Inter Income Tax Chart Book Nov2022

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CA INTERMEDIATE
PAPER 4: TAXATION
[for November 2022 Exams]
CA Deep Jain
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A Note from the Author

“The beautiful thing about learning is that nobody can take it away from
you.”-B.B. King
Dear Student,
Hope you are taking good care of yours and your family health.
My name is Deep Jain, and I am the author of this book. In addition to being qualified
Chartered Accountant, I am very passionate about teaching, I have hands-on experience in
the field of Taxation and have intense knowledge about the subject.
Reasons behind writing this book:
When I was a student, I always had these types of questions in my mind while studying.
 The Syllabus is huge, what to study and What to leave?

 How to remember all the minute details?
 How to revise 1.5 days before the exam?
So, I decided to answer this questions myself and decided to cover the whole syllabus in a
condensed and concise manner for my exams and it worked out as I was able to cover the
whole syllabus in few pages which is the key for revision before exams. As more you revise
more you retain.
I am sure that this book can be a “ONE STOP SOLUTION” for your upcoming Taxation
Paper with right study strategy.
Thankful to my parents and my guru for their continuous support.
All the best, Future CA
Happy Learning!
Regards,
CA Deep Jain
©Author
No part of this book may be reproduced, stored in a retrieval system, or distributed in any form, or
by any means, electronic, mechanical, photocopying, recording, scanning, web or otherwise without
the written permission of the author. Information and contents of this book have been collated
with utmost care, caution and dedication in order to provide a reliable and comprehensive textual
reference for readers. However, any mistake or errors that may have crept in due to any
inadvertence does not impose any legal liability over the author

S. No Topics Page
No
1) Basic Concepts and Tax Rates 2-4
2) Residence and Scope of Total Income 5-6
3) Income which do not form part of Total Income 7-8
4) Income From Salaries 9-13
5) Income From House Property 14-15
6) Profits or Gains from Business and Profession 16-24
7) Income From Capital Gains 25-32
8) Income from Other Sources 33-35
9) Income of Other Person included in Assesse’s Total Income 36-36
10) Deduction from Gross Total Income 37-40
11) Set off and Carry forward of Losses 41-41
12) Advance Tax 42-42
13) Interest U/s 234A/B/C 43-43
14) TDS and TCS 44-49
15) Provision for filing return of income and Self-Assessment 50-52
S. No Chapter Name Page

No
1) Introduction to GST 54-54
2) Supply under GST 55-57
3) Charge of GST 58-63
4) Exemption from GST 64-70
5) Time of Supply 71-71
6) Value of Supply 72-72
7) Input Tax Credit 73-74
8) Registration 75-79
9) Tax Invoice; Credit and Debit notes and E-Way bill 80-84
10) Payment of Taxes 85-86
11) Returns 87-90
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PART A: INCOME TAX LAWS
1
Basic Points Sec 4: Charge of Income Tax Sec 2(31): Person Steps for Calculation of Total Income
Tax is a compulsory charged imposed by  Income tax is charged for every Person includes: Determine Residential Status First
Government Assessment Year. Determine Income Under Each Heads XXX
 Individual [I]
 It is Charged on Every Person as  Income From Salary
 Hindu Undivided Family [HUF]  Income From House Property
defied in Sec 2(31).
 Company  PGBP
 Charged on Total income earned by
Direct Tax Indirect Tax  Firm [LLP]  Income from Capital Gains
Assessee during the Previous Year.
 Association of person/ Body of  Income from other Sources
Income Tax GST  Tax is levied at the rates prescribed
Individual[AOP/BOI] Clubbing of Income XXX
by Finance Act.
 Local Authority Setoff and Carry Forward of Losses XXX
Indian Constitution : Sec 2(9): Assessment Year [A.Y.]  Artificial Juridical Person [AJP] Gross Total Income XXX
Less : Deduction under Chapter VI-A (XXX)
7th Schedule of Article 246  Tax Payment Years. General Rule Total Income/ taxable Income XXX
 12 months period from 1/04…31/03 Tax [Taxable Income × Rate of Tax ] A. XXX
Income of P.Y. is Taxable in A.Y.
Add: Surcharge [If Income exceed Limit] B. XXX
Sec 3: Previous Year [P.Y.] Exception: Total A+B C. XXX
Union List State List Concurrent
Cases where Income of P.Y. is taxable in Add: Health and Education Cess [4% on Tax XXX
List  Income earning year.
CG SG P.Y. itself: +Surcharge i.e. 4% on C
Entry No  Previous Year is Just Preceding A.Y.
CG+SG  Income of Non resident shipping Total Tax Payable XXX
82 Tax on Entry No
business. Less: TDS/TCS/Advance Tax (XXX)
Income 46Tax on
 Income of person leaving India Net Tax Payable/Refundable XXX/
except Agriculture (XXX)
New Business Other Case permanently for long Duration.
Agri Income  Income of Discontinued business.
Income From Date of From 1st  AOP/BOI/AJP formed for particular
New business April-31st business.
Sources of Income Tax Laws till 31/03 March  Person likely to transfer property to
avoid tax.
 Income Tax Act, 1961: Applicable to
Five Heads of Income under Income
Whole of India. Sec 2(7): Assessee
Tax
 Income Tax Rules, 1962.
Means any person who is liable to pay Tax,
 Annual Finance Act, 2021. 1. Income from Salary.
Interest, or penalty under Income Tax Act
 Circulars issued by CBDT: Binding to 2. Income from house Property.
and include
A.O and not on Assessee. 3. Profits and Gains from Business and
 Notification issued by CG/CBDT  Deemed Assessee Profession. 1
 Judicial Decisions.  Assessee in Default 4. Income From Capital Gains.
5. Income From other Sources.
2
General Tax rates: For General Tax rates for Partnership Surcharge for Domestic Company Example:
Total of Mr Ram a resident
I/HUF/AOP/BOI/AJP [Resident/Non- Firm/LLP/Local Authority
Total Income Tax Rate Individual is Rs
Resident]
Tax Rate :30% >1 Crore upto 10 Crore 7% 5,07,20,000
> 10 Crore 12% Age 50
Total Income Tax
Rate
Co-operative Societies
Step 1: Tax on TI
0-2,50,000 [Basic Exemption Limit] Nil
Total Income Tax Rate Surcharge for Foreign Company =Rs2,05,58,045
2,50,000-5,00,000
0-10,000 10% Step 2: Tax on
5,00,000-10,00,000 Total Income Tax Rate
10,000-20,000 5,00,00,000
Above 10,00,000 >1 Crore upto 10 Crore 2%
20,000 =Rs 1,85,15,625
> 10 Crore 5% Step 3:
1,85,15,625+7,20,000
For Individual Resident [Age ≥ 60]
Domestic Company = Rs 1,92,35,625
Health and Education Cess : Applicable in all cases Step 4: Marginal Relief=
Total Income Tax
Total Turnover or Gross Receipts of Tax Rate
Rate 2,05,89,045-
P.Y. 2019-20 4% on [Tax +Surcharge (if any)]
0-3,00,000 [Basic Exemption Limit] Nil 1,92,35,625=Rs 13,53,420
Upto Rs _______ 25% Total Tax Payable=
3,00,000-5,00,000 To be added at the end
Otherwise 30% 2,05,89,045-13,53,420
5,00,000-10,00,000
Above 10,00,000
Marginal Relief =Rs 1,92,35,625+Cess@4%
=2,00,05,050
Foreign Company Applicable to All Assessee Where Surcharge is applicable.
You have to check marginal relief concept when the total
For Individual Resident [Age ≥ 80] Flat Tax rate: 40%
income is little bit more 50 Lacs/1Crore/2Crore/5Crore Maximum Marginal Rate
Total Income Tax Surcharge: For I/HUF/AOP/BOI/AJP Steps for Calculation of Marginal Relief Highest Slab rate of
Rate
Individual + Highest
0-5,00,000 [Basic Exemption Limit] Nil Total Income Tax Rate Step 1: Calculate tax on original Total Income [Without
Surcharge Rate of
5,00,000-10,00,000 20% >50 Lacs-1 Crore 10% Cess]
Above 10,00,000 30% >1Crore-2Crore individual +HEC
Step 2: Calculate Tax on 50lacs/1Crore/2Crore/5Crore
If DOB is 1st April, birthday will be deemed to be >2Crore-5Crore [Without cess] =30%+37% of Tax+4% of
on 31st March and benefit of Senior Citizen and More than 5 Crore Step 3: Tax to be paid=Step 2+Extra Income Tax and Surcharge.
Super Senior Citizen will be given Surcharge Rate of ____ and ___ is not applicable on Step 4: Marginal Relief=Step 1-Step 3
LTCG u/s 112A, STCG u/s 111A and Dividend Income. Example: Total income of X Ltd [Indian Co] 1,01,00,000 =30%+11.1%+1.644%
Sec 87A: Rebate For Resident Individual
Surcharge: For Firm/LLP/Local Authority/Co- =42.744%
Step 1: Tax on Rs 1,01,00,000 32,42,100
NTI ≤ ______ Step 2: Tax on Rs 1,00,00,000 30,00,000
operative Society
Step 3: Tax to be Paid = 30,00,000+1,00,000 = 31,00,000
Rebate: 100% of income tax payable (Before HEC)
Total Income Tax Rate Step 4: Marginal Relief= 32,42,100-31,00,000 = 1,42,100
12,500 Upto 1 Crore NIL Total Tax Payable= 32,42,100-1,42,100=
2 31,00,000
>1 Crore 12% Add: Cess @4% 1,24,000
Will get rebate against all income including lottery, Total Tax 32,24,000
winning etc... but NOT _____________. 3
Deemed Income:
Sec 69B: Amount of investments not fully
Sec 115BB: Alternate Minimum Tax
Sec 68: Cash Credit disclosed in the books of accounts
Tax on winnings from lotteries, card  Assesse opting 115BAC not required
 Any Sum found credited in books of the  Where in any F.Y the assessee has made any game, horse race etc. to Pay AMT.
assessee and the assessee investments or is found to be the owner of any  B/F AMT credit cannot be setoff
Tax Rate:30%
offers____________________________ bullion, jewellery or other valuable article and against income u/s 115BAC.
________________________________ the A.O. finds that the amount spent on  Therefore before opting 115BAC
Sec 115BBE: Tax Rate for
_______________ the sum so credited making such investments or acquiring such assessee shall exhaust it’s AMT
Deemed Income
shall be deemed to be income of the Credit
articles exceeds the amount recorded in the
assessee of that Previous Year.
BOA maintained by the assessee and he Tax Rate 60%+ [Surcharge @25% and
 In case of closely held company in respect Other Points:
offers no explanation, such excess may be HEC @4%] = 78%
of any share application money, share
deemed to be income of assessee for such F.Y Following Benefits or deduction Shall not be
capital, share premium or any such amount  Not Eligible for Basic Exemption
by whatever name called and the available:
Sec 69C: Unexplained Expenditure or any expenditure under
explanation given by company is not Income Tax Act 1961. Salary
satisfactory than such shall be deemed to  Where in any F.Y assessee incurs any  No setoff off losses allowed.
be income of the company .  Salary Allowances Exemption.
expenditure and he offers no explanation
Sec 69: Unexplained Investments  House rent Allowance u/s 10(13A)
about the source of such expenditure or the
 Leave Travel Concession.
explanation is unsatisfactory tot the A.O. Sec 115BAC: Alternate Tax
 Where in the F.Y immediately preceding the  Standard Deduction for Salary.
then A.O. can treat such unexplained Regime for Individual and HUF
A.Y. the assessee has  Professional Tax.
expenditure as the income of the assessee  Entertainment Allowance.
_____________________ in the BOA and It is an Optional at the end of Assessee
for such F.Y. No deduction allowed in respect
the assessee offers no explanation about Allowance u/s 10(14): Except for the Following
of such unexplained expenditure under any Total Income Tax Rate
the nature and the source of investments
head of income. 0-2,50,000[BEL] Nil  Travel allowance to Divyang Employee
or the explanation is not satisfactory, the
2,50,000-5,00,000  Travelling or Tour Allowance
value of the investments are taxed as Sec 69D: Amount borrowed or repaid on hundi Daily Allowance
5,00,001-7,50,000 
income of the assessee of such F.Y.  Conveyance Allowance
7,50,001-10,00,000
 Where any amount is borrowed on a hundi or
Sec 69A: Unexplained Money 10,00,001-12,50,000 House Property: Interest Deduction on SOP.
any amount due thereon is repaid other than
12,50,001-15,00,000
through an account-payee cheque drawn on a PGBP:
 Where in any F.Y. the assessee is found to Above 15,00,000
bank, the amount so borrowed or repaid shall
be owner of any  Special Income will be taxable Additional Depreciation.
be deemed to be the income of the person 
______________________ and the same borrowing or repaying for the previous year in at Special Rates.  Scientific Research.
is not recorded in the BOA and the which the amount was borrowed or repaid, as  Surcharge will be  Specified Business.
assessee offers no explanation about the the case may be. However, where any amount 10%/15%/25%/37% depending  Sec 10AA
nature and source of acquisition of such borrowed on a hundi has been deemed to be on Total Income.
IFOS:
money, bullion, jewellery pr the explanation the income of any person, he will not be again  Health and Education Cess will
offered is not satisfactory, the money and liable to be assessed in respect of such be ________always.  Allowance for minor income.
amount on repayment of such amount. The 3 in  Allowance to MPs/MLA.
the value of such bullion etc. may be  Option Shall be exercised
amount repaid shall include interest paid on  Deduction from family pension u/s 57.
deemed to be the income of the assessee of FORM ______long with ROI to
the amount borrowed. be furnished u/s 139(1)
such financial year. Rebate u/s 87A Always Available. 4
Residential Status of Individual [Note 1]: Exceptions to 2nd Basic Condition Sec 6(1A): Deemed Resident
Following Individuals → Residents only if Period of Stay during PY ≥ 182 days [i.e 2nd
Basic Condition [ Any one is satisfied then Resident] Condition → Not Applicable in their cases] In case of Indian citizen having total income
Total stay in India during PY ≥ ________days; (i) Indian Citizens who leaves India during PY as a member of crew of Indian ship;[Note exceeding Rs 15Lakhs during the P.Y. shall be
OR 2] deemed to be resident in India in that Previous
Total stay in India during PY ≥ 60 days AND Total stay (ii) Indian Citizens who leave India for employment outside India; Year, if he is not liable to tax in any other
in India during last 4 P.Y. ______365 days [Note 1] (iii) Indian Citizen or Person of Indian Origin who comes on visit to India in P.Y. [Such country or territory by reasons of his domicile
Additional Condition [ If Both is satisfied then person must be engaged in employment/business/profession outside India] and his total or residence or any other criteria of similar
Resident and Ordinary Resident] income excluding foreign income is upto Rs 15 Lakhs in P.Y[#] nature and he is always treated as RNOR
 Total stay in India in last __ years ≥ ___ days & # If total income excluding foreign Income is more than 15 Lakhs than 2nd Basic
 Resident in Any 2 PY out of last 10 PYs. Condition will be applicable instead of 60 days, ______ are considered
Person of Indian Origin: If the person or his parents or his grandparents were born in Scope of Total Income
CRUX: If an Individual Satisfy Both additional
UNDIVIDED INDIA. Grandparents include both maternal & paternal grandparents]
Conditions → ROR.
None or one Condition → RNOR [Resident but not [Note 2]: For computation of “No of days stay in India “following time limit shall be
ordinary Resident] excluded
“From the date entered into the _______________________ in respect of joining Indian Income Foreign Income
Date of Arrival & Departure → Considered in India for the ship & ending on the date entered into continuous discharge certificate in respect
counting no. of days in India of signing of the ship”
Income Received in Income other

Residential Status of HUF Residential Status of FIRM/AOP/BOI/AJP/LA Residential Status of
India or deemed to be than Indian
Company
If control or management of its affairs is If control or management of its affairs is Received in India Income
 Indian Company –
OR
Always Resident
 Foreign Company – Income accrue or
If arising or deemed to
_______________ be accrue or arising in
_______________ India
Resident Non Resident Resident Non Resident ____ in that year
 Accrue in India : Means generated in
Only Individuals & HUF can be resident & ordinarily then Resident
If KARTA satisfy Both Additional Conditions → HUF is India or source is in India
resident (ROR). All other classes of assessees can be otherwise Non
ROR otherwise RNOR resident  Received in India: Means where the
either a Resident or Non-Resident
POEM : means a place income has been first time received in
where key management and India. After receiving income o/s India
commercial decisions and then remitting to India it cannot be
necessary for the conduct treated as receipt of income inf India
of business are  Income can be in cash or in Kind
substantially made 5
Taxability of Income For Individual and HUF Sec 9: Income Deemed to be accrue or arise in India Significant Economic Presence [SEP]
Income ROR RNOR NR SEP of a NR in India shall also constitutes Business Connection in India
Income (of a NR) from Business Connection in India
Indian Income Taxable Taxable Taxable
Business Connection means person acting on behalf of NR Nature of Transaction Condition
Foreign Income
Must have Authority to conclude contracts on behalf of NR Transaction in respect of any Goods/ When Aggregate Payments
Income from
habitually maintains stock of goods/ merchandise from which Services/ Property carried out by a NR with Exceeds _________
Business and Taxable Taxable Not
he regularly delivers goods/merchandise in India on behalf of any person in India including provision of
profession Taxable
NR. download data or software in India
Controlled/setup
Where he habitually secures orders in India for NR. Systematic and continuous soliciting of
from India
Business activities or engaging interaction
Other Foreign Taxable Not Not
with users in India
Income Taxable Taxable
Interest, Royalty, FTS [Fees for Technical services]
Taxability of Income For other Assessee
Deemed to accrue in India in following cases & taxable to
Not to be considered as Business Connection
Income Resident NR everyone:
 Purchase of goods in India for export
Indian Income Taxable Taxable Taxable if paid by Tax Treatment  News collection in India, transmission o/s India
Foreign Income Taxable Non Taxable GOI → NR Always Taxable to NR if paid by GOI.  ____________________ films in India [Firm or company should
not have any partner or shareholder who is resident or citizen of
Resident → NR Not taxable to Recipient NR in
India
following cases:
Sec 7: Income deemed to be received in  Foreign company engaged in mining of uncut or unassorted diamonds
(i) If Loan is used for
India business/profession o/s
in Special Economic zone
India.
 Contribution in excess of _______ to RPF or
(ii) If Royalty/FTS are for
interest credited in excess of ______ Other Points:
business/profession o/s
 Contribution by CG or other employer under  Income from property, Asset or source of Income is situated in
India
a pension scheme referred u/s 80CCD India, then it is treated as deemed to be accrue or arise in India
NR → NR Taxable:
 CG on asset situated in India
 Amount transferred from unrecognized PPF (i) If Loan is used for
 Salary Income for services rendered in India whether such
to RPF[being ER contribution and int Business/Profession in
Income is before or after service rendered like gratuity,
thereon] India by NR.
(ii) (ii) If Royalty/FTS are for
pension, profit in lieu of salary
Business/Profession in  Salary received by Indian citizen from government for
India. service rendered o/s India EXCEPT perquisite and allowance
(iii) Not Taxable: If Loan is  Dividend paid by Indian company o/s India
used by NR for other than  Gifting of any money by Resident to NR / foreign company
Business/Profession
6
Sec 10(1): Agricultural Income [Exempt] Special Rules for Tea, coffee & Rubber Sec 10AA: Special Economic Zone
Sec 2(1A) Agricultural Income: [Income of Rule Agriculture Business Applicable to entity which begins to manufacture or produce article things or computer
cultivators + Land holders who have rented out Income Income software in any SEZ, deduction is allowed as follow
lands] 8 Growing &
Manufacturing Exempt Profit: Export Profits derived from articles/things or providing any Services
 Rent/Revenue derived from letting of land from SEZ unit
of Tea Deduction under this section
situated in India & used for agriculture
7B Growing & available only if SEZ unit
 Income from sale of agriculture produce Export Profits
Manufacturing
received approval up to
[Note 1] of Coffee PGBP of SEZ unit X Export turnover/Total turnover 31/03/20 and manufacturing
 Rent from house [used for dwelling and Sale of coffee
started till 31/03/21
store house] grown & cured.
 Income from saplings/seeds grown in Sale of coffee
grown, cured, Total TO & Export TO does not include freight, telecommunication or insurance charges
Nurser  Export T/O means consideration in respect of export brought into India in
roasted &
Note: Foreign Agricultural land → Convertible foreign currency within time permitted by RBI
grounded
Agricultural Income is taxable u/h IFOS.  Sale proceeds deemed to be received in India if a/c opened o/s India if opened with
7A Growing &
RBI approval
Manufacturing
Note 1: Rule 7: Sale of Agriculture of Rubber Period of Deduction
Produce Bifurcation should be done after claiming
For first five A.Y.
________________
Sale in Raw Form: Total Agriculture Income For Next 5 A.Y.
For Next 5 A.Y. 50% of Export Profits
Sale after process Scheme of Partial Integration
OR
Applicable: Individual/ HUF/AOP/BOI/AJP Amount debited to P&l A/c and credited to SEZ Reinvestment
Process is Optional Conditions: allowance Reserve a/c
Process is
for sale Agriculture Income more than Rs 5000 and Non
Compulsory for
agriculture Income more than Basic Exemption Limit Reserve amount to be utilized to acquire new P&M within 3 years and also put to use within
sale:
Computation of Tax Liability 3 years
Total Agriculture
Non Agriculture Income [TI] A xx Reserve cannot be used for : (i) Paying Dividend; (ii) Creation of Asset o/s India
Income Below are also eligible for 10AA
Agriculture Income B xx
Total [A+B] C xx
Business Income: Agriculture Income:  Software developed at client place
Tax Payable on C D xx
Sale of Final product - Market value of  Profits earned as a result of deployment of technical manpower at client place
Aggregation of B and BEL E xx
Market value of Agriculture produce abroad for software development
Tax Payable on E F xx
agriculture used- -Cost of cultivation  When there is change in SEZ to another SEZ deduction allowed but on
Net Tax Payable [D-F] G XX
Further process cost proportionate basis in case of change in ownership deduction also allowed to new 7
owner
Rule 8D: Expenditure in relation to Exempt Sec Income Eligible
Sec 14A: Expenditure incurred in relation
Income Assessee
to Exempt Income
10(6)(vi) Remuneration of Employees of a Foreign Enterprise: Individual-
Amount of Expenditure directly relating to xx [Employer is not engaged in any other Salaried
 No deduction is allowed in respect of
Exempt Income business/profession in India] employee not
expenditure incurred by assessee for
Amount equal to 1% of his annual average of xx 1. Employees’ Stay in India ≤ 90 days in PY; 2. being citizen of
earning exempt income
 When A.O. Satisfied about correctness of monthly average of the opening & closing Remuneration paid to such employee → should Not India
balance of investment, income from which is Deductible to Employer:
the claim of expenditure- No action
exempt 10(6D) Royalty/FTS received from National Technical NR and Foreign
required
 When A.O. is not satisfied- Expenditure Research Organisation (NTRO) → for services Company
Total disallowed u/s 14A xx rendered in or outside India to NTRO.
disallowed as per Rule 8D
Total Disallowance shall not be 10(10BB) Payment to Bhopal Gas Victims Any person
Alternate Minimum Tax ____________________________________ 10(10BC) Compensation received on account of Disaster from Any person
CG or SG or Local Authority
Applicable to All assessee except ________ Sec Income Eligible 10(11A) Payment from Sukanya Samriddhi Scheme[ Interest Any person
Assessee also]
Sec 115 JC Income Tax payable by any person is
10(2) Income Share received Member of HUF 10(16) Educational Scholarship Any person
higher of
by member from HUF 10(17) Payment to MP MLA Daily and constituency Any person
Tax as per income tax [Post SC & HEC] 10(2A) Income share received Partner of Firm allowance
Adjusted total income X _____ [Post SC & HEC] by partner from FIRM 10(17A) Awards for literacy, scientific and artistic and Any person
10(4)(ii) Interest on money other awards by the government
NTI as per normal provisions of tax xx standing in NRE a/c in 10(18) Pension received by individual who has been in Any person
+ Deduction u/s 10AA xx India service of CG or SG and has awarded
+ Deduction u/s 35AD xx 10(6)(ii) Remuneration of “Paramvirchakra” or “ Mahavirchakra”or “ Virchakra”
+ Deduction u/c VI A [80 QQB, 80JJ AA xx Foreign Diplomats in such other awards CG notifies is exempt
80 RRB] India: [not engaged in 10(26AAA) Sikkimese Individual (i) Income from Any source in Specified
- Depreciation on asset assuming 35 AD not (xx) any other Sikkim (ii) Dividend/Interest → Exempt; If income of
applied Business/Profession in Sikkimese woman marry Non-Sikkimese on/after Sikkimese
India] 1.4.2008 → Not Exempt. Individual
Adjusted Total Income[ATI] xx
 Not applicable for individual / HUF / AND
AOP/BOI/AJP with ATI < _______ Remuneration received
 Applicable Only if assesse claiming by Indian official in
deductions such foreign countries
______________________________ should be Exempt.
Amt Credit 10(6)(vii) Salary received by Individual [Non
crew Member of resident who is
 When AMT > Normal tax excess shall be
Foreign Ship: If His not a citizen of
treated as AMT credit
stay in India ≤ 90 days india]
 AMT can be c/f and set off for 15A.Y.
in a PY.
 Setoff allowed when normal tax > AMT
 Credit=_________________________
8
AMT Not applicable when Assessee opted 115BAC Join Us on Telegram http://t.me/canotes_ipcc
Sec 15: Charging Section Allowances Allowances Exempt u/s 10(14) Sec 10(13A): Exemption for House Rent Allowance
1. Where there exists a relationship 40%/50% of salary

