TAX READY RECKONER @ INCOME TAX MANAGEMENT

 

Basic Knowledge/Concepts about Income Tax

  1. Agricultural Income [Section 2(1A)] - Definition under I.Tax
  2. Person [Section 2(31)] - Definations under I.Tax.
  3. Income [Section 2(24)] - Definations under I.Tax.
    1. Types of Income
    2. Income Deemed To Be Received In India
    3. Income Which ‘Accrues’ Or ‘Arises’ In India
    4. Income Deemed to Accrue or Arise in India
      1. [Section 9(1)(i)] - Income Arising From Business Connection In India
      2. Income from any property held in India and assets or sources of income located in India
      3. Income from transfer of capital assets situated in India
      4. [Section 9(1)(ii)] - Salaries earned in India
      5. [Section 9(1)(iii)] - Salaries For Government Service Outside India
      6. [Section 9(1)(iv)] - Dividend paid abroad by Indian Company
      7. [Section 9(1)(v)] - Income By Way Of Interest
      8. [Section 9(1)(vi)] - Income By Way Of Royalty
      9. [Section 9(1)(vii)] - Income By Way Of Fees For Technical Services
  4. Heads of Income [Section-14]
  5. Gross Total Income [Section-80B (5)]
  6. Total Income [Section 2(45)]
  7. Rounding off of Total Income [Section 288A]
  8. Rounding off of Tax [Section 288B]
  9. Assessment Year [Section 2(9)]
  10. Previous Year [Section 2(34) r.w. Section 3]
  11. Income is Taxed in the same Year in which it is Earned
  12. Constitutional Provision Governing Taxation in India [Article 246 (Seventh Schedule)]
  13. Taxes to be imposed only by Authority of Law [Article 245]
  14. Sources Of Law Relating To Income Tax (Documents containing Laws relating to Income Tax)

Capital & Revenue

  1. Capital Receipts vs Revenue Receipts
  2. Capital Expenses vs. Revenue Expenses
  3. Revenue Losses Vs. Capital Losses

Basis of Charge (Residential Status)

  1. Introduction and Meaning of Residential Status
  2. Residential Status of an Individual
    1. Resident (Ordinary Resident) [Section 6(1)]
    2. Resident But Not Ordinarily Resident
    3. Non-resident [Section-2(30)]
  3. Residential Status of H.U.F.
    1. Ordinary Resident [Section 6(2)]
    2. Not Ordinarily Resident [Section 6(6)(b)]
    3. Non-Resident [Section 2(30)]
  4. Residential Status Of FIRM And AOP Or BOI
    1. Ordinary Resident [Section 6(2)]
    2. Not Ordinarily Resident
    3. Non-Resident [Section 2(30)]
  5. Residential Status of a ‘Company’
    1. Resident [Section 6(3)]
    2. Not Ordinarily Resident
    3. Non-Resident [Section 2(30)]
  6. Residential Status of ‘Every’ other Person
  7. Residential Status In A Nutshell

 

Exempted Incomes (Tax-Free) Under Section 10(1) to Section 10(49) i.e. total 89 Sections

Section 10 of Income Tax Act has given a long list of incomes which are totally exempt from tax and
so these incomes are not included in the gross  total income of the assessee. In other words, such incomes are totally Tax-Free.

While calculating Total Income in any previous year of any person, any income coming
under Sec. 10(1) to Sec. 10(49) shall be exempted
.

Tax Holiday (Sections 10A, 10AA, 10B & 10BA)

  1. Free Trade Zone (FTZ) – Special Provision in respect of Newly Established Undertaking in Free Trade Zone.         
    1. Conditions to be satisfied
    2. Amount of Deduction-General Provisions
    3. Period and Rate of Deduction
    4. Transfer under a Scheme of Amalgamation or Demerger

  2. Special Economic Zone (SEZ)- Special Provisions in respect of newly established units in special economic zone.
    1. Conditions to be satisfied
    2. Amount of Deduction
    3. Consequence for mercer and demerger.

  3. 100% Export Oriented Undertakings (100% E.O.U.)
    1. Conditions to be Satisfied
    2. Amount of Deduction
    3. Period of Deduction
    4. Transfer under a Scheme of Amalgamation or Demerger

  4. Income from Export of Artistic Handmade Wooden Articles
    1. Conditions to be Satisfied
    2. Amount of Deduction

Tax Holiday- Deduction
(Sections 80-IA, 80-IAB, 80IB & 80IC)

  1. Deductions In Respect Of Profits And Gains From Industrial Undertakings Or Enterprises Engaged In Infrastructure Development. [Sec. 80-IA]

  2. Deductions In Respect Of Profits And Gains By An Undertaking Or Enterprise Engaged In Development Of Special Economic Zone[Sec. 80-IAB]

  3. Deduction In Respect Of Profits And Gains From Certain Industrial Undertakings Other Than Infrastructure Development Undertaking.
    [Sec. 80-IB]


  4. Special Provisions In Respect Of Certain Undertakings Or Enterprises In Certain Special Category States- How To Find Out [Sec. 80-IC]

Tax Rates
For the Financial Year 2014-2015 [ A.Y. 2015-2016]

 

Compution of Total Income

Income from 'Salary'

> 'Salary' - Meaning & Definitions
> "Provident Fund" Valuation for Computing Salary Income
> Allowances Under Section 17(3)
> 'Perquisies' & 'Income Tax' ( Taxable & Exempted) Under Section-17(2)
> Profit in Lieu of Salary Under Section-17(3)
> Deductions Under Section-16 from Gross Salary
> Deductions Under Sec.80C out of Gross Total Income
> Chat Showing Computation of 'Salary' Income

Income from 'House Property'

> Sec. 22 : Definition of "Income from House Property"
> Income Excluded from Tax Under " Income from House Property"
> Computation of Income from 'Let-Out Property'
> Sec.23(1) : Gross Annual Value
> Deduction of Municipal Tax
> Deductions Under Sec. 24
> Computation of Income from 'Self-Occupied Property'
> Chat Showing Computation of House Property Income
> Check List for Assessment of House Property Income

Profit and Gains of   'Business or Profession'

 1.Definition Of Head Business or Profession [Section 28]

2. Compensation Received as Business Income [Section 28(ii)]

3. Income of a Trade or Professional Association [Section 28(iii)]

4. Income from Export Incentives is chargeable to Income Tax

 5. Any Amount Received Under certain Agreement for not to Carry on Business [Section 28(va)]

6. Speculation Business [Explanation to Section 28]

7. Profit Earned from an Illegal Business

 8. Transfer of certain Assets Specified u/s 35AD in certain circumstances [Section 28(vii)]

8-A. Certain Incomes relating to business but not taxable under the head ‘Profits Gains of Business or Profession .

