Taxation Handwritten Notes by Vivek Gaba Sir

VG STUDY HUB CA INTER INCOME TAX 7703880232
CA - INTER
INCOME TAX
Handwritten
SUMMARY NOTES
Relevant for:
CA – INTER May 2022 Exams
By
CA Vivek Gaba
(FCA, CCTP & B.Com)
CA VIVEK GABA NEW TAX RATES FINANCE ACT, 2020
INCOME TAX RATES

[APPLICABLE FOR MAY / JUNE 2021 EXAMS]
In case of an INDIVIDUAL (resident or non-resident) or HUF or Association of
Person (AOP) or Body of Individual (BOI) or any other artificial juridical person
(AJP)
In case INDIVIDUALS [MALE / FEMALE]

(Other than senior and super senior citizen)
Net Income Range Rate of Income-tax

AY 2021-22 AY 2020-21
[MAY / JUNE 2021 EXAMS] [ TILL DEC. 2020 EXAMS]
Up to Rs. 2,50,000 - -
Rs. 2,50,010 to Rs. 5,00,000 5% 5%
Rs. 5,00,010 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 30%
SENIOR CITIZEN
(who is 60 years or more at any time during the previous year)

AY 2021-22 AY 2020-21
[ TILL DEC. 2020 EXAMS]
[MAY / JUNE 2021 EXAMS]
Up to Rs. 3,00,000 - -
Rs. 3,00,010 to Rs. 5,00,000 5% 5%
Rs. 5,00,010 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,010 30% 30%
For any enquiry : visit at www.expertbano.com Page 1

SUPER SENIOR CITIZEN

(who is 80 years or more at any time during the previous year)

AY 2021-22 AY 2020-21
Up to Rs. 5,00,000 - -
Rs. 5,00,010 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 30%
HINDU UNDIVIDED FAMILY (INCLUDING AOP, BOI AND ARTIFICIAL JURIDICAL

PERSON)

AY 2021-22 AY 2020-21
Up to Rs. 2,50,000 - -
Rs. 2,50,000 to Rs. 5,00,000 5% 5%
Rs. 5,00,000 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 30%
CONCEPT OF SURCHARGE (LEVIED ON INCOME TAX)
Surcharge is levied on the amount of income-tax at following rates if total income

of an assessee [Individual, HUF, AOP/BOI & AJP] exceeds specified limits:- (AY 21-
22 i.e PY 20-21)
Particulars Surcharge rate

Total income upto 50 lakhs Nil
Total income more than 50 lakhs but upto 1 crore 10%
Total income more than 1 crore but upto 2 crore 15%

Total income more than 10 crore 37%
Note 1: Same rate was applicable in AY 20-21 (i.e. PY 19-20)
Note 2: The enhanced surcharge of 25% & 37%, as the case may be, is not
levied, from income chargeable to tax as dividend income and income taxable
under sections 111A, 112A and 115AD. Hence, the maximum rate of surcharge on tax
payable on such incomes shall be 15%.
However, marginal relief is available from surcharge in following manner-

i. in case where net income exceeds Rs. 50 lakh but doesn't exceed Rs. 1
Crore, the amount payable as income tax and surcharge shall not exceed the
total amount payable as income tax on total income of Rs 50 Lakh by more
than the amount of income that exceeds Rs 50 Lakhs.
ii. in case where net income exceeds Rs. 1 crore but doesn't exceed Rs. 2
crore, marginal relief shall be available from surcharge in such a manner that
the amount payable as income tax and surcharge shall not exceed the total
amount payable as income-tax on total income of Rs. 1 crore by more than
the amount of income that exceeds Rs. 1 crore.
iii. in case where net income exceeds Rs. 2 crore but doesn't exceed Rs. 5
crore, marginal relief shall be available from surcharge in such a manner that
the amount payable as income tax and surcharge shall not exceed the total
amount payable as income-tax on total income of Rs. 2 crore by more than
the amount of income that exceeds Rs. 2 crore.
iv. in case where net income exceeds Rs. 5 crore, marginal relief shall be
available from surcharge in such a manner that the amount payable as

income tax and surcharge shall not exceed the total amount payable as
income-tax on total income of Rs. 5 crore by more than the amount of
income that exceeds Rs. 5 crore.
Health and Education Cess : Health and Education Cess is levied at the rate of
4% on the amount of income-tax plus surcharge.
Note: A resident individual (whose net income does not exceed Rs. 5,00,000) can
avail rebate under section 87A. It is deductible from income-tax before calculating
health & education cess. The amount of rebate is 100 per cent of income-tax or
Rs. 12,500, whichever is less.
Special tax Rate for INDIVIDUAL AND HUF’S

(NEWLY INSERTED SECTION 115BAC)
The Finance Act, 2020, has provided an OPTION TO INDIVIDUALS [ALL

CATEGORY] AND HUF for payment of taxes at the following reduced rates from
Assessment Year 2021-22 and onwards:
Total Income (Rs) Rate

Up to 2,50,000 Nil
From 2,50,010 to 5,00,000 5%
From 5,00,010 to 7,50,000 10%
From 7,50,010 to 10,00,000 15%
From 10,00,010 to 12,50,000 20%

From 12,50,010 to 15,00,000 25%
Above 15,00,000 30%

Concept of surcharge ( levied on Income tax)
Surcharge is levied on the amount of income-tax at following rates if total income

of an assessee exceeds specified limits:- (AY 21-22 i.e PY 20-21)
Particulars Surcharge rate
Total income upto 50 lakhs Nil
Total income more than 50 lakhs but upto 1 crore 10%
Total income more than 10 crore 37%
Note: The enhanced surcharge of 25% & 37%, as the case may be, is not levied,
from income chargeable to tax as dividend income and income taxable under
sections 111A, 112A and 115AD. Hence, the maximum rate of surcharge on tax
payable on such incomes shall be 15%.
However, marginal relief is available from surcharge in following manner-
i. in case where net income exceeds Rs. 50 lakh but doesn't exceed Rs. 1
Crore, the amount payable as income tax and surcharge shall not exceed the
total amount payable as income tax on total income of Rs 50 Lakh by more
than the amount of income that exceeds Rs 50 Lakhs.
ii. in case where net income exceeds Rs. 1 crore but doesn't exceed Rs. 2 crore,
marginal relief shall be available from surcharge in such a manner that the amount
payable as income tax and surcharge shall not exceed the total amount payable as
income-tax on total income of Rs. 1 crore by more than the amount of income
that exceeds Rs. 1 crore.
iii. in case where net income exceeds Rs. 2 crore but doesn't exceed Rs. 5 crore,
marginal relief shall be available from surcharge in such a manner that the amount

payable as income tax and surcharge shall not exceed the total amount payable as
income-tax on total income of Rs. 2 crore by more than the amount of income
that exceeds Rs. 2 crore.
iv. in case where net income exceeds Rs. 5 crore, marginal relief shall be
available from surcharge in such a manner that the amount payable as income tax
and surcharge shall not exceed the total amount payable as income-tax on total
income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5
crore.
Health and Education Cess : Health and Education Cess is levied at the rate of
4% on the amount of income-tax plus surcharge.
Note 1: A resident individual (whose net income does not exceed Rs. 5,00,000) can
avail rebate under section 87A. It is deductible from income-tax before calculating
education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500,
whichever is less.
Note 2: The option to pay tax at lower rates shall be available only if the total
income of assessee is computed without claiming specified exemptions or deductions
[REFER BELOW]:
For the purposes of Note - 2, the total income of the individual or Hindu undivided
family shall be computed,—
(i) without any exemption or deduction of

 Section 10(5) or
 Section10(13A) or
 Section 10(14) (other than those as may be prescribed for this purpose) or
 Section 10(17) or
 Section 10(32), or
 section 10AA or
 section 16 or

 section 24(b) (in respect of the property referred to in sub-section (2) of

section 23) or
 section 32(1)(iia) or
 section 32AD or
 section 33AB or
 section 33ABA or
 Section 35(1)((ii)(iia)(iii)
 Section 35(2AA)(ii)(iia)(iii)
 Section 35AD
 Section 35CCC
 Section 57(1)(iia)
 under any of the provisions of Chapter VI-A (Section 80C to 80U) other
than Section 80CCD(2) or section 80JJAA;
(ii) without set off of any loss,—

(a) carried forward or depreciation from any earlier assessment year, if such loss or
depreciation is attributable to any of the deductions referred to in clause (i);
(b) under the head “Income from house property” with any other head of income;
(iii) by claiming the depreciation, if any, under any provision of section 32, except
Section 32(1)(iia), determined in such manner as may be prescribed; and
(iv) without any exemption or deduction for allowances or perquisite, by whatever

name called, provided under any other law for the time being in force.
(3) The loss and depreciation referred to in clause (ii) of sub-section (2) shall be
deemed to have been given full effect to and no further deduction for such loss or
depreciation shall be allowed for any subsequent year:
Provided that where there is a depreciation allowance in respect of a block of

assets which has not been given full effect to prior to the assessment year
beginning on the 1st day of April, 2021, corresponding adjustment shall be made to

the written down value of such block of assets as on the 1st day of April, 2020 in
the prescribed manner, if the option under sub-section (5) is exercised for a
previous year relevant to the assessment year beginning on the 1st day of April,
2021.
(4) In case of a person, having a Unit in the International Financial Services Centre,
as referred to in sub-section (1A) of section 80LA, which has exercised option under
sub-section (5), the conditions contained in sub-section (2) shall be modified to
the extent that the deduction under section 80LA shall be available to such Unit
subject to fulfilment of the conditions contained in the said section.
Explanation.—For the purposes of this sub-section, the term “Unit” shall have the
meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones
Act, 2005
(5) Nothing contained in this section shall apply unless option is exercised in the
prescribed manner by the person,—
i. having income from business or profession, on or before the due date specified
under sub-section (1) of section 139 for furnishing the returns of income for any
previous year relevant to the assessment year commencing on or after the 1st day of
April, 2021, and such option once exercised shall apply to subsequent
assessment years;
ii. having income other than the income referred to in clause (i), alongwith the
return of income to be furnished under sub-section (1) of section 139 for a previous
year relevant to the assessment year:
Provided that the option under clause (i), once exercised for any previous year
can be withdrawn only once for a previous year other than the year in which it
was exercised and thereafter, the person shall never be eligible to exercise option
under this section, except where such person ceases to have any income from
business or profession in which case, option under clause (ii) shall be available.

Example 1 based on Amendment: (without cess & Surcharge)
Annual Old Tax as per New Tax as Benefit

income slab old slab slab per new under
rate rate rate slab rate new slab
rate
2,50,000 Nil Nil Nil Nil Nil
5,00,000 5% Nil (after 5% Nil (after Nil
rebate) rebate)
7,50,000 10% 37,500 20% 62,500 25,000
8,00,000 15% 45,000 20% 72,500 27,500
10,00,000 15% 75,000 20% 1,12,500 37,500
12,00,000 20% 1,25,000 30% 1,87,500 62,500
15,00,0000 25% 1,87,500 30% 2,62,500 75,000
(max)
50,00,000 30% 12,37,500 30% 13,12,500 75,000
Example 2 based on Amendment:
Binod is a bank employee who earns Rs 8 lakh a year. Being salaried, he contributes
towards EPF and also gets HRA benefits in his salary as he is living on rent. Apart
from this, he is eligible for LTA and this year, he incurred Rs 25,000 on his
travelling and will be claiming it. Due to his family obligations, he is not able to
save anything beyond his EPF contribution.
Let’s see which tax regime will save more taxes for him.
Particular Old tax regime New tax regime

a) Annual Income 8,00,000 8,00,000
b) Standard Deduction -50,000
c) EPF Contribution (Section 80C) -25,000
d) HRA -30,000
e) Leave Travel Allowance -25,000

f) Total (Deduction & Exemption) 1,30,000

NET TAXABLE INCOME (a-f) 6,70,000 8,00,000
OPTION – 1 (TAX AS PER OLD REGIME)

TAX – 46,500 + 4% (CESS) = 48,360
OPTION – 2 (TAX AS PER NEW REGIME)

TAX – 45,000 + 4% (CESS) = 46,800
ADVICE – As you can see, Binod will save more taxes in the new tax system, with
tax burden going down by Rs 1,560 HENCE OPTION 2 (NEW TAX REGIME ) IS
BENEFICIAL FOR ASSSESSEE.

