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- - - - Definition
        
        Tax imposed on Individual or entities in respect of the Income or Profit earned by them.
      - Comprises of
        
        Income Tax Act 1961
        
        Enforced on 01-04-1962
        
        Income Tax Rule 1962
        
        Judicial Decisions
        
        Circulations or Qualifications issued by CBDT
      - Characteristics
        
        Direct
        
        Central
        
        Progressive
      - Computation
        
        Slab
        
        https://drive.google.com/file/d/1aL2_h6uhj59wh4M0hpzImAft0T1002My/view?usp=sharing
        
        Special Rates
        
        Casual Income Rates
        
        Rebate for Rs 12,500 u/s 87A Individual if Income Doesn't Exceed 5,00,000
      - Receival of Income
        
        Income Received
        
        Receipt of Income on First Occasion, Regardless of its Subsequent remittance
        
        Income Deemed to be Received Section 7
        
        Income which is Considered to be available for use by and Individual Regardless of Actual Receipt
        
        Contribution made by Employer to RPF over 12% of Salary
        
        Interest Credited to RPF of the Employee which is over 9.5%
        
        Transfer Balance from URPF to RPF
        
        TDS
        
        Dividend deemed to be received in the year in Which it is declared
        
        Contribution Made by CG or an Employer in PY to account of an employee under a notified contributory Pension Scheme referred in Section 80CCD.
        
        Deemed to Accrue or Arise Section 9
        
        Income has not actually accrue or arise in India but it is deemed to accrue or Arise in India under Income Tax Act
        
        Income deemed to accrue or arise in India, Directly or Indirectly through (A) Business Connection in India (B) Any Property in India (C) Any Asset or Source of Income (D) Transfer of Capital Asset Situated in India
        
        Salary Earned in India and Received Outside India
        
        Salary Payable by Govt. to a Citizen of India for Service outside India
        
        Dividend Paid by Indian Company outside India
        
        Income By the way of Intrest payable by Indian Government, wether it is Paid on Debt incurred or money borrowed in India or Outside India
        
        Income by the Way of Royalty, if it is payable by the Indian Govt.
        
        By the way of Fee or Technical Service, If it is paid by Indian Govt.
    - - Characteristics
        
        Different from Citizenship
        
        Determined Separately for each Previous Year
        
        Assesse may be Resident of Two or More Countries
      - Of Individual
        
        Types
        
        Resident
        Satisfies Any of Basic Condition
        
        Non-Ordinary Resident
        Fails To Satisfy Additional Condition
        
        Ordinary Resident
        Satisfies both Additional Conditions
        
        Non-Resident
        Fails to Satisfy Basic Condition
        
        Conditions
        
        Basic
        
        182+ Days in PY
        
        60 Days in PY + 365 days in 4 Preceding PY
        
        Additional
        
        Resident for 2yrs out of 10 PY, Preceding the relevant PY
        
        730 Days in 7PY Preceding the relevant PY
        
        Exceptions
        
        Second Basic Condition Doesn't Applies to
        
        Who Left India for Employment
        
        Who Left India as Member of Indian Ship
        
        Who is Person of Indian Origin, Comes for Casual Visit
        
        Indian Origin means whom Grandparents born in Undivided india i.e. before 15-08-1947
      - Of HUF
        
        Depends upon Status of Karta
      - Of Firm, AOP or BOI
        
        Based on Therir Control and Management
      - Of A Company
        
        Indian Company
        
        Always Resident
        
        Foreign Company
        
        Only If Control Wholly Lies in India
    - - Characteristics
        
        Relationship of Employee and Employer
        (A) Member of Parliament isn't a Govt. Employee
        (B) Partner of Firm isn't an Employee even if he receives Salary
        
        Surrender of Salary under Voluntary Surrender of Salary Act is Exempted from Tax of All Employee
        
        Place of Accrual: It is Deemed to Accrue or arise at place where services are Rendered
        
        No Provision of Tax Free Salary
        
        Forgoing salaries are also Taxable
        
        Salary received in Foreign Currency Are to be Converted in Indian Currency on TTBR on Last Day of Month prev. to month in which Salary is due or Paid.
        
