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1. Introduction 2. Residential Status 3. Tax Rates 4. Income from Salary 5. Income from House Property 6. Income from Business & Profession 7. Capital Gains 8. Income from Other Sources 9. 08/07/2009 Clubbing of Income
10.Set-off Carry Forward 11.Deductions from Gross Total Income 12.Agricultural Income 13. Advance Tax 14.Assessment Procedures
08/07/2009 4 .
08/07/2009 5 . It is charged on the total income of every person for the previous year. Income tax is to be deducted at source or paid in advance wherever required under the provision of the Act. Total Income is to be computed as per the provisions of the Act.Charge of Income Tax Income tax is charged in assessment year at rates specified by the Finance Act applicable on 1st April of the relevant assessment year.
An Individual. vi. ii. A Company. A Local Authority. A Firm. v.Important Definitions 1. Hindu Undivided Family (HUF). iv. Every other Artificial Juridical Person 08/07/2009 6 . An Association of Persons(AOP) or Body of Individuals (BOI). vii. i. iii. Person u/s 2(31) includes.
Assessment Year u/s 2(9) means.Contd… 2. Previous Year u/s 2(34) means. 3. 08/07/2009 7 . the period of 12 months commencing on the 1st April every year. It is the year (just after previous year) in which income is earned is charged to tax. the year in which income is earned. The current Assessment is 2010-2011.
Total Income of assessee is gross total income as reduced by the amount permissible as deduction under sections 80C to 80U. Business or Profession. Total Income (T.T.I) :.Contd… 4. 5. Index 08/07/2009 8 . Gross Total Income (G.I) :.The aggregate income under the 5 heads of income (viz. Capital Gains & Other Sources) is termed as “Gross Total Income”. House Property. Salary.
08/07/2009 9 .
Types of Residential Status The different types of residential status are:Resident(R) Not Ordinarily Resident (NOR) Non-Resident (NR) 08/07/2009 10 .
He must satisfy either He must satisfy at least one or both the Not Ordinarily Resident one of the basic additional conditions conditions. of the basic conditions. 08/07/2009 11 . of the basic conditions. Should not satisfy any Non-Resident Not required. given u/s 6(6).Residential Status of Individual The residential status of individual will be determined as underAssessee Basic Condition Additional Condition He must satisfy at one Resident Not required.
or ii. Additional Conditions u/s 6(6): i. or ii.Contd… Basic Conditions u/s 6(1): i. 08/07/2009 12 . He must be a non-resident in India in nine out of the ten previous years preceding that year. He must be in India for a period of 182 days or more during the previous year. He must be in India during 7 preceding previous years for aggregate period of 729 days or less. He must be in India for a period of 60 days or more during the previous year and 365 days or more during the four years immediately preceding the previous year.
08/07/2009 13 .Resident HUF: If the control and management of the affairs of HUF is situated wholly outside India then HUF is said to be Non.Resident in India. satisfies any of the additional conditions u/s 6(6). – Not Ordinarily Resident HUF: A resident HUF is said to be „Not Ordinarily Resident‟ in India if Karta or manager thereof.Residential Status of HUF The residential status of HUF depends upon the control and management of its affairs. – Non. – Resident HUF: If the control and management of the affairs of HUF is situated wholly or partly in India then HUF is said to be Resident in India.
Resident: If the control and management of the affairs of a firm or AOP or other person is situated wholly or partly in India then such a firm or AOP or other person is said to be resident in India. Residential Status of a firm or AOP or other person depends upon control and management of its affairs. A foreign Company will be resident in India if Control or Management of its affairs is wholly situated in India.Residential Status According to section 6(3) an Indian Company is always Resident in India. 08/07/2009 14 . Non-Resident: If the control and management of the affairs of a firm or AOP or other person is situated outside India then such a firm or AOP or other person is said to be non-resident in India.
Incidence of Tax Particulars Tax Incidence R NOR NR Yes Yes Yes Yes Yes Yes Yes Yes Income received in India by or on behalf of Yes assessee Income deemed to received in India by or Yes on behalf of assessee Income accruing or arising in India Income deemed to accrue or arise in India Income which accrues or arise outside India 08/07/2009 Yes Yes Yes No Index No 15 .
08/07/2009 16 .
INCOME (A.RATES OF INCOME TAX (Assessment Year 2010-11) 1. In case of every Individual/ HUF/ AOP/BOI artificial juridical Person.Y. 20010-11) TAX RATE NIL 10% 20% 30% Up to 150000 Next 150000 Next 200000 Above 500000 Up to 160000 Next 140000 Next 200000 Above 500000 08/07/2009 17 . 2010-11) INCOME (A.Y.
Y. 2010-11) TAX RATE NIL 10% 20% 30% Up to 180000 Next 120000 Next 200000 Above 500000 Up to 190000 Next 110000 Next 200000 Above 500000 08/07/2009 18 . 2010-11) INCOME (A.Y. INCOME (A.Contd… 2. In case of resident women below 65 years of age.
Contd… 3. 2010-11) TAX RATE NIL 10% 20% 30% Up to 225000 Next 75000 Next 200000 Above 500000 Up to 240000 Next 60000 Next 200000 Above 500000 08/07/2009 19 .e.Y. 2010-11) INCOME (A. age of 65 years or above INCOME (A. In case of resident senior citizen i.Y.
Contd… PERSONS FIRMS DOMESTIC COMPANY FOREIGN COMPANY LOCAL AUTHORITIES CO-OPERATIVE SOCIETIES Up to 10000 10000-20000 Above 20000 TAX RATE 30% 30% 40% 30% 10% 20% 30% 08/07/2009 20 .
A. if any. Individual / AOP / BOI / HUF / Artificial Juridical Person Firm Domestic Company Foreign company Co-operative Society Local Authority Education Cess and Secondary & Higher Education Cess is applicable on every person @ 2% & 1% respectively on tax liability and surcharge applicable. 1 Crore 2. Note: surcharge on personal income-tax will be eliminated from A. 2010-11 Index 08/07/2009 21 . 1 Crore 10% of tax liability. if Income exceeds Rs. if Income exceeds Rs.A. 1 Crore N.5% of tax liability.Surcharge & Cess PERSON RATE OF SURCHARGE 10% of tax liability if Income Exceeds Rs 10 Lacs 10% of tax liability. N.Y. if Income exceeds Rs.
08/07/2009 22 .
08/07/2009 23 . bonus. Employers contribution (taxable) towards recognized provident fund. iv. perquisite on profits in lieu of or in addition to any salary on wages v. Any earned leave vii. Any advance of salary vi. commission. iii.Meaning Salary includes [section17(1)] :i. Wages Any annuity on pension Any gratuity Any fees. ii.
Salary Due 2.Advance Salary [u/s 17(1)(v)] 3.BASIS OF CHARGE Income is taxable under head “Salaries”. 08/07/2009 24 . (ii)Advance salary and Arrears of salary are chargeable to tax on receipt basis only. only if there exists Employer .Employee Relationship between the payer and the payee. The following incomes shall be chargeable to income-tax under the head “Salaries”:1. whichever is earlier.Arrears of Salary Note: (i)Salary is chargeable on due basis or receipt basis.
08/07/2009 25 .Allowances Allowance is generally defined as a fixed quantity of money or other substance given regularly in addition to salary for the purpose of meeting some particular requirement connected with the services rendered by the employee or as compensation for unusual conditions of that service.Dearness Allowance .City Compensatory Allowance .It is Always Taxable. 2. 1.It is Always Taxable.
