m


  
 m

 m
 
 
 
 
 m  
 m    
! m  " #  
$ % & 
' m  () 
* %++ , m 

 p  p
 Contd«
-. %/ 0



  &  m 
1, m 
 1
2
1 


 p  3

 p  O
 %), m 

 mncome tax is charged in assessment year at rates

specified by the Finance Act applicable on 1st April of
the relevant assessment year.
 mt is charged on the total income of every person for
the previous year.
 Total mncome is to be computed as per the provisions
of the Act.
 mncome tax is to be deducted at
source or paid in advance wherever
required under the provision of the
Act.

 p  5
 mmportant Definitions
„
 
„ 
i. An mndividual,
ii. Hindu Undivided Family (HUF),
iii. A Company,
iv. A Firm,
v. An Association of Persons (AOP) or Body of
mndividuals (BOm),
vi. A Local Authority,
vii. Every other Artificial Juridical Person

 p  6
Contd«

  

  the period of 1p
months commencing on the 1st April every year. mt is
the year (just after previous year) in which income is
earned is charged to tax. The current Assessment is
p p 1 .

   
  the year in
which income is earned.

 p  
Contd«
   
   : The aggregate
income under the 5 heads of income (viz. Salary,
House Property, Business or Profession, Capital
Gains & Other Sources) is termed as ³Gross Total
mncome´.
  
  : Total mncome of assessee is
gross total income as reduced by the amount
permissible as deduction under sections
C to

U.

m


 p 


 p  
 Types of Residential Status

The different types of residential status are:


34

(
 
3 (4

.
3 4

 p  1
 Residential Status of mndividual
The residential status of individual will be determined as under

1 " % 
  1

 % 
 

 



   
 

R
     



 



     
 



  
  

 R
     
  


 



  


  
 

R
     



 p  11
 Contd«
Basic Conditions us 6(1):
i. He must be in mndia for a period of 1
p days or more during
the previous year; or
ii. He must be in mndia for a period of 6 days or more during the
previous year and 365 days or more during the four years
immediately preceding the previous year.
Additional Conditions us 6(6):
i. He must be a nonresident in mndia in nine out of the ten
previous years preceding that year; or
ii. He must be in mndia during  preceding
previous years for aggregate period of
p days or less.

 p  1p
 Residential Status of HUF
The residential status of HUF depends upon the control and
management of its affairs.
± Resident HUF: mf the control and management of the affairs of
HUF is situated wholly or partly in mndia then HUF is said to be
Resident in mndia.
± Non Resident HUF: mf the control and management of the
affairs of HUF is situated wholly outside mndia then HUF is said
to be Non Resident in mndia.
± Not Ordinarily Resident HUF: A resident HUF is said to be µNot
Ordinarily Resident¶ in mndia if Karta or manager
thereof, satisfies any of the additional
conditions us 6(6).

 p  13
 Residential Status
According to section 6(3) an mndian Company is always
Resident in mndia. A foreign Company will be resident in mndia
if Control or Management of its affairs is wholly situated in
mndia.
Residential Status of a firm or AOP or other person depends
upon control and management of its affairs.
 Resident: mf the control and management of the affairs of a firm or
AOP or other person is situated wholly or partly in mndia then such
a firm or AOP or other person is said to be resident in mndia.
 NonResident: mf the control and
management of the affairs of a firm or AOP or
other person is situated outside mndia then
such a firm or AOP or other person is said to
be nonresident in mndia.

 p  1O
 mncidence of Tax
 ! 
r  

R R R

!    !  






"
"
"

!      !  






"
"
"

!   
! "
"
"

!      
! "
"
"

! #   
 

 ! "
 

m


 p  15

 p  16
 1(/m %(51316--*.-4

1. mn case of every mndividual HUF AOPBOm artificial juridical Person.

m %(5 m %(5 11

316 --*.
--*.-4 316 ---.
---.4

7  ---- 7  !---- m8

 ----  ---- -9

----- ----- -9

1+ 2 ----- 1+ 2 ----- -9

 p  1
Contd«
p. mn case of resident women below 65 years of age.

m %(5 m %(5 11

316 --*.
--*.-4 316 --.
--.4

7  '---- 7  *---- m8

 ----  ---- -9

----- ----- -9

1+ 2 ----- 1+ 2 ----- -9

 p  1

Contd«
3. mn case of resident senior citizen i.e. age of 65 years or above

m %(5 m %(5 11

316 --*.
--*.-4 316 --.
--.4

7  --- 7  ---- m8

 $---  !---- -9

----- ----- -9

1+ 2 ----- 1+ 2 ----- -9

 p  1
Contd«
(  11

/m5 -9

(5m%%(51 6 -9

/(m& %(51 6 -9

8(%1817(mm -9

%(..(1m:(%mm
%(
7  ---- -9
----..----
---- -9
1+ 2---- -9

 p  p
 Surcharge & Cess
( 1(/7%1&

m
2
 ;1(;"(m;7/;1   
-9  +   m 
-8
<
 

/  -9  +  
-9   +  = m 
% 
= m 
% 

 %   -9 

-9  +  =
 +  = m 
% 

/  ,   9 

9  +  =
 +  = m 
% 

% ..  2  

% 1

8 1)   1


  % 
 
 #  ,) 
  %    +
 2   > 9 # 9   2    +   
),
  +=  


 p 
m
 p1

 p  pp
 Meaning
Salary includes [section1(1)] :
i. Wages
ii. Any annuity on pension
iii. Any gratuity
iv. Any fees, commission, bonus, perquisite on profits in lieu of
or in addition to any salary on wages
v. Any advance of salary
vi. Any earned leave
vii.Employers contribution (taxable) towards recognized
provident fund.

 p  p3
 BASmS OF CHARGE
mncome is taxable under head ³Salaries´, only if there exists 
 ! "  between the payer and the payee. The following
incomes shall be chargeable to incometax under the head
³Salaries´:
1.Salary Due
p.Advance Salary [us 1(1)(v)]
3.Arrears of Salary
Note:
(i)Salary is chargeable on due basis or receipt
basis, whichever is earlier.
(ii)Advance salary and Arrears of salary are
chargeable to tax on receipt basis only.

 p  pO
 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.
„ # $  mt is Always %&.
'  ' $  mt is Always %&.

 p  p5
Contd«
 ( ! $
Exemption mn Respect Of House Rent allowance is regulated by
rule pA. The least of the three given below is Exempt from Tax.