Rahul, an IT professional, earns Rs 13 lakh a year. Being salaried, he contributes
towards the EPF. Also, he has invested Rs 40,000 in tax saving mutual
fund (ELSS) and purchased a term life insurance with a coverage of Rs 1 crore. For
this, he has paid a premium of Rs 10,000. Moreover, he is also eligible to claim tax
exemption for Rs 30,000 in HRA , Rs. 20,000 in LTA, and Rs 26,400 for Sodexo meal
coupons respectively in his taxable income.
Now, let’s see how his tax liability changes in either of the tax structures

a) Annual Income 13,00,000 13,00,000
c) Section 80C -75,000
d) HRA -30,000
f) meal coupon -26,400
g) Total (Deduction & Exemption) 2,01,400
NET TAXABLE INCOME (a-g) 10,98,600 13,00,000


TAX – 1,42,080 + 4% (CESS) = 1,47,763

TAX – 1,37,500 + 4% (CESS) = 1,43,000
ADVICE – As As you can see, in this case too, the new tax system works better. In
fact, in the old tax regime, Amit will end up paying Rs 4,763 more in taxes.HENCE
OPTION 1 (old TAX REGIME ) IS BENEFICIAL FOR ASSSESSEE.
Sidharth, who earns Rs 20 lakh annually. He avails the full Rs. 1.5 lakh limit of Section
80C through a combination of contribution to EPF and ELSS mutual funds. Besides
this, he bought health insurance, for which he paid a premium of Rs 25,000 that he
claims as tax deduction under Section 80D. Also, to save more taxes from his salary, he
made additional investments of Rs 30,000 in NPS. Similar to Ramit, he also claimed a
LTA amount of Rs 25,000, which is tax exempted.
Now let’s see which tax regime will give more money in his hand.

a) Annual Income 20,00,000 13,00,000
c) Section 80C -1,50,000
d) HRA -50,000
f) health insurance -25,000
g) section 80CCD(1B) NPS -30,000
i) Total (Deduction & Exemption) 3,30,000
NET TAXABLE INCOME (a-i) 16,70,000 20,00,000


TAX – 3,13,000 + 4% (CESS) = 3,26,040

TAX – 3,37,500 + 4% (CESS) = 3,51,000
ADVICE – In this case, the old tax slab works better. It will result in lower taxes
with the difference of Rs 24,960.
CRUX:
It’s very clear that the changes introduced doesn’t make things easier for tax
payers. One shall choose the regime which is most beneficial for him. New
regime will do good to someone who is not intending to invest any money in any
tax savings plan.
Tax Rates of Partnership Firm
For the Assessment Year 2020-21 & 2021-22, a partnership firm (including LLP) is
taxable at 30%.
Surcharge : The amount of income-tax shall be increased by a surcharge at the rate
of 12% of such tax, where total income exceeds one crore rupees. However, the
surcharge shall be subject to marginal relief (where income exceeds one crore rupees,
the total amount payable as income-tax and surcharge shall not exceed total amount
payable as income-tax on total income of one crore rupees by more than the amount
of income that exceeds one crore rupees).

Health and Education Cess : The amount of income-tax and the applicable
surcharge, shall be further increased by health and education cess calculated at the
rate of 4% percent of such income-tax and surcharge
Tax Rates of Local Authority
For the Assessment Year 2020-21 & 2021-22, a local authority is taxable at 30%.
Surcharge : The amount of income-tax shall be increased by a surcharge at the

rate of 12% of such tax, where total income exceeds one crore rupees. However,
the surcharge shall be subject to marginal relief (where income exceeds one crore
rupees, the total amount payable as income-tax and surcharge shall not exceed
total amount payable as income-tax on total income of one crore rupees by more
than the amount of income that exceeds one crore rupees).
surcharge, shall be further increased by health and education cess calculated at
the rate of 4% percent of such income-tax and surcharge.
Tax Rates of Domestic Company
Income-tax rates applicable in case of domestic companies for assessment year

2021-22 are as follows:
Where its total turnover or gross receipt during the previous year 2018-19 25%
does not exceed Rs. 400 crore
Any other domestic company 30%
Surcharge : The amount of income-tax shall be increased by a surcharge at the

rate of 7% of such tax, where total income exceeds one crore rupees but not
exceeding ten crore rupees and at the rate of 12% of such tax, where total
income exceeds ten crore rupees. The surcharge shall be subject to marginal

relief, which shall be as under:
(i) Where income exceeds Rs. 1 crore but not exceeding Rs. 10 crore, the
total amount payable as income-tax and surcharge shall not exceed total
amount payable as income-tax on total income of Rs. 1 crore by more than the
amount of income that exceeds Rs. 1 crore.
(ii) Where income exceeds Rs. 10 crore, the total amount payable as
income-tax and surcharge shall not exceed total amount payable as income-tax
on total income of Rs. 10 crore by more than the amount of income that
exceeds Rs. 10 crore
the rate of 4% percent of such income-tax and surcharge.
Special Tax rates applicable to a domestic company
The special Income-tax rates applicable in case of domestic companies for

assessment year 2020-21 and 2021-22 are as follows:
Domestic company AY 20-21 AY 21-22

Where it opted for section 115BA 25% 25%
Where it opted for Section 115BAA 22% 22%
Where it opted for Section 115BAB 15% 15%
Surcharge: The rate of surcharge in case of a company opting for taxability under
Section 115BAA or Section 115BAB shall be flat 10% irrespective of amount of total
income.
Health and Education Cess: The amount of income-tax and the applicable

the rate of 4% of such income-tax and surcharge.
MAT : The domestic company who has opted for special taxation regime under
Section 115BAA & 115BAB is exempted from provision of MAT. However, no
exemption is available in case where section 115BA has been opted.
In that case, the provisions of Minimum Alternate Tax (MAT) applies, tax payable
cannot be less than 15% (+HEC) of "Book profit" computed as per section 115JB.
However, MAT is levied at the rate of 9% (plus surcharge and cess as applicable)
in case of a company, being a unit of an International Financial Services Centre
and deriving its income solely in convertible foreign exchange.
TAX RATES OF FOREIGN COMPANY
Assessment Year 2020-21 and Assessment Year 2021-22
Nature Of Income Tax Rates

Royalty received from Government or an Indian concern in 50%
pursuance of an agreement made with the Indian concern
after March 31, 1961, but before April 1, 1976, or fees for
rendering technical services in pursuance of an agreement
made after February 29, 1964 but before April 1, 1976 and
where such agreement has, in either case, been approved
by the Central Government
Any other income 40%
Surcharge: The amount of income-tax shall be increased by a surcharge at the

rate of 2% of such tax, where total income exceeds one crore rupees but not
exceeding ten crore rupees and at the rate of 5% of such tax, where total
income exceeds ten crore rupees. However, the surcharge shall be subject to
marginal relief, which shall be as under:

(i) Where income exceeds one crore rupees but not exceeding ten crore
total amount payable as income-tax on total income of one crore rupees by
more than the amount of income that exceeds one crore rupees.
(ii) Where income exceeds ten crore rupees, the total amount payable as
income-tax and surcharge shall not exceed total amount payable as income-tax
on total income of ten crore rupees by more than the amount of income that
exceeds ten crore rupees.
the rate of 4% of such income-tax and surcharge.
Tax Rates of Co-operative Society

Assessment Year 2020-21 and Assessment Year 2021-22
Taxable Income Tax Rates
Up to Rs. 10,000 10%
Rs. 10,000 to Rs. 20,000 20%
Above Rs. 20,000 30%
Surcharge: The amount of income-tax shall be increased by a surcharge at the

rate of 12% of such tax, where total income exceeds one crore rupees. However,
the surcharge shall be subject to marginal relief (where income exceeds one crore
total amount payable as income-tax on total income of one crore rupees by more
than the amount of income that exceeds one crore rupees).
Health and Education Cess: The amount of income-tax and the applicable
surcharge, shall be further increased by health and education cess calculated at the

rate of 4% percent of such income-tax and surcharge.
Special tax rates applicable to a Co-operative societies (newly

inserted section 115BAD)
Assessment Year 2021-22

Taxable Income Tax Rates
Any Income 22%
Note:
The Finance Act, 2020 has inserted a new Section 115BAD in Income-tax Act to
provide an option to the co-operative societies to get taxed at the rate of 22% plus
10% surcharge and 4% cess. The resident co-operative societies have an option to
opt for taxation under newly Section 115BAD of the Act w.e.f. Assessment Year
2021-22. The option once exercised under this section cannot be subsequently
withdrawn for the same or any other previous year.
If the new regime of Section 115BAD is opted by a co-operative society, its income
shall be computed without providing for specified exemption, deduction or incentive
available under the Act. The societies opting for this section have been kept out of
the purview of Alternate Minimum Tax (AMT). Further, the provision relating to
computation, carry forward and set-off of AMT credit shall not apply to these
assessees
The option to pay tax at lower rates shall be available only if the total income of
co-operative society is computed without claiming specified exemptions or deductions
For the purposes of concessional tax rates, the total income of the co-operative
society shall be computed,—
(i) without any deduction under the provisions of

 section 10AA or

 Section 32(1)(iia) or
 section 32AD or
 section 33AB or
 section 33ABA or
 Section 35(1)((ii)(iia)(iii)
 Section 35(2AA)(ii)(iia)(iii)
 Section 35AD
 Section 35CCC
 or under any of the provisions of Chapter VI-A [section 80C to 80U]
other than the provisions of section 80JJAA;
(ii) without set off of any loss carried forward or depreciation from any earlier
assessment year, if such loss or depreciation is attributable to any of the deductions
referred to in clause (i); and
(iii) by claiming the depreciation, if any, under section 32, other than Section
32(1)(iia), determined in such manner as may be prescribed.
(3) The loss and depreciation referred to in clause (ii) of sub-section (2) shall
be deemed to have been given full effect to and no further deduction for such
loss or depreciation shall be allowed for any subsequent year: Provided that where
there is a depreciation allowance in respect of a block of assets which has not been
given full effect to prior to the assessment year beginning on the 1st day of April,
2021, corresponding adjustment shall be made to the written down value of such
block of assets as on the 1st day of April, 2020 in such manner as may be
prescribed, if the option under sub-section (5) is exercised for a previous year
relevant to the assessment year beginning on the 1st day of April, 2021.
(4) In case of a person, having a Unit in the International Financial Services Centre,
as referred to in sub-section (1A) of section 80LA, which has exercised option under
sub-section (5), the conditions contained in sub-section (2) shall be modified to
the extent that the deduction under the said section shall be available to such Unit

CA VIVEK GABA AMENDMENTS BY FA, 2020 JUNE/DEC 2021
CHAPTER – 2
RESIDENTIAL STATUS
1. Residential status on the basis of number of days of stay in India -
Under section 6(1), an individual is said to be resident in India in any
previous year, if he satisfies any one of the following conditions:
(i) He has been in India during the previous year for a total period of 182
days or more, or
(ii) He has been in India during the 4 years immediately preceding the
previous year for a total period of 365 days or more and has been in
India for at least 60 days in the relevant previous year.
If the individual satisfies any one of the conditions mentioned above, he is

a resident. If both the above conditions are not satisfied, the individual
is a non- resident.
Exceptions:
The following categories of individuals will be treated as resident in India

only if the period of their stay during the relevant previous year
amounts to 182 days or more. In other words, even if such persons were
in India for 60 days or more (but less than 182 days) in the relevant
previous year, they will not be treated as resident due to the reason that
their stay in India was for 365 days or more during the 4 immediately
preceding years.
(1) Indian citizen, who leaves India during the relevant previous year as a
member of the crew of an Indian ship or for purposes of employment
outside India, or
Whatsapp Number – 9643036663, Call & Whatsapp - 7703880232 Page 1

(2) Indian citizen or person of Indian origin1 who, being outside India comes
on a visit to India during the relevant previous year and his TOTAL
INCOME ( other than income from foreign sources) is 15 lakhs or less.
However, such person having total income, other than the income from
foreign sources [i.e., income which accrues or arises outside India (except
income from a business controlled from or profession set up in India) and
which is not deemed to accrue or arise in India], EXCEEDING ` 15 LAKHS
DURING THE PREVIOUS YEAR will be treated as resident in India if -
- the period of his stay during the relevant previous year amounts to 182
days or more, or
- he has been in India during the 4 years immediately preceding the

previous year for a total period of 365 days or more and has been in
India for at least 120 days in the previous year.
(2) Deemed resident [Section 6(1A)]– An individual, being an Indian

citizen, having total income, other than the income from foreign sources
[i.e., income which accrues or arises outside India (except income from a
business controlled from or profession set up in India) and which is not
deemed to accrue or arise in India], exceeding ` 15 lakhs during the
previous year would be deemed to be resident in India in that previous
year, if he is not liable to pay tax in any other country or territory by
reason of his domicile or residence or any other criteria of similar nature.
However, this provision will not apply in case of an individual who is a

resident of India in the previous year as per section 6(1).

Resident and ordinarily resident/Resident but not ordinarily resident
Only individuals and HUF can be “resident but not ordinarily resident” in
India. All other classes of assessees can be either a resident or non-resident. A
not-ordinarily resident person is one who satisfies any one of the conditions
specified u/s 6(6).
(i) If such individual has been non-resident in India in any 9 out of the 10
previous years preceding the relevant previous year, or
(ii) If such individual has during the 7 previous years preceding the relevant
previous year been in India for a period of 729 days or less, or
(iii) If such individual is an Indian citizen or person of Indian origin (who, being
outside India, comes on a visit to India in any previous year) having total
income, other than the income from foreign sources [i.e., income which
accrues or arises outside India (other than income derived from a business
controlled in or profession set up in India) and which is not deemed to accrue
or arise in India], exceeding ` 15 lakhs during the previous year, who has
been in India for 120 days or more but less than 182 days during that
previous year, or
(iv) If such individual is an Indian citizen who is deemed to be resident in India

under section 6(1A) [It may be noted that a deemed resident will always be
a resident but not ordinarily resident].