9. Computation of Income of Business or Profession - General Important Points

10. General Principles - for Deductions Allowed from Gross Income of Business and Professions

11. Deductions from Gross Income of Business or Profession [ Section 30 to 44DB]

12. Expressly Admissible Deductions from Gross Income from Business or Profession [Section 30-36]

13. Expenditure Incurred in the Field of Scientific Research [Section 35]

14. Expenses on Research Activities carried on by the assessee himself

15. Contribution to Approved Institutions to carry on Research is Allowed as Weighted Deductions for Calculating Profits and Gains of Business or Professions.

 17. Expenditure incurred on the acquisition of Patents Rights or Copy Rights [Section 35A] [Applicable for expenditure incurred before 1-4-1998]

18. Expenditure on know-how [Section 35 AB] [Applicable for expenditure incurred before 1-4-1998]

 19. Expenditure for obtaining License to operate Telecommunication Services [Section 35 ABB]

20. Expenditure on eligible projects or schemes [Section 35 AC]

 21. Deduction in respect of expenditure incurred on setting up of a Specified Business [Sec. 35AD]

22. Any amount given to an institution or association [Section-35CCA]

23. Expenditure on Notified Agricultural Extension Project [Section-35 CCC] [w.e.f. A.Y. 2013-14]

24. Expenditure on Notified Skill development project [Section-35 CCD] [w.e.f. A.Y. 2013-14]

25. Amortisation of Certain Preliminary Expenses [Section 35D]

26. Expenditure on demerger or amalgamation [Section 35DD]

27. Amortisation of Expenditure Incurred Under Voluntary Retirement Scheme [Section 35DDA]

 28. Expenditure on Prospecting etc., for certain Minerals [Section 35E]

29. Other Deductions Allowed to Compute Income from Business or Profession   [Section-36]

30. Interest on Borrowed Capital [Sec. 36(1)(iii)].

31. Deduction of discount on Zero Coupon Bond [Section 36(iiia)]

32. Contribution to Provident and Superannuation Fund [Sec. 36(1)(iv)].

34. Employee’s contribution towards staff welfare schemes [Sec. 36(1)(va)]

35. Bad debts [Sec. 36(1)(vii)]

36. Bad debts of Banks, financial institution and industrial investment corporation etc. [Section 36(1)(viia)]

37. Special Reserve Created and Maintained by Financial Corporation [Section 36(1)(viii)].

38. Expenditure on Family Planning [Section-36(1)(ix)].

39. General Or Allowable Deductions [Section 37]

41. Commission earned by the agents of Life Insurance Corporation, Unit Trust of India, Post Office or Mutual Funds

42. Legal Expenses in the Interest of Business are Allowable Expenses

43. Losses incidental to Business Allowed to be Debited.

44. Expenses Expressly Disallowed In the Case of any ‘Assessee’ [ Section-40a]

45. Expenses Expressly Disallowed In the Case of any Firm [Section 40(b)]

46. Expenses Expressly Disallowed In General Cases [Section 40(b)]

47.       Disallowing of certain Expenses under certain circumstances like ‘Payments to Relatives’

48.Payments exceeding ` 20,000 by cash/bearer cheque [Section 40A (3)].

48-A. Provision for the Payment of Gratuity – [Section-40A(7)]

 49. DEEMED PROFITS Under Profits and Gains of Business or Professions [Section 41]

50. VALUATION OF STOCK for Profit and Gains of Business or Professions

51. Deduction Of Certain Payments Only If Actually Paid [Section 43B]

52. Maintenance Of Accounts By Certain Persons Carrying On Profession Or Business. [Sec. 44AA]

53. Compulsory Audit For The Non-Corporate Assessees [Section-44 AB]

54. Computation of Income on Estimated Basis [Section 44AD]

 55. Profit from the business of carriage of goods for truck owners [Section 44 AE]

56. Special provision for computation of income from royalties in case of nonresidents [Section 44DA]

57. Partly Agricultural and Partly Business Income

 58. Adjustment In The Profit And Loss A/C Prepared By The Assessee

60. Computation of Profits and Gains of a Non-Resident from Shipping Business— [Section 44B]

61. Computation of Profits and Gains of business of Oil Exploration [Section 44BB]

 62. Computation of Profits and Gains of the Business of operation of Aircrafts by Non-Resident [Section 44 BBA]

63. Computation of Profits of Foreign Enterprises [Section 44BBB]

64. Ceiling Limits in respect of Head Office Expenses [Section 440]

67. Special Provisions in case of Income of Public Financial Institutions etc. [Section 43D]

Income from 'Capital Gain'

1.       Capital Gain , Capital Assets & Property for Computing Capital Gain

 

2.       Types of Capital Assets for Computing ‘Capital Gain’

 

2A.    Types of Capital Gains for Computing ‘Capital Gain’

 

3.       Computation Of ‘Period Of Holding

 

4.       Transfer Of A Capital Asset [Section-2(47)]

 

5.       Transactions Not regarded as ‘Transfer’ [Section-47]

 

6.       Capital Gain is Deemed to be the Income of the Previous Year

7.       Amount Received from insurer [Section-45(1A)] for Computing Capital Gain

 8.      Transfer of Capital Assets by a person to firm, AOP or Body Of Individuals (BOI) [Section 45(3)] for Computing Capital Gain

 9.      Transfer of Capital Assets on Dissolution of Firm, AOP or Body Of  Individuals (BOI) [Section 45(4)] for Computing Capital Gain

 10.    Enhancement of Compensation on Compulsory Acquisition of Assets [Section-45(5)] for Computing Capital Gain

10(A).Sale of units Purchased for Deduction U/s 80 CCB [Section-45(6)]