1 1  ?  - 9   @) 

      
 " +=
 %=
)  5
 
1 1  ?  - 9   0) 
   
  
  () 

   1 0  2

+ )        ) 

 , 0) )

 1 
   ( 
+ )   
 , ) 2  6

 )    

2 - 9  

 p  p6
Contd«
   $ ) „*
+.
Entertainment allowance is first included in salary in come under
the head ³salaries´ and thereafter a deduction is given on the basis
enumerated below:

   

.. & 2

 & 2

8 )/  0 , 


 +A
) , 

 +
---
-9 + 
1    0
,

 ,) 2 

 p  p
Contd«

 ,  $  &  % 

  „-
„ ± mn the cases given below the
amount of exemption under section 1 (1O) is :±
i. The amount of the allowance ; or
ii.The amount utilized for the specific purpose for
which allowance is given.
Whichever is $

 p  p

 Contd«
Exemption is available on the aforesaid basis in the case of following allowances :

$%&'$(()$*& $+R&'$(()$*&

  $#   

 $ #         
 
        


$#  
 ,     #  

- , .   
, 

, 
 



  




*   $#  *   #         ,      
, 
  


 

  , 
    / 
 #  

  
  
    


0 $#   $ #  #        
  ,  
/  
  #  

-          
   
,   


  
  ,  



 p  amal maghani p

Contd«

* ." %     

%  mn the cases given below, the
amount of exemption does not depend upon
expenditure incurred by the employee.
Regardless of the amount of expenditure, the
allowances given below are exempt to the
extent of ±
i. the amount of allowance ; or
ii. the amount specified in rule pBB,
Whichever is lower.

 p  3
 Contd«
  0      
""

Special Compensatory Amount exempt from tax varies from Rs. 3 per mount to Rs. , per
(Hill Areas) Allowance month
The amount of exemption varies from Rs. p Per month to Rs. 1,3 per
Border area allowance
month
Tribal areas scheduled areas
Rs. p Per Month
allowance
The amount of exemption isis
Allowance for transport
a.
a. per cent of such allowance; or
employees
b.
b.Rs.
Rs. 6, per month, whichever is lower.

The amount exempt is limited to Rs. 1 per month per child up to a

Children education allowance
maximum of two children.

mt is exempt from tax to the extent of Rs. 3 per month per child up to a
Hostel expenditure allowance
maximum of two children.

Compensatory field area

Exemption is limited to Rs. p,6 per month in some cases.
allowance

 p  31
 Contd«

 1 0      

 ""

Compensatory modified area

Exemption is limited to Rs.1, per month in some cases.
allowance

Counter insurgency allowance Exemption is limited to Rs.3, per month in some cases.
mt is exempt up to Rs.
per month (Rs. 1,6 per month in the case of
Transport allowance
an employee who is blind or orthopedically handicapped)

Underground allowance Exemption is limited to Rs.
per month.

mt is exempt from tax up to Rs. 1, 6 per month (for altitude of , to

High altitude allowance
15, feet) or Rs. 1,6 per month (for altitude above 15, feet).
Highly active field area
mt is exempt from tax up to Rs. O,p per month.
allowance

msland duty allowance mt is exempt up to Rs. 3,p5 per month.

 p  3p
Contd«

ï $     

  ), „-
ï+ Any allowance paid or
allowed outside mndia by the Government to an
mndian citizen for rendering service outside mndia
is wholly exempt from tax.
/  00  $  mt is taxable.
 1 %   $ 2   taxable.
„- , $ mt is
taxable.

 p  33
Contd«
„„ $  ( 3" '  , '
43  Any allowance paid to High Court
Judges under section & ppC of the High Court
Judges (Conditions of Service) Act, 15O is not
chargeable to tax.
1p. $   0  5  6 
73 8   Allowance paid by a United
Nations Organization to its employees is not
taxable by virtue of section p of the
UN (Privileges and mmmunities) Act,
1O.

 p  3O
 PERQUmSmTES

Perquisite may be defined as any ' 

or 90  attached to an office or position     
,  .3. mt also denotes something that
benefits a man by going in to his own pocet.
Perquisites may be provided in cash or in ind.
Perquisites are included in salary income only if they
are received by an employee from his employer.

 p  35
³Perquisites´ as defined us 1 (p)

The term ³perquisites´ is defined by section 1 (p)

as including the following items:
1.The value of ! 0   provided to
the assessee by his employer
p.The value of any    "  0 
respecting any accommodation provided to the
assessee by his employer

 p  36
 Contd«
3. The value of any &0     3 or provided
0 0       in any of the
following cases :
i. By a company to an employee who is a director thereof ;
ii. By a company to an employee, being a person who has
substantial interest in the company ;
iii. 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 ³salaries´ exclusive of the value of all
benefits or amenities not provided for by way of
monetary benefits, exceeds Rs. 5 ,

 p  3
 Contd«
O. Any sum paid by the employer in respect of any
obligation which but for such payment would have been
payable by the assessee. 7& 3  0  
& 
5. Any sum payable by the employer, whether directly or
through a fund other than a recognized provident fund
or approved superannuation fund or a depositlined
insurance fund, to effect an assurance on the life of the
assessee or to effect a contract for an annuity
6. The value of any other fringe
benefits or amenity as may be
prescribed

 p  3

 TERMmNAL BENEFmTS
„   ), „-
„-+ ± Gratuity is a retirement benefit. mt is generally
payable at the time of cessation of employment and on the basis of
duration of service. Tax treatment of gratuity is given below:

   

& 2   ., 2   ., 2   

 2
+)    2
+)  
& 1=*$ & 1=*$
mt is fully exempt from
tax under section
1 (1 )(i) Least of following is exempt: Least of following is exempt:
1) ³15 days¶ salary´ x ³Length of 1) ³½ month avg. salary´ x ³Length
service´ of service´
p) Rs. 3, 5 , p) Rs. 3, 5 ,
3) Gratuity actually received. 3) Gratuity actually received.

 p  3
 Contd«

6,76 ),' „ï
„
+  Pension is chargeable tax as follows :

 m(

%(557
7 %(557

Government NonGovernment
Employee Employee
Taxable for
mf Gratuity mf Gratuity not Government as well
Entire Commuted Received Received as NonGovernment
Pension is exempt employees
whether or not Gratuity
received. 13 of commuted 1p of commuted
pension is pension is
exempt exempt

 p  O
 Contd«
   ), „ï
„
+ ± 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 exemployer is taxed as profit in lieu of
salary.
 !"   ), „-
„-9+ ± Compensation
received by a worman at the time of retrenchment is exempt
from tax to the extent of the lower of the following:
a. an amount calculated in accordance with the provisions of sec. p5F(b)
of the mndustrial Disputes Act, 1O; or
b. such amount as notified by the Government
(i.e., Rs, 5, , ); or
c. the amount received.

 p  O1
Contd«

 '     "   0

: !  ) „-
„-'+ 
Compensation received at the time of
voluntary retirement is exempt from tax,
subject to certain conditions. Maximum
amount of exemption is Rs. 5 .

 p  Op
 Provident Fund

Provident Fund Scheme is a welfare scheme

for the benefit of employees. The employee
contributes certain sum to this fund every
month and the employer also contributes
certain sum to the provident fund in
employees Ac. the employers contribution to
the extent of 1p is not chargeable to tax.

 p  O3
 LEAVE SALARY
Encashment of leave by surrendering leave standing to one¶s credit is
nown as ³leave salary´.

