, Interest, Gift Received……..
Accumulated Profit:- available profit in company after [-] expenses and
income tax.
Deemed Dividend under head of income tax Section2(22)
2(22)(a)- Distribution of accumulated profit to release company
asset. Ccapitilize general reserve not capital nature assets ko htane
ke lea dirstibute kea. Jetneka profit utneka share issue kea to wo
deem div hoga.
2(22)(b)- Distribution of debenture certificate to shareholder. Or
bonus share to preference shareholder then it will be consider as
deem dividend.
2(22)(c)- Distribution to shareholder at a time of liquidation
Not treated as dividend -> full cash consideration
2(22)(d)- Distribution of profit to reduce its capital.
Not cash consideration to preference shareholder.
2(22)(e)- Distribution of profit in the form of advance loan
Case1- If a shareholder beneficially holds 10% shares in a company
then loan or advance is given be the closely held company. This loan
nd adv will be treated as dividend in hand of shareholder.
Case2- Adv loan can be given by the company if a person hold 10%
of the company
 J A D S P A :- J- jeweler
A-Arecheological
D- drawing
S- sculpture
P- painting
A-any other work
Spouse- who is directly related ascendant or descendant (mom, dad, bro,
sisi, masi mausha, bua fufa, uncle aunt, dada dadi, nana nani, husband
wife, mama mami.)
Section 56(2)
Categories treatment
1. cash gift Upto 50000 non No cash will be taxable
taxable in aggregate. if its given on marriage.
2. Immovable property If it given without
consideration then Single transaction
stamp value exceed
50000 then it will be
taxable in hand of
receiver
3. Immovable property If property is sold but the 110% of stamp values
with less consideration which exceed consideration value.
If difference between stamp value nd
consideration is more than 50000 or 5%of consi.
4.
 T.D.S

Section[192] Salary
Rate- Average, When- at the time of payment, Employee can get salary without TDS when
FORM 13 is shown

Section[192A] Withdraw of Provident Fund

Rate- 10%, Limit- 50000, When- At the time of payment

Section[193] Interest on Securities ( debenture, bonds)

Rate- 10%;

Tax NOT required to Deducted-

1. Int payable to the individual or HUF on debenture

[a.]- issue be company PPL hold Substantial int.,

[b.]- Debenture may be listed or unlisted.

[c.]- Payment does not Exceed 5000 for individual.

2. INt on govt. Securities[Exempt- 8% and 7.75% taxable Bond limit 10000]

3. Securities issued by the company in dematerialized Form (paperless)

4. Armed forces Income are exempted.

5. Securities held by LIC & GIC (general insurance company); LIMIT- 10000

Section[194]- Dividends
Rate- 10% ;

Tax NOT required to be deducted

[a]. dividend paid to the insurance company

[b]. Paid in to an individual any mode other than CASH.

Exempt- When Form no. 13 is shown.

Section[194A] Interest other than Interest on securities
Rate- 10% ;

Section[194B] winning lotries puzzles cross word

Rate- 30% ; Exempt Limit- 10000

Section[194BB] winning of horse race

Rate- 30% ; Exempt Limit- 10000

Section[194C] Contract
Rate- 1%(individual), 2%(HUF) ; Meaning- Advertisement, Catering, etc. ;

Exception- CASE-1 contract is made for 1 Lakh and payment is less or equal to 30000 in
aggregate for individual .

CASE-2 in transportation Business or Carriage Contract TDS is not done but contractor own 10
or less goods carriages . Even it exceed 100000 no TDS is deducted.

Section

Set off and Carry Forward

Section- 70 Inter Source Adjustment ( inter head)

Set off and carry forward of loss from one source against income from another
Source under same head.

EXCEPTION-

A-

CAPITAL GAIN
Q- What is capital gain?

Ans- 1. Any property held by assessee.

2. Securities held by FII( Foreign Institutional Investor) which has invested in

securities under SEBI act 1992.