Analysis & Example: [We will Discuss in Amendment Class]


CHAPTER – 3
OTHER IMPORTANT AMENDMENTS
Chapter SALARY
In section 17 of the Income-tax Act, in clause (2), for sub-clause (vii), the
following sub-clauses shall be substituted with effect from the 1st day of
April, 2021, namely:––
(vii) the amount or the aggregate of amounts of any contribution made to

the account of the assessee by the employer–
(a) in a recognised provident fund;
(b) in the scheme referred to in sub-section (1) of section 80CCD; and
(c) in an approved superannuation fund, to the extent it exceeds 7,50,000 in

a previous year;
(viia) the annual accretion by way of interest, dividend or any other amount
of similar nature during the previous year to the balance at the credit of the
fund or scheme referred to in sub-clause (vii) to the extent it relates to the
contribution referred to in the said sub-clause which is included in total
income under the said sub-clause in any previous year computed in such
manner as may be prescribed; and”.


Chapter CAPITAL GAINS

Section 50C: Special provision for full value of consideration in certain
cases.
Where the consideration received or accruing as a result of the transfer by an

assessee of a capital asset, being land or building or both, is less than the
value adopted or assessed or assessable by any authority of a State Government
(hereafter in this section referred to as the "stamp valuation authority") for
the purpose of payment of stamp duty in respect of such transfer, the value so
adopted or assessed or assessable shall, for the purposes of section 48, be
deemed to be the full value of the consideration received or accruing as a result
of such transfer :
Provided that where the date of the agreement fixing the amount of
consideration and the date of registration for the transfer of the capital asset
are not the same, the value adopted or assessed or assessable by the stamp
valuation authority on the date of agreement may be taken for the purposes of
computing full value of consideration for such transfer:
Provided further that the first proviso shall apply only in a case where the
amount of consideration, or a part thereof, has been received by way of an
account payee cheque or account payee bank draft or by use of electronic
clearing system through a bank account or through such other electronic mode
as may be prescribed], on or before the date of the agreement for transfer:
Provided also that where the value adopted or assessed or assessable by the
stamp valuation authority does not exceed one hundred and TEN [five] per cent
of the consideration received or accruing as a result of the transfer, the

consideration so received or accruing as a result of the transfer shall, for the

purposes of section 48, be deemed to be the full value of the consideration.
Note: Consequently, even section 43CA and section 56(2)(x), are amended on
a similar basis, and provides for a ten percent tolerance limit.

.Section 55: Meaning of “adjusted”, “cost of improvement” and “cost of

acquisition”.
The following proviso is inserted-
In case of capital assets being land or building or both, the fair market value
[FMV] of such asset as on the 1 st day of April, 2001 shall not exceed the
stamp duty value, wherever available, of such asset as on 1st day of April, 2001.

Section 50CA: Capital gains in case of unquoted shares
The provisions of section 50CA of the Act shall not apply to transfer of
any movable property, being unquoted shares, of a company and its
subsidiary and the subsidiary of such subsidiary by an assessee, where,—
(i) NCLT, on an application moved by the Central Government under

section 241 of the Companies Act, 2013, has suspended the Board of
Directors of such company and has appointed new directors nominated
by the Central Government under section 242 of the said Act; and
(ii) Share of such company and its subsidiary and the subsidiary of such
subsidiary has been transferred pursuant to a resolution plan approved
by the NCLT under section 242 of the Companies Act, 2013 after
affording a reasonable opportunity of being heard to the jurisdictional
Principal Commissioner or Commissioner.
Note: Consequently, even section 56(2)(x), are amended on a similar basis.

Chapter PGBP
Amendments in Section 35 Deductions:
 Section 35(1)(ii) = 150% 100% of any sum paid……..
 Section 35(2AA) = 150% 100% of sum paid…….
 Section 35(2AB) = 150% 100% of the expenditure…….
 Sec tion 35(CCC) = 150% 100% of such expenditure…….
 Section 35(CCD) = 150% 100% of such expenditure…..
 Section 35AD = Deduction available to assessee carrying on the following

“Specified Business” if he so OPTS
Section 35(1A) New Inserted Research Institution or Research Company

Prepares and files a Statement
(1A) Notwithstanding anything contained in sub-section (1), the research

association, university, college or other institution referred to in clause (ii) or
clause (iii) or the company referred to in clause (iia) of sub-section (1) shall
not be entitled to deduction under the respective clauses of the said sub-
section, unless such research association, university, college or other institution
or company––
(i) prepares such statement for such period as may be prescribed and
deliver or cause to be delivered to the said prescribed income-tax
authority or the person authorised by such authority such
statement in such form, verified in such manner, setting forth such
particulars and within such time, as may be prescribed:
Provided that such research association, university, college or other

institution or the company may also deliver to the prescribed

authority a correction statement for rectification of any mistake or
to add, delete or update the information furnished in the statement
delivered under this sub-section in such form and verified in such
manner as may be prescribed; and
(ii) furnishes to the donor, a certificate specifying the amount of

donation in such manner, containing such particulars and within
such time from the date of receipt of sum, as may be prescribed.”.
Insertion of new section 234G: Fee for default relating to statement or

certificate
1) Without prejudice to the provisions of this Act, where
(a) the research association, university, college or other institution

referred to in clause (ii) or clause (iii) or the company referred to in
clause (iia) of sub-section (1) of section 35 fails to deliver or cause
to be delivered a statement within the time prescribed under clause
(i), or furnish a certificate prescribed under clause (ii) of sub-section
(1A) of that section; or
(b) the institution or fund fails to deliver or cause to be delivered a

statement within the time prescribed under clause (viii) of sub-
section (5) of section 80G, or furnish a certificate prescribed under
clause (ix) of the said sub-section
it shall be liable to pay, by way of fee, a sum of two hundred rupees

for every day during which the failure continues.
(1) The amount of fee referred to in sub-section (1) shall,—
(a) not exceed the amount in respect of which the failure referred
to therein has occurred;

(b) be paid before delivering or causing to be delivered the

statement or before furnishing the certificate referred to in sub-
section (1)
Insertion of new section 271K: Penalty for failure to furnish statements,

etc..
Without prejudice to the provisions of this Act, the Assessing Officer may direct
that a sum not less than ten thousand rupees but which may extend to one
lakh rupees shall be paid by way of penalty by—
(i) the research association, university, college or other institution

referred to in clause (ii) or clause (iii) or the company referred to
in clause (iia), of sub-section (1) of section 35, if it fails to deliver
or cause to be delivered a statement within the time prescribed
under clause (i), or furnish a certificate prescribed under clause (ii)
of sub-section (1A) of that section; or
(ii) the institution or fund, if it fails to deliver or cause to be

delivered a statement within the time prescribed under clause
(viii) of sub-section (5) of section 80G, or furnish a certificate
prescribed under clause (ix) of the said sub-section.”.


Section 43CA: Special provision for full value of consideration for transfer of
assets other than capital assets in certain cases
Where the consideration received or accruing as a result of the transfer by an

assessee of an asset (other than a capital asset), being land or building or
both, is less than the value adopted or assessed or assessable by any authority
of a State Government for the purpose of payment of stamp duty in respect of
such transfer, the value so adopted or assessed or assessable shall, for the
purposes of computing profits and gains from transfer of such asset, be deemed
to be the full value of the consideration received or accruing as a result of such
transfer:
Provided that where the value adopted or assessed or assessable by the
authority for the purpose of payment of stamp duty does not exceed one
hundred and TEN [five] per cent of the consideration received or accruing as a
result of the transfer, the consideration so received or accruing as a result of
the transfer shall, for the purposes of computing profits and gains from
transfer of such asset, be deemed to be the full value of the consideration.
Note: Consequently, even section 50C and section 56(2)(x), are amended on a
similar basis, and provides for a ten percent tolerance limit.

Section 44AB: Audit of accounts of certain persons carrying on business

or profession
Amendment 1 in Section 44AB:

The following proviso shall be inserted, namely;
‘Provided that in the case of a person whose––
(a) aggregate of all amounts received including amount received for sales,
turnover or gross receipts during the previous year, in cash, does NOT
EXCEED FIVE PER CENT. of the said amount; and
(b) aggregate of all payments made including amount incurred for

expenditure, in cash, during the previous year does NOT EXCEED FIVE
PER CENT. of the said payment,
this clause shall have effect as if for the words “one crore rupees”, the
words “FIVE CRORE RUPEES” had been substituted; or’;
Amendment 2 in Section 44AB:

in the Explanation, in clause (ii), - Further, to enable pre-filling of
returns in case of persons having income from business or profession, it is
required that the tax audit report may be furnished by the said assessees
at least one month prior to the due date of filing of return of income.
It means, as the due date for furnishing return of income U/s 139(1) is made
as 31st October of relevant assessment year, the due date for submission of
audit report under this section will be 30 th September of relevant of
assessment year.

Analysis of Amendment 1:
A new proviso to section 44AB(a) has been added, whereby the threshold limit
for a person carrying on business who is required to get his accounts audited,
has been increased from one crore rupees as provided in section 44AB(a) to
five crore rupees, only in cases where both the below conditions are
satisfied:
 aggregate of all receipts including sales, turnover or gross receipts, in cash

during the previous year does not exceed five per cent of such receipt; and
 aggregate of all payments made including amount incurred for expenditure, in
cash during the previous year does not exceed five per cent of such payment

Amendment: Common Line Inserted under Section 33AB, 33ABA, 35D & 35E
To enable pre-filing of returns, all the sections where a report/certificate of

Chartered Accountant is required example, section 33AB, 33ABA, 35D, 44AB,
10AA etc., the assessee has to submit the report/certificate one month prior
to the due date of filing of return of income.
Amendment in Section 40(A)(3) and Rule 6DD
 Rule 6ABBA prescribed the other electronic modes such as Credit

card, Debit Card, Net banking, IMPS, UPI, RTGS, NEFT & BHIM.
 Payment on a day on which bank was closed due to holiday or strike.
[Point deleted from Rule 6BB]

Chapter OTHER SOURCES

Section 57: Deduction
As all the dividends are made taxable in the hands of recipient, the deductions
from such income are brought in by inserting the following proviso.
No expenses are allowed as deduction EXCEPT the interest expenses incurred

to earn the income in the nature of Dividend or income in respect of units of
MF specified under clause (23D) of section 10 or income in respect of units
from a specified company defined in the explanation to clause(35) of section
10.
And SUCH DEDUCTION SHALL NOT EXCEED 20% OF THE DIVIDEND

INCOME, or income in respect of such units included in the total income for
that year.

Section 115BBDA: Tax on certain dividends received from domestic

companies.
As per this section, the dividend received by the specified assessee exceeding
Rs.10,00,000/-, such dividend received in excess Rs.10,00,000/- will be taxed at
the rate of 10%. This provision will be applicable till AY 2020-21. From AY
2021-22, this section will be inactive.
Section 115-O: Dividend Distribution Tax
DDT is removed from AY 2021-22. It means, the companies are not required
to pay tax on the dividend distributed by them. It will be taxed in the hands of
recipient i.e., Shareholders.
Section 115-R: Tax on income distributed to unit holders
Tax on distributed income to unit holders is removed from AY 2021-22. It

means, the specified company/mutual fund is not required to pay tax on the
income distributed by them. It will be taxed in the hands of recipient i.e., Unit
holders.

Section 56(2)(x): Taxation of GIFT
any immovable property,—

(A) without consideration, the stamp duty value of which exceeds fifty
thousand rupees, the stamp duty value of such property;
(B) for a consideration, the stamp duty value of such property as exceeds such
consideration, if the amount of such excess is more than the higher of the
following amounts, namely:—
(i) the amount of fifty thousand rupees; and
(ii) the amount equal to TEN [five] per cent of the consideration
Note: Consequently, even section 43CA and section 50C, are amended on a
similar basis, and provides for a ten percent tolerance limit.

CHAPTER
TAXATION OF COMPANY
Section 115BAA: Tax on income of certain domestic companies.
In section 115BAA of the Income-tax Act, in sub-section (2), in clause (i), for
the words, figures and letters ‘Chapter VI-A under the heading “C.—Deductions
in respect of certain incomes” other than the provisions of section 80JJAA’,
the words, figures and letters “Chapter VI-A other than the provisions of
section 80JJAA or section 80M” shall be substituted with effect from the
1st day of April, 2021.
It means, now the companies opting to pay tax under this section can
claim deduction U/s. 80M.
Section 115BAB: Tax on income of new manufacturing domestic companies.
In section 115BAB of the Income-tax Act, in sub-section (2),––(i) in clause

(c), in sub-clause (i), for the words, figures and letters ‘Chapter VI-A under
the heading “C.—Deductions in respect of certain incomes” other than the
provisions of section 80JJAA’, the words, figures and letters “Chapter VI-A
other than the provisions of section 80JJAA or section 80M” shall be
substituted with effect from the 1st day of April, 2021;
It means, now the companies opting to pay tax under this section can
claim deduction U/s.80M.

