yehita, Yryyyi’ | Handbook on for CA Inter (For Both New and Old Syllabus) Applicable for May & Nov. 2022 Examination Highlights of this Book: * Latest syllabus of ICAI fully covered. + Amendments by Finance Act, 2021 Highlighted. * Simplified Presentation of new GST Law. For * Solved illustrations as guidanes for: Exar Assessment Year Presentation. 2022-2023 * Circulars, Notifications:and up-to-date Case Law. * Fast Track Referencer:for quic! CAG. Sekar Cammercial | avs Dithlichare [InAial mie bea 4WITH THE BLESSING OF MATA VAISHNO DEVI Published by COMMERCIAL LAW PUBLISHERS (INDIA) PVT. LTD. HEAD OFFICE: LG-2, AKARSHAN BHAWAN, 23, ANSARI ROAD, DARYA GANJ, NEW DELHI- 110002 Phones: 43502007, 43502008, 43011562, 43452009 e-mail: commercialhouse@yahoo.coin ‘Website: commerciallawpublishers.com “Mumbai Office: 196, Princess Street, Marine Lines, Mumbai-400 002 Phones: 02240222881, 40222882, Email: naveen.commercialhouse@gmail.com PRICE: Rs, 1299/- 25th Edition ISBN: 978-93-92141-23-2 © RESERVED WITH THE AUTHOR PUBLISHING RIGHTS RESERVED WITH THE PUBLISHERS Printed at Anand Sons Despite every effort taken to avoid any error or omission, there may still be chances for such errors and omissions to have crept in inadvertently. This book is sold with the understanding that neither the author/ editors nor the publishers shall be responsible for any damage or loss in whatever manner, ‘consequent o any action taken on the basis ofthe contents of this book, caused to any person, whether a purchaser or not. No part ofthis book may either be copied of reproduced in any form or any manner whatsoever without the prior -ritten permission of the author /editors and publishers. All Disputes subject to Delhi Jurisdiction. ts Nac cmammMIN Nam hinge tea, Se ma agePRANAMS TO THE ACHARYAS OF KANCHI 850 Lakhs < @ 1 Crore 10% ~_Ti> &. Gore $2 crore a 15% ; > W Gore $T5 Gore | 25% =n TL >%5 Crore 7% _ ~ ‘Note: Marginal Relief shall be available. Refer Chapter 1 for calling at Surcharge for 112A, 111A & 115AC 3, Wef 01.04.2020 Rebate u/s 87A is applicable for a Resident Individual whose Total Income does not exceed ®5 Lakhs, Rebate = % 12,500 or 100% of Tax Payable, whichever is lower. 4, Total Income does not include taxable Long Term Capital Gain (20%), Short Term Capital Gain (15%) on Securities subjected to STT, Lottery Winnings, Horse Races, etc. (30%) and other Income chargeable gt Special Rates. 5. Above tax rates shall apply to the Total Income after deducting Certain Incomes which are’chargeable at Specific Rates = FOR OTHER. ASSESSEES L PERSONS (Note: TI = Total Income) 1 | — Applicable Surcharge — Rate oftax [Ti@Crore,but | Tr> tio | Rateof HEC “2 ‘ Crore | TEs 10 Crores ;| Crores | 1. Domestic Companies | 30% / 25% = 7% 12% 4% 2._Foreign Companies 40% - 2% 5% 4% | “3,_Firms and LLP 30% = 12% [12% | FIRAFast Track Referencer — Padhuka's Handbook on Taxation ~ For CA Inter — AY 2022 - 2023 4, Local Authorities 30% _ 12% 12% 4% 5. Co-operative ~ Societies | For First 10,000 10% - - - 4% For Next ® 10,000 20% - - - 4% For the Balance 30% ine 12% 12% 4% Marginal Relief i 1, Relief from Tax Payable shall be given, where Tax Payable together with Surcharge exceeds the Income earned by an ‘Assessee in excess of € 1 Crore /& 2 Crore/® 5 Crore. Such Relief is known as Marginal Relief. 2. The principle in Marginal Refs that the Additonal Amount of Income Tax Payable with Surcharge in excess of Income over & 1 Grore 2 Crore/® 5 Crore, should not be more than the amount in excess of 1 Crore & 2 Crorel® 5 Crore. 3. Computation: Marginal Rei Tax on Total Income inchiding Surcharge Less: (Total Income ~& 1 Crore) + (Tax on & 1 Crore excluding surcharge) Tax Payable = ‘Tax on Total Income including Surcharge Less: Marginal Relief as computed above_ ‘BASIC CONCEPTS IN INCOME TAX LAW Paints to Remember & 20,000, (c) Audit, (4) Report under RP Act. Donations more than 2,000 received other than by way of A/C payee cheque / draft /such other prescribed shall not be: exempt. 4 INCOME FROM SALARIES ae = Points to R@thember ) Chargeabllity of Salaries [Sec.15]: Year of Accrual or Receipt whichever falls ea Standard Deductions [Sec.16] : Standard Deduction from Gross Salary is %50,000 Deductions for Entertainment Allowance [Sec.16(ii)]: Only for Government Employee. Maximum ® 5,000, Deductions for Tax on Employment [Sec.16(ii)}: Professional Tax actually paid. Definition of ‘Salary’ [Sec.17(1)]: Salary incudes Wages, Annuity, Pension, Gratuity, Advance Salary, RPF Contribution, Interest on RPF, al Allowances and Perquisites. Perquisite ~ Rent Free Accommodation [Sec.17(2)(I)I: Valued as per Expin, to Sec17(2) & RU, Perquisite - Accommodation at Concessional Rent [Sec.17(2)(i)]: Valued as per Expin, to Sec.17(2) & Rule 3. | Perquisite - Specified Employee [Sec.17(2)(i)]: Benes given free of cost or at concessional rates. | Perquisite [Sec.17(2)(iv)]: Payment of personal obligation of the Employee. | Perquisite [Sec.17(2)(v)]: Contribution to Life Insurance or Contract for Annuity. _ _| Perquisite [Sec.17(2)(vi)]: Any other benefit or amenity ~ As per Rule 3(2) to Rule 3(8), Spediied Security or Sweat Equity Shares alloted by the Employer free of cost or at a concessional rate Perquisite [Sec.17(2)(vii)]: Contribution by Employer to PF, Gratuity, Pension Superannuation Fund in excess of € 7,50,000. Perquisite [Sec.17(2)(viia)]: Taxabilty of any annual Accretion by way of interest or dividend or any other amount of similar nature to the extent relates to the Employer's Contribution ufs 17(2)vil). Taxable Value of Perquisites [Rule 38]: Value determined as per Rule 38 Perquisite [Sec.17(2)(vill)]: Value of other Fringe Benefit Amenity as may be prescribed. Profits in lieu of Salary [Sec.17(3)]: + Compensation on termination/ mocification of Employment * Amount received from Keyman Insurance Policy. ‘+ Employer Contribution and Interest thereon to URPF at the time of withdrawl, Amount received in lump sum or not either atthe time of joining or cessation of employment, ief when Salary is paid in Arrears or in Advance, etc, [Sec.89(1)]: 1. Form 108 to be submitted by the Employee, 2, No Rel if VRS compensation u/s 10(10C) is aimed, Taxable Value of Perquisites [Rule 3]: Value determined as per Rule 3 Less Amount recovered from the Employee FMV of ESOP [Rule 40C]: 1. Unlisted Company — determined by Merchant Banker 2. Listed Company ~ On Exercise Date (2) Trading ~ Average of Opening & Closing Price on Exercising date (b)_No Trading ~ Closing Price on Exercising Date FMV of Specified Security [Rule 40D]: As determined by a Merchant Banker Exemption u/s 10(7): Allowance / Perquisit paid to Citizen by Govt. for rendering services outside India is fuly exempt | Keyman Insurance Policy [Sec.10(40D)]: Fully Taxable, For Salaried Persons ~ as Profits in Lieu of Salary, For | Business Persons — as Business Income, Others ~ as Income from Other Sources, Tax on Non—Monetary Perquisites [Sec.10(10CC)]: U/s 192(1A), the Employer may, at his option, pay Income Tax on | the wile or part of perquisite provided by way of non-monetary payments. Its exempt in the hands of Employee, Fro smite_Fast Track Referencer ~ Padhuka's Handbook on Taxation ~ For CA Inter AY 2022 2023 COMPUTATION OF INCOME UNDER THE HEAD SALARIES = Particulars Exemption] Deduction |INet Amount Taxable | BASIC SALARY _NIL Fully Taxable. DEARNESS ALLOWANCE — Whether forming part of Salary or Not NIL _| Fall Taxable ‘ADVANCE SALARY NI Fully Taxable ARREARS SALARY _ NL Fully Taxable CITY COMPENSATORY ALLOWANCE : NIL Fully Taxable | {BONUS Nit Fully Taxable. COMMISSION AS % OF TURNOVER NIL Fully Taxable FEES NIL Fully Taxable LUNCH / TIFFIN ALLOWANCE NIL. Fully Taxable OVERTIME ALLOWANCE NIL Fully Taxable | SERVANT ALLOWANCE NIL Fully Taxable WARDEN ALLOWANCE NIL Fully Taxable NON-PRACTISING ALLOWANCE _ NL Fully Taxable FAMILY ALLOWANCE Ni Fully Taxable RETIREMENTS BENEFITS ~ Received from Statutory PF / PPF [Sec.10(41)] Fully Exempt NIL PF — subject to conditions [Sec.10(12)] Fully Exempt NIL Approved Superannuation Fund (Sec. 10(13)} Fally Exempt NIL GRATUITY [Sec.10(10)} (2) Government Employee Fully exempt mi (6) Employee covered by Gratuity Act: Least of: + Actual Gratuity received, + 15/26 x Last Drawn Salary x Number of years of Completed Service or part thereof in excess of ix months, (Golary = Basic + D.A) |_« _%20,00,000, - {6 Other Employees: Least of the following: + Acwual Gratuity received, © 1/2 x Average salary for 10 months preceding the month of] Least is exernpt naman retirement x Number of fully completed years of service + %20,00,000, Salary = Basic + DA (if forming part of Retirement Benefits) +] Commission on T/0. Gratuity from more than one Employer: Aggregate amount exempted shal nat exceed & 20,00,000. ‘Actual amt. received Less Amount exempt Least is exempt UNCOMMUTED PENSION NIL Fully taxable COMMUTATION OF PENSION [Sec.10(10A)] /a. Government Employee Fully exempt 7 NIL bb, Other Employee + Ifin receipt of Gratuity 1/3 x Full Value of || Actual amt, received 7 __ Pension is Exempt __|_Less Amount exempt_| + TF not in receipt of Gratuity Ya x Full Value of Pension | Actual amt. received _ 7 is Exempt___|_Less Amount exempt_| LEAVE ENCASHMENT DURING SERVICE - NIL Fully taxable ‘ LEAVE ENCASHMENT ON RETIREMENT [Sec.10(10AA)] (a)_Government Employees _ Fully exempt _ NIL (6) Other employees, Least of the following: ‘+ Amount actually received ‘Actual amount received Less Amount Exempt Least is Exempt FIRS.Fast Track Referencer ~ Padhuka's Handbook on Taxation ~ For CA Inter - AY 2022 - 2023, Particulars a Leave credit at 30 days p.a. for every completed year of service x Average Salary of past 10 months Salary = Basic + DA (if forming part of retirement benefits) + Commission on Turnover. If the assessee receives Leave Encashment from more than one employer, the aggregate amount of Leave