PROJECT REPORT ON

“Direct Tax Study & Overview”

Submitted in partial fulfillment of the requirements

For

B.Com LL.B.
VII Sem
(2018-2019)

By

ASHISH SINGH

Roll No.: 18

Under the Guidance of

Dr. Kamlesh Shukla

Dr.Shakuntla Misra national Rehabilitation University

Lucknow
 ACKNOWLEDGEMENT

I take this opportunity to express and record my thanks and gratitude to the entire
Faculty of Law of Semester VII of B.ComLL.B Course in the University. Further, I
also knowledge my sincere and special thanks and gratitude to my project Guide
Dr. Kamlesh Shukla, without whose continuous guidance and encouragement it
would not have been possible for me to completed this project work.

I express my thanks to all my colleagues, with whom I have had debates and
discussions on the on the subject, which also helped me to acquire better
understanding and clarity on the subject.
Indian Tax Guide:

An initiation to get general public aware about Income Tax In India and also help people to satisfy
their queries:

Archive for the ‘Heads of Income’ Category

Defination of Income:

August 12, 2008

In order to tax the income of a person the term itself is designed under the Income Tax Act. As per
the Act the term Income includes:

A. Profits and gains of Business or Profession: This includes income from carrying on a
business or income earned by doing any profession.
B. Dividend:
C. Profit in lieu of Salary, perqusite: This includes any amount received by an employee from
his employer other then the salary amount.
D. Allowances granted to the assesse to meet his expenses incurred for performance of his
duties: This includes allowances such as HRA, Medical allowance, etc given by an
employer to his employee.
E. Any capital gains: This means any profit dericed on sale of any capital asset.
F. Winning from lotteries, crossword puzzles, races, card game, T.V. Show , etc
G. Any sum received for fund created for welfare of employees.
One interesting thing in the definition of income is that it can be received in cash or in
kind. More over the Income Tax Act does not make distinction between legal source of
income or illegal source of income. This means that gambling, smugling income is also
chargeable to tax under the Income Tax act. More over gifts of personal nature for eg.
birthday/ marriage gifts are not treated as income (but there are some exceptions in this ).
In all ties one more thing is that the term income does not only means profits but there is a
concept of negative income also.
Heads of Income:
August 8, 2008
In the Income Tax any income earned by a person is broadly categorised into five heads of
income. Any income earned to be taxed must come under any of the five heads of income. The
five heads of income are:

1. Income under Head Salaries: This head taxes the income earned by an individual as
salary from any firm or organisation.
2. Income from House Property: This head taxes rental income received by any
person from way of renting of any immoveable property.
3. Profits and Gains of Business or Profession : This head of income broadly covers

income earned by a person as a result of some business or professional set-up by him.

4. Capital Gains: This head of income taxes the income earned on sale of any investment
in form of gold, precious ornaments, shares, etc or immoveable property.
5. Income from other Sources: This head of income covers any income which is not
chargeable to tax under any of the above heads of income. Any income including gambling
or profit/loss on running of race horses, camels, interest income , etc are chargeable to tax
under this head of income.

We will take each Head of Income one by one but first in the next post we will understand
meaning of the term “Income” itself:
OBJECTIVES:

After reading this lesson, you should be able to understand:

 Classification of income into various heads.

 Concept of salary income
 Incomes forming part of salary
 The computation of basic salary in grade system
 Types of commission an employee can get
 The concept of allowances
 Various income tax provisions for computing taxable value of allowances
 Computation of taxable value of allowances

