Last Day Revision Smart Notes

By CA Yash Khandelwal

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All Tax Rates of DT Compiled

SLAB RATES:

Click here

1) Individual/ HUF/AOP/BOI/AJP (Resident/Non-Resident) for Video

Total Income upto 2,50,000 Nil

Total Income > 2,50,000 upto 5,00,000 5%

Total Income > 5,00,000 upto 10,00,000 20%

Total Income > 10,00,000 30%

2) Senior Citizen (Resident Individual of Age 60 or more)

Total Income upto 3,00,000 Nil

Total Income > 3,00,000 upto 5,00,000 5%

Total Income > 5,00,000 upto 10,00,000 20%

Total Income > 10,00,000 30%

3) Super Senior Citizen (Resident Individual of Age 80 or more)

Total Income upto 5,00,000 Nil

Total Income > 5,00,000 upto 10,00,000 20%

Total Income > 10,00,000 30%

Note: A Resident Individual whose 60th/80th birthday falls on 1st April, 2022, would

be treated as 60/80 years in the P.Y.2021-22, and would be eligible for higher basic

exemption limit of 3 lakh/5 lakh in computing his tax liability for A.Y.2022-23.

(4) FIRM / LLP / LOCAL AUTHORITY

ON THE WHOLE OF TOTAL INCOME - 30%

(5) CO-OPERATIVE SOCIETY

Total Income upto 10,000 10%

Total Income > 10,000 upto 20,000 20%

Total Income > 20,000 30%

1.1

(6) COMPANY - DOMESTIC

(i) If TOTAL T/0 or Gross Reciepts 25%

in P.Y. 2019-20 is upto Rs. 400 cr

(ii) In any other case 30%

(7) COMPANY - FOREIGN 40%

SURCHARGE:

1) Individual/HUF/AOP/BOI/AJP

→ WHEN TOTAL INCOME (TI) DOES NOT INCLUDE INCOME u/s 111A, 112A &

DIVIDEND

Total Income> 5o lakh upto 1 crore 10%

Total Income> 1 cr upto 2 cr 15%

Total Income> 2 cr upto 5 cr 25%

Total Income> 5 cr 37%

→ WHEN TOTAL INCOME (TI) INCLUDES INCOME u/s 111A, 112A & DIVIDEND

Total Income> 5o lakh upto 1 crore 10%

Total Income> 1 cr upto 2 cr 15%

If Total Income> 2 cr

• On Tax computed on Income u/s 111A, 112A & Dividend 15%

• On Other Income if

(Total Income- 111A,112A & Dividend)> 2cr upto 5cr 25%

If Total Income> 5 cr

• On Tax computed on Income u/s 111A, 112A & Dividend. 15%

• On Other Income if

(Total Income- 111A,112A & Dividend)> 5cr 37%

2) FIRM/LLP/LOCAL AUTHORITY/CO-OP SOCIETY

→ When the TOTAL INCOME exceeds Rs. 1cr. 12%.

1.2

3) COMPANY

TOTAL INCOME Foreign Co. Domestic Co.

If Total Income>1 cr upto 10 cr 2% 7%

5% 12%

If Total Income>10 cr

If Exercised option u/s 115BAA & 115 BAB → 10%

SPECIAL RATES OF TAX

1) Sec 112

LTCG (Other than section 112A) - 20%

2) Sec 112A

LTCG >Rs. 1 lakh - 10%

on transfer of

• Eq. shares in a company

• Units of an Eq. oriented fund

• Units of business trust

3) Sec 111A

STCG 15%

on transfer of

• Eq. shares in a company

• Units of an Eq. oriented fund

• Units of business trust

4) Sec 115 BB 30%

Tax on Winnings, lotteries, Card game, Horse Race

5) Sec 115 BBE

UNEXPLAINED money, investment, exp etc.(sec 68 - 69D)

Tax 60%

- No basic Exemption, No expenditure allowed. + Surcharge 25%

- No set off of loss allowed against such income + cess 4%

Effective Rate 78%

1.3

6) Sec 115 BBF 10%

Royalty Income from Patent developed & registered in India

• Developed in India- 75% Exp incurred in India

• No expense allowed.

7) Sec 115 BBG 10%

Income from transfer of Carbon Credits

• No Exp Allowed

8) Rebate u/s 87A

When Total Income does not exceed Rs. 5,00,000 Rs. 12,500 or Tax

w.e. is lower

9)Health & Education cess 4%

Notes:

→ Deduction u/s VI-A not available against above special Income

→ Basic Exemption not available against above Income except 112,112A,111A

in case of resident Individual & HUF.

Sec 115 BAA,BAB,BAC,BAD

Sec 115BAC: New Tax Regime

APPLICABLE TO- Individual /HOF

U (R, NR-Both)

NORMAL SLAB RATES SLAB RATES u/s 115 BAC

O - 2,50,000 - Nil O - 2,50,000 Nil

2,50,000 - 5,00,000 - 5% 2,50,000 - 5,00,000 5%

5,00,000 - 10,00,000 - 20%

5,00,000 - 7,50,000 10%

Above 10,00,000 - 30%
x7,50,000 - 10,00,000 15%

x10,00,000 - 12,50,000 20%

x12,50,000 - 15,00,000 25%

xAbove 15,00,000 30%

Note: For Individual above 60/80 yrs of age,

same slab rate shall be applicable.

↳ Benigit of 3L/5L Not available.

1.4

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1.5

SEC 115BAA & BAB

Particulars SEC 115BAA SEC 115BAB

1) Applicable to Domestic Companies New Domestic

Manufacturing Companies

2) Set up date Any time On or after

01/10/2019

3) Tax Rate 22% 15%

4) Surcharge 10%(mandatory) 10%(mandatory)

5) Effective Tax Rate

25.168% 17.16%

YES YES

6) Exempt from MAT?