81: %15 

Retirement  Leaving the Job

During Employment

Government NonGovernment
Chargeable to Employee Employee
Tax

Least of following is exempt :

1) Earned Leave on the basis of
Fully Exempt Average Salary
p) 1 x Average monthly salary
3) Rs. 3
O) Leave Salary Received

 p  OO
 Deductions Admissible in Computing
mncome under head µSALARmES¶
„   $ 3 & 
), „*
+: This deduction is available in case of
Government employees only.
 % 
0  % ), „*
+:
Any sum paid by assessee on account of a tax on
employment within the meaning of Article p6(p).
Under the said article employment tax cannot
exceed Rs. p5 p.a.

 p  O5
 Relief in respect of
Advance or Arrears of Salary us

When an assessee is in receipt of a sum in the
nature of salary, being paid in arrears or in advance,
due to which his total income is assessed at a rate
higher than that at which it would otherwise have
been assessed, Relief is granted on an
application made by the assessee to the assessing
officer.

 p  m
 O6

 p  O
 Basis of Charge
The basis of charge of income under the head
µincome from house property¶ is the  : of
the property. Annual Value is inherent capacity of the
property to earn an income. mt is the amount for
which the property might reasonably be expected to
let from year to year.
mncome from house property is charged to tax on
6  9 , as generally tax is not on receipt of
income but on the inherent potential
of the house property to generate
income.

 p  O

 Conditions to be Satisfied
1. The property must consist of buildings or lands
appurtenant to such buildings.
p. The assessee must be the $ of such house
property.
3. The property should not be used by the owner
thereof for the purpose of any business or
profession carried on by him, the profits of which
are chargeable to tax.

 p  O
Computation of Gross Annual Value
(GAV)

,;„;<;';%;!;;0$<
  1  1 

(a) Fair Rent of the House xxx

(b) Municipal Value of House xxx

(c) Whichever is more of (a) and (b) XXX

(d) Standard Rent xxx

 
 [whichever is less of (c) and (d)]
[whichever 

 p  5
Contd«
, < ' % ! =  !
! &
!!
Where the property or any part thereof is let out,
 mf ARR is more than ER referred to in Step 1, then,
: > !!
 mf ARR is less than ER and it is due the vacancy of
property then, : > !!
 mf ARR is less than ER not owing to vacancy : > !

Note: ARR = Rent Received  Receivable

 Unrealized Rent

 p  51
 Net Annual Value (NAV)

Net Annual Value is the sum computed after

deducting from Gross Annual Value, the taxes
levied by any local authority in respect of the
property.


 
  

 p  5p
 Meaning
„ ?   :  < For collecting municipal taxes,
local authorities mae a periodical survey of all
building in their jurisdiction. Such valuation may be
taen as strong evidence representing the earning
capacity of a building.
1  ! 0 "
 : 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.
 , ! : Standard rent is
the maximum rent which a person
can legally recover from his tenant
under a Rent Control Act.

 p  53
Selfoccupied Property [Sec. p3(p)]

Property is considered to be self ± occupied where,

> the property consisting of house or part thereof is
in the occupation of the owner for the purposes of
his own residence; 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.

 p  5O
Contd«

mn case of Selfoccupied House Property Net

Annual Value is always Zero.
Since NAV is zero, the municipal taxes paid by
the owner of the house are not deductible.

 p  55
 Deduction Admissible us pO

,   : 3  of Annual Value (i.e.

3  of NAV)
 &    &$ 0
@        $ 
  0 "  : Actual amount
of interest for the year on accrual basis   15th
of the interest, if any, pertaining to the pre
acquisition or preconstruction period.

 p  56
 Deduction for mnterest on
Capital Borrowed in case of SOP
Maximum limit of deduction in respect of interest on
capital borrowed in case of a Selfoccupied property
whose annual value is assessed at NmL, is Rs. 1,5 ,
51m575
%1

7%m(

m  +  0
  .
+  0
  ..*** 
?       )  =-=---

m ) -=---

 p  5
 Recovery of Unrealized Rent
[Section p5AA]
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 ³mncome from
house property´.
1  of the amount actually received is taxable in
the previous year in which it is realized.

 p  5

 Arrears of Rent [Section p5B]

Arrears of rent shall be deemed to be income

chargeable under the head ³mncome from house
property´. mt shall be charged to income tax as
income of previous year in which it is received.
Taxable amount is computed as under :
1m%781 15(7 

)  2
  
- -
- -99  )   
1  +     

 p  m
 5

 p  6
 Basis of Charge [sec. p
]
The following income is chargeable to tax under the head
³Profits and gains of business or profession´:
1.Profits and gains of any business or profession;
p.Any compensation or other payments due to or received
by any person specified in section p
(ii);
3.mncome derived by a trade, professional or similar
association from specific services performed for its
members;
O.The value of any benefit or
perquisite, whether convertible into
money or not, arising from business
or the exercise of a profession;

 p  61
Contd«
5. any profit on transfer of the Duty Entitlement Pass
Boo Scheme.
6. Any profit on the transfer of the duty free
replenishment certificate;
. Export incentive available to exporters;

. Any interest, salary, bonus, commission or
remuneration received by a partner from firm; Any
sum received for not carrying out any activity in
relation to any business or not to
share any nowhow, patent,
copyright, trademar, etc.

 p  6p
Contd«
. Any sum received under a Keyman insurance policy
including bonus;
1 . Profits and gains of managing agency; and
11. mncome from speculative transaction.

mncome from the aforesaid activities is computed in

accordance with the provisions laid down in section p
to OOD.

 p  63
 Expenses Expressly Allowed
1. Rent, rates, taxes, repairs and insurance for building
[Sec. 3 ]
p. Repairs and insurance of machinery, plant and
furniture [Sec. 31]
3. Depreciation allowance [Sec. 3p]
O. Teacoffeerubber development account [Sec. 33AB]
5. Expenditure on acquisition of patent rights and
copyrights [Sec. 35A]
6. mnsurance premium [Sec. 36 (1) (i)]
. Premier for insurance on health of
employees [Sec. 36(1) (ib)]

 p  6O
Contd«

. Bonus or commission to employees [Sec. 36(1)(ii)]
. mnterest on borrowed capital [Sec. 36(1)(iii)]
1 . Employer¶s contribution to recognized provident fund
and approved superannuation fund [Sec. 36(1)(iv)]
11. Contribution towards approved gratuity fund [Sec.
36(1)(v)]
1p. Employee¶s contribution towards staff welfare
schemes
13. Bad debts [Sec. 36(1)(vii)]
1O. Family planning expenditure [Sec.
36(1) (ix)]

 p  65
Contd«

15. Baning cash transaction tax, securities

transaction tax and commodities transaction
tax.
16. Advertisement expenses [Sec. 3(pB)].
1. General Deduction [Sec. 3(1)].