Income tax in India

The Central Government has been empowered by Entry 82 of the Union List of Schedule VII of
the Constitution of India to levy tax on all income other than agricultural income (subject to
Section 10(1)). The Income Tax Law comprises The Income Tax Act 1961, Income Tax Rules
1962, Notifications and Circulars issued by Central Board of Direct Taxes (CBDT), Annual
Finance Acts and Judicial pronouncements by Supreme Court and High Courts. The government
of on taxable income of all persons including individuals, Hindu Undivided Families (HUFs),
companies, firms, association of persons, body of individuals, local authority and any other
artificial judicial person. Levy of tax is separate on each of the persons. The levy is governed by
the Indian Income Tax Act, 1961. The Indian Income Tax Department is governed by CBDT and
is part of the Department of Revenue under the Ministry of Finance, Govt. of India. Income tax is
a key source of funds that the government uses to fund its activities and serve the public. The
Income Tax Department is the biggest revenue mobilize for the Government. The total tax
revenues of the Central Government increased from ₹1392.26 billion (US$21 billion) in 1997-98
to ₹5889.09 billion (US$89 billion) in 2007-08.
Residential status, Scope of taxable income & Charge
Charge to income-tax
Whose income exceeds the maximum amount, which is not chargeable to the income tax, is an
assesses, and shall be chargeable to the income tax at the rate or rates prescribed under the finance
act for the relevant assessment year, shall be determined on basis of his residential status. Income
tax is a tax payable, at enacted by the Union Budget (Finance Act) for every Assessment Year, on
the Total Income earned in the Previous Year by every Person. The chargeability is based on nature
of income, i.e., whether it is revenue or capital. The rates of taxation of income are-:

Income Tax Rates/Slabs Rate (%) (Applicable for assessment year 2015-16.)

Net income range Net Net income range Net income range Income
(Individual resident income (For (For any other Tax
(Age below range (For super senior person rates3
60 Yrs.) or any NRI resident excluding
citizen2)
companies and co-
/ HUF / AOP / BOI senior
operative
/ AJP) citizen1) societies)

Up to ₹250,000 Up to Up to ₹500,000 Up to ₹200,000 NIL

₹300,000
₹250,001–500,000 ₹300,001– _ ₹200,001–500,000 10%
500,000
₹500,001–1,000,000 ₹500,001– ₹500,001– ₹500,001–1,000,000 20%
1,000,000 1,000,000
Above ₹1,000,000 Above Above ₹1,000,000 Above ₹1,000,000 30%
₹1,000,000

A. Senior citizen is one who is 60 years or more at any time during the previous year but not
more than 80 years on the last day of the previous year.
B. Super senior citizen is one who is 80 years or more at any time during the previous year.
C. These slab-rates aren't applicable for the incomes which are to be taxed at special rates
under section 111A, 112, 115, 161, 164 and 167. For instance, long-term capital gains
 (except the one mentioned in section 10(38))for all assesses is taxable at 20%. For
individual assesses whose total income does not exceed ₹500,000 after providing for any
deduction under Chapter VI A are eligible for a rebate of up to ₹2,000 under section 87A
(applicable from assessment year 2014-15 onwards). A surcharge of 10% on income tax
payable is applicable for every non-corporate assesses, whose total income exceeds ₹10
million (applicable for assessment year 2014-15).

About 1% of the national population, called the upper class, fall under the 30% slab. It grew 22%
annually on average during 2000-10 to 0.58 million income taxpayers. The middle class, who fall
under the 10% and 20% slabs, grew 7% annually on average to 2.78 million income taxpayers.

Residential status
Residential status of a person other than an individual:

Type of person Control & Control & Control &

management of affairs management of affairs management of affairs
of of the of the taxpayer
the taxpayer is wholly taxpayer is wholly is partly in India
in India outside India partly outside India

HUF Resident Non-resident Resident

Firm Resident Non-resident Resident

Association of Resident Non-resident Resident

Persons

Indian company Resident Resident Resident

Foreign company Resident Non-resident Non-resident

Any other person Resident Non-resident Resident

except an individual
 1. HUF is resident or non-resident, the additional conditions (as laid down for an individual)
should be checked for the karta to determine whether the HUF is ordinary or not-ordinary
resident.
2. An Indian company is the one which satisfies the conditions as laid down under section
2(26) of the Act.
3. Foreign company is the one which satisfies the conditions as laid down under section
2(23A) of the Act.