of employer and employee then Dearness Allowance Children Hostel Allowance OR
income received is taxable under Actual Amount received
the head salary.  Dearness Allowance is fully taxable  Max Rs 300 p.m. per child [max 2 OR
2. Salary is taxable even in case of whether it is in terms or not in child] Rent Paid – 10% of Salary
part time job like employee work terms. Notes:
with 2 employer’s simultaneously.  If nothing is given about DA then Children Education Allowance  Salary = Basic + DA[T]+ Commission[T]
3. Salary is taxable on the basis of assume it is not in terms  If there is any change in factor namely salary,
due or received whichever is Bonus  Max Rs 100 p.m. per child [max 2 HRA, Period, place of business etc. needs to be
earlier. child] computed separately
Exception:  Taxable on receipt basis. Consider  _______ if metro cities
Following salaries charged to tax only on only when actually received by Underground Allowance [Mumbai/Delhi/Chennai/Kolkata]
receipt basis company Sec 16(ii): Entertainment Allowance
 Commission  Allowed to employee who is working
 in unnatural climate.  Fully Taxable for all employees. Deduction is
 Fully taxable irrespective of any nature.  Max Rs ________ allowed to government employees.
 Advance Salary Amount of Deduction for government employees
4. Salary received by partner form Tribal Allowance 20% of Basic Salary
partnership is taxable under the  Taxable on receipt basis. OR
head PGBP.  If advance against salary given  Max Rs 200 p.m. Actual Amount received
5. Salary received by MP, MLA, MLC then it shall be ignored or if only OR
shall be taxable under the head advance given then ignore as it is Allowance to employees of transport Maximum Rs 5,000
IFOS. treated as loan. Sec 16(i): Standard Deduction
undertaking
How to Compute Salary Arrears Salary
Amount received * 70% Rs 50,000
Basic Salary XX  Means salary under dispute or OR OR
Add: Taxable allowance XX increase of salary retrospectively. Rs 10,000 p.m. Amount of salary
Add: Taxable Perquisite XX Taxable in the year in which it is Sec 16(iii): Professional Tax
Gross Salary XX received
Fully Exempt Allowance
Less: Deduction u/s 16. (XX)  Professional tax means tax on employment,
Net Salary XX profession, trade, etc. leviedby a state under
Allowances Exempt u/s 10(14)
article 276 of the Constitution.
 Deduction = Actual Amount Paid
Basic Salary Commutation/Transport Allowance
 If Employer has paid the amount, 1st Add in salary
and then take the deduction
It is fully Taxable Max Rs 3,200 p.m. [in case of blind /deaf&
dumb or handicapped 9
Gratuity Sec 10(10C): Voluntary Retirement Scheme Provident Funds [PF]
Salary p.m. Latest Basic Salary p.m. + Latest Amount Exempt: Particulars SPF RPF URPF
D.A.[Both] Actual Amount Received EE Deduction Deduction u/s No Deduction u/s 80C
Average Salary Avg Basic Salary of Last 10 OR Contribution u/s 80C 80C
p.m. [excluding retirement month] Maximum Rs.5,00,000 ER’s Exempt Exempt up to Exempt
months + Avg DA [T] of last 10 OR Contribution 12% of Salary
months + Avg T/O commission of Salary p.m. x 3months x No of years of Completed Salary = Basic
last 10 months Service. +DA[T] +
OR Commission [T]
Salary p.m. x Balance no of months Interest on Exempt Exempt from Exempt
left for service PF tax
During employment At the time of retirement Salary p.m.= Basic + DA[T] + Commission [T] Up to 9.5% p.a.;
Repayment Exempt u/s Exempt from  EE Cont: Exempt
Fully Taxable for Sec 10(10B): Retrenchment Compensation of Lumpsum 10(11) tax, subject to  Int on EE Cont:
All employees Govt Employee Amount at fulfillment of Taxable under
[Govt/Non-Govt] Amount Exempt: the time of certain condition IFOS
Fully exempt Maximum Rs.5,00,000 retirement  ER’S Cont: Taxable
OR under Salary
At the time of retirement Int on ER’s Cont:
Compensation as per Industrial Disputes Act [Note 1] 
Taxable under
Note: Salary
POGA Employees NON-POGA employee
1. 15/26 x Avg Salary of last 3months x No of Conditions:
Amount Exempt: Amount Exempt: years of completion of service Only if Employee has rendered 5 years of service or more
2. Salary p.m.= Basic + DA[T] + Commission [T] If rendered less than 5 years of service then exemption allowed earlier in
respect of contribution and interest shall be withdrawn.
Pension However, in the following cases exemption shall not be withdrawn even if
service rendered is for less than 5 years.
Uncommuted Pension [monthly pension] = 1. Employee retired due to death.
___________________________________ 2. Employee retired due to shut down of employer’s business
Commuted Pension [Lumpsum pension]: Exempt 3. Employee has retired with the instructions that his balance in RPF
should be transferred to new employer or to NPS referred u/s 80CCD
Common Note for SPF/RPF:

 Exemption u/s 10(11)/(12) not available for interest accrued during
Note: Govt Employees Non Govt Employees
the P.Y. to the extent it relates to the contribution made by that
Complete year of service: For calculating complete year of
Gratuity not person/employee exceeding Rs 2,50,000 in any P.Y. in that fund on or
service any period of more than 6 M shall be taken to be Fully Exempt Gratuity Received
Received after 1/4/2021
full year [only for POGA employee]
 If ER does not made contribution than limit of Rs 2,50,000 not
applicable
Leave Credit = _____________________________
 Interest accrued before 31/3/2021 would be exempt without
Maximum 30 days are allowed for every completed year Total Pension = Full value of pension any limit 10
Super Annuation fund [SAF] Sec 17(2): Perquisites Sec 17(2): Perquisites Sec 17(2): Perquisites
Particulars SAF  It means extra benefit offered by

EE Contribution employer to employee. It may be Transport facility for Transport employee Leave Travel Concession
ER’s Contribution monetary or monetary.
Interest  Perquisites is received when actual  Employee who are working with airline 1. Travel by Air:
Repayment of Lumpsum expenditure is incurred [car facility, and railway company: Airline and Railway Amount Exempt:
Amount at the time of medical facility] facility is fully exempt. Actual Expenses
retirement Gift  For other employee: Fully Taxable. OR
Educational facility: Economy class fare
[Air India]
Unapproved Super annuation fund = Same as URPF
 For employee: Fully exempt
Gift in cash Gift in kind  For children: It is exempt if value of 2. Travel by any other mode
education is up to Rs 1,000p.m. per child A. Railway Facility available:
Leave Salary
Taxable and education is provided in employer’s Amount Exempt:
If FMV _____________
It means payment made against unutilized leave own institution or institution where Actual Expenses
then it is fully exempt
employer have tie-ups, otherwise fully ORS
otherwise fully taxable 1st Class railway AC
taxable.
Leave Salary during At the time of retirement  For other relative: Fully taxable B. Railway Facility not available
Employment ESOP: Employee Stock option Plan Loan (i) Recognised transport
facility available
Fully Taxable Govt Employee Shares offered by company to employees at Loan given by employer to employee at Amount Exempt
For all employees Less than market price concessional rate of interest or without any Actual Expenses
[Govt/Non-Govt] Fully Exempt Taxable Amt = ___________________ interest. OR
Other Employe Take FMV of the date on which shares is ex Taxable Amount Deluxe class bus fare
ercised by employee = _____________________________ (ii) Recognised transport
Movable Asset Notes: facility not available
Avg Salary p.m.= Exempt Amount:
 If Loan is upto Rs 20,000 then interest Amount Exempt:
Avg Basic salary of Computer/Laptop: Fully Exempt benefit is not taxable. Actual Expenses
Last 10 months + Avg Other Asset:  If loan is taken for treatment of OR
st
DA [T] of last 10 1. Owned by employer specified disease then interest benefit 1 Class railway fare of
months + Commission Taxable Amount = _______________ is not taxable even if Loan amount is Similar distance
2. Hired by employer more than Rs 20,000 Notes:
[T] last 10 months
Taxable Amount = Hire charges paid by ER Lunch Facility LTC is available for the travel of EE,
Note: Last 10 Gas Electricity and Water supply his spouse, children and dependent
months from the Exempt upto Rs 50 per meal, if lunch is provided relative [M,F,B,S].
date of retirement It is fully taxable. in office premises or through paid vouchers LTC is available only for 2 children
Free Servant Note: 1st time = 1child 2nd time= Twins:
 Tea, coffee or breakfast is not taxable Exemption allowed to 3 children.
It is fully Taxable  Lunch provided in remote area is not
taxable 1st time = 1twins 2nd time= 1child
:Exemption allowed to 2 children 11
Sec 17(2): Perquisites Sec 17(2): Perquisites Sec 17(2): Perquisites Sec 17(2): Perquisites
Medical Facility Rent Free Accommodation Car Facility Following perquisites which are fully exempt
When the treatment is done in India: For Government Employee: Car is used fully for office purpose:  Telephone or mobile bill paid or
Treatment in Govt hospital, Taxable as pee license fees decided by ____________ reimbursed by employer.
Treatment in ER’s own hospital Govt If ER maintains record of each journey and  Scholarship to ee’s children.
Treatment in Govt Recognised For other-employee: employer issue certificate that car is used  Goods sold by employer to employee at
Hospital I. Owned by Employer: exclusively for office purposes reasonable price
Taxable Amount = 7.5%/10%/15% of Car is used fully for Personal  Tax on non-monetary perquisite paid by
Otherwise: Fully Taxable Salary purpose: employer.
When the treatment is done outside India: Furniture also provided = 10% of Cost 1. Car is owned by Employer: 10% of Cost
Benefit of treatment II. Hired by Employer: OR
2. Hired by employer = Hire charges paid by Sale of shares by Employee
Benefit of Stay Taxable Amount = 15% of Salary
OR employer[1]D
Capital gain will be applicable at the time of sale in
Hire Charges paid by ER Driver’s salary [if paid by employer][2]
the hands of employee:
Furniture also provided: Hire charged Running and maintenance charges [if paid
Computation of Capital Gain
paid by ER by employer[3]
FVOC [Sale price] XX
Benefit of Travel: Note: Total Exempt = 1+2+3
Less: Cost of Acquisition [FMV as per (XX)
 For Population upto 10lacs: 7.5% Car is used fully for partly office and partly
Sec. 3(8)
Note:  For Population > 10lacs upto 25 personal purpose:
STCG/LTCG XX
 Medical insurance premium is fully lacs: 10% 1. Car owned by Employee:
POH = from Date of allotment of ESOPS till the
exempt  For population > 25lacs: 15% (a) Running and maintenance charges paid by
date of transfer of shares by employee
 Exemption for stay and travel is allowed  Salary = Same as mentioned in Employee: No benefit and not taxable
only for one patient and one attendant hotel benefit. (b) Running and maintenance charges paid by
 Exemption for treatment is allowed for  Salary of Current period should Employer
Taxability of ESOPS in case of Startups
EE, spouse, children, and dependent be considered. Taxable Amount= Running and maintenance
relative[M,F,B,S] charges paid by ER – 1800p.m./2400p.m. referred u/s 80-IAC
 Advance/Arrears of salary =
Hotel Benefit Ignored For upto 1600CC= 1800p.m.
Eligible startups are required to deduct TDS in
 Retirement benefit should not For more than 1600CC = 2400p.m.
case of ESOPs within 14 days from:
Taxable Amount: be considered [gratuity, VRS, 2. Car owned by Employer:
 After the expiry of 48 months from the
(I) 24% of Salary [Basic + DA + Bonus Pension, Leave salary, lumpsum (a) Running and maintenance charges paid by
end of relevant A.Y. or
+Taxable Allowances + Commission amt from P.F., Retrenchment Employee:
 From the date of sale of such specified
[All] + other monetary income] compensation] Taxable Amount = 600p.m/900p.m
security or sweat equity shares by the
(II) Hire [Rent] charges paid by employer  Salary should only for the For upto 1600CC= 600p.m.
assessee or
Notes: period of for which assessee For more than 1600CC = 900.m.
 From the date of the assessee ceasing to
 If hotel facility for transfer of has occupied property. (b) Running and maintenance charges paid by
be the employee of the startup.
employee upto 15days then not taxable  ER Contribution towards PF and Employer:
 If employer recover any rent from Int on PF = Ignored Taxable Amount = 1800p.m/2400p.m
employee then reduce such amt from For upto 1600CC= 1800p.m.
taxable amount For more than 1600CC = 240p.m. 12
Sec 17(2)(vii) Perquisite Taxable Rule 9D: Calculation of Rebate u/s 89 for Arrears of
interest relating to Salary
The amount or aggregate of amounts of any contribution ESOPs or Sweat equity shares are taxable as perquisite in
contribution in SPF, RPF,
made hands of employee in the year in which shares allotted to Step 1: Firstly, calculate the tax due
- in a recognised provident fund employee. exceeding specified limit
in the current year by including the
- in NPS referred to in section 80CCD(1) Taxable Amt = FMV of Shares on the date on which option arrears in your total income.
Separate accounts within the
- in an approved superannuation fund exercised – Amt paid by Employee for ESOPs Step 2: Now, calculate the tax due in
PF account shall be maintained
by the employer to the account of the assessee, to the Calculation of FMV as per Rule 3(8) the current year by excluding the
during the P.Y. 21-22 and all
extent it exceeds Rs 7,50,000. I. If shares are listed on recognized stock exchange arrears from your total income.
subsequent P.Y. for taxable
Sec 17(2)(viia) – Step 3: Compute the difference of
contribution and non-taxable
In a case where, on the date of the exercising of the option, the two figures step 1 and step 2 and
contribution made by a person.
Annual accretion by way of Interest/dividend /similar the share in the company is listed on a recognized stock let’s call that difference as X
Non-Taxable contribution
amount on contribution of more than Rs 7,50,000 exchange, the fair market value shall be the average of the Step 4: Now calculate your tax due in
account shall be the
By ER also treated as Perquisite in hands of EE and Taxable. opening price and closing price of the share on that date on the year for which the arrears have
aggregate of the following
Calculation of Annual Accretion of Interest Dividend etc in the said stock exchange. been received including the arrears in
i. Closing balance in the
P.Y. If shares are listed on more than one recognized stock your total income
account as on
TP = __________________________ exchange - Step 5: Then calculate your tax due in
31/3/2021
TP Taxable perquisite under section 17(2)(viia)for the However, where, on the date of exercising of the option, the the year for which the arrears have
ii. Any Contribution made
current previous year share is listed on more than one recognized stock been received by excluding the arrears
by the person in the
PC Amount or aggregate of amounts of employer’s exchanges, the fair market value shall be the average of from your total income.
account during the
contribution in excess of Rs 7.5 lakh to RPF, NPS opening price and closing price of the share on the Step 6: After that compute the
P.Y.21-22 and
u/s 80CCD and approved SAF during the previous recognised stock exchange which records the highest volume difference of the two figures of Step
subsequent P.Y. which
year of trading in the share 4 and 5 and let’s call the difference as
is not included in the
PC1 Amount or aggregate of amounts of employer’s If no trading in share on recognized stock exchange - Y
taxable contribution
contribution in excess of Rs 7.5 lakh to RPF, NPS Further, where on the date of exercising of the option, Step 7: Lastly Subtract X from Y and
account and
u/s 80CCD and approved SAF for the previous year there is no trading in the share on any recognized stock you will get the relief amount
iii. Interest accrued on (i)
or years commencing on or after 1st April, 2020 exchange, the fair market value shall be -
and (ii) as reduce by
other than the current previous year (a) the closing price of the share on any recognised stock
withdrawal, if any,
TP1 Aggregate of taxable perquisite under section exchange on a date closest to the date of exercising of the
from such account
17(2)(viia) for the previous year or years option and immediately preceding such date; or
Taxable contribution account
commencing on or after 1st April, 2020 other than (b) the closing price of the share on a recognised stock
shall be the aggregate of the
the current previous year exchange, which records the highest volume of trading in
following
R I/Favg such share, if the closing price, as on the date closest to the
i. Contribution made by
I Amount or aggregate of amounts of income accrued date of exercising of the option and immediately preceding
the person in a PY in
during the current previous year in RPF, NPS u/s such date, is recorded on more than one recognized stock
the account during the
80CCD and approved SAF exchange.
PY 21-22 and
Favg Amount or aggregate of amounts of balance to the II. If shares are not listed on recognized stock
subsequent PY which is
credit of RPF, NPS u/s 80CCD and approved SAF on exchange - In a case where, on the date of exercising of the
in excess of
1st April, 2021 + Amount or aggregate of amounts option, the share in the company is not listed on a recognised
2,50,000/5,00,000
of balance to the credit of RPF, NPS u/s 80CCD and stock exchange, the fair market value shall be such value of
ii. Interest accrued on (i)
approved SAF31st March, 2022)/2 the share in the company as determined by a merchant
banker on specified date. 13
Sec 22: Charging Section How to Compute IFHP? Sec 23: Gross Annual Value [Note 1] Municipal Taxes [Note 2]
Rental Income [Annual Income] is Gross Annual Value [GAV] [Note 1] xx 1. Calculate Expected Rent (ER) → Higher of (a) MV  Tax which is recovered
taxable under the head IFHP if Less: Municipal taxes paid[Note 2] (xx) or (b) FR subject to Max. of SR. by:
following two conditions are satisfied Net Annual Value xx 2. Calculate Actual Rent Received (ARR)  Municipality, Gram
Less: Deduction u/s 24 Rent Received + Rent receivable - Unrealized panchayat, Local
 There should be House property (a)Standard Deduction[30% of NAV] (xx) Rent Authority
[House property means building or (b)Interest on Loan (xx) 3. GAV = Higher of (1) ER or (2) ARR  Also known as house tax,
land appurtenant thereto] Income from house property xx FR→ Fair Rent→ Rent of similar property in same property tax, local tax
 Assessee should be owner [Legal locality  Allowed on payment basis
& deemed] of that house property MV→ Municipal Value→ Value of property as per [ O/s- not allowed]
municipal records  Allowed only when paid by
Types of house property owner
Sec 24: Deduction Limit on Deduction  If Municipal taxes given
Let Out Property [LOP]: Always of Interest as % then it should be
24(a) - Standard Deduction = ________________________________ calculated on MV
Taxable
[Flat Deduction] [No other deduction in HP] Only For SOP [ No
Self Occupied Property[SOP][for 24(b) - Interest on Borrowed Capital [Paid -Allowed; O/s-Allowed] [ only Limit for LOP/DLOP]
Residence] when taken for Repairs, construction, renovation] Loan for Concept of Vacancy
Current Year Interest → [Interest of PY of completion of construction & acquisition/constructio
Upto TWO SOP – _________
afterwards] n of HP on/after 1.4.99 ER≤AR+VR then AR will be GAV
Remaining SOP- _____________ Interest = ________________________________________ & such acquisition or ER>AR+VR then ER will be GAV
Pre-Construction Interest: It means interest paid before the year in construction is
Self Occupied Property[SOP][For which construction was completed. Allowed in five equal instalments from completed within 5
Business and Profession]- Ignore the year in which construction was completed year- ___________
Important Points: Normal Case-
Note: NAV of HP held as SIT = Nil
Interest on fresh loan taken to repay original loan → Deductible _________
for 2 years from the end of FY in
Brokerage/commission for Arrangement of loan → Not Deductible. Limit is for combined 2
which completion certificate is issued
Interest on unpaid interest → ______________. SOP & not for each
if Not Let Out for such period. If loan is taken from o/s India → ___________________. SOP
14
Un-realised Rent Concept of Partly Let out property Sec 26: Co-ownership
Rent which is not recovered by owner from tenant it is like AREA WISE Co-owned Compute Income from HP as if there is
bad debts, it is deductible while calculating actual rent If some area of house is let out and some is self HP is LOP one owner
when following 4 conditions are satisfied occupied then let out portion is treated as LOP and Income so computed shall be
 Tenancy is bonafide; self occupied is treated as SOP. In this case MV, FR, apportioned amongst each co-owner as
 Tenant should have vacated that house property SR, municipal taxes, int on loan should be divided per their share.
 Such tenant should not occupy any other house between SOP and LOP on area basis. Co-owned Annual Value → Nil
property of same assessee Actual rent should never be divided because it is HP is SOP Deduction of 30K/2 L u/s 24(b)
 Reasonable steps have been taken for recovery of always for LOP separately for each co-owner.
unrealized rent TIME WISE HP OWNED BY P’SHIP FIRM → Income is assessed in
Arrears of Rent: Means rent under dispute If property is let out for some period and self hands of firm & not to partners.
occupied for some period then it is treated as let
Sec 25A: Recovery of un-realised rent & arrears of out property only irrespective of the period even if
for one day also. Sec 27: Deemed owner
rent
If any Individual transfer any house property to
Taxable in the year in which it is recovered, whether
Concept of Composite Rent his/her spouse without any consideration or inadequate
assessee is owner or not
consideration than such Ind is treated as Deemed
Taxable Amount= Recovery ×70% [30% Std Deduction] Composite Rent= Rent of HP + Rent of any other assets owner of that property
Exception: Transfer in connection to live apart
If any Individual transfer any house property to a
minor child without any consideration or inadequate
Agreement is separable Agreement is not
consideration than such Ind is treated as Deemed
separable
owner of that property
Total Rent Taxable
Exception: Minor married Daughter
Rent of Rent of under PGBP/IFOS
In case of Co-op Society, Shareholder is treated as
HP other Assets
deemed owner
Under Under
IFHP IFOS/PGBP
Holder of impartible Asset
15
Sec 28: Charging Section

