1. Definitions Under Income Tax Act, 1961 1
1.1 Introduction Sec. Ref.
1.2 Definitions under the Act
- Assessment Year 2(9)
- Previous Year 2(34)
- Person 2(31)
- Assessee 2(7)
1.3 Total Income
1.4 Rates of Taxes
1.5 Residential Status (6)
- Resident
- Non Resident
- Resident but Not Ordinarily Resident
1.6 Accrual of Income (9)
1.7 Illustrations
1.8 Summary
1.9 Key Words
1.10 Self-assessment Questions
2. Income Exempt from Tax 19
2.1 Introduction Sec. Ref.
2.2 Incomes Exempt under Section 10 of the Act
2.2.1 Agricultural Income 10(1)
2.2.2 Share of profit of a partner from a
Firm 10(2A)
2.2.3 Amount received under a Life
Insurance Policy 10(10D)
2.2.4 Interest, premium or bonus on
specified investments 10(15)
2.2.5 Educational Scholarship 10(16)
2.2.6 Payments to MPs, MLAs etc. 10(17)
2.2.7 Income of a Local Authority 10(20)
2.2.8 Income of a Mutual Fund 10(23D)
2.2.9 Income of venture capital fund 10(23FB)
2.2.10 Income of Trade Unions 10(24)
2.2.11 Income of certain funds 10(25)
2.2.12 Income of Employees State
Insurance Fund 10(25A)
2.2.13 Capital gains arising from the
transfer of units of UTI 10(33)
2.2.14 Dividend reed from domestic
Companies 10(34)
2.2.15 Some other exemptions
2.2.16 Occasional Incomes or Gifts 10(39)
2.3 Newly Established Undertakings In Free
Trade Zones, Software Technology Park 10A)