        It is Taxed on Basis of Due or Received whichever is Earlier
        
        (A) 1st of Next month is the Due Date of Salary for Govt. Employee
        (B) Last of Particular Month is the Due Date of Salary for Bank and Non-Govt Body
        
        Dearness Pay is the Pay Given For the Purpose for Retirement Benefit
      - Exceptions
        
        Citizen of India rendering service to Indian Govt. outside India yet the salary is Taxable in India though Perquisite and Allowance received Outside India are not.
      - Allowance: Permitted Amount within a set of regulations or for a Specified Purpose
        
        Fully Taxable Allowance: Included in Gross Salaries
        DCM-LOS-WFN
        
        Dearness Allowance
        
        City Compensatory Allowance
        
        Medical Allowance
        
        Lunch Allowance
        
        Overtime Allowance
        
        Servant Allowance
        
        Warden Allowance
        
        Family Allowance
        
        Non-Practicing Allowance
        
        Special Allowance
        
        HRA Section 13A
        
        Least of the Following
        
        Actual HRA Received
        
        Rent Paid - 10% of Salary
        
        40% of Salary (50% in Case of DMKC)
        
        Salary = Basic + DA + Fixed %age of Commission
        
        Allowance Exempt up to the amount of Expenses
        TDCHAU
        
        Travelling Allowance
        
        Daily Allowance
        
        Conveyance Allowance
        
        Helper Allowance
        
        Academic Allowance
        
        Uniform Allowance
        
        Allowance exempt up to the amount given or amount Specified, whichever is Less
        
        Child Education Allowance
        100p.m. for Max of 2
        
        Children Hostel Allowance
        300p.m. for Max of 2
        
        Transport Allowance
        (A) Employee is Handicapped then 3200p.m.
        (B) Employee Working in Transport System then 70% of such allowance or Rs.10,000p.m. whichever is less
        
        Entertainment Allowance Section 16(2)
        Included in Gross Salaries
        Only for Govt. Employee,
        (A) Actual Amount Received
        (B) 20% of Basic Salary
        (C) Rs.5,000
        
        Professional Tax Section 16(3)
        
        Fully Exempted Allowance
        
        Foreign Allowance
        
        Allowance to High Court Judge
        
        Sumptuary Allowance Given to High and Supreme Court Judge
        
        Allowance to an Employee of UNO
      - Perquisite: Benefit received in Addition of Salary
        
        Taxable in hands of all categories of Employee
        
        RFA
        
        Unfurnished
        
        Goverment Employee
        
        License Fee Determined by Employee
        
        Private Employee
        
        Owned by Employer
        
        1 more item...
        
        Taken on Hire
        
        1 more item...
        
        Salary = Basic + DA + Bonus + Commission + All Taxable Allowance
        Shall not include Employer's Contribution to PF A/C
        
        Furnished
        
        Unfurnished + 10% of the Cost of Furniture + Hire Charge
        
        Accommodation Provided at Concessional Rate
        
        RFA - Amount Recovered from Employee
        
        Accommodation Provided in Hotel
        
        Least of Following
        
        24% of Salary during which Accommodation is Provided in Hotel
        
        Actual charges Paid or Payable to Hotel
        
        Salary = Basic + DA + Bonus + Commission + All Taxable Allowance
        Shall not include Employer's Contribution to PF A/C
        
        Obligation of Employee paid by Employer
        
        Value of Specified Security or Sweat Equity share allotted or Transferred Directly or Indirectly by the employer free of Cost or at Concessional Rate
        
        The Value of any other Fringe Benefit
        
        Interest Free or Concessional Loan
        
        Loan under Rs.20,000
        
        Nil
        
        Taken for Medical Treatment of Specified Disease in Rule 3A
        
        Nil
        
        Other Case
        
        Amount of Interest Calculated at the rate of SBI on the First Day of Relevant PY on Maximum Outstanding Balance
        