Sec 29: How to Compute PGBP? Sec 31: Repairs & Insurance of a Plant and Machinery and furniture.
Following income shall be taxable
under the head PGBP: Follow Section 30 to 43D Expenses Deduction
Calculation of PGBP Income Revenue Allowed
 Any Profit or Gain of any Repairs
Business or Profession. Net Profit As per P/L Account XXX Capital Repairs Not Allowed [Added to
 Assistance Grant or subsidy Add: Cost of P&M and furniture]
received from CG/SG/ relating Depreciation Debited to P/L Account XXX Insurance Allowed
to B & P. Expenses Debited to P/L A/c but not allowed as XXX
 Profit on sale of Import deduction [Disallowed]
Entitlement License.
Income not credited to P/L A/C but taxable XXX
 Export incentive on Duty Sec 32: Depreciation
under this head
Drawback.
XXX Conditions to Claim Depreciation: Depreciable Asset
 Value of any gift/perquisite
Less: 1. Asset Must be used in Business and
arising due to B & P.
Depreciation as per Income Tax Act (XXX) Profession. [ Active/Passive]
 Non-Compete Fees received for
Expenses Not Debited to P/L A/c but allowed as (XXX) AND
not carrying out activity relating Tangible Asset Intangible Asset
deduction [Allowed] 2. Assessee must be owner of Such
to B & P or for not sharing
Income Credited to P/L A/C but not taxable (XXX) Asset [Wholly or Partly]
Intangible asset.
under this head [ E.g. CG, Agri Income etc.] Notes:
 Amount received under keyman +
PGBP XXX Depreciation is allowed only when asset Class IV
insurance policy.
 FMV of stock on conversion into is put to use.
capital asset. In case of following Asset Depreciation is
Sec 30: Rent, Rates, Taxes, Repairs & Insurance
 Interest Salary, bonus, allowed even if asset are ready for use.
of a Building. 
commission, or any remuneration
received by partner from 
Expenses Deduction
partnership firm [ to the extent 
Rent Allowed Class I Class II Class III
deduction allowed to firm/LLP]. Depreciation is allowed to beneficial owner.
Rates and Taxes [Municipal Tax] Allowed
In case of Lease Asset, Depreciation is
Speculative Business Revenue Repairs Allowed allowed to Lessor.
Capital Repairs Not Allowed In case of partial ownership Depreciation
Part of Business consist of
____________ is allowed as per respective share.
sale/purchase of shares or commodity
Insurance Allowed No Depreciation on Land and Goodwill.
other than actual deliver. Intangible Asset includes knowhow, patent,
P/L of Speculative Business to be It is Mandatory to Claim depreciation.
1. Expenses are allowed as deduction if Building is copyright, Trademark, license, franchise, or any
calculated separately. other business or commercial Right of similar
used for Business and Profession.
Following are not Speculative Business:
2. Capital Repair by Tenant is treated as Deemed nature other than Goodwill of Business and