11.     Distribution of Assets by A Company in Liquidation for Computing Capital Gain

11(A).Capital Gain on Purchase by A Company of its Own Shares or Other  Securities [Section 46A]

12.     DEEMED CAPITAL GAIN [Section 47A]

13..    Method of Computing Capital Gain [Section 48]

13-A. Expenses Disallowed u/s Section 48 for Computing Capital Gain

14.     Cases in which the Indexation of Cost is not to be done while Calculating long Term Capital Gain

15.     Computation of Capital Gain in Case of Non-Residents [Sec. 48 Proviso 1 ]

16.     Determination of Cost of Acquisition for Computing Capital Gain.

 17.    Taxation of Gain on ‘Slump Sale’ for Computing Capital Gain

18.     Special Provision for full Value of Consideration in certain cases (Section 50C] for Computing Capital Gain

 19.    Treatment of Advance Money Received and Forfeited (Section-51] for Computing Capital Gain

20.     Cost of Acquisition of Goodwill [Section-55(2)(a)] for Computing Capital Gain

21.     Cost of Acquisition of Shares [Section 55 (2) (v)] for Computing   Capital Gain

22.     Capital Gains Exempted u/s 10

23.     Capital Gains—Exempted u/s 54

24.     Capital Gain on Transfer of Self-Cultivated Agricultural Land in Urban   Areas [ Section 54 B]

25.     Capital Gains on Compulsory Acquisition Of Land And Buildings [Section 54D]

26.     Capital Gain on Transfer of any Long Term Capital Asset [Section-54EC]

27.     Exemption of Capital Gain on Transfer Of Long-Term Capital Assets in case of Investment In Residential House [Section 54F]

28.     Capital Gain on Shifting of Industrial Undertaking from Urban Areas to Non-Urban Areas [Section 54G]

29.     Exemption of Capital Gain on transfer of assets in case of shifting of Industrial Undertaking from an urban area to any Special Economic Zone (SEZ) [Sec. 54GA]

 30.    Long term Capital Gain on Transfer of Residential Property if Net Consideration is Invested in the Equity Shares of an Eligible company [Section 54GB] [w.e.f. A.Y. 2013- 14 but upto A.Y. 201 7-1 8]

 31.    Reference to Valuation Officer [Section 55] towards Capital Gain

32.     TREATMENT OF CAPITAL LOSS [Section 74]

33.     TAX ON CAPITAL GAINS

Income from 'Other Sources'

> Sec.56 : Basis of Charges
> Deductions from 'Income from Other Sources'
> Amounts Expressly Disallowed
> Income From Other Sources – in  Nutshell

'Clubbing of Income' - Aggregation of Income

> Sec.60 : Transfer of Income without Transfer of Assets
> Sec.61 : Revocable Transfer of Assets
> Sec.64 : Inclusion of Income of Spouse, Minor Child , etc. in income of Individual
 

'Set Off and Carry Forward of Losses'

> Sec.70 : Set-Off of Loss from one Source against Income from another Source Under the Same Head of Income.
> Sec.71 : Set-Off of Loss from one Head against Income from another Head
> Sec.71 B : Carry Forward and Set-Off of Loss Under the Head 'Income from House Property'
> Sec.72 : Carry Forward and Set-Off of Business Losses
> Sec.73 : Losses in the Speculation Business
> Sec.74 : Losses Under the Head 'Capital Gains'.
> Sec.74a : Losses from Certain Specified Sources Falling Under the Head 'Income from Other Sources'
> Table showing Set Off and Carry Forward of Losses
 

Deductions

in respect of certain Payments.

    1. Deduction in respect of Life Insurance Premia, Deferred Annuity, Contribution to PF, etc. [ Sec. 80 C ]
    2. Deduction in respect of Contribution to certain Pension Funds [Sec.80CCC]
    3. Deduction in respect of Contribution to Pension Scheme of Central Government or any other Employers [ Sec. 80 CCD]
    4. Deduction in respect of Health or Medical Insurance Premia [ Sec.80D]
    5. Deduction in respect of Maintenance Including Medical Treatment of a Dependent who is a person with Disability [ Sec. 80 DD ]
    6. Deduction in respect of Medical Treatment , etc. [ Sec. 80 DDB ]
    7. Deduction in respect of Interest of Loan taken for Higher Education [Sec.80 E ]
    8. Deduction in respect of Donations to certain Funds, Charitable Institutions , etc. [ Sec. 80 G ]
    9. Deduction in respect of Rents Paid [ Sec. 80 GG

Deductions in respect of certain Incomes

    1. Deduction in respect of Profit and Gains from Industrial Undertaking or Enterprises engaged in infrastructure Development [ Sec. 80 IA ]
    2. Deduction in respect of Profit and Gains from Industrial Undertakings or enterprises engaged in development of Special Economic Zone. [Sec. 80 IAB ]
    3. Deduction in respect of Profit & Gain from certain Industrial Undertaking other than Infrastructure Development Undertaking [Sec.80-IB]
    4. Special Provisions in respect of Certain Undertaking or Enterprises in certain special category States. [ Sec. 80-IC]
    5. Deduction in the case of Hotels and Convention center in NCR [Sec.80ID]
    6. Deduction in respect of certain undertaking in North-Eastern States [Sec.80-IE].
    7. Deduction In Respect Of Profit And Gains From Business Of Collecting And Processing Of Bio-Degradable Waste. [ Sec. 80-JJA]
    8. Deduction In Respect Of Employment Of New Workmen [ Sec. 80-JJAA]
    9. Deduction In Respect Of Certain Income Of Offshore Banking Units And International Financial Services Center. [ Sec. 80-LA]
    10. Deduction In Respect Of Income Of Co-Operative Societies. [ Sec. 80P ]
    11. Deduction In Respect Of Royalty Income, Etc., Of Authors Of Certain Books Other Than Text-Books [ Sec. 80-QQB ]
    12. Deduction In Respect Of Royalty On Patents [ Sec. 80-RRB ]

Other Deductions

    1. Deduction In Case Of A Person With Disability [ Sec. 80 U ]
 
Income Tax on Co-operative Cocieties
1.         Definition of Co-operative society [Section 2(19)]—
2.         Deduction in respect of income of co-operative societies [Section 80P]
3.        RATES OF INCOME-TAX FOR CO-OPERATIVE SOCIETIES [ A.Y. 2014-2015 & A.Y. 2015-2016]
 