        Use of Movable Asset
        
        Laptop and Computer
        
        Nil
        
        Other
        
        10% of Actual Cost or Hire Charge for Period of Use
        
        Transfer of Movable Assets
        
        Computer and Electronics
        
        Actual Cost - 50% Dep on WDV
        
        Motor Car
        
        Actual Cost - 20% Dep on WDV
        
        Other Asset
        
        Actual Cost - 10% Dep on SLM
        
        Value of Free Meal, Tea and Snacks
        
        Tea and Snacks = Nil
        
        Free Meals and Non Alcoholic Beverage Provided in Remote Area = Nil
        
        Free Meals and Non Alcoholic Beverage Provided in Offlice = 50rs per meal is exempted
        
        Value of Gift Voucher and Token
        
        If Below 5000 in Aggregate then Nil, Excess will be taxable with Full Value
        
        Taxable only in Case of Specified Employee
        
        Def. of Specified Employee:
        
        Director of Company
        
        Has Substantial Interest in Company i.e. 20% Voting Rights
        
        His Income under Head Salary Exceeds Rs.50000 after deduction u/s 16
        
        Salary = Basic + Bonus + Commission + Taxable Allowance + Cash Benefit - Deductions under sec 16
        
        Valuation of Facility of Sweeper, Gardener, Cook and PA
        
        Employed by Employer
        
        Taxable for Specified Empoloyee
        
        Employed by Employee
        
        Taxable for All Employee
        
        Valuation of Facility of Gas, Electricity and Water
        
        Connection in The Name of Employee
        
        Taxable for All Employee
        
        Connection in The Name of Employer
        
        Taxable for Specified Employee
        
        Education Facility
        
        To Children of Employee
        
        School Owned by Employer
        
        Cost of Such Education Incurred
        
        In any Other School
        
        Cost of Such Education in Similar School but Exempt up to Rs.1000p.m. Per Child
        
        To Other House hold Members
        
        Cost of Such Education Incurred / In Similar School
        
        If value Facility Exceeds 1000p.m. Then The Perquisite will be the Full Value without any deduction of Rs.1000p.m.
        2.Child included Step Child as Well as Adopted child
        
        No Limitation of No. Of Child
        
        Facility of A Car
        
        Owned By Employer
        
        Expenses Paid by Employer
        
        Used For
        
        3 more items...
        
        Expenses Paid by Employee
        
        Used For
        
        3 more items...
        
        Owned By Employee
        
        Expenses Paid by Employer
        
        Used For
        
        3 more items...
        
        Expenses Paid By Employee
        
        Nil
        
        Any amount Recovered from Employee shall be deducted to know the Taxable Value
        
        If More than one Car is Provided to Employer, One Car is Treated as Wholly For Private Use and Others For Both Official and Private Purpose
        
        Tax-Free Perquisite
        
        Medical Facility
        
        Treatment in India
        
        Employer's Hospital = Exempt
        
        Government's Hospital = Exempt
        
        Specified Disease in Approved Hospital = Exempt
        
        Reimbursement of Health Insurance Premium = Exempt
        
        Reimbursement of Expenses of medical Treatment in Private Hospital = Fully Taxable
        
        Treatment Outside India
        
        Expenses on medical treatment = Exempt Subject to RBI Permission
        
        Medical treatment and Stay abroad, Including one attendant = Subject to RBI Permission
        
        Expenses of Travelling including one Attendant = Fully Exempt
        
        Tea and Snack Facility
        
        Residential accommodation Provided at Site
        
        Loan less than Rs.20,000 or For Treatment of Specified Disease
        
        Perquisite provided by Govt. to Employee outside India
        
        Tax Paid By Employer on the non-monetary Perquisite of employee shall be Exempt in the Hands of Employee
        
        Refresher Course Facility
        
        Laptop and Computer Provided to Employee
        
        Privilege Pass to Railways and Airline Staffs
        
        Leave Travel Concession u/s 10(5)
        