House Rent Allowance Exemption In Respect Of House Rent allowance is regulated by rule 2A. 26 2 3 08/07/2009 .Contd… 3. The least of the three given below is Exempt from Tax. 1 An Amount Equal to 50 % of Salary. Where Residential House in situated at Bombay. Calcutta. The Excess of Rent Paid over 10 % of Salary. Delhi or Madras and An Amount Equal to 40 % of Salary where Residential House is situated at any Other Place. House Rent Allowance Received by The Employee in Respect of The Period during which Rental Accommodation is Occupied by the Employee during the Previous Year.
Rs. 20 % of basic salary 3.169(ii)]Entertainment allowance is first included in salary in come under the head “salaries” and thereafter a deduction is given on the basis enumerated below: Status of Employee Non.Contd… 4. Entertainment allowance [sec. 5000 2. Amount of entertainment allowance grated during the previous year Nothing is deductible 08/07/2009 27 .Government Government Least of the Following is deductible : 1.
08/07/2009 28 . The amount of the allowance . Whichever is lower.Contd… 5. ii. or The amount utilized for the specific purpose for which allowance is given. Special allowances prescribed as exempt under section 10(14) – In the cases given below the amount of exemption under section 10(14) is :– i.
kamal maghani 29 Conveyance Allowance Daily Allowance 08/07/2009 .Contd… Exemption is available on the aforesaid basis in the case of following allowances :NAME OF ALLOWANCE Travelling Allowance/ Transfer Allowance NATURE OF ALLOWANCE Any allowance granted to meet the cost of travel on tour or on transfer (including sum paid in connection with transfer. to meet the ordinary daily charges incurred by an employee on account of absence from this normal place of duty. Conveyance allowance granted to meet the expenditure on conveyance in performance of duties of an office (expenditure for covering the journey between office and residence is not to be included). Any allowance whether granted on tour or for the period of journey in connection with transfer. packing and transportation of personal effects on such transfer).
08/07/2009 30 . or ii.In the cases given below. the amount of allowance . Regardless of the amount of expenditure. When exemption does not depend upon expenditure .Contd… 6. Whichever is lower. the allowances given below are exempt to the extent of – i. the amount of exemption does not depend upon expenditure incurred by the employee. the amount specified in rule 2BB.
70 per cent of such allowance.000 per month. whichever is lower. Exemption is limited to Rs. It is exempt from tax to the extent of Rs. 300 per mount to Rs. 300 per month per child up to a maximum of two children. 200 Per Month The amount of exemption isa. 100 per month per child up to a maximum of two children. 1. 2.000 per month The amount of exemption varies from Rs. 200 Per month to Rs.Contd… Name of allowance Special Compensatory (Hill Areas) Allowance Border area allowance Tribal areas/ scheduled areas allowance Exemption as specifiedin rule 2BB Amount exempt from tax varies from Rs.600 per month in some cases.300 per month Rs.Rs. The amount exempt is limited to Rs. 7. 31 Allowance for transport employees Children education allowance Hostel expenditure allowance Compensatory field area allowance 08/07/2009 . or b. 6.
000 feet).200 per month. 1.1.000 feet) or Rs. It is exempt from tax up to Rs. 32 .Contd… Name of Allowance Compensatory modified area allowance Counter insurgency allowance Transport allowance Exemption as Specified in Rule 2BB Exemption is limited to Rs.900 per month in some cases. 3. 4.060 per month (for altitude of 9. 800 per month. It is exempt up to Rs. 1. Exemption is limited to Rs.3. 1.000 per month in some cases.000 to 15.600 per month in the case of an employee who is blind or orthopedically handicapped) Underground allowance High altitude allowance Highly active field area allowance Island duty allowance 08/07/2009 Exemption is limited to Rs.600 per month (for altitude above 15. It is exempt from tax up to Rs.250 per month. 800 per month (Rs. It is exempt up to Rs.
10( 7)] .It is taxable.It is taxable. 10. 9.Contd… 7.Any allowance paid or allowed outside India by the Government to an Indian citizen for rendering service outside India is wholly exempt from tax. 08/07/2009 33 . 8. Allowance to Government employees outside India [Sec. Tiffin allowance .Servant allowance . Fixed medical allowance – It is taxable.
Allowance to High Court and Supreme Court Judges . 1954 is not chargeable to tax. 08/07/2009 34 .Allowance paid by a United Nations Organization to its employees is not taxable by virtue of section 2 of the UN (Privileges and Immunities) Act. 12. Allowance received from a United Nations Organization . 1974.Any allowance paid to High Court Judges under section & 22C of the High Court Judges (Conditions of Service) Act.Contd… 11.
It also denotes something that benefits a man by going in to his own pocket. Perquisites may be provided in cash or in kind. Perquisites are included in salary income only if they are received by an employee from his employer.PERQUISITES Perquisite may be defined as any Casual Emolument or Benefit attached to an office or position in Addition to Salary or Wages. 08/07/2009 35 .
The value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer 08/07/2009 36 .“Perquisites” as defined u/s 17 (2) The term “perquisites” is defined by section 17 (2) as including the following items: 1.The value of Rent-free Accommodation provided to the assessee by his employer 2.
By any employer (including a company) to an employee to whom provisions of (i) and (ii) above do not apply and whose income under the head “salaries” exclusive of the value of all benefits or amenities not provided for by way of monetary benefits. iii. ii. 50.Contd… 3. By a company to an employee. The value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases : i. By a company to an employee who is a director thereof . being a person who has substantial interest in the company .000 08/07/2009 37 . exceeds Rs.
whether directly or through a fund other than a recognized provident fund or approved superannuation fund or a deposit-linked insurance fund.Contd… 4. to effect an assurance on the life of the assessee or to effect a contract for an annuity 6. Obligation of Employee met by Employer. 5. Any sum payable by the employer. Any sum paid by the employer in respect of any obligation which but for such payment would have been payable by the assessee. The value of any other fringe benefits or amenity as may be prescribed 08/07/2009 38 .
50.10(10)] – Gratuity is a retirement benefit.TERMINAL BENEFITS 1. 39 08/07/2009 . Tax treatment of gratuity is given below: Status of Employee Government Employee It is fully exempt from tax under section 10(10)(i) Non-government employee covered by the payment of Gratuity Act. 3. 50. It is generally payable at the time of cessation of employment and on the basis of duration of service. 1972 Least of following is exempt: 1) “15 days‟ salary” x “Length of service” 2) Rs. Non-government employee not covered by the payment of Gratuity Act. salary” x “Length of service” 2) Rs. 1972 Least of following is exempt: 1) “½ month avg. Gratuity [Sec. 000 3) Gratuity actually received. 3. 000 3) Gratuity actually received.
Pension is chargeable tax as follows :PENSION COMMUTED Government Employee Non-Government Employee If Gratuity Received 1/3 of commuted pension is exempt If Gratuity not Received 1/2 of commuted pension is exempt UNCOMMUTED Entire Commuted Pension is exempt whether or not Gratuity received.Contd… 2. 17(1)(ii)] . PENSION [SEC. Taxable for Government as well as NonGovernment employees 08/07/2009 40 .