7) Tax Rates for Special Special Rate Special Rate

Rates Income + l0% Surcharge + l0% Surcharge

(111A,112, 112A) + 4% cess + 4% cess

8) Tax Rates for 25.168% 25.168%

House property (22% + 10% + 4%) (22% + 10% + 4%)

& IFOS Income 6 expenses allowed capnotallowed see24457

9) when option On or before due date of On or before due date of

Under this section can 139(1) for relevant P.Y. 139(1) for First P.Y.

be exercised?

80 JJAA

10) Company cannot 80 JJAA

claim deduction under 80 LA 80M

chapter VI-A except 80 M

Common Deductions under above 2 Section which Company can not claim:

• Sec 10AA → SEZ

• Additional Depreciation- Sec 32(1)(iia)

• Sec 32 AD- Investment allowance

• Sec 33AB/33ABA - Tea Coffee Rubber

scientific

Research.

• Scientific Research:- Donation to 35(1)(ii) Institute, Research Asso.,

35(1)(iia) College, University Social/

35(iii) Statistical

Indian Co. eng. in R&D

35 (2AA) IIT & National laboratory.

1.6

• MAT is not applicable so MAT Credit will lapse.

• Sec 35C2AB) → Company engaged in Biotech or Mfg. Business(In-house research)

• Sec 35AD → Specified Business.

• Sec 35CCC Agriculture Extension Projet

• Sec 35CCD- Skill Development project.

• No Deduction under chapter Vl-A except → cheek point 10

Tax Rates u/s 115BAB

Income from Manufacturing 15%

Income from Non- manufacturing Activity 22%

STCG on Depreciable Assets 15%

STCG an Non- depreciable Assets 22%

Special Tax Income special rates

Some Notes for Sec 115BAB

→ Co. should be set up on or after 1st Oct 2019

→ Co. should have commenced manufacturing on or before 31/03/2023

→ shall not be formed by splitting up a reconstruction of existing business.

→ Company shall use New Plant & Machinery. 20% Old is allowed

Imported is considered New

→ Company shall not use Building which was previously used as Hotel or a convention

centre.

See 115 BAD:. Tax on Income of Co-op Societies

→ Tax @ 22% + surcharge 10% + cess 4% (Effective Rate - 25.168%)

→ Assessee can not claim certain deductions → as given above

→ Any deduction under chapter Vl-A not available except Sec 80JJAA & Sec 80LA.

→ Tax on Special Rates of Income - Special Rates(111A,112,112A) + surcharge 10% +

4% Cess.

→ AMT not applicable, Hence AMT Credit will lapse.

→ Assessee can exercise this option on or before due date of ROI u/s 139(1).

1.7

Some Important Notes:

→ Any Unabsorbed loss of above sections for which deduction is not allowed will

lapse on Opting 115BAA,BAC,BAD.

→From Unabsorbed Depreciation, the portion of Additional depreciation can not be

set off.

↳ The additional depreciation will be added to WDV of 1st April of F.Y. in

which option is exercised.

→ If assessee opts any of the above section 115BA, 115 BAA, 115BAB, 115BAC,

115BAD then Maximum Depreciation allowed will be @40%

Note: Section 115BA is no more relevant for exam, thats why it is not included

in the book. Please refer Pg. from ICAI study mat if you want to read it.

1.8

Taxation in the case of Buy Back:

IN CASE OF FOREIGN COMPANY IN CASE OF DOMESTIC CO.

(LISTED or UNLISTED)

In hands of
In hands

Shareholders

of company In hands In hands

of company of Shareholders

No Tax

Sec 46A:. Capital Gain
Treatment

is applicable in hands Domestic co. shall Exempt u/s

of shareholders

pay tax @ 23.296% 10(34A)

FVOC(Buy Back Price) xxx (20% + 12% + 4 %)

(-) COA/ICOA xxx on distributed Income

STCG/LTCG xxx (Sec 115QA)

POH= Date of Acquisition to Date of Buy Back Distributed Income=

Buyback Price-Issue Price(incl. premium)

Notes:

• Redemption of preference shares → also amounts to Buy Back of Shares

• Tax on Buyback shall be paid to Govt → within 14 days of Buy Back

• Sec 115 QB/QC:- Interest @1% pm or part From 15th day Till

Actual payment of Tax

Taxation of DIVIDEND

→ From A.Y. 21-22. DDT is abolished

Now Dividend & Deemed Dividend is taxable in the hands of shareholders at

Normal Tax Rates.

→ Sec 115BBD

26% or more eq. Sh

Indian Co.
Capital
Foreign Co.

Dividend

Tax Rate → 15% in hands of Indian co. + surcharge if appl. + cess.

No Expenses Allowed

ANONYMOUS DONATION

Sec 115 BBC: Taxable @ 30%

Whole Anonymous donation is not taxable @ 30%,

some amount is deducted from it →

Higher of:-

→ All donation.- corpus,

(i) 5% of TOTAL DONATION

anonymous, govt. grant

(ii) Rs. 1,00,000

→ Anonymous donation received by wholly Religious trust - Not Taxable

→ The amount which is deducted from anonymous donation → This is added with normal

donation - and it is taxed at normal rates.

Exit Tax(Sec 115TD):

The 'Accreted Income' of trust registered u/s 12AA/12AB shall be taxable at

MMR- 34.944% (30%+12%+4%) in 3 Cases:.

MAT

(i) Tax computed as per Normal provisions of Income tax

OR

(ii) 15% of Book Profit (MAT)

WHICHEVER IS HIGHER

AMT

→ Income Tax payable as per Normal provisions or

→ 18.5% of Adjusted Total Income

WHICHEVER IS HIGHER

Note: If Company/UNIT is located in IFSC, MAT/AMT Rate is 9% instead OF 15%/18.5%.