Scope of total income:

Indian income is always taxable in India not withstanding residential status of the taxpayer.

Foreign income is not taxable in the hands of a non-resident in India. For resident (in case of firm,
association of persons, company and every other person) or resident & ordinarily resident (in case
of an individual or an HUF), foreign income is always taxable. For resident but not ordinarily
resident foreign income is taxable only if it is business income and business is controlled wholly
or partly in India or it is a professional income and profession is set up in India.

A. Foreign income is the one which satisfies both the following conditions:-
 Income is not received (or not deemed to be received under section 7) in India, and
 Income doesn't accrue (or doesn't deemed to be accrued under section 9) in India.
If such an income satisfies one or none the above conditions then it is an Indian income.

Heads of income:
The total income of a person is segregated into five heads:-
 Income from salaries
 Income from house property
 Profits and gains of business or profession
 Capital gains and
 Income from other sources
Income from salaries:
All income received as salary under employer-employee relationship is taxed under this head, on
due or receipt basis, whichever arises earlier. Employers must withhold tax compulsorily (subject
to Section 192), if income exceeds minimum exemption limit, as Tax Deducted at Source (TDS),
and provide their employees with a Form 16 which shows the tax deductions and net paid income.
The Act contains exemptions including (the list isn't exhaustive):-

Particulars Relevant section for computing exemption

Leave travel concession 10(5)
Death-cum-Retirement Gratuity 10(10)
Commuted value of Pension (not taxable for 10(10A)
specified Government employees)
Leave encashment 10(10AA)
Retrenchment Compensation 10(10B)
Compensation received at time of Voluntary 10(10C)
Retirement
Tax on perquisite paid by employer 10(10CC)
Amount received from Superannuation 10(13)
Fund to legal heirs of employee
House Rent Allowance 10(13A)
Some Special Allowances 10(14)

The Act contains list of perquisites which are always taxable in all cases and a list of perquisites
which are exempt in all cases (List I). All other perquisites are to be calculated according to
specified provision and rules for each. Only two deductions are allowed under Section 16, viz.
Professional Tax and Entertainment Allowance (the latter only available for specified government
employees).

Computation of exemption for gratuity [Section 10(10)]

In case of Government employee it is fully exempt from tax.
In case of non-government employee covered by Payment of Gratuity Act, 1972 it is exempt
from tax up to the least of the following:-
 15 days' salary for each year of service or part thereof exceeding six months(i.e.,
15/26*last drawn salary*completed year of service or part thereof exceeding 6
months), or
 ₹ 1 million, or
 Gratuity actually received
In case of non-government employee not covered by Payment of Gratuity Act, 1972 it is
exempt from tax up to the least of the following:-
 ₹ 1 million, and
 Half month's salary for each completed year of service(i.e.,15/30*Average
salary*completed year of service), or
 Gratuity actually received
Average salary for above purpose is average salary drawn during 10 months immediately
preceding the month in which the employee retired or ceased to exist.

Computation of exemption of House Rent Allowance(HRA) [Section 10(13A)]

The least of the following is exempt:-
 Allowance actually received
 40 per cent of salary (50 per cent in case of Bombay/Calcutta/Delhi/Madras)
 Rent paid in excess of 10% of salary
Salary for this purpose means basic plus dearness allowance (if terms of employment so
provide) plus fixed percent commission on turnover.

Computation of exemption for pension [Section 10(10A)]

Uncommuted pension is taxable in all cases. Commuted pension is exempt for specified
Government employees. In any other case, commuted pension is exempt to the extent given
below:-
1/3 of normal pension is exempt if the employee is in receipt of gratuity 1/2
of normal pension is exempt if the employee is not in receipt of gratuity

Computation of exemption for Leave encashment [Section 10(10AA)]