CHAPTER AMT
Section 115JC: Special provisions for payment of tax by certain persons
other than a company. [Alternate Minimum Tax]
If an assessee opts to tax under Sec.115BAC or Sec.115BAD, then Alternate

Minimum Tax is not applicable to such assessee.
Section 115JD:Tax credit for alternate minimum tax.
If any assessee opts to pay tax under Sec.115BAC or Sec.115BAD and if any
brought forward Alternate Minimum Tax [AMT] credit exists, such credit will
lapse as it is not allowed to carry forward further.

FIRST PROVISO TO SECTION 234C
Provided that nothing contained in this sub-section shall apply to any

shortfall in the payment of the tax due on the returned income where such
shortfall is on account of under-estimate or failure to estimate—
(a) the amount of capital gains; or
(b) income by way of lottery, crossword puzzles, races, card games and
gambling etc.; or
(c) income under the head "Profits and gains of business or profession" in
cases where the income accrues or arises under the said head for the
first time; or
(d) Dividend income

CHAPTER TDS
Section 194: TDS on Dividends
The Company distributing dividend has to deduct TDS as under-
– On dividend distributed in any Mode i.e., either in cash or cheque, etc.
– If such dividend paid is more than Rs.5000/- (earlier it was 2500/-)
– The rate of TDS is 10%
Section 194A TDS on interest other than interest on securities:
Keeping other things same as mentioned already in the section, Applicability for
Individual and HUF (payer) is changed as under –
If an Individual or HUF is having business turnover more than Rs.

1,00,00,000/- in the financial year immediately preceding the financial year
in which such amount liable for tds is paid or credited &
If an Individual or HUF is having professional receipts more than Rs.

50,00,000/- in the financial year immediately preceding the financial year
in which such amount liable for tds is paid or credited, is required to deduct
TDS.
The scope of section 194A to deduct tax at source in respect of payment of

interest is being widened in respect of the Cooperative Societies.
– If the total sales, gross receipt or turnover of the Cooperative Society

exceeds Rs. 50 crore during the financial year immediately preceding the
financial year and the amount of interest to be credited or paid during the
financial year is more than Rs. 40,000 in the case of such cooperative
society, the cooperative society shall be required to deduct tax at the rate of

10% in case the amount of interest credited or paid or likely to be credited or

paid during the financial year.
-However, in the case of the senior citizen, the tax shall be required to be
deducted at source in case this amount is more than Rs. 50,000/-
TDS U/s 194C, 194H, 194I, 194J & 194IB
Keeping other things same as mentioned already in the section, Applicability for
Individual and HUF (payers) is changed as under –
– If an Individual or HUF is having business turnover more than Rs.

1,00,00,000/- in the financial year immediately preceding the financial year in
which such amount liable for tds is paid or credited &
– If an Individual or HUF is having professional receipts more than Rs.

50,00,000/- in the financial year immediately preceding the financial year in
which such amount liable for tds is paid or credited, is required to deduct
TDS.
Section 194K: [newly inserted] TDS in respect of units
– Any person responsible for paying to a resident any income in respect of

Units,
– Shall deduct TDS at the rate of 10%
– If any sum paid is more than Rs. 5000/-
Section 194N: TDS on Payment of certain amount of CASH
Every person, being,—
(i) a banking company
(ii) a co-operative bank

(iii) a post office

who is responsible for paying any sum, being the amount or the
aggregate of amounts, as the case may be, in cash EXCEEDING ONE
CRORE RUPEES DURING THE PREVIOUS YEAR, to any person (herein
referred to as the recipient) from one or more accounts maintained by
the recipient with it shall, at the time of payment of such sum,
DEDUCT AN AMOUNT EQUAL TO TWO PER CENT. of such sum, as
income-tax:
Provided that in case of a recepient who has not filed the returns of
income for all of the three assessment years relevant to the three
previous years, for which the time limit of file return of income under
sub-section (1) of section 139 has expired, immediately preceding the
previous year in which the payment of the sum is made to him, the
provision of this section shall apply with the modification that—
(i) the sum shall be the amount or the aggregate of amounts, as

the case may be, in cash exceeding twenty lakh rupees during
the previous year; and
(ii) the deduction shall be—
(a) AN AMOUNT EQUAL TO TWO PER CENT. of the sum where

the amount or aggregate of amounts, as the case may be,
being paid in cash exceeds twenty lakh rupees during the
previous year but does not exceed one crore rupees; or
(b) AN AMOUNT EQUAL TO FIVE PER CENT. of the sum where

the amount or aggregate of amounts, as the case may be,
being paid in cash exceeds one crore rupees during the

previous year:
Section 206AA: TDS at higher rate
A recipient who fails to furnish PAN to the person making a payment would
suffer TDS at the higher of the rates mentioned below:
 At the rate specified in the relevant provision of the Act;

 At the rate or rates in force, i.e., the rate prescribed in the Finance Act
(Finance Act 2020 for FY 2020-21);
 At the rate of 20% [As per Finance Act, 2020, 5% tax is required to
be deducted in case of section 194-O instead of 20%]
Changes in Time limit of TDS & TCS Return
The due date of furnishing the TDS/TCS return for the Quarter ending on 30 th
June, 2020 and Quarter ending on 30th Sep, 2020 i.e. Q1 and Q2 for F.Y 2020-
21 shall be 31st March, 2021
Section 201: Interest in case of failure to deduct and paid TDS
Where the due date for payment of TDS falls during 20th March, 2020 to 29th
June, 2020 and such TDS has not been paid by such date but is paid by 30th
June, 2020, then the rate of interest in respect of such amount for the period
delay shall not exceed 0.75% for every month or part.

194-O: [newly inserted] Payment of certain sums by e-commerce operator

to the e-commerce participant.
– an E-commerce operator shall be required to deduct TDS at the rate of

1% at the time of credit of amount of sale or service or both to the
account of the E-commerce participant or at the time of payment thereof
to such participant by any mode, whichever is earlier.
– The rate of TDS is 1%
– The amount shall include the payment directly made by the purchaser
of the goods or services to the E-commerce participant.
– However, this provision shall not be applicable for E-commerce

participant if the E-commerce participant happens to be an individual or
HUF and the gross amount of sales or services or both of such individual
or HUF through such E-commerce operator during the year does not
exceed Rs.5 lakhs and such E-commerce participant furnishes a PAN or
aadhar Number.
– In case the E-commerce participant does not furnish PAN or Aadhar

Number to the e-commerce operator, TDS shall be deducted at the
rate of 5% under section 206AA of the Act
Section 197: Certificate for deduction at lower rate
For TDS under 194-O, lower deduction certificate can be obtained by the
assessee.

Section 271AAD:[newly inserted] Penalty for false or omitted entries found

in books of accounts
– If it is found during any proceeding under the Act that in the books of
accounts maintained by any person, there is a (i) false entry or (ii) any entry
relevant for computation of total income of such person has been omitted to
evade tax liability, then such person shall be liable to pay by way of penalty, a
sum which is equal to the aggregate amounts of such false entries or omitted
entry.
– Further, penalty will be levied of the aggregate amounts of such false entries
or omitted entry on any other person who causes the assessee in making the
false entry or omits or causes to omit an entry.
– The term ‘false entry’ has been defined in an inclusive manner to include use
or intention to use:
(a) Forged or falsified documents such as a false invoice, or a false piece of

documentary evidence, or
(b) invoice for supply or receipt of goods or services or both issued by or

received by the assessee in respect of which no actual goods or services have
been provided or received; or
(c) Invoice issued for supply of goods or services or both issued by or received
from a non-existent person


Miscellaneous Amendments:
1. Revision under Section 264 is made by CCIT or CIT
2. Finance Act, 2020 provides that corpus donations made by a trust i.e.,
donations made by trust with a specific direction that they are towards
the corpus of the trust/institutions shall not treated as application of
income if such corpus donations are made to –
a) A trust registered u/s 12AA
b) A Fund, university, medical institutions or hospitals u/s 10(23C)
3. Authorised dealer receiving from a buyer for remittance out of India and
seller of an overseas tour program package from a buyer shall, at the
time of debiting the amount payable by the buyer or at the time of
receipt of such amount from the said buyer, by any mode, whichever is
earlier, collect from the buyer (As amended by Finance Act, 2020 this
TCS will be effective from 1st October, 2020):
a. TCS @ 5% for amount exceeding Rs. 7 Lacs in a financial year and

is for a purpose other than purchase of overseas tour program package.
the tour operator shall collect TCS on the entire sum as there is no
threshold limit for him.
b. TCS @ 0.5% if the amount exceeding Rs. 7 Lacs being remitted out
is a loan obtained from any financial institution as defined in section
80E, for the purpose of pursuing any education.
c. TCS@ 10% if no PAN or Aadhaar is furnished
4. A seller, who receives consideration for sale of any goods of the

aggregate value exceeding Rs. 50 lacs in any previous year, other than
the goods being exported out of india or goods covered elsewhere under
this section, at the time of receipt of such amount, collect from the

buyer TCS @ 0.1 % of the sale consideration exceeding Rs 50 lacs. (As

amended by Finance Act, 2020)
TCS @ 10% if no PAN or Aadhaar is furnished by the buyer.

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 13th May, 2020
PRESS RELEASE
Reduction in rate of Tax Deduction at Source (TDS) & Tax Collection at Source (TCS)
In order to provide more funds at the disposal of the taxpayers for dealing with the
economic situation arising out of COVID-19 pandemic, the rates of Tax Deduction at Source
(TDS) for the following non-salaried specified payments made to residents has been reduced
by 25% for the period from 14th May, 2020 to 31st March, 2021:-
Section of Nature of Payment Existing Rate Reduced rate

the Income- of TDS from
S. No tax Act 14/05/2020 to
31/03/2021
1 193 Interest on Securities 10% 7.5%
2 194 Dividend 10% 7.5%
194A Interest other than interest 10% 7.5%

3 on securities
194C Payment of Contractors 1% (individ- 0.75% (indi-

and sub-contractors ual/HUF) vidual/HUF)
4 2% (others) 1.5% (others)
5 194D Insurance Commission 5% 3.75%
194DA Payment in respect of life 5% 3.75%

6 insurance policy
194EE Payments in respect of 10% 7.5%

7 deposits under National
Savings Scheme
194F Payments on account of 20% 15%

8 re-purchase of Units by
Mutual Funds or UTI
194G Commission, prize etc., 5% 3.75%

9 on sale of lottery tickets
10 194H Commission or brokerage 5% 3.75%

194-I(a) Rent for plant and ma- 2% 1.5%
11 chinery
194-I(b) Rent for immovable prop- 10% 7.5%

12 erty
194-IA Payment for acquisition 1% 0.75%

13 of immovable property
194-IB Payment of rent by indi- 5% 3.75%

14 vidual or HUF
194-IC Payment for Joint Devel- 10% 7.5%

15 opment Agreements
194J Fee for Professional or 2% (FTS, cer- 1.5% (FTS,

Technical Services (FTS), tain royalties, certain royal-
16 Royalty, etc. call centre) ties, call cen-
10% (others) tre)
7.5% (others)
194K Payment of dividend by 10% 7.5%

17 Mutual Funds
194LA Payment of Compensa- 10% 7.5%

tion on acquisition of im-
18 movable property
194LBA(1) Payment of income by 10% 7.5%

19 Business trust
194LBB(i) Payment of income by In- 10% 7.5%

20 vestment fund
194LBC(1) Income by securitisation 25% (Individ- 18.75% (Indi-

trust ual/HUF) vidual/HUF)
21 30% (Others) 22.5% (Oth-
ers)
194M Payment to commission, 5% 3.75%

22 brokerage etc. by Individ-
ual and HUF
194-O TDS on e-commerce par- 1% 0.75%

23 ticipants (w.e.f.
1.10.2020)
2. Further, the rate of Tax Collection at Source (TCS) for the following specified receipts
has also been reduced by 25% for the period from 14th May, 2020 to 31st March, 2021:-
Section of Nature of Receipts Existing Reduced rate

the In- Rate of TCS from
S. No come-tax 14/05/2020 to
Act 31/03/2021
206C(1) Sale of
(a) Tendu Leaves 5% 3.75%
(b)Timber obtained under a for- 2.5% 1.875%

est lease
(c) timber obtained by any other 2.5% 1.875%

1 mode
(d) Any other forest produce not 2.5% 1.875%

being timber/tendu leaves
(e) scrap 1% 0.75%
(f) Minerals, being coal or lig- 1% 0.75%

nite or iron ore
206C(1C) Grant of license, lease, etc. of 2% 1.5%

(a) Parking lot
2
(b) Toll Plaza 2% 1.5%
(c) Mining and quarrying 2% 1.5%
206C(1F) Sale of motor vehicle above 10 1% 0.75%

3 lakhs
206C(1H) Sale of any other goods 0.1% 0.75%

4 (w.e.f
01.10.2020)
3. Therefore, TDS on the amount paid or credited during the period from 14th May, 2020
to 31st March, 2021 shall be deducted at the reduced rates specified in the table in para 1
above. Similarly, the tax on the amount received or debited during the period from 14th
May, 2020 to 31st March, 2021 shall be collected at the reduced rates specified in the table
in para 2 above.
4. It is further stated that there shall be no reduction in rates of TDS or TCS, where the tax
is required to be deducted or collected at higher rate due to non-furnishing of
PAN/Aadhaar. For example, if the tax is required to be deducted at 20% under section
206AA of the Income-tax Act due to non-furnishing of PAN/Aadhaar, it shall be deducted
at the rate of 20% and not at the rate of 15%.
5. Legislative amendments in this regard shall be proposed in due course.
(Surabhi Ahluwalia)
Commissioner of Income Tax
(Media & Technical Policy)
Official Spokesperson, CBDT
CHAPTER RETURN OF
INCOME & Adv. Tax
Section 139: Due date for filing of ITR is amended as under-
a. Date of filing Audit Report delinked from date of filing return.
b. For audit cases due date is changed as 31st Oct of relevant Assessment
Year.
c. Earlier, the due date for filing ITR of only the Working partner was that of
same for audit cases. But now, it is amended and made as due date for
filing of ITR of partners (i.e., both the sleeping and working partner) will be
that of audit cases (i.e. 31st Oct of relevant Assessment year).
Section 139AA QUOTING OF AADHAAR NUMBER
1. Every person who has been allotted PAN as on the 1st day of July, 2017, and
who is eligible to obtain Aadhaar number, shall intimate his Aadhaar
number to Principal Director General/ Principal Director of Income Tax
(System) by 31st March, 2021.
2. The provisions of this section shall not apply to the following persons
i. Residing in the States of Assam, Jammu and Kashmir and

Meghalaya
ii. Non-resident as per income tax Act
iii. Of the age of 80 years or more at any time during the relevant PY
iv. Not a citizen of India
Who do not possess Aadhaar Number or the Enrolment ID.