 p  66
 EXPENSES NOT DEDUCTmBLE
[Section 3(1)]

1. Damages and penalty paid for transgressing the

terms of agreement with the State.
p. Penalty and damages paid in connection with
infringement of law.
3. Litigation expenditure incurred for curing any defect
in the title of assets or completing that title.
O. Litigation expenses for registration of shares.
5. Fees paid for increase of authorized capital.

 p  6
 Contd«
6. Expenditure on raising equity share capital and
preference share capital. However, expenditure on
issue of bonus shares id deductible.
. Amount paid for acquiring technical nowhow which is
to be utilized for the purpose of manufacturing any new
article and such nowhow is to become the property
of the assessee at the end of the stipulated period.

. Amount expended for acquiring a business or a right of
permanent character or an asset
which generates income or for
avoiding compensation in business.

 p  6

Contd«
. Payments made for acquisition of good will.
1 . Expenditure incurred for acquiring right over or in
land to win minerals.
11. Fees paid to obtain license to investigate and
search minerals.
1p. 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, however,
deductible).

 p  6
 Contd«
13. Tax paid by the assessee (who is defaulter by not
deducting tax at source under section 15) on behalf of
nonresident.
1O. Compensation paid to contracting party with the object of
avoiding an unnecessary investment in capital assets.
15. Expenditure on shifting of registered office.
16. mnsurance premia paid by a firm on life insurance policies
of its partners.
1. Amount paid by liquor contractor to
police staff and other officer to enable
it to mae unauthorized purchases
and sales of liquor.

 p  
Contd«
1
. Amount paid by a company to the Registrar of
Companies as filing fee for enhancement of capital
base of the company.
1. Payment made by assessee company which was
partner in a firm, to outgoing partners of firm on
account of their agreeing to restrain from carrying
on similar business for a period of 15 years.

 p  1
 Specific Disallowances
1. mnterest, Royalty, fees for Technical Services payable
outside mndia,if on such amount tax is deductible but tax
has not been deducted or deposited with Government.
[Sec. O (a)(i)]
p. Fringe Benefit Tax [Sec. O (a)(ic)]
3. mncomeTax [Sec. O (a)(ii)]
O. Salary Payable Outside mndia without Tax Deduction
[sec. O (a)(iii)]
5. Provident Fund Payment without tax
Deduction at Source [Sec. O (a)(iv)]
6. Certain specified expenses in case
of Partnership Firm

 p  p
Contd«
. mnterest paid by an AOP BOm to its members is not
allowed as deduction by virtue of sec. O (ba)

. Payment to relatives in excess of fair value ± not
deductible [Section O A(p)]
. Expenditure in excess of Rs. p , in aggregate in
a day paid otherwise than by account payee
cheque drawn on a ban or account payee ban
draft ± Not allowable [Section O A(3))]
1 . Amount not deductible in respect
of certain unpaid liabilities
[Sec.O3B]

 p  3
Boos of Accounts to be maintained
[Section OOAA]
The persons carrying on specified professions are required
to maintain specified boos of account only if the gross
receipts of their profession have exceeded Rs. 1,5 ,
Every other person carrying on business or profession
shall eep and maintain such boos 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) mf his income from business or profession
exceeds Rs. 1,p , ;
b) Total salesturnovergross receipts thereof
exceeds Rs.1 , ,
c) the assessee has claimed his income lower
than deemed profits

 p  O
 Tax Audit us OOAB
This section applies to following :
   ,  . 1    + 

  2    0) ) .

"    =  2  ,    

 -=--=---

   &    
 -=--=---

"   2

; 1"=  )  
)     +  0 ) )     , 
1= 1/= "" 
""" 


 )   2  

The assessee is required to get his accounts of such

previous year audited by a Chartered
Accountant before 3 th September of
the assessment year.

 p  5
 Special Provisions for Computing mncome on
Estimated Basis OOAD, OOAE & OOAF
Not withstanding anything contained in Sections p
to O3C,
the following provisions will apply.
1
1 1/

Business of Civil construction or supply of Plying, hiring or leasing goods Retail trade in any
Assessee labour for it
it.. carriages owned by him
him.. goods or
merchandise..
merchandise

This Section Gross receipts of such Goods carriages owned by Total business
applies if business during the previous assessee at any time during turnover in that
year do not exceed RsRs.. O previous year doesn¶t exceed previous year
lacs..
lacs 1 lacs doesn¶t exceed Rs Rs..
O lacs
lacs..

Deemed
 of Gross receipts (No. of heavy goods

(No. 5 of Gross receipts
Profits vehicle x Rs
Rs.. 35 x NM) + or such higher sum
(No.. of other vehicles x Rs
(No Rs.. as declared by him
315 x NM) in his Return of
NM = No
No.. of months mncome..
mncome

amal maghani 6
 DEPRmCmATmON [Sec. 3p]
Ô   $ ),  +  Depreciation shall be
determined according to the provisions of section 3p.
'   0   3 Ô    mn order to avail
depreciation, one should satisfy the following conditions:
± Asset must be owned by the assessee.
± mt must be used for the purpose of business or profession.
± mt should be used during the relevant previous year.
± Depreciation is available on tangible as well as intangible
assets.

 p  
Contd«
9A 0  ),
„„+  The term ³bloc of
assets´ means a group of assets falling within a
class of assets comprising ±
± tangible assets, being buildings, machinery, plant or
furniture;
± intangible assets, being nowhow, patents,
copyrights, trade mars, licenses, franchises or any
other business or commercial rights of similar nature.
± mn respect of which the same
percentage of depreciation is
prescribed.

 p  

Contd«

.  Ô$ : ), 

*+  Written down value for
the assessment year p 1 will be determined as
under:
/ 
 )
  
2  ) + B  ) 1   = --'
--'
 

 )  2= 

C  D  )  3 ,  ) + B4 ? 