Annuity [Sec. 17(1)(ii)] – An annuity payable by a present employer is taxable as salary even if it is paid voluntarily without any contractual obligation of the employer. 25F(b) of the Industrial Disputes Act. An annuity received from an ex-employer is taxed as profit in lieu of salary. 000). 5. 08/07/2009 41 .e. or c.. 00. Rs.Retrenchment compensation [Sec. the amount received. such amount as notified by the Government (i. an amount calculated in accordance with the provisions of sec. or b. 4.Contd… 3. 10(10B)] – Compensation received by a workman at the time of retrenchment is exempt from tax to the extent of the lower of the following: a. 1947.
subject to certain conditions.10 (10C)] . 08/07/2009 42 . 500000.Contd… 5. Compensation received at the time of Voluntary Retirement [sec.Compensation received at the time of voluntary retirement is exempt from tax. Maximum amount of exemption is Rs.
the employers contribution to the extent of 12% is not chargeable to tax.Provident Fund Provident Fund Scheme is a welfare scheme for the benefit of employees. 08/07/2009 43 . The employee contributes certain sum to this fund every month and the employer also contributes certain sum to the provident fund in employees A/c.
LEAVE SALARY Encashment of leave by surrendering leave standing to one‟s credit is known as “leave salary”. LEAVE ENCASHMENT During Employment Retirement / Leaving the Job Chargeable to Tax Government Employee Non-Government Employee Fully Exempt Least of following is exempt :1) Earned Leave on the basis of Average Salary 2) 10 x Average monthly salary 3) Rs. 300000 4) Leave Salary Received 44 08/07/2009 .
Employment Tax / Professional Tax [Sec. Under the said article employment tax cannot exceed Rs. 08/07/2009 45 . 2500 p.Deductions Admissible in Computing Income under head „SALARIES‟ 1.a.16(ii)]: This deduction is available in case of Government employees only. 2.16(iii)]: Any sum paid by assessee on account of a tax on employment within the meaning of Article 276(2). Entertainment allowance granted by employer [Sec.
being paid in arrears or in advance. Relief is granted on an application made by the assessee to the assessing officer. 08/07/2009 Index 46 . due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed.Relief in respect of Advance or Arrears of Salary u/s 89 When an assessee is in receipt of a sum in the nature of salary.
08/07/2009 47 .
It is the amount for which the property might reasonably be expected to let from year to year. 08/07/2009 48 . Income from house property is charged to tax on Notional Basis. as generally tax is not on receipt of income but on the inherent potential of the house property to generate income.Basis of Charge The basis of charge of income under the head „income from house property‟ is the Annual Value of the property. Annual Value is inherent capacity of the property to earn an income.
the profits of which are chargeable to tax. The property must consist of buildings or lands appurtenant to such buildings. The property should not be used by the owner thereof for the purpose of any business or profession carried on by him.Conditions to be Satisfied 1. 08/07/2009 49 . 3. 2. The assessee must be the owner of such house property.
Computation of Gross Annual Value (GAV) Step 1 : Calculate Expected Rent as follows:Particulars (a) Fair Rent of the House (b) Municipal Value of House Amount xxx xxx Amount (c) Whichever is more of (a) and (b) (d) Standard Rent Expected Rent [whichever is less of (c) and (d)] XXX xxx XXX 08/07/2009 50 .
Where the property or any part thereof is let out. GAV = ARR If ARR is less than ER and it is due the vacancy of property then. then.Contd… Step 2 : Compare Expected Rent & Actual Rent Receivable (ARR). GAV = ARR If ARR is less than ER not owing to vacancy GAV = ER Note: ARR = Rent Received / Receivable less Unrealized Rent 08/07/2009 51 . If ARR is more than ER referred to in Step 1.
Net Annual Value (NAV) Net Annual Value is the sum computed after deducting from Gross Annual Value. NAV = GAV – Municipal Taxes Paid 08/07/2009 52 . the taxes levied by any local authority in respect of the property.
3. Municipal Valuation :. Standard Rent :. local authorities make a periodical survey of all building in their jurisdiction. 2.Fair rent of the property can be determined on the basis of a rent fetched by a similar property in the same or similar locality. Such valuation may be taken as strong evidence representing the earning capacity of a building.Standard rent is the maximum rent which a person can legally recover from his tenant under a Rent Control Act.Meaning 1.For collecting municipal taxes. 08/07/2009 53 . Fair Rent of the Property :.
he has to reside at that other place in a building not belonging to him. or such property cannot actually be occupied by the owner by reason of the fact that owing to his employment. 08/07/2009 54 . the property consisting of house or part thereof is in the occupation of the owner for the purposes of his own residence. business or profession carried on at any other place. 23(2)] Property is considered to be self – occupied where.Self-occupied Property [Sec.
the municipal taxes paid by the owner of the house are not deductible. 08/07/2009 55 .Contd… In case of Self-occupied House Property Net Annual Value is always Zero. Since NAV is zero.
Deduction Admissible u/s 24
i. Statutory deduction :- 30% of Annual Value (i.e. 30% of NAV) ii.Interest payable on capital borrowed for acquisition, construction, repair, renewal or reconstruction of house property :- Actual amount of interest for the year on accrual basis plus 1/5th of the interest, if any, pertaining to the preacquisition or pre-construction period.
Deduction for Interest on Capital Borrowed in case of SOP
Maximum limit of deduction in respect of interest on capital borrowed in case of a Self-occupied property whose annual value is assessed at NIL, is Rs. 1,50,000
Interest on capital borrowed on or after 1-4-1999 for acquisition or construction of house In any other case MAXIMUM DEDUCTION
Recovery of Unrealized Rent [Section 25AA]
Any amount of rent realized by the assessee during the previous year, which he could not realize from a property let to a tenant, shall be deemed to be income chargeable under the head “Income from house property”. 100% of the amount actually received is taxable in the previous year in which it is realized.
Taxable amount is computed as under :PARTICULARS The amount received as arrears of rent Less: 30% of such amount Amount taxable as arrears of rent AMOUNT XXX xxx XXX Index 08/07/2009 59 . It shall be charged to income tax as income of previous year in which it is received.Arrears of Rent [Section 25B] Arrears of rent shall be deemed to be income chargeable under the head “Income from house property”.
08/07/2009 60 .
4. 3.Income derived by a trade.Any compensation or other payments due to or received by any person specified in section 28(ii).Basis of Charge [sec. 28] The following income is chargeable to tax under the head “Profits and gains of business or profession”: 1. arising from business or the exercise of a profession.Profits and gains of any business or profession. 2. professional or similar association from specific services performed for its members.The value of any benefit or perquisite. 08/07/2009 61 . whether convertible into money or not.
Contd… 5. patent. 7. etc. copyright. Any interest. commission or remuneration received by a partner from firm. Any profit on the transfer of the duty free replenishment certificate. bonus. any profit on transfer of the Duty Entitlement Pass Book Scheme. 8. Any sum received for not carrying out any activity in relation to any business or not to share any know-how. salary. 08/07/2009 62 . trademark. 6. Export incentive available to exporters.
10. 08/07/2009 63 .Contd… 9. Income from the aforesaid activities is computed in accordance with the provisions laid down in section 29 to 44D. Profits and gains of managing agency. and 11. Any sum received under a Keyman insurance policy including bonus. Income from speculative transaction.
taxes. Tea/coffee/rubber development account [Sec.Expenses Expressly Allowed 1. Insurance premium [Sec. Repairs and insurance of machinery. repairs and insurance for building [Sec. 33AB] 5. 35A] 6. Rent. 31] 3. rates. 32] 4. 36 (1) (i)] 7. Premier for insurance on health of employees [Sec. 30] 2. 36(1) (ib)] 08/07/2009 64 . Depreciation allowance [Sec. plant and furniture [Sec. Expenditure on acquisition of patent rights and copyrights [Sec.