Encashment exempted shall not exceed & 3,00,000. icin ; | ‘Net Amount Taxabie®| + Average Salary of past 10 Months x 10 Months + 3,00,000 RETRENCHMENT COMPENSATION [Sec.10(10B)] Least of — + Amount determined u/s 25F(b) of Industral Disputes Act, 1947 + Amount actually received + 5,00,000 Least is exempt ‘Actual amount received Less Amount exempt VOLUNTARY RETIREMENT COMPENSATION (if us 89(1) is not claimed) [Sec.10(10C)] & Rule 2BA, Least of - (@) Amount actually received (©) © 5,00,000 (©) Maximum of * Last drawn Salary x 3 x No. of fully completed years of service, or + Last drawn Salary x Balance of months of service left ‘Salary = Basic Pay + DA (if forming part of Retirement Benefits). This exemption can be availed by assessee only once in a lifetime, Least is exempt ‘Actual amount received Less Amount Exempt LEAVE TRAVEL ASSISTANCE Sec 10(5) — Rule 2B Twice in a block of four years: [Current Block is 2022-2025). (2) By Air ~ National Airways ~ Economy Class ~ Shortest route (0) By Train -1 Class AC fare ~ Shortest Route (©) By Recognized Transport ~ Deluxe Class ~ Shortest Route (d) By other means ~ 1 Chass AC Fare as per Railways, equivalent for distance traveled ~ Shortest Route ‘+ IFLTAis not availed twice in a block of 4 yrs, 1* LTA availed in the next 4 yrs block can be taken as if itis for previous block. + Exemption not available for more than two surviving children of an individual and born after 1.10.1998, + Wee. 01.04,2021, Where an individual daims the above exemption, no such exemption shall be allowed in respect of same expenditure to any other individual. ‘Amount is exempt only for the Shortest Route ‘Actual amount received Less Amount Exempt EMPLOYER CONTRIBUTION TO RPF Sec.10(12) Actual Contribution made Less 12% of Salary Salary = Basic + DA (If forming part of Retirement Benefits) NIL Fully Taxable EMPLOYER CONTRIBUTION TO URPF Taxable only at the time of actual receipt from URPF or transfer from| LURPF to RPF. (Amount + Interest thereon is taxable) NIL Fully Taxable INTEREST ON RPF: Actual Interest received Less Interest at 9.5% NIL Fully taxable /Allowance/Perquisites u/s 10(45): Notified Allowance or Perquisite paid to the Chairman / Retired [Chairman / of UPSC is exempt. Fully Exempt NIL INTEREST ON URPF: On Employee's contribution ~ taxable as Income from Other Sources Not Applicable HOUSE RENT ALLOWANCE [Sec.10(13A), Rule 2A]: ‘+ Actual HRA received for relevant period Least is Exempt Actual HRA Received Less Amount exempt FTR.Ani i EL | | Fast Track Referencer ~ Padhuka's Handbook on Taxation ~ For CA Inter — AY 2022 ~ 2023, z S|iExemption/ Deduction Net Amount T ‘© 50% (4 metros) / 40% (athers) of Salary of the relevant period. ‘© Rent for relevant period Less 10% of salary for relevant period. Salary = Basic + DA (if part of Retmt Benefits) + Comm. on TIO ‘Sec.10(14) ALLOWANCES — Partly Exempted (a) Children Education Allowance (for Maximum 2 Children) % 100 pm per child (b) Children Hostel Expenditure Allowance (for Max 2 Children) © 300 pm per child (©) Running Allowance for Transport Sector Employees 70% of Amount Received or {10,000 pm (4) Transport Allowance (only for differently abled persons) %3,200 pm. (e) Mining / Underground Allowance \(f) Tribal Area Allowance %200 p.m. (G) Composite Hill Compensatory Allowance 300 to % 7,000 p.m 1| amount received (h) Border Area, Remote Area, Disturbed Area Allowance 200 to ¥ 1,300 pm Less Amount Exempt’ (i) Compensatory Field Area Allowance 2,600 p.m. G) Compensatory, Modified Field Area Allowance 21,000 p.m. {k) Counter Insurgency Allowance 3,900 p.m. () High Altitude Allowance % 1,060 to = 1,600 pm (m) Special Compensatory Highly Active Field Area Allowance %4,200 p.m. (n)_Isiand Duty Allowance 3,250 p.m. Fully Exempted Allowances (i) Travelling Allowance (ii) Daily Allowance: (il) Conveyance Allowance peers (iv) Helper Allowance perros of fa NIL (v) Academic Allowance ‘duties (vi) Uniform Allowance (vii) Allowances / Perquisites to Govt. Employees for Services| rendered outside India ~ Sec.10(7) ‘GROSS SALARY (before Valuation of Perquisites) Total of above |Add: Valuation of Perquisites See Rule 3 Gross Salary Less: Deduction u/s 16 ‘Standard Deduction © 50,000 Entertainment Allowance Tax on Employment (Professional Tax) INCOME UNDER THE HEAD SALARIES VALUATION OF PERQUISITES 1, ACCOMMODATION PROVIDED BY THE EMPLOYER TO THE EMPLOYEE 1. Value of Unfurnished Accommodation ~ Explanation 1 to Sec.17(2). Nature of Perquisite © Ps Taxable Value of Perquisite ee Provided by Government License Fee determined by the Government Less Rent recovered from Employee __| Provided by Employer other than Central and State Government. (@) Owned by Employer In cities having population exceeding 25 Lakhs as per 2001 Census: 15% of Salary Less Rent actually paid by Employee In cities having population exceeding 10 Lakhs but not exceeding 25 Lakhs as per 2001 Census: 10% of Salary Less Rent actually paid by Employee In Other places: 7.5% of Salary Less Rent actually paid by the Employee FIRALfast Tack Referencer ~ Padhuka’s Handbook on Taxation — For CA Inter ~ AY 2022 — 2023 ature of Perquisite fy ___ Taxable Value of Perquisite '(b) Taken on Lease by the Employer |Rent paid by Employer or 15% of Salary, whichever is lower |Less Rent recovered from Employee [(0) Accommodation in hotel 24% of Salary paid / payable or Actual Charges paid / payable, whichever s lower L | Less Amount paid or payable by the Employee Hotel Accommodation: Accommodation provided in a Hotel will nt be a taxable perquisite II — * The period of such accommodation does not exceed 15 days, * Such accommodation has been provided on the transfer ofthe Employee from one place to another, 2._Valuation of Furnished Accommodatio i ans ere Value of Unfurnished Accommodation as above 00 JAdd: Value of Furniture ~ _TFowned by Employer, then 10% per annum of Original Cost of such Furniture 200 = If hired from Third Party, then Actual Hire Charges 200 Less: _Any charges paid or payable by the Employee (000) Value of Furnished Accommodation 200K Note: Fumiture incudes Television Sels, Radio, Refrigerator, other Household Appliance, Ai-Condlioning Fant or Equipment. VALUATION NOT APPLICABLE (2) Employees Covered: Employees working at — Mining Site, Onshore Oil Exploration Site, Offshore Site, Project Execution Site, Dam Site, Power Generation Site. (b) Condi + The accommodation should be of a temporary nature and ‘+ Plinth area should not exceed 800 Square Feet. * Accommodation should be located atleast 8 kms away from local limits of Municipality / Cantonment or located in a emote area (i.e. 40 kms away from town with less than 20,000 population) VALUAI IF ACCOMMODATION IN CASE OF EI ON TRANSFI (2) For the first 90 days of transfer: Where accommodation is provided both at existing place of work and in new place, the accommodation, which has lower value, shall be taxable, (b) After 90 days: Both accommodations shall be taxable, HM SALARY FOR VALUATION OF ACCOMMODATIC "ACILITIES Stary nade Salary ekelndes + Basic Salary + Other DAL + DAA. if considered for Retirement Benefits * Employer's Contribution to PF + All Taxable Allowances * Exempted Allowances * Bonus or Commission or Ex-gratia + Value of Perquisites /+__Any other Monetary Payment _ + Value of Perquisites specifically excluded 2. VALUATION OF OTHER PERQUISITES Rule Nature of Perquisité vo a5 |) Taxable Value of Perduisite (rve) 3(3) | Semice of Sweeper, Gardener or Watchman |” Actual Cost to the Employer | or Personal Attendant ‘Less: Amount paid by the Employee . | ; Procured from outside Agency: Amount paid to outside agency 3(4) cto ey orWater for | Resources owned by ‘employer himself: Manufacturing cost pu _ Less: Amount paid by the Employee | 3(5) | Education facies to members of is If the Cost of Education per Child does not exceed & 1,000 p.m, ~ ! household Not Taxable, otherwise fully taxable, | ® Paeread WOETERTaite Cost tothe Employer (See limit of ® 1,000 pm above.) school sponsored by the Employer | LESS: Amount recovered from Employee | FIRAZ_Fast Track Referencer ~ Padhuka's Hand ‘on Taxation ~ For CA Inter ~ AY 2022 ~ 2023 Rule = Nature of Perquisite. | | Taxable Value of Perquisite (IVP) == a (b) Other Schools Cost of education in similar locality / institution Less: _ Amount recovered from Employee ‘Transportation of goods or passengers at. ‘Value at which offered to Public 346) | fee or concessional rate provided by the | Less: Amount recovered fom the Employee employer engaged in that business (other than Railways / Airlines) _ — Housing Loan / Vehicle Loan—For |» Interest Charged by Employer 2 SBI Rate: acquiring Capital Assets and not for |. Interest charged is lower than SBI rates: repairs Interest at SBI rates on maximum outstanding balance 'SBI Rate = SBI Rate prevailing on the ; Fist Day ofthe Previous Year Less: Interest paid by the Employee on that loan. ‘Interest Charged by Employer = SBI Rates: NOT Taxable. Interest charged is lower than SBI rates: Interest at SBI Rate on maximum outstanding balance Less: Interest paid by the Employee on that Loan Exceptions: (2) Medical Loan for treatment of diseases specified in Rule 3A except Loan reimbursed by Medical Insurance. [{(b) Loan not exceeding & 20,000 in aggregate. 307 Other Loans Traveling, Touring, Accommodation and 3(7) | Other Expenses met by the Employer ‘Amount incurred by Employer or Value offered to public i)__| other than specified in Rule 28, (To be“ | Less: Amount recovered from Employee ‘calculated only forthe periad of vacation) ne Free Meals during office hours + Actual Cost to the Employer (upto © 50 per Meal / Tea/ Snacks | 3(7) | Free Meal in remote area or offshore | NOT taxable) Less Amount recovered from the Employee installation area is not a taxable perquisite | « Tea or Non-Alcoholic Beverages / Snacks during working hours are not taxable 3(7) | Value of any oft or voucher or token other | » Value of Git. (iv) _| than gifts made in cash or convertible into In case the aggregate value of gift during the previous year is money (¢.9, gift cheques) on Ceremonies. less than % 5,000, then itis not a taxable perquisite. 