Rule 114AAA: Manner of Making PAN INOPERATIVE
Where a person, who has been allotted the permanent account number as on
the 1st day of July, 2017 and is required to intimate his Aadhaar number under
sub-section (2) of section 139AA, has failed to intimate the same on or
before the 31st day of March, 2020, the permanent account number of such
person shall become inoperative immediately, then:
 it shall be deemed that he has not furnished, intimated or quoted the

permanent account number, as the case may be, in accordance with the
provisions of the Act, and he shall be liable for all the consequences
under the Act for not furnishing, intimating or quoting the permanent
account number.
 Where the person has intimated his Aadhaar number after the 31st day
of March, 2020, his permanent account number shall become
operative
Section 139A: Permanent Account Number (PAN)
If the assessee does not have PAN but has Aadhaar number, then he can
quote Aadhaar number where is a requirement to quote PAN. In such case
PAN will be automatically allotted to him. It shall be deemed that he has
applied for PAN. He is not required to apply for PAN or submit any
documents for getting PAN

VG STUDY HUB INCOME TAX AMENDMENTS FINANCE ACT, 2021
INCOME TAX
AMENDMENTS
Finance Act, 2021
Relevant for:
CS – Executive: JUNE/DEC. 2022
CA – INTER: MAY/NOV 2022
CMA – INTER: JUNE/DEC. 2022
Compilation by
CA Vivek Gaba (FCA, CCTP & B.Com)
WWW.VGSTUDYHUB.COM 1
INDEX
CH. No Chapter Name Page No
1. Basics of Income Tax 3
2. Return of Income 3
3. Residential Status 7
4. Salary 8
5. PGBP 12
6. Capital Gains 18
7. Other Sources 20
8. Deductions 22
9. TDS/TCS 23
10 Other Amendments by FA, 2021 28
CHAPTER-1
BASIC OF INCOME TAX
Amendment: 1
For May/June or Nov/Dec. 2022 Exams: PY 21-22 & AY 22-23 is Relevant
Amendment: 2
Tax Rates for Domestic Company
If the total turnover of gross receipt of the company 25% of Total Income
in P.Y. 2019-20 ≤ ₹ 400 Crore
In any other case 30% of Total Income
Note: Other Tax Rates & Provisions are same as December 2021
CHAPTER -2
RETURN OF INCOME
Amendment: 1
1. Sec.139(1) Meaning of due date: Due Date Means-
Assessee Due Date

(i) Where the assessee, other than an 31St October of the A.Y.
assessee referred to in clause (ii), is-
a. A company
b. A person (other than a company) whose
accounts are required to be audited
under the Income-tax Act, 1961 or any
other law in force; or
b) A partner of a firm whose accounts are
required to be audited under the Income
Tax Act, 1961 or any other law for the time
being in force or the spouse of such
partner if the provisions of section 5A
applies to such spouse.
(ii) In the case of an assessee including the 30th November of A.Y.
partner of the firm or the spouse of such
partner (if the provisions of section 5A
applier to such spouse), being such assessee
who is required to furnish a report referred
to in section 92E.
(iii) In the case of any other assessee. 31st July of A.Y.
Apportionment of income between spouses governed by Portuguese Civil Code

(Section 5A):
(1) Where the husband and wife are governed by the system of community of property (known under the
Portuguese Civil Code of 1860 as "COMMUNIAO DOS BENS") in force in the State of Goa and in the Union
territories of Dadra and Nagar Haveli and Daman and Diu, the income of the husband and of the wife
under any head of income shall not be assessed as that of such community of property (whether treated as an
association of persons or a body of individuals), but such income of the husband and of the wife under each
head of income (other than under the head "Salaries") shall be apportioned equally between the husband
and the wife and the income so apportioned shall be included separately in the total income of the husband
and of the wife respectively, and the remaining provisions of this Act shall apply accordingly.
(2) Where the husband or, as the case may be, the wife governed by the aforesaid system of community of
property has any income under the head "Salaries", such income shall be included in the total income of the
spouse who has actually earned it.
Amendment: 2
Sec.139(4) BELATED RETURN
1) Furnishing of belated return of income: Any person who has not

furnished a return within the time allowed to him under section
139(1), may furnish the return for any previous year at any time -
a) Before 3 months prior to the end of the relevant assessment year;
(i.e. 31.12.2022 for PY 21-22) or
b) Before the completion of the assessment,
whichever is EARLIER.
Example: 1
For A.Y 2022-23, No return of income has been filed and no assessment has been made under section 144.
Upto what time can be the assesse file the return of income?
Solution: Return of income under section 139(4) can be filed upto 31st December, 2022 subject to Section 234F.
Example: 2
For A.Y 2022-23, No return of income has been filed. The assessing officer makes a best judgement assessment
under section 144 on 30th November, 2022/31se December, 2022/31st March 2022. Upto what time can be the
assesse file the return of income?
Solution: Return of Income u/s 139(4) could have been filed upto 20.11.2022/30.12.2022/31.12.2022 subject to
section 234F.
Amendment: 3
REVISED RETURN [SECTION 139(5)]
If any person having furnished a return under section 139(1) or section

139(4), discovers any omission or any wrong statement therein, he may
furnish a revised return AT ANY TIME
a) Before 3 months prior to the end of the relevant assessment year; or

b) Before the completion of the
assessment, Whichever is EARLIER.
Example 1: For Assessment year 2022-23, the due date of filing of ROI was 31-10-2022 and ROI is filed on 31-10-2022
declaring an income of 4,00,000. Revised return is filed on 31-12-2022 declaring loss of 7,30,000. Can the loss be carried
forward?
Solution:
As per the judgement of Dhampur Sugar Mills Ltd., revised return under section 139(5) substitutes the original return
from the date original return was filed. Hence, revised return filed on 31.12.2022 substitutes the original return filed on
31.10.2022 and is deemed to be filed on 31.10.2022. Thereby, as per the provisions of section 80 read with section
139(3), the loss of 7,30,000 shall be carried forward.
Example 2: If in the above question, the original return was filed on 10.11.2022 instead of 31.10.2022, whether the loss
can be carried forward?
Solution:
The return filed under section 139(4) can be revised under section 139(5) Therefore, revised return filed on 31-12-2022 is
valid. As per Dhampur Sugar Mills Ltd., the revised return substitute the original return from 10-11-2022 and is deemed
to be filed on 10-11-2022 As per the provision of section 80 read with section 139(3) the loss cannot be carried forward.
Example 3: For the assessment year 2022-23, the due date of filing of ROI was 31.10.2022 and ROI is filed on
10.11.2022 declaring a loss of Rs. 2,50,000. Revised return is furnished on 31.12.2022 declaring a loss of Rs. 7,00,000.
Comment
Solution:
The return filed on 10.11.2022 is a return filed u/s 139 (4) and as per the provisions of section 80 read with section
139(3), the loss of Rs. 2,50,000 cannot be carried forward. Further the return filed on 31.12.2022 is a valid return, as per
SC in Kumar Jagdish Chandra Sinha amendment made by Finance Act, 2016. As per Dhampur Sugar Mills Ltd., the
revised return is deemed to be filed on 10-10-2022 As per the provision of section 80 read with section 139(3) the loss of
Rs. 7,00,000 cannot be carried forward
Example 4: For the assessment year 2022-23, the due date of filing of ROI was 31.10.2022 and the return is not filed up
to 31.10.2022 The Assessing officer issues notice under section 142(1)
Case 1: On 1-1-2023 and ask the assessee to file the return on 31-1-2023. Assessee files the return on 31-1-2023/10-2-
2023.
Solution:
The late return has been filed after the period given under section 139(4) and therefore, cannot be revised. This is because
the law provides that a return filed under section 139(1) or 139(4) can be revised.
Amendment: 4
Sec.234F Fees for Delay in filling ROI
Where a person who is required to file ROI u/s 139 fail to do so within
prescribe time u/s 139(1), he shall pay by way of fees, a sum of Rs.5000
However if Total Income of the person does not exceed 5L the Fees
payable shall be 1000.
Space for Example:
Amendment: 5
Sec.234H Fees for default relating to Intimation of AADHAR Number

Where a person required to intimate his Aadhar number u/s 139AA fails to do
so before 30th September 2021, he shall be liable to pay such fees as may be
prescribe, at the time of making intimation u/s 139AA after 30th Sep 2021.
However, such fees shall not exceed Rs.1000.
Space for Example:
Chapter 3
Residential Status
Amendment: 1
Significant economic presence [Explanation 2A to section 9(1)(i)]
Significant economic presence of a non-resident in India shall also
constitute business connection in India.
Nature of transaction Condition

(a) in respect of any goods, Aggregate of payments arising
services or property carried out from such transaction or
by a non-resident with any transactions during the previous
person in India including year should exceed ₹2 crores.
provision of download of data
or software in India
(b) systematic and continuous The number of users should be at
soliciting of business activities least 3 lakhs.
or engaging in interaction with
users in India
Further, the above transactions or activities shall constitute significant

economic presence in India, whether or not,—
(i) the agreement for such transactions or activities is entered in India;
(ii) the non-resident has a residence or place of business in India; or
(iii) the non-resident renders services in India:
However, where a business connection is established by reason of
significant economic presence in India, only so much of income as is
attributable to the transactions or activities referred to in (a) or (b) above
shall be deemed to accrue or arise in India.
Space for Example:
CHAPTER-3 SALARIES
Amendment: 1
1. Interest Credited on Contribution by such person/employee
As per section 10(11), any payment from
1. Public Provident Fund(PPF)
2. Statuary Provident Fund (SPF)
3. Recognize Provident Fund (RPF)
Accumulated balance due and becoming payable to an employee is exempt

under section 10(11) & 10(12). The Finance Act 2021 provided that any
interest to the extent it relates to the amount of Provident Fund
contribution exceeding Rs 2,50,000 made by employees would be subject
to tax [Assume, if employee contributes Rs. 4,50,000, the interest on
2,00,000 shall not exempt] . However, in cases where only the employee is
making contributions to the Provident Fund, the threshold limit of Rs
2,50,000 would be enhanced to Rs 5,00,000 [Assume, if employee
contributes Rs. 6,00,000 then interest on Rs. 1,00,000 shall not be exempt].
Thus, such an amendment would lead to dual accounts within the
Provident Fund account i.e. the Taxable as well as the Non-Taxable
component.
It may be noted that interest accrued on contribution to such funds upto

31st March, 2021 would be exempt without any limit, even if the accrual of
income is after that date.
Note: Exemption of PF will be available in following Circumstances:

1. Employee has completed the service of 5 years.
2. Employee has not completed the service of 5 years but service
was Terminated by reason of
a) Ill health
b) Discontinuation by Employee
c) Reason beyond the Control of Employee.
3. Employer Transfer the accumulated balance related to employee towards
a) Account of New Employer
b) NPS u/s 80CCD
c) Govt. Notified Account
Illustration 1 Based on Amendment
Mr. Pinku retires from service on December 31, 2021, after 25 years
of service. Following are the particulars of his income/investments for the
previous year 2021-22:
Particulars ₹
Basic Pay @ ₹20,000 per month for 9 Months 1,80,000
Dearness pay (50% forms part of the retirement benefits) ₹ 90,000
10,000 per month for 9 months
Lump sum payment received from the Unrecognised Provident 7,00,000
Fund
Deposits in the PPF account 50,000
Out of the amount received from the unrecognized provident fund, the
employer’s contribution was ₹ 2,80,000 and the interest thereon ₹ 55,000.
The employee’s contribution was ₹3,00,000 and the interest thereon ₹
65,000. What is the taxable portion of the amount received from the
unrecognized provident fund in the hands of Mr. Sohan for the
assessment year 2022-23?
Solution-
Taxable portion of the amount received from the URPF in the hands of
Mr. Sohan for the A.Y. 2022-23 is computed hereunder:
Particulars ₹
Amount taxable under the head “Salaries”:
Employer’s share in the payment received from the URPF 2,80,000
Interest on the employer’s share 55,000
Total 3,35,000
Amount taxable under the head “Income from Other Sources”:
Interest on the employee’s share 65,000
Total amount taxable from the amount received from the fund 4,00,000
Note: The employee is not eligible for deduction under section 80C for his
contribution to URPF at the time of such contribution. Hence, the
employee’s share received from the URPF is not taxable at the time of
withdrawal as this amount has already been taxed as his salary income.
Illustration-2 ( Based On Amendment).
Will your answer be any different if the fund mentioned above was a
recognised provident fund?
Solution-
The receipt of accumulated balance in a recognized provident fund
would be exempt in the hand of the employee if the employee has
rendered continuous service of 5 years or more. In the given case, since
the withdrawal is taking place after a service of 25 years, the entire amount
received from the RPF will be fully exempt from tax.
Amendment: 2
Annual accretion to the balance at the credit of the recognised provident
fund/ NPS/ approved superannuation fund which relates to the
employer’s contribution and included in total income (on account of the
same having exceeded ₹ 7,50,000)
Any annual accretion by way of interest, dividend or any other amount of
similar nature during the previous year to the balance at the credit of the
recognized provident fund or NPS or approved superannuation fund to
the extent it relates to the employer’s contribution shall also be Taxable as
Perquisite.
The CBDT has, vide Rule 3B, notified the manner to compute the annual
accretion by way of interest, dividend or any other amount of similar
nature during the previous year-
TP = (PC/2)*R + (PC1 + TP1)*R
Where,
TP Taxable perquisite under section 17(2)(viia)for the current
previous year
PC Excess Contribution for the Current Previous year.
PC1 Amount or aggregate of amounts of employer’s contribution

in excess of ₹ 7.5 lakh to recognized provident fund, national
pension scheme u/s 80CCD and approved superannuation
fund for the previous year or years commencing on or after
1st April, 2020
other than the current previous year
TP1 Aggregate of taxable perquisite under section 17(2)(viia) for the
previous year or years commencing on or after 1st April, 2020
other than the current previous year
R I/ Favg
I Amount or aggregate of amounts of income accrued during
the current previous year in recognized provident fund,
national pension scheme u/s 80CCD and approved
superannuation fund
Favg (Amount or aggregate of amounts of balance to the credit of
recognized provident fund, national pension scheme u/s
80CCD and approved superannuation fund on 1st April, 2021
+ Amount or aggregate of amounts of balance to the credit of
recognized provident fund, national pension scheme u/s
80CCD and
approved superannuation fund on 31st March, 2022)/2
Where the amount or aggregate of amounts of TP1 and PC1 exceeds the
amount or aggregate of amounts of balance to the credit of the specified
fund or scheme on 1st April, 2021, then, the amount in excess of the
amount or aggregate of amounts of the said balance shall be ignored for
the purpose of computing the amount or aggregate of amounts of TP1
and PC1.
Illustration 1 Based on Amendment.

Mr. X is appointed as a CFO of ABC Ltd. in Mumbai from 1.5.2020. His basic
salary is ₹ 5,50,000 p.m. He is paid 10% as D.A. He contributes 11% of
his pay and D.A. towards his recognized provident fund and the company
contributes the same amount. The accumulated balance in recognized
provident fund as on 1.4.2021 and 31.3.2022 is ₹ 15,35,000 and ₹ 33,55,000,
respectively. Compute the perquisite value chargeable in the hands of
Mr. X u/s 17(2)(vii) and 17(2)(viia) for the P.Y. 2021-22.
Solution-
1. Perquisite value taxable u/s 17(2)(vii) = ₹ 7,98,600, being employer’s
contribution to recognized provident fund during the P.Y. 2021-22 – ₹
7,50,000 = ₹ 48,600
2. Annual accretion on perquisite taxable u/s 17(2)(vii) = (PC/2)*R + (PC1

+ TP1)*R
= (48,600/2)*0.091 + 0
= ₹ 2,211
PC ABC Ltd.’s contribution in excess of ₹ 7.5 lakh to recognized

provident fund during P.Y. 2021-22 = ₹ 48,600
PC1 Nil since employer’s contribution is less than ₹ 7.5 lakh to

recognized provident fund in P.Y. 2020-21.
TP1 Nil
R I/Favg = 2,22,800/24,45,000 = 0.091
I RPF balance as on 31.3.2022 – employee’s and employer’s
contribution during the year – RPF balance as on 1.4.2021 = ₹ 2,22,800
(₹ 33,55,000 – ₹ 7,98,600 – ₹ 7,98,600 – ₹ 15,35,000)
Favg Balance to the credit of recognized provident fund as on 1st April, 2021
+ Balance to the credit of recognized provident fund as on 31st March,
2022)/2 = (₹ 15,35,000 + ₹ 33,55,000)/2 = ₹ 24,45,000
Note – Since the employee’s contribution to RPF exceeds ₹ 2,50,000 in the

P.Y.2021-22, interest on ₹ 5,48,600 (i.e., ₹ 7,98,600 – ₹ 2,50,000) will also be
chargeable to tax.
CHAPTER-4
PGBP
Amendment: 1
1) Sec.2(11) Block of assets:
Block of Assets: A “block of assets” is defined in section 2(11), as a group of
assets falling within a class of assets comprising—
 Tangible assets, being buildings, machinery, plant or furniture;
 Intangible assets, being know-how, patents, copyrights, trademarks,
licenses, franchises or any other business or commercial rights of similar
nature, not being goodwill of a business or profession.
Amendment: 2
2) Sec.43(6) Written down value

While computing W.D.V. of the block of assets as on 1.4.2020 i.e., for P.Y.
2020- 21, if goodwill of a business or profession was part of the block of
assets and depreciation was allowed on that to the assessee upto P.Y.
2019-20, actual cost of the goodwill as reduced by the amount of
depreciation that would have been allowable to the assessee for such
goodwill as if goodwill was the only asset in the block, has to be reduced.
However, such amount of reduction cannot exceed the WDV.
Amendment: 3
3) Sec.36(1)(VA) Amount received by assessee-employer as contribution from

his employees towards their welfare fund to be allowed only if such
amount is credited on or before due date
any sum received by the employee as contribution towards any welfare
fund of such employees will be allowed only if such sum is credited by the
taxpayer to the employee’s account in the relevant fund on or before the
due date.
As per EPF Scheme 1952, the amounts under consideration in respect of

wages of the employees for any particular month shall be paid within 15
days of the close of every month.
Note - It is clarified that the provisions of section 43B shall not be applicable.
Amendment: 4
4) Sec.43CA: Land & Building Held as Stock in trade.
Where the stamp duty value exceed 110% of the consideration received or
accruing then Stamp duty value shall be Full Value of consideration for the
purposes of computing PGBP.
Instead of 110% take 120% if Following Conditions are satisfied
Conditions
The Transfer of Such transfer is by The considereation

residential unit takes way of first time received or accring
place during the period allotment of the as a result of such
between 12.11.2020 and residential unit to any transfer ≤ ₹2 Crores
30.6.2021 person
Meaning of residential unit –

An independent housing unit with separate facilities for living, cooking
and sanitary requirement, distinctly separated from other residential units
within the building, which is directly accessible from an outer door or
through an interior door in a shared hallway and not by walking through
the living space of another household.
Example based on amendment
X Purchases a newly constructed residential unit of 4,500 sq.ft (under first
allotment) from DEF Builders Ltd. The following information is available-
Case 1 Case 2 Case 3
Date of agreement October October 18,2020 October 18,2020
18,2020
Agreed Consideration Rs. 2 Crore Rs. 2 Crore Rs. 2 Crore
Advance paid on
October 14, 2020 Rs. 20 Lakhs Rs. 20 Lakhs Rs. 20 Lakhs
through NEFT
Stamp duty value
on October 14, 2020 Rs. 2.4 Crore Rs. 2.7 Crore Rs. 2.3 Crore
Date of conveyance March 7, 2021 June 30, 2021 July 25, 2021
deed and its
registration in favour
of X
Stamp duty value on
the date of registration Rs. 2.5 Crore Rs. 2.4 Crore Rs. 2.6 Crore
X and DEF Builders Ltd. want to know tax implications of aforesaid
transaction under sections 43CA and 56)2)(x).
Solution:-
In the above cases, a part of consideration is paid through NEFT on the
date of agreement, Consequently, stamp duty value on the date of
agreement shall be taken for the purpose of safe harbour limit. Moreover,
safe harbour limit for the purpose of sections 43CA and 56(2)(x) has been
increased from 10% to 20% if a few conditions are satisfied. These
conditions are discussed in the table (infra) along with the data given in
the case study-
Whether conditions for applying the
safe harbour limit of 20% are
satisfied-
Situation 1 Situation 2 Situation 3
Condition 1- Residential Unit Yes Yes Yes
is transferred during
November 12, 2020 and June
30, 2021 Yes Yes Yes
Condition 2- Residential unit
is transferred by way of first
allotment Yes Yes Yes
Condition 3-
Consideration does not
exceed Rs. 2 Crore
What is safe harbour limit 20% 20% 10%
under Sec. 43CA &
56(2)(x) Sale consideration Rs. 2 Crore Rs. 2 Crore Rs. 2 Crore
Sale consideration as Rs. 2.4 Crore Rs. 2.4 Rs. 2.2
increased by safe harbour Crore Crore
limits
Stamp duty value on the date

of agreement (as a part of
consideration is paid through
Rs. 2.4 Crore
NEFT on the before the date of Rs. 2.4 Rs. 2.4
agreement Crore Crore
Whether stamp duty value
exceeds 120%/110% of sale No No
consideration No
Full value of consideration Rs. 2 Crore Rs. 2.7 Rs. 2.3
in the hands of DEF Ltd. Crore Crore
under section 43CA
Amount taxable in the hands of NIL Rs. 70 Rs. 30 lakh
X under Section 56(2)(x) lakh
Amendment: 5
AUDIT OF ACCOUNTS OF CERTAIN PERSONS CARRYING ON

BUSINESS OR PROFESSION [SECTION 44AB]
Persons When tax audit is

required?
(1) (2) (3)
Business
(a) In case of a person carrying If his total sales, turnover or gross receipts
on business in business > ₹ 1 crore in the relevant PY
Note – The requirement of audit u/s 44AB
does not apply to a person who declares
profits and gains on presumptive basis
u/s
44AD and his total sales, turnover, or
gross receipts does not exceed ₹ 2 crore.
If in case of such person If his total sales, turnover or gross
carrying on business - receipts in business > ₹ 10 crore in the
(i) Aggregate cash receipts in relevant PY
the relevant PY≤ 5% of total
receipts (including receipts
for sales, turnover, gross
receipts); and
(ii) Aggregate cash payments in
the relevant PY ≤ 5% of total
payments (including
amount
incurred for expenditure)
Note – For this purpose, the payment or receipt, as the case may be,
by a cheque drawn on a bank or by a bank draft, which is not account
payee, would be deemed to be the payment or receipt, as the case may be,
in cash.
(b) In case of an assessee covered If such assessee claims that the profits and
u/s 44AE i.e., an assessee gains from business in the relevant P.Y. are
engaged in the business of lower than the profits and gains computed
plying, hiring or leasing goods on a presumptive basis u/s 44AE [i.e., ₹
carriages who owns not more 1000 per ton of gross vehicle weight or
than 10 goods carriages at any unladen weight in case of each heavy
time during the P.Y. goods vehicle and ₹ 7,500 for each vehicle,
other than heavy goods vehicle, for every
month or part of the month for which the
vehicle is
owned by the assessee].
(c) In case of an eligible assessee If he declares profit for any of the five
carrying on business, whose successive PYs (say, P.Y.2021-22) not in
total turnover, sales, gross accordance with section 44AD (i.e., he
receipts ≤ ₹ 200 lakhs, and declares profits lower than 8% or 6% of
who has opted for section total turnover, sales or gross receipts, as
44AD in any earlier PY (say, the case may be, in that year), then he
P.Y.2020-21) cannot opt for section 44AD for five
successive PYs after the year of such
default (i.e., from P.Y.2022- 23 to P.Y.2026-
27). For the year of default (i.e., P.Y.2021-
22) and five successive previous years
(i.e., P.Y.2022-23 to P.Y.2026-27), he
has to maintain books of account u/s
44AA and get them audited u/s 44AB,
if his
income exceeds the basic exemption limit.
PROFESSION CASES
(a) In case of a person carrying If his gross receipts in profession > ₹ 50
on profession lakh in the relevant PY
(b) In case of an assessee If such resident assessee claims that the

carrying on a notified profits and gains from such profession
profession under section in the relevant PY are lower than the
44AA(1) i.e., legal medical, profits and gains computed on a
engineering, accountancy, presumptive basis u/s 44ADA (50% of
architecture, interior gross receipts) and his income exceeds
decoration, technical the basic exemption limit in that PY.
consultancy, whose
gross receipts ≤ ₹ 50
lakhs
Example Based on Amendment