Contribution towards approved gratuity fund [Sec. Bad debts [Sec. Employee‟s contribution towards staff welfare schemes 13. 36(1) (ix)] 08/07/2009 65 . Bonus or commission to employees [Sec. 36(1)(v)] 12. Employer‟s contribution to recognized provident fund and approved superannuation fund [Sec. 36(1)(vii)] 14. 36(1)(iii)] 10. 36(1)(ii)] 9. Interest on borrowed capital [Sec.Contd… 8. 36(1)(iv)] 11. Family planning expenditure [Sec.
17. 16. General Deduction [Sec. 08/07/2009 66 .Contd… 15. 37(1)]. Banking cash transaction tax. securities transaction tax and commodities transaction tax. Advertisement expenses [Sec. 37(2B)].
08/07/2009 67 .EXPENSES NOT DEDUCTIBLE [Section 37(1)] 1. Damages and penalty paid for transgressing the terms of agreement with the State. Litigation expenditure incurred for curing any defect in the title of assets or completing that title. 5. 2. Fees paid for increase of authorized capital. Litigation expenses for registration of shares. Penalty and damages paid in connection with infringement of law. 3. 4.
Contd… 6. expenditure on issue of bonus shares id deductible. 08/07/2009 68 . Amount expended for acquiring a business or a right of permanent character or an asset which generates income or for avoiding compensation in business. However. 7. Expenditure on raising equity share capital and preference share capital. Amount paid for acquiring technical know-how which is to be utilized for the purpose of manufacturing any new article and such know-how is to become the property of the assessee at the end of the stipulated period. 8.
11. Fees paid to obtain license to investigate and search minerals. however. 08/07/2009 69 .Contd… 9. Expenditure incurred for acquiring right over or in land to win minerals. 12. Payment made in consideration of acquiring a monopoly right to manufacturer a producer (royalty payable on the basis of goods produced under the same arrangement is. deductible). Payments made for acquisition of good will. 10.
17. 14. Compensation paid to contracting party with the object of avoiding an unnecessary investment in capital assets. Expenditure on shifting of registered office. 16. Insurance premia paid by a firm on life insurance policies of its partners. 15.Contd… 13. 08/07/2009 70 . Amount paid by liquor contractor to police staff and other officer to enable it to make unauthorized purchases and sales of liquor. Tax paid by the assessee (who is defaulter by not deducting tax at source under section 195) on behalf of non-resident.
Amount paid by a company to the Registrar of Companies as filing fee for enhancement of capital base of the company. 19. 08/07/2009 71 . Payment made by assessee company which was partner in a firm.Contd… 18. to outgoing partners of firm on account of their agreeing to restrain from carrying on similar business for a period of 15 years.
fees for Technical Services payable outside India. Salary Payable Outside India without Tax Deduction [sec. 40(a)(i)] 2. Provident Fund Payment without tax Deduction at Source [Sec. Income-Tax [Sec. Fringe Benefit Tax [Sec. 40(a)(iii)] 5. 40(a)(iv)] 6. Certain specified expenses in case of Partnership Firm 08/07/2009 72 .if on such amount tax is deductible but tax has not been deducted or deposited with Government. 40(a)(ii)] 4. 40(a)(ic)] 3. [Sec. Interest. Royalty.Specific Disallowances 1.
7. Interest paid by an AOP/ BOI to its members is not allowed as deduction by virtue of sec. 40(ba) 8. Payment to relatives in excess of fair value – not deductible [Section 40A(2)] 9. Expenditure in excess of Rs. 20,000 in aggregate in a day paid otherwise than by account payee cheque drawn on a bank or account payee bank draft – Not allowable [Section 40A(3))] 10. Amount not deductible in respect of certain unpaid liabilities [Sec.43B]
Books of Accounts to be maintained [Section 44AA]
The persons carrying on specified professions are required to maintain specified books of account only if the gross receipts of their profession have exceeded Rs. 1,50,000 Every other person carrying on business or profession shall keep and maintain such books of account and other documents as may enable the Assessing Officer to compute his total income in accordance with the provisions of this Act.
a) If his income from business or profession exceeds Rs. 1,20,000; b) Total sales/turnover/gross receipts thereof exceeds Rs.10,00,000 c) the assessee has claimed his income lower than deemed profits
Tax Audit u/s 44AB
This section applies to following :Person carrying on Business Profession Accounts are to be audited for previous year in which Total sales, turnover or gross receipts exceed Rs. 40,00,000 Gross receipts exceed Rs. 10,00,000
Business covered u/s He has claimed his income to be lower than the 44AB, 44AE, 44AF, profits or gains so deemed under the respective 4BB and 44BBB section.
The assessee is required to get his accounts of such previous year audited by a Chartered Accountant before 30th September of the assessment year.
Special Provisions for Computing Income on Estimated Basis 44AD. 5% of Gross receipts or such higher sum as declared by him in his Return of Income. goods carriages owned any goods or by him. 76 Deemed Profits (No. 40 lacs. 44AE & 44AF Not withstanding anything contained in Sections 28 to 43C. the following provisions will apply. hiring or leasing Retail trade in Assessee supply of labour for it. Sec. 40 lacs. 8% of Gross receipts Goods carriages owned by assessee at any time during previous year doesn‟t exceed 10 lacs Total business turnover in that previous year doesn‟t exceed Rs. 44 AE Sec. This Section applies if Gross receipts of such business during the previous year do not exceed Rs. of other vehicles x Rs. 44 AD Sec. 3500 x NM) + (No. of heavy goods vehicle x Rs. of months kamal maghani . 44AF Business of Civil construction or Plying. merchandise. 3150 x NM) NM = No.
08/07/2009 77 .In order to avail depreciation.Depreciation shall be determined according to the provisions of section 32. one should satisfy the following conditions: – – – – Asset must be owned by the assessee. Depreciation is available on tangible as well as intangible assets.DEPRICIATION [Sec. It must be used for the purpose of business or profession. It should be used during the relevant previous year. Conditions for claiming Depreciation . 32] Depreciation allowance [Sec. 32] .
Contd… Block of Assets [Sec. trade marks. being know-how.The term “block of assets” means a group of assets falling within a class of assets comprising – – tangible assets. 2(11)] . 08/07/2009 78 . licenses. copyrights. machinery. – In respect of which the same percentage of depreciation is prescribed. – intangible assets. being buildings. patents. plant or furniture. franchises or any other business or commercial rights of similar nature.
79 Step 3 08/07/2009 . To this value. add “actual cost” of the asset (falling in the block) acquired during the previous year 2009-10. 2009. 43(6)] . From the resultant figure.Contd… Written Down Value [Sec. deduct money received/receivable (together with scrap value) in respect of that asset (falling within the block of assets) which is sold.Written down value for the assessment year 2010-11 will be determined as under: Step 1 Step 2 Find out the depreciated value of the block on the April 1. discarded demolished or destroyed during the previous year 2009-10.
08/07/2009 80 . If the block of assets is empty or ceases to exist on the last day of the previous year though the written down value is not zero . directly or indirectly. though the block is not empty . if any.Contd… Meaning of “Actual Cost” [Sec. If written down value of the block of asset is reduced to zero. by any other person or authority.It means the actual cost to the assessee as reduced by the proportion of the cost thereof.No depreciation is admissible. as has been met.No depreciation is admissible. 43(1)] .