3(7)_| Expenditure incurred on creditcard or add + Actual expenciture to Employer Less Amount recovered from (v)_| on card including membership fee and Employee. annual fee. ‘+ IF itis incurred for official purpose and supported by necessary documents then it is not taxable. 3(7) | Expenditure on Club other than Health [+ Actual Expenditure incurred by the Employer Less Amount (vi) | Club or Sports Club or similar facies recovered from Employee. | Provided uniformly to all Employees. «If the expenditure is incurred exclusively for official purposes and supported by necessary documents then itis not taxable, ‘+ Initial Fee of Corporate Membership of a Club is not a taxable ee erquisite, Use of any Movable Asset other than 10% of Actual Cost if owned by the Employer, or 2G} | Computer or Laptops or athe assets Actual Rental Charge Pid / Payable by Employer Seady mentioned Less: Amount recovered from Employee Transfer of Movable Asset to Employees: ‘Computers & Electronic Items Motor Car ‘Other Assets ‘Actual Cost ‘Actual Cost ‘Actual Cost Less: Depreciation @ 50% for every _| Less: Depreciation @ 20% for |Less: Depreciation @ 10% for 30) completed year under WOV | every completed year | every completed year om method. under WOV method. under SLM Method. | Value of the Asset Value ofthe Asset | Value of the Asset Less: Amount recovered from the Less: Amount recovered from |Less: Amount recovered from the |___employee | the employee employee | Value of the perquisite ‘Value of the perquisite _| Value of the perquisite + Electronic gadgets include Computer, Digital Diaries and Printers, but extlude washing machines, Microwave FIRBrack Referencer ~ Padhuka's Handbook on Taxation ~ For CA Inter — AY 2022 ~ 2023 Nature of Perquisite Taxable Value of Perquisite (TVP), ovens, Mixers, Hot plates, Ovens ett. + Transfer of assets, which are 10 years old, shall not attract taxability. '3(7) | Any other benefit or amenities or service or Cost to the employer (bx) | right or privilege provided by the employer | Less: Amount recovered from employee other than telephone or mobile phone | a _ ‘+ Member of household includes Spouse(s), Children & their spouses, Parents, Servants and dependents. ‘+ Completed year means actual completed year from the date of acquisition of asset to the date of transfer of such asset to Employees, [Rule 3. TAXABILITY OF MOTOR CAR BENEFITS [Rule 3(2)(A)] Taxable Value of Perquisite Purpese? eae Fully Official Not a perquisite provided the documents specified in _| Rute 3(2)(6) are maintained, 1(b) Employer Employer | Fully personal use | Agaregate of - (a) Actual expenditure on car (b) Remuneration to Chauffeur (©) 10% of the Cost of Car (normal wear & tear) Less: Amount charged from Employee 1(6) Employer Employer | Partly for offical and | Cubic Capacity of Car Engine upto 1.6 Lires partly for personal | & 1,800 p.m. + © 900 p.m. for Chauffeur | Cubic Capacity of Car Engine above 1.6 Litres 2,400 p.m. + 2 900 p.m. for Chauffeur 2(a) Employer | Employee | Fully Oia use | NOP 521 are nahtabed [See Noted bebe” ae Employee [Fully Personal | 10% of the Cost of Car (normal wear & tea) / hire charges Employee | Partiy for official and | Cubic Capacity of Car Engine upto 1.6 Litres partly for personal | & 600 p,m. + € 900 p.m. for Chauffeur Cubic Capacity of Car Engine above 1.6 Litres _ | £900 pam. + % 900 p.m. for Chauffeur Employer | Fully oficial use Not a perquisite provided documents as per Rule 3(2\(8) 3(@) Employee | are maintained. Employer | Party for official use | Subject to Rule 3(2)(6) 3(b) Employ and partly for | Actual Expenditure incurred Less eae Personal use Car Cubic Capacity upto 1.6 Litres - Value as per 1(c}) Car Cubic Capacity above 1.6 Litres ~ Value as per 1(c)() 2(b) Employer 2(6) Employer '3(c) Employee Employer | Fully Personal | Actual Expenses incurred by Employer. 3(i) Employee owns | Employer | Fully official use Not a Perquisite provided documents as per Rule other auto-motive but 3(2)(B) are maintained | not car 3(li) Employee owns | Employer | Partly for official and | Subject to Rule 3(2)(B) | other auto-motive but Partly for personal | Actual Expenditure incurred by Employer | not car use | bess: € $00 pm Notes: 1, Using Cars from a Pool of Cars owned or hired by Employer: ‘The employee is permitted to use any or all cars for both official and personal use: _ For one car Valued as per 1(0)i) For more than one car __| Valued as per 1(b) asi uly used for personal purpose 2, Documents to be maintained for claiming ‘not taxable perquisite’ or higher deduction wherever applicable. [Rule 32\(6)) FIR.i4Fast Track Referencer ~ Padhuka's Handbook on Taxation — (2022 ~ 2023, (2) Employer should maintain complete details of journey undertaken for official purpose, which includes date of journey, destination, mileage and amount of expenditure incurred thereon. (b) Certificate of supervising authority of the employee, wherever applicable, to the effect that the expenditure was incurred wholly and exclusively for performance of official duties, should be provided. 5 INCOME FROM HOUSE PROPERTY [Sec.27]; Person treated as Owner even if no document of tite is rested in his name, Indudes~ ‘Property transferred to Spouse or Minor Child for inadequate consideration, + Holder of Impartible estate, ‘+ Member of Co-operative Society, Company, etc. who is allotted a House Property, + Part-performance of a Contract u/s 53A of the Transfer of Property Act, + Holder of a Power of Attomey, + Property constructed on a Leasehold Land, * Ownership of Property is under dispute, + Lessee of a Property taken on a lease for a period of not less than 12 years. Unrealised Rent (Sec.23(1) Expln]: Reduced from Actual Rent, if (2) Tenancy is Bonafide, (b) Tenant has vacated the property, (c) Tenant not in occupation of any other Property of Assessee, (d) Steps taken for Recovery. Recovery of Unrealised Rent [Sec.25A]: Treated as the Income of the Previous Year in which itis realized, to the extent ofthe benefit enjoyed by way of reduction in Net Annual Value. 30% deduction willbe allowed against such receipt / recovery of Unrealised Rent.. Municipal Tax including Tax for Services [Sec.23(1) Proviso]: Paid during curent previous year allowed as deduction. Deductions u/s 24: 30% of NAV and Interest on Borrowed Capital. ‘Treatment of Prior Period Interest [Sec.24 ExpIn.]: Allowed in 5 equal installments from the PY in which acquisition was made or construction completed, [Interest paid outside India [5.25]: Disalowed if paid without deduction of TDS and no person treated as Agent u/s 163. Determination of Annual Value [Sec.23(1)(a)/(b)/(€) In case of Let Out Property - see Note 1,2 Below Table, SSelf-Occupied Property or SOP kept vacant due to employment or business [Sec.23(2)}: Annual Value is NIL, tf Not Let Out fr any part ofthe year & no benefit derived therefrom. [SOP-=Self Occupied Property} More than Two House Property Self Occupied [Sec.23(4)]: Two house treated Self Occupied, and all other Houses: Deemed Let Out at the option of the Assessee, Receipt of Arrears of Rent [Sec.25A]: Treated as Income of the PY in which it is received, 30% of Arrears shall be| allowed as deduction. ‘Co-Ownership [Sec.26]: If their Shares are defined, it is assessable in their hands independently to the extent oftheir Share, otherwise assessable as an AOP.. [Income from a House Property earned in Foreign Currency [Rule 115]: Determined at TT Buying Rate of such ‘currency on the last day of RPY. [Annual Value of House Property held as Stock in Trade — Sec.23(5) wees. 01.04.2018: Property consisting of any Building / Land appurtenant thereto, held as Stock in Trade and is not let out during the whole| or any part of the PY. ‘Annual Value of that property or part of the property, for the period upto 2 year from the end of the FY in which the| certificate of completion of construction of the property is obtained from the Competent Authority, shall be taken as NIL. Note 1 Annual Value u/s 23(1)(a)/(b) Note 2 Annual Value u/s 23(1)(c) Step 4: Compare Fair Rent and Municipal Value and | Step 4: Compare Fair Rent with Municipal Value and select select whichever is higher. | whichever is higher. FIRASFast Track Referencer ~ Padhuka's Handbook on Taxation ~ For CA Inter ~ AY 2022 - 2023, ‘Step 2: Compare Step 1 with Standard Rent select | Step 2: Compare Step 1 with Standard Rent, if applicable — whichever is lower. (a) If Step 1 > Standard Rent, select Standard Rent, | (b) Step 1 < Standard Rent, then select Step 1 | Step 3: Compare Step 2 with Actual Rent Received or | Step 3: Compare Actual Rent Received or Receivable for the Receivable (excluding Unrealized Rent under Rule Whole Period (excluding Unrealized Rent under Rule 4) 4). The Higher Value in Step 3 is Annuel Value. with Step 2. The higher figure shall be the Annual Value. | ‘Step 4: Applicable only if the higher figure in Step 3 is Actual Rent Received. If owing to such Vacancy, Rent Received or Receivable is less, then Annual Value is Rent Received or Receivable for the let-out periad only. COMPUTATION OF INCOME FROM HOUSE PROPERTY SOP or ‘SOP Let-out | 5 neon ot tere | SOP for part of i kept | Let-out for | property kept | Property the year and let Particulars | vacant | Fullyear |” vacant for pacotthe | Probe’ | out for part of | u/s | whole year : the year 3a) | year | occupied (4) Q2) @) (4) | (5) (6) _ | For Whole year is u/s 23(1)(a)(b) | u/s.23(1{c) js 23(1)(¢) | seiaied Val NIL | (Refer Note 1) | (Refer Note 2) | (Refer Note 2) ZBELVEIO) (Refer te 2) | two |__Notea) | Less: Munidpal Tax | jyq | Municipal Tax | Municipal Tax | Municipal Tax | property | Municipal Tax Paid paid Paid |__Paid Paid tke |__for Whole year Balance NIL nav | _ (NAV) NAV Column 1 Nv Less: Dedn. u/s 24_| | __| General Dedns| Other nL | 30% ofNaV | NIL 30% OFNAV | properties | 309% of NAV 72,00,000 i] like | Column 2 | Interest for Whole (Acqn, Construction, | (oF) ; Ranwis’Renewsts” | 30,000 | Nolin No Limit No Limit ve No caig Reconstruction) | (Note) oo L Note: (2) Conditions for Interest on Housing Loan upto a maximum (b) Interest on Housing Loan upto a of 2,00,000: maximum of % 30,000, + Loan taken for acquisition or construction of House Property, + Any of the above conditions in (a) is not + onor after 01.04.1999 satisfied or + Acquisition or Construction should be completed within S years + Loan is taken for repair, renovation or from the end of the financial year in which capital was borrowed. reconstruction at ay point of time. Note: w.e.f 01.04.2020, Maximum amount of deduction u/s 24 shall be allowed as < 2,00,000 PROFITS & GAINS OF BUSINESS OR PROFESSION COMPUTATION OF INCOME UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION [Sec.29] es Pad Item Res “Conditions //Restrictions Net Profit as per Profit and Loss Account “Lessi- | Allowable Expenditure and not debited to Profit & Loss A/é 30. Rent, Rates, Taxes, Repairs and Insurance for Building ‘Current-Repairs of capital nature not allowed as a deduction FIR.A6_Fast Track Referencer ~ Padhuka’s Handbook on Taxation ~ For CA Inter ~ AY 2022 ~ 2023 3 Section. PAL Items) Le. Conditions'/ Réstrictions 9) Repairs & Insurance for Machinery, Plant & Furniture [Current Repairs of capital nature not allowed as a deduction Depreciation 1. Conditions for Claim: (a) Ownership,(b) Use, (C) Block of Assets, (4) Mandatory. 2. Method: (a) SLM Optional for Tangible Assets of Power Sector Units, (b) WDV Method in all ther cases, 3. Newly acquired assets during current PY put into use for less than 180 days, entitled for depreciation at 50% of Normal Rate. 4. Balance Additional Depreciation allowable in next PY: If Additional Depreciation is restricted to 50% of allowable amount since used for < 180 days, the balance 50% shall be allowed u/s 32 in the Immediately succeeding previous year in respect of such asset w.e.f. 01.04.2016] 5. Additional Depreciation: 20% of Actual Cost of Machinery or Plant (10% if used for < 180 days). 6. Days Ratio apportionment for Succession/Business Re-organsation. 7. STCG/STCL on Sale of Depreciable Assets u/s 50 '8. Unabsorbed Depreciation carried forward for any number of years} set off against any Income. Where Agricultural Produce of the Assessee used as Raw Material for Manufacture [Average Market Price of Agricutural Produce consumed is debited to Manufacturing Account. No deduction towards Agricultural Operations shall be allowed. Rule7a [income from growing and manufacture of Rubber {65% of POB Agricultural Income 35% oF POB is Business Income Rule7e income from grown and cured Coffee 75% of POB Agricultural Income Rule7e [Income from grown and cured, roasted and grounded Coffee 60% of POB Agricultural Income 40% of POB is Business Income income from growing and manufacture of Tea {60% of POB Agricultural Income 40% of POB is Business Income —_ Expenditure on Scientific Research (A) In-House Research Revenue (or) Capital Expenditure, and Prior Period Expenditure of 3 years fully allovied as deduction in year of commencement of business. Research by Company engaged in Bio-Technology or of Manufacture or Production of any article or thing (not specified (@)Beducon on Tr-Roue 100% of Revenue or Capital Expenditure incurred (excent Land & Building) is allowed. Building 100% allowed, Prior Period Expenditure 100% allowed. '* The prescribed authority shall submit its report in relation to the | _inXd Schedule) approval of the said facility to PCCIT/CCIT/PDGIT/DGIT. Laz Payment made to Deduction % Any Research Association (or) University / College, etc. 100% for Scientific Research 7 a Company approved by Prescribed Authority for’ is _ (©) Deduction for Contributions | crete RAD. 100% Any Research Associaton (or) University / College, etc.| 59, for Social Science or Statistical Research a _ National Laboratory/University/IIT/Specified Person 100% | Expenditure for Specified Business ~ (@) Cross Country Natural Gas Pipe Line Network (b) Cold Chain Facility, Ware Housing Facility for Storage of Agricultural Produce. General: 100% of Capital Expenditure incurred, except on Land, Goodwill or Financial Instrument, ‘+ Prior Period Expenditure: 100% allowed, if capitalized in Books. No other deduction allowed for same expenditure, Provisions of| ‘80A and 80-IA shall apply for goods in specified business. + No Double Deduction: For Assessee claiming deduction u/s| (0) Building 2 Star Hotel, Hospital 35AD, no deduction shall be allowed u/s 10AA or Chapter VI-A “C|Fast Track Referencer ~ Padhuka's Handbook on Taxation ~ For CA Inter - AY 2022 ~ 2023 Litem | < Micaniditions Restrictions = with atleast 100 beds, Housing Project for Slum Redevelopment Developing & Building a Housing Project under a scheme framed by CG / SG Production of Fertilizer in India Setting up and Operating inland Container Depot or Freight Station, Bee-keeping, Warehousing Facity for Storage of Sugar Laying and operating a Slurry Pipeline for the transportation of Iron Ore Setting-up and operating a Semi Conductor Wafer Fabrication Manufacturing Unit, and wihich is notified by CBDT w.e-f, 01.04.2018 Business of| developing or maintaining and ‘operating or developing, maintaining and operating a New Infrastructure Faciity Deductions in respect of Certain Incomes’. | + Usage: Any asset in respect of which a deduction is claimed and] allowed u/s 35D shall be used only for the Specified Business, for | 8 years beginning with the previous year in which such asset is! acquired or constructed. | + No Deduction in case of cash payments exceeding z 10,000: Capital Expenditure in respect of which, payment or aggregate | of payments made to a person in a day, exceeding ¢ 10,000 is made) otherwise than by an A/c Payee Cheque drawn on a Bank or an AJc| Payee Bank Draft or use of ECS through @ Bank acoount or such other | electronic mode as may be prescribed is disallowed. + Taxable for non-usage of Asset: (@) Situation: Asset used for other purpose during the 8-year period except demolished / discarded / destroyed / transferred | as referred u/s 28(vi) (b) Taxable Amount: Total Amount of deduction daimed and | allowed in one or more previous years, as reduced by the amount of Depreciation Allowable u/s 32, shall be deemed to| be the Income of the Assessee, as if no deduction u/s 35AD was allowed, (c) Manner of Charge: It is chargeable as "PGBP" of the| Previous year in which the asset is so used, (d) Exception: The above shall not apply to a Company which has become a Sick Industrial Company u/s 17(1) of the Sick| Industrial Companies (Special Provisions) Act, 1985, during the 8 year period. Payment to Associations and Institutions for Rural Development Programmes 100% Contribution shall be allowed as deduction. If approval is| withdrawn subsequent to payment, then deduction cannot be denied. Expenditure on Agricultural Extension Project notified by CBDT 150% of the expenditure incurred “VExpenditure on Skill Development| Project notified by CBDT. 150% of the expenditure incurred (other than cost of Land & Building) ‘Amortisation of Preliminary Expenses incurred for setting up or extension ‘undertaking or Business Unit. + For Indian Compani Employed. Resident Non-Corporates: 5% of Cost of Project. + _Time Period: Amortised in 5 equal instalments, + 5% of Cost of Project, or 596 of Capital] ae ‘Amortisation of Expenditure incurred|* Allowed in 5 installments after the payment was made. * sj under VRS + Deduction to Resulting Entity in case of Business Re-organization, |. 36(4)(i)__| Insurance Premium of Stocks [Allowed on Payment basis. * 36(4)(ia) | Insurance Premium on Life of Cattle [Allowed on Payment basis — for Federal Mik Co-operative Society. 36(1)(ib) | Insurance on Health of Employees Allowed on Payment basis. Payment in any mode other than Cash, | 36(2)(iI)_| Bonus or Commission to Employees | Alowed when paid before due date offing Return (Sec.436] “36(4)(ii) | Interest on Borrowed Capital fra ae eek cu date offing Ret In respect of Loans * Applicable for Infrastructure Capital Co. / Fund, Public Sector Co &| 36(2)( Illa) | Discount on Zero Coupon Bonds Scheduled Bank, s - ___|+ Written off over the period of the Bond. 36(4)(0) Res perenne "lowed when paid before due date of fling Retumn (Se438] ‘buts Contribution should not exceed 10% of the Salary 361) 18) ee act PEtSON| tary indudes Dif the tems of employment sp provid, but excludes all other Allowances and Perquisites, 36(1)(V) Employer's Contribution to _an| Allowed when paid before due date offing Return (Sec438) FTR.ABFast Track Referencer ~ Padhuka's Handbook on Taxation ~ For CA Inter — AY 2022 ~ 2023, [Pat item TT Conditions / Restricts ae S| [Approved Gratuity Fund Welfare Funds Recoveries from Employees towards Paid before the prescribed due date (Including grace days) under the respective Act [ESI / EPF, etc] [Note: Sec. 438 shall not apply and shall be deemed never to have been applied for the purposes of determining the “due date” for Sec. 36(1\(va)} [Allowance in respect of dead yermanently useless animals ‘or|Cost of Animal Less Insurance Claim or any other receipt. No amortization of cost is allowed, iad Debts Revenue Bad Debts subject to write-off in the books of accounts. Planning amongst the Employees Securities Transaction Tax Paid Expenditure on promoting Family [Banking Cash Transaction Tax paid _| Allowed as a deduction [+ Allowable only for Companies. Revenue Expenditure is fully allowed. Capital Expenditure