Tax Rates for Investment fund: Tax Rates for Securitisation trust:

Company- 25%/30% (based on turnover) Securitization Trust has to deduct TDS

Firm → 30% u/s 194LBC while paying to Unit Holders:

Others- MMR
Resident: Ind/HUF - 25%

Others - 30%

NR/FC → Rates in force

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5.7

Rates of Depreciation

10% 15% 20% 25% 30% 40%

Plant & Machinery, Computer/Laptop

Building Motor Vehicle(Normal) SHIPS Intangible Motor Aircraft

Assets Books-any
Furniture Oil wells Vehicle

Windmills installed used for Pollution control

Hire equipments
before 1- 4. 14.

Temporary Building

Windmills inst.

on or after 1.4.14.

Notes:

(i) Motor Vehicles:

• Business of running them on hire → 30%

Acquired & put to use between 23/08/19- 31.3.20 → 45%.

• Other Vehicles → 15 %

Acquired & put to use between 23/08/19- 31.3.20 → 30%.

(ii) Buildings: Residential → 5%

General → 10%

Temporary → 40%.

(iii) Mobile/ EPABx → Not computer - 15%

(iv) UPS/ Printer/Scanner & other Accessories (Computers) - 40%

(v) Plant & machinery

Includes Does not include

Ships, Vehicles, Books, Scientific Tea Bushes, livestock,

Appliances and surgical equipments. Building, Furniture.

(vi) If Asset is used for less than 180 days → Half Rate depreciation is allowable

→ cut off date:- 03rd october → Asset purchased on or after 4th Oct , half rate

of depreciation will be allowable.

2.5

TAXATION OF AOP/BOI

When Shares of Members are Known: -

All members having NTI One or more members have

upto Basic Exemption NTI> basic exemption

Tax at slab Rate Tax on Entire Income @ MMR i.e.

42.744%(30+37+4)

→ If Income of any member is taxable at Rate higher than MMR, then:

• His Share of Income will be taxable at Higher Rate

• Balance Income of AOP/BOI will be taxable at MMR

(2) When Shares of Members are UNKNOWN:-

Tax Entire Income @MMR i.e. 42.744%

If Income of One Member is taxable at rate higher than MMR, then whole Income of

AOP/BOI will be taxable at such higher rate.

Note: While calculating NTI (Net Total Income) of member share from AOP/BOI will

not be included.

Sec 40 (ba)

Interest, Salary, Bonus/Commission paid by AOP/BOI → shall be disallowed

While Computing PGBP Income OF AOP/BOI.

Interest

IF AOP/ BOI Members

paid Interest too

Only Net Interest paid by AOP/BOI shall be disallowed

→ Loss OF AOP/BOI shall be carried/forward by AOP/BOl only.

5.13

234A 234B 234C

Interest for delayed Interest for non/short Interest on delay in

filing of Return payment of advance tax Installments

Tax as per ROI Adv. Tax Short Deferred Amount

[after adj. of TDS,TCS,adv paid/not paid

x

tax etc]

1% per month or
x x

part

1% per month or 1% per month or x

part part

month

x x 15/06 15% 3M

15/09 45% 3M

From due date u/s From 1st April of A.Y

139(1) to actual date 15/12 75% 3M

to Date of Assessment

of filing retun 15/03 100% 1M

u/s 143(1)/143(3)

234D :INTEREST ON EXCESS REFUND GRANTED AT THE TIME OF SUMMARY

ASSESSMENT

Applicability: Levies on excess refund granted.

-Where no refund is due on regular assessment and yet amount of

refund paid.

-Amt refunded u/s 143(1) > amount refundable on regular assessment.

Rate : 0.5% per month or part

Period of Int: From the date of grant of Refund to the date of such regular assessement.

234E : FEE FOR DEFAULT IN FURNISHING TDS/TCS STATEMENT.

Fees: Rs. 200 everyday for late filing

[However, the amount of fees shall not exceed the the amt of TDS/TCS

filed in TDS/TCS statement]

Penalty u/s 271H – minimum 10,000 to 1,00,000

Fees & penalty

Where TDS/TCS statement furnished within one year - Only Fees of 234E levied

-if filed beyond one year- Both Fess & penalty of 271H levied.

16.2

234F: FEE FOR DEFAULT IN FURNISHING RETURN OF INCOME

Income < 5,00,000 = Rs. 1000

Income > 5,00,000 = Rs. 5000

234H :FEE FOR DEFAULT RELATING TO INTIMATION OF AADHAR No. u/s 139AA(2)

Penalty Amount shall be Rs. 1000

16.3

TONNAGE TAXATION:

Sec 115UG: COMPUTATION OF TONNAGE INCOME

Income = Daily Tonnage Income x No. of days ship is operated in a P. Y.

We have to calculate this now.

QUALIFYING SHIP DAILY TONNAGE

HAVING NET TONNAGE INCOME

Tonnage upto 1000 Rs. 70 for each 100 tons

> 1000 upto 10,000 Rs. 700 + Rs. 53 for each 100 tons

> 10,000 upto 25000 Rs. 5470 + Rs. 42 for each 100 tons

> 25000 Rs. 11,770 + Rs. 29 for each 100 tons

Notes:

• Tonnage shall be rounded off to nearest multiple of 100

• Tax Rate will be @ 30% + surcharge + cess (if applicable)

• MAT not applicable

• No Deductions/set off of losses allowed against Tonnage Income.

