M.K.

GUPTA
CA EDUCATION
9811429230 / 9212011367
WWW.MKGEDUCATION.COM

TAXATION
(Pape !4" Pa # 1$ I%&'(e Ta)
(*'+,(e - 1"

MA. !2014 / NO* ! 2014 P... 2013!14 A... 2014!1/ 0.A. - 2013
NOT 0O1 2A3E (0' P 45a#e C4 &,+a#4'% O%+6"

NO*!2014 PAPE1 4$ TAXATION

(One paper three hours 100 marks) 3e5e+ '7 K%'8+e9:e$ Working knowledge O;<e&#45e=$ (a) To gain knowledge of the provisions of Income-ta law relating to the topics mentioned in the contents !elow" and (!) To gain a!ilit# to solve simple pro!lems concerning assessees with the status of $Individual% covering the areas mentioned in the contents !elow& C'%#e%#=$ PA1T I$ INCOME!TAX (/0 MA1K2" 1& Important definitions in the Income-ta 'ct( 1)*1 +& ,asis of charge" rates of ta es applica!le for different t#pes of assessees -& .oncepts of previous #ear and assessment #ear /& 0esidential status and scope of total income" Income deemed to !e received 1 deemed to accrue or arise in India 2& Incomes which do not form part of total income *& 3eads of income and the provisions governing computation of income under different heads 4& Income of other persons included in assessee%s total income 5& 'ggregation of income" set-off or carr# forward and set-off of losses )& 6eductions from gross total income 10& .omputation of total income and ta pa#a!le" re!ates and reliefs 11& 7rovisions concerning advance ta and ta deducted at source 1+& 7rovisions for filing of return of income& PA1T II - INDI1ECT TAXE2 (/0 MA1K2" O;<e&#45e$ To develop an understanding of the !asic concepts of the different t#pes of indirect ta es and to ac8uire the a!ilit# to anal#se the significant provisions of service ta & 1& Introduction to e cise dut#( customs dut#( central sales ta and 9'T .onstitutional aspects( ,asic concepts relating to lev#( ta a!le event and related provisions +& :ignificant provisions of service ta (i)& .onstitutional 'spects (ii) ,asic .oncepts and ;eneral 7rinciples (iii) .harge of service ta including negative list of services (iv) 7oint of ta ation of services (v) < emptions and '!atements (vi) 9aluation of ta a!le services (vii) Invoicing for ta a!le services (viii) 7a#ment of service ta (i ) 0egistration ( ) =urnishing of returns ( i) .<>9'T .redit ?0ule 1 -) of .<>9'T .redit 0ules( +00/@ >ote If new legislations are enacted in place of the e isting legislations the s#lla!us will accordingl# include the corresponding provisions of such new legislations in place of the e isting legislations with effect from the date to !e notified !# the Institute& :tudents shall not !e e amined with reference to an# particular :tate 9'T Aaw&

 INT1ODUCTION (DI1ECT TAX / INDI1ECT TAX" COMPUTATION O0 TOTA3 INCOME AND TAX 3IA>I3IT. TAXA>I3IT. O0 GI0T AD*ANCE PA.MENT O0 TAX 1E2IDENTIA3 2TATU2 ? 2COPE O0 TOTA3 INCOME INCOME UNDE1 T@E @EAD @OU2E P1OPE1T. KE. TO E00ECTI*E 3EA1NING

20!21 22!90

91!108 109!134 13/!18/

186!26/ 266!272

0EED>ACK 01OM 2TUDENT2 O0 CA!IPCC/PCC 1. *IAENDE1 AGGA1WA3 NO*!2010 (1'++ N'.174639" A++ I%94a T'ppe 4% CA!IPCC ' person who possesses such vast knowledge in the field of ta ation( that we people can onl# dream of( is none other than B& C& ;upta :ir& 3e possesses the rare a!ilit# to teach this procedural su!Dect with utmost ease( ena!ling his students to grasp all the provisions without an# confusion& The 8ualit# of stud# material provided is such that a good stud# of it helped me score )+ marks& The variet# and comple it# of practical pro!lems covered in the !ooks are not availa!le an#where else& One can find man# places where ta ation is !eing taught !ut it is hardl# possi!le to find a !etter place where ta laws are com!ined with their practical applica!ilit# to ensure that all concepts are cr#stal clear& :ir is e tremel# generous& Bone#-making doesn%t appear to !e his priorit# and it is clearl# reflected in his classes( where the infrastructure and administration stands second to none and students are awarded handsome cash-priEes not onl# in classes !ut also in tests( which are regularl# conducted& Thanking :ir for all what he has done would !e an insult since it was onl# his efforts that helped me reach this position& :ir( its #our success& The relationship !etween us started in .7T onl# and continued in I7.. and I hope it will continue forever& 2. P1AC@I AAIN MA.!2010 (1'++ N'.66312" A++ I%94a T'ppe 4% CA!PCC B& C& ;upta :ir is an outstanding teacher& 3e is not onl# a good teacher !ut a good person !# heart& 3is wa# of teaching is e cellent& There are man# provisions in ta !ut :ir repeats ever# provision atleast two times& This helps in understanding those provisions easil#& 3is !ooks are ver# good& <ver#thing from theor# to 70'.TI.'A IAAF:T0'TIO>( <G'BI>'TIO> HF<:TIO>: and ,'0< '.T is covered in his !ooks& :ir%s staff and management is also ver# good& <ver#thing is handled in a s#stematic manner and on time& Overall it was a good e perience& Thanks :ir II J3. 2A@I3 AGGA1WA3 NO*!2011 (1'++ N'.271741" 4#B 1ANK The material provided !# the :ir in the class as well as in !ooks is self sufficient for the e ams& B&C& ;upta :ir%s knowledge a!out the su!Dect is e cellent& Boreover( his down-to-earth nature make him the !est ta teacher one could get& 4. MA.ANK AGA1WA3 AUNE!2009 (1'++ N'. 3//86" 4#B 1ANK :ir has alwa#s !een ver# motivating and his guidance has helped me to e cel in the e ams& :ir has an immense knowledge of the su!Dect and has alwa#s !een availa!le to answer our 8ueries& Thank #ou :irI /. 2A@I3 A1O1A NO*!2011(1'++ N'.21/712" 6#B 1ANK B# opinion towards B&C& ;upta :ir is ver# good& 3is enthusiasm in class has amaEed me a lot& There are man# provisions in the su!Dect !ut :ir repeats them atleast twice which is of immense help& 'lso( the e planation of topic with a relevant practical e ample clears all the 8ueries& B&C& ;upta :ir%s !ooks along with notes cover easil# the entire s#lla!us and the notes prove reall# helpful one da# !efore the e am& O9<0'AA ' ;0<'T <G7<0I<>.<I 6. NIKETA 2A>OO MA.!2011(1'++ N'./2328" 6#B 1ANK I think B&C& ;upta :ir is an outstanding Teacher& 3e has e cellent knowledge of the su!Dect& With his skills and knowledge( he has made Ta su!Dect ver# eas# to understand and reall# interesting& I would recommend ever# aspiring .'( to take guidance from :ir& It will reall# !e helpful& Thank #ou :ir( for guiding us throughout& It was a wonderful e perience& 7. ANU GOE3 NO*!2011 (1'++ N'.288966" 7#B 1ANK The e perience with B&C& ;upta Ta .lasses was reall# amaEingII :ir is full of knowledge and e perience& 3e repeats ever# provision and concept !ehind it in detail& I have personall# never seen him in a hurr# to finish the course& 3is ver# motive is to make sure the student understand the provisions full#I The !ook has large num!er of practical illustrations( which further helps to understand the su!DectI Thank #ou :irIII 8. 1A@U3 C@UG@ NO*!2012(1'++ N'.230037" 8#B 1ANK I% m so glad that I had Doined B&C& ;upta Ta .lasses and not the other competitors& B&C& ;upta :ir is the epitome of knowledge& 3e makes sure that the students do not have an# dou!t a!out their choice of

) coaching& 3is large-heartedness in the form of cash priEes and recognition to the students acts as an e cellent motivator and makes the classes enDo#a!le& Aastl#( the !ooks and other stud# materials are a comprehensive collection of ever#thing re8uired to top this e amination& Thank #ou so muchI 9. MAD@A* >ANKA NO*!2011(1'++ N'.233313" 8#B 1ANK B&C& ;upta :ir is one of the !est teacher in m# life and he is the !est teacher of ta ation in whole India& 3e has a vast knowledge in the field of ta ation which helped me a lot to get such good marks and he inspired me to get rank& ,ecause of him( I developed great interest in ta due to which I am going to choose m# career in field of ta ation& =or this I am ver# thankful to the :ir& 10. 1AAAT GUPTA NO*!2011(1'++ N'.408691" 9#B 1ANK I got )th rank !# scoring great marks in all si su!Dect !ut the !iggest credit for m# achievement goes to B&C& ;upta :ir& 3is wa# of appreciating the students is e cellent& ,ooks given !# B&C& ;upta :ir is so eas# and understanda!le& In .' market B&C& ;upta :ir is the onl# name which helps the students in all areas whether in studies or in motivating the students& Thank #ou :ir& 11. *I2@A3 >AN2A3 MA.!2012 (1'++ N'. 22944/" 10#B 1ANK ' person who can infuse in students provision of Ta ation so comprehensivel# can !e none other than B&C& ;upta :ir& 3e is like an ocean( where!# all the minerals of knowledge can !e e tracted Dust !# attending to classes and pa#ing attention to his lectures& 3is indepth knowledge and detailed !ook are of immense advantage& :ir( its #our success what I have achieved toda# won%t !e possi!le without #our contri!ution :ir& Thank Kou :ir& 12. NE*AID AGGA1WA3 NO*!2010(1'++ N'.178788" 10#B 1ANK B# opinion towards :ir is ver# good& 3is enthusiasm in class amaEed me a lot& 3is indepth knowledge of the su!Dect along with detailed !ooks was of immense help& 3e is !# far the !est ta teacher one can go for guidance& 13. 1UC@IKA A1O1A MA.!2008 (1'++ N'. 62449" 13#B 1ANK B&C& ;upta :ir has vast knowledge a!out the su!Dect and is ever read# to help their students to touch the heights of their career& I owe a great deal of m# success to :ir and this institute and considers m#self to !e fortunate of !eing the part of this institute& B&C& ;F7T' :I0 0O.C: II 14. A2@I2@ 2A>OO AUNE!2009 (1'++ N'. 47977" 13#B 1ANK 's a teacher( B&C& ;upta :ir is Dust like a sea of knowledge and #ou get each and ever# thing from ver# !eginning to end from him& :ir is reall# a nice person& 3e gives each and ever#thing to his student& .oaching is e cellent and the !ook is complete& If a student reads :ir%s note!ook L !ook and get :ir%s knowledge he will sureshot get ver# good marks& 1/. GA1IMA MADAN MA.!2010 (1'++ N'./7619" 13#B 1ANK >o one can replace B& C& ;upta :ir& 3is wa# of teaching is uni8ue in this world& The environment of classrooms is well maintained& The facilities provided were upto the mark& There is no need to refer an# other !ook if #ou are stud#ing B& C& ;upta :ir%s notes and stud# material& ,e honest towards #our studies and :ir will show #ou the wa# of success& 16. *IKA2 NO*!2012 (1'++ N'.240037" 14#B 1ANK B&C& ;upta :ir is an inspiration for .' students and the !est teacher I have ever studied from& 3is wa#s of teaching and conceptual clarit# are flawless& I am reall# thankful to :ir for his contri!ution in m# life and studies& 3is !ooks are also the !est to stud# and practice& 17. KE2@A* GOE3 NO*!2011 (1'++ N'.234/97" 14#B 1ANK ' complete package& ' good teacher with good teaching skills making #ou learn and practice a lot in the class itself& 3is notes are e cellent !oth for the e ams and future& 3e also provides a lot of knowledge for the other issues as well& Thank #ou :irI Thanks a lot for #our help and support& 18. NA*NEET KAU1 MA.!2012 (1'++ N'. 404876" 1/#B 1ANK B& C& ;upta :ir is ver# !rilliant and supporting teacher& 3e is a great human !eing and marvellous person& <ver# aspiring .' must gain his knowledge& 3e provides e cellent and tremendous services to the students& 3e helped me to enhance m# knowledge& Thank #ou so much :ir for this ultimate support and help& :impl# in one sentence he is ;od of Income Ta and is !est teacher in .' world&