It is fully exempt in case of specified Government employees
In other case, it is exempt from tax to the extent of least of the following:-
 Amount actually received at the time of retirement
 ₹ 300,000
 10 months average salary
 Cash equivalent of leave salary in respect of the period of earned leave at the credit
of the employee at the time of retirement, but it cannot exceed 30 days of average
salary for
every completed year of service
Average salary for the above purpose means average salary drawn during 10 months
immediately preceding retirement

Computation of exemption for Retrenchment compensation [Section 10(10B)]

It is exempt to the extent of least of the following:-
 ₹ 500,000, or
 Amount calculated under section 25F(b) of the Industrial Disputes Act
 Computation of exemption for Voluntary Retirement Scheme [Section 10(10C)]
Least of the following three amounts is exempt in case of approved/recognized scheme:-
 Actual received
 Rs500,000,
 Last drawn salary*3*Completed years of service, or, last drawn salary*remaining
months of service; whichever is lower

Computation of deduction for Entertainment Allowance [Section 16 (ii)] and Professional Tax
[Section 16 (iii)]
Section 16(ii) a deduction in respect of any allowance in the nature of an entertainment
allowance specifically granted by an employer to the assessee is in receipt of a salary from
the Government, a sum equal to one-fifth of his salary (exclusive of any allowance, benefit or
other perquisite) or five thousand rupees, whichever is less.
Section 16 (iii) a deduction of any sum paid by the assessee on account of a tax on
employment within the meaning of clause (2) of article 276 of the Constitution, leviable by
or under any law.
 Professional tax is allowed as a deduction to all the employees.
 It is allowed as a deduction when actually paid.
Income from house property:

Income under this head is taxable if the assessee is the owner of a property consisting of building
or land appurtenant thereto and is not used by him for his business or professional purpose. An
individual or an Hindu Undivided Family (HUF) is eligible to claim any one property as Self-
occupied if it is used for own or family's residential purpose. In that case, the Net Annual Value (as
explained below) will be nil. Such a benefit can only be claimed for one house property. However,
the individual (or HUF) will still be entitled to claim Interest on borrowed capital as deduction
under section 24, subject to some conditions. In the case of a self occupied house deduction on
account of interest on borrowed capital is subject to a maximum limit of ₹150,000 (if loan is taken
on or after 1 April 1999 and construction is completed within 3 years) and ₹30,000 (if the loan is
taken before 1 April 1999). For let-out property, all interest is deductible, with no upper limits.
The balance is added to taxable income.

The computation of income from let-out property is as under:-

Gross annual value (GAV) xxxx

Less: Municipal Taxes paid (xxxx)
Net Annual value (NAV) xxxx
Less: Deductions under section 24 (xxxx)
Income from House property xxxx
1) The GAV is higher of Annual Letting Value (ALV) and Actual rent received/receivable
during the year. The ALV is higher of fair rent and municipal value, but restricted to
standard rent fixed by Rent Control Act.
2) Only two deductions are allowed under this head by virtue of section 24, viz.,
 30% of Net annual value as Standard deduction
 Interest on capital borrowed for the purpose of acquisition, construction, repairs, renewals
or reconstruction of property (subject to certain provisions).
Profits and Gains of business or profession:
The income referred to in section 28, i.e., the incomes chargeable as "Income from Business or
Profession" shall be computed in accordance with the provisions contained in sections 30 to 43D.
However, there are few more sections under this Chapter, viz., Sections 44 to 44DA (except
sections 44AA, 44AB & 44C), which contain the computation completely within itself. Section
44C is a disallowance provision in the case non-residents. Section44AA deals with maintenance of
books and section 44AB deals with audit of accounts.