Tonnage Tax Reserve A/c

→ Minimum 20% of Book Profit shall be transferred to Tonnage Tax Reserve A/c in

every P.Y.
Purchase of ship within 8 years

→ Reserve Amount should be utilised for

Business of operating ships

Shortfall in Reserve

Taxable Amount = Relevant Shipping Income x Shortfall

Minimum Reserve to be created

5.11

Statement of Financial Transactions(SFT)

Due Date for filing SFT: 31st May of the year immediately following

the F.Y. in which the Transaction is recorded.

See 271FA- PENALTY FOR NON-FILING OF SFT

→ On failure to furnish SFT or Reportable Accounts

Penalty is Rs.500 per day till the period of Notice

→ On failure to pay the same till expiry of notice:

Penalty would be Rs. 1000 per day after expiry of notice.

Sec 271FAA: Inaccurate Info in SFT or Reportable A/cs

Penalty = Rs. 50,000

Printing

Mtgfor ISBAB

thepurpose notallowed

ofAddudeph

NR All Rates of Tax

-CA Yash Khandelwal

Things to Study

I specifiedfund
FIIIQII
OFO Bonds/GDR

Section 115A Section 115AB Section 115 AC Section 115AD

10% 10% 10/15/20/30

Interest Dividend Royalty/FTS

20%/5% 20% 10%

at

Section 115BBA Chapter XII-A

Sec 115C - 115I

20%

10%/20%

LTCG Div/Interest

Sec 115A Interest

Interest received Interest received from Int payable by

from Govt. an Infra Debt fund

Indian co. or Bus. Trust

20% 5%
Normally Listed in IFSC

5% 4%

Int payable to Int. recd

FII/QFI from Bus. Trust

5% 5%

Sec 115A:. Tax On Dividends & Income recieved on Units in case of NR/FC.

Rate of Tax on Dividend Income- 20%.

Sec 115A → Tax on Royalty and FTS in case of NR/FC

Rate of Tax - 10% or rate as per DTAA, whichever is lower.

Sec 115A → Tax on Interest in case of NR/FC

Particulars Rate of Tax

(I) Interest Recieved from Indian Government

or Indian concern other than II,III,IV,V below 20%

[Money Borrowed in foreign Currency]

(II) Interest recieved u/s 194LB from an

Infrastructure Debt fund referred in sec 10(47) 5%

[No condition of Investment in Foreign Currency]

(III) Interest payable by Indian Company

or Business Trust on:-

→ Loan Agreement, Rupee Denominated Bonds. 5%

Any other long term Bard

→ When any RDB or Other long term Bond 4%

is listed only on recognised Stock exchange in IFSC

[Money Borrowed in foreign Currency]

(IV) Interest Payable to Foreign Institutional Investor

or Qualified Foreign Investor for Investment in: 5%

• RDB of Indian Co.

• Govt. Security

• Municipal Debt Security

[No condition of Investment in Foreign Currency]

(V) Distributed Income in the nature of Interest

from SPV recieved from Business Trust 5%

[No condition of Investment in Foreign Currency ]

Notes:

(1) As per sec 10(15), Interest payable to NR/FC by a unit in IFSC on moneys

borrowed by it on or after 1.9.2019 is completely EXEMPT FROM TAX.

(2) As per section 10(4C) , Interest on RDB issued by Indian co. or Business Trust

during the period 17.9.2018 - 31.3.2019 is completely EXEMPT FROM TAX.

2.14

Space for Your Notes:

Some Important Notes on Sec 115A:

(Common for Interest,Royalty,FTS,Dividend)

1) The assessee is not required to file ROI if:-

• Total Income consists only if Income u/s 115A

TDS has been deducted at rate not less than u/s II5A.

(2) No deduction of any expenditure us 28-44C & sec 57 is deductible while

computing above Income.

(3) Deduction under chapter VI-A is not allowed on above Income.

Exception:

But deduction u/s 80LA shall be available to the unit of NR/FC located in an IFSC.

→ Dividend & Interest recieved by that unit will be allowed as deduction u/s 80LA.

[Sec 80LA- Deduction is allowed on profits of 10 A.Ys out of Block of 15 A.Ys,

which means 100% deduction will be available on dividend Income.]

(4) Unabsorbed Depreciation can't be set off against above Income - current as well

as Brought Forward.

(5) Set-off & carry forward of losses is Allowed against above Income.

(6) Deduction of payment is allowed to the payer only if TDS is deducted and paid,

otherwise disallowance u/s 40(a)(i) will be attracted.

(7) Special Rate is applicable to above Income only, Other Income is taxable at

Normal Tax Rates.

See 44DA:- Special Provisions for computing Income by way of Royalties, FTS in

case of NR/FC

Taxability of Royalty & FTS in hands of NR/FC

Sec 44DA

Sec 115A

where NR/FC does not Where NR/FC has PE in India or

have any PE or fixed

performs professional services through

place of Business or a fixed place in India & Royalty-FTS is

profession in India. effectively connected with such PE.

Tax Rate:- 10% Tax Rate:- Normal Tax Rates

+ surcharge (2% or 5%)+ cess 4% Foreign Co. 40%

Foreign Firm 30%

→No need to maintain BoA Compulsory maintenance of

& documents. BoA & other Documents.

→ No Audit requirement Compulsory Audit requirement.

→ Deduction under chapter VI-A allowed. Deduction under chapter Vl-A allowed.

→ Losses of Other Business in India → Losses of Other Business in

can be set-off India can be set-off

→ No deduction of Expenses is allowed All expenses will be allowed as deduction

while computing such Income. while computing Income under PGBP.

2.18

No deduction shall be allowed:

• For any expenditure which is not wholly

& exclusively incurred for business of such

PE or fixed place.

• For any amount paid by PE to its head

office or other offices

Note: Deduction shall be allowed for

reimbursement of Actual Expenses incurred

by HO or other offices if such expenses are

incurred for such PE in India.