2.4 Income of 100% Export Oriented Units 10B
2.5 Income of a Political Party 10(13A)
2.6 Annexure
2.7 Illustration
2.8 Summary
2.9 Key words
2.10 Self-assessment Questions
3. Income from Salaries 37
3.1 Meaning of Salary Sec. Ref.
3.2 Exemptions
3.2.1 Leave Travel Concession 10(5)
3.2.2 Gratuity 10(10)
3.2.3 Pension 10(10A)
3.2.4 Leave Salary 10(10AA)
3.2.5 Retrenchment Compensation
3.2.6 VRS Compensation
3.2.7 Provident Fund
3.2.8 Super Annuation Fund
3.2.9 House Rent Allowance 10(13A) >
3.2.10 Special allowances 10(14)
3.3 Perquisites 17(2)
3.3.1 ESOP
3.3.2 Rent Free Accommodation
3.3.3 Furnished Accommodation
3.3.4 Accommodation at concessional Rate
3.3.5 Domestic Servants
3.3.6 Gas, Electricity Etc.
3.3.7 Educational Facilities
3.3.8 Other Fringe Benefits
3.3.9 Transfer of Employer's Movable Assets
3.3.10 Medical Facility
3.4 Perquisites Exempt from Tax
3.5 Deductions
3.5.1 Entertainment Allowance
3.5.2 Professional Tax
3.6 Illustrations
3.7 Summary
3.8 Key Words
3.9 Self-assessment Questions
4. Income from House Property and Other Sources 75
4.1 Scope Sec. 22
4.2 Deemed Ownership Sec 27
4.3 Determination of Annual Value
4.4 Classification of House Property
4.5 Deductions Sec. 24
4.6 Inadmissible Deductions Sec. 25
4.7 Income from other Sources Sec. 56
4.8 Deductions From Income From Other Sources
4.9 Inadmissible Expenses Sec. 58
4.10 Illustrations
4.11 Summary
4.12 Key Words
4.13 Self-assessment Questions
5. Profit and Gains from Business and Profession 105
5.1 Introduction Sec. Ref.
5.2 Expenses allowed as Deductions
5.2.1 Rent, Repairs, etc. 30
5.2.2 Repairs and maintenance 31
5.2.3 Depreciation 32
5.2.4 Other Deductions 36
5.2.5 General Deductions 37(1)
5.3 Capital Expenditure vs. Revenue Expenditure
5.4 Expenditure Not Allowed as Deductions
5.4.1 Royalties and Interest, Bonus 40(a)
5.4.2 Taxation of Partnership Firm 40(b)
5.4.3 Payment to relatives 40A (2)
5.4.4 Payment in cash excess of limit 40A(3)
5.4.5 Payment of Gratuity 40A(7)
5.4.6 Mandatory Payments 43B
5.5 Allowability of Certain Expenditures
5.6 Illustrations
5.7 Annexure
5.8 Summary
5.9 Key Words
5.10 Self-assessment Questi ons
6. Capital Gains 159
6.1 Introduction Sec. Ref.
6.2 Capital Asset
6.2.1 Transfer of Capital asset
6.3 Calculation of Capital Gains
6.3.1 Cost of Acquisition
6.3.2 Cost of Improvement
6.4 Deductions from Capital Gains
6.4.1 Transfer of Residential House (54)
6.4.2 Transfer of Agricultural land (54B)
6.4.3 Investment in Bonds (54EC)
6.4.4 Transfer of asset other than
Residential Property (54F)