EXCEPTION-

a. Personal Property- any things which use for day to day activity or common
life use things. EXCLUDE- JADSPA
b. Stock Trade- any stock, material or asset use in business is not taxable under
capital gain.
c. Rural Agriculture land not taxable under capital gain.
d. Gold Bonds
e. Special Bearer Bond
f. Gold deposit Bond

TYPE OF CAPITAL ASSETS

1- Short Term Capita_ Duration- 36 months before the date of transfer

Exempt- 12 Months for

i. listed- Equity, preference, Debenture, Govt. Bonds

ii. Unlisted or Listed - Zero Coupon Bond, Equity Oriented Fund(EOF), Unit Trust of
India(UTI).

Exempt- 24 Months

i.Unlisted- Equity, Peference.

ii. Immovable Property

Transfer[section 2(47)]
 1. Sale of Asset
2. Extinguished of any right in asset (apna adhikar chorna)
3. Compulsory acquisition of an asset
4. Conversion of asset into trade stock
5. Any immovable property
6. Maturity or redemption of zero coupon bond

Insurance claim [45(1A)]

Compensation received more than actual damage will be consider as capital gain

Conversion of personal asset into stock in trade[45(2)]

When asset is converted into business stock

Taxable – the difference B/w actual price and market value

A person want to transfer a market value at the of

Personal watch of 5000 into conversion 7000
Business
Difference of
2000 will be taxable
Under capital gain
Note- if a person is transfer it’s building which was purchase in 2010 in business in
2020 but under this business the building sold on 2023 then the index of valuation
will be of 2023 when it’s sold.

If a property is purchase before 2001 expl-1998,1988 then the purchase values of

2001 index will be taken as substitute of 1998 or 1988.

Transfer of capital asset by a partner into firm/AOP/BOI [45(3)]

When asset is brought by the partner into firm it’s recorded on book value.

Sale consideration- book value by firm

Taxable- at time of transfer

Index- as usual

Transfer of capital asset by firm to its partner by way of distribution at

the time of dissolution [45(4)]
At the time of dissolution when asset of release to its partner –
Sale consideration- fair market value
Index- as usual [cost – exp]
Taxable- at the year of transfer
Transfer by way of compulsory Acquisition[45(5)
When govt. want to take acquired asset of a person permanently than the

Sale consideration  as usual

(-) Cost of acquisition  as given
Index- available
Tax will be deducted at the time of first payment of the consideration
amt
And the govt. increase the compensation then the amt received will be
taxable. In this case cost of acquisition will be Zero.
iiii

sec 54 CG from sale of ho

use property
Exemption Under Capital Gain (CG)

Section-54 CG from long term house property(HP)

Applicable to the individual nd HUF
Purch of HP from CG of HP
2 house can be pruch (once in a lifetime only) By CG
1 house can be purch
LIMIT- 2cr
TIME- 1yr Before 2 yr After CG for PURCH , 3yr for CONSTRUCTION after
CG
Hold- 3yr
Section-54B CG transfer of urban agriculture land
The Land which is transfer should be used at least for agriculture purpose
for 2yrs before transfer,
Purchase- land which have to be use for 2yrs for agriculture (urban/rural)
Hold- 3yrs
Capital gain scheme- YES

Section- 54D CG acquisition of land and building forming part of

industries undertaking.
Transfer- compulsorily acquire by govt. and which used 2yrs for industry
purpose before transfer
Purchase- should have acquired land or building for industrial purpose or
(to transfer of the existing industry) with CG. Under 3Yrs.
Hold – 3yrs
Section- 54EC CG from long term asset land and building or both
invested In special Bond.
Transfer- long term capital asset residential or non- resident
What to purch- any bond with is certified under govt. IRFC, NHAI …etc.
within 6month from the date of CG.
Hold- 5yrs
Limit- 50 lakh
Scheme – NOT
Section- 54EE CG’ not to be charged in investment units of a specified
fund .
Transfer- long term capital asset
Purch/ invest- CG should be invested in long term special asset(to be
notify by central govt) – investment within 6month from date of CG.
Hold- 3yrs
Limit- 50lakh