10 19. ADITI AGA1WA3 NO*!2011 (1'++ N'.298278" 1/#B 1ANK B&C& ;upta :ir is a great teacher having an e ceptionall# well knowledge a!out the su!Dect& 3e teaches ever# concept in ver# detailed manners and the notes provided are sufficient for preparation during e am& 20. @A12@ KUMA1 GA1G NO*!2011 (1'++ N'.207614" 1/#B 1ANK The notes of B&C& ;upta :ir was ver# useful for m# preparation& I give the credit of m# success to :ir& 'lso( the stud# material and the motivational words of :ir were ver# useful& 21. 2ANDIP AGA1WA3 MA.!2010 (1'++ N'. /3610" 1/#B 1ANK ' man who has achieved all the levels of satisfaction and is here Dust to serve the societ# with his knowledge and aura& 3e is the man with the a!ilit# to produce rank holders with most ease& 3is !ook is more than enough for scoring heavil#& 22. 1EEMA NO*!2010 (1'++ N'.174999" 1/#B 1ANK I think( B& C& ;upta :ir is one of the !est teacher in Ta ation& =or me( ta ation !ecame so much eas# Dust !ecause I have studied from B&C& ;upta :ir& It%s a life time achievement for me that I have studied from B&C& ;upta :ir& Thanks a lot to :ir( #ou are great& 23. 2AC@IN GUPTA MA.!2008 (1'++ N'. 29304" 16#B 1ANK <G.<AA<>T .O'.3I>; I <G.<AA<>T C>OWA<6;< I <G.<AA<>T ,OOC I <G.<AA<>T W'K O= T'CI>; F7 HF<0I<: I The wa# of teaching of :ir is ver# nice& 3e makes each and ever# thing so eas# that we can learn it in the class room itself& The notes and !ooks provided !# :ir are e cellent& There is no need to consult an# !ook and in m# opinion B&C& ;upta :ir is the !est teacher of income ta in world& 24. 2UMAN 1ANI NO*!2008 (1'++ N'. 21180" 16#B 1ANK 3e is the !est teacher and having e cellent practical knowledge& 3e is ver# cooperative and !oosts the confidence level of the students& >o teacher can !e compared with him !ecause he is the !est& 3e is also a super! person as a human !eing and understands the pro!lems of students and solves them& I am ver# Thankful to him and even words are not sufficient to e press his gratitude& 2/. 1ID@I NA1U3A NO*!2009 (1'++ N'. 6096/" 16#B 1ANK .oaching provided !# B& C& ;upta :ir is ver# good and knowledge of teacher is ver# good& < cellent Teacher( =a!ulous personalit# and Barvellous ;uide these are the apt words to descri!e B&C& ;upta :ir& 3e taught me how !eautiful the stud#ing is& 3is knowledge of the su!Dect is outstanding& 26. ANI3 KUMA1 MA3I NO*!2010 (1'++ N'. /3101" 16#B 1ANK ,roadl# :peaking( B& C& ;upta :ir%s knowledge( e perience and .' oriented approach is far !e#ond other teachers& 3e is ver# much e cellent in his concept& Thanking #ou and m# colleagues and seniors namel# 'mit( 'nkit( BanoD( B# .&'& M 'ksha# :ir& Thanking #ou again& If #ou want to get 0ank( do what #our teacher and #our mind vis-N-vis #our heart guides& 0eall#I 27. 1AM DA2 2ONAWA3A MA.!2011 (1'++ N'.4/919" 16#B 1ANK =irst of all Thank Kou 9er# Buch :ir for #our support( it helped me to take a rank& Kou are a good teacher& Kour method of teaching and #our never ending knowledge( !ecome ver# useful for me to get the good marks in ta ation& Overall I am full# satisfied with #our teaching& 28. C@A1U 2ING@A3 AUNE!2009 (1'++ N'. 46941" 17#B 1ANK B&C& ;upta :ir is the !est teacher for Ta & 3e is a ver# nice person& 3e is alwa#s there to help the students& 3is class notes and !ook are self sufficient to score good marks in Ta & I admire him not onl# as a teacher !ut also as a guide and as a person& Thank #ou :ir& 29. *A1UN 3AK1A NO*!2008 (1'++ N'. 693/1" 18#B 1ANK In m# view( B&C& ;upta :ir is the !est teacher for Income Ta for 7..& 3e is a !rilliant teacher& The stud# material provided was e cellent with perfect e amples& Aastl#( it is hard work and support of our teacher which has helped me to get 15th 0ank in 7..& T@ANK .OU 2I1CC 1EGA1D2 30. AMAN AAIN NO*!2011 (1'++ N'.233247" 19#B 1ANK OThe mediocre teacher tells& The ;ood Teacher e plains& The superior teacher demonstrates M The ;reat teacher inspires&P B&C& ;upta :ir is reall# a great teacher& 3is unmatcha!le st#le of teaching coupled with

11 :ir%s peace M calm nature of dealing with students M handling their 8ueries is reall# e cellent& The reason !ehind m# e cellence in ta ation entirel# goes to B&C& ;upta :ir& The notes M !ooks provided is more than enough M e haustive& It was reall# a great e perience M memora!le period of m# life& Thanks a lot :irI 31. A1PIT >AN2A3 NO*!2011 (1'++ N'.222713" 20#B 1ANK Kou know #ou are in the right place when #ou are taking coaching from B&C& ;upta :ir& B&C& ;upta :ir%s vast knowledge and amaEing conceptual clarit# goes a long wa# in helping #ou understanding Ta ation in great detail& Thank Kou :ir for teaching meII 32. AN2@IKA GUPTA NO*!2010 (1'++ N'.17/016" 20#B 1ANK B& C& ;upta :ir is ver# good teacher and he has a OTreasure of CnowledgeP& 3is teaching st#le is e cellent and I will pra# to ;od for giving successful life1future to B&C& ;upta :ir& ,ooks contain all the necessar# materials& The Institute is also ver# nice and the staff is ver# co-operative in nature and finall# I wish to pa# OThanksP to :ir and his staff for their e cellent teaching and co-operative !ehaviour& ThanksIII 33. ANKIT >AN2A3 NO*!2012 (1'++ N'. 226718" 21=# 1ANK B&C& ;upta .' .lasses is not an institution( !ut a famil#& I am associated with the institution from .7T and it has helped me to achieve 'll India 0ank- +1& B&C& ;upta :ir is having tremendous knowledge in ta ation& 3is wa# of teaching through repetition of the content and various e amples has helped me a lot& 3e is a guide to Ta ation& The !ooks provided are so good that the# present the entire content in a ver# clear manner& The e amples and the ta ation laws in ,are 'ct make the !ooks more interestingI Thank #ouI 34. NI2@U KUMA1I >A1O3IA MA.!2012 (1'++ N'. 23/90/" 21=# 1ANK The person !ecause of whom I found the vast su!Dect ta ver# eas# is none other than B&C& ;upta :ir& 3is teaching st#le is different from the other teachers which helps us learning the complicated ta provisions ver# easil#& I am personall# ver# much inspired !# B&C& ;upta :ir and thanks a lot to him for his support and dedication in the tuition classes& :ir I will alwa#s miss #our OQan ;anP performance of the last class& 3/. ANKIT GO3A2@ AUNE!2009 (1'++ N'. 47738" 21=# 1ANK ;uidance given !# :ir was e cellent& >otes are e cellent( #our concepts are ver# good& 's far as #our !ook is concerned( it is a complete package in itself( covering all the peculiar 8uestionsI Thanks for all #our support and guidanceI Thanks a lot I 36. DEEPAK 1O@1A MA.!2012 (1'++ N'. 406074" 22%9 1ANK In m# view B&C& ;upta :ir is the !est teacher for Ta ation paper& :ir has e cellent knowledge over the su!Dect& :ir use to give real life e amples in the class room so the student can also understand the law properl#& :ir alwa#s encourages the students for hard work !# taking tests and !# providing priEes in the class& :tud# material and notes provided !# the :ir is more than enough to score good marks in the e am& Aastl# I would like to sa# thanks to :ir( from the !ottom of m# heart( Dust !ecause of B&C& ;upta :ir& I could score good marks& 37. 1A@U3 AAIN AUNE!2009 (1'++ N'. 47/97" 22%9 1ANK B&C& ;upta is the !est teacher for Ta ation& B&C& ;upta :ir has vast knowledge a!out the su!Dect and is read# to help their students to touch the heights of their .areer& 3e has alwa#s !een encouraging and without his support( I would not have !een a!le to score a rank& Thank #ou :ir& 38. 2A1T@AK GUPTA NO*!2012 (1'++ N'.241/19" 23 9 1ANK B&C& ;upta :ir has such vast e perience M knowledge in the field of Ta ation that we as students can onl# dream a!out& The classes are ver# well organiEed M we never felt an# kind of !oredom& 'll the 8ueries were solved in the class itself M :ir repeats ever# topic twice or thrice which makes it easier for the students to grasp& 39. MANOA NA1WA3 MA.!2011 (1'++ N'./3612" 23 9 1ANK =irst of all I would like to sa# OT3'>C:P thousand times to B& C& ;upta :ir& I owe m# success to him& 3e is a complete package for ever# .' aspirant for OTa ationP& I think :ir should !e called as OTa ;uruP& I have Doined this coaching in order to achieve a rank and :ir made it possi!le&

1+ :ir !oosted our morale from time to time( gave us the confidence needed to aim the 0ank& :ir handled our 8ueries !oth( in and after the class( so well that we do not need to worr# a!out it at home& Teaching st#le of :ir is fa!ulous and :ir himself is a ver# great personalit#& In last( please !less me :ir& Thanking #ou& 40. 2AWAN >A@ETI MA.!2012 (1'++ N'. 230/69" 2/#B 1ANK B&C& ;upta :ir has a vast knowledge of Ta ation& I thank him for developing m# interest in this su!Dect& <ver#thing from his teaching skills to stud# material is e cellent& I liked his innovative wa# of rewarding students for solving 8uestion on stage& Thank Kou :ir& 41. M. 21INID@I NO*!2011 (1'++ N'.220746" 2/#B 1ANK B&C& ;upta :ir teaches ta to all his students in the easiest possi!le wa# so that the concepts are clear to ever# student in the class& 3e not onl# teaches us !ut also makes us learn in the class itself& :o attending the class completes the preparation then M there& The material provided is another important plus& Thank Kou :ir& Kour teaching has indeed made T'G'TIO> a favourite su!Dect of mine& 42. 1OUNAK AGA1WA3 NO*!2011 (1'++ N'.236372" 2/#B 1ANK >o words can descri!e our teacher (OB&C& ;upta :irP)( if an#one wants to !e under good hands of ta ation( #ou are where #ou should !e& The teacher( the centre were all amaEing& The performance of students itself speaks a!out the teacher and the coaching& What was taught in the classes was more than enough for a rank& 43. C@@A*I ME@TA MA.!2010 (1'++ N'./6911" 2/#B 1ANK Income ta coaching were ver# helpful in m# preparation for the e ams& :tud# material is ver# well organiEed& The practice 8uestions clarified the concept !eautifull#& I thank B& C& ;upta :ir for helping me score so well in ta ation which helped m# overall score in the 7.. e amination& B# warm regards and a heart full $Thank Kou% to #ou :ir& 44. NI2@ANT GUPTA NO*!2010 (1'++ N'.173038" 2/#B 1ANK < cellent coaching for income ta with detailed notes( with supporting e amples on each point& The e cellent 8uer# handling procedure undertaken here helps immensel#& 4/. D@1U* AGGA1WA3 NO*!2008 (1'++ N'. 6618/" 26#B 1ANK Well what should I sa# a!out B&C& ;F7T' :ir( he is a mo!ile enc#clopedia in Ta ation& 3e has vast and e haustive knowledge a!out Ta ation which he alwa#s tries to pass on to the students& Kou can%t forget :ir%s sense of humor& 3e is one of the most dedicated teachers I have ever seen& < tremel# punctual unlike usII I trul# dedicate m# achievements to :ir& 46. MAD@U1 AGGA1WA3 NO*!2009 (1'++ N'. /3009" 26#B 1ANK :ir made Ta look a simple su!Dect& .lasses were full of fun and the !ook is ver# comprehensive #et eas# to stud#& =eel luck# to have chosen B& C& ;upta :ir as m# Ta teacherII 3is coaching is ver# good( knowledge is e cellent and 8ueries taken are e cellent& 47. >1IAE2@ AGGA1WA3 MA.!2010 (1'++ N'. /9234" 26#B 1ANK The !est ta facult# in India& Thanks to B&C& ;upta :ir( and his staff for providing me such environment which helped me get such marks& 48. 1A@U3 >AN2A3 MA.!2013(1'++ N'. 217716" 27#B 1ANK .oaching at B& C& ;upta .lasses is e cellent& 3is !ooks cover each and ever# concept of ta & <ver# student alwa#s in search of !est teacher for his ta classes& I Think that the# should not have an# need to search as B& C& ;F7T' :ir is that teacher for whom ever# student dreamed of& The# e plain each and ever# aspect of ta in such a manner that there would !e no dou!t& 'lso 2 .'%s are availa!le for +/ hours& This t#pe of facilit# is uni8ue in itself& I am trul# appreciating there wa# of teaching( s#stematic administrative setup and additional facilities given during classes& 7riEes given during classes is !est wa# to get the attention of students for important concept& I hope this relationship would continue for =I>'A& T3'>C: a lot :ir II 49. AA>@A2 >@ANDA1I NO*!2012 (1'++ N'. 3301/7" 27#B 1ANK