In summary, the sections relating to computation of business income can be grouped as under: -
Specific Sections 30 to 37 cover expenses which are expressly allowed as
deductions deduction while computing business income.
Specific Sections 40, 40A and 43B cover inadmissible expenses.
disallowance
Deemed Incomes Sections 33AB, 33ABA, 33AC, 35A, 35ABB, 41.
Special provisions Sections 42, 43C, 43D, 44, 44A, 44B, 44BB, 44BBA, 44BBB, 44DA,
44DB.
Presumptive Sections 44AD, 44AE 55.
Income

The computation of income under the head "Profits and Gains of Business or Profession"
depends on the particulars and information available.
If regular books of accounts are not maintained, then the computation would be as under: -
Income (including deemed income) chargeable as income xxx
under this head
Less: Expenses deductible (net of disallowances) under this (xx)
head
However, if regular books of accounts have been maintained and profit and loss account has
been prepared, then the computation would be as under: -

Net Profit as per profit and loss account xxx

Add : Inadmissible expenses debited to profit and loss account xx
Add: Deemed incomes not credited to profit and loss account xx
Less: Deductible expenses not debited to profit and loss account (xx)
Less: Incomes chargeable under other heads credited to Profit & Loss A/c (xx)
Income from capital gains:
Transfer of capital assets results in capital gains. A Capital asset is defined under section 2(14) of
the I.T. Act, 1961 as property of any kind held by an assesses such as real estate, equity shares,
bonds, jewellery, paintings, art etc. but does not include some items like any stock-in-trade for
businesses and personal effects. Transfer has been defined under section 2(47) to include sale,
exchange, relinquishment of asset extinguishment of rights in an asset, etc. Certain transactions are
not regarded as 'Transfer' under section 47. Computation of Capital Gains:-

Full value of consideration xxx

Less: Cost of acquisition (xx)
Less: Cost of improvement (xx)
Less: Expenditure pertaining to transfer incurred by the transferor (xx)

1) In case of transfer of land or building, if sale consideration is less than the stamp duty
valuation, then such stamp duty value shall be taken as full value of consideration by virtue
of Section 50C. The transferor is entitled to challenge the stamp duty valuation before the
Assessing Officer.
2) Cost of acquisition & cost of improvement shall be indexed in case the capital asset is long
term.

For tax purposes, there are two types of capital assets: Long term and short term. Transfer of long
term assets gives rise to long term capital gains. The benefit of indexation is available only for
long term capital assets. If the period of holding is more than 36 months, the capital asset is long
term, otherwise it is short term. However, in the below mentioned cases, the capital asset held for
more than 12 months will be treated as long term:-

 Any share in any company

 Government securities
 Listed debentures
 Units of UTI or mutual fund, and
 Zero-coupon bond
Also, in certain cases, indexation benefit is not be available even though the capital asset is long
term. Such cases include depreciable asset (Section 50), Slump Sale (Section 50B),
Bonds/debentures (other than capital indexed bonds) and certain other express provisions in the
Act. There are different scheme of taxation of long term capital gains. These are:

1. As per Section 10(38) of Income Tax Act, 1961 long term capital gains on shares or securities or
mutual funds on which Securities Transaction Tax (STT) has been deducted and paid, no tax is
payable. STT has been applied on all stock market transactions since October 2004 but does not
apply to off-market transactions and company buybacks; therefore, the higher capital gains taxes
will apply to such transactions where STT is not paid.

2. In case of other shares and securities, person has an option to either index costs to inflation and
pay 20% of indexed gains, or pay 10% of non indexed gains. The cost inflation index rates are
released by the I-T department each year.

3. In case of all other long term capital gains, indexation benefit is available and tax rate is 20%.

All capital gains that are not long term are short term capital gains, which are taxed as such:
 Under section 111A, for shares or mutual funds where STT is paid, tax rate is 10% from
Assessment Year (AY) 2005-06 as per Finance Act 2004. With effect from AY 2009-10 the
tax rate is 15%.
 In all other cases, it is part of gross total income and normal tax rate is applicable.

For companies abroad, the tax liability is 20% of such gains suitably indexed (since STT is not
paid). Besides exemptions under section 10(33), 10(37) & 10(38) certain specific exemptions are
available under section 54, 54B, 54D, 54EC (http://topcafirms.com/index.php/whitepaper/ 4376-
capital-gains-exemption-us-54ec-of-income-tax-act-1961), 54F, 54G & 54GA.