Income Tax on Partnership Firms
1.      Meaning of Firm, Partner and Partnership—
2.      Liability of Partners of limited liability partnership in liquidation [Section 167C] —
3.      Assessment as a Firm [Section 184(1)]—
4.      First assessment as a firm [Section 184(2)]—
5.      Subsequent assessment as a firm [Sections 184(3) & 184(4)]—
6.      Failure of conditions mentioned in Section 144 [Section 184(5)]—
7.     Assessment when section 184 not complied with [Section 185]—
8.     Uls 40(b). Amounts deductable subject to limits.
9.     Special Provisions For Computation Of Income Of Certain Types Of Business
10.   Rates of Income-tax of Partnership Firms
Limited Liability Partnership
1.         Meaning of Limited Liability Partnership—
2.         Process to Start LLP
3.         Essential elements to incorporate LLP—
4.         Who can be partner in LLP—
5.         User Registration—
6.         Designated Partners and their role—
7.         Filing of LLP agreement (Form-3) and Partners’ details (Form-4)—
8.         Accounts, Audit and Returns—
9.         Conversion of existing firms, Companies and unlisted public company into an LLP—
9(a).    # Conversion of small company into LLP (Section 47(xiiib)]
10.         Winding up and dissolution of LLP—
11.       Difference between LLP and Partnership—
12.       Special provisions relating to certain limited liability patnerships— [Inserted bythe Finance Act, 2011, w.e.f. 1.04.2012].
 

Income Tax Authorities

  1. Various Authorities
  2. Power Of Income Tax Authorities Relating To Search And Seizure [ Section 132 ]
  3. Application Of Seized Or Requisitioned Assets [Section132(B)]
  4. Power Of Survey [ Section 133a ]
  5. Provision Relating To Power To Collect Certain Information [Section 133b]
  6. Disclosure Of Information Regarding Assessees To Certain Authorities [ Section 138 ]

Recovery of Tax and Refunds

  1. Payment of Tax
  2. Modes of recovery of Tax
  3. Refunds

Tax Deducted at Source (TDS)

    1. Introduction- Deduction of Tax at Source (TDS)
    2. Deduction of Tax from the “Salary” [ Sec-192]
    3. Deduction Of Tax From Interest On Securities [ Section-193]
    4. Deduction Of Tax From Deemed Dividend [ Section-194]
    5. Deduction Of Tax From Interest Other Than Interest On Securities [ Section 194A]
    6. Winning From Lottery Or Crossword Puzzle Or Card game And Game Of Any Sort [Section 194B]
    7. Winning From Horse Race [ Section 194BB]
    8. Payment To Contractor And Sub-Contractor [ Section 194C]
    9. Tax Deducted At Source From Insurance Commission [ Section 194D]
    10. Payments To Non-Resident Sportsmen Or Sports Associations [ Section 194E]
    11. Commission, Etc., On The Sale Of Lottery Tickets [Section 194G]
    12. Commission Or Brokerage [ Section 194H]
    13. Payment Of Rent [ Section 194 I ]
    14. Fees For Professional Or Technical Services [ Section 194J]

Filling of Return

  1. Introduction
  2. Time Limit For Filling Return Of Income [ Section 139(1)]
  3. When Return Of Loss Should Be Filed [ Section 139(3)]
  4. Can Return Be Filied Beyond Time [ Section 139(4)]
  5. Can Revised Return Be Filed [ Section 139(5)]
  6. What Is A Defective Or Incomplete Return [ Section 139(9)]
  7. Who Should  Sign The Return Of Income [ Section 140]
  8. Permanent Account Number (PAN)

Tax Planning , Tax Avoidance and Tax Evasion

1. Meaning of Tax Planning

1.1. Why Every Person Needs Tax Planning ?
1.2. How is Tool of Tax Planning Exercised ?
1.3. Methods Of Tax Planning

2. Tax Avoidance
Tax Evasion
4. The Difference Between ‘Tax Planning’ And ‘Tax Management’
5. The Difference Between ‘Tax Avoidance’ And ‘Tax Evasion’.

Penalty

A. Types of Penalties imposed under Income Tax Act. 1961

B. Power to Reduce or Waive Penalty, etc. in certain cases (Section 273 A)

C. Stay or Compounding proceedings [Section 273 A (4)]

D. Procedure for imposing Penalty [Section 274]

E. Time limits of commencement and completion of Penalty proceedings (Section 275)

F. Power of Commissioner to Grant Immunity from Penalty [Section 273AA]

G. Summary Of Provisions Relating To Penalties

H. Important Notes on Penalty under Income Tax Act. 1961.

 

Prosecutions By Income Tax Authorities

    1. For removing any Assets, Books of Account, Documents etc. found during search in contravention of order served U/s 132(3) [ Sec. 275A]

    2. Removal, concealment, transfer or delivery of property to avoid tax recovery [ Sec. 276 ]
    3. Failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B. [ Sec. 276B]
    4. Failure to pay the tax collected at source. [ Sec. 276BB]
    5. Willful attempt to evade tax, etc. [ Section 276 (C)(1)]
    6. Failure to furnish returns of income [ Sec. 276CC]
    7. Failure to produce accounts and documents. [ Sec. 276D]
    8. Abetment of false return, etc. [ Sec. 278]
    9. Offences by companies. [ Sec. 278 B]
    10. Offences by Hindu undivided families. [ Sec. 278C]

Income Tax "Settlement Commisstions"

    1. Meaning of Settlement Commisions
    2. Setting Up Of Settlement Commission
    3. Constitution Of Settlement Commission [Section 245B]
    4. Jurisdiction And Powers Of Settlement Commission [Section 245BA]
    5. Vice-Chairman To Act As Chairman [Section 245 BB]
    6. Transfer Of Cases [Section 245 BC]
    7. Decision To Be Majority [Section 245 BD]
    8. Application For Settlement Of Cases [Section 245 C]
    9. Calculation Of Additional Income-Tax [Section 245C (IA)]
    10. Bar On Making Application [Section 245C (1E)]
    11. Procedure On Receipt Of Application [Section 245D]
    12. Payment Of Additional Income-Tax [Section 245D (2A)]
    13. Power Of Settlement Commission To Order Provisional Attachment To Protect Revenue [Section 245DD (1)]