When a depreciable asset(on which depreciation is claimed on straight line basis) of a power generating unit is disposed in a previous year. However in subsequent year full depreciation is allowed irrespective of use. if used in production or manufacturing.Contd… Additional depreciation @ 20% is available on new plant or machinery acquired & installed after 31. 08/07/2009 81 . then deprecation & additional depreciation is restricted to 50% of actual depreciation. If asset is used for less than 180 days during the previous year. in which its purchased.03.05. then terminal depreciation (loss) is deductible or balancing charge (gain) is taxable.
– Rate of interest should not exceed 12 percent Deduction of Remuneration to Partners can be claimed if paid :– to a Working Partner – According to the Partnership Deed – Does not exceed the Permissible Limits.Partnership Deductibility of interest paid to partners by firm depends upon following :– Payment of interest should be authorized by the partnership deed – Payment of interest should pertain to the period after the partnership deed. 08/07/2009 82 .
50.000 of the book profit or in case of a loss On the next Rs.00.000 or at the rate of 90 percent of the book profit.000 of the book profit On the balance of the book profit Rs.000 or at the rate of 90 percent of the book profit. 50. 1.000 of the book profit or in case of a loss On the next Rs.00. 1.000 of the book profit On the balance of the book profit In the case of any other firm On the first Rs. whichever is more At the rate of 60 percent rate of 40 percent 83 Rs. 75.Contd… The maximum amount of salary paid to all the partners during the previous year should not exceed the limits given below :In case of a firm carrying of a profession referred to in section 44AA On the first Rs. 75. whichever is more At the rate of 60 percent At the rate of 40 percent kamal maghani At the .
Minimum Alternate Tax (MAT) Applicability of Minimum alternate tax (MAT) sec. • Up to assessment year 2001-02 these provisions were covered by sec. book profit shall be deemed as total income & 10% of book profits should be deemed as tax liability. • In such case. • If tax liability of a company under normal provision is lower than 10% of book profit. 115 JB MAT is applicable in case of companies only. 115JB :• Minimum alternate tax (MAT) sec. 115 JA. 08/07/2009 84 .
• MAT credit can be carried forward for a period of seven years. Index 08/07/2009 85 .Contd… • A company is allowed credit of tax paid u/s 115JB for the assessment year 2006-07 and onwards in accordance with the provisions of section 115-JAA.
08/07/2009 86 .
Any profit or gains arises as a result of transfer. 54F. 4. 54G.Such transfer takes place during the previous year.There should be a capital asset.Basis of Charge Capital Gain‟s tax liability arises only when the following conditions are satisfied: 1. and 54GA 08/07/2009 87 . 54D.Such profit or gains is not exempt from tax under section 54. 54B. 2. 54EC.The capital asset is transferred by the assessee 3. 5.
Paintings. 2. However. movable property including wearing apparel and furniture held for his personal use or for the use of any member of his family dependent upon him. 08/07/2009 88 . that is to say.Personal effects of the assessee.Capital Assets “Capital asset” is defined to include property of any kind. consumable stores or raw material held for the purposes of business or profession.Any stock-in-trade. Archaeological Collections. movable or immovable. whether fixed or circulating. Sculptures. or Art Work will not be considered as “personal effects”. Drawings. However. following are excluded from the definition of “capital assets”: 1. tangible or intangible. Jewellery.
having a population of 10. 1980 issued by the Central Government.Contd… 3. – 4. or in any notified area. Special Bearer Bonds. Gold Deposit Bonds issued under Gold Deposit Scheme. 1999. Agricultural land in India provided it is not situated – – in any area within the territorial jurisdiction of a municipality or cantonment board. 6½ percent Gold Bonds. 5. 08/07/2009 89 . 1980 or National Defense Gold Bonds.000 or more. 1991. 1977 or 7 percent Gold Bonds. 6.
immediately prior to its date of transfer.” However in following cases 36 months will be replaced by 12 months :• Equity or preference shares in a company • Listed Securities • Units of UTI • Units of a mutual fund specified under section 10(23D) • Zero coupon bonds 08/07/2009 90 . then it is known as “long term capital asset. In other words. if a capital asset is held by an assessee for more than 36 months.Short-term / Long-term Capital Assets “Short term capital asset” means a capital asset held by an assessee for not more than 36 months.
in relation to capital asset. 2(47)]. 3.The expression “expenditure on transfer” means expenditure incurred which is necessary to effect the transfer.Important Terms 1. Expenditure on Transfer :. 2.Transfer. Full Value of Consideration :. 08/07/2009 91 .The expression “full value” means the whole price without any deduction whatsoever. exchange or relinquishment of the asset or the extinguishment of any rights therein or the compulsory acquisition thereof under any law [sec. includes sale. Transfer of Capital Asset :.
08/07/2009 92 . In case of Depreciable Asset COA is the WDV of asset in the beginning of the year. Cost of improvement :. In case of Slump Sale COA is the Net Worth of the undertaking. Cost of Acquisition :.Contd… 4.Cost of acquisition of an asset is the value for which it was acquired by the assessee. 5.Cost of improvement is capital expenditure incurred by an assessee in making any additions/ improvement to the capital asset.
the same proportion as CII for the year in which the asset is transferred bears to the CII for the first year in which the asset was held by the assessee or on 01.Contd… 6.1981. 08/07/2009 93 .an amount which bears to the COI. whichever is later. Indexed Cost of Acquisition :.04. Indexed Cost of Improvement :. 7. the same proportion as CII for the year in which the asset is transferred bears to the CII for the year of improvement.the amount which bears to the COA.
54B]:Available to Individual on transfer of Agricultural land used by individual or his parent for agricultural purposes during 2 year preceding date of transfer and Agricultural land (urban or rural) is purchased. 54]:Available to Individual & HUF on transfer of Long-term Residential Property and new residential House property is purchased or constructed. 08/07/2009 94 . 2. Profit on sale of property used for residence [S.Capital Gain Exemption 1. Capital gains on transfer of agricultural land [S.
redeemable after 3 years issued by (a) National Highway authority of India. or (b) Rural Electrification Corporation.Contd… 3. Investment in certain bonds [S.54EC] :Available to all assesses on transfer of any long-term capital asset for purchase of Bonds. 08/07/2009 95 .
08/07/2009 96 .Available to Individual & HUF on transfer of Long-term Asset other than Residential house Property and residential House property is purchased or constructed.Contd… 4. Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house [S. 54F]:.
Contd… 5. if New land or building for the industrial undertaking is purchased or constructed.Available to all assesses on Compulsory acquisition of land or building which was used in the business of industrial undertaking during 2 years prior to date of transfer.54D]:. 08/07/2009 97 . Compulsory acquisition of land & building [S.
(c) Incurring notified expenses.54G]:Available to all assesses on Transfer of plant. land or building in such rural area or.Contd… 6. if (a) Purchase/ Construction of plant. machinery or land or building for shifting industrial undertaking from under area to rural area. machinery. 08/07/2009 98 . (b) Shifting original assets to that area or. Shifting of undertaking to rural area [Sec.
08/07/2009 99 . if (a) Purchase/ Construction of plant. Shifting of undertaking to SEZ [Sec. (c) Incurring notified expenses.Contd… 7. land or building in such SEZ or (b) Shifting the original asset to SEZ or. machinery.54GA]:Available to all assesses on Transfer of plant. machinery or land or building for shifting industrial undertaking from urban area to special Economic Zone.