Section Secti Secti Sectio Section Section 54G Section Sectio

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54 54F 54GA
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Income from other sources:

This is a residual head, under this head income which does not meet criteria to go to other heads is
taxed. There are also some specific incomes which are to be always taxed under this head .
1. Income by way of Dividends.
2. Income from horse races/lotteries.
3. Employees' contribution towards staff welfare scheme/ provident fund/ superannuation fund or
any fund set up under the provisions of ESIC Act, received from the employees by the employer.
4. Interest on securities (debentures, Government securities and bonds).
5. Any amount received from keyman insurance policy including the sum allocated by way of
bonus on such policy.
6.Gifts(subject to certain condition and exemptions)
(http://www.indiantaxupdates.com/2012/10/21/tax-on-gift-received-cash-or-non-cash/).
7. Interest on compensation/enhanced compensation.
8. Income from renting of other than house property.
9. Family pension received by family members after the death of the pensioner.
10. Income by way of interest on other than securities.
Agricultural income:
Agricultural income is exempt from tax by virtue of section 10(1). Section 2(1A) defines
agricultural income as:-
 Any rent or revenue derived from land, which is situated in India and is used for
agricultural purposes.
 Any income derived from such land by agricultural operations including processing of
agricultural produce, raised or received as rent-in-kind so as to render it fit for the market
or sale of such produce.
 Income attributable to a farm house (subject to some conditions).
 Income derived from saplings or seedlings grown in a nursery.

Income partly agricultural and partly business activities:

Income in respect of the below mentioned activities is initially computed as if it is business
income and after considering permissible deductions. Thereafter, 40,35 or 25 percent of the
income as the case may be, is treated as business income, and the rest is treated as agricultural
income.

Income Business Agricultural

income Income
Growing & manufacturing tea in India 40% 60%
Sale of latex or cenex or latex based crepes or brown crepes 35% 65%
manufactured from field latex or coalgum obtained from rubber
plants grown
by a seller in India
Sale of coffee grown & cured by seller in India 25% 75%
Sale of coffee grown, cured, roasted & grounded by seller in 40% 60%
India

 For apportionment of a composite business-cum-agricultural income, other than the above-

mentioned, the market value of any agricultural produce, raised by the assesses or received
by him as rent-in-kind and utilized as raw material in his business, should be deducted. No
further deduction is permissible in respect of any expenditure incurred by the assesses as a
cultivator or receiver of rent-in-kind .
 Permissible deductions from Gross Total Income:
Deductions allowed under Chapter VI-A i.e., sections 80C to 80U, cannot exceed gross total
income of an assesses excluding short term capital gains under section 111A and any long term
capital gains. Some deductions under sections 80C to 80DDB are listed below.

Section 80C deductions:

Deduction under this section is available only to an individual or an HUF.
Section 80C of the Income Tax Act allows certain investments and expenditure to be deducted
from total income up to the maximum of Rs 1,50,000 from the Financial Year 2014-15.

Section 80CCC (pension):

Contribution made by the assesses and by employer to New Pension Scheme is admissible for
deduction under this section. The assesses should be an individual who is employed on or after 1
January 2004. The deduction shall be equal to the amount contributed by the assesses and/or by
the employer, not exceeding 10% of his salary (basic dearness allowance). Even a self-employed
person can claim this deduction which will be restricted to 10% of gross total income.

The total deduction available to an assesses under sections 80C, 80CCC & 80CCD is restricted to
150,000 per annum. However, employer's contribution to Notified Pension Scheme under section
80CCD is not a part of the limit of 150,000.

Sec 80D:
(1) In computing the total income of an assesses, being an individual or a Hindu undivided family,
there shall be deducted such sum, as specified in sub-section (2) or sub-section
(3), payment of which is made by any mode 95[as specified in sub-section (2B),] in the previous
year out of his income chargeable to tax.