Section- 54F CG on transfer of long term capital asset other than

 residential HP
Assessee- individual/ HUF
Transfer- HP outside India or other capital asset.
Purch- should acquire one house property in India. 1yr before and 2yrs
after or 3yrs for construction
Hold- new Hp is transfer under 3yrs
Purchase another HP other than what acquire under 2yrs.
Scheme- YES
Section- 54G CG from transfer of industrial undertaking from Urban
Area
Transfer- Any capital asset being-
a. Machinery, land or building
b. Any right on building or land
c. Used for a purposes of business of an industrial undertaking situate
in urban area .
Acquire – purch of any land building for shifting the industry other than
Urban Area. 1year before and 3years after the transfer.
Hold- 3 yrs
Scheme- YES
54GA transfer of capital asset forming the part of industrial undertaking
from urban area to special economic zone (SEZ)
SAME AS 54G just the shifting will take place from Urban to SEZ
Deemed owner/ owner- section 27 under HP
1, Transfer Of Property To Spouse Or Minor Child- if a property is
transferred with inadequate consideration then the property will be
clubbed in hand of transferor
2, Holder Of Impartible Property- if a person is holding a property on
behalf of the family then the who is holding it will be deemed owner.
3, Property hold by the member co-operative society/company- a person
to whom property is allotted or leased under the house building scheme
of the society is treated as deemed owner of the property.
4. A person who acquire property under transfer of property act 1882
u/s 53A- if a person acquire property or hold under power of attorney
while satisfy all the condition.
5. Lessee of a building u/s 269UA(f)- if a person acquire a property under
a lease for not less than 12 years on a continues basis then he or she will
be treated as a deemed owner on the property . but the renewal should
not be made less than 1yr.

PGBP
Section30- Rent, rates, taxes, repairs and insurance of Building-
Use- for business or profession
Current repairs vs capital repairs- only current repairs are allowed as
deduction. Current repairs are those which use for renovation of existing
asset. Repair doesn’t result in new advantages.
Municipal tax- rates nd taxes deduct at cash basis.
Section 31- repairs and insurance of machinery, plant and furniture—
Use- for business or profession
Current or capital repairs- only current repairs are allowed.
Section 32- depreciation –
Tangible asset- building, machinery, plant and furniture only
Intangible asset- copyright, patent, licence.. 25% depreciation for all
intangible.
Condition:-
Asset must be owned by assesse and
Should be used for business or profession during P.Y .
Put to use of asset in P.Y for at least for 180days if used less than
180 days than ½ depreciation is allowed for the 1st yr.
Method of computing depreciation- WDV -> written down value method
Block of asset- any asset of same rate and category can be charged
together.
Section 32(1)iia- additional depreciation is applicable on all assessee
engaged in business of manufacture or production of any article or thing
or in the business of generation, transmission or distribution of power.
Condition-
>assessee must be an industrial undertaking
>assessee acquired nd installed after 31st march 2005
> Put to use less than 180 days 10% additional depreciation is allowed
and remaining 10% can be charged next yr.
> Put to use 180 days or more 20% additional depreciation allowed
> special rate of 35% additional depreciation on following ->
a. assessee sets up an undertaking for manufacture of any article or
thing.
b. undertaking on or after 1.4.2015
c. undertaking should be set up in the notified backward area Andhra
Pradesh, bihar, west Bengal nd telangana
Section 2(42C)- treatment of slump sale- whole asset will be depreciate in
slump be WDV method.
Section 43(1)-actual cost of asset

Sec 29 specific deduction

Sec 30 rent rates taxes insurance repairs for building
Sec 31 repair insurance of machinery plant furniture
Sec 32 depreciation
Sec 32(1) additional depreciation
Sec 32AD investment in new plant or machinery in notified backward
area
Sec 33AB Rule(5AC) rubber tea coffee growing or manufacture
Sec 33ABA nd Rule (5AD) site restoration fund
Sec 35 scientific Research
Sec 35(2AB) in house development exp incurred by company
Sec 35ABB abba ka telecom Amortisation of telecom licence fee
Sec 35CCA Chalo Chale Araa matlub not agriculture rural development
Sec 35CCC Chalo Chale Chapra Agriculture karne
Sec 35CCD Chalo Chale development karne
Sec 35D Rule 6AB amortization of preliminary exp-
Sec 35DD double donkey 2 company deduction of expenses incurred in
case of amalgamation or demerge
Section 36 ------
Sec 36(1) (i) Insurance premium for stocks nd stores . full deduction
Sec 36 (1) (ia) Insurance premium efrfr