Computation of Short-term Capital Gains
Particulars Full Value of Consideration Less: Expenses incurred wholly and exclusively for such transfer Net Consideration Less: Cost of Acquisition Less: Cost of Improvement Less: Exemption u/s 54B, 54D, 54G, 54GA Taxable Short -term Capital gains Amount XXX xxx XXX xxx xxx xxx XXX
Computation of Long-term Capital Gains
Particulars Full Value of Consideration Less: Expenses incurred wholly and exclusively for such transfer Net Consideration Less: Indexed Cost of Acquisition Less: Indexed Cost of Improvement Less: Exemption u/s 54, 54B, 54D, 54EC, 54F, 54G, 54GA Taxable Long- term Capital gains Amount XXX xxx XXX xxx xxx xxx XXX
Cost Inflation Index (CII) for the first year in which the asset was held by the assessee or for the year beginning on 1.4.1981, whichever is later / the year of improvement
Indexed Cost of Acquisition / Improvement
Cost of acquisition / improvement x Cost inflation Index of the year of transfer
08/07/2009 103 .
General [Section 56(1)] Income of every kind. which is not to be excluded from the total income and not chargeable to tax under any other head. shall be chargeable under the head “Income from Other Sources”. 08/07/2009 104 .
if the same is not chargeable under the head „Profits and Gains of Business or Profession. Income by way of interest on securities if not chargeable as Profits and Gains of Business or Profession 08/07/2009 105 .‟ 4. 2. Any sum received by an employer-assessee from his employees as contributions to any welfare fund.: Winnings from lotteries.Specific Income [Section 56(2)] 1. Dividends. card games and other games of any sort or from gambling or betting of any form or nature whatsoever. crossword puzzles. 3. races including horse races. Lottery winnings etc.
if the same is not chargeable to income tax under the head „Profits and Gains of Business or Profession.Contd… 5. and the letting of buildings is inseparable from letting of such machinery. machinery or furniture belonging to the assessee. if not chargeable to under the head „Profits and Gains of Business or Profession‟.‟ 7. Income from letting on hire of machinery. 6. Income from letting on hire of Plant. plant or furniture and also buildings. plant or furniture. Interest on bank deposits and loans 08/07/2009 106 .
Income of race establishment 08/07/2009 Index 107 .Interest on foreign government securities 11.” 9. Director‟s fee 14. Cash Gifts exceeding Rs.Income from sub-letting 13. 50.Contd… 8.000 10. if the same is not chargeable to income-tax under the head „Profits and Gains of Business or Profession‟ or under the head “Salaries.Agricultural income received from outside India 12. Any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy.
08/07/2009 108 .
Income from such asset is taxable in the hands of the transferor.When Spouse is employed in the concern without any technical or professional knowledge or experience or when he/ she has substantial interest in that concern. 64(1)(ii)] :. An individual is assessable in respect of remuneration of spouse [Sec. 2. Transfer of income without transfer of asset [Sec. 3.Cases where Clubbing Applies 1. Revocable transfer of assets :. 08/07/2009 109 . 60] :– The income from the asset would be taxable in the hands of the transferor.
An individual is assessable in respect of income from assets transferred to son’s wife [Sec. 64(1)(vi)]:. 5.When the asset is transferred otherwise than (a) for adequate consideration. An individual is assessable in respect of income from assets transferred to spouse:.When the asset is transferred otherwise than (a) for adequate consideration 08/07/2009 110 . or (b) in connection with an agreement to live apart.Contd… 4.
It is transferred for the immediate or deferred benefit of his/her spouse. An individual is assessable in respect of income from assets transferred to a person for the benefit of son’s wife [Sec. 64(1)(viii)] :. An individual is assessable in respect of income from assets transferred to a person for the benefit of spouse [Sec.Contd… 6. 7. 64(1)(vii)] :.It is transferred for the immediate or deferred benefit of his/her son‟s wife. The transfer is without adequate consideration. The transfer is without adequate consideration. 08/07/2009 111 .
Contd… 8.When Income from asset transferred to HUF for inadequate consideration. Clubbing in case of transfer of property to HUF [Section 64(2)] :. 64(1A)] :. An individual is assessable in respect of income of his minor child [Sec. 08/07/2009 112 . 9.The income of minor will be included in the income of that parent whose total income [excluding the income includible under section 64(1A)] is greater.
Cash credit [Sec. 08/07/2009 113 . the sum so credited may be charged to income-tax as the income of the assessee of that previous year. 68] .Undisclosed Income / Investments 1.Where any sum is found credited in the books of an assessee maintained for any previous year and the assessee offers no explanation about the nature and source thereof.
the assessee has made investments which are not recorded in the books of account maintained by him and the assessee offers no explanation about the nature and source of the investments. Unexplained investments [Sec.Contd… 2.69] – Where in the financial year immediately preceding the assessment year. the value of the investments may be deemed to be the income of the assessee of such financial year. 08/07/2009 114 .
bullion. 69A] . jewellery. or other valuable article which are not recorded in the books of account maintained by him and the assessee offers no explanation about the nature and source of acquisition then value of such things may be deemed to the income of the assessee for such financial year. Unexplained money. 08/07/2009 115 .Where in any financial year the assessee is found to be the owner of any money.Contd… 3. etc [sec.
O. for such financial year. finds that the amount expended on making such investments or in acquiring such things exceeds the amount recorded in the books of account maintained by the assessee. etc.Contd… 4.69B] – Where in any financial year the assessee has made investments or is found to be the owner of any bullion.. jewellery or other valuable article. Amount of investments. and the A. not fully disclosed in books of account [Sec. and he offers no explanation about such excess amount. 08/07/2009 116 . the excess amount may be deemed to be the income of the assessee.
69D] – Where any amount is borrowed on a hundi. etc. may deemed to be the income of the assessee for such financial year.Unexplained expenditure. the amount so borrowed or repaid shall be deemed to be the income of the person borrowing or repaying for the previous year in which the amount was borrowed or repaid. 69C] – Where in any financial year an assessee has incurred any expenditure & he offers no explanation about the source of such expenditure. 08/07/2009 Index 117 . or any amount due thereon is repaid otherwise than through an account payee cheque. the amount covered by such expenditure.Contd… 5. 6.Amount borrowed or repaid on hundi [Sec. [Sec.
08/07/2009 118 .
Process of Set-off & Carry Forward The process of setting off of losses and their carry forward may be covered in the following steps: Step 1 Inter-source adjustment under the same head of income Inter-head adjustment in the same assessment year. Step 2 Step 3 08/07/2009 119 . Step 3 is applied only if a loss cannot be set off under Steps 1 and 2. Step 2 is applied only if a loss cannot be set off under Step 1. Carry forward of loss.
If depreciation allowance is not fully deductible under the head “Profits and gains of business or profession” because of absence or inadequacy of profits. it is deductible from income chargeable under other heads of income [except income under the head “Salaries”] for the same assessment year. 120 Step 2 Step 3 08/07/2009 .Unabsorbed Depreciation While dealing with unabsorbed depreciation one should keep in mind the following points: Step 1 Depreciation allowance of the previous year is first deductible from the income chargeable under the head “Profits and gains of business or profession”. it can be carried forward to the subsequent assessment year(s) by the same assessee. If depreciation allowance is still unabsorbed.
card games.Inter-Source Set Off [Section 70] Loss arising from one source of income under a head can be set off against income arising from any other source under the same head. except in the following cases – Loss Long-term capital Loss Speculation business loss Loss from business of owning and maintaining race horse Loss from lottery. gambling betting etc. Set-off allowed against Long-term Capital Gain Speculation business gain Income from business of owning and maintaining race horse Income from lottery. card games. 08/07/2009 121 . gambling betting etc.