Sec 44C : Deduction in case of Head office Expenses in Case of Non - Resident.

NR - SPECIAL RATES OF TAX

Sec 115AB Sec 115AC Sec 115AD

1) Applicable to: Overseas Non- Resident Foreign Institutional

Financial incl. Foreign Investor or

co. specified Fund

Organisation

Units of UTI & Bonds of Indian co.
2) Applicable on: Securities Other than

Mutual fund or GDR acquired in Units of UTI &

acquired in Foreign Currency. Mutual fund.

Foreign Currency

3) Tax Rates: LTCG → 10% LTCG → 10%

LTCG - 10 %

Dividend→10% Dividends→10%

STCG - 30 %

Interest→10%

Interest & Dividend:

FII→ 20%

LTCG u/s 112A: 10%

Specified fund→10%
in excess of

LTCG u/s 112A: 10%

Rs.100,000

in excess of Rs.100,000

STCG u/s 111A:- 15%

STCG u/s 111A:- 15%

4) TDS 10% on LTCG & 10% on LTCG, Interest & Dividend:

Dividend Dividend

FII → 20%

(Sec 196B) & Interest

Specified Fund→ 10%

(See 196C)

Dnt 194LD 57

Uca lot

CCG 112h 101 inches on

Pinterestdivided

Sperryfad lot Sech111A 157 te

FII 207 Other7cg 301

Notes on Sec 115 AD:-

Specified fund means:

• A fund which is registered as Category III Alternative Investment Fund regulated

by SEBI.

• which is located in any IFSC

• of which all the units are held by non-residents other than units held by sponsor

or manager.

→ In case of Specified fund, the provisions of this section shall apply to the extent

of Income that is attributable to the units held by NR. (not being PE of NR in India)

→ Higher Surcharge of 25%,37% will not apply in case if NR is a foreign fund in

case of dividend, capital Gain u/s 111A & 112A.

Sec 115BBA :Income of NR Sportsperson, Sports Association & Entertainer

Tax Rate - 20% →TDS u/s 194E

a) A Sportsman - Non-Resident & not a citizen of India Any Income recieved or

recievable by way of:

• Participation in India in any game (other than sec 115BB)

• Advertisement

• Contribution to articles for any game in India in newspapers, magazines or Journals.

b) A NR Sports Association or Institution

Any amount paid or payable to such association or institution in relation to any

sports(other than sec 115BB)

c) An Entertainer - Non-Resident & not a citizen of India.

Any Income received or receivable from his performance in India.

Note:- Umpire or Referee does not come under this section.

Some Common points about see 115A, 115BBA, 115 AB, 115 AC and 115AD

• Sec 28 to 44C & section 57 not available.

• Chapter VI-A deductions not available.

• Indexation benifit not available.

• Other Income Taxable at Normal Tax Rates

• Benefit of Basic Exemption limit not available.

• These provisions are mandatory.

2.21

Special Provisions for NRI → Chapter XII-A

Section 115C- 115I

In case of NRI, there is an option to choose:.

Specific Provisions General Provisions

Chapter XII-A - see 115C- 115I. ie. Sec 112&115 A

• See 115F is available. • See 115 F is not available.

• Exemption of Rs. 100,000 not available • Exemption of Rs.100,000 is available

on CG u/s 112A on CG u/s112A

• 2nd proviso to sec 48(indexation) not • 2nd proviso to sec 48(indexation) not

available available

• First proviso to sec 48:- • First proviso to see 48:-

Unlisted Shares- Available Unlisted Shares: Not available

Listed shares sold in: Listed shares sold in:

Stock Exchange- Available Stock Exchange → Not available

Off Market - Available Off Market - Available.

Section 115C

NRI means:- NR + Indian Citizen / Person of Indian Origin

Foreign Exchange Assets- Any of the following assets purchased in Convertible

Foreign Exchange:

• Shares of Indian Company - Private or Public.

• Debentures of Public Ltd. Indian Co.

• Deposits of Public Ltd. Indian Co

• Government Securities.

LTCG - LTCG from foreign Exchange Assets

Investment Income: Dividend and Interest from Foreign Exchange Assets.

Section 115E: Tax Rates:-

• LTCG - 10%

• Investment Income- 20%

• Other Income - Normal Tax Rates

2.22

Section 115D:

(1) Investment Income:- Section 28 to 44D,

Section 57, Not available

Chapter VI-A

(2) Long Term Capital Gains - Chapter Vl-A not available

(a) 1st proviso to sec 48(TTBR/TTSR) - Available

(b) 2nd proviso to sec 48(Indexation) - Not available

(3) Other Income - Normal Provisions

Sec 115 F:

LTCG on Forex asset shall be exempt if:-

• Net consideration is utilized for purchasing another forex Asset.

• It is purchased within 6 months of transfer

Exempt Amount = LTCG x Cost of New Asset

Net Consideration

Lock in period = 3 Years, if sold before 3 years, Exempt LTCG shall be taxable.

Sec 115G:- Exemption from Filing ROI.

ROI is not required to be filed if:.

• Total Income includes only Investment Income and/or LTCG.

• TDS has been deducted.

Sec 115H: Chapter to apply even if NRI becomes Resident.

When NRI becomes Resident, he can choose the option to be Governed by this chapter.

• Investment Income will be taxed @ 20%

• Dividend Income & LTCG will be taxed normally.

Sec 115I: This chapter is Optional

2.23

Presumptive Taxation for Non-Residents

44B 44 BBA 44BB 44BBB

Shipping Business Operation of Aircraft Services for prospecting/ services for

extraction/production of Turnkey

mineral oils Projects.