Fringe Benefit Tax (FBT)

1. Introduction
2. Salient Features Of FBT
3. Important Points Relating To Fringe Benefit Tax
4. Characteristics Of FBT
5. Classification Of Employer For FBT
6. Classification Of Not Employer For FBT
7. Direct Fringe Benefit
8. Deemed Fringe Benefit
9. Payment Of FBT To The Government
10. Filing Of FBT Return

Service Tax

    1. Service Tax – Key Provisions At A Glance
    2. Applicability Of Service Tax
    3. Service Tax Rate
    4. Registration Formalities
    5. Payment & Refund Of Tax
    6. Filling Or Returns
    7. Assessments
    8. Central Value Added Tax (Cenvat) Credit
    9. Penalties & Prosecutions

Value Added Tax (VAT)

    1. Introductions
    2. Concept of VAT
    3. Types of Dealers
    4. General terminology used in VAT
    5. Advantages of VAT over Sales Tax
    6. VAT Rates
    7. Computation of VAT and Profit
    8. Items Covered in Indian VAT

Central Sales Tax (CST)

    1. Introductions
    2. Inter-State Sale
    3. What are the objectives of CST Act ?
    4. What are the conditions for CST Act to become applicable.
    5. Rate of CST
    6. Sale Price
    7. CST Transactions Forms

Tax Collected at Source (TCS)

    1. Introductions
    2. Classification of Seller for TCS
    3. Classification of Buyer for TCS
    4. Goods and Transactions classified under TCS.
    5. Certificate of TCS
    6. TCS Exemptions
    7. Payment of TCS to the Government
    8. Electronic TCS (e-TCS)
    9. Filing of TCS Returns
 

Taxation in Companies

1.      Corporate Tax ( MEANING & CONCEPT)

1.1. Sec. 2(26) : Definition Of An Indian Company

1.2. Sec. 2(23A) : Definition Of A Foreign Company

1.3. Definition Of A Domestic Company

1.4. Sec.2(18): Company Of Substantially Interest To The Public

1.5. Corporate Tax Rates

1.6. Computation Of Tax

1.7. Gross Total Income

1.8. Allowable Deductions

1.9. Tax Rebates Available For Corporate Tax

1.10. Payment Of Tax

1.11. Advance Tax Payment

1.12.Filing Of Income Tax Returns

1.13.Forms For Filing Corporate Tax   

2.      COMPUTATION OF BOOK PROFIT

3.      ANALYSING COMPUTATION OF TOTAL INCOME AND BOOK PROFIT

4.      AMOUNTS EXPRESSLY ALLOWED AS DEDUCTION

4.1.  Sec. 30  :           Rent, Rates, Taxes, Repairs & Insurance Of Buildings Used For Business

4.2. Sec. 31 :             Repairs & Insurance Of Plant, Machinery & Furniture

4.3. Sec. 32  :            Depreciation

4.4. Sec. 36(1)(i) :     Insurance Of Stock

4.5. Sec. 36(1)(ib) :   Insurance Premium On The Health Of Employees

4.6. Sec. 36(1)(ii) :    Bonus Or  Commission Paid To Employees

4.7. Sec. 36(1)(iii) :   Interest Paid On Borrowed Capital For The Purpose Of Business Or Profession

4.8. Sec. 36(1)(iv)  :  Employer’s Contribution Towards Recognized Provident Fund Or An Approved Superannuation Fund.

4.9.  Sec. 36(1)(v)  :  Employer’s Contribution Paid Towards An Approved Gratuity Fund

4.10.Sec.36(1)(va)]: Employee’s Contribution Towards Staff Welfare Scheme.

4.11.Sec.36(1)(vii)]:  Bad Debts

4.12. Sec.36(1)(ix)]:  Family Planning Expenditure Incurred By Company

4.13.Sec.36(1)(xii) :  Banking Cash Transaction Tax (BCTT)

4.14. Sec. 37             :General Deduction

4.15.                           Loss arising due to Business

4.16.                           Penalty For Any Breach Of Law

 

5.      SEC. 40 A : AMOUNT EXPRESSLY DISALLOWED AS DEDUCTION                        

6.      SEC. 35 : EXPENDITURE ON SCIENTIFIC RESEARCH 

7.      SEC. 35D : AMORTISATIN OF CERTAIN PERLIMINARY EXPENSES

8.      RESTRICTION ON DEDUCTIONS

8.1. Sec. 40 A           :Non-Deductible Expenses or Payments

8.2. Sec.40A(2)(a)    :Payment Made to Relatives

8.3. Sec.40A(3)         :Cash Expenditure 

8.4. Sec. 43 B           :Certain Expenses Allowed as Deduction only on Payment

(A)[ Section 43b]      Is Applicable Only To Following Actual Paymennt

(B)                               In Which Year Deduction Is Allowed ?

9.      [SECTION 115JB]  MINIMUM ALTERNATIVE TAX (MAT)

9.1.      Introduction

9.2.      Provisions Of Minimum Alternative Tax On Companies (Mat) [Section 15 JA]

9.3.      Tax Credit In Respect Of Tax Paid Under Mat    [Section 115JAA]

9.4.      [Seci1on 115JB] :     Special Provision For Payment Of Tax By Certain Companies (MAT)

9.5.      Tax On Distributed Profits

10.    CARRY FORWARD AND SET-OFF LOSES

          10.1.   Business Loss [Section 72 (1)].

10.2.   Loss of speculation business.

10.3.   Loss under the head capital gains

10.4.   Loss under the head ‘Other Sources’ [Section 74A (3)).

10.5.   Carry forward and Set-off  Loses of Certain Companies [Section 79]

10.6.   Order In Which Current And Brought Forward Losses Are To Be Adjusted

10.7.   Losses in Case of Succession of Business or Profession

10.8.   Provisions relating to carry forward and set-off accumulated loss and unabsorbed depreciation in certain cases of amalgamation [Section 72 (A)]

10.9.   Carry forward and Set-off Lossess of Certain Companies [Section 79]

10.10. Provisions relating to carry forward and set off of accumulated losses and unabsorbed depreciation on amalgamation and demerger [Section 72A]

