Professional Documents
Culture Documents
Income Under
Various Heads
INDEX
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. Clubbing of Income
Prepared By: Ajit S. Deshpande
Contd…
10.Set-off Carry Forward
11.Deductions from Gross Total Income
12.Agricultural Income
13. Advance Tax
14.Assessment Procedures
Resident(R)
Non-Resident (NR)
Additional
Assessee Basic Condition
Condition
He must satisfy at one of
Resident Not required.
the basic conditions.
He must satisfy either
He must satisfy at least
Not Ordinarily one or both the
one of the basic
Resident additional conditions
conditions.
given u/s 6(6).
INCOME INCOME
TAX RATE
(A.Y. 2009-10) (A.Y. 2010-11)
Up to 225000 Up to 240000 NIL
Next 75000 Next 60000 10%
Next 200000 Next 200000 20%
Status of Employee
Whichever is lower.
Status of Employee
lly exempt
tax under Least of following is exempt: Least of following is exempt:
10(10)(i) 1)“15 days’ salary” x “Length 1)“½ month avg. salary” x
of service” “Length of service”
2)Rs. 3, 50, 000 2)Rs. 3, 50, 000
3)Gratuity actually received. 3)Gratuity actually received.
PENSION
COMMUTED UNCOMMUTED
Government Non-Government
Taxable
Employee Employee
well as
e
If Gratuity Received If Gratuity not Received
ommuted Pension
mpt whether or not 1/3 of commuted 1/2 of commuted
tuity received. pension is exempt pension is exempt
Prepared By: Ajit S. Deshpande
Contd…
3.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. An annuity
received from an ex-employer is taxed as profit in lieu of
salary.
LEAVE ENCASHMENT
Index
Prepared By: Ajit S. Deshpande
Prepared By: Ajit S. Deshpande
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. It is the amount for which
the property might reasonably be expected to let
from year to year.
or
such property cannot actually be occupied by the
owner by reason of the fact that owing to his
employment, business or profession carried on at
any other place, he has to reside at that other place
in a building not belonging to him.
Prepared By: Ajit S. Deshpande
Contd…
MAXIMUM
CASE DEDUCTION
On the first Rs. 1,00,000 of the book profit or in Rs. 50,000 or at the rate of 90 percent of the book
case of a loss profit, whichever is more
On the next Rs. 1,00,000 of the book profit At the rate of 60 percent
On the next Rs. 75,000 of the book profit At the rate of 60 percent
Index
Index
Prepared By: Ajit S. Deshpande
Prepared By: Ajit S. Deshpande
General [Section 56(1)]
Index
Prepared By: Ajit S. Deshpande
Prepared By: Ajit S. Deshpande
Cases where Clubbing Applies
1. Transfer of income without transfer of asset [Sec.
60] :– The income from the asset would be taxable in
the hands of the transferor.
2. Revocable transfer of assets :- Income from such
asset is taxable in the hands of the transferor.
3. An individual is assessable in respect of remuneration
of spouse [Sec. 64(1)(ii)] :- 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.
Index
Prepared By: Ajit S. Deshpande
Prepared By: Ajit S. Deshpande
Process of Set-off & Carry Forward
The process of setting off of losses and their carry forward may be
covered in the following steps:
Carry forward of loss. Step 3 is applied only if a loss cannot be set off
Step 3
under Steps 1 and 2.
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
Step 2 [except income under the head “Salaries”] for the same assessment year.
Loss from business of owning and Income from business of owning and
maintaining race horse maintaining race horse
Loss from lottery, card games, gambling Income from lottery, card games, gambling
betting etc. betting etc.
71B Loss from house property Income from house property 8 years from the end of the
relevant A.Y.
72 Losses under ‘Profits & Gains of Profits of any 8 years from the end of the
Business or Profession’, except Business/Profession relevant A.Y.
speculation business loss. (including speculation
business profits also)
73 Losses in speculation business. Income from speculation 4 years from the end of the
business relevant A.Y.
74 Losses under the head Capital Capital Gains 8 years from the end of the
gains. relevant A.Y.
74A Loss incurred in activity of Income from owning and 4 years from the end of the
owning and maintaining race maintaining race horses relevant A.Y.
horses.
Index
Prepared By: Ajit S. Deshpande
Prepared By: Ajit S. Deshpande
Meaning
“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 2009-10, any income
derived from saplings or seedlings grown in a nursery shall be
deemed to be agricultural income.
Step 2 Agricultural & non-agricultural income of the assessee will then be aggregated & income-tax is
calculated on the aggregate income.
Step 3 The net agricultural income will then be increased by the amount of exemption limit and income-
tax is calculated on net agricultural income, so increased, as if such income was the total income
of the assessee.
Step 4 The amount of income-tax determined at Step two will be reduced by the amount of income-tax
determined under Step three.
Step 5 Find out the balance. Add surcharge; education cess & SHEC.
Step 6 The amount so arrived will be the total income-tax payable by the assessee.
Index
Prepared By: Ajit S. Deshpande
Prepared By: Ajit S. Deshpande
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. However,
the aggregate amount of deductions cannot exceed the
Gross Total Income.
No deduction from certain (following) Incomes :
Long term Capital Gains referred u/s 112, and Short Term Capital
gains referred u/s 111A.
Winnings from lotteries, races, etc. as referred to in section 115BB.
Incomes referred to in section 115A (1) (a), 115AC, 115ACA,
115AD, 115BBA and 115D.
Index
An assessee who Assessed tax Simple interest @ 1 From April 1 of the assessment
has paid advance minus advance percent for every year to the date of determination of
tax but the amount tax month or part of income under section 143(1) or
of advance tax paid month where regular assessment is made
by him is less than to the date of regular assessment
90 percent of
assessed tax.
Index
Index