Let us consider the following particulars relating to a resident individual,
Mr. A, being an eligible assessee carrying on retail trade business whose
total turnover do not exceed ₹ 2 crore in any of the previous years
relevant to A.Y.2022-23 to A.Y.2024-25
Particulars A.Y.2022 A.Y.2023 A.Y.2024

- 23 - 24 - 25
Total turnover ( ₹) 1,80,00,000 1,90,00,000 2,00,00,000
Amount received through 1,60,00,000 1,45,00,000 1,80,00,000
prescribed electronic modes on or
before 31st October of the A.Y.
Income offered for taxation ( ₹) 11,20,000 12,30,000 10,00,000

% of gross receipts 6% on 6% on ₹ 5% on ₹ 2
₹ 1.60 1.45 crore
crore and crore and
8% on ₹ 8% on ₹
20 lakhs 45 lakhs
Offered income as per Yes Yes No
presumptive taxation scheme u/s
44AD
In the above case, Mr. A, an eligible assessee, opts for presumptive taxation
under section 44AD for A.Y.2022-23 and A.Y.2023-24 and offers income of ₹
11.20 lakh and ₹ 12.30 lakh on gross receipts of ₹ 1.80 crore and ₹ 1.90 crore,
respectively.
However, for A.Y.2024-25, he offers income of only ₹ 10 lakh on turnover of ₹

2 crore, which amounts to 5% of his gross receipts. He needs to maintain
books of account under section 44AA and gets the same audited under section
44AB. Since he has not offered income in accordance with the provisions of
section 44AD(1) for five consecutive assessment years, after A.Y. 2022-23, he
will not be eligible to claim the benefit of section 44AD for next five assessment
years succeeding A.Y.2024-25 i.e., from A.Y.2025-26 to 2029-30.
CHAPTER-5
CAPITAL GAINS
Amendment: 1
SECTION 2(14) CAPITAL ASSET
According to section 2(14), a capital asset means –
a) Property of any kind held by an assessee, whether or not connected
with his business or profession;
b) Any securities held by a Foreign Institutional Investor
c) Any unit linked insurance policy (ULIP) issued on or after 1.2.2021,
to which exemption under section 10(10D) does not apply on account
of –
i. Premium payable exceeding ₹ 2,50,000 for any PY during the term of
such policy; or
ii. The aggregate amount of premium exceeding ₹ 2,50,000 in any PY
during the term of any such ULIP(s), in a case where premium is
payable by a person for more than one ULIP issued on or after
1.2.2021.
Amendment: 2
Sec.45(1B) (iii) Unit Linked Insurance Policy Receipts [Section 45(1B)]

Where any person receives, at any time during any previous year, any
amount, under a ULIP issued on or after 1.2.2021, to which exemption
under section 10(10D) does not apply on account of –
(i) premium payable exceeding ₹ 2,50,000 for any of the previous

years during the term of such policy; or
(ii) the aggregate amount of premium exceeding ₹ 2,50,000 in any of
the previous years during the term of any such ULIP(s), in a case where
premium is payable by a person for more than one ULIP issued on or after
1.2.2021, then, any profits or gains arising from receipt of such amount by such
person shall be chargeable to income-tax under the head “Capital gains” and
shall be deemed to be the income of the such person for the previous year in
which such amount was received. The income taxable shall be calculated in
such manner as may be prescribed.
Amendment: 3
Sec.55(2) Cost of Acquisition of Goodwill:
Goodwill of a business or profession or a trademark or brand name
associated with a business or profession or a right to manufacture,
produce or process any article or thing, or right to carry on any business or
profession, tenancy rights, stage carriage permits and loom hours COA will
be NIL if Self generated.
In case of Purchased Goodwill: However, in case of a capital asset, being

goodwill of a business or profession, in respect of which depreciation under
section 32(1) has been obtained by the assessee in any previous year (upto
P.Y.2019-20), the cost of acquisition of such goodwill would be the amount of
the purchase price as reduced by the total amount of depreciation (upto
P.Y.2019-20) obtained by the assessee under section 32(1).
In case of Purchase of Goodwill by Previous Owner:

However, in case of a capital asset, being goodwill of a business or
profession, in respect of which depreciation under section 32(1) has been
obtained by the assessee in any previous year (upto P.Y.2019-20), the cost of
acquisition of such goodwill would be the amount of the purchase price for
such previous owner as reduced by the total amount of depreciation (upto
P.Y.2019-20) obtained by the assessee under section 32(1).
Amendment: 4
Sec.50B Slump Sale: Deemed full value of consideration
[Section 50B(2)(ii)]
Fair market value of the capital assets as on the date of transfer,
calculated in the prescribed manner, shall be deemed to be the full value of the
consideration received or accruing as a result of the transfer of such capital
asset.
Accordingly, the CBDT has inserted Rule 11UAE to determine fair

market value of the capital Assets.
Amendment: 5
Cost Inflation Index: 317 for FY 21-22.
Amendment: 6
Applicability of Sec.111A/112A on ULIP
Section 111A and 112A has been amended to cover the Taxation of ULIP, if
any, and therefore is conditions of those section are satisfied then ULIP shall be
taxed at the rate of 15% or 10%(beyond 1 lakh as the case may be)
CHAPTER-6
INCOME FROM OTHER SOURCES
Amendment: 1
1. Sec.56(2)(X) Immovable property [Land or building or both]:
I. If an immovable Property is received
a) Without consideration:- The Stamp duty value of such property
would be taxed as the income of the recipient, if it exceeds ₹
50,000.
b) For Inadequate consideration:- If Consideration is less than the
stamp duty value of the property and the difference between the
stamp duty value and consideration is more than the higher
of –
i. ₹ 50,000 and
ii. 10% of consideration
The Difference between the stamp duty value and the consideration shall
be chargeable to tax in the hands of the assessee as “Income from other
sources”.
In case immovable property, being a residential unit fulfilling the stipulated

conditions mentioned below, is received for inadequate consideration from a
person who holds such property as his stock-in-trade, then, only if the stamp
duty value of the residential unit exceeds the sale consideration by 20% of
the consideration or ₹ 50,000, whichever is higher, would the difference
between the stamp duty value and the actual consideration be chargeable
to tax in the hands of the recipient of immovable property. The benefit of
higher threshold of 20% of consideration vis-à-vis 10% of consideration shall
be available, subject to the satisfaction of following conditions –
i. The residential unit is transferred during the period between

12.11.2020 and 30.6.2021;
ii. Such transfer is by way of first time allotment of the residential unit
and
iii. The consideration paid or payable as a result of such transfer ≤ ₹ 2
crores.
Note – Though the residential unit should be the stock in trade of the
seller for applicability of the higher threshold of 20%, it should be a capital
asset in the hands of the buyer in the first place for attracting the provisions
of section 56(2)(x).
Meaning of residential unit – An independent housing unit with separate
facilities for living, cooking and sanitary requirement, distinctly separated
from other residential units within the building, which is directly accessible
from an outer door or through an interior door in a shared hallway and
not by walking through the living space of another household.
It may be noted that the above limit shall be considered for each property
separately.
Amendment: 2
2. Non-applicability of section 56(2)(x):
However, any sum of money or value of property received in the

following circumstances would be outside the ambit of section 56(2)(x) -
(i) From any relative; or

(ii) On the occasion of the marriage of the individual; or
(iii) Under a will or by way of inheritance; or
(iv) In contemplation of death of the payer or donor, as the case may be; or
(v) From any local authority as defined in the Explanation to section
10(20); or
(vi) From any fund or foundation or university or other educational
institution or hospital or other medical institution or any trust or
institution referred to in section 10(23C); or
(vii) From or by any trust or institution registered under section 12A or
section 12AA or section 12AB; or
(viii) By any fund or trust or institution or any university or other educational
institution or any hospital or other medical institution referred to in
Section 10(23C)(iv)/(v)/ (vi)/(via).
(ix) By way of transaction not regarded as transfer under section
47(i)/(iv)/(v)/(vi)/(via)/
(viaa)/(vib)/(vic)/(vica)/(vicb)/(vid)/(vii)/(viiac)/(viiad)/(viiae)/(viiaf).
(x) From an individual by a trust created or established solely for the
benefit of relative of the individual.
(xi) From such class of persons and subject to such conditions, as may
be prescribed.
CHAPTER-7
DEDUCTIONS
1. Deduction in respect of interest payable on loan taken for
acquisition of residential house property [Section 80EEA]
(i) Eligible assessee: An individual who has taken a loan for

acquisition of residential house property from any financial
institution. Interest payable on such loan would qualify for
deduction under this section.
(ii) Conditions: The conditions to be satisfied for availing this

deduction are as follows:
Stamp Duty Value of

House ≤ ₹45 Lakhs
The Individual Loan should be

should not own any Conditions sanctioned by a Financial
residential house on Institution during the
the date of sanction of Period from 1.4.2019 and
loan. 31.03.2022
The Individual
should not be
eligible to claim
deduction u/s 80EE
(iii) Quantum of deduction: The maximum deduction allowable is ₹

1,50,000. The deduction of upto ₹ 1,50,000 under section 80EEA is
over and above the deduction available under section 24(b) in
respect of interest payable on loan borrowed for acquisition of a
residential house property.
CHAPTER-8
TDS/TCS
Amendment: 1
Section 194P: Deduction of tax by a specified bank in case of

specified senior citizen (1) Applicability and rate of TDS
A notified banking company shall compute total Income of specified senior
citizen for the relevant assessment year, computed after giving effect to -
- Deduction allowable under Chapter VI-A; and
- Rebate allowable under section 87A
Exemption from filing return of income
The specified senior citizen is exempted from filing his return of income
for the assessment year relevant to the previous year in which the tax has
been deducted under this section.
Meaning of certain terms
S. Term Meaning
No.
(i) Specified A banking company which is a scheduled bank and
bank has been appointed as agents of Reserve Bank of
India under section 45 of the Reserve Bank of India
Act, 1934
(ii) Specified An individual, being a resident in India, who
senior citizen 1. is of the age of 75 years or more at any time during
the previous year;
2. is having pension income [Also, he should have
no other income except interest income received
or receivable from any account maintained by
such individual in the same specified bank in
which he is receiving his pension income]; and
3. has furnished a declaration to the specified bank
containing such particulars, in the prescribed
form and verified in the prescribed manner.
Accordingly, CBDT has inserted Rule 26D to
prescribe the form and manner for furnishing
the declaration
discussed below.
Amendment: 2
Deduction of tax at source on purchase of goods
[Section 194Q] [w.e.f 1.7.2021]
1. Applicability and rate of TDS.