10.11. Filling of Return of Loss [Sec. 80]

11.    TAX ON DISTRIBUTED PROFITS OF DOMESTIC COMPANIES [ Sec. 115-O ]

 
Tax Management- Managerial & Financial Decisions
 

1. Tax Management with reference to -Location & Nature of Business.

1.1.       Tax Management  In Location Of The New Business
1.2.       Tax Management  In Nature Of  The New Business

2. Tax Management with reference to -Deemed Dividend

2.1.       Introduction
2.2.       Any Distribution Entailing Release Etc.
2.3.       Any Distribution By Way Of Debenture Etc.
2.4.       Distribution To Shareholders On Liquidation
2.5.       Distribution On Reduction Of Capital     
2.6.       Payment By Way Of Advance Or Loan To Shareholders
2.7.       Tax Planning Through Issue Of Bonus Shares
2.8.       Tax Planning Through Purchase Of Own Shares Or Distribution Of Dividend

3. Tax Management with reference to –Lease or Buy Decisions

4. Tax Management with Reference to - Repair, Replace and Make or Buy Decisions

4.1. Repair, Replace, Renewal Or Renovation

4.2. ‘Make Or Buy’  Decisions

5. Capital Gains on Distribution of Assets by Companies in Liquidation

6. Sale of Scientific Research Asset

7. Tax Management With Reference To Capital Structure

7.1. Capital Structure Decisions

7.2. Tax Considerations

7.3. Tax Planning

8. Conversion of Firm / Sole Proprietorship to Company

8.1. Conversion Of From Into Company [ Section 47 (Iii) ]

8.2. Conversion Of Sole Proprietary Business Into Company [Section 47(Xiv)]

8.3. Provisions Relating To Carry Forward And Set Off Of Accumulated Loss And Unabsorbed Depreciation Allowance In Case Of Succession [Section 72a(6)]

8.4. Withdrawal Of Exemption [ Section 47a(3)]

 
[A] ‘Assessment’ of “Agricultural Income

1.         Need for Assessment of Agricultural Income

 

2.         ‘DEFINITION’ Of Agricultural Income

 

3.         Tests To Determine Agricultural Income

Test  (A) —Income derived from land

Test (B)—Land is used for agricultural purposes

Test (C)—Land is situated in India

 

4.         Types Of Agricultural Income

1.         Any income received as rent or revenue from agricultural land

2.         Income derived from Agriculture

3.         Any income accruing to the person by the performance of any process to render the produce marketable

4.         Any income received by the person by the sale of produce raised or received as rent-in-kind

5.         Income from buildings used for agriculture

 

5.         Partly Agricultural and Partly Non-agricultural Income

1. Rule 7—General Rule [Applicable to all except Tea, Coffee and Rubber]

2. Meaning of ‘Market Value’ [Rule 7(2)].         

3. Rule 7A—Growing and manufacturing of Rubber in India

4. Rule 7B—Growing and manufacturing of coffee in India

a. Case [ I ] .If coffee is grown and cured by seller [Rule 7B(I)]

b. Case [ II ] If coffee is grown, cured, roasted and grinded by the seller with or without mixing chicory or other flavouring ingredients, [Rule 7B(IA)]

5. Rule 8—Growing and manufacturing of Tea in India

    TABLE - PARTLY AGRICULTURAL AND PARTLY BUSINESS INCOME

 

6.         Illustrations Of Agricultural Incomes

 

7.         Illustrations Of Non-Agricultural Incomes

 

8.         Assessment Of Agricultural Income

What to Integrate?

When to Integrate?

When not to Integrate?

How to Integrate?

 
[B] ‘Assessment’ of “Individual

1. Income received from different institutions

1.         As a member of Hindu Undivided Family.

2.         Income received as share from AOP.

3.         As a partner of firm assessed as firm assessed u/s 184.

4.         Share of income from firm assessed u/s 185.

5.         As a shareholder of a company.

2. Incomes of other persons to be included in the Total Income of an individual

  1. Transfer of income without transfer of asset.

  2. Revocable transfer of assets.

  3. Income of a minor child.

  4. Income from assets transferred to the spouse, daughter-in-law by an individual

  5. Income from the assets transferred by an individual

  6. Share of income arising to spouse for being member of a trust or to minor child who is beneficiary under a trust.

3. Computation Of Tax Liability

 
[C] ‘Assessments’ OF “HUF (Hindu Undivided Family)”

Meaning of Assessment of HUF

 

1.         Schools of Hindu Law

Mitakshara School.

Dayabhaga School

 

2.         Residence of H.UF.

 

3.         Assessment of Hindu Undivided Family

 

4.         Partition of Hindu Undivided Family (Section 171)

Total Partition.

Partial Partition.

 

5.         Assessment on Partition

            Income not treated as family income

            Individual Income or Family Income

 

 
[D] ‘Assessment’ Of “FIRMS

 

1.         What Is Partnership ?

 

1. Which firm is to be assessed as FIRM ? [Section 184]

2. Instrument of partnership

3. When instrument of partnership is to be submitted?

4. Change in Constitution?

5. Meaning of Change in Constitution [Section 187]

6. Succession of One Firm by Another Firm (Sec. 188)

7. Liability of partners for tax payable by firm [Section 188A]

8. Firm Dissolved or Business Discontinued

9. Book Profit

 

2.        ASSESSMENT OF FIRM U/S 184 [which fulfils conditions of Section 184]

[A1]     Computation of firm’s business income :

[A2]     Limits on payment of remuneration to partners [Section 40(b)]

[A3]     Computation of Total Income of a FIRM

[A4]     Computation of firm’s Tax

[A5]     Treatment of Share of Income from firm

[A6]     Treatment of remuneration and interest received from firm

 

3.        ASSESSMENT OF FIRM U/S 185 [Assessment when Section 184 not complied with]

I.          Computation of business income

II.         Computation of total income

III.        Computation of firm’s Tax

IV.       Treatment of Share of Income from firm

V.        Treatment of remuneration and interest received from firm

 
[E] ‘Assessment’ Of “Association Of Person(AOP)