building and hence Depreciation is allowed to profession

tenant. 16

Depreciation Rates: Calculation of WDV of Block and Depreciation. Proviso to Sec 32(1): Depreciation in case of Sec 38(2): Asset Partly
Amalgamation/Demerger/Succession. used for other purpose
Type of Asset Rate Opening WDV of Block as on 1st Day of P.Y. XXX
Building Add: Actual Cost of Asset Purchase during P.Y. XXX Depreciation is calculated normally and after that it shall If Asset is not exclusively used
Residential Building 1. Put to use for 180 days or more be distributed between amalgamating company/demerged for Business/profession then
Commercial Building 2. Put to use for less than 180 days company/predecessor AND Amalgamated Co /Resulting deduction u/s 30,31,32 shall be
Temporary Structures. 3. Purchase but not put to use during P.Y. Company/ Successor in the ration of no of days for which restricted to a proportionate
Furniture: Less: Amount received on sale of (XXX) assets were used by them. part as determined by A.O
All Furniture Asset/destroyed/demolished/discarded during Succession means;
Plant and Machinery: P.Y. .
Aero planes, Pollution control WDV of Block for Depreciation XXX Sec 43(1): Actual Cost
equipment, Medical Equipment, Less: Depreciation (XXX)
Windmill, Energy Saving Closing WDV as on Last Day of P.Y. XXX Purchase Price X
devices, Books and Annual Add:
Sec 32(1)(iia): Additional Depreciation
Publications, Computer Depreciation on WDV of Asset Installation Charges X
including computer software Eligible Assessee: Transport Charges X
and accessories. On cost of Asset On cost of Asset put Balance WDV Assessee engaged in business of manufacturing/production Trial run/ test run X
Ships purchase but not put to use for less than of any article or generation transmission or distribution of expense
Motor car [Taxis, Buses etc.] to use during P.Y. 180days power AND Purchase NEW Plant and Machinery during P.Y Taxes Duty [If ITC not X
used in business of running on Also Include Business of Printing and Publishing. available]
hire. No Depreciation Half Depreciation Full Rate Interest on Loan taken X
Other Motor car, Oil Wells, Depreciation Additional Depreciation: for Purchase of asset
office equipment, EPABX and  20% of ______________________ [upto Put to use]
mobile phones, other Plant and  Depreciation allowed at 10% of actual cost [if asset Balance treated as
Capital Gain/Loss on Depreciable Asset
machinery. used for less than 180 days]. revenue expenditure
If motor car purchase and No Depreciation is allowed in Following Plant and Less:
put to use between If WDV of Block for If all assets of Block are Machinery: Amount received on sale (X)
23/8/2019-31/3/2020: Depreciation is Sold  Second hand Plant and Machinery. of trial run
Hire [Taxis, Buses] negative  P&M installed in office premises or residential Subsidy or Government (X)
Other motor car If WDV of block If WDV premises. grant received for
Intangible Asset STCG for Depreciation of block  Office Appliances or Equipment. Purchase of Asset
is positive for Depreci  Ships, Aircraft and transport vehicles. Actual Cost X
No Depreciation atio is  P&M on which __________ deduction is allowed.
Block of Asset System:
STCL Negative Notes;
 Additional Depreciation is allowed only when If payment or expenditure for
Same class of Asset AND having same
assessee follows WDV method. asset to single person in a single
rate of Depreciation. No Depreciation STCG
Depreciation Shall be allowed on WDV of  Forklift Truck used in factory is not treated as day exceed Rs 10,000 by
Block of Asset at prescribed percentage. No Depreciation transport vehicle and hence additional depreciation Cash/Bearer Cheque/Cross
allowed. Cheque then such payment shall
Individual Asset System:
Two methods of Depreciation WDV and SLM not form part of Actual Cost of
Depreciation should be calculated on Mandatory to follow WDV unless power generating Units. Means asset : Ignore Such Amount
Individual Asset. power generating units has option to follow WDV or SLM
17
Explanation to Sec 43(1)
Taxation of Grants/Subsidy from Government
Explanation 7 to Sec 43(6)
Cases Actual Cost In cases of Composite Scheme for the purpose of computing WDV of assets Any Subsidy, grants, cash incentive, duty drawback, waiver etc by CG
Asset used in Nil [We claim the total amount of Depreciation shall be computed as if the entire composite or SG or any authority or Body [other than referred in explanation 10]
scientific Research deduction in Sec 35] income of the assessee is chargeable under the head PGB. The depreciation shall be treated as Income u/s 2(24)(xviii)
Stock converted into FMV on the date of so computed shall be deemed to have been actually allowed to the assesseee
capital Asset and used conversion Notes:
in Business and __________________________________________________________
 If Subsidy received for acquiring asset, then reduce from
Profession ________________________.
actual cost of asset.
Asset acquired by WDV of previous
Example: Turnover Say Rs 20 Lakhs, the Depreciation Rs 1 Lakhs, expenses Rs 14  Any other Subsidy treated as PGBP.
Gift/will Owner
Lakhs  Any subsidy or grant received as corpus donation from CG or
Reacquisition of Asset Reacquisition Price Sol: any trust or institution shall be treated as income
sold OR Income =Rs 15 Lakhs
WDV at the time of  Not applicable for any subsidy which is received for welfare of
Business Income=Rs 6 Lakhs [40% of 15 Lacs]
Sale individual
Depreciation as per rule= 40K [40%of 1 Lacs]
Building used for Original Cost – As per this Explanation= Complete 1 Lacs
personal purpose Notional Depreciation
Depreciation on Goodwill of Business and Profession [w.e.f A.Y
brought into Business till date at current
21-22]
Depreciation rate.
Depreciation for undertaking engaged in Case 2: S.P. =Rs 89
Asset transferred WDV of Transferor
generation of Power then in such case  Goodwill of a business or profession is ___________ for
between holding and
WDV is less than S.P. depreciation from P.Y.2020-221.
100% Subsidiary
 If Value of Intangible block of Assets on 1st April 2020 includes
Asset Transferred by WDV of then there will be
goodwill of a business or profession [on which depreciation was
Amalgamating Amalgamating Profit of Rs 8 which
WDV SLM obtained by the assessee upto P.Y. 2019-20] then depreciated
Company to Company is known as Balancing
Same as discussed value of goodwill shall be reduce from the value of the Intangible
Amalgamated Company Charges and Taxable
In case of Sale of asset block of assets. For this purpose, depreciated value of goodwill
Asset Transferred by WDV of Demerged under PGBP. shall be calculated as if the goodwill was the only asset in the
Demerged Company to Company of Asset relevant block of Assets.
Case 3: S.P.120 then
Resulting Company Transferred Sec 55: If Goodwill of Business or Profession [on which depreciation
Section 35AD Nil in such the S.P. is
claimed till P.Y.2019-20] is transferred during P.Y.2020-21 or thereafter
Asset acquired with Amount determined more than Cost
then cost of Acquisition of goodwill for the purpose capital gain shall be
an intention to claim by A.O. with the therefore following
actual cost minus depreciation claimed.
higher Depreciation approval of J.C. treatment is give Calculation of WDV of Intangible assets block for P.Y. 2020-21
Government IF relates to any Loss=Terminal Profit= Balancing Profit=120-80= Rs 40 Opening WDV of ITA on 1/04/2020 XXX
Grant/Subsidy Asset then reduce Depreciation Charge
from the Actual Cost Upto Cost Rs 20 Add: Actual cost of asset other goodwill acquired during P.Y. XXX
Asset Brought into Actual Cost- Less: Money received [Sale Value] (XXX)
Deduction Allowed Taxable under PGBP Balancing Charge
India by NR for use in Depreciation Less: WDV of Goodwill [ assuming that goodwill is only asset in (XXX)
Example: Actual Cost= Rs 100 Dep= Rs 20
his Business or calculated at the rate Balance amunt Rs 20 block
WDV=Rs 80
profession in force as if the asset STCG u/s 50A WDV for Depreciation XXX
Case 1: S.P.= Rs 72 in such case WDV is more
was used in India from Less: Depreciation actually allowed (XXX)
then S.P. there will be Loss of Rs 8 which is
the date of purchase Closing WDV XXX18
Terminal Depreciation
Example:
Downloaded From www.castudynotes.com Common Note for Sec 35D and 35DDA
Sec 32(2): Unabsorbed Depreciation Sec 35DD: Expenditure on Voluntary
WDV of ITA-Rs 70,00,000 [Includes Patents In case of Amalgamation/Demerger then
Retirement Scheme [VRS]
and Goodwill]. Profit Before Charging Depreciation as Per XXX remaining deduction shall be allowed to
Goodwill purchased on 14/02/2019-Rs Income Tax Act Eligible Assessee: All Assessee Amalgamated Company/Resulting
40,00,000. Less: Depreciation as per Income Tax Act (XXX) Deduction allowed in Five equal instalments in Company.
Compute WDV of Block as on 1/04/2022 and Unabsorbed Depreciation (XXX) 5 years of amount paid. For Sec 35DDA: In case of succession
depreciation allowed for P.Y.20-21 and P.Y. 21- It can be setoff from any head of income except from Deduction for P.Y.= ________________ the remaining deduction shall be allowed
22 salary AND can be carryforward for indefinite period to successor
Calculation of Depreciation
Opening WDV on 1/4/2020 70,00,000
Sec 35D: Preliminary expenses Sec 35D; Scientific Research
Add: Actual Cost of asset Nil
acquired during P.Y. Deduction allowed only to resident assessee who incurs
Less: Money received Nil preliminary expenses at the time of commencement of
Less: WDV of Goodwill [Note 1] (26,25,000) business or extension of business or setting up new Inhouse Outside Contribution
WDV for Depreciation 43,75,000 business unit.
Less: Dep actually allowed for (10,93,750) Preliminary expenses include:
P.Y.2020-21  Preparation of feasibility report
Opening WDV as on 1/4/21 32,81,250 Within 3 years After To Approved Indian Co To
 Market survey
Add: Actual Cost of asset Nil  Engineering Services before Commencement engaged in R & D For IIT/Nation
acquired during P.Y.  Drafting of MOA/AOA commencement of Business Scientific Research al
Less: Money received Nil  Legal fees of business Laboratory
100% Deduction
WDV for Depreciation 32,81,250  Expenses relating to public issue of shares and For
Less: Dep actually allowed for (8,20,313) debentures Scientific
P.Y.21-22  Other expenses as notified by CBDT Research
Opening WDV as on 1/4/22 24,60,937 Maximum Limit for Deduction:
Note 1: Indian Company: 100%
Opening WDV as on 1/4/18 Nil 5% of Cost of project Deduction
Add: Actual Cost of Goodwill 40,00,000 OR
acquired during P.Y. 5% of Capital Employed
Less: Money received Nil Other Resident Assessee: To Approved: [For scientific,
WDV for Depreciation 40,00,000 5% of Cost of Project 100% Deduction in 100 % Deduction in social and statistical research]
Less: Dep actually allowed for (5,00,000) Deduction Allowed: the year of the year of Expense  College
P.Y.18-19@12.5% Actual Preliminary Expenses Deduction commencement  University
Opening WDV as on 1/4/19 35,00,000 OR ____________  Research Association
Add: Actual Cost of Goodwill Nil Amount as per Maximum Limit General Points:  Institute
acquired during P.Y.  Deduction allowed even if approval of
Cost of Project: Amount invested in Fixed assets of 100% Deduction
Less: Money Received Nil institution withdrawn after payment
new business or extension or new unit.
WDV for Depreciation 35,00,000  Unabsorbed expenditure on scientific
Capital Employed: Share capital+ Debentures+ Long
Less: Dep actually allowed for (8,75,000) research can be setoff and carryforward
term borrowings for new business/extension/new unit
P.Y.19-20 @25% same as unabsorbed Dep.
Share capital shall not include Reserve and surplus
WDV of Goodwill on 1/4/20 26,25,000  No Depreciation if Deduction claimed u/s 35 19
and security premium
Sec 35AD: Expenditure on Specified  If payment or expenditure for capital If Specified Business Asset is Sec 36(1)(iv)/(v): Employer’s contribution
Business [ Optional For assessee] asset to single person in a single day used/transferred to Non-Specified for the benefit of the employee
exceed Rs 10,000 by Cash/Bearer Business after period of 8 years:
Deduction allowed on all capital expenses Cheque/Cross Cheque then no deduction No PGBP Income Statutory Provident Fund
except Land/Goodwill/Financial instrument. shall be allowed for such expense: Actual Cost: Nil Recognized Provident Fund
Capital Expenditure: Ignore Such Amount Approved Superannuation Fund
 Before Commencement of business:  If Deduction is claimed u/s 35AD then Approved Gratuity Fund
Sec 36: Certain Deductions
100% Deduction in the year of commencement deduction u/s 80IA to 80RRB and Sec Any other Fund as per Law
 After Commencement of business: 10AA shall not be allowed for same
100% Deduction in the year of expense business. Unapproved Recognized PF
Sec 36(1)(i): Premium for insurance
 Loss from specified business is setoff Unapproved Superannuation fund
of Stock in Trade
Specified Business: against profit of any other specified Unapproved Gratuity Fund
1. Cold Chain Facility. business.  It is allowed as Deduction. Any other fund
2. Hotel of 2 star or above.  Loss from specified business can be Sec 36(1)(ib): Health insurance
3. Hospital with atleast 100 beds for carryforward for Indefinite period. Sec 36(1)(iva): Employer’s Contribution
premium for employees
patients.  If Specified Business capital Asset is
towards Pension Scheme referred u/s
4. Housing project for slum development sold then Amount received taxable  Allowed as deduction if paid in
under PGBP. [No CG even if SP>Actual 80CCD
scheme and under affordable housing any mode other than Cash
scheme. Cost] Sec 36(1)(ii): Bonus or commission to Deduction allowed to employer. [Subject to Sec
5. Production of Fertilizers in India.  Asset on which deduction us claimed u/s employees 43B]
6. Inland Container depot. 35AD should be exclusively used for
Amount of Deduction:
7. Honey Production. specified business for minimum period  Allowed as deduction subject to
Actual Contribution
8. Warehousing facility for storage of of 8 years from the year of acquisition. Sec 43B.
OR
sugar. If Specified Business Asset is used for Non-  There is no restriction on the
10% of Salary [Basic + DA(Terms)]
9. Warehousing facility for storage of Specified Business within period of 8 years amount of bonus it may exceed
Sec 36 (1)(va): Employees contribution
Agriculture produce. then following shall be taxable under PGBP the bonus payable under
10. Cross country pipeline of natural gas/oil. payment of Bonus towards PF/ESI/Superannuation fund
11. Slurry pipeline for transportation of Deduction Allowed Earlier [Cost of X Sec 36(1)(iii): Interest on Loan
 Deduction allowed if amount is deposited
Iron ore. Asset]
Personal Purpose: Not allowed on or before due date of that fund.
12. Semi conductor wafer fabrication Less: Depreciation that would have been (X)
For Business/profession Purpose:  If not deposited by Employer on or before
manufacturing unit. allowable if Sec 35AD was not there
Loan from Sch Bank/PFI/State due date of that fund then it shall be
13. Developing maintaining and operating PGBP X
Financial Corporation/State Industrial deemed to be PGBP income of employer
new Infrastructure facility
Investment Corporation/NBFC. and never be allowed to employer
Other Important Points: If Specified Business Asset is transferred to
Allowed as deduction subject Sec 43B.  PF due date is 15th of Next month.
 Business should be new [Not formed by Non-Specified Business within period of 8
Loan From other: Sec 36(1)(ix): Expenses on promotion of
splitting up or reconstruction of years then Actual Cost for Non-Specified
existing Business]. business shall be: Allowed as Deduction Family Planning of employees
 Plant and machinery should be new Cost of Asset X Sec 36(1)(iiia): Discount on Zero
Coupon Bond Eligible Assessee: Only Companies
except Imported P&M and 20% of Total Less: Depreciation allowable if such (X)
P&M can be old. asset used for non-specified business
Prorata amount of discount shall be Revenue expenses: 100% Deduction Allowed
 Depreciation Not allowed if Deduction from the date of acquisition
amortized over the life of ZCB Capital Expenses: Allowed in 5 equal instalments20
claimed u/s 35AD Actual Cost of Asset X
Sec 36(1)(vii): Bad Debts Sec 36(1)(xv)/(xvi): Securities Premium paid by the firm Allowed Amount Not Deductible
Transaction tax/Commodity Transaction on the keyman insurance
policy of a partner
Tax
Tax audit fees or Allowed Sec 40(a)(i): Payment made to Non-
Actual Bad Debts Provision for bad Debts litigation expenses in resident
It is allowed as deduction if assessee held
shares/units/commodities as Stock in Trade. relation to income tax
Not Allowed [Except Banks] cases Any Amount paid or credited to NR or Foreign
Sec 36(1)(xviii): Mark to market Loss
Provision for loss of Not allowed company on which TDS was deductible:
or other expected Loss
subsidiary, provision for  But TDS was not deducted during P.Y.
deferred tax, provision OR
Deduction allowed as per ICDS [ on the basis
for un-certain liability,  TDS deducted but not paid to Govt
of actual settlement]
Allowed Not allowed provision in diminution in upto due date of ROI
[Except Money lending Business] value of asset Then such Amount=100% disallowed in
Sec 37: General Deduction Current P.Y.
Share issue expenses Not Allowed [as
Other Points: [other than preliminary] it is Capital in Sec 40(a)(ia):Payment made to resident
Any expenditure [other than covered u/s
 Bad Debts should be written off in the incurred for nature as it
30-36] is allowed as deduction if following
books in the P.Y. in which deduction is IPO/FPO/Right shares results in Any Amount paid or credited to resident on
conditions are satisfied:
claimed. change in which TDS was deductible:
 Expenses Should be Revenue in nature
 Debts should be taken into account for capital]  But TDS was not deducted during P.Y.
 Expenses incurred wholly and
computing income for P.Y. or earlier P.Y. Expenditure incurred for Allowed as it is OR
exclusively for Business and
 No need to prove that the debts are become Buy back of Shares, Bonus revenue in  TDS deducted but not paid to Govt
profession.
bad. shares, Debentures or nature and does upto due date of ROI
 Expenses should not be prohibited by
Sec 41(4): Bad Debts Recovery loan issue expenses not results into Then such Amount=30% disallowed in Current
law
change in P.Y.
 Taxable under PGBP in the year of Recovery. Allowability of some expenses
capital
 Amount Taxable=Bad Debts recovered in Exception to Sec 40(a)(i)/(a)(ia)
excess of not written off [Recovery- Corporate Social
Tax and Interest and penalties of Direct IF any amount has been paid or credited to
Disallowed earlier] Responsibility [Not treated
tax and Indirect Tax: payee without deduction of TDS andbsuch
 Taxable only if Assessee who claims Bad as Business expenses]
Direct Indirect payee:
Debts and Assessee who recovers is Same. Gift to employee
Tax Tax  Furnishes his ROI
 Where the amount of such debt has been Dividend
 Considers such amount in Total
Customary Expenses [puja Tax, Advance Tax, TDS Not Allowed
taken into account in computing the income Income
at the time of diawli] Allowed
for P.Y. or earlier P.Y. [on the basis of ICDS  Paid Tax due on such amount
Expenses incurred by CA;s Interest [Including Not Allowed
without recording the same in the accounts] Then amount will be disallowed in the Current
for attending CPE seminars Interest on TDS and allowed
such debt shall be allowed in the P.Y. in year however allowed in the year when payee
Advertisement in brochure, Not allowed Advance Tax]
which such debts becomes bad and IT shall Files his ROI.
souvenir, newspaper, Penalty Not Not
be deemed that such debt has been written However payer has to pay Interest u/s
pamphlet published by allowed allowed
off as irrecoverable in the accounts. 201(1A)@1%p.m. or part of month on the
Example: Political party amount of TDS not deducted from the date
Interest on Loan taken for Not Allowed Penalty for Breach of Law: Not allowed
Bad Debts =Rs 1,00,000, Allowed by A.O.=Rs 60,000 on which the TDS was so deductible till the
payment of Tax Penalty for breach of contract [Revenue in
Disallowed=Rs 40,000 Recovered=Rs62,000 date on which payee file his ROI
nature]: Allowed
Taxable Amount=62,000-40,000=Rs 22,000 Freebies i.e. illegal expenses 21
Amount Not Deductible Asseesee Specified Person [ Relative]  Payment of Retirement benefits to Sec 43B: Expenses Allowed on Payment
Individual Spouse, Mother, Father, employees /their family upto Rs Basis
Brother, Sister, Lineal 50,000
Sec 40(a)(iib): Royalty, fees etc Ascendant or Descendant of  Payment of salary to employees who is Following expenses are allowed only if they are
charged by State Govt Individual posted to a place other than his PAID up to due date of return filing as per Sec
HUF Member and their Relative normal place of duty for 15days or 139(1):
If any Royalty, fees, service charge etc is Firm Partner and their Relative more  Any tax, Duty, Cess.
exclusively collected by State Government AOP/BOI Member and their Relative  Payment to producer/Cultivator of  Employer Contribution towards
from state govt undertaking then such Company Director and their Relative Agricultural product, forest product, 1. Statutory Provident Fund
expense is not allowed to such state govt For All Any person holding Substantial poultry, Dairy product, fish product, 2. Recognized Provident Fund
undertaking Assessee Interest in Business of live stock etc. [Not middleman 3. Approved Superannuation Fund
Sec 40(a)(iii): TDS on salary payable Assessee/Relative of Assessee /trader] 4. Approved Gratuity Fund
outside India or NR Substantial Interest Means  Payment made by authorized dealer or 5. Pension scheme u/s 880CCD
20% or more of Voting power money changer against purchase of 6. Any other Fund as per law
Any Salary payable outside India or to NR or Profit Share foreign currency or travellers cheques  Bonus or commission to employee.
in India and if: in the normal course of his business  Interest on Loan to:
 TDS Not deducted  Payment mmade through 1. Scheduled Bank
OR Sec 40A(3): Cash Payment>10,000 to a NEFT/RTGS/Debit card/Credit 2. Co-operative Bank
 TDS deducted but not paid to Govt single person in a single day card/ECS/UPI/BHIM 3. Pubic financial institution
upto due date of TDS payment, 4. State Financial Corporation
Then such sum shall not be allowed as  If aggregate payment for expenditure 5. State industrial investment
to single person in a single day exceed Sec 40A(7): Provision of Gratuity
deduction. corporation
If TDS deposited late even by one day, the Rs 10,000 by Cash/Bearer 6. NBFC
Not Allowed
salary shall not be allowed as deduction Cheque/Cross Cheque then such  Leave encashment to employees.
Only payment to Approved Gratuity fund or
payment = 100% Disallowed.  Amount payable to railways for use of
Sec 40(a)(v): Tax on Non-monetary provision for gratuity actually become payable
 If Payment Made to transporter, then railway asset.
perquisite during P.Y. [due basis] shall be allowed as
limit will be 35,000. If Interest converted to Loan then such
deduction.
Sec 40A(3A): conversion cannot be treated as payment.
Tax on non-monetary perquisite is generally
 If Expenditure claimed as deduction However, when Instalment of such converted
paid by employee. However, if employer 43A: Asset purchase in foreign
in earlier year on due basis and if such Interest is paid, deduction is allowed.
decide to pay tax on non-monetary perquisite currency in credit or when asset
expenditure subsequently paid in
from his pocket, then that tax is Not Allowed
cash/Bearer cheque/cross cheque in acquired from currency loan
as deduction because its exempt in the hands Sec 41: Deemed PGBP
excess of Rs 10,000 in a day then
of employee u/s 10(10CC) Profit/loss due to foreign Exchange
deduction allowed earlier is Taxable
Sec 40A(2): Payments to specified fluctuations at the time of payment
under PGBP 41(1): Recovery against any deductions already
persons [Relatives] Exception to Sec 40A(3) [Rule6DD]: shall be adjusted from cost of Asset
. claimed
 Payment made to
IF Payment of expenditure made to specified  If Profit:
RBI/LIC/Banks/Govt. If assessee has taken deduction of any expenditure or
persons then A.O. can disallow Excessive or ____________________
 Payment By book entry [Adjustment] trading liability in earlier years AND during Current p.y.
unreasonable Amount.  If Loss: Added to Cost of
 Payment made in village/town where Assessee has obtained refund of such expenditure OR
Payment in Excess of FMV= Excess disallowed Asset
there are no banking facility there is remission or cessation of such liability
Note 1: Specified Persons [Relatives] Also includes profit/loss on Hedging
Continue…… Then such Remission/refund shall be deemed to be PGBP 22
contract entered for such asset
Sec 41: Deemed PGBP Sec 44AA: Compulsory Maintenance of Books of 44AB: Compulsory Audit of Books of Accounts
Accounts [BOA]
Sec 41(2): Balancing Charge PART A: Maintenance of BOA by Notified Profession:

Notified Person: Legal, Medical, Engineering, Architect, Specified Profession For Business
Already Discussed with Depreciation. Accounting, Technical Consultancy, Interior Decoration,
Sec 41(3): Sale of Scientific Research Film artist, CS, IT Professionals When G.R. >Rs 50 Lacs When T/o > Rs 1 Crore
Asset
From A.Y.2021-22;
Sale without use in Business Non-Applicability:
Sale Price Assessee declaring income u/s
OR If Gross Receipts exceed 44AD and his turnover/GR is
Other Case
Deduction already Rs ________ in all 3 upto Rs 2 Crore.
claimed u/s 35(1)(iv). preceding P.Y. OR Likely
IF S.P.>Cost then Capital gain also arise. to exceed in Current P.Y. Maintain
Sale after use in Business: [New Business] Such BOA Mandatory Audit
Add to block of asset 1. If Assessee covered by Sec 44AD/44ADA and Assessee claims income less than
which
Actual Cost=Nil 8%/6% or 50% of Turnover/Gross Receipts and his total income is more than basic
enables
1. Cash Book exemption limit.
A.O. to
At the time of sale sec 50 will arise. 2. Journal 2. Assessee claiming lower income u/s 44AE
Compute Audit must be done by CA
Sec 41(4): Recovery of Bad Debts 3. Ledger
4. Carbon Copies of bills Total Tax audit report to be filed in form 3CA/3CB/3CD
Already Discussed exceeding Rs 25 Income Specified Date: 1 month before the due date of filing ROI u/s 139(1)
5. Original bill for expenditure Penalty U/s 271B: If Assessee fails to get accounts audited
bill exceeding Rs 50 0.5% of T.O/G.R.
PART B: Maintenance of BOA for other 6. Daily case register and OR
Assessee: stock register [Medical] Rs 1,50,000
For Individual/HUF required to maintain when:

Turnover/Gross receipts exceed Rs 25,00,000 Sec 40(b): Payment of Interest, Bonus, Commission or Remuneration
OR As per Sec 271A, if assessee fails to maintain BOA
PGBP Income exceed Rs 2,50,000 as per Sec 44AA Interest& Remuneration paid by firm/LLP is allowed as deduction if following conditions
_______________________________________ are satisfied
In any ONE of 3 Preceding P.Y. _
 Remuneration paid to only working partner
 Remuneration and Interest should be authorized by partnership deed
For other person when:  Remuneration and interest should relate to period falling after the date of
Turnover/Gross receipts exceed Rs 10,00,000 partnership deed. Means no retrospective interest
OR  Interest on Partner’s capital and loan allowed max@12% Simple Interest
PGBP Income exceed Rs 1,20,000 Continue….Next Page
In any ONE of 3 Preceding P.Y. 23