1B&C& ;upta :ir has an ocean of knowledge regarding the su!Dect which he e plains with utmost lucidit# M simplicit#& Boreover( his ha!it of repeating each provision twice makes it more understanda!le& /0. P1I.A3 MA@AAAN NO*!2012 (1'++ N'. 226942" 27#B 1ANK >o one can possess the vast knowledge of Ta ation which B&C& ;upta :ir possesses& 3e is not onl# a knowledgea!le person !ut also knows the !est wa# to impart it& 3e is the reason for m# success& The infrastructure facilities provided were amaEing and so were the !ooks& Thank #ou :ir J) /1. 2U1ENDE1 >ANIWA3 MA.!2012 (1'++ N'. 404942" 27#B 1ANK B&C& ;upta :ir is a ver# good teacher& /2. @IMAN2@U GUPTA NO*!2009 (1'++ N'. //960" 27#B 1ANK In m# knowledge till date I have not seen such a !rilliant teacher full with enthusiasm( energ# M vast pool of knowledge M e perience& 3is nature is ver# good& The wa# :ir attends our 8ueries is Dust fantastic& Baterial given !# :ir is more than enough& F don%t need to refer an# other !ook& 3e is the !est teacher for Ta ation& /3. 2AMEE1 1OU2@AN MA.!2011 (1'++ N'.1927/4" 27#B 1ANK I was simpl# enthralled !# B&C& ;upta :ir%s wa# of teaching& The conceptual clarit# is awesome& The stud# material is comprehensive and the management is e cellent& Overall( it was a life changing e perience and the dedication of :ir cannot !e ever forgotten& Thank #ou ver# much :irII /4. 2ANAEE* KUMA1 21I*A2TA* MA.!2012 (1'++ N'. 404733" 28#B 1ANK B# opinion a!out teacher is clear that B&C& ;upta :ir gives full help to the students during the classes& The# give full time to student& The techni8ue of teaching is ver# e cellent& 3e is ver# hardworking and good person& The !ook also ver# good& The solved illustration in the !ook is ver# useful to the students& =or an# 8uer# :ir gives e tra classes& 'lso num!er of solved pro!lems gives full opportunit# to the student to !uild their concept regarding ta ation su!Dect& :ir also provides special classes relating to 'mendment in the ta su!Dect& The teaching environment is apprecia!le& //. NITIN KUMA1 AAIN AUNE!2009 (1'++ N'. 47826" 28#B 1ANK There is no match of B&C& ;upta :ir his knowledge is so vast that is !e#ond our thinking& The topic wise modules provided !# :ir covers each M ever#thing that one re8uires to get good marks in ta ation& The atmosphere of the class is so great that I was proud to !e a student of B&C& ;upta :ir( also :ir%s personalit# alwa#s inspire the students and motivate them& Thank #ou :ir& /6. KU2@A3 A1O1A NO*!2010(1'++ N'.36718" 29#B 1ANK B& C& ;upta :ir is a ver# knowledgea!le person and he has a ver# uni8ue st#le of teaching which keeps the students glued to the e planations& The coaching staff is friendl# and co-operative& The !ook covers all the aspects re8uired for the e ams& It is detailed and e haustive& /7. 2ANTO2@ GI1I NO*!2011 (1'++ N'.227904" 30#B 1ANK B&C& ;upta :ir is the !est teacher in ta ation& ,est facult# and good stud# material& /8. A>@I2@EK AAIN MA.!2011 (1'++ N'.18408/" 30#B 1ANK B&C& ;upta :ir is not onl# a !rilliant teacher( !ut also e tremel# helpful person& 3is simplicit# and st#le of teaching makes him different from other teachers& Thank #ou :ir for all #our efforts( that #ou have given for ordinar# students like me to make us shine like stars& /9. *A1UN * KA3E MA.!2011 (1'++ N'.182349" 31=# 1ANK B# e perience as an student of B&C& ;upta :ir has !een wonderful& :ir not onl# e plains the provisions of the 'ct !ut also the reason !ehind those provisions& :ir has amaEing wa#s of taking 8ueries from his students where students can ask their dou!ts during the class or after the class or even !# message service& I feel that the wa# :ir motivates his students in the form of incentives is amaEing& :ir is ver# particular regarding time which I feel adds to his greatness as a teacher& 60. 1O@IT MU1MU1IA NO*!2011 (1'++ N'. 216642" 31=# 1ANK B&C& ;upta :ir is wiEard of ta ation& 3e is reall# !rilliant& 3e makes conceptual clearance of ever# provision to provide us insightful knowledge of ta & 61. A>@I2@EK >AT1A NO*-2011 (1'++ N'.407692" 32%9 1ANK

1/ :ir is ver# motivating and the class notes given !# him in classes are ver# good and knowledgea!le for the e am purposes& It is advised for ever# student that Dust go through the !ooks and class notes of :ir& The# are much sufficient for scoring !etter in e ams& 62. A1UN 2ETIA NO*!2008 (1'++ N'. 21201" 32%9 1ANK I think B&C& ;upta :ir is !est facult# I have ever seen& 3e is having a tremendous knowledge M command in ta ation& The wa# he carries his class is un!elieva!le& 'fter coming to his class( I alwa#s get encouraged from him& Thanks to :ir( for !eing so nice to us& 63. @E3INA MA3ANI MA.!2011 (1'++ N'.47662" 32%9 1ANK I am grateful to the institute and B&C& ;upta :ir for his e cellent teaching and knowledge which he has shared with students like me& Thank Kou :irII 64. 2A@I3 C@AD@A MA.!2011 (1'++ N'.183/69" 32%9 1ANK B&C& ;upta :ir is one of the !est teachers that we have in this .' profession& 3is calm M composed e planations make the student understand the concept in depth& 3is 8uer# resolving techni8ues are !e#ond comparison and also he tr# to e hi!it positive energ# among the students which is commenda!le& Their stud# material and notes are more than sufficient& I would like to thank and congratulate :ir for m# -+nd 0ank& Thank Kou :ir& 6/. KUNA3 MENDI1ATTA MA.!2011 (1'++ N'.48976" 32%9 1ANK I am e tremel# grateful to B&C& ;upta :ir for helping me in getting good marks in ta and for raising m# hopes of m# passing .' < am& =urther to add more( the !ooks that :ir offered to us contained all the relevant 8uestions that we are asked in .' e amination& 66. MONI2@A P1UT@I AUNE!2009 (1'++ N'. 4800/" 33 9 1ANK The motivation provided !# our dear :ir led me into the path where I never felt down& There was alwa#s a hand on us who guided towards the correct path& Boreover( the knowledge provided !# B&C& ;upta :ir is un!eata!le and more than sufficient& I reall# respect him for the whole life and thanks him for whatever I am toda#& 67. *A2UD@A A1O1A MA.!2010 (1'++ N'./78/7" 33 9 1ANK B& C& ;upta :ir is a ver# good teacher& 3is wa# of teaching ever# single topic in a detailed wa# is one thing that I like the most& With this it !uilds up a lot of confidence M clarit# in mind relating to concept of the topic concerned& 68. NUPU1 AAIN NO*!2009 (1'++ N'. 6326/" 34#B 1ANK B& C& ;upta :ir is a !rilliant teacher& >ot onl# that( he is a ver# good human !eing and is alwa#s there to help the students& 3e has alwa#s motivated me and has !een a source of inspiration& The coaching classes suited me reall# well& The wa# :ir handle the 8ueries is worth appreciation& I trul# owe m# success to B& C& ;upta :irI Thank #ou :o much :ir for #our continuous guidance and support& Thank #ouI 69. NE@A AGGA1WA3 NO*!2010 (1'++ N'.1/1847" 34#B 1ANK In I7..( ta seems to !e the toughest !ut when #ou are trained under B& C& ;upta :ir( the fact !ecomes a m#th& The classes are made so spontaneousl# interesting that no point can !e missed out& Incentives given !# the :ir are a !oost to stud# hard and !rings in the sense of competitiveness among students& The stud# material and the notes given !# :ir are enough to score e cellent marks in e ams& Thank #ou :ir for #our !lessings& 70. MO@IT 2A>OO NO*!2011 (1'++ N'.233293" 3/#B 1ANK B&C& ;upta :ir has e cellent teaching skills& I sincerel# thank :ir for his guidance& B&C& ;upta :ir%s simple and eas# approach towards ever# topic makes the su!Dect easier to understand& The stud# material that is provided has all the concepts covered& Overall it was a ver# good e perience& 71. DU1ICA AGA1WA3 NO*!2011 (1'++ N'.200078" 3/#B 1ANK Bere words cannot e plain m# gratitude towards our honoura!le teacher B&C& ;upta :ir& The stud# material is the ultimate one& The wa# of his teaching is reall# commenda!le& 3e enhanced our practical knowledge immensel#& Thank Kou :ir&