        On Leave to any Place in India
        
        To any Place in India after Retirement from his Service
    - - Provident Fund: Compulsory, Government managed Retirement saving Scheme
        
        Types
        
        SPF
        
        for Govt./Semi Govt. Employee and University/Educational Institution
        
        RPF
        
        For Private Employee
        approved by PF Commissioner and Income Tax Commissioner
        
        URPF
        
        For Private Employee
        May not approved by PF Commissioner but Defiantly Not Approved by Income Tax Commissioner
        
        PPF
        
        For any Member of Public
        min Deposit = 500
        max Deposit = 1,50,000
        
        Taxability: https://drive.google.com/file/d/1qqpN7lxxOcnagbDiBCZQF9frETVbAFjz/view?usp=sharing
      - Gratuity: Gift in Return for Service Rendered
        
        Government Employee
        
        Fully Exempted
        
        Non-Government Employee
        
        Covered Under Gratuity Act 1972
        
        Served For 5+ Year
        
        Least of the Following
        
        Actual Gratuity Received
        
        15/26LDSCYOS
        
        20,00,000 Aggregate
        
        Not Covered Under Gratuity Act 1972
        
        Least of the Following
        
        Actual Gratuity Received
        
        1/2Average of 10mth SalaryCYOS
        
        20,00,000 Aggregate
      - Pension: A regular Payment made After retirement or Death of Employee as award of his Past Services or his Contribution to Personal Pension Scheme
        
        Commuted Pension (Lumpsum)
        
        Govt., LA or SC
        
        Fully Exempted
        
        Others
        
        Received Gratuity
        
        Exempt 1/3rd of TCV
        
        Not Received Gratuity
        
        Exempt 1/2 of TCV
        
        Uncommuted Pension (Periodic)
        
        Fully Taxable
      - Leave Encashment
        
        Govt. Employee
        
        Fully Exempted u/s 10(10AA)
        
        Others
        
        Least of the Following Shall be Exempted
        
        Actual Amount Received
        
        10mth Average Salary
        
        Salary For Unveiled Leave
        
        Cash equivalent to unveiled Leave
        
        3,00,000
      - Retrenchment Compensation: Compensation Received Under Industrial Dispute Act 1947
        
        Least of the Following shall be Exempted
        
        Actual Amount of Compensation
        
        1/2Average SalaryCYOS
        
        5,00,000
        
        Salary = Basic + DA
        
        Monthly = Last Three Calendar Month
        
        Weekly = Wages of Last Four Weeks
        
        Daily = Wages of Last 12 Working Days
      - Voluntary Retirement Service
        
        Least of the Following shall be Exempted
        
        Actual Amount Received
        
        3LDSCYOS
        
        LDS*Remaining month of Service
        
        Rs.5,00,000
        
        Salary = Basic + DA + Fixed %age of Commission
    - - Characteristics
        
        Consist of Land, Building and Apartments
        
        Assessee is the Owner of the Property
        
        Property is not being used for Business or Profession purposes
        
        Not Exempted under any Other Section of Income Tax
      - Types
        
        Fully Exempted
        
        Income from Farm House
        
        Annual Value of Palace of Ex-Indian Ruler
        
        House used For Own Business Or Profession
        
        Income From Vacant House
        
        Income from House Property Owned by LA, Charity, Scientific Research Association, Trade Union, Political Party
        
        Taxable
        
        Let Out House
        
        Self Occupied House
        
        Deemed to Let out
        
        House Vacant Part of Previous Year
      - Deductions
        
        30% of Annual Value
        
        Interest on Borrowed Capital
        
        Interest for Previous Year
        
        Entire Amount as well as Interest on Fresh Loan is Deductible
        
        Interest for Pre-Acquisition or Pre-Construction Period
        
        Claimed as Deduction over Period of Five Year in Equal Installment
        
        Interest not deductible
        
        Intrest paid outside India on which tax hasn't been paid or deducted and in respect no person in india who may be treated as an agent
      - Important Terms
        