 , ) 2   --'
--'..-*
-*
 

/  )   ,=


    2
; 2+ 3 ,) 0 )
 24     )  3 , 0 )  ) + B  4 0) )
  
=



  )

 

 , ) 2   --' --'..
-*
-*
 

 p  
Contd«
? 3 0 B 'C ), 
„+  mt means the
actual cost to the assessee as reduced by the proportion
of the cost thereof, if any, as has been met, directly or
indirectly, by any other person or authority.
0 $  $  0 " &A 0    
8 "3" " &A     No depreciation is
admissible.
0 " &A 0       %   "
  0 "    "3" "
$  $    8  No
depreciation is admissible.

 p 

Contd«
Additional depreciation @ p  is available on new plant or
machinery acquired & installed after 31. 3. 5, if used in
production or manufacturing.
mf asset is used for less than 1
days during the previous year,
in which its purchased, then deprecation & additional
depreciation is restricted to 5  of actual depreciation.
However in subsequent year full depreciation is allowed
irrespective of use.
When a depreciable asset(on which depreciation is claimed on
straight line basis) of a power generating
unit is disposed in a previous year, then
terminal depreciation (loss) is deductible or
balancing charge (gain) is taxable.

 p 
1
 )
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.
± Rate of interest should not exceed 1p percent
Deduction of Remuneration to Partners can be claimed if
paid :
± to a Woring Partner
± According to the Partnership Deed
± Does not exceed the Permissible Limits.

 p 
p
 Contd«
The maximum amount of salary paid to all the partners
during the previous year should not exceed the limits given
below :
m       ,      
    11
11

On the first Rs. 1, , of the boo profit or in Rs. 5 , or at the rate of  percent of the boo
case of a loss profit, whichever is more

On the next Rs. 1, , of the boo profit t the rate of percent

On the balance of the boo profit t the rate of O percent

m )    )  

On the first Rs. 5, of the boo profit or in case Rs. 5 , or at the rate of  percent of the boo
of a loss profit, whichever is more

On the next Rs. 5, of the boo profit t the rate of percent

On the balance of the boo profit t the rate of O percent

amal maghani
3
 5  13514
Applicability of Minimum alternate tax (MAT) sec. 115JB :
 Minimum alternate tax (MAT) sec. 115 JB MAT is
applicable in case of companies only.
 mf tax liability of a company under normal provision is
lower than 1  of boo profit.
 mn such case, boo profit shall be deemed as total
income & 1  of boo profits should be deemed as tax
liability.
 Up to assessment year p 1 p
these provisions were covered by
sec. 115 JA.

 p 
O
Contd«

 A company is allowed credit of tax paid us 115

JB for the assessment year p 6  and
onwards in accordance with the provisions of
section 115JAA.
 MAT credit can be carried forward for a period of
seven years.

m


 p 
5

 p 
6
 Basis of Charge
Capital Gain¶s tax liability arises only when the
following conditions are satisfied:
1.There should be a capital asset.
p.The capital asset is transferred by the assessee
3.Such transfer taes place during the previous year.
O.Any profit or gains arises as a result of transfer.
5.Such profit or gains is not exempt from tax under
section 5O, 5OB, 5OD, 5OEC, 5OF,
5OG, and 5OGA

 p 

 Capital Assets
³Capital asset´ is defined to include property of any ind,
whether fixed or circulating, movable or immovable, tangible or
intangible. However, following are excluded from the definition
of ³capital assets´:
1.Any stocintrade, consumable stores or raw material held for
the purposes of business or profession.
p.Personal effects of the assessee, that is to say, 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. However, Jewellery,
Archaeological Collections, Drawings,
Paintings, Sculptures, or Art Wor will not
be considered as ³personal effects´.

 p 


 Contd«
3. Agricultural land in mndia provided it is not situated ±
± in any area within the territorial jurisdiction of a municipality
or cantonment board, having a population of 1 , or
more; or
± in any notified area.
O. 6½ percent Gold Bonds, 1 or  percent Gold Bonds,
1
or National Defense Gold Bonds, 1
issued by the
Central Government.
5. Special Bearer Bonds, 11.
6. Gold Deposit Bonds issued under
Gold Deposit Scheme, 1.

 p 

 Shortterm  Longterm
Capital Assets
³Short term capital asset´ means a capital asset held by an
assessee for not more than 36 months, immediately prior to
its date of transfer. mn other words, if a capital asset is held
by an assessee for more than 36 months, then it is nown
as ³long term capital asset.´
However in following cases 36 months will be replaced by
1p months :
 Equity or preference shares in a company
 Listed Securities
 Units of UTm
 Units of a mutual fund specified under
section 1 (p3D)
 Zero coupon bonds

 p  
 mmportant Terms
„ 0 0 '   : Transfer, in relation to capital
asset, includes sale, exchange or relinquishment of the
asset or the extinguishment of any rights therein or the
compulsory acquisition thereof under any law [sec.
p(O)].
1 : 0 '   : The expression ³full value´
means the whole price without any deduction
whatsoever.
 %   0 : The
expression ³expenditure on transfer´
means expenditure incurred which is
necessary to effect the transfer.

 p  1
Contd«
 ' 0 @    : Cost of acquisition of an asset
is the value for which it was acquired by the
assessee. mn case of # &  '7 is the
.#: of asset in the beginning of the year. mn case
of , , '7 is the 6 ." of the
undertaing.
 ' 0  : Cost of improvement is
capital expenditure incurred by an assessee in
maing any additions improvement to
the capital asset.

 p  p
Contd«
* % ' 0 @    : the amount which bears
to the COA, the same proportion as Cmm for the year in
which the asset is transferred bears to the Cmm for the
first year in which the asset was held by the assessee
or on 1. O.1
1, whichever is later.
ï % ' 0  : an amount which
bears to the COm, the same proportion as Cmm for the
year in which the asset is transferred bears to the Cmm
for the year of improvement.

 p  3
 Capital Gain Exemption
„
0    0   0   ), +:
Available to mndividual & HUF on transfer of Longterm
Residential Property and new residential House
property is purchased or constructed.
'  3   0 0 3   ), 9+:
Available to mndividual on transfer of Agricultural land
used by individual or his parent for agricultural
purposes during p year preceding date of transfer and
Agricultural land (urban or rural) is
purchased.

 p  O
Contd«

     & ), '+ :

Available to all assesses on transfer of any
longterm capital asset for purchase of Bonds,
redeemable after 3 years issued by
(a) National Highway authority of mndia; or
(b) Rural Electrification Corporation,

 p  5
Contd«

 '  3   0 0     

  & "3   0  
   " ), 1+: Available to
mndividual & HUF on transfer of Longterm Asset
other than Residential house Property and
residential House property is purchased or
constructed.

 p  6
Contd«

 ' @    0  = &  3

), #+: Available to all assesses on
Compulsory acquisition of land or building
which was used in the business of industrial
undertaing during p years prior to date of
transfer, if New land or building for the industrial
undertaing is purchased or constructed.

 p  
Contd«

* ," 0 3 0 A 3    ), +:

Available to all assesses on Transfer of plant,
machinery or land or building for shifting industrial
undertaing from under area to rural area, if (a)
Purchase Construction of plant, machinery, land or
building in such rural area or, (b) Shifting original
assets to that area or, (c) mncurring notified
expenses.