12 72. PITAM GOE3 NO*!2008 (1'++ N'. 66077" 3/#B 1ANK The !ook given !# B&C& ;F7T' :ir is more than enough to score good marks& It was due to the hard work and due efforts of B&C& ;F7T' :ir that I am a!le to score good marks in 7.<& Thanks a lot :ir for #our cooperation and sincerit#& C<<7 0O.CI>;II 73. @IMAN2@U KUMA1 MA.!2011 (1'++ N'.47698" 3/#B 1ANK 3e is ver# good teacher& 3e is ver# helpful& 3e alwa#s motivate students !# providing gifts& 74. NI@A1IKA GUPTA NO*!2011 (1'++ N'.222611" 36#B 1ANK <ver# aspect was taken care !# B&C& ;upta :ir from !ooks to class interaction& The st#le of teaching was ver# good and easil# understanda!le& Hueries were alwa#s solved on the spot without dela#& I was ver# satisfied !# the coaching as it helped me to improve m# capa!ilit# and the classes provided a ver# nurturing environment& .oaching was e cellent& 7/. ANAND GUTGUTIA MA.!2010(1'++ N'.6/223" 36#B 1ANK It was great overall e perience and evoked interest in ta & I alwa#s looked forward to m# ta classes& 76. P1I.A 2ING@A3 NO*!2009 (1'++ N'. 39736" 37#B 1ANK In m# view( B& C& ;upta :ir is a fa!ulous teacher& 3is knowledge regarding the su!Dect is ultimate& 3e is ver# devoted M frank to the student& We can ask an# num!er of dou!ts in the class or after the class without an# hesitation& Bost important things I liked a!out him (1) 3e calls the student on stage to solve the 8uestion that help to !oost the confidence in student (+) 3is view of encouraging students !# providing various incentives1rewards& '!out !ooks( I can sa# his !ooks are ver# good covering whole s#lla!us M written in ver# eas# language& 77. 1A@U3 .ADA* NO*!2009 (1'++ N'. /2981" 37#B 1ANK B&C& ;upta :ir is simpl# a Ta ;uru& 3is knowledge a!out his su!Dect is complete& The wa# he teach us is ver# simple M short& Kou need not read an# other !ooks& <ven the classroom notes are enough to score good marks& 3is coaching is e cellent( knowledge is e cellent and 8ueries taken are e cellent& 78. AA1U2@I GA1G MA.!2010 (1'++ N'. 66027" 37#B 1ANK B& C& ;upta :ir is a vast reservoir of knowledge& 3is st#le of teaching is good with a com!ination of e cellent and ver# helpful notes& ,ooks provided !# B& C& ;upta :ir are sufficient in themselves to help an# student achieve a good rank& 3eartiest Thanks to B& C& ;upta :ir III 79. 3OKE2@ AGGA1WA3 NO*!2010 (1'++ N'.189271" 37#B 1ANK :ir( is e cellent in each M ever# area of ta ation& 3is knowledge and teaching st#le is super!& When I started m# ta classes from him( I found this su!Dect easiest among all su!Dects& 0eall# :ir( F r awesome& 'll I can sa# is east or west( B&C& ;upta :ir is the !est& 80. D@WANI 2E@GA3 NO*!2010 (1'++ N'.174/43" 37#B 1ANK B& C& ;upta :ir is intelligent( Doll# and knows the su!Dect ver# well& The classes were enriching since he linked the law with our da#-to-da# lives e plaining the reason e actl# wh# the law was enacted& This gave us a deep knowledge of the su!Dect and clear understanding& The !ook has a good variet# of 8uestions( eas# language and case laws& 81. *I1END1A DA.AMA MA.!2011 (1'++ N'.4/423" 37#B 1ANK ,est thing a!out B&C& ;upta :ir is that( he repeats ever# provision at least two times( which helps a lot& 3e is ver# knowledgea!le person and keeps the class environment( students friendl#& 3e has sound knowledge of the su!Dect& The ,ooks are ver# good and student does not re8uire an#thing else for preparation& Thank #ou :ir( for #our motivation and !eing an inspiration to us& Thank Kou :ir& 82. P1A>IN >A1A3 NO*!2011(1'++ N'.22849" 38#B 1ANK .onceptual clarit# is the most remarka!le feat of B&C& ;upta :ir& 3is notes are magnificent and !ooks are self-sufficient& 83. KI1TI ANEAA NO*!2009 (1'++ N'. /1444" 38#B 1ANK < cellent teacher with e cellent knowledge& 3is wa# of teaching is ver# good& What I liked a!out B& C& ;upta :ir is that he thinks from the point of view of students& 3is !ook is Dust great and was sufficient for getting good marks in ta ation& 3is !ook has a variet# of 8uestions&

1* Than a lot :ir& 84. AA2@I2@ GUPTA NO*!2009 (1'++ N'. /3088" 38#B 1ANK It%s !een an honor to !e a student of B& C& ;upta :ir& 3e is a super! teacher and has a ver# vast knowledge of the su!Dect& 3e is one of the !est teacher I have come across m# life till date& :ir Thank #ou ver# much and I owe a part of m# success to #ou& 3is coaching is e cellent( knowledge is e cellent and 8ueries taken are e cellent& 8/. >A>ITA MITTA3 NO*!2009 (1'++ N'. /2776" 38#B 1ANK B& C& ;upta :ir is the !est teacher in ta ( ver# helping and give due care to ever# student individuall#& 3e has the answer for ever# 8uer#& I respect him a lot& 3is coaching is ver# good( knowledge is ver# good and 8ueries taken are e cellent& 86. 1I2@A>@ KUMA1 GUPTA NO*!2010 (1'++ N'.174748" 38#B 1ANK B& C& ;upta :ir is a ver# !rilliant teacher& 3e has got a ver# positive attitude and he keeps motivating his students to perform well and clearing their 8ueries in a timel# manner as well& The !ooks provided !# :ir are also ver# good containing ver# good 8uestions as well& Wish he could teach me in .' finals also& Thank #ou :ir for all #our guidance to achieve such a result& 87. AA.U2@I KAT.A3 NO*!2011 (1'++ N'.271628" 39#B 1ANK B&C& ;upta :ir is the !est ta teacher and taking his classes has alwa#s !een an e citing affair& 3is knowledge a!out ta and especiall# the wa# things are handled practicall# has !een 8uite enlightening& 3e has made the most feared su!Dect(usuall#)( the most fun filled and eas#& Thank Kou so much :ir and I wish ever#one has an opportunit# to sit in #our class& The !ook( notes and all the management is done ver# properl# and in a smooth manner& 'll in all( the !est wa# to stud# ta & 88. 2UMED@A 1ANI AGGA1WA3 NO*!2011(1'++ N'.222716" 39#B 1ANK B&C& ;upta :ir made Ta look a simple su!Dect( despite of the fact that Ta is the most difficult M complicated su!Dect in I7.. having num!er of provisions& 3e made all the concepts cr#stal clear !# e plaining each concept atleast twice& <ven the .'%s emplo#ed !# :ir for solving the dou!ts and guiding the students were ver# helpful& 'll I could sa# is that it was an amaEing e perience to stud# at B&C& ;upta .lasses& The relationship !etween us started in .7T with 9ai!hav :ir M >eha Bam( it continued in I7.. with B&C& ;upta :ir M I hope it will last long forever& 89. PI.U2@ GUPTA NO*!2008 (1'++ N'. 6/203" 39#B 1ANK :ir is e cellent in his wa# of teaching and revision( 100R coverage of his s#lla!us( personal attention( fle i!le timings student friendl# attitude are some of the attri!utes of these classes& 90. *ANDANA KAU2@IK AUNE!2009 (1'++ N'. 48100" 39#B 1ANK B& C& ;upta :ir is a !est teacher& 3is wa# of teaching is ver# good M makes us to learn the su!Dect ver# easil#& 3is knowledge a!out the su!Dect is ultimate& 91. 2UMANT GUPTA NO*!2009 (1'++ N'. /00/3" 39#B 1ANK I think he is the !est person in the Do!& 3is e cellence in Ta ation and his friendl# relations with students and his coolness and calmness and further encouragement to his students( Dust lifts off the !urden of the course& I thank :ir for !eing there and helping me to achieve this feat in m# life& 92. MEG@A A1O1A NO*!2009 (1'++ N'. /2763" 39#B 1ANK B& C& ;upta :ir has alwa#s !een a support to all the students while their teaching sessions& 3e has alwa#s !oosted our morale to achieve great heights and great score not onl# in ta ation !ut also in ever# other su!Dect& 3e laid e8ual importance to !oth theor# and practical which helps the students to appl# whatever the# are stud#ing in their practical training& 't the end I would like to thank him for !eing such a good teacher and a friend& 93. 2UNN. GI1D@A1 NO*!2010 (1'++ N'.60/24" 39#B 1ANK .oaching !# :ir gave me an insight into practical aspects of ta ation with the help of which I was a!le to co-relate m# studies with practical training i&e& articleship& 'lso stud# material provided was good and compact enough to !e revised in e ams& I thank :ir for providing me such guidance& 94. *AI>@A* AGGA1WA3 NO*!2010 (1'++ N'./6278" 39#B 1ANK B& C& ;upta :ir is the lifeline of 7.. Ta & ' teacher with a!undant knowledge& In serious terms( a perfect Ta ;uru&

14 9/. *A1AD * KA3E MA.!2011 (1'++ N'.182310" 39#B 1ANK B# e perience of !eing a student here at B&C& ;upta Ta .lasses has !een an unforgetta!le one& I had attended the !atch (Bonda#-:unda#) with little hopes of understanding the ta laws in such a small time frame& ,ut the manner in which :ir taught graduall# made me realiEe that I was wrong& :ir taught each and ever# provision in a manner that a person who listens carefull# in the class would understand it 42R-50R then and there& :ir%s techni8ue of taking up dou!ts is also amaEing& .ash incentives for answering classroom 8uestions correctl# 8uicker than an#one else improves speed( fosters sense of competition and also attracts one to listen to what is !eing taught so that he1she would get a chance to earn that incentive& Thank #ou :ir for ever#thing& 96. A.OTI GO.A3 AUNE!2009 (1'++ N'. 46348" 40#B 1ANK In m# opinion B& C& ;upta :ir is one of the !est teacher& 3is method of teaching is e cellent speciall# the repetition of sections again and again in the class& 3is wa# of taking up 8ueries is unmatcha!le& 3e makes the Ta concept cr#stal clear among the students through well e plained e amples& 'll students of 7.. are !lessed with such a good teacher& Thank to #ou :ir !ecause of #ou Ta has !een ver# eas# su!Dect for me& 97. ANKIT GOE3 NO*!2010 (1'++ N'.1/6437" 40#B 1ANK B& C& ;upta :ir is an e cellent facult# in ta and his !ooks are ver# nice and wa# of taking 8ueries is ver# nice& <ver# aspect of ta is covered in his !ooks& Overall it was a ver# good e perience& 98. 2ONIA AGGA1WA3 NO*!2008(1'++ N'. 691/3" 41=# 1ANK :ir is a pool of knowledge( the onl# thing #ou need is to learn us how to swim M gain as much as #ou can& The !ook given !# :ir covers the whole module& The overall environment of class is ver# good for studies& 99. 1I2@U GO.A3 MA.!2010(1'++ N'. /7632" 41=# 1ANK ,ook is the ,est( Teacher is the ,est( 8ueries are taken in the ,est wa# !# :ir& Kou appear !efore me as god and onl# !ecause of #ou I was a!le to secure1get rank& Thank Kou :ir& 100. MO@IT GOE3 NO*!2010 (1'++ N'.49010" 41=# 1ANK B& C& ;upta :ir is the !est teacher for ta according to me& The Dourne# is more appropriate word for me rather than stud#ing ta with him& What he gives in ta is commenda!le and uncompara!le for me& 0ather than making students preparing for studies( he tells them what it is and gives them a !road view of how the provisions come into effect and their applications& If #ou want to enrich #ourself with ta knowledge B& C& ;upta :ir is !est& Thank Kou :ir for giving me the pearls of wisdom from the sea of #our knowledge& 101. MEENAK2@I >UD@I1AAA MA.!2013 (1'++ N'. 241261" 42%9 1ANK I am e tremel# thankful to B&C& ;upta :ir for teaching Ta so well& I fall short of words to e press m# gratitude towards him& It%s onl# and onl# his hard work which made me gets this /+ nd 0ank& I am ver# ver# thankful to .' 'nshul 'ggarwal :ir who helped me a lot in solving m# 8ueries& 102. K@U2@>OO TEKC@ANDANI NO*!2011 (1'++ N'.270637" 42%9 1ANK I had an e cellent time in the coaching& I learnt a lot even the things which are not covered in the course& B&C& ;upta :ir has a vast knowledge in all fields and speciall# ta ation& The material provided !# the center was e tremel# useful& The ,are Te t helped in clearing all the concepts& I would like to thank :ir for giving me such an immense e perience and knowledge& The tests which were held regularl# were also helpful in stud#ing the su!Dect& Thank #ou :irIII 103. PI.U2@ 2@A1MA NO*!2010 (1'++ N'.174793" 42%9 1ANK The classes were e cellentl# managed& :ir repeats all the sections atleast two times( which helps a lot& B&C& ;upta :ir is !est for Ta & Thanks :ir& 104. MANI2@A AINDA3 NO*!2011 (1'++ N'.22/4/4" 43 9 1ANK B&C& ;upta :ir teaches ver# well& Bost importantl#( he focuses on practical application of ta provisions which makes understanding of the provisions ver# easier& 'lso his !ooks are ver# good and are in eas# language& Thank Kou :irII 10/. MEG@A AGA1WA3 NO*!2011 (1O33 NO.267/18" 43 9 1ANK

15 ;oing to :ir%s coaching was the !est part of the da#& :ir%s st#le of teaching is Dust fa!ulous& :ir is ver# punctual and the staff is so cooperative and adDusting& The !ooks covered all the provisions successfull#&