is allowed in five equel installments, Fully allowed as deduction only when paid if Income from such transaction is included as PGBP. Commodities Transaction Tax Paid | course of the Assessee's business during the previous year. + Taxable Commodities Transactions should be entered into in the + _Income arising from such transactions is included as PGBP. Deduction in respect of any Marked to market loss or other expected | Deciuction in respect of Marked to ae as or ther Expected ozs | Sal Be alowed f the same compet in aetanc wih the Income Computation and Disclosure Standards notified u/s 145(2). General Deductions Revenue Expenses, wholy and exclusively non-personal, related to| Business and not contrary to provision of law, fully allowed, Corporate Social Responsibility (CSR) expenditure us 135 of the Companies Act, 2013 is not allowed. inadmissible Expenditures debited in Pi 38 “YBuilding, etc. partly ‘Souvenir, Brochure, Pampk business, Advertisement in Political Parties’ etc. Fully disallowed for Proportionate Depreciation and Expenses used for non-business| purpose disallowed. | |Payments of Interest, Royalty, Fees|(b) W.e.f. AY 2020-2021, Where an Assessee falls to deduct tax at [for Technical Services or other sum source but is not deemed to be an Assessee in Default u/s 201(1), (2) Payable Outside India or (b) In India to a Non-Resident (not being @ Company) or (C) to a Foreign Company without TDS, entire expenditure is not allowed. then it shall be deemed that the Assessee has deducted and paid| the tax on such sum, on the date of furnishing of Return of Income| by the Payee. 40(a)(ia) Retum u/s 139(1). ‘Any Payment made to a Resident, ‘on which Tax is deductible, but tax' it fas not. been” deducted” /~ after| 2: Alowabe in the year of remittance of TDS. Getuetion, tax has not been paid} Note: If Payer fais to deduct TDS, but is not deemed to be an before the due date of furnishing assessee in default u/s 2011), it is deemed that TDS is deducted and 1, 30% of the Expense will not be allowed. paid on the date of furnishing Return of Income by the Resident Payee. 4n(ay( Rates or Taxes levied on Profits or| Not allowed as deduction, (Including tax pald abroad, eligible for rei / Gains of any business or profession _| deduction u/s 90/904/91) 40(a)(iia) Wealth Tax Fully disallowed -4o(ayib) other Fee or Charge levied on, [appropriated either directly Undertakings by the State Govt Royalty, License Fee, Service Fee, Privilege Fee, Service Charge or any indirectly from, State Government] or or | Fully disallowed 40(a)(iil) Resident ‘Salary paid outside India or to Non-| Payment without TDS not allowed FIRAgFast Track Referencer — Padhuka's Handbook on Taxation ~ For CA Inter ~ AY 2022 - 2023 408(2) Section | Se Palitem _ Conditions //Restrictions ae: yay) [Contribution to Welfare Fund of| 491210) | empioyees fn arengements for Tos|"ot alowed _ 40(a)(v): | Tax on Perquisites paid by Employer |Not allowed _ | saxo). |For, Fares Fem THEE as 125 or as pecans Ded = |For Partnership Firm, Remuneration Book Profit Maximum Remuneration 40(b) allowable = Least of: folowing or Upto & 3 Lakhs 1,50,000 or 90% of Book Profit i 2° Per Partnership Deed or paid— On balance 60% of Book Profit, 40(ba) | Disalowances in case of AOP/GOI__| Interest, Remuneration, etc paid to Member shall not be alowed, Payments to Relatives as specified |P2¥Ment considered as excessive or unreasonable shal not be alowed. No disallowance, if transaction is at Arm’s Length Price as per Sec.92F, 40A(3) & | Single or Aggregate Payments in respect of allowable expenditure in excess of & 10,000, (% 35,000 if Payment is made for Plying, Hiring ‘or Leasing Goods Carriages) other ‘Ac Payee DD/ use of electronic| Rule pb |" BY way of Alc Payee Cheque or “\clearing system through a Bank “Account or such other electronic! mode as may be prescribed to a ||single person on a single day. [+ Whole of the payment shall be disallowed. Expenditure allowed on due basis but aggregate payments made in subsequent P.Y.s in excess of € 10,000/ 35,000 shall be disallowed. Exceptions given in Rule 6DD Provision for Gratuity |Disalowed, except in case of provision for contribution to Recognised Gratuity Fund or actual lability incurred, Funds Contribution to Non-Recognised|" Payment to any Unrecognised / Non-Statutory Employer Welfare| Fund is disallowed, + Contribution u/s 36(1)v) / (iva) /(v) or under any law, is allowable. Marked to Market Loss or other| Expected Loss 1. No deduction or allowance shall be allowed in respect of any| marked to market loss or other expected loss except as allowable ufs 36(1)(xvii). 2. In other words, loss can be allowed only if it is computed accordance with the provisions of ICDS. |S. Leave Salary. Dedlutions only on actual payment. |” Raiway Assets. ‘A. Items covered: 1. Employers’ Contribution to RPF or other Employee Welfare Funds, 2. Tax, Duty, Coss, etc, 3, Bonus or Commission to Employees, 4 Interest payable to Public Financial Institution or Scheduled Bank,Co-operative Bank, Rural Development Bank, NBFC'S 6. Any sum payable by Assessee to the Indian Railways for use of| 438. B, Allowability: : + lowed if paid on or before due date of filing Return u/s 139(1). + Otherwise itis alowed only in the year of payment. {Note: Sec. 438 shall not apply and shall be deemed never to have been applied to a sum received by the assessee from any of his Jemployees to which the provisions of Sec. 2(24)x) applies, i.e. Employees Contribution to PF, Superannuation Fund, ESI or any other| | fund] Add: _|Sec4i—Deemed Business Income Goan ee Less: _| Incomes credited in Profit and Loss Account not chargeable to tax under this head. + Agricultural Income + Exempt Income w/s 10 TRONFast Track Referencer ~ Padhuka's Handbook on Taxation ~ For CA Inter-— AY 2022 ~ 2023 SLT SEE Conditions //Restrictions sone Income chargeable under the. heads Salary, House Property, Capital Gains or Other Sources Any Reserve Withdrawn Dividend income Bad Debts Recovered not allowed as deduction in the earlier years [Expenditure debited to Profit and Lass A/c but hot deductible under this head + Expenditure on Agricultural Income Expendituré incurred in relation to Exempt Income Expenditure incurred in relation to other Heads of Income like Salary, HP, Capital Gains or Other Sources, Any Reserve créated other than allowable Statutory Reserve u/s 33AC oF 36(1) Debits in PBL Ac allowable as Deduction under Chapter VI-A Capital Expenditure © = °F ° Personal expenditure CChanties and Donations Depreciation as per Books Preliminary Expenses in excess of permissible imit Ege ‘Income chargeable under the head PROFITS AND GAINS OF BUSINESS OR PROFESSION OT Reeriber ae! ‘Income under the head PGBP: Sec, 28 defines what Income is chargeable to tax undef this head, and includes sum received on account of any Capital Asset allowed'as deduction u/s 35AD. Recovery of Loss or Expenditure already allowed or remission of liability [Sec.41(1)]: Recovered Amount shall be| deemed to be PGBP for him or successor of Business and chargeable to tax in the PY of receipt. Profit on Sale of assets of Power Sector Unit which has claimed Depreciation under SLM [Sec.41(2)]: If Moneys, payable is greater than WDV, then the difference between Actual Cost and WDV shall be chargeable tax as Business Income in the PY in which the amount is due. [Amount realized on Sale of Capital Asset used for Scientific Research (Sec.41(3)]: Lower of ~ () Amount of] Deduction, or (ji) Sale Proceeds, is chargeable to tax as PGP in the PY of transfer. Recovery of Bad Debt allowed u/s 36(1)(vil) [Sec.41(4)]: 11, If Recovered amount is greater than the Unallowed Amount, then such excess is treated as Income us 41(4). 2: Ifthe Recovered amounts less than the Unallowed Amount, then such deficiency is allowed as deduction u/s 36(2)(i). Note: Recovery by Successor of business is not Taxable, ‘Set off of Losses incurred in the year of discontinuance of business [Sec.41(5 /41(4), 41(3), 41(4), 41(48). [Deductions in case of business for prospecting etc. for mineral oil [Sec.42]: Provision as per Income Tax Act or provision as per the agreement with the Government, whichever is beneficial to the Assessee shall apply. ‘Changes in Rate of Exchange of Currency [Sec.43A]; Fluctuation related to ~ (2) Depreciable Asset ~ Adjusted towards Actual Cost/ WDV. (b)_ Revenue — Adjusted towards Income ‘Taxation of Foreign Exchange Fluctuation: 1. Nature of Income [Sec.43AA(2)]: Any gain or loss arising on account ofthe effects of change in foreign exchange rates of all foreign currency transactions, including those relating to— () monetary items and non-monetary items, {i) translation of fnancil statements of foreign operations, (ii) forward exchange contracts, (wv) foreign currency translation reserves. 2. Taxability [Sec.43AA(1)]: Subject to the provisions of Sec.43A, above referred Gain or Loss shall be treated as income of Loss, and such gain or loss shall be computed in accordance with the ICDS notified u/s 145(2) ‘Cost of Acquisition of Stock in Trade [S.43C] Cost to Previous Owner (+) Cost of Transfer (+)Cost of Improvement Full Value of Consideration in certain cases [Sec. 43CA] - ~ 41. Situation : Consideration received or accruing to the Assessee < Value adopted by the Stamp Valuation Authority. Full Value of Consideration = Value adopted by Stamp Valuation Authority, for Transfer of Land / Building other| than Capital Assets First set off against Income u/s FIRFast Track Referencer ~ Pachuka's Handbook on Taxation - For CA Inter ~ AY 2022 ~ 2023 iE os Points to Remember 0 ‘Computation of Income from Construction and Service contracts [Sec.43CB]: 4, Nature of Income: The profits and gains arising from a construction contractor a contract for providing services 2. Determination of Income: Such Income shall be determined on the basis of Percentage of Completion method in accordance with ICDS notified u/s 145(2) 3. Exception: For the following services profits and gains shall be based on — Nature of Contract | Basis of Determination Duration of contract not more than 90 days Project completion method | Contract involving indeterminate number of acts over a specific period of | Straight line method | time {interest on Bad Debts and Doubtful Debts for Scheduled Bank, etc [Sec.43D]: Treated as the Income in the year of Credit to P&L A/c or Year of Receipt, whichever is earlier. W.e.f 01.04.2020 Sec.43D, is amended to include deposit— {taking NBFC’s and Systemically Important Non—deposit taking NBFCs within the scope of this section. | Speculative Transactions [Sec.43(5)]: 1, Transactions involving transfer of Commodities, Securities, etc. which are settled without actual delivery. Derivative! ‘Transactions including Commodity Derivatives are not speculative. 