 p  

Contd«
ï ," 0 3 0 A 3  , ), +:
Available to all assesses on Transfer of plant,
machinery or land or building for shifting
industrial undertaing from urban area to
special Economic Zone, if (a) Purchase
Construction of plant, machinery, land or
building in such SEZ or (b) Shifting the original
asset to SEZ or, (c) mncurring notified expenses.

 p  
 Computation of Shortterm
Capital Gains
  1 

Full Value of Consideration XXX

Less:: Expenses incurred wholly and exclusively for

Less such transfer xxx

% 
  

Less:: Cost of Acquisition

Less xxx

Less: Cost of mmprovement xxx

Less: Exemption us 5OB, 5OD, 5OG, 5OGA xxx

+) ..% , 

+)  

 p  1
 Computation of Longterm
Capital Gains
  1 

Full Value of Consideration XXX

Less:: Expenses incurred wholly and exclusively for

Less such transfer xxx

% 
  

Less:: mndexed Cost of Acquisition

Less xxx

Less: mndexed Cost of mmprovement xxx

Less: Exemption us 5O, 5OB, 5OD, 5OEC, 5OF, 5OG, 5OGA xxx

+8 ,.. % , 

+8 , 

 p  1 1
 mndexed Cost

Cost mnflation mndex

%   (Cmm) for the first year
m

%  ?   ; in which the asset was
   2 held by the assessee
%  or for the year
1?   ;
 m
 beginning on
m  2 )  1.O.1
1, whichever is
 later  the year of
improvement

 p  m
 1 p

 p  1 3
 General [Section 56(1)]

mncome of every ind, 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 ³mncome from
Other Sources´.

 p  1 O
 Specific mncome [Section 56(p)]
1. Dividends.
p. Lottery winnings etc.: Winnings from lotteries,
crossword puzzles, races including horse races, card
games and other games of any sort or from gambling or
betting of any form or nature whatsoever.
3. Any sum received by an employerassessee from his
employees as contributions to any welfare fund, if the
same is not chargeable under the head µProfits and
Gains of Business or Profession.¶
O. mncome by way of interest on
securities if not chargeable as
Profits and Gains of Business or

 p 
Profession 1 5
Contd«
5. mncome from letting on hire of Plant, machinery or
furniture belonging to the assessee, if not chargeable
to under the head µProfits and Gains of Business or
Profession¶.
6. mncome from letting on hire of machinery, plant or
furniture and also buildings, and the letting of
buildings is inseparable from letting of such
machinery, plant or furniture, if the same is not
chargeable to income tax under the head µProfits and
Gains of Business or Profession.¶
. mnterest on ban deposits and
loans

 p  1 6
Contd«

. Any sum received under a Keyman insurance policy
including the sum allocated by way of bonus on such
policy, if the same is not chargeable to incometax
under the head µProfits and Gains of Business or
Profession¶ or under the head ³Salaries.´
. Cash Gifts exceeding Rs. 5 ,
1 .mnterest on foreign government securities
11.Agricultural income received from outside mndia
1p.mncome from subletting
13.Director¶s fee
1O.mncome of race establishment

 p  m
 1 

 p  1

 Cases where Clubbing Applies
„ 0 0  $ " 0 0  ), *-+
:± The income from the asset would be taxable in the
hands of the transferor.
!& 0 0  : mncome from such
asset is taxable in the hands of the transferor.
      &   0  
0  ), *
„
+ : When Spouse is employed
in the concern without any technical or professional
nowledge or experience or when he
she has substantial interest in that
concern.

 p  1 
Contd«
      &   0 
0  0  : When the asset
is transferred otherwise than (a) for adequate
consideration, or (b) in connection with an
agreement to live apart.
      &   0 
0  0  D $ 0 ),
*
„
 +: When the asset is transferred otherwise
than (a) for adequate consideration

 p  11
Contd«
*      &   0  0
 0    0 " &0  0
 ), *
„
 + : mt is transferred for the
immediate or deferred benefit of hisher spouse. The
transfer is without adequate consideration.
ï      &   0  0
 0    0 " &0  0 D
$ 0 ), *
„
 + : mt is transferred for the
immediate or deferred benefit of hisher
son¶s wife. The transfer is without
adequate consideration.

 p  111
Contd«

/      &   0  0

"    "  ), *
„+ : The income of minor
will be included in the income of that parent whose
total income [excluding the income includible under
section 6O(1A)] is greater.
 '&& 3   0 0 0   (51
),  *
+ : When mncome from asset
transferred to HUF for inadequate consideration.

 p  11p
 Undisclosed mncome  mnvestments

„ '"   ), */]  Where any sum is found

credited in the boos of an assessee
maintained for any previous year and the
assessee offers no explanation about the
nature and source thereof, the sum so credited
may be charged to incometax as the income of
the assessee of that previous year.

 p  113
Contd«
5%   ), *+ ± Where in
the financial year immediately preceding the
assessment year, the assessee has made
investments which are not recorded in the
boos of account maintained by him and the
assessee offers no explanation about the
nature and source of the investments, the value
of the investments may be deemed to be the
income of the assessee of such
financial year.

 p  11O
Contd«
 5%    ) *+  Where in
any financial year the assessee is found to be
the owner of any money, bullion, jewellery, or
other valuable article which are not recorded in
the boos 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.

 p  115
Contd«
  0     0   
&A 0  ), *9+ ± 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, and the A.O. finds that the amount
expended on maing such investments or in acquiring
such things exceeds the amount recorded in the
boos of account maintained by the assessee, and he
offers no explanation about such excess amount, the
excess amount may be deemed to be
the income of the assessee, for such
financial year.

 p  116
 Contd«
 5%  %   ), *'+ ± Where in any
financial year an assessee has incurred any expenditure & he
offers no explanation about the source of such expenditure,
the amount covered by such expenditure, may deemed to be
the income of the assessee for such financial year.
*  &$     " ), *#+ ± Where any
amount is borrowed on a hundi, or any amount due thereon is
repaid otherwise than through an account payee cheque, 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.

 p  m
 11

 p  11

Process of Setoff & Carry Forward
The process of setting off of losses and their carry forward may be
covered in the following steps:

  m..  
E 
 )  )
  
m

m.)

E  )   
m.       