106. MO@IT GA1G NO*!2008 (1'++ N'. 6/676" 43 9 1ANK B&C& ;upta :ir%s approach is not short term !ut long term& 3e not onl# wants a child to clear !ut also wants him1her to e cel in the field of ta ation !# providing his knowledge& 3is approach of calling students to solve 8uestions on !oard has worked to a great e tent& 107. KI2@AN KUMA1 NO*!2010(1'++ N'.1791/3" 43 9 1ANK :tud#ing ta ation with B& C& ;upta :ir is trul# a fun and an enriching e perience& 3is simplicit#( manner of conducting class and 8uer# session is indeed gratif#ing and awesome& 3owever( the !est thing is the emphasis on practical 8uestions which is indispensa!le for securing decent marks& The notes given during the class !# :ir is e cellent and covers entire s#lla!us in a precise M crisp manner which is ver# helpful especiall# during the e amination time& =inall#( a heartfull thanks to #ou :ir& Kou reall# rockIII 108. *IKA2 AGGA1WA3 NO*!2012 (1'++ N'. 239889" 44#B 1ANK It%s !een a great e perience stud#ing ta from B&C& ;upta :ir& Ta seemed to !e the most difficult su!Dect to me !efore I Doined his classes( !ut since I Doined his classes( it !ecame one of m# favorite su!Dects& <ver#thing is !est here( !e it staff( infrastructure or :ir himself& The stud# material provided !# :ir is e cellent and o!viates the need to refer other !ooks& 3e takes ever# dou!t politel# and solves all 8ueries& 3e is a ver# kind hearted person& Thanks a ton to #ou( :irII 109. KUNA3 KE2@AN NO*!2012 (1'++ N'. 239941" 44#B 1ANK B&C& ;upta :ir is a !rilliant teacher with vast knowledge and e pertise in the field of Ta & The wa# of teaching is uncompara!le and notes M stud# material is more than enough if one wants to score e cellent marks& :ir makes the classes ver# interesting and I consider m#self luck# to !e taught !# him& We consider him more as father and guide than a teacher& Thank #ou ver# much :ir& 110. T1IPTI GUPTA AUNE!2009 (1'++ N'. 47936" 44#B 1ANK :ir is reall# a ver# good teacher& 3is knowledge a!out ta is great& The wa# he links practical life with theor# life is reall# ver# good& The stud# modules provided !# :ir is more than sufficient with full knowledge of course and eas# language& :ir has reall# cooperated with us& I reall# want to thank him for his contri!ution in m# life& Thanks :irII 111. KAN@AI.A MITTA3 MA.!2010(1'++ N'. /7773" 44#B 1ANK B& C& ;upta :ir is a ver# good teacher& We did not re8uire to refer an# other !ook& :ir%s notes were more than sufficient& 3e is a ver# 8ualified teacher and his teaching skills are unmatcha!le& 112. TA1UN KUMA1 NO*!2012 (1'++ N'. 2270/8" 4/#B 1ANK ' teacher like B&C&;upta :ir makes ta stud# so eas# that there is no need for practice at home& :ir is great& $T3'>C KOF :I0% 113. AO@N @AIDE1 NO*!2012 (1'++ N'. 232666" 4/#B 1ANK 'ccording to me :ir%s wa# of teaching is ver# different& It is !ased on practical knowledge& <ast or west :ir is the !est& 114. A1U2@I AAIN MA.!2012 (1'++ N'. 229/72" 4/#B 1ANK B&C& ;upta :ir is an outstanding teacher of Ta ation& It is a !oon to have !een his student& Thank #ou so much :ir& 11/. A>@I2@EK 2AC@DE*A NO*!2011(1'++ N'.228089" 4/#B 1ANK B&C& ;upta :ir is one the most knowledgea!le person I have ever met& ,ooks provided !# them are !est and so is the coaching& B&C& ;upta :ir motivates each M ever# student !# giving the rewards& I would like to thank :ir from the !ottom of m# heart& T3'>C KOF :I0III 116. TU2@A1 AAIN NO*!2012 (1'++ N'.227314" 46#B 1ANK :ir has alwa#s proved himself to !e !est teacher in Ta ation field& 3is knowledge in su!Dect is immense and M his st#le of teaching is uni8ue& :pecial thing a!out classes is its decorum and 8ualit# of stud# material provided is e tremel# good& The past #ear 8uestion along with lots of e amples make the material more suita!le M student friendl# for stud# M help the students a lot& Thank #ou ver# much :irII

1) 117. 2A@I3 MANG3A MA.!2010(1'++ N'./8/98" 46#B 1ANK The !ooks given !# :ir and the knowledge provided in the classes is incompara!le and more than sufficient& I thank B& C& ;upta :ir( whole heartedl# for the knowledge he provided !# his sincere efforts& 118. MA@E2@ AGGA1WA3 MA.!2011 (1'++ N'./2164" 46#B 1ANK W<AA( 7<0:O>'AAK I am a !ig admirer of B& C& ;upta :ir& 3e is trul# the ,<:T T<'.3<0 and his teaching is the !est of all( I have ever e perienced( 3is wa# of imparting knowledge and clarif#ing su!Dect is so good that students gain complete knowledge without much personal efforts& I would call B& C& ;upta :ir classes not onl# teaching !ut a full training programme for students& Teaching is not a !usiness for :ir( rather it is more of social welfare that he is doing !# giving !rilliant minds full of knowledge to the societ#& 3e motivates students !# e cellent means and enhance their knowledge to another level& I must sa# class notes are more than sufficient to get good marks& I heartil# dedicate m# achievement to :ir& 3ighl# grateful to #ou :ir& Thank #ou so much& 119. AK@I3 2E@GA3 NO*!2011 (1'++ N'.211/27" 46#B 1ANK B&C& ;upta :ir teaches the course ver# !rightl#& 0eall# :ir( #ou are the god in the industr# of teaching& :ir #ou are the !est& 120. AMAN MITTA3 NO*!2011 (1'++ N'.274222" 47#B 1ANK In m# opinion( no teacher can teach the ta !etter than the B&C& ;upta :ir& 3e is ver# good !# heart& 3e teaches in such a manner that no student can face pro!lems& 121. 1OUNAK 2AWA1IA NO*!2011 (1'++ N'.236371" 47#B 1ANK B&C& ;upta :ir has a ver# deep knowledge a!out the su!Dect and his practical approach towards the su!Dect helps understand the concepts ver# easil#& B&C& ;upta :ir repeats ever# section atleast twice and makes us learn them in the class itself& The notes provided in the class are more than enough for I7.. and the 8uestions in his !ook ranges from simple pro!lems to difficult ones& Aast !ut not the least( B&C& ;upta :ir is ver# kind hearted and generous person and he is so hardworking which is highl# motivational for all of us& 122. PANC@ANAN AGGA1WA3 NO*!2009 (1'++ N'. /2360" 47#B 1ANK In m# personal opinion( he is a ver# good teacher and also ver# friendl# in nature while teaching& 3e alwa#s give the right wa# to success& 3is coaching is e cellent( knowledge is e cellent and 8ueries taken up are e cellent& 123. DE*ENDE1 PANDE. NO*!2009 (1'++ N'. 60647" 47#B 1ANK The !est thing a!out B& C& ;upta :ir is that he e plains each and ever#thing related to the topic& .lass notes are sufficient for getting good marks& 3is coaching is e cellent( knowledge is e cellent and 8ueries taken up are e cellent& 124. A2@I2@ AAIN NO*!2009 (1'++ N'. /3180" 47#B 1ANK I think B& C& ;upta :ir should !e greeted with the title of OTa ;uruP& 3is knowledge a!out the su!Dect is outstanding and matchless& The method of teaching is uni8ue& The material provided !# the :ir is a package in itself& The st#le of taking up the 8uer# is e cellent& I suggest ever# .' aspirant to Doin B& C& ;upta :ir classes& :ir put enough efforts for the success of students& Once #ou Doin Ta classes of :ir leave ever#thing on him and Dust concentrate in the class M have !elief in him& 12/. PANKAA >AN2A3 NO*!2009 (1'++ N'. /2640" 47#B 1ANK Cnowledge coupled with e perience make B& C& ;upta :ir a great teacher& 3e is down to earth man who alwa#s guided and encouraged us to achieve the success& ,ook is 8uite good involving plent# of 8uestions with solutions which helped me out ver# much& 3is coaching is e cellent( knowledge is e cellent and 8ueries taken up are e cellent& 126. PI.U2@ >O1ANIA NO*!2009 (1'++ N'.40193" 47#B 1ANK B& C& ;upta :ir is the !est teacher for availing ta coaching& :ir responds to 8ueries in an e cellent manner& The incentive scheme of :ir for encouraging students is awesome& The stud# material of B& C& ;upta :ir is e cellent and the pro!lems in the !ooks are ver# comprehensive& 127. NITIN KUMA1 NO*!2010 (1'++ N'.184364" 47#B 1ANK

+0 B& C& ;upta :ir is ver# knowledgea!le person& 3e has vast e perience of teaching& 3is !ook is ver# helpful and covers all concepts&

128. 2IDD@A1T@ AAIN NO*!2010 (1'++ N'.1830/1" 47#B 1ANK :ir%s knowledge was e cellent( his motivation in class did wonders( it was alwa#s interesting !ecause :ir made class ver# interesting& I reall# enDo#ed the practical 8uestions in class( especiall# his notes that he made us write in class& The !ook was helpful( especiall# the service ta 1vat !ook( I enDo#ed the summariEed portion of service ta & Overall an e cellent e perienceI 129. C@ETAN MA3IK MA.!2011(1'++ N'.47892" 47#B 1ANK The teacher is reall# good& It was a reall# good e perience& ,ooks are the !est and so as the coaching provided !# the :ir& 130. *I*EK 2UGAND@ NO*!2011 (1'++ N'.222907" 48#B 1ANK B&C& ;upta :ir( in m# opinion is a vast storehouse of knowledge in the field of ta ation& 3e( apart from !eing a great teacher is also an awesome human !eing& 3is coaching classes provides a great amount of competitive environment and I feel m#self !lessed to !e his student& 131. AMANDEEP 2ING@ >@ATIA NO*!2008 (1'++ N'. 66060" 48#B 1ANK B&C& ;upta :ir is a good teacher& 3e knows each and ever# aspect of T'G'TIO> and also gives his precious knowledge to students& 3e is ver# helpful teacher& 3e is alwa#s read# to solve the pro!lems of ever# student& I must sa# that I Dust got rank !ecause of :ir& 3e motivates ever# student to stud# hard& 132. NIMI2@A 2A1DA NO*!2011(1'++ N'.271629" 49#B 1ANK B&C& ;upta :ir is an awesome teacher& The wa# he e plains us the su!Dect( it is not Dust understanda!le !ut !ecomes so interesting& >ot Dust this( B&C& ;upta :ir%s incentives also show how much he wants his students to e cel& There comes a lot of confusion regarding completeness of s#lla!us( especiall# of indirect ta ( !ut when it comes to :ir%s notes and !ooks com!ined- there remains not a single dou!t& Thank Kou so much :ir& 133. 2@I*AM MA1WA@ NO*!2011(1'++ N'. 406941" 49#B 1ANK B&C& ;upta :ir is an amaEing teacher having e cellent knowledge of the su!Dect& 3e is alwa#s read# to solve 8ueries& 3is techni8ues of motivating students incompara!le& B&C& ;upta :ir is ,est& :tud# material is e cellent& < amples are ver# good in the !ooks& Thank #ou& 134. KE2@A* >@A1DWAA NO*!2011 (1'++ N'.421167" /0#B 1ANK B&C& ;upta Ta .lasses are a perfect !lend of studies as well as innovation and skill development& One can not onl# gain in academic arena !ut stud#ing grooms personalit# and professional attitude& Talking a!out B&C& ;upta :ir( he is not onl# a good teacher !ut also a good motivator& The apt and appropriate presentation of the relevant 8uestion and answer have helped a lot in reaching a new height of success& ;reat teacher( ;reat human !eing& Thanks a lot :ir& Thank Kou so much& 13/. PANKAA GU3ATI NO*!2009 (1'++ N'. /2267" /0#B 1ANK The knowledge given !# :ir is e cellent& B&C& ;upta :ir motivates each and ever# student !# giving them various rewards& 3e is availa!le all time to solve the Hueries of the students& The !ooks provided !# :ir are enough to score good marks& Thank #ou :ir& 136. @EENA GUPTA MA.!2010 (1'++ N'./3424" /0#B 1ANK The B& C& ;upta :ir classes were fa!ulous& The wa# :ir mi es classroom knowledge with practical work is une plaina!le& Cnowledge of :ir is incompara!le& The stud# environment of his classes was so comforta!le that I was a!le to concentrate in classes& I would like to thank :ir from the !ottom of m# heart for his kind contri!ution in m# studies& Thank #ou :ir&