2. Condition of CTT not applicable: For transaction in respect of trading in agricultural commodity derivatives, the requirement of chargeabilty to commodity transactions tax under Chapter VII ofthe Finance Act, 2013 shall not apply. 3. Non Speculative Transaction: A transaction in respect of trading of agrcutural commodity derivatives, which is not chargeable to CTT, in@ registered stock exchange, willbe treated as non-speculative transaction. Income of Insurance Business [Sec.44]: Income shal be computed as per I Schedule of the Ack. Deduction in the case of Trade, Professional or Similar Association [Sec.44A]: Excess of expenditure incurred for | members over and above the subscriptions received from Members shall be allowed as deduction subject to @ maximum of 50% of Total Income. - Maintenance of Accounts [Sec.44AA, Rule 6F] 1, Notified Professionals: Gross Receipts or Income exceeds & 1,50,000 in all three Prior Previous Years. 2. Non—Specified Professionals and Business Assesses: * Business Income exceeds % 1,20,000 either during the current PY in which business commences or any one of| three Prior Previous Years. [W.e.f 01.04.2018, for Individuals & HUF, the limit is 2,50,000] * Gross Turnover or Receipts exceeds € 10 Lakhs either during the current PY in which business commences or any one of three Prior Previous Years. [w.e.f 01.04.2048, for Individuals & HUF, the limit is 25,00,000] * Declaring lesser income than as prescribed u/s 44AD/44AE/44B5/4488B + w.e,f, 01.04.2017, Eligible Assessee to whom provisions of Sec.44AD(4) applies, and whose Income exceeds the maximum amount which is not chargeble to tax in any previous year. /Audit of Accounts [Sec.44AB, Rule 6G]: 1. Business Assessee: Gross Tumover or Receipt exceeds & 1,00,00,000. 2, Professionals: Gross Income or Receipts exceeds @ 50,00,000 3. Dectaring lesser Income than as prescribed u/s 44AD / 44AE / 44BB / 44BBB / 44ADA and Income exceeds the Basic Exemption Limit in any PY for the business u/s 44AD(4) [Due Date of filing the Tax Audit Report is as per Sec.139(1)] }4. W.e¥.01.04.2018, From the requirement of Auct of Books of Accounts u/s Sec4B, folowing person is excluded — + Eligible person, who declares Profits for the PY u/s 44AD(1) and + his Total Sales, Total Tumover or Gross Receipts, in business does not exceed & 2 Crores in that PY __+ _ Cash Receipts & Payments not exceed 5% ofthe total Receipt 7 Tumover upto 5 Crores Presumptive Income of Eligible Business [Sec.44AD]: 1, Profits and Gains of Business other than Plyng, Hiring or Leasing Goods Carriage Vehicles and whose Total Turnover < 2 crore shall be Generally ~ 8% of Turnover or any other higher sum dectared by the Assessee. Special Cases ~ 6% of Total Turnover or Gross Receipts or any other higher sum deciared by the Assessee if Total ‘Turnover or Gross Receipts, received by way of an Account Payee Cheque or an Account Payee Bank Draft or Use of Electronic Clearing System through a Bank Account such other electronic mode as may be prescribed during the PY or| [I before the due date u/s 139(1) for such PY, alone are eligible for this lower rate of tax. Deductions u/s 30 to 38 shal be deemed to have been allowed. Firm can claim deduction u/s 40(b). FIR.22 isin asFast Track Referencer ~ Padhuka's Handbook on Taxation ~ For CA Inter — AY 2022 ~ 2023 3, $ec.44AD is not applicable to — (i) Person carrying on profession as referred in Sec.44AA, (ii) Person earning income in the nature of Commission or Brokerage, or (ii) Person carrying on any Agency Business. Presumptive Income of Profession [Sec.44ADA] 11. _Assessee’s Total Gross Receipts in the previous year does not exceed % 50 Lakhs. 2, Presumptive Income = 50% of Total Gross Receipts, or higher sum declared by the Assessee in the previous year. Profits & Gains of Business of Plying,, Hiring or Leasing Goods Carriages if not more than 10 Vehicles are owned [Sec.44AE]: Presumptive Income = Higher of sum daimed to have been actualy eared from the vehicle or and amount as computed below 1, Heavy Goods Vehicle: & 1,000 per ton of gross vehicle weight or unladen weight: per month or part of ]@ month during which vehide is owned by the assessee in the PY. 2. Other vehicle: & 7,500 per month or part of.a month during which vehicle iscowned by the assessee in the PY. 3.__Deductions u/s 30 to 38 shall be deemed to.have been alowed. Firm can claim deduction w/s,40(b).- COMPUTATION OF DEPRECIATION [Sec.32].- © paitiellats Nature of Block Jif Bo si a [Building | P&M ‘A. Opening WDV as on 1* April of RelevantPrevious Year B. Additions to the Block 1. Asset Acquired and put to use In the same PY for~ __(@) Less than 180 days (b) 180 days or more: 2. Asset acquired in preceding Previous Yeai(s) and put to use during the PY Total Additions (1) + (2) C. Deductions from the Block 1. Money Pole towards any asset vihich ts sold, discarded, demolished or destroyed (Incl. Scrap Value) 2. In case of Slump Sale, Actual Cost of asset as reduced by all Depreciation Total Deductions (1) + (2) D. Net Block Value (A) + (B)-(C) E, Depreciation - 1. Normal Depreciation (2) Asset put to use for less than 180 days ~ 50% of Normal Depreciation [Point B 4(a)] (b)_On the balance Net Block Value 2. Additional Depreciation for Plant and Machinery used by Manufacturer/producer of any article or thing or in the Business of generation or generation and distribution of Power (2) New asset put to use for less than 180 days at 10% [Point B 1(a)] (b)_New asset put to use for 180 days or more at 20% Note: For assets put to use less than 180 days ~ Balance 50% of addtional depreciation shall be allowed in the immediately succeeding previous year. Total Depreciation Closing WDV FIR23Fast Track Referencer ~ Padhuka’s Handbook on Taxation ~ For CA Inter ~ AY 2022 ~ 2023 »7 CAPITAL GAINS : Pointsto Remember eae ue Capital Asset [Sec.2(14)]: Includes Property of any kind and excludes certain Secures held by FIl. Excludes Stock, Personal Effects, Rural Agrcutural Land, Depost Certificate Issued under Gold Monetiseion Scheme etc. Jewellery is & Capital Asset. _ 2 | Infrastructure Capital Company’ [Sec.2(26A)]: Company which makes investment by acquiring Shares or providing [long-term finance to any prescribed Enterprise or Undertaking, ‘ | Infrastructure Capital Fund [Sec.2(26B)]: A Fund operating under a Trust Deed estabished (0 raise monies by Trustee! for investment by acquiring Shares or providing long-term fiianée t any prescribed Erterprise or Undertaking. 7 |Long Term Capital Asset (LTCA) [Sec.2(29AA)]: Not & Shot Tetin Capital Asset. Long Term Capital Gains (LTCG) [Sec.2(29B)]: Capital Gains arising from transfer of LTCA. Short Term Capital Asset (STCA) [Sec.2(42A)]: Financial ASsets’= Land & building held for not more than 12 months, A Unlisted shares held not more than 24 months shall be treated as Short Term Capital Asset, Other Assets ~ Held for not more than 36 months. [Short Term Capital Gains (STCG) [Sec.2(42B)]: Capital Gains arising rom transfer of STCA, Transfer [Sec.2(47)]: Sale, Exchange, Relinquishment, Extinguishment of Rights, Compulsory Acquisition, Conversion of Capital Asset into Stock in Trade, Maturity / Redemption of Zere Coupon. Bond, Part, Performance of Contract, Enjoyment of| [Immovable Property. : . | Transfer includes disposing off or parting with an asset or any interest therein, or creating any interest in any asset ‘in’ any | manner, notwithstancing that such transfer of rights has-been characteized'as being effected of dependent upon or flowing | from the transfer of a Share or Shares of Company registered or incorporated outside India, - Zero Coupon Bond [Sec.2(48)] Bonds issued by Infrastructure Capital Company or Infrastructure Capital Fund or Infrestructure Debt Fund or Public Sector Company or Scheduled Banks with no-benefit before maturity ar redemption. \Consideration not ascertainable [Sec.50D]: For computing tax on Capital Gains, the FMV of the Asset on the date of [transfer shall be deemed to be the Full Value of the Consideration received or accruing as a result of such transfer, Forfeiture of Advance Money received in respect: of «unfructified transfer [Sec.51}: Advance Reczived upto 31.03.2014 is reduced from Cost of Acquistion / WDV / FMV. Received from 01,04,2014 onwards: Taxable as Income from Other Sources. No reduction from Cost of Acquisition / WDV / FMV. Cost of Acquisition & Cost of Improvement [Sec.55]: Nature of Asset Cost of Acquisition | Cost of Improvement | Financial Assets _ ‘Allotment / Purchase Price NI _| Self-Generated Goodwill of Business or profession NIL, NIL Right to manufacture / produce / process any article / right to NIL | wat carry on business : I Faia co a a Fes] to eae Cost of Acquisition in Specific Circumstances for Specific Assets [Sec.55(2)(a)] wef. 010420217 Capital Assets: (2) Goodwill of Business or profession, or (©) Right to manufacture / produce / process any article / ight to carry on