 
       +   
  

%  0
  
       
       +  
 

    


 p  11
 Unabsorbed Depreciation
While dealing with unabsorbed depreciation one should eep in mind
the following points:

     0  ) 2     

 +   )
  ),+ 
 ) )
C   
,   +  
    D
  D

m
     0    

 + 
 ) )
C   

,   +     D +  +  

? 
  =  

 +     ),+ 
 ) )
   
  F    
 ) )
C DG   )   


m
     0    + +
=   +  
 0
 )
+?  34 + )  

 

 p  1p
 mnterSource Set Off [Section  ]

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 ±
8  ..  0
, 


8 ,.. 8 
8 , 8 ,..% & 
8 ,

  +     + , 

8  +   0 ,

   , m  +   0 ,

)     ,) 

8   =

,=,+ , m   =
,=,+ ,
+ , + ,

 p  1p1
 mnterHead Setoff [Section 1]
Loss arising under one head of income can be set off against
income under any other head, except in the following cases ±
1.Loss arising under the head capital gain cannot be setoff
from income under any other head
p.Losses under the head ³Profits and gains of business or
profession´ cannot be set off against income under the head
³Salaries´.
Note: Unabsorbed depreciation of past year(s) is carried
forward us 3p(p); therefore, the same can be setoff
against income under the head µSalaries¶.

 p  1pp
 Provisions relating to carry forward
and setoff of losses
m  ,  0) ) )      0) ) 
 8   +  
 0

   +    +  
 0

1B
1 B Loss from house property mncome from house property
years from the end of the
relevant A.Y.

p Losses under µProfits & Gains of Profits of any
years from the end of the
Business or Profession¶, except BusinessProfession (including relevant A.Y.
speculation business loss
loss.. speculation business profits
also)

3 Losses in speculation business. mncome from speculation O years from the end of the
business relevant A.Y.

O Losses under the head Capital Capital Gains
years from the end of the
gains. relevant A.Y.

OA Loss incurred in activity of owning mncome from owning and O years from the end of the
and maintaining race horses. maintaining race horses relevant A.Y.

 p 
m

1p3

 p  1pO
 Meaning
³Agricultural mncome´ means:
1. Any rent or revenue derived from land which is situated in
mndia and used for agricultural purposes [sec. p(1A) (a)].
p. Any income derived from such land by agricultural operations
including processing of the agricultural produce, raised or
received as rentinind so as to render it fit for the maret or
sale of such produce [sec. p(1A)(b)].
3. mncome attributable to a farm house subject to certain
conditions.
O. With effect from the assessment year
p 1 , any income derived from
saplings or seedlings grown in a nursery
shall be deemed to be agricultural
income.

 p  1p5
Partially Agricultural & Partially Business
mncome [Rules , a, b And
]
"7m  1&m%78718
m %(5
m %(5 m %(5

& 0 , 
 ,   m
 -9 !-9

   ,
     +

  3)     4  + 0   9 !9

3)   + 0  =  
 =
 B
+B     +B  4 
)     
+ B ++ 

 
   
   , + 

  ++  , 0 + )   m



    , 0 

+  9 $9

    , 0= 

=  

, 

-9 !-9
+   m
 0 )  0 )    , )   
) 2  , ,


 p  1p6
 The Scheme of Partial mntegration of
NonAgricultural mncome with Agricultural mncome
The scheme of partial integration of nonagricultural
income with agricultural income is applicable if the
following conditions are satisfied ±
)     
2
=   
 
2

 =  +
  
2
=
              E
  
 
   

)   )    ..,    

, )   
      F F = 
 ='-=
'-=---3 
---3    
 0  + 0 ! 4=
 ==
 =--- 3     
     H !    4 

    =-=
-=--- 3     ) 
2
  2 7/   ) 
 --*
--*..-
-GG

) ,     )   

 
 =---
---
   

 p  1p
 Contd«
mncometax will be computed for the assessment year
p 1 in the following manner:
  Net agricultural income is to be computed as if it were income chargeable to income
incometax.

  Agricultural & non

nonagricultural income of the assessee will then be aggregated & income
incometax is
calculated on the aggregate income.

  The net agricultural income will then be increased by the amount of exemption limit and income
income
tax is calculated on net agricultural income, so increased, as if such income was the total income
of the assessee.

  The amount of income

incometax determined at Step two will be reduced by the amount of income
incometax
determined under Step three.

  Find out the balance. ; surcharge; education cess & SHEC.
;surcharge;

 ! The amount so arrived will be the total income

incometax payable by the assessee.

m


 p  1p


 p  1p
 mntroduction
Ô   &  ),  /-] A
The total income of an assessee is to be computed
after maing deductions permissible us
C to
U.
However, the aggregate amount of deductions cannot
exceed the Gross Total mncome.
6   0  
0$ 3  A
Long term Capital Gains referred us 11p, and Short Term
Capital gains referred us 111A.
Winnings from lotteries, races, etc. as
referred to in section 115BB.
mncomes referred to in section 115A (1) (a),
115AC, 115ACA, 115AD, 115BBA and
115D.

 p  13
 Deduction for Payment of
Life mnsurance Premia, etc., [Section
C]
Deduction under this section is allowed as follows ±
 Deduction is available only in respect of µspecified
sums¶ actually paid or deposited during the previous
year (sum not actually paid and outstanding is not
allowed)
 Specified sums must have been paiddeposited by
an mndividual or HUF; and
 The total amount of deduction under this section is
subject to a maximum limit of
Rs.1, , .

 p  131
 Contribution To Certain Pension Funds
[Section
CCC]
 Amount paid or deposited by individual in the previous
year ±
± out of his income chargeable to tax
± to effect or eep in force a contract for any annuity plan of LmC
or any other insurer
± for receiving pension from the fund referred to in section
1 (p3AAB).
 Quantum of DeductionA Deduction shall be allowed to
the extent of lower of the following ±
± Amount so paid or deposited; or
± Rs. 1, ,

 p  13p
 Contribution to Pension Scheme of Central
Government or any Other Employer [Sec.
CCD]



     A Deduction is available in
respect of both of the following ±
± Sum deposited by assessee in his account in notified pension
scheme; and
± Contribution made by Central Govt. or any other employer to
assesse¶s Ac.
 I 

 A Deduction shall be allowed to
the extent of aggregate of the following 
 
;
  
+   ) 
  )  ;  -
-99  =
0) )2   0
   +
+ )     J 1;  -
-99  = 0) )2 
 0

 p  133
Aggregate Limit us
C,
CCC &
CCD

The aggregate amount of

deductions under section
C,
section
CCC and section

CCD shall not, in any case,
exceed Rs.1, , .

 p  13O
 Deduction mn Respect Of
Health mnsurance Premia [Sec.
D]
 Deduction is available in respect of the amount paid to
effect or to eep in force health insurance under a
scheme ±
± made by General mnsurance Corporation of mndia (GmC) and
approved by Central Government; or
± made by any other insurer and approved by mnsurance Regulatory
and Development Authority.
 Deduction shall be to the extent of lower of ±
± Health insurance premia paid in respect of health of any member
of that HUF; or
± Rs. 15, (Rs. p , in case the insured
is a senior citizen).