1.         Computation of AOP’s Business Income

2.         Computation of AOP’s Total income

3.         Rates Of Tax For  PFAOP/AOP  [u/s 167B]

A.        Where shares of members of PFAOP/AOP are not known or are indeterminate:

B.        Where shares of members of PFAOP/AOP are known or are determinate:

4.         Allocation Of P.F.A.O.P’s Total Income [Section 67A]

5.         Treatment of Share of Income Received By Members Of P.F.A.O.P.

6.         Rebate of Tax u/s 86

 
[F] ‘Assessment’ of “Companies

1.         Company Taxation

2.         Important Definitions

[A]       Person [Section 2(3 1)]

[B]       Company [Section 2(17)]

[C]       A person having substantial interest in the company [Section 2(32)]

[D]       Principal Officer [Section 2(35)]

3.         Types Of Companies

            1. Indian Company [Section 2(26)]

2. Company in which public are substantially interested [Section     2(18)]

3. Widely Held Company

4. Closely held Company

5. Domestic Company [Section 2(22A)]

6. Meaning of “the prescribed arrangement for declaration and payment of dividends within India” (Rule 27)

7. Foreign Company [Section 2(23A)]

8. Investment Company [Section 109 (ii)(i)]

9. Consultancy Service Company

10. Trading Company [Section 109(iia)]

11. Banking Company

4.         Residential Status Of A Company [Section 6(4)]

            (a) Resident Companies [Section 6(3)]

(b) Non Resident [Section 2(30)]

5.         Incidence Of Tax—Scope Of Total Income

            A. Resident : U/s 5(1)

B. Non Resident. U/s 5(2)

6.         Types of incomes

1. Income received in India

2. Deemed to be received in India

3. Income accruing or arising in India

4. Income deemed to accrue or arise in India

5. Any income accruing and received outside India

6. Past Untaxed Income

7.         Computation Of Gross Total Income Of A Company

            1. Head wise calculation

            2. Agricultural Income of a Company

            Table - Splitting Tip Of Composite Income In Certain Specified Cases

8.         Set off and Carry Forward of Losses of Companies

9.         Carry Forward of Losses

            1. House property

            2. Profits and gains of Business or Profession

            3. Loss under the head capital gains

            4. Other sources

10.       Special Provisions Regarding Losses Relating To Companies Only

            Accumulated Loss

Ubabsorbed Depreciation

11.       Carry forward and Set-off losses of certain companies [Section 79]

12.       Deductions Out Of Gross Total Income

13.       Special provision for payment of income tax by certain companies or minimum alternate tax (MAT) on companies [Section 115JB)

Credit of tax paid under mat [Section 115JAA (la)]

Necessity of preparing Profit & Loss Account in accordance with the provisions of Companies Act, 1956

Points to be kept in mind while preparing Annual Accounts by the Companies

14.       Calculation of Book Profits [Explanation to Sec. 115JB(2)]

15.       Explanation of Certain Items of Statutory Additions:

            (a)       Income tax paid or payable or any provision thereof

            (b)       Transfer to any reserve             

            (c)        Provisions for unascertained liabilities

(d)       An ascertained liability      

(e)       An unascertained liability

16.       Treatment of Certain Statutory Deductions

 

(i)         Withdrawal from any Reserve or Provision [ Section 11 5JB(2)(i) (explanation)]

(ii)        Case A. If reserve was created before 1-4-97

(iii)       Case B. (1) If reserve was created on or after 1-4-97

(iv)       B/F loss or Unabsorbed depreciation

(v)        MAT Provisions not to affect c/f & set off provision provided under Income Tax Act.

(vi)       Furnishing of report from Chartered Accountant [Section 115JB(4)]

17. Dividend Tax—Special Provisions Relating To Tax On Distributed Profits Of Domestic Companies

1. Tax on distributed profits of companies [Section 115-0]

2. Treatment of dividend received by a domestic company from its subsidiary company [Section 115-O(1A) [Inserted by the Finance Act, 2008, with retrospective effect from Assessment Year 2008-09]

3. Responsibility to deposit tax

4. Final payment

5. No deduction

6. Interest payable for non-payment of tax by domestic companies [Section 115P )

7. Assessee in default [Section 115Q]

18.       Credit of Tax paid under MAT [Section 115JAA(1A)]

1. Amount of Tax Credit

2. Year in which tax credit shall be available [Section 115JAA(4)]

3. Period for which tax Credit is available [Section 115JAA(3A)]

4. Increase/Decrease of Tax Credit

[G] ‘Assessment’ of “Co-operative Societies

1.         Meaning & Definition - Co-operative Societies

            Co-operative Society—Definition

            Urban Consumer’s Co-operative Society

 

2.         Deductions from Total Income

 

3.         Concession u/s 27(11,) : Co-operative Housing Society 

            Other Deductions

 
[H] ‘Assessment’ in “Special Cases

 

1.         Tax Liability on Income on which no Tax is Payable [Section 110]

 

2.         Tax on Accumulated Balance of Recognised Provident Fund [Section 111]

[A]       Tax On Capital Gains :

A1.      Short Term Capital Assets [Section 111A]

                        A2.      Long Term Capital Gain [Section 112]

 

3.         Tax on Dividends, Royalty and Technical Service Fee in case of Foreign Companies [Section 115A]

 

4.         Tax on Income by way of Income From Royalty Received Under an Agreement entered into on or after 1-6-2005 [Section 115A(ii)AA ]

 

5.         Tax on income by way of fees for technical servives [Section 115A(b)BB)]

 

6.         Amendment in Section 115A relating to tax on dividends etc.

 

7.         Tax on income from capital gain on sale of units purchased in foreign currency [Section 115AB]

 

8.         Tax on Capital Gain from sale of Bonds or GDRs purchased in foreign currency [Section 115AC]

 

9.         Tax on income of Global Depository Receipts purchased in foreign currency or capital gain on their transfer [Section 115ACA]

 

10.       Tax on income of Foreign Institutional Investors from securities or Capital gain on transfer of securities [Section 115AD]

 

11.       Tax on Gain from life insurance business [Section 115B]

 

12.       Tax on winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or gambling or betting [Section 115BB]

 

13.       Tax on Non-resident sportsmen or sports association [Section 115BBA]

 