business or profession, or (©) Tenancy rights, Route permits, Loom Hours, Trade Marks, Brand-name related to business Situation ___ Cost of Acquisition: (@) Acquisition of such assets by Assessee by purchase from | Purchase price (Less) Depreciation-caimed u/s 32 before _a previous owner ‘AY 2021-2022, if any (©) Case faling u/s 49(1)() to 49() and such asset Was] hace oice for econ eee sen oye owner (26. defied ip ‘atl Depreciation calmed ws 32 bre AY omens any FIR.24___Fast Track Referencer — Padhuka’s Handbook on Taxation ~ For CA Inter ~ AY 2022 ~ 2023 COMPUTATION OF CAPITAL GAINS ‘Computation of Short Term Capital Gain ~ Computation of Long Term Capital Gain__| Consideration Received Consideration Recelved Ton Less: Expenses of Transfer Less: Expenses of Transfer | | (oo). Net Consideration [__Net Consideration voa_| Less: Cost of Acquisition Less: Indexed Cost of Acquisition rox |_| Less: Cost of Improvement Less: Indexed Cost of Improvement rox | (oon) Short Term Capital Gain vox | Long Term Capital Gain. 00% Less: Exemption u/s 548, 54D, 54G, 54GA (oon) | Less: Exemption u/s 54 to 54GB (000) Taxable STCG ~00x_| Taxable LTCG | ox Particliars, -| Any other LTCG | ‘Section in 111A __| Normal Rate| [LTCG- | 20% with ICA oF 10% Rate of Tax °1,00,000] x | of LTCG without ICA 20% 15% Normal Rate 10% | Whichever is Lower ” 10% (Total “co 7 10% oF 20% of (Total| 20% of (Total | 15% of (Tota Residents, whose Tota) Income tess |" “Income Less | Income Less | Income Less_| Normal Rate ars ae Bec unavailed Basic | unavailed Basic | unavailed Basic| of Tax [" exemption) Exemption) Exemption) | Exemption) STCG Taxable LTCG Taxable (Basic Non Resident Individual & (Basic ne NIL Exemption ot | TCS TEBE | seenpton ct Normal Rate aa available) _| | Chapter VI-A Deduction _ Not Applicable : ‘Available Rebate u/s 87A NA Applicable | NA [Applicable Applicable TRANSACTION NOT REGARDED AS TRANSFER UI/S 47 Sec, | Nature of transaction not | transaction not to be regarded as | Transferee, incase | hands of ” regarded astransfer | transfer between Transferor and | of subsequent _| Transferee Transferee (Sec.47) transfer by him— | [Sec.49] 7 _ Sec.2(42A) | Holding Period in | Conditions to be fulfilled for the | the hands of the | Cost in the [Distribution of Capital Asset in 47{) total or partial partition of HUF Previous Owners | Cost to _— holding period shall | Previous be included. Owner Transfer of Capital Asset under| 4z\il)\Gift / Will [ Irrevocable Trust (Capital Assets other than Shares,| Previous Owner's | Cost to Debentures or Warrants allotted directiy| holding period shall | Previous or indirectly under ESOP. be included. Owner Transfer of Capital Asset by Holding Company to its Holding Company oF its Nominees hold 100% Shares in. Subsiciary| Previous Owner’s | Cost to {Subsidiary Company to its anv) 7 holding period shall } Previous ‘Subsidiary (withdrawal of Company relent orons [exemption u/s 47A(1) applies) |+ Subsidiary Company is Indian Co. 7 ‘a7 _|Tansfer of Captal Asset by|+ Whole of the Share Captal of the] Previous Owners | Cost to Subsidiary Company held by Holding | holding period shall_| Previous FIRSFast Track Referencer - Padhuka’s Handbook on Taxation ~ For CA Inter ~ AY 2022 ~ 2023 Holding Period in ] Conditions to be fulfiled for the | the hands of the | Costin the sec, | Nature of transaction not | transaction not to be regarded as | Transferee, in case | hands of "| regardedastransfer | transfer between Transferor and | of subsequent | Transferee| Transferee (Sec.47) transfer by him— | [Sec.49] | = Sec.2(42A) Holding Company] Company. be include, Owner | (withdrawal of exemption U/S]. Holding Company is an Indian | 47A(1) applies) Company. 7 __| Transfer of @ Capital Asse, ina ; , any, |store of amalgamation, by/ Amalgamated Campa san Idan | ,reveus Owners | Cost the Amalgemating Company to Company. 4 the Amalgamated Company. pee aes Transfer of Captal Asset, By a : Cost to 47 io) | Demerged Company tothe) sur Conran an nen _ aaa Resulting Company. npeny. Owner Transfer or Issue of Shares by 47a |2, Resulting Company to the) The sue is made in consideration of | edna Patio mI coe note 4 » |Snareholders of Demerged| demerger ofthe undertaking, ged Company | "below shall be included, Company. Transfer by Shareholders in al The Amalgamated Company is an Indian scheme of Amalgamation: Company. + Asset Transferred: Shares |Note: If the Consideration consists of Cost of anvil) pee in Amalgamating| something more than the share/shares in Period of holding of | Previous ‘ompany. |the Amalgamated Company, then the| "- Amalgamating ese + Consideration received: |Assessee isnot ented to exemption u/s| company shares shall Shares of Amalgamated| 47. [Goutam Sarabal Trust 173 ITR| "be hia, Company 216 (Guj.)] : : + Any transfer made outside India, of a Cepita asset being Rupee Denominated j et . Bond of an Indian Company, j Transfer of Rupee Not Denominated Bond + Ssued outsce Inia, Not Applicable | poplicable i 47 (viaa) + By @ Non Resident to another Non : Resident shal not be regarded as i Transfer. Transfer of a Capital AsSet,|. Transfer takes place through an being a eee Sara Intermediary dealing in settiement| 47 (in) | 27g a petode payment oF Series, ; 1 i Note: Meaning of Gove *. TaNsfer smade outside India, ctAmvicabie | wt | Security as per Sec.2() of the|*. Tranter is made by @ Non-Resident | Applicable 4 [ScRa, 1956 to-another, | | eS + | Transfer of Sovereign Gold Bond| Transfer of Sovereign Gold Bond| ; issued by RBI issued by the RBI under the Sovereign 4 (vic) Gold Bond Scheme, 2015 by way of] Not Applicable Not 1 redemption, by an assessee being an Applicable | Individual ; Transfer of Urban Agricultural Not | 4? (7) | Lands prior to 13.1670 = Not Applicable | applicable | Transfer ofthe folowing: | The transfer is made to | Work of ‘Art, Archaeological, |Government, University, National Scientific or Art Collections, Museum, National Art Gallery, National| Not 7) J ecoks, Moruscis, Drawings arcines any instuten rete by] NOCAPAabe | 4 NL Paintings, Photographs, | Central ‘Government to be of ‘national Printings. |importance.. | : 47%) [Transfer by__way of : Holding Period of _[ Cost of New FIR.26Fast Track Referencer ~ Padhuka's Handbook on Taxation ~ For CA Inter ~ AY 2022 - 2023 Holding Period in | Conditions to be fulfilled forthe | thehands of the | Cost in the sec, | Nature of transaction not | transaction not to be regarded as_| Transferee, incase hands of * regarded astransfer | transfer between Transferor and | of subsequent _| Transferee Transferee (Sec.47) transfer by him— | [Sec.49] - 7 _ z $ec.2(42A)_ conversion of Bonds, earlier asset cannot | Asset = Debentures, Debenture Stock be taken into account | That portion and Deposit Certificates in any of cost of form into Shares or Oid Asset Debentures of that Company. thatis 7 converted. (Capital Asset, being Equity Share of @ azo) [Cameron of Preference| Company, became, he property of the Shares to Equity Shares Assessee in consideration of a transfer ufs 47(x0) Transfer made in consideration| Two or more schemes of Equity ofthe allotment to Unit Holder| Oriented Fund or of two or more: rm a7 in) lof a Capital Asset, being] Schemes of 2 Fund otter then] — Not Applicable | popicany Unit), in the Consolidated] Equity Oriented Fund. plicable [Scheme of a Mutual Fund. "Transfer of a Capital Asset in @ 47 (xv) ‘The scheme shall be notified by the Not Re ental Goverment Not ropteable | pepeae ‘Transfer by @ Unit Holder, | made in consideration of the allotment to him of a Capital Asset, being Unit(s), in the| Consolidation is of two or more schemes | Holding Period of Consalidated Scheme of a| of Equity Oriented Fund or oftwo or | earlier Share(s) by . Mutual Fund mote Schemes of a Fund other than | the Assessee is also [Assets Transferred: Unit(s) Equity Oriented Fund included, 47oqvil) held by him in the Consolidating Scheme of the Mutual Fund _ Note: 1 Cost of Acquisition of Specific Securities or Sweat Equi fas been taken into account forthe purpose of Holding Period, shall be reckoned from Date of Allotment or Transfer of such Shares. Cost of Acquisit which Income Tax was paid under the head Income from Other Sources. Cost of Acquisition of Resulting Company's Shares on Demerger [Sec.49(2C)] Cost of Acquisition of Demerged Co's Shares x ‘Net Worth of the Demerged Company before Demerger [Net Worth of Demerged Company = Paid up Share Capital and General Reserve as per books, before demerger. Original Cost of Acquisition of Shares in Demerged Company Less: Cost of acquisition of Resulting Company's Shares as above Business Reorganisation of Co-operative Bank [Sec.49(2E)]: Sec.49(2), Sec.49(2C) and Sec.49(2D) are applicable to business re-organization of a Co-operative Bank as referred u/s 44DB. FIR? Cost of Acquisition of Demerged Company's Shares after Demerger [Sec.49(2D)] ‘Net Book Value of Assets transferred to Resulting Co. Shares [Sec.49(2AA)] = Fair Market Value which f valuation of perquisites on which tax were paid under the head Salaries. ion of Gifts: Cost of Acquisition of property received as gift shall be the Market Value of the Gifts onFast Track Referencer ~ Padhuka’s Handbook on Taxation ~ For CA Inter~ AY 2022 ~ 2023 EXEMPTIONS FROM CAPITAL GAINS aa Two Residential or 2 YeRS| pelore House in after tel due date india fae Clot Residential | Individual | Exceeding | Capital Capital Grins | se of rising “Thouse Jor HUF |36montts Gains _| Note: amount | invested chase, or| em US Investment in] whicheveris less [PARS° 129) if eee ae ears ater)" 6 rot eigile for He ate ilzed Eales transfer, in| MP % 2 crores] cet nme it a us 139 constucon Used for agrcature 2 by him or aoe tis paren , | Aarcutural JIncvdual Jor HUF for} Capital | Agicutura within 2 ys] -As ae arene | yrs] Gains (ma oe after tansfer| above | “AS @0¥e- : immediatly