+1

Introduction

++

INT1ODUCTION
>A2IC CONCEPT2
INCOME TAX 3AW $ AN INT1ODUCTION WBa# 4= a Ta)E Aet us !egin !# understanding the meaning of ta & Ta is a fee charged !# a government on a product( income or activit#& There are two t#pes of ta es direct ta es and indirect ta es (:ee .hart !elow this paragraph)& If ta is levied directl# on the income or wealth of a person( then it is a direct ta e&g& incometa & If ta is levied on the price of a good or service( then it is called an indirect ta e&g& e cise dut#& In the case of indirect ta es( the person pa#ing the ta passes on the incidence to another person& T#pes of Ta es

6irect Ta es

Indirect Ta es

Income Ta

Wealth Ta

< cise 6ut#

.ustoms 6ut#

:ervice Ta

:ales Ta 1 9alue 'dded Ta

WB6 a e Ta)e= 3e54e9E The reason for lev# of ta es is that the# constitute the !asic source of revenue to the government& 0evenue so raised is utiliEed for meeting the e penses of government like defence( provision of education( healthcare( infrastructure facilities like roads( dams etc& O5e 54e8 '7 I%&'(e!Ta) 3a8 4% I%94a Income-ta is the most significant direct ta & In this material( we would !e introducing the students to the Income-ta law in India& The income-ta law in India consists of the following components .OB7O><>T: O= I>.OB< T'G A'W

Income Ta 'ct 'nnual =inance 'ctIncome Ta 0ules

.irculars1 >otifications

Aegal 6ecisions of .ourt

The various instruments of law containing the law relating to income-ta are e plained !elowJ I%&'(e!#a) A&#F 1961$ The lev# of income-ta in India is governed !# the Income-ta 'ct( 1)*1& In this !ook we shall !riefl# refer to this as the 'ct& This 'ct came into force on 1st 'pril( 1)*+& The 'ct contains +)5 sections and GI9 schedules& These undergo change ever# #ear with additions and deletions !rought a!out !# the annual =inance 'ct passed !# 7arliament& In pursuance of the power given !# the Income-ta 'ct( 1)*1 rules have !een framed to facilitate proper administration of the Income-ta 'ct( 1)*1& TBe 04%a%&e A&# $ <ver# #ear( the =inance Binister of the ;overnment of India presents the ,udget to the 7arliament& 7art ' of the !udget speech contains the proposed policies of the ;overnment in fiscal areas& 7art , of the !udget speech contains the detailed ta proposals&

Introduction

+-

In order to implement the a!ove proposals( the =inance ,ill is introduced in the 7arliament& Once the =inance ,ill is approved !# the 7arliament and gets the assent of the 7resident( it !ecomes the =inance 'ct& I%&'(e!#a) 1,+e= $ The administration of direct ta es is looked after !# the .entral ,oard of 6irect Ta es (.,6T)& The .,6T is empowered to make rules for carr#ing out the purposes of the 'ct& =or the proper administration of the Income-ta 'ct( the .,6T frames rules from time to time& These rules are collectivel# called Income-ta 0ules( 1)*+& It is important to keep in mind that along with the Income-ta 'ct( 1)*1( these rules should also !e studied& C4 &,+a = a%9 N'#474&a#4'%= $ .irculars are issued !# the .,6T from time to time to deal with certain specific pro!lems and to clarif# dou!ts regarding the scope and meaning of the provisions& These circulars are issued for the guidance of the officers and1or assessees& The department is !ound !# the circulars& While such circulars are not !inding the assessees the# can take advantage of !eneficial circulars& Ca=e 3a8= $ The stud# of case laws is an important and unavoida!le part of the stud# of income-ta law& It is not possi!le for 7arliament to conceive and provide for all possi!le issues that ma# arise in the implementation of an# 'ct& 3ence the Dudiciar# will hear the disputes !etween the assessees and the department and give decisions on various issues& The :upreme .ourt is the 'pe .ourt of the countr# and the law laid down !# the :upreme .ourt is the law of the land& The decisions given !# various 3igh .ourts will appl# in the respective states in which such 3igh .ourts have Durisdiction& 3e56 '7 I%&'(e!Ta) Income-ta is a ta levied on the total income of the previous #ear of ever# person& ' person includes an individual( 3indu Fndivided =amil# (3F=)( 'ssociation of 7ersons ('O7)( ,od# of Individuals (,OI)( a firm( a compan# etc& C'%&ep# '7 I%&'(e The definition of income as per the Income-ta 'ct( 1)*1 !egins with the words OIncome includesP& Therefore( it is an inclusive definition and not an e haustive one& :uch a definition does not confine the scope of income !ut leaves room for more inclusions within the am!it of the term& .ertain important principles relating to income are enumerated !elow Income( in general( means a periodic monetar# return which accrues or is e pected to accrue regularl# from definite sources& 3owever( under the Income-ta 'ct( 1)*1( even certain income which do not arise regularl# are treated as income for ta purposes e&g& Winnings from lotteries( crossword puEEles& Income normall# refers to revenue receipts& .apital receipts are generall# not included within the scope of income& 3owever( the Income-ta 'ct( 1)*1 has specificall# included certain capital receipts within the definition of income e&g& .apital gains i&e& gains on sale of a capital asset like land& Income means net receipts and not gross receipts& >et receipts are arrived at after deducting the e penditure incurred in connection with earning such receipts& The e penditure which can !e deducted while computing income under each head is prescri!ed under the Income-ta 'ct& Income is ta a!le either on due !asis or receipt !asis& =or computing income under the heads O7rofits and gains of !usiness or professionP and OIncome from other sourcesP( the method of accounting regularl# emplo#ed !# the assessee should !e considered( which can !e either cash s#stem or mercantile s#stem& Income earned in a previous #ear is chargea!le to ta in the assessment #ear& 7revious #ear is the financial #ear( ending on -1st Barch( in which income has accrued1 received& 'ssessment #ear is the financial #ear (ending on -1st Barch) following the previous #ear& The income of the previous #ear is assessed during the assessment #ear following the previous #ear& =or instance( income of previous #ear +01--1/ is assessed during +01/-12& Therefore( +01/-12 is the assessment #ear for assessment of income of the previous #ear +01--1/&

.omputation Of Total Income 'nd Ta Aia!ilit#

+/

COMPUTATION O0 TOTA3 INCOME AND TAX 3IA>I3IT.

>A2I2 O0 C@A1GE AND 1ATE2 O0 TAXE2 CBa :e '7 I%&'(e!Ta) :ection / of the Income-ta 'ct is the &Ba :4%: =e&#4'% which provides thatJ (i) Ta shall !e charged at the rates prescri!ed for the #ear !# the annual =inance 'ct& (ii) The charge is on ever# person specified under section +(-1)" (iii) Ta is chargea!le on the total income earned during the previous #ear and not the assessment #ear& (There are certain e ceptions provided !# sections 14+( 14/( 14/'( 142 and 14*)" (iv) Ta shall !e levied in accordance with and su!Dect to the various provisions contained in the 'ct& This section is the !ack !one of the law of income-ta in so far as it serves as the most operative provision of the 'ct& The ta lia!ilit# of a person springs from this section& 1a#e= '7 Ta) Income-ta is to !e charged at the rates fi ed for the #ear !# the annual =inance 'ct& =irst :chedule to the =inance 'ct is divided into three parts& 7art I of the =irst :chedule to the =inance 'ct( +01- specifies the rates at which income-ta is to !e levied on income chargea!le to ta for the '&K& +01--1/& (i&e& for the earlier #ear) 7art II of the =irst :chedule la#s down the rate at which ta is to !e deducted at source during the financial #ear +01--1/ i&e& '&K& +01/-12 from income su!Dect to such deduction under the 'ct" 7art III of the =irst :chedule la#s down the rates for charging income-ta in certain cases( rates for deducting income-ta from income chargea!le under the head SsalariesS and the rates for computing advance ta for the financial #ear +01--1/ i&e& '&K&+01/-12& 7art I9 contains rules for computation of >et 'gricultural Income& (7art III of the =irst :chedule to the =inance 'ct( +01- will !ecome 7art I of the =irst :chedule to the =inance 'ct( +01/ and so on&) D,e=#4'% 1$ W 4#e a %'#e '% C'(p,#a#4'% '7 T'#a+ I%&'(e. A%=8e $ C'(p,#a#4'% '7 T'#a+ I%&'(e Whether a particular income shall !e ta ed or not shall depend on the residential status and the t#pe of income& 0esidential status infact e plains connection of the person with the countr# and t#pes of income e plains the connection of the income with the countr#& If the person donot have an# connection and also the incomes do not have an# connection with the countr#( the income shall not !e ta a!le !ut if either the person or the income has an# connection( the income is ta a!le& If the income is ta a!le( it will !e further divided into five different categories of income which are called heads of income i&e& if the income is received from the emplo#er( it will !e considered to !e income under the head salar#" if the income is in connection with letting out of house propert#( income is ta a!le under the head house propert#" if the income is from an# !usiness or profession( it is ta a!le under the head profits and gains of !usiness1profession" if an# capital asset (gold( land( house etc) has !een transferred( income is ta a!le under the head capital gains" if there is an# other income like interest or winnings from a lotter# etc( it is covered under the head other sources&

.omputation Of Total Income 'nd Ta Aia!ilit#

+2

Income shall !e computed under each head i&e& e penses incurred shall !e deducted from the gross receipt as per the provisions of the relevant head& Income computed under each head shall !e added up to compute the gross total income& .ertain concessions are allowed from the gross total income which are called deduction from gross total income under section 50. to 50F& 'fter permitting the deductions( remaining income is called total income& .omputation of total income can !e shown mathematicall# in the manner given !elowJ T'#a+ I%&'(e '7 a% a==e==ee =Ba++ ;e &'(p,#e9 4% #Be 7'++'84%: =#ep=$ .ompute the income of the assessee under all the five heads( permitting e emption1deductions of each head& ` (i) Income from :alaries (:ection 12 to 14) TTT&& (ii) Income from 3ouse 7ropert# (:ection ++ to +4) TTT&& (iii) 7rofits and gains of ,usiness or 7rofession (:ection +5 to //6,) TTT&& (iv) .apital ;ains (:ection /2 to 22') TTT&& (v) Income from Other :ources (:ection 2* to 2)) TTT&& ;ross Total Income TTT&& UUUUUUU 6eductions from gross total income ?:ection 50. to 50F@ TTT&& UUUUUUU Total Income TTT&& UUUUUUU Total Income shall !e rounded off u1s +55' in the multiples of 10 and for this purpose( an# paisa shall !e ignored and if the last digit is 2 or more( it will !e rounded off to the higher multiple otherwise it will !e rounded off to the lower multiple& TTT&& UUUUUUU D,e=#4'% 2$ W 4#e a %'#e '% C'(p,#a#4'% '7 Ta) 34a;4+4#6. A%=8e $ C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta lia!ilit# of an individual( 3indu Fndivided =amil#( association of persons( !od# of individual shall !e computed in the manner given !elowJ 1. 6ivide Total Income into four parts (4" 3'%: #e ( &ap4#a+ :a4%= 2e&#4'% 112 Aong term capital gains shall !e ta ed G 20H (44" 2B' # #e ( &ap4#a+ :a4%= '% #Be # a%=7e '7 eI,4#6 =Ba e= ' ,%4#= '7 a% eI,4#6 ' 4e%#e9 7,%9 2e&#4'% 111A :uch capital gains shall !e ta a!le G 1/H (444" Ca=,a+ I%&'(e 's per section 112,,( casual income shall !e ta a!le V -0R& 's per section +(+/)(i )( casual income means an# winnings from lotteries( crossword puEEles( races including horse races( card games and other games of an# sort or from gam!ling or !etting of an# form or nature whatsoever&