(2) Where the assesses is an individual, the sum referred to in sub-section (1) shall be the
aggregate of the following, namely:- (a) the whole of the amount paid to effect or to keep in force
an insurance on the health of the assesses or his family 96[or any contribution made to the Central
Government Health Scheme] 96a[or such other scheme as may be notified by the Central
Government in this behalf] 97[or any payment made on account of preventive health check-up of
the assesses or his family]as does not exceed in the aggregate fifteen thousand rupees; and (b) the
whole of the amount paid to effect or to keep in force an insurance on the health of the parent or
parents of the assesses 97[or any payment made on account of preventive health check-up of the
parent or parents of the assesses]as does not exceed in the aggregate fifteen thousand rupees.

(3) Where the assessee is a Hindu undivided family, the sum referred to in sub-section (1) shall be
the whole of the amount paid to effect or to keep in force an insurance on the health of any
member of that Hindu undivided family as does not exceed in the aggregate fifteen thousand
rupees.

(4) Where the sum specified in clause (a) or clause (b) of sub-section (2) or in sub-section (3) is
paid to effect or keep in force an insurance on the health of any person specified therein, and who
is a senior citizen, the provisions of this section shall have effect as if for the words "fifteen
thousand rupees", the words "twenty thousand rupees" had been substituted. Explanation:-For the
purposes of this sub-section, "senior citizen" means an individual resident in India who is of the
age of 60[sixty years] or more at any time during the relevant previous year.

(5) The insurance referred to in this section shall be in accordance with a scheme99 made in this
behalf by— (a) the General Insurance Corporation of India formed under section 9 of the General
Insurance Business (Nationalization) Act, 1972 (57 of 1972) and approved by the Central
Government in this behalf; or (b) any other insurer and approved by the Insurance Regulatory and
Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory
and Development Authority Act, 1999 (41 of 1999).

Amount of Deduction U/Sec 80D

HUF Individual
On whose health insurance Any Individual Parents whether Total
policy can be taken member himself, spouse, dependent or not
Dependent
children
General deduction 15000 15000 15000 30000
Additional deduction if 5000 5000 5000 10000
insured is a senior citizen
Total 20000 20000 20000 40000

Deduction under Section 80D (http://caknowledge.in/deduction-for-medical-insurance-premium-

usec-80d/) is also available in respect of contribution to Central Government Health Scheme.
However this deduction is not available to HUF. Deduction is available to an individual and only
in respect of health insurance policy taken for Individual himself, spouse and dependent children.
If an individual takes an insurance policy on health of Parents whether dependent or not, deduction
under this Section will not be available.

Deduction under this section within the existing limit, in respect of any payment or contribution
made by the assesses to such other health scheme as may be notified by the Central Government.

Section 80DDB: Deduction in respect of medical treatment, etc:

Deduction is allowed to resident individual or HUF(Hindu Undivided Family ) in respect of
expenditure actually during the PY incurred for the medical treatment of specified disease or
ailment as specified in the rules 11DD for himself or a dependent relative or a member of a HUF.

Section 80E: Education loan interest:

Interest payment on education loan for education in India gets deduction under this section.
Education loan should be for self, spouse, child or the whose legal guardian the assesses is.

Financial institute must be gazette company by the Central Government of India.

Section 80TTA: Interest on Savings Account:

Up to Rs 10,000 earned as interest from savings account in bank, post office or a co-operative
society can be claimed for deduction under this section. This rebate is applicable for individuals
and HUFs.
Section 80U: Disability:
Disabled persons can get a flat deduction on Income Tax on producing their disability certificate.
If disability is severe Rs 1,00,000 can be claimed else Rs 50,000.server here mean disability 80%
or more as per this section.

Section 24: Interest on housing loans:

80CCF and 80D. However, this is only applicable for a residence constructed within three
financial years after the loan is taken and also the loan if taken after 1 April 1999.

If the house is not occupied due to employment, the house will be considered self occupied.

For let out properties, the entire interest paid is deductible under section 24 of the Income Tax act.
However, the rent is to be shown as income from such properties. 30% of rent received and
municipal taxes paid are available for deduction of tax.