Remuneration allowed on Book Profit Basis
 PRESUMPTIVE TAXATION
BOOK PROFIT
Particulars Sec 44AD Sec 44ADA Sec 44AE
A B Eligible Resident Individual/Resident Resident Any Assessee engage in business of plying,
Assessee HUF/Resident Firm [Not LLP] engage in Individual/Resident Firm hiring, leasing goods carriage
On First Rs Balance B.P. Maximum Limit =
any business other than [Not LLP] engage in notified [Transportation Business]
3,00,000 B.P A+B
At the rate 60% 1. Sec 44AE profession
B.P.*90% 2. Agency Business
OR 3. Commission & Brokerage business
Rs 1,50,000 Eligible 1. Applicable only to business: Notified Profession whose Transportation business in which assessee
Business 2. Any business whose total Gross Receipts are upto Rs does not more than 10 Goods carriage at
/profession T/o/G.R. is up to Rs 2 Crore 50 lacs any time during P.Y.
Book Profit PGBP
Net Profit under PGBP XX Income
Less: Current year+ b/f depreciation (XX)
Add: Remuneration [if debited to P/L] XX
Book Profit XX
Explanation to Sec 40(b): Expenditure No Deduction of any expenditure u/s 30- No Deduction of any No Deduction of any expenditure u/s 30-
Deduction 38 and 40(b) expenditure u/s 30-38 and 38
 If any individual is a partner in a firm on individual capacity &
40(b)
receiving interest on representative capacity then sec 40(b)
Maintenance Not required to maintain BOA if Not required to maintain Not required to maintain BOA if Assessee
not applicable.
of BOA Assessee opt for this sec BOA if Assessee opt for opt for this sec
 If any individual is a partner in a firm on representative
this sec
capacity & receiving interest on individual capacity then sec
Other  Assessee shall not claimed  Advance Tax only in  Advance Tax Payment in 4
40(b) not applicable
Points deduction u/s 10AA and Sec one instalment Instalments
 40(b) Not applicable it means interest can be paid more than
80IA to 80RRB i.e.15th March of F.Y.  ROI filing Due date= 31st July of
12%.
 ROI filing Due date= 31st July of  ROI filing Due date= A.Y
 Applicable only For interest and not for remuneration. i.e.
A.Y. 31st July of A.Y
means remuneration shall be within limit of 40(b) irrespective
 Advance Tax only in one
whether individual or representative capacity.
instalment i.e.15th March of F.Y.
Sec 40(ba): Interest, salary, Bonus, Commission paid by  If Assessee declares income for
AOP/BOI while computing PGBP shall be disallowed any P.Y. as per Sec 44AD and he
does not declare income for next
 If any individual is a member in a AOP/BOI on individual 5 consecutive P.Y. as per Sec
capacity & receiving interest on representative capacity then 44AD
sec 40(ba) not applicable.
 If any individual is a member in a AOP/BOI on representative  He will not be eligible for 44AD
capacity & receiving interest on individual capacity then sec for 5 years subsequent to year in
40(ba) not applicable which does not declare income as
 40(ba) Not applicable it means interest is allowed to AOP/BOI per Sec 44AD
while computing PGBP
 Net interest shall be allowed when int is received and paid __ 24
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Sec 45(1): Charging Section Definition of Urban Area: Sec 2(47): Definition of Transfer When Asset Acquired before 1/04/2001:
1. Any Area [municipality, cantonment board etc] Cost of Acquisition will be
 If there is a Capital Asset AND which has population of 10,000 or more 1. Sale, exchange or relinquishment of Actual Cost
transfer of Capital Asset during 2. In the following area within the distance, asset. OR
P.Y. measured aerially 2. Extinguishment of any right therein. FMV as on 1/04/2001
 Then any gain arising from such Shortest distance Population according 3. Compulsory acquisition thereof under When Improvement done before
transfer shall be taxable under from area referred in to last census any law. 1/04/2001: Ignored
head capital gains in the P.Y. in point 1 4. Conversion of capital asset into stock
which transfer took place. Upto 2 Kms >10,000 up to 1,00,000 in trade. Important Note:
Sec 2(14): Capital Asset Upto 6 Kms >1,00,000 up to 5. Possession of immovable property in __________________________________
10,00,000 part performance of contract. __________________________________
1. Property of any kind Upto 8Kms >10,00,000 6. Any transaction which has the effect __________________________________
[Movable/Immovable/Tangible/Int Rural area means area which is not urban area. of transferring or enabling the __________________________________
angible] held by assessee whether enjoyment of property __________________________________
Type of Capital Asset
it is Business or profession 7. Redemption of Zero-Coupon Bonds __________________________________
property or Personal property. Sec 48: Computation of Capital Gain _____
2. Any Securities held by foreign First Proviso to Sec 48: Computation
institutional investor [FII] Particulars Rs
of Capital Gain in case of NR
Capital Asset does not include: Full value of Consideration [FVOC] X
1. Stock in trade [RM/WIP/FG]. Less: Transfer expenses (X)  Assessee; Non-Resident [Includes
2. Movable personal property but STCG LTCG Net Consideration X Foreign Company]
however it includes Capital Asset Period of Period of Less: Cost of Acquisition (X)  Who is holding Shares or Debentures
 Jewellery, Drawings, Paintings, Holding Holding Less: Cost of Improvement (X) of Indian Company AND such asset
Sculpture, Archaeological [Short term] [Long term] Capital Gain X was acquired in foreign currency by
Collection or any other work of 1. Listed Shares Second Proviso [exception] to Section 48: way of purchase or reinvestment then
art & Securities Indexation: CG shall be calculated in foreign
3. Rural Agriculture Land in India. 2. Zero Coupon In case of LTCA, COA and COI be indexed currency and after that it shall be
4. Gold Deposit Bonds Bond A. Indexed Cost of Acquisition [ICOA] reconverted into Indian Currency
5. ULIP to which exemption u/s 3. Unit of Equity COA*CII for the year of transfer Rules 115A: Method of Conversion
10(10D) does not apply due to oriented CII for the first year in which asset COA
fourth and fifth proviso thereof. mutual was held by assesee or for the year 2001-02
Notes: funds/UTI whichever, is later Transfer
 Gold utensils, silver Bars, silver 1. Unlisted B. Indexed Cost of Improvement[ICOI] expense
coins were held not to be Shares COI* CII for the year of transfer Sale
consider as personal effect: 2. Land and CII for the first year in which Consideration
Capital Gain applicable. Building improvement to the asset took place CG into INR
 Silver utensils: No Capital Gain. Cost Inflation Index:
Other capital Asset Indexation not Available
 Car used in business treated as P.Y.2021-22= 317 DOT= Date of Transfer
Asseesee should be NR in the year of Sale25
Capital Asset. P.Y.2001-02= 100
Third Proviso to Sec 48: Sec 55: Cost of Acquisition and Cost of Cost of Acquisition: Cost of Improvement
Improvement
Indexation not available in case of LTCG 4. Right Shares/Security  All expenditure of capital nature
for assets specified in Sec 112A. incurred on improvement of capital
Fourth Proviso to Sec 48: Asset by assessee/previous owner on
Cost of Acquisition:
If Right Shares If Right offer or after 1/4/2001 shall be
Indexation not available to Bonds or Normal Case: purchased by Assesseee Sold/Renounce considered.
Debentures except Capital Indexation COA=Purchase Price COA= Nil [#]  Expenditure incurred before
Bonds and Sovereign gold bonds. COA = Purchase price [Including all expense related to 1/4/2001: Ignored
Redemption of Sovereign Gold Bonds purchase except STT]  Goodwill of Business or Profession,
A. Individual on Maturity: No CG as Brand Name, Trade mark, right to
per Sec 47 Special Cases: manufacture any article or thing,
B. Individual Transfer before 1. When Asset becomes property by way of Tenancy right, Loan hours, Route
Transactions not regarded as Transfer [sec permits: Expenditure Shall always be
maturity: CG Apply [Index
47]: # CG Computation Nil
Available] STCG = FVOC – COA
COA= Cost to Previous owner
C. Other Assessee: CG Applicable Here FVOC= Renouncement price Capital Gains in Special Cases
on transfer or maturity. 2. Goodwill of Business or Profession, Brand POH = From offer date to renouncement date
Name, Trade mark, right to manufacture any therefore STCG. As per Sec 45(1) Capital gain is chargeable to
Fifth Proviso to Sec 48: article or thing, Tenancy right, Loan hours, tax in the year of transfer but in the following
Route permits, 5. Other Assets 4 cases capital gain is not taxable in the year
Foreign exchange fluctuation on RDB. Asset acquired before 1/4/2001 of transfer.
 Assessee: Non resident Cost of Asset Sec 45(1A): Insurance Claims for
 Any gain arising on rupee Self-Generated If Purchased OR Damage or Destruction of Capital Asset
denominated bond against COA= Nil COA=Purchase Price FMV as on 1/4/2001
foreign currency at the time of Notes: Asset acquired on or after 1/4/2001: When capital asset is destroyed due to
redemption of RDB of Indian  Benefit of FMV as on 1/04/2001 NOT available Cost of acquisition. fire, flood, earthquake, or any other
company shall be ignored for the  If Depreciation claimed on goodwill by assessee Note:
natural calamity.
then COA=Purchase Price – Depreciation In case of Land and Building FMV as on
purpose of Computation of Capital gain is taxable in year in which
1/4/2001 shall not exceed SDV as on
FVOC. insurance claim is received.
3. Bonus Shares/Security 1/4/2001
Seventh Proviso to Sec 48: Security IF no claim received then no capital gain shall
Example 1:
arise.
Transaction Tax [STT] not allowed X acquired a house property on 1/07/1992 for
Sale Consideration = Amount received/FMV of
If allotted before Alloted on or after Rs 2,00,000. FMV as on 1/4/2001 is Rs
Transfer expenses are allowed as deduction asset received from Insurance company.
1/4/2001 1/4/2001 5,00,000 and SDV on 1/4/2001 is Rs 4,50,000
except for STT POH = Upto the Date of destruction
COA= FMV as on 1/4/2001 COA=Nil Here COA will be Rs 4,50,000
Index for transfer year= Year of Destruction
Note:
 Period of Holding [POH] in case of Example 2: Assume in above case SDV is Rs
shares/securities = From allotment date to 7,00,000
transfer date Then COA will be Rs 5,00,000
Example 3: Assume in Case 1 Cost Rs 26

6,00,000
Capital Gains in Special Cases Capital Gains in Special Cases Capital Gains in Special Cases FVOC/ Sale Consideration
Sec 45(2): Capital Asset Converted Sec 45(5): Compulsory Acquisition of Sec 45(5A): Capital Gain in case of If Date of Agreement and Date of Registration
into Stock capital Asset under any Law. Join Development Agreement [JDA] is not Same for SDV
 Capital Gain is taxable in the  Capital Gain is taxable in the year in  Applicable to Individual or HUF
year in which converted stock is which compensation is received  Capital Gain is taxable in the year in
sold. Initial Compensation: which Completion certificate is
 Sale Consideration = FMV of  Taxable in the year in which Issued. If whole or part Other Case
Capital asset on the date of compensation is first received [ Full  Sale Consideration= SDV in project consideration is received
Conversion. compensation is taxable even if part on the date of issue of completion by A/c payee
 Index for transfer year = Year of amount is received] certificate + Amount received in
cheque/DD/ECS/Electroni
conversion.  Sale Consideration= Initial cash
c mode on or before date
CG Computation Compensation Amount.  Index for transfer year = Year in
of agreement
 Index for transfer year = Year in which possession is Transferred
which asset is compulsory acquired  COA = Amount deemed as FVOC u/s
FVOC [Initial Compensation] X 45(5A)
Less: COA/ICOA (X)
Business Income
Less: COI/ICOI (X) Full Value of Consideration/Sale
STCG/LTCG X Consideration
Enhanced Compensation: Electronic mode Includes:
 Taxable as and when compensation Amount received or accruing from transfer Credit Card, Debit Card, Net banking,
received. of capital asset = Sale Price RTGS, IMPS, BHIM, UPI, NEFT
 If proportionate stock is sold then
 Sale Consideration= Enhanced Sec 50C: FVOC/ Sale consideration of
proportionate amount is taxable.
Compensation.
Land and Building Reference to Valuation Officer
 Amount recorded in the BOA=
 COA= Litigation Expenses.
Relevant.
 Taxable only when it is received on  If Assessee not agree with SDV and not
Note: FVOC will be:
the base of Final order disputed that in court.
For the purpose of Sec 54EC period of 6 Sale Price
FVOC [Enhanced Compensation] X  Assessee can request A.O. to refer case to
months shall calculate from date of sale of OR
Less: Litigation Expenses (X) Departmental officer.
stock in trade. Stamp Duty Value
STCG/LTCG X  A.O. may refer that case to valuation officer
Conversion of Stock in Trade into Capital If Stamp duty value is upto 110% of Sale
Assets: Notes: Price then FVOC will be Sale Price.
 Interest received on late/Enhanced Example: Case FVOC/Sale
FMV of inventory on the date on which it
compensation= Taxable under IFOS. Sale Price= Rs 1,00,000 Consideration
is converted into or treated as Capital
 50% Deduction will be allowed u/s SDV=Rs 1,08,000 Stamp duty Value [SDV]
asset.
Income= FMV of Inventory on the date of 57. FVOC = Sale Price Rs 1,00,000 as SDV is
 If compensation reduced by any within 110% of Sale Price Valuation Amount
conversion
court or authority then rectification Example 2: Assuming in above SDV =Rs OR
COA= FMV on the date of conversion
has to be made to give effect of the 1,12,000 Sale Price
POH=From the date of conversion or
same FVOC =Rs 1,12,000 as SDV > 110% of Sale Price 27
treatment into capital asset
Full Value of Consideration/Sale Sec 50B: Slump Sale Sec 47: Certain Transaction not Sec 47: Certain Transaction not regarded as
Consideration regarded as Transfer [Exempt Transfer [Exempt Transfer]
Calculation of Capital Gain.
Transfer]
Amount received or accruing from transfer Particulars Rs 5. Transfer of Capital assets being shares of
of capital asset = Sale Price FVOC/ Sale Consideration [FMV as X In the following cases no capital gain will amalgamating company by a shareholder in a
per Rule 11UAE] scheme of amalgamation:
arise:
Sec 50CA: FVOC/ Sale Consideration Less: Transfer Expenses (X) Conditions:
Net Consideration X 1. Distribution on Total/partial  Amalgamated company is Indian Company.
for Unlisted Shares
Less: Cost of Acquisition [Note 1] X partition of HUF.  Consideration of allotment to him in shares in
FVOC/ Sale Consideration will be: STCG/LTCG X 2. Transfer under Gift/ amalgamated company.
FMV will/irrevocable trust [Except ESOP]
OR Note 1: 3. Transfer under Amalgamation, by 6. Transfer of shares by demerged company to
Sale Price 1. COA= Net-worth of amalgamating company to resulting company in a scheme of demerger
undertaking/unit provided Resulting company is an Indian
amalgamated company provided
Sec 50D: Sale Consideration when 2. Indexation = Not available. Company.
amalgamated company is an Indian
3. FVOC will be 7. Transfer of Rupee Denominated Bond of an
Sale price is not ascertainable or Company
FMV 1: FMV of assets transferred Indian company by one NR to Another NR
cannot be determined. outside India.
OR 4. Transfer of Capital Asset between
FMV 2: FMV of consideration receipt wholly owned subsidiary [100%] and 8. Issue of shares by resulting company to
FMV on the Date of transfer shall be
[monetary + non-monetary] holding company shareholder of demerged company will not be
FVOC/sale consideration.
Conditions: regarded as transfer of shares of demerged
Computation of Net-worth:  Transferee co should be Indian company in the hands of such shareholders.
Sec 51: Advance Money Forfeited Depreciable Asset WDV as per 9. Transfer of Government security [carrying a
company.
income tax act  Holding company holds 100% periodic payment of interest] made outside
If forfeited before 1/04/2014
Add: Other Asset Book Value Shareholding of Subsidiary. India by one non-resident to another
Total Assets XXX resident through an intermediary dealing in
Deduct from Cost of Acquisition before For Above Cases 1-4
Less: Liabilities (Book value) settlement of securities.
indexation [ When such asset is sold]
Net worth XXX COA= Cost to the previous owner. 10. Any transfer of sovereign gold bonds issued
If forfeited on or after 1/04/2014
by RBI under sovereign gold bond scheme
ICOA= COA * CII of the year of transfer 2015, by way of redemption by an assessee
Taxable under Income from other source Notes:
 Revaluation Shall be ignored. being an individual.
CII for the year in which
 If net worth becomes negative then 11. Transfer of capital asset being any work of
Sec 50B: Slump Sale asset first held by
COA= Nil art, archaeological/scientific/ art collection,
previous owner book, manuscript, drawing, painting, print to
It means sale of unit/undertaking/division  For 35AD assets, self- generated
goodwill, COI=Incurred by previous owner and the government, university, national museum,
for lumpsum consideration without assigning
Value= Nil national art gallery, national archives any
value/selling price of individual asset. present owner shall be considered.
 No profit under PGBP shall arise public museum or notified institution.
Case STCG/LTCG
even if stock is transferred in slum POH= POH of Previous owner shall be 12. Transfer of capital asset under Reverse
If unit held for upto 3 mortgage. [Any amount received by Senior
sale considered
years citizen under this scheme is exempt]
If unit held for more than Benefit of FMV as on 1/4/2001: Available
3 years 28
Sec 47: Certain Transaction EXEMPTION
not regarded as Transfer
Particulars Sec 54 Sec 54B Sec 54D Sec 54EC Sec 54F
[Exempt Transfer]
Eligible Assessee Individual/HUF Individual/HUF Any person Any Person Individual/HUF
13. Conversion of Asset Residential House Property Urban Agriculture Land Compulsory Acquisition Land or Building or Both Any capital asset not being
bonds/debentures/depos Transferred [LTCG] [STCG/LTCG] of Land & Building of [LTCG] residential House Property
it certificates of a Industrial Unit [LTCG]
company into debentures [STCG/LTCG]
or share of that company Asset in which
Note: capital Gain is
 COA of invested
(
shares/debentures
received on conversion = Time Limit for
Cost of that part of Investment
debenture/bond/debt
stock/deposit
certificate, which is so
converted.
 POH of shares or Deposit Scheme Applicable Applicable Applicable Not Applicable Not Applicable
debentures shall also Exemption Limit Capital Gains Capital Gains Capital Gains Capital Gains
include the period for OR OR OR OR Amount Invested × LTCG
which debt/bonds/debt Cost of New Asset/ Cost of new asset/ Amount Cost of new asset/ Cost of new asset Net Consideration
stock/deposit certificate Amount Deposited Deposited Amount Deposited Maximum Rs 50 Lacs
held by assessee. Withdrawal of If new Asset transfer If new Asset transfer If new Asset transfer If new Asset transfer If new Asset transfer within
Exemption within 3 years from the within 3 years from the within 3 years from the within 5 years 3 years
14. Conversion of Preference date of purchase or date of date of purchase. date of purchase or
shares of company into construction date of construction Then Amount exempt Then Amount exempt earlier
equity shares of that Then Amount exempt earlier will be taxable as will be taxable as LTCG in the
company Then Amount exempt earlier earlier will be deducted Then Amount exempt LTCG in the year of year of transfer.
Notes: will be deducted from COA from COA of new asset earlier will be deducted transfer/conversion
 COA of equity shares of new asset from COA of new asset
received on conversion Other Points Payment for investment is Asset transferred shall be Asset transferred Payment for investment Payment for investment is
shall be the cost of that sufficient for exemption. used for agriculture purpose shall be used for is sufficient for sufficient for exemption.
part of preference Residential House can be by individual or his parents Industrial unit for 2 exemption. Investment in name of any
shares, which is so SOP or LOP. during 2 years before the years before the In case of conversion of other person also eligible for
converted. Investment in two adjacent transfer. transfer. Lad & Building into Stock exemption
 POH of equity shares flats are treated as 1. Payment for investment is Payment for in trade , investment Assessee does not own more
shall also include the Construction includes cost sufficient for exemption. Investment is time limit of 6 months than 1 residential house
period for which pref. of both Land & Building. Investment in name of any sufficient for shall be considered from property at the time of
shares are held by Investment in name of any other person also eligible exemption. the date of sale of stock transfer.
assesee. other person also eligible for for exemption in trade.
exemption
29
Exemption Tax Rates on Capital Gains Tax Rates on Capital Gains Tax Rates on Capital Gains
Important Points: Sec 55: Cost of Acquisition for Sec 112: Other Long Term Capital Gain
1. Not utilization of balance in capital Sec 111A: Tax on STCG of certain transfer of Assets mentioned in Sec [other than referred in 112A & 111A]
gain A/c scheme:
Assets 112A
 Amount deposited is not utilized
wholly or partly for specified purpose STCG on transfer of: If Assets mentioned in Sec 112A are
in specified time. Equity Shares. purchased or acquired before 1/2/2018. Resident/Domes NR/Foreign
 Amount not so utilized is taxable as Units of Equity oriented fund. Cost of Acquisition will be: tic Company Company
capital gain of P.Y. in which specified Units of Business trust. Step 1: Cost of Acquisition
time expires OR
2. Sec 54EC: Step 2:
 If assesseee takes any loan or advance Step 2:
on the security of bonds/units, he Other STCG: Taxable at Normal Tax Rate FMV as on 31/1/2018
shall be deemed to have converted Note: OR
into money on the date on which such LTCG on unlisted Other
 Deduction under Chapter VI-A not Sale consideration
loan or advance is taken and capital securities of
available Note:
gain exempted earlier shall be taxable  Benefit of 15% available when private company
 Indexation not available
Additional Conditions for Sec 54F: transaction carried out in IFSC
 On the date of transfer of LTCA whether STT paid or not FMV as on 31/1/2018
assessee should not own more than one
Sec 112A: Tax on LTCG of certain
residential house.
Assets
 Should not purchase any other house
within 2 years or construct within 3 Equity Shares Units of Equity
LTCG on transfer of:
years from the date of transfer. oriented I case of LTCG on listed securities other than units
Equity Shares. STT Paid
 If conditions not satisfied then fund/business and ZCB assessee can pay tax:
Units of Equity oriented fund. [Listed]
exempt CG taxable in P.Y. in which Highest Trading
Units of Business trust Trust 10% without indexation
such other residential house Price as on 20% with indexation
purchased/constructed. 31/1/2018
Common points for 111A/112A/112
1. No Deduction under Chapter VI-A.

Sec 10(37): Exemption of CG on case 2. Benefit of Basic exemption Limit : Available
Note:
of Urban Agriculture Land  Deduction under Chapter VI-A not If Listed on If not Listed to Resident /Individual
available. 31/1/2018 on 31/1/2018 o First from other Income
LTCG/STCG on compulsory acquisition of o Then from 111A/112A/112
 In case of equity shares STT paid
urban agriculture land shall be exempted if Total Income of Mr Deep is Rs 4,20,000 [include
both at the time of purchase and Sale
following conditions are satisfied: LTCG of Rs 2,50,000 on land]
 Benefit of 10% available when
Assessee should be Individual/HUF. Now tax liability:
transaction carried out in IFSC
Such agriculture land should be used for [2,50,000-80,000]=1,70,000*20%=Rs 34,000+HEC
whether STT paid or not
agriculture purpose for 2 years before date If no trading on 31/1/2018 then highest @4%
 Rebate u/s 87A not available
of transfer by assessee or his parents. price on such stock exchange on a date
Consideration is determined by RBI/CG. immediately preceding 31/1/2018 30
Sec 55A: Reference to Valuation Taxation in case of Amalgamation Taxation in case of Demerger Taxation in case of Demerger
officer.
2. COA of the shares in the amalgamated 1. the resulting company issues, in
In the following case A.O. an refer to company = COA of shares in the consideration of the demerger, its
amalgamating company. shares to the shareholders of the Taxation of Resulting Company
valuation officer:
FMV claimed by assessee as per Registered 3. POH = Period for which shares held in demerged company on a proportionate
COA of Asset received in Demerger = COA to
Valuer amalgamating company + period in basis;
Demerged company
 A.O. is of the opinion that the value so amalgamated company. 2. The shareholders holding minimum75%
claimed is at variance with it’s FMV Taxation of Amalgamating Company value of shares in the demerged
Taxation of Demerged Company
In any other case: company becomes the shareholder of
1. FMV as per A.O. opinion more than  As per Sec 47, there will be no capital Resulting company. 1. As per Sec 47, there will be no capital
value claimed by assessee by: gain on transfer of capital asset by Taxation of Shareholder gain when asset transferred by
15% of Value claimed by Asseseee amalgamating company to amalgamated
Demerged company to resulting
OR company. 1. As per sec 47, there is no capital gain
company.
Rs 25,000 Taxation of Amalgamated Company in the hands of shareholders of
2. PGBP losses and unabsorbed
2. Having regard to nature of asset and demerged company when they receive
1. COA of asset becomes property of share of resulting company. depreciation of amalgamating company
other relevant circumstances, it is
amalgamated company = COA of 2. POH of shares of resulting company = can be c/f & set off by amalgamated
necessary so to do.
amalgamating company [cost to Period for which shares were held in company
previous owner] demerged company shall also be
Taxation in case of Amalgamation 2. POH = Period of Amalgamating considered Taxation in case of Buyback of Share
company + period of Amalgamated 3. COA of Shares of Resulting company
by Domestic Company
Company COA of Shares
Sec 2(1B): Definition of Amalgamation 3. PGBP losses and unabsorbed Held in demerged * Net BV of assets In the hands of Company:
depreciation of amalgamating company Company transferred in demerger
Merger of one or more companies with
can be c/f & set off by amalgamated  Taxable _____________on
another company or the merger of two or
company. Net worth of demerged Distributed income
more companies to form one company that:
Company before  Distributed company = Buyback Price –
1. All the assets and liabilities of
Taxation in case of Demerger demerger issue price [including premium]
amalgamating company becomes the
assets & liabilities of amalgamated
Net worth = Paid up share capital + General In the hands of shareholder:
company.
Reserve.  Capital Gain exempt u/s 10(34)
2. Shareholders holding minimum 75% in Sec 2(19AA): Definition of Demerger
Note:
value of shares in amalgamating
3. All the assets and liabilities of COA of Shares in demerged Company  Redemption of Preference share also
company become shareholders of
Demerged company becomes the COA of original shares in X amounts to Buy Back
amalgamated company.
assets & liabilities of Resulting demerged company  Interest @ 1%p.m. or part of the
Taxation of Shareholder month applicable from 15th day.
company. Less: COA of shares in resulting (X)
4. All the assets & liabilities should be company as computed in point 3 Assessee will be treated as assessee
1. As per sec 47, there is no transfer
transferred at book value. X in default
and hence no capital gain when
shareholders allotted shares of [Revaluation shall be ignored]
amalgamated company in exchange of 5. Transfer of undertaking on Going
share of amalgamating company. concern basis 31
Taxation in case of Liquidation Summary for Period of Holding
In the hands of Company: Normal Case:

 When asset of company is distributed From Date of purchase to Date of
on it’s liquidation such distribution sale/Transfer
shall not be treated as transfer. Special case:
Hence, capital gain shall not apply in 1. When Asset becomes property by
the hand of company way of Transactions not regarded as
In the hands of shareholder: Transfer [sec 47]: Include Period of
 Distribution shall be treated as Previous owner/Previous Asset.
Deemed dividend u/s 2(22)(c) 2. Asset Destroyed case: Upto Date of
Particulars Amount destruction
Money Received X 3. Conversion of capital Asset into stock
Add: FMV of asset received on X in trade: Upto Date of conversion
date of distribution 4. Compulsory Acquisition: Upto date of
Less: Amount assessed as dividend (X) compulsory acquisition
u/s 2(22)(c) 5. Shares in a company Liquidation: upto
Sale Consideration/FVOC X date of Liquidation
Less: COA/ICOA (X)
STCG/LTCG X
Note:
1. POH of Shares = Date of Acquisition
to date of liquidation
2. CG applicable in the hands of
shareholder in the year in which he
received assets under liquidation
3. COA of assets received under
liquidation is FMV of such asset on the
date of distribution.
Summary for indexation
In the following four cases indexation

benefit is not available:
1. Capital gain in case of NR
2. Capital gain in case of Debenture and
bond
3. Assets mentioned in 112A: Listed
equity shares, Equity oriented units,
units of business trust.
4. Sec 50B: Slum sale
32
Sec 56(1): Charging Section Sec 56(2)(x): Money or property received without consideration or for Inadequate Sec 56(2)(x) Not applicable i.e.
consideration in excess of Rs 50,000/Taxability of Gifts Exempted Gifts
Income is taxable under this head if:
It is not taxable under other heads Gifts received from:
Applicable to All Assessee.
OR  From relative
GIFT
Income is not exempt under Income Tax  On marriage of individual
Act,1961  Under will or inheritance
Money Movable Property Immovable Property  Due to death of donor or payer
Sec 56(2): Following Income are
 From local authority
taxable under this head  From Institution trust
If Money registered u/s 12AA
 Dividend.
Without Inadequate Without Inadequate  From any Hospital or any
 Winnings from puzzles, card game, received >
Consideration Consideration Consideration Consideration medical institution
etc. 50,000
 From any university or
 Any Sum received from the
educational institution
employee toward contribution for If Difference
If FMV > 50,000 If SDV > 50,000  From any individual by a trust
any staff welfare fund, if it is not Amount > created solely for the benefit
chargeable under PGBP.
50,000 of relative of the individual.
 Interest on securities if not
 By way of transaction not
chargeable under PGBP
regarded as transfer
 Rent from letting out P&M or
 By an fund, trust, hospital,
furniture with or without building,
medical institution, university
if not chargeable under PGBP.
Aggreagte education, institution refereed
 Any sum received from keyman
in sec 10(23C)
insurance policy if not chargeable
Any car, phone, T.V. furniture, wrist
under PGBP.
watch etc. received then not taxable
 Interest received on compensation Note:
even if ________________________
of compulsory acquisition of capital  SDV same as per Sec 50C
When property is Stock in trade then
asset.  For seller of residential unit from 12.11.2020-30.06.2021 for inadequate consideration upto Rs 2 crore
sec 56(2)(x) not applicable.
 Amount received under family we will consider 120% instead of 110%
Sec 56(2)(x) is applicable even gift
pension. Property [Movable and Immovable] includes:
 Gift received by employee from employer due [money] made outside India by R to NR
 Interest received on Bank deposit _______________________
to Sec 49(4):
and loan given. _______________________
___________________________________  IF property [Gift] is taxable u/s
 Interest on income tax refund. ______________________
 Any Benefit/gift/perquisite arising due to 56(2)(x) and it sold
 Income from subletting of house _______________________
Business or profession Taxable under head Subsequently, than it’s COA =
property.
FMC/SDV Taxed u/s 56(2)(x)
 Royalty income. PGBP
 Ignore Cost of Previous owner &
 Agriculture Income.
POH
 Director sitting fees.
 Salary of MP/MLA/MLC 33
Relative: Assuming Raj and Deep are brother For Sec 50C/43CA/56(2)(x): If Date of Sec 56(2)(viib): Shares issued on premium
In hands of Raj: No CG as Gift is not
Agreement and Date of Registration is
For Individual: regarded as transfer Applicable:
not Same
1. Spouse In hands of Deep: No CG as it is exempted
2. Brother or Sister of Individual When closely held company issues shares to any
Gifts
3. Brother or sister of spouse of resident share holder on premium then
When capital asset is sold
Individual Income of Company = ___________________
FVOC Rs 83,00,000
4. Brother or sister of either of If whole or part Other Case Taxable under IFOS
(-) transfer Expenses -
parents of Individual. consideration is received Note: Closely held company includes
Rs 83,00,000
5. Any Lineal Ascendent or by A/c payee  Private company/unlisted company
(-) ICOA
Descendent of Individual. [3,00,000*317/100] Rs 9,51,000 cheque/DD/ECS/Electro SDV on the
6. Any Lineal Ascendent or LTCG Rs 73,49,000 nic mode on or before Date of
Registration Salary Income of MP/MLA
Descendent of spouse of date of agreement
Individual. Sec 43CA: SDV shall be treated as Daily Allowance and Constituency Allowance is Exempt
7. Spouse of person referred in 2 to Other Salary Income = Taxable under other Source
sales consideration
6 [Niece, nephew, friends, fiance
SDV on the Date of
are not relative] When any immovable property held as Stock Agreement
For HUF in trade in that case Sale Consideration will Sec 57: While calculating Income under IFOS
 Any member of HUF be:
Example:
Following Deduction shall be allowed
Stamp duty value Example: X Builder transfer a residential
Mr. Raj acquired House property for Rs 3 OR house to Mr. Deep on 14/4/2021 for Rs 1.9Cr.
Lakhs during P.Y. 2001-02, he gifted such Sale Price
SDV on the date of transfer was Rs 2.15Cr. Income from units of UTI/Mutual Funds
property to his friend Deep on 16/7/21
[SDV on the date of gifting was Rs 40 Discuss tax treatment in hands pf X and Deep
Note: Either Dividend or Interest Income will be there
lakhs]. Deep sold such property to viraj on  If SDV is upto 110% of sale price Answer: Taxable in the hands of unitholders.
16/2/22 for Rs 83 Lakhs . then Sale consideration will be SDV. In this case tolerance band of 120% of sale Deduction of Expense: Only Interest Expense,
Answer:  For seller of Residential unit price will be applicable as it is residential unit. maximum 20% of Such income
In the hands of Raj: between 12.11.2020-30.06-2021 sale Therefore, 120% of Sale price will be Rs Interest on Securities
No capital gain as gift is not regarded as amount upto Rs 2Crore we will take 2.28Cr.
transfer. 120% instead of 110% Actual SDV given =Rs 2.15Cr which is less than If not taxable under PGBP then taxable under IFOS
In the hands of Deep: 120% of Sale Price Deduction of Expense: Interest/brokerage/or any
Since friend is not relative therefore IMMOVABLE PROPERTY In the hands of X Builders: other expense incurred [same as per PGBP provisions]
taxability will arise in the hands of Deep. As per Sec 43CA since SDV is not more than Employee contribution toward any welfare fund
SDV > 50,000 therefore entire SDV is 120% of Sale price the sale consideration will
taxable i.e. Entire 40 Lakhs will be taxed. be Rs 1.9Cr. Taxable under IFOS.
In the hands of Deep when property sold: Capital Asset Stock in trade
In the hands of Deep Deduction of Expense: any amount remitted before due
FVOC Rs 83,00,000 Difference between SDV and Sale date under respective acts [36(1)(va)]
(-) Transfer Expenses - consideration is more than 50,000 but SDV is
Rs 83,00,000 not more than 120% of sale price so Sec
(-) COA as per S 49(4) Rs 40,00,000 ________________________________
56(2)(x) not applicable
STCG Rs 43,00,000 Capital Gain PGBP Income
34
Sec 57: While calculating Income under Casual Income Taxation of Dividend Sec 2(22)(e): Advance or Loan by closely held
IFOS Following Deduction shall be allowed company to it’s shareholders to the extent of
Casual Income includes:  Indian Company: Company formed and
Accumulated profits
 registered under Companies Act, 2013
  Domestic Company: Indian company or
Rental income from Plant& Machinery, Applicable: Closely held company [Private
 any other foreign company who has made
furniture company/unlisted company].
 prescribed arrangement for payment of
Any payment by a company in which public is not
 dividend within India. Therefore, every
If not taxable under PGBP then taxable under substantially interested [Private/unlisted company]
 Indian are Domestic company but all
IFOS by way of Loan/ Advance to
Tax Rate @ 30%. foreign company are not domestic.
Computation of Income:  Shareholder holding not less than 10% voting
Other points:  If foreign company makes prescribed
power [Equity Share capital]
 No deduction of any arrangement for payment of dividends in
OR
expenditure. India then it shall be treated as
 Any concern/ Entity in which such
 No setoff of losses. Domestic company
shareholder has substantial interest [ 20% or
 Losses can be carryforward  Foreign Company: Company which is not
more voting power/share in profit at any time
 No benefit of basic exemption domestic company.
 during the P.Y.]
limit. Taxability:
Net Income X To the extent of Accumulated Profits of the company
 No deduction under chapter Dividend from Domestic Company:
shall be treated as Deemed Dividend
Family Pension VI-A Notes:
Advance money forfeited Dividend from foreign Company:
Monthly pension received by employee family  Concern means HUF, Firm, Company,
after the death of employee. AOP/BOI
If forfeited on or after 1.04.2014- Deduction of Expense: Only Interest Expense,
Deduction Limit:  Any payment by company on behalf of or for
_________________________ maximum 20% of Such income
1/3rd of Family pension received individual benefit of such shareholder is also
OR
Taxation of Deemed Dividend deemed dividend
Rs 15,000 P.a. Sec 58: Expenses Not allowed as  Repayment of loans/advance is irrelevant
Sec 2(22)(a)/(b)/(c)/(d): All Companies  Shareholder can be any person
Family pension received by widow/children of deduction under IFOS
Sec 2(22)(a): Distribution of Company assets to  Accumulated profits mean profits as per
member of armed forces/paramilitary forces of
 Any personal expenses of shareholders to the extent of Accumulated companies act [means accounting profit] and
the union.
assessee Profits [capitalized or not] not assessable profit
Received by any member of the family of an
individual who had been in the service of central  Any interest chargeable under Sec 2(22)(b): Not to be treated as Deemed Dividend:
or state government and had been awarded this act which is payable outside Distribution of debentures, deposit certificates  Loan/Advance in the ordinary course of
India on which TDS has not been to shareholders and bonus shares to preference business.
‘’paramvirhcakra’’ or ‘’mahavirchakra’’ or other
paid or deducted. shareholders to the extent of Accumulated  Trade Advances which is in the nature of
notified awards would be exempt u/s10(18)(ii).
 Any payment which is chargeable Profits whether capitalized or no commercial transaction.
Interest on compensation or Enhanced under the head salaries if it is
Sec 2(22)(c):  Buy Back of Shares.
compensation payable outside India unless TDS
Distribution on liquidation to shareholders to the  Shares allotted to Shareholder of demerged
has been paid or deducted
Income of P.Y. in which it is received. extent of Accumulated profits whether company by resulting company under scheme
thereon
____________________________________ capitalized or not of demerger.
 Cash expenditure exceeding
____________________________________ 10,000. Sec 2(22)(d):  Any Distribution in respect of pref. Shares
____________________________________  Amount paid to resident person Distribution on reduction of capital to  Any Dividend paid by a company, which is
____________________________________ on which no T.D.S has been shareholders to the extent of Accumulated setoff by company against the loan which has
deducted. profits whether capitalized or not been deemed as dividend u/s 2(22)(e) 35
Sec 64(1A): Income of Minor Child Sec 64(1)(vi): Asset transferred to son’s wife Sec 64(1)(vii)&(viii): Asset transferred to any
person for the benefit of spouse or son’s wife
Taxability:  Individual transfer any Asset (other than House) to
 In the hands of parent whose income is more before his/her son’s wife without consideration or for
Clubbed in Income of Transferor (upto benefit accruing
clubbing minor’s income Inadequate Consideration → ____________________
to spouse/son’s wife)
 Parents got divorced → Clubbed to parent who  Applicable when relationship of mother/father in law &
maintain minor child in the PY daughter in law exist and wife exist
 Both Parents are Dead: Sec 60: Income transfer Sec 61: Revocable
____________________________________ without transfer of asset Transfer
 Clubbing provisions are also applicable in case of Sec 64(1)(ii): Income of spouse from a concern where
minor married daughter ______________________ Income is received by
Exceptions:
assessee has substantial interest ______________________ transferee but tax is
 Income has been earned by the Minor due to his own ___________ paid by transferor
 Remuneration to Spouse: from concern in which other Spouse
Skills and manual work
has Substantial Interest → Asset transferred by individual to
 Minor is suffering from disabilities referred in Exception:
____________________________________________ spouse /son’s wife and such amount
Section 80U  NO CLUBBING → If Remuneration is received by Spouse due to is invested in business then __________________
Exemption to Minor’s Parent u/s 10(32) = Rs. 1500 p.a.per his/her Qualifications. proportionate profit will be __________________
 Both Husband & Wife has SI & both gets remuneration without clubbed using following formula
child is allowed __________________
Qualification from Same Concern → Clubbed in TI of
Once clubbing is done with that of one parent it will continue Husband/Wife whose TI (excluding such remuneration) is higher Income from business × Gifted by __________________
to be clubbed with that parent only unless A.O. changes  Substantial Interest: For Company→20% or more shareholding assessee/Capital of business on _________________
For Firm/AOP/BOI→20% or more PSR First day of P.Y[Note 1]
Child includes step child and adopted child
Sec 64(2): Asset transfer to HUF Some important points:
Note 1:
Sec 64(1)(iv): Asset transferred to spouse
Income derived by HUF from such property  Income includes losses→ Hence Clubbing provision  Clubbing
Individual transfer any Asset (other than House) to applicable applicable only
 → ____________________________.
 Asset transferred is converted into other form→ when gifted
his/her spouse without consideration or for Inadequate
CLUBBING AFTER PARTITION: Share of Income from such converted asset shall be clubbed
Consideration → ___________________________ money is
Individual + Spouse + Minor Child →  Capital gain will be clubbed in case of sale of asset
 Applicable when relationship of Husband and wife exist included in
 Clubbing provision also applicable in case of crossgifts
 Transfer for Agreement to Live Apart→ No Clubbing ___________________________ opening capital
to the extent of income on the matching amount of
crossgifts  All the clubbing
provision are not
applicable to
second
generation
income
36
Basics  Fixed Deposit in Schedule Bank or Post Sec 80CCC: Contribution to Sec 80CCD: Contribution Sec 80E:
office for a period of 5 Years. to Pension Fund of CG or Deduction in
Pension Fund of LIC or other
 Deduction under Chapter VI-A Cannot  __________ paid for education of
Insurance Company New pension Scheme or respect of
exceed Gross Total Income. children [ Maximum 2 children for
Atal Pension Yojana Interest on Loan
 Deduction under Chapter VI-A is not education in India] [ Coaching fees, Eligible Assessee: Individual
available from income which are Donation not allowed]. for higher
Maximum Deduction: __________ Eligible Assessee: Individual
chargeable at Special rates.  Deposit in NABARD Bonds. 80CCD(1):
education in India
 Deposit in Amount of Deduction or abroad
Types of Deduction _______________________ Sec 80CCD(2): Employer’s
For Salaried Employee
 Deposit in _______________. Contribution to NPS for the Eligible Assessee:
Employees Contribution
 Stamp Duty Registration Fees for benefit of employee: OR ___
Payment/ Income Based Purchase of House Property. 10% of Salary Deduction Amount:
Investment Deduction  Investments in Units of UTI/Mutual ER’s Contribution first Taxable under Other Individual Interest Paid
Based Funds. the head Salary in the hands of Assessee’s Contribution [Maximum for _____
Deduction  Investment in pension fund of employee than he gets deduction u/s OR Years]
UTI/Mutual Fund. 80CCD(2) 20% of GTI Deduction is allowed
Sec 80C to  Contribution by Central Government Amount of Deduction:
if loan taken for Self,
80GGC Employee to Tier II A/c of pension Employer’s Contribution 80CCD(1B): spouse, children, and
Scheme 80CCD. OR Balance Contribution u/s any student from
 Contribution towards Unit Linked 10 % of Salary 80CCD(1) can be claimed u/s whom assessee is legal
Note 1: Deduction available only when ROI is Insurance Premium. 80CCD(1B) upto Rs 50,000 Guardian
filed upto Due date u/s 139(1) Note 1: 14% of Salary if CG Employee
Individual: Self, Spouse, Children Salary=Basic Salary + DA
HUF: Any member of HUF Amount Received on Closure of Sec 80EE: Deduction in respect of Interest on
Sec 80C: Specified Payments Policy Taken before 1/04/2012 Account: Housing Loan
Premium Paid  In Case of Death: Fully
Eligible Assessee: Individual and HUF OR Exempt Eligible Assessee: Individual
Maximum Deduction: Rs 1,50,000 _____of Policy Value [Sum Assured]  Other Case: _____ Exempt Maximum Deduction: Rs 50,000
Eligible Investments: Policy Taken on or after 1/04/2012 In case of partial withdrawal from Conditions:
 Life Insurance Premium [Note 1] Premium Paid NPS by an employee payment shall be  Loan Should be taken from _________
 Investment in PPF [ Individual : Self, OR exempt upto 25% of Contribution institution for acquisition of residential
Spouse, Children] [ HUF: Any member 10% of Policy Value [Sum Assured] made by him [ Fully Taxable for Non- property.
of HUF. Policy Taken on or after 1/04/2013 for person Salaried Employee]  Purchase price of house upto Rs ______ Lacs.
 Employee Contribution in SPF and RPF. with disability u/s 80U and suffering from  Loan Should be Sanctioned Between 1/4/2016-
 Investment in NSC and Interest specified disease u/s 80DDB 31/3/2017
accrued thereon, Sec 80CCE: Aggregate Deduction
Premium Paid  Assessee does not own any residential house on
 Repayment of Housing Loan taken from u/s 80C+80CCC+80CCD(1) the date of sanction of Loan
OR
Financial institution or Banks for ____ of Policy Value [Sum Assured]  First deduction should be claimed ________
Purchase or Construction of House __________________________ 37
upto 2 lacs and remaining int deduction in 80EE
Sec 80EEA: Deduction in respect of Sec 80G: Donation
Interest on Housing Loan
Eligible Assessee: All Assessee
Eligible Assessee: Individual [Other than Eligible Donation
Covered in 80EE]
Maximum Deduction: Rs 1,50,000 Category A Category B Category C Category D
Conditions: 1. 1. National Defense Fund 1. Charitable Trust. 1. Donation for
2. 2. National Children Fund 2. Donation for renovation or repair Promoting Family
 Loan Should be taken from Banks or 3. 3. Swachh Bharat Kosh of temple gurudwara, mosque or Planning.
Financial institution for acquisition 4. 4. Clean Ganga Fund church. 2. Donation by Company
of residential property. 5. Fund For Army etc. 3. Donation for promoting minority to Indian Olympic
 Stamp duty value of house property 6. P.M. National relief Fund interest. Association.
upto Rs 45 Lacs. 7. National Sports Fund 4. Donation to Housing Development
 Loan Should be Sanctioned Between 8. CM Fund. Authority.
1/4/2019-31/3/2022.
 Assessee does not own any
residential house on the date of
sanction of Loan.
Calculation of Limit and Donation under Category C and D: Example:
 No deduction under any other Note:
Step 1: Calculate Adjusted Total Income Gross Total Income Rs 7,00,000
provisions of the act if deduction __________________
Gross Total Income XXX Deduction Under chapter VI-A Rs 1,00,000
taken under this section.
Less: Deduction under Chapter VI-A [Except 80G] (XXX) Donation to Charitable RS 30,000 __________________
 First deduction should be claimed
Adjusted Total Income[ATI] XXX Donation For Family Planning Rs 50,000 _.
u/s 24(b) upto 2 lacs and remaining
Answer:
int deduction u/s 80EEA Donation in kind are not
Step 2: Maximum Limit of Donation Step 1: Adjusted Total Income =Rs 6,00,000
eligible
Total Donation Under Category C and D
Step 2: Maximum Limit of Donation
OR
Sec 80EEB: Deduction in respect of 10% of Adjusted Total Income Total Donation [30,000+50,000] Rs 80,000
Interest on Electric Vehicle Loan 60,000
Step 3: Maximum limit of Donation 10% of ATI [6,00,000*10%] Rs 60,000
Eligible Assessee: Individual
Step 3: Maximum Limit of Donation =Rs 60,000
Maximum Deduction: ______________
Conditions: First Category D: Then Category C:
First Category D i.e Family Planning [100% with Limit]
 Loan Should be taken from Banks or ______________ _______________
=Rs 50,000*100%= Rs 50,000
Financial institution including NBFC ____________ _______________
for Purchase of electric Vehicle. _ Balance For Category C i.e. Charitable Donation [50% with Limit] [Half Deduction]
 Loan Should be sanctioned between
Donor shall be allowed deduction if done (60,000-50,000)*50%= Rs 5,000
1/4/2019-31/3/2023.
trust/institution prepare statement in FORM 10BD
 No deduction under any other Total Donation Allowed =Rs 55,000 [50,000+5,000]
and submitted to PDGIT upto 31st May of Next F.Y.
provisions of the act if deduction
taken under this section assessment Donee shall furnishes a certificate to the donor in
year. FORM No 10BE upto _______________________ 38
Sec 80GG: Rent Paid of House Sec 80GGC: Donation to Political Party Sec 80QQB: Royalty from Sec 80TTA: Interest on Saving Account
Porperty or Electoral Trust books of literacy, artistic,
Eligible Assessee: Individual and HUF
scientific nature.
Eligible Assessee: Individual [who does not Eligible Assessee: ___________________ Amount of Deduction:
receive HRA] Amount of Deduction: 100% of Donation. Interest Amount
Eligible Assessee: Resident
Amount of Deduction: OR
Individual
Rs 5,000 p.m. No Deduction allowed for donation paid in Rs 10,000
OR Cash.  Saving Account with Bank, Co-operative Bank or
Eligible Royalty Received
25% of ATI Post office.
OR
OR  Deduction not available to Resident Senior Citizen
Rs 3,00,000
Rent Paid-10% of ATI Sec 80JJAA: Deduction in respect of Eligible for deduction u/s 80TTB
Employment of new Employees Note: Eligible Royalty
ATI= Adjusted Total Income  When Lump Sump Royalty Sec 80TTB: Interest on Deposits in case of senior
Gross Total Income XXX Eligible Assessee: Any Assessee engaged in received: Amount Received Citizens
Less: Deduction Under Chapter VI-A (XXX) Business and to Whom Sec 44AB applies. as royalty.
except 80GG Amount of Deduction: 30% of Additional  Not Lump Sum: _____ of Eligible Assessee: ____________________
Adjusted Total income XXX Employee Cost. [Deduction Allowed for 3 the value of Books Sold Amount of Deduction:
Consecutive Years]. If Royalty is received outside India, Interest Amount
This assessee or his spouse or minor child Additional Employee Cost: Total Salary Paid or then deduction is allowed only if OR
or HUF should not own any house at the Payable to Additional Employee employed such royalty amount is brought in Rs 50,000
place of his duty during the P.Y. India in convertible foreign  Saving Account with Bank, Co-operative Bank or
Note 1: Exchange _______ months from Post office.
For Existing Business: Deduction is allowed the end of P.Y. or time allowed by  Deduction not available to Resident Senior Citizen
Sec 80GGA: Deduction in respect of only if: RBI Eligible for deduction u/s 80TTB
Donation for Scientific Research or  There is increase in Total no of
Rural Development employees. Sec 80RRB: Royalty from
 Salary Paid by A/c payee Cheque patents. Common Note for 80TTA and 80TTB:
Eligible Assessee: /DD/ECS/Electronic mode
_______________________________ Note 2: Eligible Assessee: Resident ____________________________________________
Amount of Deduction: 100% of Donation.  Additional Employees do not include: Individual ____________________________________________
Employees Amount of Deduction: ____________________________________________
No Deduction allowed for donation paid in ______________________. Royalty Received __________________________________________
Cash exceeding Rs 2,000.  Employees who do not participate in OR
RPF Rs 3,00,000
 Employees for whom entire
Sec 80GGB: Donation to Political
contribution is paid by Government Note: # Note 3: For Sec 80JJAA
Party or Electoral Trust If Royalty is received outside India,
under Employees Pension Scheme.
then deduction is allowed only if ____________________________________________
 Employee employed for less than
Eligible Assessee: Indian Company _________________________________________
______ days in a P.Y.[In case of such royalty amount is brought in
Amount of Deduction: 100% of Donation.
manufacture of Apparel or footwear or India in convertible foreign
leather products than ______ days. Exchange within 6 months from the
No Deduction allowed for donation paid in
Cash.
Note 3: # end of P.Y. or time allowed by RBI 39
Sec 80D: Deduction in respect of Medical Insurance Premium, Central Govt. Health Sec 80DD:Deduction in respect of Medical Sec 80U: Deduction for Handicapped
Scheme, Preventive Health Checkup and Medical Treatment: Treatment and Maintenance of Handicapped Assessee
dependent relative
Eligible Assessee: Individual and HUF Eligible Assessee: Resident Individual
Individual: Self, Spouse, Parents [Whether Dependent or not] and Dependent Children. Eligible Assessee: Resident Individual and HUF Amount of Deduction:
HUF: Any member of HUF. Relative Individual: Spouse, Brother, Sister, Normal Disability: Rs 75,000
Mode of Payment: Any mode other than cash but payment for preventive health checkup can be Children, Mother, Father Severe Disability: Rs 1,25,000
made in cash. HUF: Any member of HUF. [80% or more]
Amount Paid Nature of Payment Amount of Deduction Amount of Deduction:

For Normal Disability: Rs 75,000
Self, Spouse 1. Health/Medical Rs 25,000 Severe Disability: Rs 1,25,000
and Insurance Premium. OR [80% or more]
dependent 2. Contribution to Central. Total Payment
Children Government Health Assessee should have incur expenses on medical
Scheme. If any person is 60 years or more plus treatment or deposit any amount for maintenance
3. Preventive Health Resident of such handicapped dependent relative
Checkup. Rs 50,000
OR
Total Payment Sec 80DDB: Deduction in respect of
Parents 1. Health/Medical Rs 25,000
Medical Treatment of specified Disease
[Whether Insurance Premium. OR
Dependent 2. Preventive Health Total Payment Eligible Assessee: Resident Individual and HUF.
or Not] Checkup Individual: Self, dependent relative[ Spouse,
If any person is 60 years or more plus Brother, Sister, Children,Parents]
Resident HUF: Any dependent member of HUF.
Rs 50,000
OR Amount of Deduction:
Total Payment Actual Expenses on treatment XXX
Member of Health/Medical Insurance Rs 25,000 OR
HUF Premium. OR 40,000/1,00,000 [#]
Total Payment
Notes: Less: Insurance Claim received (XXX)
 Aggregate Payment for preventive health Checkup of Self, Spouse, dependent children
and Parents cannot exceed Rs 5,000. Amount of Deduction XXX
 IF Person is 60 years or more than medical expenditure are also eligible.
 Member of HUF also eligible for 50,000 benefit if 60 years or more. Assessee should have incur expenses on treatment
If Premium is paid for more than one year, then Deduction for each year shall be computed of specified deisease.
as follows: # Normal Case: 40,000
Senior Citizen: 1,00,000
40
Sec 70: Intra Head Adjustment/Inter Source

Carry forward of Losses:
 Loss from one source can be set off against Income
from another source under same head of income  If Loss cannot be set off either under (i) Same head (Intra Head) or (ii) Different heads of Income (Inter Head) due to
Exceptions: Absence of Eligible Income in same year, it is carried forward to next year & set off against income from same head subject to
Speculative Business certain restrictions in following AYs subject to prescribed time limit
Loss
[In simple words year in which loss incurred for first time than we will set off in that year and if any loss left than it will c/f]
Specified Business
 Brought Forward Loss can be set off only against Income from same head only (Unabsorbed Depreciation → ___________
Loss [Sec 35AD]
except Salary)
Long term Capital Order of Set off of Losses
Loss In the year of Loss In Subsequent Years Carried 1) Current year
Loss from Activity of Loss From Intra Head Inter Head Carried Forward forward Depreciation
O&M Race Horses Adjustment Adjustment Losses and set off No of 2) Brough forward
Years losses from Business
Salary Not Possible Not Possible and Profession
Sec 71: Inter Head Adjustment
House Property Allowed Only Against HP 3) Unabsorbed
 Loss from one head of income can be set off against PGBP Depreciation
another head of Income Normal Business Allowed Allowed only against Other points:
Normal Business  In case of exempt
Exceptions:
Income income losses shall
Speculative Business
Speculative Business Against Allowed only against be ignored
Loss
Speculative Speculative gain  No setoff allowed in
Specified Business
Business case of casual income
Loss [Sec 35AD]
[ lottery, puzzles
Long term Capital Specified Business Against Specified Allowed only against
etc]
Loss Business Specified Business
 B/f losses from a
Loss from Activity of Unabsorbed Allowed Allowed [Except
business can be set
O&M Race Horses Depreciation against salary]
off even if such
Short Term capital Capital Gains
business is
Loss LTCL Against LTCG Against LTCG
discontinued
Business Loss STCL Against Against STCG/LTCG
 Set off of losses not
STCG/LTCG
permissible against
IFOS
Transaction in shares where delivery affected unexplained
Owning and Only against Only Against Income
PGBP: if held as Stock in trade Income/Investment,
maintaining of horse Income from from Horses
CG if shares are held as Capital Asset money etc
horses
Transaction in shares where delivery not affected
Other Loss Allowed Not allowed
Always Speculation Business Income
Derivatives
Always Normal Business Income
41
Tax is recovered from the assessee in Sec 208: Applicability of Advance Tax Sec 209: Procedure for Computing Advance Tax Payable
following ways:  All Taxable incomes [including capital gains, Following Steps Needs to be followed
winnings from lotteries, crossword puzzle etc are Step 1:
 Advance Tax
liable for advance tax Step 2:
 TDS
 Obligation to Pay Advance Tax Arises where Step 3:
 TCS advance tax payable in a year is  Net Agricultural income is also considered for the purpose of
Generally, income of P.Y.is taxable in the _______________________ computing Advance Tax in case of specified class of assesses.
 Advance Tax Payable= [(Tax on Estimated Total  The Specified Percentage of Advance tax shall be paid by the
Following A.Y. However, assessee is
Income - Rebate/Relief) + HEC – TDS/TCS] assessee on his accord on or before the due date of each
required to pay advance tax in P.Y. itself
 Exception: installment
on the basis of estimated income u/s 207
______________________________
Some Key Points