prior to the date of ransfer Ca 8 C& 8 ff witin 3 Bor! any Used for 2) capital -As Indust industial | As above years after ~Asabove- undertaking AS58866 [yea [3S undertaking raster | BO" 7 if sold within Capital | Species 3 ts, alan Gains bonds exempted Capt (vesiment |redeemable Witin 6 ‘CG will be| pees | Any inthe yea of| ater 3. years months of deemed to being land| accesses TOA |sser_&]in_ NHAL or As above transier of/— be LTCG of or building next nancial] RECL. Or any origina the Fea yer = [other Bond asset assessee in Maximum &| ntied by the the year of S0Lakhs) | Cental Govt sale of new ‘ asse Wiihin 4 hou pes ee ae [Any asset} Should not ‘One (Amount Invested / ee 2 eral 54B, 4D other than| Individual |own more|Net Consi-|Residential Net a 7 ‘Same as| except thal Residential |or HUF than 1 |duration [House in| Consideration): a 6, in Sec. | under House house on Inia Capital Gains Epon SecS4F it date of i case of will be taxed iransfer aria as LTCG,Fast Track Referencer ~ Padhuka’s Handbook on Taxation ~ For CA Inter ~ AY 2022 ~ 2023 3 [ep alana zl investment Cost of Specied Sane in ur Asset Amt 5 |Long Tem Spectied (a) = CG then,|& months exempted | Capital after the = \on a Asset ia gucci ttre CS ane shal be ‘s4ee'|/< ‘Assessee |LTCA during any] {7° (0) < CG then ot) — | chargeable ees, FY does) 528 Japoly the below SONS 7 Ho LTCG in oo not: exceed formula oe the year of _|Assel) 50 Lakhs op avestment |S" fransfer Capital Gain Amt exempted Shares or vey bol, (Stas of anAnount ves win i Solano Debenture |Non |e, | Capital | nian tet months — |ohargeable “Jin anIndan|Resident |ey¢q"|Gains | Company or| Consideration) *| rans fe LCG in Company debenture | Capital Gains 7 te year of {transfer COMPUTATION OF CAPITAL GAINS - Special Cases Ta RE aa eae Hs se Taxability-| atop sheer os General computation of Short Term and Long the Firm or by @ Member into AOP , BOL [Sec.45(3)) Year of |g. Ser opt Gans '5ec45(3)] earl | = Consideration for Transfer Less CA or ICA Tnsurance Claim received on Loss of Assets] Yearof |g _ 5 [seca5(2a)] Teg es = Insurance Claim received Less CA or ICA Conversion of Capital Asset into Stock-in-| Year of |g = FMV = eee a5(2}l NER, [C= FV ofthe Canta Asset onconeson Less CA or ICA, BI= Sele Consideration (Note: Indexation based on year of| converted conversion, not on year of sale) stock a) FMV considered as above, Sale of Shares held as Depository [Sec.| Yearof [og _ Sak ot Sees ee hunt al0ven) | uoter_|CO= C7sertn fr transer Less Chor Ica Introduction of Capital Asset by a Partner ito) Year gf |G = Amount credited in Partner’s/ Member's Capital Account| Introduction | in the books of the Firm/AOP/BOI Less CA or ICA Receipt of Capital Asset by Partners Members on reconstitution of Firm / AOP / BO! [Sec.45(4)] W.e.f. 01.04.2021 Year of Receipt [A=B+C-D Where, Capital Gains Taxable Value of any money received (as on the date of Receipt) FIV of Capital Asset Received (as on the date of Receipt) D = Amount of Balance in Capital A/c of such person in the | Books of Alc of the Entity Compulsory Acquisition of Capital Asset by Government / Approved authority [$.45(5)] a) Normal Compensation acquisition) receipt lb) Enhanced Compensation Year of (Indexation based on year af compulsory| Yea! Of Fst | Less whole CA or ICA actual receipt | receipt of Enhanced Compensation | CG = Whole of Normal Compensation Received or Receivable For Subsequent Receipts, CA shall be NIL. CG = Enhanced Compensation Less Expenses incurred on} FIR.29Fast Track Referencer ~ Padhuka's Handbook on Taxation ~ For CA Inter — AY 2022 — 2023 ag : | Year of [2 i | _ Nature transaction | Naa Teg 2 eatonet con : Redemption of 80CCB Units [Sec.45(6)] | Year of [CG = Repurchase Price Less Amount invested Note: (No | repurchase | indexation) Recelpt of Assets / Cash from Company on . liquidation in the hands of Sharchekier| Year of [CG = FMV of Assets recetved Addl Amount received in Cash [sec.46] receipt | Less Deemed Dividend u/s 2(22)(6) Less Ck TCA of Sars Secunt Tse eden Sere uooecned eons CG = Consideration for Transfer Less CA or ICA [Transfer of Depreciable Assets [Sec.50] CG = Consideration for transfer Less: Expenses on Transfer ‘Opening WOV Year of ‘Additions during the year transfer |[W.e.f. 01.04.2021 Where Goodwill of a Business or Profession forms part of block of assets for period beginning ‘on 01.04.2020 and depreciation thereon has been obtained by the assessee, WDV of that block and STCG, if any, shall be: determined in prescrived manner] [Transfer of Depreciable Assets by Power| Year of 5 i Sector Units [sec.50A] transfer |CG = Consideration for Transfer Less Original Cost of Asset ‘Sale or Undertaking as a Going Concem or| CG =Lump sum Consideration Less Net Worth ‘Slump Sale [Sec.50B] Year of _ | (No indexation for LTCG) transfer | WDV = In case of Capital Asset being Goodwill of a Business Or Profession which has not been acquired by the assessee by Purchase from a Previous Owner = NIL] Transfer of Land or Bulding or both at less| Year of [CG = Value as per Stamp Duty Authority Less CA or ICA [See than Stamp Duty Value [Sec.50C] Transfer [Note] _ Note: ‘Sec 50C: 1, Value adopted or assessed or assessable by the Stamp valuation authority does not exceed 110% of the consideration received or accruing as a result ofthe transfer, 2. Full value of Consideration: For the purposes of computing Capital Gains from transfer of such asset u/s 48, the consideration so received or accruing as a result of the transfer shall, be deemed to be the full value of the Consideration. Otherwise guideline value shall be taken as Consideration : Sec.50CA: Where the transfer of Share other than Quoted Share Is less than FMV, then Full Value of Consideration shall be FMV determined in prescribed manner. Exceptions: [w.ef. 01.04.2020] Provisions of Sec.SOCA shall not apply to any consideration received or accruing as a result of transfer by prescribed persons subject to conditions. Reference to Valuation Officer [Sec.55A]: IF A.O. opines eslimated value by Registered Valuer is at variance with FMV, FMV of asset exceeds declared value by & 25,000 or 15%, when circumstances warrant, Dividend Stripping [Sec.94(7)}: If purchased 3 Months prior to Record Date and sold within 9 Months (for Units) and 3 Months (for Securities), then such loss on sale shall be ignored to the extent of Dividend Received or Receivable, its Bonus Stripping [Sec.94(8)]: If purchased units 3 months prior to Record Date and sold within 9 months thereafter, then loss on such sale shall be ignored. Such loss shall be treated as COA of such additional unt on their subsequent sae. FTR.30Fast Track Referencer ~ Padhuka's Handbook on Taxation - For CA Inter ~ AY 2022 ~ 2023 Computation of Income from Other Sources _ Income from Other Sources u/s 56 Less: Allowable Expenses u/s 57 Add: — Inadmissible Expenses u/s 58 Deemed Income u/s 59 INCOME FROM OTHER SOURCES Chargeability [Sec.56(1)]: Income not related to any other head. ‘Specific Income Taxable [Sec.56(2)]: Dividend, Betting Income, Interest on Securities, Composite Rent, Letting of| Machinery or Furniture, PF Contribution from Employees under certain circumstances and Forfeiture of Advance received for failed negotiations in respect of transfer of Capital Assets. Gifts [Sec.56]: Gift is taxable for assesses, if acquired for Nil or Inadequate Consideration as under — [Consideration | _ Particulars Taxable Amount Ni___|Money and aggregate Value > % 50,000 ‘Aggregate Value Ni___ [Immovable property with Stamp Duty Value > © 50,000 ‘Stamp Duty Value Tnadequate | Consideration of Immovable Property < Stamp Duty Value by & 50,000 ‘Stamp Duty Value (-) Consideration [Only if cifference is | | Greater than ¥ 50,000 (or) 10% of the consideration whichever is _ higher) Ni___[Other property with FMV > % 50,000 FMV, Inadequate _| Consideration of Other Property < FMV by ® 50,000 FMV (-) Consideration Deductions [Sec.57]: + General: Commission or Brokerage for Interest or other Taxable Dividend, Deductions as allowable u/s 30, 31 & 32, «+ For Family Pension [Sec.57(Iia)] 33.33% of Family Pension or € 15,000, whichever is less, + Any other expenditure other than capital nature. [Sec.57(ii)] + For Interest on Compensation or Enhanced Compensation [Sec.57(vi)]: 50% of the Interest Received will be allowed as deduction. ‘Amounts not deductible [Sec.58] + Personal Expenses / Interest or Salary paid outside India without TDS / Expenses u/s 40A, Wealth Tax, Expenses| relating to Betting and other expenses of similar nature. Expenses as per Sec.44D in connection with Royalty Agreement| {applicable for Foreign Companies). «TDS Default: (w.e.f 04.04.2018): Provisions of Sec.40(a)(la) disallowing 30% of any sum payable to a Resident, on which tax is deductible, but ~ (@) Tax has not been deducted, or (b) after deduction, tax has not been paid before the due date of furnishing Return u/s 139(1) shall also be applicable to computation of Income u/h Income from Other Sources. __* Deemed Income chargeable to tax 5S oF expenditure already allowed as deduction subsequently recovered| [is taxable in the year of receipt. _ Deemed Dividend [Sec.2(22) :Distribution or payment to the extent accumulated profits whether capitalized or not: (@) Which entails the release of Company's Assets, (b) Debentures, Debenture Stock, Deposit Certificates, Bonus shares to| Preference Shareholders, (c) On liquidation, (d) On reduction of Capital, (2) Any sum by way of Advance or loan to specified Shareholder or Concern |0n Points (a) to (d), the Company is fable to pay Dividend Distribution Tax. On Point (e, the Receiver i liable to pay tax. Tax on Income from Patents [Sec. 115BBF] 1. Eligible Assessee : Person Resident in India and who is a Patentee. 2._Nature of Income: Income by way of Royalty in respect of a Patent developed and registered in India, } FTR3L