P. Chidambaram while announcing his Budget 2013 speech on 28 Feb 2013 also announced that
for the year 2013-14, an additional deduction of ₹ 100,000 would be allowed to be deducted for
the payment of Interest on Home Loan u/s 80EE.[11] This deduction would be allowed provided
that the total value of the loan is not more than ₹ 25,00,000 and the total value of the house is not
more than ₹ 40,00,000 and the loan should be a fresh loan taken during the financial year 2013-
14. This deduction would be over and above the ₹ 150,000 deduction.

The losses from all properties shall be allowed to be adjusted against salary income at the source
itself. Therefore, refund claims of T.D.S. deducted in excess, on this count, will no more be
necessary.
Due date of submission of return:
The due date of submission of return shall be ascertained according to section 139(1) of the Act
as under:-
30 September of the Assessment
Year(AY)
30 November of the AY
31 July of the AY
If the assesses is a company (not having any inter-
nation transaction), or
If the assesses is any person other than a company
whose books of accounts are required to be audited
under any law, or
If the assesses is a working partner in a firm whose
books of accounts are required to be audited under
any law.
If the assesses is a company and it is required to furnish
report under section 92E pertaining to international
transactions.
In any other case.

If the Income of a Salaried Individual is less than ₹ 500,000 and he has earned income through
salary or Interest or both, such Individuals are exempted from filing their Income Tax return
provided that such payment has been received after the deduction of TDS and this person has not
earned interest more than ₹ 10,000 from all source combined. Such a person should not have
changed jobs in the financial year.

CBDT has announced that all individual/HUF taxpayers with income more than ₹ 500,000 are
required to file their income tax returns online. However, digital signatures won't be mandatory for
such class of taxpayers.

Advance tax:
Under this scheme, every assessee is required to pay tax in a particular financial year, preceding
the assessment year, on an estimated basis. However, if such estimated tax liability for an
individual who is not above 60 years of age at any point of time during the previous year and does
not conduct any business in the previous year, and the estimated tax liability is below ₹ 10,000,
advance tax will not be payable. The due dates of payment of advance tax are:-
References:
1. Institute of Chartered Accountants of India (2011). Taxation. ISBN 978-81-8441-290-1.

2."Growth of Income Tax revenue in India"

(http://shodhganga.inflibnet.ac.in/bitstream/10603/2876/12/12_chapter%205.pdf) (PDF).
Retrieved 16 November 2012.

3. http://www.thetaxinfo.com/2013/12/income-tax-rebate-of-2000-calculation-sec-87a/

4.The Indian upper class grew rapidly during the Noughts

(http://www.financialexpress.com/news/evasion-of-personal-tax-dips-to-59-of-mopup/1096336)

5. Business Income (http://www.v-krishnan-and-company.com/business_income.html)

6. 80C limit Increased from 1,00,000 to 1,50,000 (http://www.thetaxinfo.com/2014/12/80c-tax-

deductions/)

7. The institute of Cost accountants of India (Jan 2012). Applied direct taxation. Directorate of
Studies,The Institute of Cost accountants of India. p. 238.

8. http://www.tax.fintotal.com/Sections/80E-Tax-Rebate/5913/68

9. http://www.tax.fintotal.com/Sections/80TTA-Tax-Rebate/6212/68

10. http://www.tax.fintotal.com/Sections/80U-Tax-Rebate/5916/68

11. http://www.thetaxinfo.com/2014/01/additional-deduction-on-interest-on-housing-loan/

12.http://www.incometaxindia.gov.in/publications/1_Compute_Your_Salary_Income/2_Income_
from_house_property.asp
13. http://www.caclubindia.com/articles/e-filing-is-mandatory-income-is-more-than-5-lacs-
17646.asp

14. Income Tax rates Companies (http://businesssetup.in/blog/view/Income-Tax-rates-for-

Companies)

15. Finance Act 2010