 p  135
 Maintenance of A Dependant Being
Person With Disability [Section
DD]
 Deduction is available in respect of ±
± expenditure incurred for medical  treatment  nursing  training
rehabilitation, or
± amount paid under scheme LmC  UTm other insurer approved by
CBDT for maintenance, of a ³dependant´, being a person with
disability.
 Deduction shall be allowed to the extent of ±
± Rs. 5 , (Rs. 5, in case of dependant suffering with severe
disability), irrespective of expenditure incurred or sum paid.

 p  136
 Deduction in respect of
Medical Treatment, etc. [Sec.
DDB]
 Deduction is available in respect of sum actually paid
during previous year for medical treatment of prescribed
disease or ailment for the following ±
± mn case of individual: himself or his spouse, children, parents,
brothers and sisters,
± mn case of HUF: its member(s),
± dependant mainly on such individual or HUF for his support and
maintenance.
 Deduction shall be available to the extent of lower of the
following ±
± sum actually paid; or
± Rs. O , (Rs. 6 , in case of a senior
citizen).

 p  13
Deduction in respect of mnterest on Loan
taen for Higher Education [Sec.
E]

 Deduction in available in respect of sum

paid by the assessee in the previous year,
out of his income chargeable to tax, by
way of interest on loan taen ±
± for his higher education, or
± for the higher education of his relative.
 1  of the amount of interest on such
loan Deduction will be admissible.

 p  13

 Deduction in respect of Donations
[Section
G]
 Deduction is allowed under this section to all assesses
in respect of donations of sum of money in the
following manner ±
± 1  deduction will be allowed if donations are given to any
of the 1 specified funds.
± 5  deduction will be allowed if donations made to any of the
5 specified funds.
± 1  deduction shall be allowed subject to the qualifying
amount if donations are made for promoting family planning.
± 5  deduction shall be allowed subject
to the qualifying amount if donations are
made towards any of the 5 specified
purposes.

 p  13
Deductions in respect of Rents Paid
[Sec.
GG]
 Rent actually paid for any furnished or
unfurnished residential accommodation occupied
by the mndividual, who is not in receipt of any
House Rent Allowance (HRA).
 The deduction shall be allowed to the extent of
least of the following ±
± Rs. p, per month;
± p5 of adjusted total income;
± Rent paid  1  of adjusted Total mncome.

 p  1O
 Deduction in respect of person with
Disability [Section
U]

  3 & < mndividual resident in

mndia, who, at any time during the previous
year, is certified by the medical authority to
be a person with disability
 # < Rs. 5 , (Rs. 5, for
severe disability). Severe disability means

 or more of disability.

 p  1O1
 Other Deductions
Deduction in respect of certain Donations for Scientific
Research or Rural Development [Sec.
GGA]
Deduction in respect of Contribution to Political Parties
[Sec.
GGB &
GGC]
Profits & Gains from mndustrial Undertaing engaged in
mnfrastructure Development [Sec.
mA]
Profits & Gains from Undertaing engaged in
Development of SEZs [Sec.
mAB]
Profits & Gains from mndustrial
Undertaing engaged in other than in
mnfrastructure Development [Sec.
mB]

 p  1Op
Contd«
Deduction available to certain Undertaings in certain
Special category States [Sec.
mC]
Profits & Gains from business of Hotels & Convention
Centre in Specified Areas [Sec.
mD]
Special provisions in respect of certain Undertaings in
NorthEastern States [Sec.
mE]
Deduction available to assessee in the business of
Collecting & Processing BioDegradable Waste
[Sec.
JJA]
Deduction in respect of
Employment of New Wormen
[Sec.
JJAA]

 p  1O3
Contd«
Deduction from incomes of Offshore Baning Units
& mnternational Financial Services Centre [Sec.
LA]
Deduction in respect of income of Cooperative
Society [Sec.
P]
Deduction in respect of Royalty mncome, etc. of
Author of certain Boos other than Text Boos
[Sec.
QQB]
Deduction in respect of Royalty mncome of Patents
[Sec.
RRB]

m


 p  1OO

 p  1O5
 Liability to pay Advance Tax
Every person is liable to pay tax on income in
advance i.e. from completion of the previous
year (advance tax) if tax payable is ! --- or
more. All items of income are liable for payment
of advance tax.
However, from  -„- -„„ liability
to pay advance tax arises, if the tax payable is
! „---- or more

 p  1O6
 Due Dates

1  ++%   1  ++ .

.



1 %  1

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.
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2
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2 7  !-   
2
) 2    +  +

(  +  5)   ) 7  --   

2 7  --   
2
2    +  +

 p  1O
 Default in payment of Advance Tax
[Sec. p3OB]
Under section p3OB(1), interest is payable as follows:
o      
   

   
    

1  0)  m      >  /  1     )  

 +   +     2  )
 
   

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  )      
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 + )     )      
   3 34 
 
2  
 ) 0) ,   

+ )    )  )
  , 
*-  




 p  1O

 Deferment of Advance Tax
[Sec. p3OC]
mnterest is payable under section p3OC if an
assessee has not paid advance tax or
underestimated installments of advance tax.
Simple mnterest at the rate of „E  " is
payable for period 3 months for each installment
due.

m


 p  1O

 p  15
 Time for filing Return of mncome
[Sec. 13(1)]

  

   ,

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 +-
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 + 


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 +
 +-



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 p  151
 Filing of Return in Electronic Form
[Sec. 13D]
Section 13D has been inserted from June 1, p 6. mt
provides that the Board may mae 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; the documents, statements, receipts,
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; the
computer resource or the electronic
record to which the return of income in
electronic form may be transmitted.

 p  15p
 Filing of Return after Due Date
[Sec. 13(O)]
mf the return is not furnished within the time
allowed under section 13(1) or within the time
allowed under section 1Op(1), the person may
(before the assessment is made), furnish the return
of any previous year at any time before the end of
one year from the end of relevant assessment
year.

 p  153
 Consequences of Late Submission
mf return is submitted after the due date of submission of
return of income, the following consequences will be
applicable. These rules are applicable even if a belated
return is submitted within the timelimit given above ±
± The assessee will be liable for penal interest us p3OA.
± A penalty of ! --- may be imposed us p1F if belated
return is submitted after the end of assessment year.
± mf return of loss is submitted after the due date, a few losses
cannot be carried forward.
± mf return is submitted belated, deduction
under section 1 A, 1 B,
mA,
mB,
mC,

mD and
mE will not be available.

 p  15O
 mnterest for defaults in furnishing
Return of mncome [Section p3OA]
mf any person fails to furnish his return of income us 13 for
any assessment year or furnishes such return after due
date specified in section 13(1), then, he will liable to pay
interest at the rate of „E  " 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,
whichever is earlier, calculated on the
amount of selfassessment tax
payable.

m


 p  155
 mNCOME TAX

( 6# 

Source : mnternet

156