14.       Tax on Non-Residents [Section 115C to 115-I ]

1.         Computation of total income of a non-resident [Section 115D ]

2.         Tax on investment income and long-term capital gains [Sect/on 115E ]

3.         No tax on capital gain on transfer of foreign exchange assets [Section 115F]

4.         Return of income not to be filed [Section 115G ]

5.         Continuance of benefit even after becoming Resident [Section 115H]

6.         Option to assessee [Section 115-I]

15.        Specials provision for payment of tax by certain companies [Section 115JB ]

 

16.     Special Provisions Relating To Tax On Distributed Profits [Section 115-O ]

            C1.      Tax on distributed profits of companies

C2.      Responsibility to deposit tax

C3.      Final payment

C4.      No deduction

C5.      Interest on non-payment of tax [Section 115P ]

C6.      Tax on distributed income of Mutual Funds [Section 115R]

 

 
[I] ‘Assessment’ of “Fringe Benefits

1.     Fringe Benefit Tax—An Introduction

 

2.         Rationale And Meaning Of ‘Fringe Benefits Tax’

 

3.         Perquisites taxable in the hands of employees v/s Fringe Benefits Tax

            (A) Perquisites Taxable in the hands of Employees

            (B) Perquisites Liable to FBT

 

4.         Feature Of Fringe Benefits Tax

            3.         Chargeable on specified fringe benefits. Section 1 15WB(1)

4.         Valuation of Fringe benefits

5.         Rate of FBT

6.         FBI is a presumptive Tax

7.         FBT is not an allowed business expense          

8.         FBT and MAT

9.         FBT in addition to Income Tax.

10.       Return of Fringe Benefits

 

5.         Meaning Of Certain Expressions

            Definitions [Section 115W]

 

6.         Basis Of Charge Of Tax On Fringe Benefits

6.1.      Charge of fringe benefit tax [Section 115WA ]

 

7.         Fringe Benefits [Section 115WB]

 

8.         Some Examples of Fringe Benefits

 

9.         Some Examples Of Benefits Which Are Not Fringe Benefits

 

10.         Value Of Fringe Benefits [Section-115WC]

 

11.       Advance Tax In Respect Of Fringe Benefits

12.       Return of fringe benefits [Section 115WD]

13.       Assessment of fringe benefits [Section 115WE]

14.       Best judgment assessment [Section 115WF ]

15.       Time limit for completion of assessment u/s 115WF—amendment in Section 153

16.       Fringe benefits escaping assessment [Section 115WG]

17.       Issue of notice where fringe benefits have escaped assessment [Section 115WH]

18.       Payment of fringe benefit tax [Section 115WI ]

19.       Advance tax in respect of fringe benefits [Section 115WJ ]

20.       Interest for default in furnishing return of fringe benefits [Section 115WK]

21.       Computation of interest u/s 115WK—Amendment in [ Section 140A(1A)]

22.       Claim of refund under fringe benefit tax [Section 238(1A)]

23.       Period within which refund of tax paid under fringe benefits tax can be claimed [Section 239(2)]

24.       Interest on refund under fringe benefit tax [Section 244A(1) and (3)]

25.       Appeal to commissioner (appeals) [Section 244A(1)(aa)]

26.       Penalty for non complying with the notice [Section 271(1)(b) and (d)]

27.       Penalty for failure to furnish return of fringe benefits [Section 271FB]

28.       Penalty for non-furnishing of quarterly return u/s 206(a) [Section 272a(2)]

29.       Prosecution for not furnishing of return u/s 115WD(1) or u/s 11WH(1) [Section 276cc]

30.       Abetment of false return filed u/s 115WD(1) or u/s 115WH(2) [Section 278]

31.       Amendment of section 119 [Section 115WL]

 
"Family Tax Planning"- More Income & Less Taxes
1 : Introduction to Family Tax Planning
2 : How To Avoid Clubbing Of Income Of Husband And Wife
3 : How To Avoid Clubbing Of Income Of Minor Children In Parent’s Income
4 : Let Your Minor Children Join Your Band For Tax Planning With Separate Income Tax File
5 : Use Of Marriage For Tax Planning
6 : Your Major Children Are Your Great Tax Savers
7 : Your Parents And In-Laws Can Save More Taxes For You
8 : You May Plan To Save Income Tax For Your Successors
9 : Separate Income Tax File For A Daughter-In-Law
10 : Precautions To Be Taken In The Matter Of Making Gifts And Settlements
11 : Tax Planning For A Nuclear Family
12 : Tax Planning By DINKs (Double Income No Kids)
13 : Tax Planning While Accepting Gift
14 : It Is Possible To Have A Trust For Your Prospective Spouse
15 : It Is Possible To Have A Discretionary Trust
16 : Avoid Oral Trust
17 : Conclusion @ Family Tax Planning
 
Special Provisions relating to 'Income Of Shipping Companies'
[Chapter Xll-G of Income-Tax Act]
 
Security Transaction Tax (STT)
 
Commodities Transaction Tax - CTT
 

Tax Guide for NRI - Tax Planning, Tax Saving, Investment Guidance for Non-Resident Indians !

1. Basic Aspects Of Tax Planning For NRIs

2. How an NRI can Avoid Clubbing of his Incomes and Wealth with that of his Spouse and Children

3. The Incomes of an NRI completely Exempt from Income Tax

4. Capital Gain of an NRI could be Completely Exempt from Income Tax

5. Items completely Exempt from Wealth Tax for an NRI

6. Special Procedure of Assessment regarding Income of an NRI from Foreign Exchange Assets

7. Deductions Allowed to NRIs in the Computation of Total Income and Tax Payable

8. Procedure for the Filing of Income Tax and Wealth Tax Returns, Assessment, and Refunds

9. Gifts by NRIs to Relatives and Friends can be made fully Exempt from Gift Tax

10. FEMA and NRIs Preliminary Aspects Analysed

11. Acquisition and Transfer of Immovable Property in India by NRIs and FEMA

12. Permissible and Prohibited Current Account Transactions in Case of NRI

13. Investment In Shares, Securities, Units And Other Activities, etc. by an NRI in India

14. Deposits in India by an NRI

15. RFC account of a Returning NRI and Investment Abroad

 
 
 
Guide & FAQ on Tax Knowledgebase @ Taxation Income Tax @ Glance HUF - Formation, Planning & Taxation
TRUSTs (Formation, Management & Taxation) NRI (Tax Planning,Saving,Investemnt) Budget 2017-2018  

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