.omputation Of Total Income 'nd Ta Aia!ilit#

+*

3'##e 6 includes winnings from priEes awarded to an# person !# draw of lots or !# chance or in an# other manner whatsoever( under an# scheme or arrangement !# whatever name called& Ca 9 :a(e and other game of an# sort includes an# game show( an entertainment programme on television or electronic mode( in which people compete to win priEes or an# other similar game& (45" A%6 '#Be 4%&'(e 'n# other income is ta a!le at =+a; a#e= as per the relevant =inance 'ct (=inance 'ct +01-) and are as given !elowJ 1e=49e%# 4%94549,a+ '7 #Be a:e '7 60 6ea = ' (' e a# a%6 #4(e ,p#' #Be e%9 '7 e+e5a%# p e54',= 6ea ;,# +e== #Ba% e4:B#6 6ea = If total income is upto `+(20(000 >IA On ne t `+(20(000 10R On ne t `2(00(000 +0R On ,alance amount -0R 1e=49e%# 4%94549,a+ '7 #Be a:e '7 80 6ea = ' (' e a# a%6 #4(e ,p#' #Be e%9 '7 e+e5a%# p e54',= 6ea If total income is upto `2(00(000 >IA On ne t `2(00(000 +0R On ,alance amount -0R A%6 I%94549,a+F @4%9, U%94549e9 0a(4+6F A=='&4a#4'% '7 Pe ='%=F >'96 '7 I%94549,a+ ' a #474&4a+ A, 494&a+ Pe ='% Income shall !e ta a!le at the sla! rates given !elowJ If total Income upto `+(00(000 >IA On ne t `-(00(000 10R On ne t `2(00(000 +0R On ,alance amount -0R (The purpose of sla! rates is to ta the income of poor person at lower rate) :urcharge shall !e applica!le V 10H provided total income is e ceeding ` 1 & ' e& 1e;a#e '7 4%&'(e!#a) 4% &a=e '7 &e #a4% 4%94549,a+= 2e&#4'% 87A In order to provide ta relief to the individual ta pa#ers who are in the 10R ta sla!( section 54' has !een inserted to provide a re!ate from the ta pa#a!le !# an assessee( !eing an individual resident in India( whose total income does not e ceed ` 2(00(000& (i) The re!ate shall !e e8ual to the amount of income-ta pa#a!le on the total income for an# assessment #ear or an amount of ` +(000( whichever is less& (ii) .onse8uentl#( an# individual having total income up to ` +(+0(000 will not !e re8uired to pa# an# ta & =urther( ever# individual having total income a!ove `+(+0(000 !ut not e ceeding ` 2(00(000 shall get a ta relief of ` +(000& In effect( the re!ate would !e the ta pa#a!le or ` +(000( whichever is less& (iii) =urther( the aggregate amount of re!ate under section 54' shall not e ceed the amount of income-ta (as computed !efore allowing such re!ate) on the total income of the assessee with which he is chargea!le for an# assessment #ear& 7rimar# <ducation .ess and :econdar# and 3igher <ducation .ess shall !e applied onl# after permitting re!ate under section 54'&

.omputation Of Total Income 'nd Ta Aia!ilit# 0e!ate shall !e allowed even from ta on AT.; or :T.; under section 111' or .asual Income&

+4

2. P 4(a 6 E9,&a#4'% Ce== a%9 2e&'%9a 6 a%9 @4:Be E9,&a#4'% Ce== 7rimar# <ducation .ess (7<.) shall !e charged V +R and :econdar# and 3igher <ducation .ess (:3<.) V 1R of income ta & 1',%94%: '77 '7 Ta) 2e&#4'% 288> 'n# amount pa#a!le( and the amount of refund due( shall !e rounded off to the nearest multiple of ten rupees and for this purpose an# part of a rupee consisting of paise shall !e ignored and thereafter if such amount is not a multiple of ten( then( if the last figure in that amount is five or more( the amount shall !e increased to the ne t higher amount which is a multiple of ten and if the last figure is less than five the amount shall !e reduced to the ne t lower amount which is a multiple of ten& Ma :4%a+ 1e+4e7 7rovided that in the case of persons mentioned a!ove having total income e ceeding one crore rupees( the total amount pa#a!le as income-ta and surcharge on such income shall not e ceed the total amount pa#a!le as income-ta on a total income of one crore rupees !# more than the amount of income that e ceeds one crore rupees& ' person shall !e eligi!le for marginal relief upto total income of `10/(++(-50 and afterwards he will not !e eligi!le for marginal relief when sla! of `+(00(000 shall !e applica!le& e&g& If Br& G has total income of `10+(50(000( his ta lia!ilit# shall !e computed in the manner given !elowJ Total Income 10+(50(000 Ta on `10+(50(000 at sla! rate +)(1/(000 'ddJ :urcharge V 10R +()1(/00 Ta !efore education cess -+(02(/00 Increase in income `+(50(000 over `100(00(000 and increase in ta in comparison to income of `100(00(000( `-(42(/00 (-+(02(/00 +5(-0(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `-(42(/00 `+(50(000 )2(/00 Ta after marginal relief -1(10(000 'ddJ <ducation cess V +R *+(+00 'ddJ :3<. V 1R -1(100 Ta Aia!ilit# -+(0-(-00 Cap4#a+ Ga4%= If an# capital asset has !een transferred like land( !uilding( gold( shares etc& profit shall !e called capital gains and if the asset has !een transferred within a period of three #ears( capital gains shall !e short term and shall !e ta a!le at the normal rate otherwise it will !e long term capital gain and shall !e ta a!le V +0R& In case of shares or units of mutual fund etc&( period of three #ears shall !e taken as one #ear& If an# person has transferred e8uit# shares or units of e8uit# oriented mutual funds and has paid securities transaction ta ( in such cases long term capital gain shall !e e empt from income ta under section 10(-5) !ut short term capital gains shall !e covered under section 111' and shall !e ta a!le V 12R& <8uit# oriented mutual fund means such mutual funds in which more than *2R of the total proceeds have !een invested in the e8uit# shares of the domestic compan#& I++,=# a#4'% 1$ .ompute ta lia!ilit# in the following cases for the assessment #ear +01/-12&

.omputation Of Total Income 'nd Ta Aia!ilit# (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (i ) ( ) ( i) ( ii) Br& G (resident) has total income of `2(00(000 Br& G (non-resident) has total income of `2(00(000 Brs& G (resident) has total income of `2(00(000 Brs& G (non-resident) has total income of `2(00(000 Br& G (resident)( aged *0 #ears has total income of `2(00(000 Brs& G (resident)( aged *0 #ears has total income of `2(00(000 Br& G (non-resident)( aged *0 #ears has total income of `2(00(000 Brs& G (non-resident)( aged *0 #ears has total income of `2(00(000 Br& G (resident)( aged 50 #ears has total income of `2(00(000 Brs& G (resident)( aged 50 #ears has total income of `2(00(000 Br& G (non-resident)( aged 50 #ears has total income of `2(00(000 Brs& G (non-resident)( aged 50 #ears has total income of `2(00(000

+5

2'+,#4'%$ (i) Computation of Tax Liability Total Income Ta on `2(00(000 at sla! rate AessJ 0e!ate u1s 54' (-0(000 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +5(5/0 (ii) Computation of Tax Liability Total Income Ta on `2(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()00 N'#e$ 0e!ate under section 54' is not allowed to non-resident& (iii) Computation of Tax Liability Total Income Ta on `2(00(000 at sla! rate AessJ 0e!ate u1s 54' (-0(000 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +5(5/0 (iv) Computation of Tax Liability Total Income Ta on `2(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()00

` 2(00(000 -0(000 +(000 +5(000 2*0 +50

2(00(000 -0(000 *00 -00

2(00(000 -0(000 +(000 +5(000 2*0 +50

2(00(000 -0(000 *00 -00

.omputation Of Total Income 'nd Ta Aia!ilit# N'#e$ 0e!ate under section 54' is not allowed to non-resident& (v) Computation of Tax Liability Total Income Ta on `2(00(000 at sla! rate AessJ 0e!ate u1s 54' (+2(000 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +-(*)0 (vi) Computation of Tax Liability Total Income Ta on `2(00(000 at sla! rate AessJ 0e!ate u1s 54' (+2(000 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +-(*)0 (vii) Computation of Tax Liability Total Income Ta on `2(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()00 N'#e$ 0e!ate under section 54' is not allowed to non-resident& (viii) Computation of Tax Liability Total Income Ta on `2(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()00 N'#e$ 0e!ate under section 54' is not allowed to non-resident& (ix) Computation of Tax Liability Total Income Ta Aia!ilit# >il (x) Computation of Tax Liability Total Income Ta Aia!ilit# >il (xi) Computation of Tax Liability

+)

2(00(000 +2(000 +(000 +-(000 /*0 +-0

2(00(000 +2(000 +(000 +-(000 /*0 +-0

2(00(000 -0(000 *00 -00

2(00(000 -0(000 *00 -00

2(00(000

2(00(000

.omputation Of Total Income 'nd Ta Aia!ilit# Total Income Ta on `2(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()00 N'#e$ 0e!ate under section 54' is not allowed to non-resident& (xii) Computation of Tax Liability Total Income Ta on `2(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()00 N'#e$ 0e!ate under section 54' is not allowed to non-resident& I++,=# a#4'% 2$ .ompute ta lia!ilit# in the following cases for the assessment #ear +01/-12& (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (i ) ( ) ( i) ( ii) Br& G (resident) has total income of `2(02(000 Br& G (non-resident) has total income of `2(+0(000 Brs& G (resident) has total income of `2(05(000 Brs& G (non-resident) has total income of `1+(00(000 Br& G (resident)( aged *0 #ears has total income of `++(00(000 Brs& G (resident)( aged *0 #ears has total income of `102(00(000 Br& G (non-resident)( aged *0 #ears has total income of `40(00(000 Brs& G (non-resident)( aged *0 #ears has total income of `/(00(000 Br& G (resident)( aged 50 #ears has total income of `/())(000 Brs& G (resident)( aged 50 #ears has total income of `10-(00(000 Br& G (non-resident)( aged 50 #ears has total income of `1+(00(000 Brs& G (non-resident)( aged 50 #ears has total income of `)(00(000

-0 2(00(000 -0(000 *00 -00

2(00(000 -0(000 *00 -00

2'+,#4'%$ (i) Computation of Tax Liability Total Income Ta on `2(02(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -1()-0 (ii) Computation of Tax Liability Total Income Ta on `2(+0(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -2(0+0

` 2(02(000 -1(000 *+0 -10

2(+0(000 -/(000 *50 -/0

.omputation Of Total Income 'nd Ta Aia!ilit# (iii) Computation of Tax Liability Total Income Ta on `2(05(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -+(2/5 0ounded off u1s +55, (iv) Computation of Tax Liability Total Income Ta on `1+(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1()2(400 (v) Computation of Tax Liability Total Income Ta on `++(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# /())(220 (vi) Computation of Tax Liability Total Income Ta on `102(00(000 at sla! rate 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# --(40(*42 0ounded off u1s +55, (vii) Computation of Tax Liability Total Income Ta on `40(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1)(54()00 (viii) Computation of Tax Liability Total Income Ta on `/(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +0(*00 N'#e$ 0e!ate under section 54' is not allowed for non-resident&

-1 2(05(000 -1(*00 *-+ -1* -+(220 1+(00(000 1()0(000 -(500 1()00

++(00(000 /(52(000 )(400 /(520

102(00(000 +)(42(000 +()4(200 -+(4+(200 *2(/20 -+(4+2 --(40(*50 40(00(000 1)(-0(000 -5(*00 1)(-00