6.4.5 Transfer of asset other than house property
6.5 Illustrations
6.6 Key Words
6.7 Summary
6.8 Self-assessment Questions
7. Deductions from Total Income 197
7.1 Introduction Sec. Ref.
7.2 Deductions (General) (80C)
7.2.1 Contribution to Pension Funds (80CCC)
7.2.2 Pension Funds-Central Govt. (80CCD)
7.2.3 Medical Insurance (80D)
7.2.4 Medical Payment of Dependants (80DD)
7.2.5 Medical Treatment (80DDB)
7.2.6 Repayment of loan (80E)
7.2.7 Donation (80G)
7.2.8 Rent paid (80GG)
7.2.9 Scientific research donation (80GGA)
7.3 Profits from Biodegradable Waste (80JJA)
7.3.1 Deduction of New Workmen (80JJAA)
7.3.2 Income of Off shore Banking (80LA)
7.3.3 Persons with Disability (80U)
7.4 Profits from Infrastructural Activity (80IA)
7.4.1 Profits from Other Undertakings (80D3)
7.5 Illustration
7.6 Summary
7.7 Key Words
7.8 Self-assessment Questions
8. Tax Deducted at Source, Interest, Rebates and Relief 229
8.1 Introduction Sec. Ref.
8.2 Tax Deductions at Source (TDS) (27)
8.2.1 Payment of salary (192)
8.2.2 TDS- interest on securities (193)
8.2.3 TDS- Interest on other than securities (194A)
8.2.4 TDS- Winnings from lotteries (194B)
8.2.5 TDS- Payment to contractors (194C)
8.2.6 TDS- Insurance commission (194D)
8.2.7 TDS- Payment to non resident (194E)
Sportsmen or Sports Association
8.2.8 TDS- Payment in respect of NSC (194EE)
8.2.9 TDS- Repurchase of Mutual Funds (194F) 8.2.10 TDS-Commission (194H)
8.2.11 TDS-Rent (1941)
8.2.12 TDS- Professional fee> (194J)
8.3 Advance Tax
8.4 Self Assessment Tax
8.5 Interest
8.5.1 Late filing of return (234A)
8.5.2 Interest-Non payment of advance tax (234B)
8.5.3 Interest-Non payment of advance tax (234C)
8.5.4 Interest on refund (234D)
8.5.5 Interest-Late payment of tax (220)
8.5.6 Interest-Failure to pay TDS (201)
8.6 Rebate in respect of securities
Transaction tax
8.6.1 Rebate to association of persons (86)
8.6.2 Arrears of salary
8.7 Summary
8.8 Key Words
8.9 Self-assessment Questions -
9. Assessment and Procedures 265
9.1 Introduction Sec. Ref.
9.2 Powers of Income Tax Officers
9.3 Filing of Returns
9.3.1 Filing of bulk returns 139(1A)
9.3.2 E-Filing Of Returns 139(1B)
9.3.3 Loss return 139(3)
9.3.4 Belated Returns 139(4)
9.3.5 Returns by Trusts 139(4A)
9.3.6 Returns by political parties 139(4B)
9.3.7 Returns by Certain Associations 139(4C)
9.3.8 Revised return 139(5)
9.3.9 Defective Returns 139(9)
9.3.10 Signature on Return 140A
9.4 Enquiry Before assessment 142
9.4.1 Assessment 143A
9.4.2 Best Judgment Assessment 144
9.4.3 Income Escaping Assessment 147
9.4.4 Notice under escaping assessment 148
9.4.5 Assessment of any other person 153C
9.5 Appeals to High Court 260A
9.5.1 Revisions 263
9.5.2 Appeal to commissioner 264
9.6 Summary
9.7 Key Words
9.8 Self-assessment Questions
10. Taxation of Partnership Firms 289
10.1 Introduction
10.2 Assessment as a Firm
10.3 Change in Constitution
10.4 Succession of Firms
9. Assessment and Procedures 265
9.1 Introduction Sec. Ref.
9.2 Powers of Income Tax Officers
9.3 Filing of Returns
9.3.1 Filing of bulk returns 139(1A)
9.3.2 E-Filing Of Returns 139(1B)
9.3.3 Loss return 139(3)
9.3.4 Belated Returns 139(4)
9.3.5 Returns by Trusts 139(4A)
9.3.6 Returns by political parties 139(4B)
9.3.7 Returns by Certain Associations 139(4C)
9.3.8 Revised return 139(5)
9.3.9 Defective Returns 139(9)
9.3.10 Signature on Return 140A
9.4 Enquiry Before assessment 142
9.4.1 Assessment 143A
9.4.2 Best Judgment Assessment 144
9.4.3 Income Escaping Assessment 147
9.4.4 Notice under escaping assessment 148
9.4.5 Assessment of any other person 153C
9.5 Appeals to High Court 260A
9.5.1 Revisions 263
9.5.2 Appeal to commissioner 264
9.6 Summary
9.7 Key Words
9.8 Self-assessment Questions
10. Taxation of Partnership Firms 289
10.1 Introduction
10.2 Assessment as a Firm
10.3 Change in Constitution
10.4 Succession of Firms
10.5 Joint and Several Liabilities of Firms
10.6 Dissolution of Firms
10.7 illustrations
10.8 Summary
10.9 Key Words
10.10 Self-assessment Questions
11. Taxation of Companies 305
11.1 Introduction
11.2 Concept of Amalgamation
11.3 Concept of Demerger
11.4 Taxation of Companies
11.4.1 Minimum Alternate Tax
11.4.2 MAT-Foreign Companies
11.4.3 Credit of MAT
11.5 Illustration
11.6 Summary
11.7 Key Words
11.8 Self-assessment Questions
12. Set off and Carry Forward of Lossess 325
12.1 Introduction Sec. Ref.
12.2 Setoff of Losses
12.3 Deemed Income
12.3.1 Cash Credit (68)
12.3.2 Unexplained Investment (69)
12.3.3 Unexplained Money, Jewellery (69A)
12.3.4 Unexplained Expenditure (69C)
12.3.5 Investment not Fully Disclosed (69B)
12.3.6 Any Amount Borrowed/Repaid
on Hundi (69D)
12.4 Carry Forward of Losses
12.5 Illustrations
12.6 Summary
12.7 Key Words
12.8 Self-assessment Questions
13. Tax Audit 345
13.1 Introduction Sec. Ref.
13.2 Form 3CD
13.3 Presumptive Profits (Clause No. 10)
13.3.1 Business of Civil Construction (44AD)
13.3.2 Business of Plying and Fining (44 AE)
13.3.3 Retail Business (44AF)
13.4 Method of Accounting (145)
13.5 .Amount Admissible under Act
13.5.1 Tea or rubber and Coffee Dev. (33AB)
13.5.2 Extraction of Oil (3ABA)
13.5.3 Scientific Research Expenditure (35)
13.5.4 Sum Paid to Public Sector Cos. (35 AC)
13.5.5 Payment to Certain Associations (35CCA)
13.5.6 Preliminary Expenses (35D)
13.5.7 Extraction of Minerals (35E)
13.6 Amounts Debited to P and L Account
13.7 Payment made to Specified Persons
13.8 Deemed Profits
13.9 Profits Chargeable to Tax
13.10 Deduction on Actual Basis (43B)
13.11 Details of Loan borrowed and Accepted
13.12 Brought forward Losses
13.13 Deduction under Chapter VIA
13.14 Tax Deduction at Source
13.15 Quantitative Details
13.16 Cost Audit Report
13.17 Accounting Ratios
13.18 Summary
13.19 Keywords
13.20 Self-assessment Questions
13.21 Annexure
Appendix A - Computation of Income 375
Appendix B - Suggested Reference Books 401