10% 0f 10% 0f
7.5% of 5% of

1) Freight(Money) received in India- Gross Amt. recieved or Amount

Irrespective of from where goods/passenger recievable in India recieved

is loaded. for Services. or recievable

for Such

2) Freight on Goods/Passengers loaded

services

from India- Irrespective of where money is

received

TRANSFER PRICING- Secondary Adjustment

Secondary adjustment is not required → if primary Adjustment is upto Rs. 1 crore

or the primary adjustment is made for A.Y.2016-17 or an earlier assessment year.

→ If Option 1 & Option 2 for Repatriation is not opted, and AE doesn't repatriate

the excess money in 90 days, the assessee can pay additional tax at

18% +12% surc.+4% cess effectively 20.9664%

Interest rate to be changed if excess money not repatriated:

(i)Where the international transaction is denominated in Indian rupee:

At the one year marginal cost of fund lending rate of SBI as on 1st April of the

relevant P.Y. + 3.25%

(ii) Where the international transaction is denominated in foreign currency:

At six month London Interbank Offered Rate (LIBOR) as on 30th September of

the relevant P.Y. + 3.00%

Sec 92 BA: Specified Domestic Transactions

Transactions where the aggregate value of such transactions in the P. Y. > Rs. 20 Cr.

Section 94A- Notified Jurisdictional Area

Section 94A allows the Indian Government to notify the non-cooperative countries or

islands, i.e. those locales that abstain from sharing information, as Notified

Jurisdictional Area (NJA)

• All parties → Deemed to be Associated Enterprises.

• All Transactions → Deemed to be an International Transaction

• All provisions of Transfer Pricing shall apply except variance of 1%/3%.

• Payment to any person in NJA -> TDS rate will be 30%

• If Assessee recieves any funds from a person located in NJA, then assessee have

to offer explaination about the source of funds in the hands of that person.

If Assessee does not give satisfactory explanation, then that funds will

be taxable as Income in the hands of the assessee.

See 94B: Excess Interest

BEPS Action Plan 4 suggests → For Removal of Thin Capitalization→ That's

why Sec 94B was introduced.

• Applicable to Indian Co. or PE of Foreign Co. in India.

• Enterprise who takes loan from NR/AE who pays Interest

• Interest allowed → 30% of EBITDA

Excess Interest:-

i. Total Interest - 30% of EBITDA

ii. Interest paid to AE w.e. is lower

Excess Interest can be c/f for 8 years

• This section is not applicable if interest is paid for debt issued by a lender which is a

PE in India of a NR, being a person engaged in Business of Banking

• Where the debt is issued by a Unrelated lender(not AE) but an Associated Enterprise

either: a) provides an implicit or explicit guarantee to such lender or

b) deposits a corresponding and matching amount of funds with the lender,

such debt shall be deemed to have been issued by an associated enterprise.

Chapter 12: TDS & TCS

SECTION RATES LIMITS/ CONDITIONS

Sec 192 Slab Rates TDS deducted at the time of payment

Salary

192A 10% Service < 5 yrs, Amount > 50K - TDS

PF Accumulated NO PAN - MMR Applicable.

Balance Service> 5 yrs - NO TDS

194I P&M - 2% NO TDS If Aggregate Rent is upto Rs.

Rent BUILDING - 10% 2,40,000

Rent kaun deta hai?- Main TDS is applicable on Refundable Deposits

194 C Ind/HUF - 1% NO TDS if:

• Single Payment is upto Rs. 30,000

C- Contractor Others - 2%

• Aggregate amt. during F. Y. is upto 1lac

• Contract is for Personal Purpose of

Ind/HUF

194 J - JANHIT Operation of • NO TDS if

Professional Fees Call Centre - 2% < 30,000

Fees for Non

FTS Royalty
Others - 10% compete

professional

FTS services Fees

Being a Professional The Limit of 30,000 is for each

Others

service

2% payment

10%

ROYALTY • Commission/sitting Fees Paid to

Non-Executive/Independent Directors.
sale, Distribution Others

of films 2% ↳ No Threshold limit

2%

• No TDS on personal payments by

Ind/HUF for FPS

194H- Hafta. 5 % NO TDS if Amt is upto Rs. 15000.

Commission/Brokrage 5 takka NO TDS on Underwriting Commission

or brokrage on Public issue

12.1

194M- Man Se 5% KAUN KAATEGA - Individual/HUF

Payment of not covered in 194C, 1945, 1944

• Contract KISKA KATEGA - Any Resident Person

• Professional fees

LIMIT- Agg. Amt.> Rs. 50 lakh

• Commission/Brokrage

paid. in the P.Y.

Sec 194G- Gamble 5% NO TDS if Amt is upto Rs. 15000.

Lottery sale If Lottery seller wins lottery on unsold

Commission tickets, it will be taxable@30%

194D 5% NO TDS if Amt is upto Rs. 15000.

Insurance Commission

194B- Lottery, Puzzles • NO TDS if Amt is upto RS. 10,000

Badi lottery

30% • Deducted at the time of payment only

194BB - Horse Race

• If winning is in kind, the payer shall

Bhag Bhag release winnings only after ensuring

that TDS is paid to Govt

194E → Payment to NR 20% Sportsperson & Entertainer

Sportsman, Association, shall be NR+ Non-Citizen

+ cess 4%

ENTERTAINER (eff. 20.8%)

Refer Sec 115 BBA

in NR chapter.

→ TDS only applicable if amt. recd.

Sec 195 Rate in Force

Payment made to by NR or foreign is taxble in India.

(given in finance

NR or Foreign co. at every year) → If Rates given in DTAA are lower,

then those Rates will apply.