Losses under the head “Profits and gains of business or profession” cannot be set off against income under the head “Salaries”. the same can be set-off against income under the head „Salaries‟.Loss arising under the head capital gain cannot be setoff from income under any other head 2. 08/07/2009 122 . therefore. Note: Unabsorbed depreciation of past year(s) is carried forward u/s 32(2).Inter-Head Set-off [Section 71] Loss arising under one head of income can be set off against income under any other head. except in the following cases – 1.
Provisions relating to carry forward and setoff of losses Loss to Sec. race horses. Capital Gains 8 years from the end of the relevant A. Gains of Business or Business/Profession Profession‟. 73 74 74A Loss incurred in activity of Income from owning 4 years from the end owning and maintaining and maintaining race of the relevant A. of the relevant A.Y. except (including speculation speculation business loss. horses 08/07/2009 Index 123 . of years for carried Income against which which it can be the loss can be setoff carried forward Loss from house property Income from house 8 years from the end property of the relevant A.Y. speculation business be Losses under the head Capital gains.Y. Losses under „Profits & Profits of any 8 years from the end of the relevant A. forward 71B 72 No.Y.Y. business profits also) Income from 4 years from the end Losses in speculation business.
08/07/2009 124 .
“Agricultural Income” means:
1. Any rent or revenue derived from land which is situated in India and used for agricultural purposes [sec. 2(1A) (a)]. 2. Any income derived from such land by agricultural operations including processing of the agricultural produce, raised or received as rent-in-kind so as to render it fit for the market or sale of such produce [sec. 2(1A)(b)]. 3. Income attributable to a farm house subject to certain conditions. 4. With effect from the assessment year 2010-11, any income derived from saplings or seedlings grown in a nursery shall be deemed to be agricultural income.
Partially Agricultural & Partially Business Income [Rules 7, 7a, 7b And 8]
Growing and manufacturing tea in India
Sale of centrifuged latex or cenex or latex based creps (such as pale latex crepe) or brown crepes (such as estate brown crepe, remilled crepe, smoked blanket crepe or flat bark crepe) or technically specified block rubbers manufactured or processed from field latex or coagulum obtained from rubber plants grown by the seller in India Sale of coffee grow and cured by seller Sale of coffee grown, cured, roasted and grounded by seller in India with or without mixing chicory or other flavoring ingredients
BUSINESS INCOME 40% 35%
AGRICULTURAL INCOME 60% 65%
The Scheme of Partial Integration of Non-Agricultural Income with Agricultural Income
The scheme of partial integration of non-agricultural income with agricultural income is applicable if the following conditions are satisfied –
Condition 1 The taxpayer is an individual, a Hindu undivided family, a body of individual, an association of persons or an artificial juridical person. The taxpayer has non-agricultural income exceeding the amount of exemption limit [i.e., Rs. 1,80,000(in case a resident woman below 65 years), Rs. 2,25,000 (in case of a resident senior citizen 65 years or more) and Rs. 1,50,000 (in case of any other individual or every HUF for the assessment year 2010-11] The agricultural income of the taxpayer exceeds Rs. 5,000.
Add surcharge. so increased. The amount of income-tax determined at Step two will be reduced by the amount of income-tax determined under Step three. as if such income was the total income of the assessee. Find out the balance. The net agricultural income will then be increased by the amount of exemption limit and income-tax is calculated on net agricultural income. Agricultural & non-agricultural income of the assessee will then be aggregated & income-tax is calculated on the aggregate income. education cess & SHEC. The amount so arrived will be the total income-tax payable by the assessee.Contd… Income-tax will be computed for the assessment year 2010-11 in the following manner: Step 1 Step 2 Step 3 Net agricultural income is to be computed as if it were income chargeable to income-tax. Index Step 4 Step 5 Step 6 08/07/2009 128 .
08/07/2009 129 .
races. No deduction from certain (following) Incomes : Long term Capital Gains referred u/s 112. as referred to in section 115BB. However. etc. Incomes referred to in section 115A (1) (a). the aggregate amount of deductions cannot exceed the Gross Total Income. 115BBA and 115D. 115AD.Introduction Deductions to be made [Section 80A] : The total income of an assessee is to be computed after making deductions permissible u/s 80C to 80U. 130 08/07/2009 . Winnings from lotteries. 115ACA. 115AC. and Short Term Capital gains referred u/s 111A.
etc.. 08/07/2009 131 . [Section 80C] Deduction under this section is allowed as follows – Deduction is available only in respect of „specified sums‟ actually paid or deposited during the previous year (sum not actually paid and outstanding is not allowed) Specified sums must have been paid/deposited by an Individual or HUF.00. and The total amount of deduction under this section is subject to a maximum limit of Rs.1.000.Deduction for Payment of Life Insurance Premia.
• Quantum of Deduction: Deduction shall be allowed to the extent of lower of the following – – Amount so paid or deposited.Contribution To Certain Pension Funds [Section 80CCC] • Amount paid or deposited by individual in the previous year – – out of his income chargeable to tax – to effect or keep in force a contract for any annuity plan of LIC or any other insurer – for receiving pension from the fund referred to in section 10(23AAB). or – Rs.00. 1.000 08/07/2009 132 .
whichever is lower Sum contributed by the employer in assesse’s A/c or 10% of salary. and – Contribution made by Central Govt. • Quantum of Deduction: Deduction shall be allowed to the extent of aggregate of the following Sum paid/deposited by assessee to the credit of his a/c or 10% of salary. whichever is lower 08/07/2009 133 .Contribution to Pension Scheme of Central Government or any Other Employer [Sec. 80CCD] • Deduction in respect of: Deduction is available in respect of both of the following – – Sum deposited by assessee in his account in notified pension scheme. or any other employer to assesse‟s A/c.
exceed Rs.Aggregate Limit u/s 80C. 80CCC & 80CCD The aggregate amount of deductions under section 80C. in any case.1. section 80CCC and section 80CCD shall not.000. 08/07/2009 134 .00.
or – made by any other insurer and approved by Insurance Regulatory and Development Authority. 08/07/2009 135 . 15. 20.000 in case the insured is a senior citizen). 80D] • Deduction is available in respect of the amount paid to effect or to keep in force health insurance under a scheme – – made by General Insurance Corporation of India (GIC) and approved by Central Government. or – Rs. • Deduction shall be to the extent of lower of – – Health insurance premia paid in respect of health of any member of that HUF.Deduction In Respect Of Health Insurance Premia [Sec.000 (Rs.
08/07/2009 136 . irrespective of expenditure incurred or sum paid.Maintenance of A Dependant Being Person With Disability [Section 80DD] • Deduction is available in respect of – – expenditure incurred for medical / treatment / nursing / training/ rehabilitation. being a person with disability.000 in case of dependant suffering with severe disability). • Deduction shall be allowed to the extent of – – Rs. or – amount paid under scheme LIC / UTI other insurer approved by CBDT for maintenance. 75.000 (Rs. 50. of a “dependant”.