Section 194Q requires any person, being a buyer who is
responsible for paying any sum to any resident-seller for purchase
of goods of the value or aggregate of such value exceeding
₹ 50lakhs in a previous year, to deduct tax at source @0.1% of such
sum exceeding₹ 50 lakhs.
Non-applicability of TDS under section 194Q

Tax is not required to be deducted under this section in respect of a
transaction on which -
(a) Tax is deductible under any of the provisions of this Act; and
(b) Tax is collectible under the provisions of section 206C, other
than section 206C(1H).
In case of a transaction to which both section 206C(1H) and
section 194Q applies, tax is required to be deducted under section
194Q.
Meaning of buyer
Buyer means a person whose total sales, gross receipts or turnover
from the business carried on by him during the financial year
immediately preceding the financial year in which the purchase of
goods is carried out.
However, buyer does not include a person as notified by the
Central Government for this purpose, subject to fulfillment of the
stipulated conditions.
Example Based on Amendment:

Mr. Gupta, a resident Indian, is in retail business and his turnover for
F.Y.2020-21 was ₹ 12 crores. He regularly purchases goods from
another resident, Mr. Agarwal, a wholesaler, and the aggregate
payments during the F.Y.2021-22 was ₹ 95 lakh (₹ 20 lakh on 1.6.2021,
₹ 25 lakh on 12.8.2021, ₹ 22 lakh on 23.11.2021 and ₹ 28 lakh on
25.3.2022). Assume that the said amounts were credited to Mr.
Agarwal’s account in the books of Mr. Gupta on the same date. Mr.
Agarwal’s turnover for F.Y.2020-21 was ₹ 15 crores.
1) Based on the above facts, examine the TDS/TCS implications,
if any, under the Income-tax Act, 1961.
2) Would your answer be different if Mr. Gupta’s turnover for
F.Y.2020- 21 was ₹ 8 crores, all other facts remaining the same?
3) Would your answer to (1) and (2) change, if PAN has not been
furnished by the buyer or seller, as required?
Solution:
1) Since Mr. Gupta’s turnover for F.Y.2020-21 exceeds 10 crores, and
payments made by him to Mr. Agarwal, a resident seller exceed ₹
50 lakhs in the P.Y.2021-22, he is liable to deduct tax@0.1% of ₹ 45
lakhs (being the sum exceeding ₹ 50 lakhs) in the following manner
–
No tax is to be deducted u/s 194Q on the payments made on
1.6.2021 and 12.8.2021, since the aggregate payments till that date
i.e. 45 lakhs, has not exceeded the threshold of ₹ 50 lakhs.
Tax of ₹ 1,700 (i.e., 0.1% of ₹ 17 lakhs) has to be deducted u/s 194Q
from the payment/ credit of ₹ 22 lakh on 23.11.2021 [₹ 22 lakh – ₹ 5
lakhs, being the balance unexhausted threshold limit]. Tax of ₹ 2,800
(i.e., 0.1% of ₹ 28 lakhs) has to be deducted u/s 194Q from the
payment/ credit of ₹ 28 lakhs on 25.3.2022.
Note – In this case, since both section 194Q and 206C(1H) applies,
tax has to be deducted u/s 194Q.
2) If Mr. Gupta’s turnover for the F.Y.2020-21 was only ₹ 8 crores, TDS
provisions under section 194Q would not be attracted. However,
TCS provisions under section 206C(1H) would be attracted in the
hands of Mr. Agarwal, since his turnover exceeds ₹ 10 crores in the
F.Y.2020-21 and his receipts from Mr. Gupta exceed ₹ 50 lakhs.
No tax is to be collected u/s 206C(1H) on 1.6.2021 and 12.8.2021, since
the aggregate receipts till that date i.e. 45 lakhs, has not exceeded the
threshold of ₹ 50 lakhs.
Tax of ₹ 1,700 (i.e., 0.1% of ₹ 17 lakhs) has to be collected u/s
206C(1H) on 23.11.2021 (₹ 22 lakh – ₹ 5 lakhs, being the balance
unexhausted threshold limit). Tax of 2800(0.1% of 28 lakh has to be
collected u/s 206C(IH) on 25.03.2022.
3) In case (1), if PAN is not furnished by Mr. Agarwal to Mr. Gupta,

then, Mr. Gupta has to deduct tax@5%, instead of 0.1%. Accordingly,
tax of ₹ 85,000 (i.e., 5% of ₹ 17 lakhs) and ₹ 1,40,000 (5% of ₹ 28
lakhs) has to be deducted by Mr. Gupta u/s 194Q on 23.11.2021 and
25.3.2022, respectively.
In case (2), if PAN is not furnished by Mr. Gupta to Mr. Agarwal,
then, Mr. Agarwal has to collect tax@1% instead of 0.1%.
Accordingly, tax of
₹ 17,000 (i.e., 1% of ₹ 17 lakhs) and ₹ 28,000 (1% of ₹ 28 lakhs) has to
be collected by Mr. Agarwal u/s 206C(1H) on 23.11.2021 and
25.3.2022, respectively.
Amendment: 3
Higher rate of TDS for non-filers of income-tax return [Section 206AB]
1. Section 206AB requires tax to be deducted at source under the

provisions of this Chapter on any sum or income or amount paid, or
payable or credited, by a person (deductee) to a specified person, at
higher of the following rates-
a) At Twice the rate prescribed in the relevant provisions of the Act;
b) At Twice the rate or rates in force i.e., the rate mentioned in the
Finance Act; or
c) At 5%
However, section 206AB is not applicable in case of tax deductible at

source under section 192, 192A, 194B 194BB, or 194N.
In case the provisions of section 206AA are also applicable to the specified
person, in addition to the provisions of this section, then, tax is required
to be deducted at higher of the two rates provided in section 206AA and
section 206AB.
Meaning of “Specified person”- A person who has Not filed the Return
of income
— For both of the two assessment years relevant to the two
previous years immediately prior to the previous year in
which tax is required to be deducted for which the time
limit of filling return of income under section 139(!) has
expired. And
— The aggregate of tax deducted at source and tax collected
at source in his case is₹ 50,000 or more in each of these two
previous years.
However, the specified person does not include a non-resident
who does not have a permanent establishment in India.
. Amendment: 4
Higher rate of TCS for non-filers of Income tax return and

non furnishers of PAN [Section 206CCA & 206CC]
(i) Section 206CCA, inserted w.e.f. 1.7.2021, requires tax to be
collected at source under the provisions of this Chapter on any sum or
amount received by a person (collectee) from a specified person, at
higher of the following rates –
a) At twice the rate specified in the relevant provision of the Act;
b) At 5% Section
(ii) The provisions of section 206CC require tax collection at the higher
of the following two rates, in case of failure by the person paying any
sum or amount on which tax is collectible at source to furnish PAN to
the person responsible for collecting tax at source -
— At twice the rate specified in the relevant provision of the Act
— At 5% [1%, in case tax is required to be collected at source u/s
206C(1H)]
The provisions of section 206CC does not apply to a non-resident
who does not have a permanent establishment in India.
It may be noted that whereas section 206CC is applicable to persons

paying any sum or amount (on which tax is collectible at source) who
have not furnished PAN, section 206CCA is applicable to specified
persons who have failed to file return of income.
(iii) Meaning of “specified person” – A person who has not filed the
returns of income for both of the two assessment years relevant to the
two previous years immediately prior to the previous year in which
tax is required to be collected, for which the time limit of filing return
of income under section 139(1) has expired, and the aggregate of tax
deducted at source and tax collected at source in his case is₹ 50,000 or
more in each of these two previous years.
However, the specified person does not include a non-resident who

does not have a permanent establishment in India.
In case the provisions of section 206CC are also applicable to the
specified person, in addition to the provisions of section 206CCA,
then, tax is required to be collected at higher of the two rates
provided in section 206CC and section 206CCA.
CHAPTER- 9
OTHER AMENDMENTS by FA, 2021
AMENDMENT: 1
SURCHARGE ON INDIVIDUAL & HUF
Where total income done not include dividend income and capital gains referred to section 111A/112A:
Total Income Surcharge

Upto Rs. 50 lakhs Nil
Above Rs. 50 lakhs but upto Rs. 1 crore 10 %
Above Rs. 1 crore but upto Rs. 2 crore 15%
Above Rs. 2 crore but upto Rs. 5 crore 25%
Above Rs. 5 crores 37%
When total income includes Dividend Income and/ or Capital Gains referred to in section 111A and/or
112A:
Total Income Surcharge
(i) Does not exceed Rs. 50 lakhs Nil
(ii) Exceeds Rs. 50 lakhs but does not exceed 15%
Rs.1 crore
(iii) Exceeds Rs. 1 crore but does not exceed 15%
2 crores Exceeds Rs. 2 crores
(iv) Exceeds Rs.2 crores 15%
A. On tax computed on Capital Gains under
section 111A & 112A and dividend
income
B. On tax computed on
Total Income - Capital Gains under
income
If Total Income - Capital Gains under
income
(a) Is upto Rs. 2 crore 15%
(b) is above Rs. 2 crores but upto Rs. 5 25%
crores Above Rs.5 crores
(c) Above Rs. 5 crore 37%
AMENDMENT: 2
As deduction under section 35(1)(iv).
4. The notification under section 32(1)(ii)/(iia)/(iii) shall be withdrawn unless such institution/ company
intimates the prescribed authority by 30.06.2021 & its approval then shall be valid for a period of 5 years,
otherwise it shall be deemed to be withdrawn. [Intimation in Form 10A]
5. Such institution/company also files a statement [prescribed donation details] and furnishes a certificate to the
donor by 31st May of the succeeding F.Y. failing which donor shall not get deduction & donee institution/ company
liable to 200/day late fee [Section 234G] and/or penalty of 10,000 to 1,00,000. [Section 271K]
AMENDMENT: 3
Section 44AD
Applicable to all resident assesses individuals and partnership firms other than LLPs
AMENDMENT: 4
NOTICE UNDER SECTION 142(1)
Section 142(1)(i): If return of income has not been furnished under section 139(1), then the Assessing
Officer may issue a notice requiring the assessee to furnish the return of income within the time specified
in the notice. The notice under section 142(1)(i) can also be issued after 31st December of the
relevant AY.
AMENDMENT: 5
As per section 143(1), the intimation for tax payable refundable shall not be sent after the expiry of 9
months from the end of the financial year in which return is filed. However, the limitation of 9
months shall not apply to issue of cheque of refund.
AMENDMENT: 6
SECTION 153 : TIME LIMT FOR COMPLETION OF ASSESSMENT OR REASSESSMENT

Normal Period of Assessment Period of Assessment / Reassessment
/ Reassessment where a reference has been made to
Transfer Pricing Officer to determine
Arm’s Length Price
Assessment under section 9 months from the end of the 21 months from the end of the relevant
143(3) or under section 144 relevant Assessment Year. Assessment Year.
Assessment or reassessment 12 months from the end of the 24 months from the end of the financial
under section 147 financial year in which notice year in which notice under section 148 was
under section 148 was served. served.
Fresh assessment under 12 months from the end of the 24 months from the end of the financial
section 143(3) / 144 / 147 financial year in which order year in which order under section 254 is
where assessment has been under section 254 is received received by the CIT or order under section
cancelled and referred by CIT or order under 263 or 264 was passed by the CCIT/CIT.
cancelled and referred back to
Assessing Officer for fresh
AMENDMENT: 7
Slump sale
[defined under section 2(42C)]
As per Finance Act, 2021, slump sale of an undertaking includes:
(i) Transfer of undertaking for monetary consideration.
(ii) Transfer of undertaking for non-monetary consideration e.g., assets or undertaking received on
transfer of undertaking.
(iii) Transfer of undertaking for monetary and non-monetary consideration e.g.,
assets/undertaking and money received on Transfer of undertaking.
AMENDMENT: 8
For Making Assessment u/s 143(3) the A.O is required to serve a notice u/s 143(2). This
Notice has to be served within 3 Months from the end of the F.Y in which return is
furnished
For Any Doubt:

Whatsapp at : 9643036663
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VG STUDY HUB CA INTER INCOME TAX 7703880232

INCOME TAX RATES

In case INDIVIDUALS [MALE / FEMALE]

Net Income Range Rate of Income-tax

Net Income Range Rate of Income-tax

Rs. 3,00,010 to Rs. 5,00,000 5% 5%

Rs. 5,00,010 to Rs. 10,00,000 20% 20%

Above Rs. 10,00,010 30% 30%

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SUPER SENIOR CITIZEN

Net Income Range Rate of Income-tax

Rs. 5,00,010 to Rs. 10,00,000 20% 20%

Above Rs. 10,00,000 30% 30%

HINDU UNDIVIDED FAMILY (INCLUDING AOP, BOI AND ARTIFICIAL JURIDICAL

Net Income Range Rate of Income-tax

CONCEPT OF SURCHARGE (LEVIED ON INCOME TAX)

Surcharge is levied on the amount of income-tax at following rates if total income

Particulars Surcharge rate

Total income more than 2 crore but upto 5 crore 25%

Note 1: Same rate was applicable in AY 20-21 (i.e. PY 19-20)

However, marginal relief is available from surcharge in following manner-

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Special tax Rate for INDIVIDUAL AND HUF’S

The Finance Act, 2020, has provided an OPTION TO INDIVIDUALS [ALL

Total Income (Rs) Rate

From 2,50,010 to 5,00,000 5%

From 5,00,010 to 7,50,000 10%

From 7,50,010 to 10,00,000 15%

From 10,00,010 to 12,50,000 20%

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Concept of surcharge ( levied on Income tax)

Surcharge is levied on the amount of income-tax at following rates if total income

However, marginal relief is available from surcharge in following manner-

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(i) without any exemption or deduction of

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 section 24(b) (in respect of the property referred to in sub-section (2) of

(ii) without set off of any loss,—

(iv) without any exemption or deduction for allowances or perquisite, by whatever

Provided that where there is a depreciation allowance in respect of a block of

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Example 1 based on Amendment: (without cess & Surcharge)

Annual Old Tax as per New Tax as Benefit

Example 2 based on Amendment:

Particular Old tax regime New tax regime

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f) Total (Deduction & Exemption) 1,30,000

OPTION – 1 (TAX AS PER OLD REGIME)

OPTION – 2 (TAX AS PER NEW REGIME)

Example 3 based on Amendment:

Particular Old tax regime New tax regime

NET TAXABLE INCOME (a-g) 10,98,600 13,00,000

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OPTION – 1 (TAX AS PER OLD REGIME)

OPTION – 2 (TAX AS PER NEW REGIME)

Example 4 based on Amendment:

Particular Old tax regime New tax regime

NET TAXABLE INCOME (a-i) 16,70,000 20,00,000

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OPTION – 1 (TAX AS PER OLD REGIME)

OPTION – 2 (TAX AS PER NEW REGIME)

Tax Rates of Partnership Firm

Surcharge : The amount of income-tax shall be increased by a surcharge at the rate