194 10% Deducted at the time of payment only

TDS on Kaun kaatega- Payment made by

Dividend Domestic Company

Kiska Katega -

Cash
Any Resident Person any other Mode

No limit

No TDS upto Rs.

5000

12.2

193 10% No TDS:

Interest on Securities Int payable on CG or SG Securities

Int paid to LIC, GIC

194A- Alag wala Interest 10% LIMIT for Int paid by:

Interest other than -Banks/co-op bank/ Post off. - Rs. 40,000

Int. on securities -Others 5000
50,000 for senior citizens

194DA 5% On Income Component

Maturity Proceeds (After 1.9.19)

(Maturity less premium paid)

of LIP

NO TDS if:-
DA- DAULAT

• If amount less than Rs. 1,00,000

• If Sum is Recd. on death of Insured.

• If Maturity exempt u/s 10(10D)

194IA 1% of sale Price • No TDS on Rural Agri land

Sale of Immovable • Consideration < 50L → NO TDS

Property ↳ TDS on 50 lacs or more

Not

SDV

• Consideration includes maintainace fees,

parking fees & all other similar charges

194IB 5% • NO TDS IF RENT per month is upto

TDS on Rent NO PAN - 20% Rs. 50,000

of Immovable

• Deducted at the time of payment/

Property

credit of rent of last month w.e. earlier

• Deduction not to exceed Rent for

Last month

194 IC - Indira Colony.

10% IF CONSIDERATION IN KIND → NO TDS

Consideration for

agreement as per Sec

45(5A)

Joint development

Agreement

12.3

194 LA 10% of Amount upto Rs. 2,50, 000 → NO TDS

Compulsory Sale Price Rural or Urban Agri land-NO TDS

Acq of Immovable

Property

194K 10% NO TDS if payment is

TDS on Income KAUN KAATEGA - UTI/MF
upto Rs. 5000 in a P.Y.

KISKA KATEGA- Resident person
in respect of units.

194LB 5% KAUN KAATEGA - Inf. Debt Fund

TDs on Interest KISKA KATEGA - NR/FC.

on Infrastructure

Debt fund

194N- Nahi Denge When limit is 1 cr: → TDS only applicable on excess

amount over and above limit.

TDS on Cash Rate- 2%

withdrawls in Eg- withdrawal 1.20 cr

When limit is 20 lacs:.

excess of Rs. I crore TDS applicable on 0.20 Cr only.

20 lakhs to 1 crores- 2%

Above 1 crores-5%
Limit will be checked separately for

different banks

→ If assessee has not filed ROI for all 3

preceding P. Ys for which Due Date u/s

139(1) is expired, Limit will be Rs. 20

lakhs

1940 1% NO TDS if all the following conditions

are satisfied:

TDS on payment KAUN KAATEGA-E-Commerce

by E-commerce operator
KISKA KATEGA - E-Commerce i) E- comm. participants Ind/HUF

Operator participant (resident person)

ii) Gross amount of Sale/Services

during P.Y. is upto Rs. 5 lakh

206 AA -

If No PAN- 5% iii) PAN or aadhaar furnished.

12.4

Amendments (F.A. 21)

194P TDS rate- Slab Rate → Section only applicable if

Senior citizen has ONLY:.

Pairi Pauna

Payer-Specified Bank

TDS by Bank in
Payee- Individual

case of Senior Citizen Pension Interest in any

Resident aged
Income Account in which

75 yrs or more

he receives pension

→ That Alc should be with

the same Bank only.

Rate- 0.1%
194Q → Only applicable on excess amount over

NO PAN- 5% 50 lakhs, not whole amount.

Purchase of Goods

of more than Rs. 50 → TDS under this section not

Kaun Kaatega:.

lakhs during P.Y. applicable if:.

Any Buyer whose

last year
w.e.f. 1/7/21

TDS already TCS already

T/O> Rs. 10 crore

deducted collected

under any u/s 206C(1H)

Kiska Katega:

other section

Seller
eg. 1940

Notes:

→ Where both 194Q & 206C (1H) applies, TDS has to be deducted u/s 194Q

→ Where TDS u/s 194Q & TCS u/s 206(1)/(1F)/(1G) applies, TCS has to be collected

under above sections.

→ TDS u/s 194Q,194O, 206C(1H) not applicable on securities transactions through RSE.

→ TDS u/s 194Q not applicable on GST component. But It will be applicable on whole amount of any

Advance payment.

→ If Buyer is NR- 194Q not applicable But it will be applicable if

If Seller is NR - 206C(1H) not applicable NR has PE in India

→ For 1st Year of Business, TDS u/s 194Q not applicable since last year T/O is zero.

→ If Whole Income of Seller is Exempt- 194Q not applicable

If Whole Income of Buyer is Exempt - 206C(1H) not applicable

→ TDS u/s 194Q is applicable from 1.7.21, but for calculating threshold of Rs. 50 lakhs we will

consider purchases before 1.7.21 also. TDS will not be applicable on those purchases before 1.7.21

12.5

To whom HIJAC are applicable?

HIJAC (1) Assessee other than Individual/HUF

(2) Ind/HUF whose last year T/O> 1 cr in case of Business

G/R > 50 lacs in case of profession.

Master Chart for Remembering all limits

→TDS is applicable starting

→ NO TDS if amount is upto

↳ No TDS If Amounts < Threshold limit from this Amount

Which means TDS is only applicable if

Sec 194IA → TDS applicable if

Amount paid is more than the

Amt is 50 lakhs or more

threshold Limit
→ NO TDS till Rs. 49,99,999

All Other sections Sec 194DA → TDS applicable if

Amt is 1,00,000 or more

→ No TDS till Rs. 99,999

Sec 192A → TDS applicable if

Amt is Rs. 50,000 or more

→ No TDs till Rs. 49,999.