60.000 (Rs. 80DDB] • Deduction is available in respect of sum actually paid during previous year for medical treatment of prescribed disease or ailment for the following – – In case of individual: himself or his spouse. [Sec. • Deduction shall be available to the extent of lower of the following – – sum actually paid. etc.000 in case of a senior citizen). children.Deduction in respect of Medical Treatment. – dependant mainly on such individual or HUF for his support and maintenance. 08/07/2009 137 . or – Rs. – In case of HUF: its member(s). parents. brothers and sisters. 40.
by way of interest on loan taken – – for his higher education.Deduction in respect of Interest on Loan taken for Higher Education [Sec. or – for the higher education of his relative. • 100% of the amount of interest on such loan Deduction will be admissible. 08/07/2009 138 . out of his income chargeable to tax.80E] • Deduction in available in respect of sum paid by the assessee in the previous year.
– 100% deduction shall be allowed subject to the qualifying amount if donations are made for promoting family planning. – 50% deduction shall be allowed subject to the qualifying amount if donations are made towards any of the 5 specified purposes.Deduction in respect of Donations [Section 80G] • Deduction is allowed under this section to all assesses in respect of donations of sum of money in the following manner – – 100% deduction will be allowed if donations are given to any of the 19 specified funds. – 50% deduction will be allowed if donations made to any of the 5 specified funds. 08/07/2009 139 .
Deductions in respect of Rents Paid [Sec. 08/07/2009 140 . – 25% of adjusted total income. – Rent paid less 10% of adjusted Total Income.80GG] • Rent actually paid for any furnished or unfurnished residential accommodation occupied by the Individual. • The deduction shall be allowed to the extent of least of the following – – Rs. who is not in receipt of any House Rent Allowance (HRA).000 per month. 2.
50. Severe disability means 80% or more of disability. 75.Deduction in respect of person with Disability [Section 80U] • Eligible Assessee: Individual resident in India. who.000 (Rs. at any time during the previous year.000 for severe disability). is certified by the medical authority to be a person with disability • Deduction: Rs. 08/07/2009 141 .
80IB] 08/07/2009 142 .Other Deductions Deduction in respect of certain Donations for Scientific Research or Rural Development [Sec. 80 IA] Profits & Gains from Undertaking engaged in Development of SEZs [Sec. 80IAB] Profits & Gains from Industrial Undertaking engaged in other than in Infrastructure Development [Sec. 80GGB & 80GGC] Profits & Gains from Industrial Undertaking engaged in Infrastructure Development [Sec.80GGA] Deduction in respect of Contribution to Political Parties [Sec.
80JJAA] 08/07/2009 143 .80IC] Profits & Gains from business of Hotels & Convention Centre in Specified Areas [Sec. 80IE] Deduction available to assessee in the business of Collecting & Processing Bio-Degradable Waste [Sec. 80ID] Special provisions in respect of certain Undertakings in North-Eastern States [Sec.Contd… Deduction available to certain Undertakings in certain Special category States [Sec.80JJA] Deduction in respect of Employment of New Workmen [Sec.
etc.80LA] Deduction in respect of income of Co-operative Society [Sec.80QQB] Deduction in respect of Royalty Income of Patents [Sec.Contd… Deduction from incomes of Off-shore Banking Units & International Financial Services Centre [Sec. 80P] Deduction in respect of Royalty Income. of Author of certain Books other than Text Books [Sec. 80 RRB] Index 08/07/2009 144 .
08/07/2009 145 .
e. from completion of the previous year (advance tax) if tax payable is Rs.000 or more. 10. 5.Liability to pay Advance Tax Every person is liable to pay tax on income in advance i. However. if the tax payable is Rs.000 or more 08/07/2009 146 . from Assessment 2010-2011 liability to pay advance tax arises. All items of income are liable for payment of advance tax.
Due Dates Due Date Amount payble by Corporate Assessee Amount payble by Non-Corporate Assessee - On or before June 15 of Up to 15 percent of the previous year advance tax payable On or before September Up to 45 percent of Up to 30 percent of 15 of the previous year advance tax payable advance tax payable On or before December Up to 75 percent of Up to 60 percent of 15 of the previous year advance tax payable advance tax payable On or before March 15 Up to 100 percent of Up to 100 percent of of the previous year advance tax payable advance tax payable 08/07/2009 147 .
has accessed tax failed to pay such tax An assessee who has paid advance tax but the amount of advance tax paid by him is less than 90 percent of assessed tax. 234B] Under section 234B(1). 08/07/2009 From April 1 of the assessment year to the date of determination of income under section 143(1) or where regular assessment is made to the date of regular assessment Assessed tax Simple interest @ 1 From April 1 of the assessment minus percent for every year to the date of advance tax month or part of determination of income under month section 143(1) or where regular assessment is made to the date of regular assessment 148 .Default in payment of Advance Tax [Sec. interest is payable as follows: When interest is payable Interest is payable on Rate of interest Simple interest @ 1 percent for every month or part of month Period for which interest is payable An assessee who Interest is is liable to pay payable on advance tax.
Index 08/07/2009 149 . Simple Interest at the rate of 1% per month is payable for period 3 months for each installment due.Deferment of Advance Tax [Sec. 234C] Interest is payable under section 234C if an assessee has not paid advance tax or underestimated installments of advance tax.
08/07/2009 150 .
Where the assessee is person other than a company – a)In case where accounts of the assessee are required to be audited under any law b)Where the assessee is “working partner” in a firm whose accounts are required to be audited under any law c)In any other case Due Date for filing Return September 30 September 30 September 30 July 31 08/07/2009 151 . 139(1)] Different Situations 1.Time for filing Return of Income [Sec. Where the assessee is a company 2.
139D] Section 139D has been inserted from June 1. 08/07/2009 152 . certificates or audited reports which may not be furnished along with the return of income in electronic form but shall be produced before the Assessing Officer on demand. It provides that the Board may make rules providing for the class or classes of persons who shall be required to furnish the return of income in electronic form. the form and the manner in which the return of income in electronic form may be furnished.Filing of Return in Electronic Form [Sec. the documents. the computer resource or the electronic record to which the return of income in electronic form may be transmitted. 2006. statements. receipts.
furnish the return of any previous year at any time before the end of one year from the end of relevant assessment year.Filing of Return after Due Date [Sec. 139(4)] If the return is not furnished within the time allowed under section 139(1) or within the time allowed under section 142(1). 08/07/2009 153 . the person may (before the assessment is made).
80-IB.Consequences of Late Submission If return is submitted after the due date of submission of return of income. a few losses cannot be carried forward. – If return of loss is submitted after the due date.000 may be imposed u/s 271F if belated return is submitted after the end of assessment year. deduction under section 10A. These rules are applicable even if a belated return is submitted within the time-limit given above – – The assessee will be liable for penal interest u/s 234A. the following consequences will be applicable. 5. – If return is submitted belated. 80-IA. 08/07/2009 154 . 80IC. 80-ID and 80-IE will not be available. – A penalty of Rs. 10B.
Interest for defaults in furnishing Return of Income [Section 234A] If any person fails to furnish his return of income u/s 139 for any assessment year or furnishes such return after due date specified in section 139(1). he will liable to pay interest at the rate of 1% per month for the period beginning from the date immediately following the due date of furnishing return of income and ending on the Date of furnishing the return or completion of assessment. then. whichever is earlier. calculated on the amount of self-assessment tax payable. Index 08/07/2009 155 .