Sec 210: Payment of Advance Tax Sec 211: Advance Tax Due Date  Estimated Income shall be Revised @ every date of Payment.
Payment of Advance Tax may be made in  Tax deductible but not so deducted cannot be reduced for
the following ways: Date of Payment Cumulative % of computing Advance Tax
 By Assessee on his own Advance Tax  Advance tax paid on/before 31st March →
 In pursuance of notice by A.O Up to 15th June of _______________________________________________.
If the tax payer has not paid advance tax, PY  Banks Closed on Payment Date → Pay on Next Working Day; and no
interest will be levived
then the A.O. can pass an order specifying Up to 15th Sept of
 If any unexpected income arises after DD of any instalment. In
the installments in which advance tax PY
such cases, Advance Tax payable on such Income, shall be paid in
should be paid. Up to 15th Dec of Remaining Instalments or by 31st March of PY (if No Instalment is
A.O. can pass this order only up to the PY remaining).[E.g.Capital gains, Winnings]
last day of February. The assessee can Up to 15th Mar of
submit lower or higher estimate of income PY
and pay tax accordingly If assesse paying tax u/s 44 AD / 44 ADA, Due date = Note: There is No penalty for non-payment of advance tax.
15th March [Only 1 Installment] However, the assessee is liable to pay simple interest u/s 234
42
Sec 234A: Interest for delay in Return filing Sec 234B: Interest for Sec 234C: Interest for deferment Sec 244A: Interest on
When: If No ROI is filed or ROI is filed after the Due non/short payment of Advance of Advance tax instalments Refund @ 0.5%
Date u/s 139(1). tax Deferred Amount
Tax as per Return of Income [After adj TDS / TCS / Refund out of Self assessment
When: No Advance Tax Paid OR ×
Adv tax / MAT credit/ Relief u/s 89] Tax:
Advance Tax paid is < 90% of Assessed Rate _________________________ From: Date of filing of return or
× Tax × Payment of taxes
Rate [1 % Per month or part of a month] Advance Tax short paid as per ROI Whichever is later
Period [3months for all instalment except
× × last instalment] Till: Date of Granting refund
Period [From: Next day after ROI due date Till: Date of Rate ________________________ [for last instalment int is applicable for 1
Refund out of TDS/TCS:
month i.e 16/3-31/3]
actual filing] × Return filed upto due date u/s
Note: However as per Supreme court decision in Dr. 139(1) From :1st April of A.Y. Till:
Period ________________________
Pranoy Roy credit will be given of self assessment, if it is No interest if advance tax paid up to 12% in 1st
Date of Granting refund
paid upto due date of return filing. instalment or 36% in 2nd instalment
Return filed after due date
From: Date of filing return Till:
Sec 234E: Fee for default in furnishing Sec 234F: Fee for default in
Date of granting refund
Sec 234H: Fee for default in Linking
TDS/TCS statements furnishing return of income
When: For delayed filing quarterly statement
Aadhar with PAN
ROI up to 31 Dec AY = 5000
Amount: Mandatory fees of Rs 200 per day during which ROI after 31 Dec AY = 10,000 Fees of Rs 500 applicable if assessee link
default continues Max 1,000, if NTI does not exceed 5 aadhar with PAN after 31/03/2022 but before
Maximum; Fees cannot exceed the amount of TDS
Lacs 30/06/2022 This fee applicable at the time of
deductible
linking
Fees shall be paid before filing quarterly statement
After 30/06/2022 = Fees of Rs 1,000
43
TDS: Some Basic Points Section Nature of Payer Payee Rate Remarks
Payment
TDS Deducted only when amount taxable in Any person Employee[R/NR] Slab  Employer Shall consider details of other income and deduction if submitted by
the hands of receiver Rate Employee. TIP paid to workers No TDS
TDS to be deducted  Employer shall not consider loss except loss from house property.
At the time of payment  When Employee has worked with more than one employer or changed the job
EARLIER
Or during the P.Y he may furnish the details of his salary and TDS deducted by one
At the time of credit employer to another employer.
Exception: TDS deducted at the time of  TDS not to be deducted in case Remuneration received by partner from FIRM
payment Any Person Employee[R/NR] 10%  No TDS if amount less than 50,000
 Salary  IF No PAN furnished by Employee than TDS at MMR
 EPF Payment Any Person Resident Payee 10% No TDS if interest is paid:
 Winnings  For Debentures issued by a public company to I/HUF if Int does not exceed Rs
 Dividend 5000 during the P.Y and the same is paid by a/c cheque
 Cash withdrawal  Int Paid to GIC LIC or other insurers
 Maturity of LIP  Securities Listed through D-Mat form
 Compensation on Compulsory  National Development bonds
acquisition  Seven-year National Saving Certificate
Generally, no surcharge and cess to be added  Sec 54EC Capital gains bonds issued by Power Finance Corp Limited or Indian
However, when payment made to NR/ foreign railway finance corporation limited
company or salary then surcharge and cess to  8% saving (taxable) bonds, 2003/7.75% Savings (Taxable) Bonds, 2018 > 10K →
be added TDS Applicable
When GST amount is separate than No TDS Domestic Resident Person 10%  No TDS if Payment made to Individual by any mode other than Cash and payment
on GST Company is Upto Rs 5000in P.Y
 No TDS if dividend to LIC GIC or any other insurer provided shares are owned
In certain cases TDS also deducted where by them or they have beneficial interest
the payment made for personal purpose Any person Resident Person 10% No TDS if
other than I  Paid by bank / Post office upto 40,000[Rs 50,000 for Resident Senior]
TDS Rate when No PAN furnished by and HUF [#]  [Limit of 40,000 is branch wise and if CBS adopted than Limit of 40,000 is for
payee to payer [Sec 206AA] whole Bank]
Rate as per Respective Section  Other cases upto 5000
HIGHER
Or  Paid by firm to partner
20%  Int on income tax and bank saving
For Sec 194-O/194-Q- Rate is 5%  Interest on ZCB
 Interest by one Co-op Society to another Co-op Society
[#] Individual and HUF required to deduct  Interest to Banks, Co-op banks, LIC, GIC, UTI, Skill Development Fund
TDS if Last year turnover > 1 Cr in case of  Interest on compensation awarded under Motor Accidents Claims Tribunal → No
business or > 50 lacs in case of profession TDS on Credit of Any Amount of Interest & No TDS on payment ≤ 50,000 in a
FY
44
Section Nature of Payment Payer Payee Rate Remarks
Any Person Any Person 30% No TDS if: Winnings id Upto Rs 10,000
 If the winning is wholly or partly in kind than payer shall release prize only after ensuring that tax on such
winning is paid to Govt.
 In Case Book punter paying the winnings , credits such winnings and debits the losses to the punter , tax has
to be deducted @30% on winnings before set off of losses. Therefore, the net amount after deduction of
tax and losses has to be paid to the winner.
Any Person Any Person 30%  Same as 194B
Any Person Resident Person If I/HUF than: No TDS if:
other Than I 1%  Single contract upto 30K
and HUF[#] Others: 2%  Aggregate contract upto 1 Lac in P.Y
 Contract for personal purpose of I/HUF
 Transporter owns 10 or less vehicles at any time in P.Y and who furnishes a declaration to this effect along
with PAN
Work includes: Advertising, Carriage of goods by any mode other than railways, Catering and Job Work
In case of Job work TDS applied on value excluding material if no bifurcation than on Whole Amount.
Payment by broadcasters or telecasters [TV Channels] to production houses for production of content for
broadcasting and telecasting
 Where content is produced as per specification it is treated as job work and hence TDS applicable
 Where telecaster/broadcaster acquires only telecasting or broadcasting rights than no TDS applicable
Payment by Client to advertisement agency TDS Applicable.
Cold Storage Facility TDS Applicable.
Payment for transportation of gas only if transportation charges paid by Third Party.
Any Person Any Resident 5% No TDS if:
Person  If Commission is upto Rs 15,000 in F.Y.
Any Person Any Resident 5% No TDS if:
Person  If maturity amount is less than Rs 1,00,000.
 If maturity amount is exempted u/s 10(10D).
Amount Eligible for TDS=Maturity Amount-Premium Paid.
Any Person NR 20.8%  Payment to NR not being Citizen of India for Participation in any game, Advertisement, Contribution of
Sportsperson/NR [20%+HEC@4%] article in newspapers, magazines, journals relating to Sports in India.
Entertainer not  Guarantee Income received by NR Sports association or institution in relation to any game or sports played
being Citizen of in India.
India or NR
Sport association
Any Person Any Person 5% No TDS if:
 If Commission is upto Rs 15,000 in F.Y.
Any Person Resident Person 5% No TDS if:
other Than I  If Commission and brokerage is upto Rs 15,000 in F.Y.
and HUF[#]  When Payment made by BSNL or MTNL to their public call office franchise
 If Amount paid is related to security like underwriting, brokerage on Public issue 45
Section Nature of Payment Payer Payee
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Rate
From www.castudynotes.com
Remarks
Any Person Resident Person P & M: 2% No TDS if:
other Than I Land, Building,  Rent up to Rs 2,40,000 to a person in F.Y.
and HUF [#] Furniture:10%  No TDS on refundable deposit
 Lumpsum Lease Payment at onetime upfront lease charges
 Amount paid for passenger service fees
Advance Rent also Subject to TDS in the year of Payment
TDS applicable irrespective whether payee is owner or not
Any Person Resident Person 1% of No TDS if:
[Buyer] [Seller] Consideration  Actual Consideration is less than Rs 50,00,000
Actual Consideration includes Club fees, membership fees, parking fees or water facility fees, maintenance fees
advance fees or any other similar charges
I/HUF [Not Resident Person 5% No TDS if:
covered in 194-I  Rent is upto Rs 50,000 P.M. or part of month
Time of Deduction:
At the time of credit
OR EARLIER
Actual Payment of Last month rent
When no PAN Rate is 20% however in this case deduction cannot exceed last month RENT
Any Person Resident Person 10% Applicable for Consideration Received Under Section 45(5A)
Any Person Resident Person 10% No TDS if:
other Than I If payment  Professional fees/ technical services/ royalty is upto 30K [Separately]
and HUF [#] made to call  when fees for professional services is made for personal purpose by I/HUF
centre or FTS For I/HUF they are required to deduct TDS only on Fees for professional service and Fees for Technical Service.
not being No need to deduct TDS on royalty or Non-Compete Fees.
professional Payment made to sportsmen, referee, Team physician, Anchor, Umpire, Commentator, Sports Columnist Event
service or for manager will be regarded as Fees for professional Service and TDS will be deducted u/s 195.
cinematographic Third Party making payments on behalf of insurance companies to hospital for settlement of medical/insurance
films, TDS@2% claims etc. are liable to deduct TDS u/s 194J.
Consideration paid for acquisition of Software falls within the definition of royalty and hence no TDS.
Any Resident Person 10% No TDS if:
Person[UTI/MF]  If payment is upto Rs 5,000 in a P.Y
Any person Resident Person 10% No TDS if:
 If payment is upto Rs 2,50,000 in a P.Y
 If immovable property is urban agricultural land as CG is exempt u/s 10(37)
 Rural Agricultural Land is Not Capital Asset
I/HUF[Other Resident Person 5% No TDS if
than required to  aggregate sum paid is upto 50 Lac
deduct TDS u/s This section is specifically for payment made for personal purpose only.
194C, 194H,
194J
46
Section Nature of Payment Payer Payee
Downloaded
Rate
From
Remarks
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194N Cash Withdrawal from Bank, Co-op Any Person 2% [Note 1] No TDS if:
Bank, Co-op Bank, Post Bank, Post  Cash withdrawal is upto Rs 1 Crore. If more than 1 Crore than TDS applicable on excess amount over 1 Crore
office office  Cash Withdrawal by Government, Banks , Co-op Bank, Post office, white Label ATM, Cash Replenishment
Agencies, Agents under Agriculture Produce Market Committee, Authorised Dealer, Full Fledge Money
Changer
Note 1:
 If return not filed in last 3 AY, then 20 Lacs < Withdrawal < 1 Cr, TDS @2% on excess
 1 Cr < Withdrawal , TDS @5% on excess
194-O Payment By Any person[E- Resident Person[ 1% [Gross No TDS if all satisfied
Ecommerce Com operator E-Commerce Amount of  Payee is Individual/HUF.
[ Sale of Goods or who owns or Participant who Sale i.e.Total  Gross sale through ECO upto 5 Lacs.
services ] manage E- selling goods or Price  Payee has furnished PAN or Aadhar to ECO.
Facility or services through collected  If TDS cannot be deducted under this Section than cannot be deducted any other section of the act. This is
platform] E-Com operator ] from not applicable when payment has been made for hosting advertisement or providing ant other service which
Customer are not related to Sale of goods / services.
 Any payment made by payer to E-Com participant but sale is facilitated by E-Com operator shall be deemed to
be the amount paid/credited by E-Com operator to E-Com participant and shall be included in gross amount
for TDS purpose.
 Payment gateway will not be required to deduct TDS u/s 194-O if the tax has been deducted by E-com
operator u/s 194-O of the act on the same transaction.
 In years subsequent to the First Year, if the insurance agent or insurance aggregator has no involvement in
transactions between insurance company and the buyer of insurance policy, he would not be liable to deduct
TDS u/s 194-O for those subsequent years. However, the insurance company shall be required to deduct tax
on commission payment, if any, made to the insurance agent or insurance aggregator for those subsequent
years.
194P Pension income & Specified Bank Resident Slab rate TDS deducted after giving effect to VI A deduction & rebate 87ASenior citizen should have only such income
interest on such [Schedule Individual age ≥75
pension income Bank] in P.Y
194-Q Purchase of Goods Any person Resident Person 0.1% of Sum  No TDS upto 50 Lacs. TDS only on excess.
[W.E.F More than 50 Lakhs in [Buyer] whose [Seller] in excess of  In case of transaction to which both 194 -O and 194-Q applies TDS to be deducted u/194 O.
1/7/2021] P.Y. last year Rs 50 Lakhs  No TDS if TCS u/s 206C(1) / (1F) / (1G).
[Note 1] Turnover is  No TDS on security commodity traded through RSE.
more than  Renewable energy certificate traded through registered power exchanges.
10Crore  In case transaction to which both S 206(1H) and 194Q applies TDS to be deducted u/s 194Q.
 Since 194Q is effective from 1/7/2021 so purchase made or payment made upto 30/06/2021 not subject to
TDS . Since limit of 50 Lakhs is for whole P.Y. so for checking limit of 50 Lakhs we will consider purchase
made between 1/4/2021-30/6/2021
 Not applicable for Exempt income.
 Not applicable in first year of Incorporation.
 Only Business T/o or Profession receipts should be taken.
 In case of Purchase return no need to return TDS amount it can be adjusted in future against the same seller 47
Sec 196 Sec 206AB: Higher Rate of Deduction for non filing Return Sec 201(1A): Interest on Late Deduction or Late Payment
of Income
TDS Not Applicable if Payee is Government, In Case of Late Deduction:
RBI, Mutual Fund, New Pension Trust, If Payee has not filed his ROI for 2 Preceding P.Y. Int @ 1% Per month or part thereof on amount of TDS not deducted from
Statutory Corporation. [For which ROI filing Time limit Expires] AND for which aggregate of date on which TDS was deductible till date on which TDS is actually deducted
TDS and TCS of such Payee is 50,000 or more in each of these 2 P.Y.
Sec 197 Then TDS Rate Shall be In Case of Late payment:
Int @ 1.5% Per month or part thereof on amount of TDS not paid from date
Payee can apply to A.O. to issue certificate of on which TDS was deducted till date on which tax is actually paid
Twice of Rate Given
Lower Deduction or No Deduction of TDS if OR HIGHER
Total income or receipts of income is not liable 5%
to tax or taxable at lower rate. Not Applicable in Case of 192, 192A, 194B, 194BB, 194N
Sec 200A [Processing of TDS return]
If Both Sec 206AA and 206AB applicable than Rate will be Higher of
Sec 197A TDS return filed shall be processed electronically and the following
Both.
adjustment shall be made
If Income of Resident Assessee other than  Rectification of any Arithmetical Accuracy
Company and Firm is Less than Basic Exemption Due Dates for TDS Return/ Statement  Incorrect Claim
limit, no TDS Shall be deducted u/s 192A, 193,
194A, 194D, 194DA, 194-I.if Payee give self Quarter Ended TDS Return An Intimation will be prepared specifying the amount of demand/refund
30th June 31st July alongwith interest, fees [if any] and sent to the deductor within 1 year from
Declaration in form 15G and 15H[ for Senior
30th September 31st October the end of the F.Y in which return was filed.
Citizen].
31st December 31st January
Sec 198 31st March 31st May
TCS: SOME BASIC POINTS
TDS Shall be deemed to be the income of the Fees of Rs 200 per day of default u/s 234E if TDS return after TCS is Collected by Seller from Buyer
Payee, except TDS paid by Employer on Non- due dates. TCS is to be Collected:
Monetary Perquisite or TDS deducted u/s IF TDS/TCS return filed after 1 year of Prescribed date the At the time of Receipt of Amount
194N. penalty u/s 271H ranging from Min 10,000 to Maximum Rs 1,00,000 OR Earlier
also applicable. Debiting the A/c of Buyer
Sec 199
 No TCS if Seller if I / HUF and whose Turnover / Gross Receipts From
TDS Credit is available to person from whose Sec 201 Business/ Profession in last year is upto Rs 1 Cr/50 Lakhs.
income deduction is made except Clubbing of
income. If Assessee fails to deduct TDS or after deduction fails to pay
 No TCS if Buyer is Government, Embassy, Consultants, High Commission,
TDS to Govt, Assessee will be deemed to be Assesee in default.
Trade Representation, and Clubs.
Due Dates for Payment of TDS If Assessee fails to deduct TDS of any payee he shall not be
 No TCS if Buyer buys goods for personal consumption.
deemed to be Assessee in default if Such Payee
During April -Feb 7th of Next Month  Furnished his ROI
 NO TCS if goods are used for manufacturing article.
March Month 30th April  Taken Such Sum in Income
For 194-I, 194-IB, 194M : By 30th of Next  Paid Tax on Such Sum
Month  Payer has furnished a certificate from CA in form 26A
48
TCS RATES [206C(1)] TCS RATES 206C(1H) Sec 206CB [Processing of TCS return]
Specified Goods Rate Sale of Goods of value exceeding 0.1% of Sale Consideration in TCS return filed shall be processed electronically and the following
Alcoholic Liquor for Home Rs 50 Lakhs excess of Rs 50 Lakhs adjustment shall be made
Consumption  No TCS on Export of Goods and Goods specified in 206C(1).  Rectification of any Arithmetical Accuracy
Scrap [Not usable as such]  Applicable only if seller Turnover exceeds Rs 10 Crs in  Incorrect Claim
Minerals being Coal, lignite, Iron Preceding F.Y
ore  If TDS applicable u/s 194Q than no TCS. An Intimation will be prepared specifying the amount of demand/refund
Timber and other forest along with interest, fees [if any] and sent to the deductor within 1 year from
products the end of the F.Y in which return was filed.
206CC : Non Furnishing of PAN by Collectee or Aadhar
Tendu Leaves
If the Collectee has not provided his PAN to the Collector then TCS Note 1:
TCS RATES [206C(1C)] Rate Shall be
 If the invoice is received before = Excluding GST
Lease or Licensing of parking 2% Twice of the rate  If the Advance is received before invoice = Including GST
Lot, Toll Plaza, Mines or quarry OR  Same treatment for VAT/Sales Tax/Excise Duty
for the purpose of business 5% [1% in case of sub section (1H)]  In case of purchase returns, where the money is refunded by the
seller = Tax deducted earlier u/s 194Q on such purchase (which is
TCS RATES [206C(1F)] now returned) may be adjusted against the next purchase from the
Sec 206CCA: Higher Rate of TCS for non filing Return of same seller
Sale of Motor Vehicle of the 1% Income  Can Department of Government be a “buyer” for the purposes of
value exceeding 10 Lakhs section 194Q?
If Collectee has not filed his ROI for 2 Preceding P.Y.[For which
 No TCS if Consideration per vehicle is - If it is carrying on business/commercial activity = Yes
ROI filing Time limit Expires] AND for which aggregate TCS of
upto Rs 10 Lakhs. -If it is not carrying on any business/commercial activity = No
such collectee is 50,000 or more in each of these 2 P.Y.
 Sale of Motor Vehicle by Manufacture  Can Department of Central/State Government be considered as
Then TCS Rate Shall be
to dealer /distributor “seller” for the purpose of section 194Q? = No
Twice of Rate Given
 At the time of receipt of amount
OR
5%
TCS RATES [206C(1G)]
Overseas 5% on remittance in Due Date for Payment of TCS is 7th of Next Month
Remittance excess of Rs 7Lakhs Due Date for TCS Return/ Statement
Overseas Tour 5% of Sale Value
Package Quarter Ended TDS Return
th
 No TCS if remittance is upto Rs 7 30 June
Lakhs in a year 30th September
 IF remittance is out of Loan from 31st December
financial institution for educational 31st March
purpose u/s 80E than TCS rate will be Fees of Rs 200 per day of default u/s 234E if TDS return after due dates.
0.5% IF TDS/TCS return filed after 1 year of Prescribed date the penalty u/s
 Not applicable to NRI who is visiting 271H ranging from Min 10,000 to Maximum Rs 1,00,000 also applicable
49
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Sec 139: Filing of Return of Income Sec 139(1): Due Date for filing ROI Sec 139(3): Loss Return Sec 139(4): Belated Return
Company & Firms (Including LLP)- ____________ Person required to furnish ROI needs to be filed upto due date for carry forward If return not filed within due date,
transfer pricing audit of following losses[ Sec 80] can be filed within [EARLIER]
Other Person- If GTI (before claiming exemption
report u/s 92E  Business loss 3 months prior to end of relevant A.Y.
u/s 54,54B,54D,54EC,54F) >  Every other  Speculation business loss OR
_______________________________ company Before completion of assessment
 Loss from specified business
 Person whose  Loss in CG Consequences
Resident & ordinary resident who is beneficial
Books of A/c are  Loss from activity of owning and maintaining No carry forward of losses.
owner / beneficiary of any asset located o/s India.
required to be race horses No VI – A deductions (Income based)
Beneficial Owner: audited Notes: Interest u/s 234A i.e. 1% pm or part
holds any asset located o/s India  Working Partner  Loss can be set off even if return filed after there of
Signing authority in any A/C o/s India of Audited FIRM due date Late filing fees u/s 234F – 5,000 /
Any other Person  HP loss and unabsorbed depreciation can be c/f 1,000
Beneficiary of Asset located o/s India - Not even if return filed late
required to file ROI, if such income is includible in Loss allowed to be c/f (Even if return not filed within
the income of beneficial owner Sec 139(1C): due date) if genuine hardship Sec 139(5): Revised Return
Other Points:
Authority Return Losses
CG may by notification specify class of person If any error discovered in ROI filed
Deposited > 1 crore aggregate in current a/c CIT/PCIT
 who are exempted from filing ROI earlier u/s 139(1) /(3)/(4) then Return
CCIT/PCCIT
 Electricity expenditure > 1 Lac can be revised within[ EARLIER]
CBDT
 Incurred foreign travel expenditure > 2 Lacs 3 months prior to end of relevant AY
for himself or any other person Sec 139(9): Defective Return OR
Sec 139AA: Aadhar Number Before completion of assessment
Return shall be considered as defective, if-
 Unlimited revised returns can
Sec 139(1A): Option to furnish return to  Return not filed in prescribed form Every person eligible to obtain Aadhar Number must be filed
employer  Proof of tax not attached with return mandatorily quote Aadhar Number in:  Revised Return substitutes
 Report u/s 44AB not submitted (a) Application form for Allotment of PAN; (b) ROI.
original return from the date
Section gives an option to salaried person to furnish A.O will give 15 days to assessee to rectify If a person does not have Aadhar Number, he is required to
original return was filed
a ROI for any P.Y to his employer in accordance the defect if assessee does not rectify the quote Enrolment ID of Aadhar
with such schemes as may be specified by CBDT defect the return will be considered as invalid Every person already having PAN on 1st July 2017 shall link
return Aadhar with PAN within the time allowed by Government
otherwise PAN will be inoperative
Sec 139(1B): Exceptions: Provisions of Sec 139AA would not apply to
Individual who does not possess Aadhar number or Enrolment
Filing of ROI through Computer mode in accordance ID & is: (a) Residing in States of Assam, J&K; Meghalaya; (b)
with schemes as may be notified by CBDT Non-Resident; (C) Super Senior Citizen [Age ≥ 80 years at
any time during PY; (d) Not a Citizen of India 50
Sec 140: Verification of Return Sec 139A: Permanent Account Number PAN and Aadhar Interchangeable
In case of Verified by Person required to Apply PAN Time limit for making Every person who is required to furnish/intimate/quote
1. Individual 1. Himself Application his PAN may furnish/intimate/quote his Aadhar No. in lieu
2. Individual Not 2. Competent to Person whose TI (or TI of any other person i.r.o On/before 31st May of AY of PAN if he:
present in India verify on behalf which he is assessable) > BEL for which such income is
 has not been allotted a PAN but possesses Aadhar
or mentally of individual assessable
incapacitated
no
Person carrying on any business/profession whose Before the end of that PY
1. HUF 1. Karta  Has been allotted PAN and has already linked
Sales; TO; GR > (likely to be) Rs. 5 lacs in any PY
2. Karta Not 2. Any adult Aadhar and PAN
Resident (other than individual) which enters into On/before 31st May of the
present in India member of HUF financial transaction ≥ Rs. 2.5L in a FY immediately following FY
or Karta not
Every person who is MD, director, partner, On/before 31st May of
Sec 139B: Tax Return Preparer
capacitated
trustee, author, founder, Karta, CEO, PO or immediately following FY in
1. Partnership Firm 1. Managing Who Can Any Individual Other than
office bearer of any person referred in (3) above which the person referred in
2. If there is no Partner be TRP  CA
or agent of such person referred in (3) above (iii) enters into specified
Managing 2. Any Adult  Legal Practitioner
financial transaction
Partner Partner
 Officer of Scheduled Bank
1. LLP 1. Designated
2. If there is no Partner
 Employee of Specified class of
Quoting of PAN
Designated 2. Any partner or person
Partner any other Nature of Transaction Value Who can All individual and HUF except
person may be
Contract for Sale/Purchase of securities file ROI  Company
prescribed through  Any other persons whose BOA are
Sale/Purchase of unlisted shares from open market.
1. Company 1. MD
Payment to a mutual fund for purchase of its units. TRP required to be audited u/s 44AB or
2. NO MD 2. Any other
Payment for acquiring debentures/bonds/RBI bonds any other Laws
Director as may
be prescribed Sale/Purchase of other Goods/Services
Sale/Purchase of Motor Vehicle
1. Company under 1. Liquidator Sec 140A: Self Assessment Tax
liquidation 2. Insolvency Hotel/Restaurants bills
2. Company under professional Purchase of foreign currency  Tax to be paid before return filing.[After considering Advance
Insolvency appointed by Life Insurance Premium tax, TDS, TCS, MAT, AMT, relief[including relief u/s 89]
adjudicating Opening Demat account.  In case of shortfall of payment, order of adjustment 1) Fees 2)
authority Opening Bank A/c other than time deposit Interest 3) Tax
1. Political Party 1. CEO Application for issue of Credit/Debit card
2. Local Authority 2. Principal Cash Deposit with a bank
3. Any other Officer
Purchase of bank draft/Cheque from bank
Sec 139C: Annexure Less ROI
person 3. Person
Time deposit with (i) Bank/Co-operative bank/PO (ii)
competent to  CBDT to make rules providing for a class or classes of persons
Nidhi Co. (iii) Registered NBFC who shall not be required to furnish any certificate, Audit
verify
Total Payment for prepaid payment instruments to a report, any document or receipt etc along with their ROI
bank/co-operative bank  Person can do e-filing of return [139D]
MINOR: He shall quote PAN of parent or guardian  AO may required person to furnish such documents as may be
required 51
Sec 139: Mandatory Return Filing [Amendments]
Case Prescribed Monetary

Transaction Threshold
A Person His total sales,
Carrying turnover or gross
Business receipts, as the case
may be, in the business
A person His total gross receipts
carrying on in profession
profession
A resident The aggregate of TDS
individual and TCS in his case
who is aged ≥
60 years at
any time
during the
relevant P.Y.
Any other The aggregate of TDS
Person and TCS in his case
A Person The deposit in one or
having more savings bank
Savings Bank account of the person,
Account in aggregate
52

Inter Income Tax Chart Book Nov2022

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Inter Income Tax Chart Book Nov2022

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A Note from the Author

Reasons behind writing this book:

 The Syllabus is huge, what to study and What to leave?

Thankful to my parents and my guru for their continuous support.

All the best, Future CA

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We have announced Free Tax Revision Lectures for Nov 22

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PART A: INCOME TAX LAWS

Income Received in Income other

1. Where there exists a relationship 40%/50% of salary

Common Note for SPF/RPF:

Particulars SAF  It means extra benefit offered by

Sec 28: Charging Section

Sec 41(2): Balancing Charge PART A: Maintenance of BOA by Notified Profession:

For Individual/HUF required to maintain when:

In any ONE of 3 Preceding P.Y. 23

Example 3: Assume in Case 1 Cost Rs 26

1. No Deduction under Chapter VI-A.

In the hands of Company: Normal Case:

Summary for indexation

In the following four cases indexation

Amount Paid Nature of Payment Amount of Deduction Amount of Deduction:

Sec 70: Intra Head Adjustment/Inter Source

Some Key Points

Case Prescribed Monetary

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