        Municipal Value: Value determined my Municipal Authorities for Tax Purposes
        
        Fair rental Value: Rent of Simmilar property in the same locality
        
        Standard rent: Rent fixed by Rent control Act
        
        Annual Value: Inherent capacity of a House Property to earn rent
      - Special Treatment
        
        Realisation of Unrealised Rent Sec.25AA
        
        Deduction Allowed
        
        The amount of realised rent is chargeable to tax after making 30% deduction, but expenses incurred aren't deductable
        
        Deduction Not allowed
        
        Any amount realised from rent is Fully exempted
        
        Arrear of rent
        
        Taxable in the year of receipt after 30% on it
        
        Property owned by Co-owner
        
        Self occupied
        
        Annual value of each co-owner is Nil, and maximum deduction can be claimed are 30,000/200000 under section 24b
        
        Let out
        
        To be computed for each owner as per their definite share
    - - Definition
        
        Business: Profit motive, Risk, Regular, Production and Procurement, Advertisement
        
        Profession: Rendering of service, Charging fee, Less risky, Governed by Professional Institution,
      - Rules
        
        Recovery of Bad debts
        
        If allowed deduction earlier year
        
        Exempt when Realised
        
        If not allowed deduction in earlier year
        
        Taxable when realised
        
        Business or Profession Carried by Assessee
        
        Tax is Charged on Aggregate Income
        
        P&L of Speculative Business are to be kept Seperate
        
        No tax is Paid on Notional Profit
        
        Legal or Illegal Business, Both are Taxable but Criminal Proceedings will not be allowed as Deductions
        
        Preliminary expenses are not Allowed as Deductions
        
        Non Capital Business losses are not allowed as Deductions
        
        Sum Allowed Previously as Deductions are Taxable if Recovered during the Previous Year
      - Business expenses
        
        Expressly allowed
        
        Rent, Rate, Taxes, Insurance and Repairs
        
        Repairs and Insurance of machinery plant and furniture
        
        Depreciation
        
        No Dep is Charged if Asset Sold During PY
        
        If acquiring days is less than 180 days then Depreciation will be halved
        
        Bonus and Commission to Employee
        
        Interest Paid on Capital Borrowed
        
        Employers Contribution to RPF
        
        Bad Debt
        
        Expressly Disallowed
        
        Sum Paid on Account of Income Tax
        
        Expenditure on Advertisement by political Party
        
        Any Salary Royalty Interest Fee Payable outside India, Non-resident, Resident Whose Tax has not been paid
        
        Any Provision or Reserve
        
        Deductable in actual payment basis Section 43B
        
        Leave Encashment
        
        Interest Payable to Scheduled bank
        
        Bonus or Commission Payable to Employee
        
        Expenditure on scientific research Section 35
        
        In house Research
        
        Normal Business
        
        100
        
        Specified Business
        
        150
        
        Contribution to Others
        
        Approved Institutions
        
        150
        
        Company
        
        100
        
        National Laboratory
        
        150
        
        App. inst For social research
        
        100
        
        No Loss Due to Writing off
        
        Family Planning Expenditure for Employee of Company
        
        Unabsorbed Depreciation
        
        Capital Expenditure on Scientific Research
      - Rates of depreciation
    - - Definition
      - Types
        
        STCG
        
        LTCG
      - Exemption
        
        On Transfer of House Property Used for Residence
        
        Transfer of Urban Agriculture Land
        
        Compulsory Acquisition of Land and Building
      - Terms
        
        Capital Assets
        
        Doesn't Includes
        
        Commercial Goods
        
        Movable Goods
        
        Inclusive of
        
        Exclusive of
        
        Agriculture Land
        
        Special Bearer Bond
        
        Gold Bonds
        
        Self Generated Goodwill
        
        Financial Asset
        
        FVC
        
        Deemed Full Value of Consideration
        
        Expenses of Transfer
        
        COA
        
        Deemed Cost of Acquisition
        
        Cost of Improvement
        
        Enhanced Compensation/Consideration
        
        Indexation of COA and COI
      - Exception
  - - - Valuation
      - Technique