12.6

Sec 206AB: TDS Rate for Non- Filers (F. A 2021)

In case of TDS, if payee has not of last 2 P.Ys, for which due date has

Filed Returns

expired (PY18-19, 19-20), & TDS deducted is 50,000 or more, then TDS Rate

shall be: - Twice the TDS Rate

w.e.is higher
- or 5%

192,

→ This section is not applicable on

192A

NR payee not having

194B &

PE in India

194BB

194LBC

194N

→ In case payee did not furnish PAN: Rate as per Sec 206AA

or

5%

w.e. is higher.

12.7

TAX COLLECTED AT SOURCE

TCS RATES

Sec 206C(1)

(a) Alcoholic liquor for human consumption 1%

(b) Tendu leaves 5%

(c) Timber obtained under a forest lease 2.5%

(d) Timber obtained by any mode other than (c) 2.5%

(e) Any other forest produce not being timber or tendu leaves. 2.5%

(f) Scrap 1%

(g) Minerals, being coal or lignite or iron ore 1%

Note : No TCS shall be collected if Resident Buyer gives declaration that above goods

are to be utilised for the purpose of manufacturing, processing or producing articles

or things or for generation of power and not for trading purposes.

Sec 206C(1C) : Lease or a licence of parking lot, toll plaza or mine or a quarry

TCS Rate - 2%.

TCS shall be collected by every person who grants a lease or a licence or enters into a

contract or otherwise transfers any right or interest in any -

- parking lot or

- toll plaza or

- a mine or a quarry

to another person (other than a public sector company) for the use of such parking

lot or toll plaza or mine or quarry for the purposes of business.

Note – Mining and quarrying excludes mining and quarrying of mineral oil i.e. mining

and quarrying of petroleum and natural gas.

Sec 206C(1F): Sale of motor vehicle of value exceeding 10 lakhs

TCS shall be collected by seller, on sale of a motor vehicle of the value > Rs. 10

lakhs, from the buyer @1% of the sale consideration.

Note: TCS under this section is not applicable when Manufacturer sells cars to the

dealers. Only applicable on Retail Sale

→ Limit of Rs. 10 Lacs has to be checked at each purchase, not on aggregate sale

made during the P.Y.

12.8

Sec 206C(1G)

TCS on Remittance outside India

OR Sale of Tour Package.

In case of authorized dealer, In case of Sale of an

who receives an amount Overseas tour program package,

of more than 7 lacs in p y. if seller receives any amount, Seller

from a buyer → who is is required to collect TCS @5%.

remitting amount outside

India under LRS of RBI,

the Auth. dealer is required to

collect TCS @ 5% in excess of Rs. 7 Lacs.

to toe 4

Note: If remitted amount is remitted out B 1,7 S

1949 1
of educational loan taken from Financial 1 low

Institution, TCS Rate shall be @ 0.5% low 206

1940 CCM

Sec 206C(1H)

Sale of goods of value exceeding 50 lakh

Sells goods exceeding

Seller Buyer

value 50 Lacs in a P.Y.

Having T/0 > 10Cr

in Last P.Y.

TCS shall be collected @ 0.1% at the time of receipt

of amount in excess of 50 Lacs

→ TCS is not required to be collected under this section if already collected u/s

206C(1)/(1F)/(1G) or if Goods are exported.

→ Where both 194Q & 206C (1H) applies, TDS has to be deducted u/s 194Q

→ TCS u/s 206C(1H) shall be calculated on whole amount including GST.

→ If Collectee did not provide PAN, TCS shall be collected @ 1%

→ In case of Sale of Fuel to NR Airlines, TCS u/s 206C(1H) not applicable

12.9

Additional Points

Due Date of Payment of TDS/TCS

TDS TCS

For Other Months 7th of Next month 7th of Next month

For March 30th April of Next F.Y. 7th April of Next F.Y.

For Sec 194M,194IA, 194IB:

→ TAN not required as TDS under these sections are deducted ocassionally

Due Date of Return : 194 IA - Form 26QB

30 Days from the end of

& Payment 194 IB - Form 26QB

month in which deducted

194 M - Form 26QB

Due Date of Return of TDS/TCS

Quarter Ended TCS Return TDS

30th June 15th July 31st July

30th September 15th October 31st October

31st December 15th January 31st January

31st March 15th May 31st May

Late Fees: Rs. 200 per day of delay in filing of TDS/TCS Returns

If TDS/TCS Return is filed after 1 year of Due Date → Penalty u/s 271H shall be

leviable - 10,000 to max 1,00,000.

12.10

Interest for Late Deduction/Collection of TDS/TCS

TDS TCS

1% per month
Late Deduction/Collection 1% per month

or part or part

Period Date on which TDS was
Date on which TCS was

deductible to date on

collectible to date on

which it is deducted
which it is actually paid

Late Payment 1.5 % per month -

or part

Period Date on which TDS was

deducted to date on

which it is actually paid

Time of Collecting TCS

(a) at the time of debiting the party or But for Sec 206C(1F) & 1(H),

(b) receipt of consideration TCS is collected only at the time of

w.e. is earlier receipt of consideration.

Section 206CC

If Collectee has not provided PAN or Aadhar, TCS Rate shall be:

Twice the TCS Rate

In case of Sec 206C(1H), It is 1%

OR

5%

w.e. is higher

Sec 201: Assessee in Default

If TDS is not deducted then, Assessee is treated as assessee in

OR deducted but not paid to Govt. default.

Penalty u/s 221 is attracted → which can be upto 100% of TDS Amount

12.11

Payer is not treated as Assessee in Default if :

filed return u/s 139(1)

paid tax on such income PayEE Has taken into account such

income

And Payer has furnished a certificate from his

CA in this regard to AO

12.12