/(00(000 +0(000 /00 +00

.omputation Of Total Income 'nd Ta Aia!ilit# (ix) Computation of Tax Liability Total Income Ta on `/())(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# >il (x) Computation of Tax Liability Total Income Ta on `10-(00(000 at sla! rate 'ddJ :urcharge V 10R Ta !efore education cess Increase in income `-(00(000 over `100(00(000 and increase in ta in comparison to income of `100(00(000(`-(4)(000 (-1(4)(000 +5(00(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `-(4)(000 `-(00(000 Ta after marginal relief 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -1()-(000 (xi) Computation of Tax Liability Total Income Ta on `1+(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1()2(400 (xii) Computation of Tax Liability Total Income Ta on `)(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(1-(-00 I++,=# a#4'% 3$ .ompute ta lia!ilit# in the following cases for the assessment #ear +01/-12& (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (i ) ( ) ( i) Br& G (resident) has total income of `100(02(000 Br& G (non-resident) has total income of `10-(00(000 Brs& G (resident) has total income of `10/(00(000 Brs& G (non-resident) has total income of `102(00(000 Br& G (resident)( aged *0 #ears has total income of `10*(00(000 Brs& G (resident)( aged *0 #ears has total income of `104(00(000 Br& G (non-resident)( aged *0 #ears has total income of `105(00(000 Brs& G (non-resident)( aged *0 #ears has total income of `10/(20(000 Br& G (resident)( aged 50 #ears has total income of `10/(+2(000 Brs& G (resident)( aged 50 #ears has total income of `10/(10(000 Br& G (non-resident)( aged 50 #ears has total income of `10/(++(-50

-+

/())(000 >il >il >il

10-(00(000 +5()0(000 +(5)(000 -1(4)(000 4)(000 -1(00(000 *+(000 -1(000

1+(00(000 1()0(000 -(500 1()00

)(00(000 1(10(000 +(+00 1(100

.omputation Of Total Income 'nd Ta Aia!ilit# ( ii) Brs& G (non-resident)( aged 50 #ears has total income of `10/(++(-)0 2'+,#4'%$ (i) Computation of Tax Liability Total Income Ta on `100(02(000 at sla! rate 'ddJ :urcharge V 10R Ta !efore education cess Increase in income `2(000 over `100(00(000 and increase in ta in comparison to income of `100(00(000(`+(5/(*20 (-1(1/(*20 +5(-0(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `+(5/(*20 `2(000 Ta after marginal relief 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +)(+0(020 (ii) Computation of Tax Liability Total Income Ta on `10-(00(000 at sla! rate 'ddJ :urcharge V 10R Ta !efore education cess Increase in income `-(00(000 over `100(00(000 and increase in ta in comparison to income of `100(00(000( `-(5+(000 (-+(1+(000 +5(-0(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `-(5+(000 `-(00(000 Ta after marginal relief 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -+(+-()00

--

` 100(02(000 +5(-1(200 +(5-(120 -1(1/(*20 +(4)(*20 +5(-2(000 2*(400 +5(-20

10-(00(000 +)(+0(000 +()+(000 -+(1+(000 5+(000 -1(-0(000 *+(*00 -1(-00

(iii) Computation of Tax Liability Total Income 10/(00(000 Ta on `10/(00(000 at sla! rate +)(20(000 'ddJ :urcharge V 10R +()2(000 Ta !efore education cess -+(/2(000 Increase in income `/(00(000 over `100(00(000 and increase in ta in comparison to income of `100(00(000( `/(12(000 (-+(/2(000 +5(-0(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `/(12(000 `/(00(000 12(000 Ta after marginal relief -+(-0(000 'ddJ <ducation cess V +R */(*00 'ddJ :3<. V 1R -+(-00 Ta Aia!ilit# --(+*()00 (iv) Computation of Tax Liability Total Income Ta on `102(00(000 at sla! rate 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 102(00(000 +)(50(000 +()5(000 -+(45(000 *2(2*0 -+(450

.omputation Of Total Income 'nd Ta Aia!ilit# --(4*(-/0 (v) Computation of Tax Liability Total Income Ta on `10*(00(000 at sla! rate 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -/(0/(**2 0ounded off u1s +55, (vi) Computation of Tax Liability Total Income Ta on `104(00(000 at sla! rate 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -/(-5(*22 0ounded off u1s +55, (vii) Computation of Tax Liability Total Income Ta on `105(00(000 at sla! rate 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -/(45(-10 (viii) Computation of Tax Liability Total Income Ta on `10/(20(000 at sla! rate 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# --(2)(-/2 0ounded off u1s +55, (ix) Computation of Tax Liability Total Income Ta on `10/(+2(000 at sla! rate 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# --(1*(524&20

-/

10*(00(000 -0(02(000 -(00(200 --(02(200 **(110 --(022 -/(0/(*40 104(00(000 -0(-2(000 -(0-(200 --(-5(200 **(440 --(-52 -/(-5(**0 105(00(000 -0(40(000 -(04(000 --(44(000 *4(2/0 --(440

10/(20(000 +)(*2(000 +()*(200 -+(*1(200 *2(+-0 -+(*12 --(2)(-20 10/(+2(000&00 +)(+4(200&00 +()+(420&00 -+(+0(+20&00 */(/02&00 -+(+0+&20

.omputation Of Total Income 'nd Ta Aia!ilit# 0ounded off u1s +55,

-2 --(1*(5*0&00

(x) Computation of Tax Liability Total Income 10/(10(000 Ta on `10/(10(000 at sla! rate +)(+-(000 'ddJ :urcharge V 10R +()+(-00 Ta !efore education cess -+(12(-00 Increase in income `/(10(000 over `100(00(000 and increase in ta in comparison to income of `100(00(000( `/(12(-00 (-+(12(-00 +5(00(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `/(12(-00 `/(10(000 2(-00 Ta after marginal relief -+(10(000 'ddJ <ducation cess V +R */(+00 'ddJ :3<. V 1R -+(100 Ta Aia!ilit# --(0*(-00 (xi) Computation of Tax Liability Total Income 10/(++(-50&00 Ta on `10/(++(-50 at sla! rate +)(2*(41/&00 'ddJ :urcharge V 10R +()2(*41&/0 Ta !efore education cess -+(2+(-52&/0 Increase in income `/(++(-50 over `100(00(000 and increase in ta in comparison to income of `100(00(000( `/(++(-52&/0 (-+(2+(-52&/ +5(-0(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `/(++(-52&/0 `/(++(-50 2&/0 Ta after marginal relief -+(2+(-50&00 'ddJ <ducation cess V +R *2(0/4&*0 'ddJ :3<. V 1R -+(2+-&50 Ta Aia!ilit# --(/)()21&/0 0ounded off u1s +55, --(/)()20&00 (xii) Computation of Tax Liability Total Income 10/(++(-)0&00 Ta on `10/(++(-)0 at sla! rate +)(2*(414&00 'ddJ :urcharge V 10R +()2(*41&40 Ta !efore education cess -+(2+(-55&40 Increase in income `/(++(-)0 over `100(00(000 and increase in ta in comparison to income of `100(00(000( `/(++(-55&40 (-+(2+(-55&40 +5(-0(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `/(++(-55&40 `/(++(-)0) >il Ta after marginal relief -+(2+(-55&40 'ddJ <ducation cess V +R *2(0/4&44 'ddJ :3<. V 1R -+(2+-&55 Ta Aia!ilit# --(/)()*0&-2 0ounded off u1s +55, --(/)()*0&00 I++,=# a#4'% 4(A"$ Br& G has income asunderJ Income under the head salar# Income under the head house propert# Income under the head !usiness1profession Aong term capital gains :hort term capital gains ` 2(-2(000 +(/2(000 -0(000 1(10(000 +2(000

.omputation Of Total Income 'nd Ta Aia!ilit# .asual Income (winnings of lotter#) 6eductions allowed under section 50. to 50F .ompute his ta lia!ilit# for the assessment #ear +01/-12& 2'+,#4'%$ Computation of Total Income Income under the head :alar# Income under the head 3ouse 7ropert# Income under the head ,usiness17rofession Income under the head .apital gains Aong term capital gains :hort term capital gains Income under the head Other :ources (.asual income) ;ross Total Income AessJ 6eductions u1s 50. to 50F Total Income Computation of Tax Liability Ta on Aong term capital gains `1(10(000 V +0R u1s 11+ Ta on .asual Income `22(000 V -0R u1s 112,, Ta on >ormal income `5(10(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(-/(/12 0ounded off u1s +55, I++,=# a#4'% 4 (>"$ 7resume the assessee is Brs& G& 2'+,#4'%$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(10(000 V +0R u1s 11+ Ta on .asual Income `22(000 V -0R u1s 112,, Ta on >ormal income `5(10(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(-/(/12 0ounded off u1s +55, I++,=# a#4'% 4 (C"$ 7resume the assessee is Br& G( aged *0 #ears& 2'+,#4'%$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(10(000 V +0R u1s 11+ Ta on .asual Income `22(000 V -0R u1s 112,, Ta on >ormal income `5(10(000 at sla! rate `

-* 22(000 +2(000

` 2(-2(000 +(/2(000 -0(000

1(10(000 +2(000

1(-2(000 22(000 10(00(000 +2(000 )(42(000 ++(000 1*(200 )+(000 1(-0(200 +(*10 1(-02 1(-/(/+0 ` )(42(000 ++(000 1*(200 )+(000 1(-0(200 +(*10 1(-02 1(-/(/+0 ` )(42(000 ++(000 1*(200 54(000

.omputation Of Total Income 'nd Ta Aia!ilit# Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(+)(+*2 0ounded off u1s +55, I++,=# a#4'% 4 (D"$ 7resume the assessee is Br& G( aged 50 #ears& 2'+,#4'%$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(10(000 V +0R u1s 11+ Ta on .asual Income `22(000 V -0R u1s 112,, Ta on >ormal income `5(10(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(0-(212 0ounded off u1s +55, I++,=# a#4'% 4 (E"$ 7resume the assessee is Brs& G (non-resident)& 2'+,#4'%$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(10(000 V +0R u1s 11+ Ta on .asual Income `22(000 V -0R u1s 112,, Ta on >ormal income `5(10(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(-/(/12 0ounded off u1s +55, I++,=# a#4'% 4 (0"$ 7resume the assessee is Br& G (non-resident) aged *0 #ears& 2'+,#4'%$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(10(000 V +0R u1s 11+ Ta on .asual Income `22(000 V -0R u1s 112,, Ta on >ormal income `5(10(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(-/(/12 0ounded off u1s +55, I++,=# a#4'% 4 (G"$ 7resume the assessee is Br& G (non-resident) aged 50 #ears&

-4 1(+2(200 +(210 1(+22 1(+)(+40 ` )(42(000 ++(000 1*(200 *+(000 1(00(200 +(010 1(002 1(0-(2+0 ` )(42(000 ++(000 1*(200 )+(000 1(-0(200 +(*10 1(-02 1(-/(/+0 ` )(42(000 ++(000 1*(200 )+(000 1(-0(200 +(*10 1(-02 1(-/(/+0

.omputation Of Total Income 'nd Ta Aia!ilit# 2'+,#4'%$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(10(000 V +0R u1s 11+ Ta on .asual Income `22(000 V -0R u1s 112,, Ta on >ormal income `5(10(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(-/(/12 0ounded off u1s +55,

-5 ` )(42(000 ++(000 1*(200 )+(000 1(-0(200 +(*10 1(-02 1(-/(/+0

2pe&4a+ p '54=4'% 4% &a=e '7 1e=49e%# I%94549,a+ a%9 e=49e%# @4%9, U%94549e9 0a(4+6 In case of a resident individual or resident 3indu Fndivided =amil# if total income e cluding long term capital gains and short term capital gain covered under section 111' and casual income is !elow the amount which is e empt from income ta (i&e& +(00(0001+(20(00012(00(000)( in such cases deficienc# in the e emption shall !e allowed from long term capital gains or short term capital gain under section 111' as the case ma# !e& Example Br& G has long term capital gains of `1(/0(000 and his income from house propert# is `40(000& In this case( his ta lia!ilit# shall !e >il ?(1(/0(000 1(-0(000) +0R@ Ta on `10(000 V +0R +(000 AessJ 0e!ate u1s 54' (`+(000 or `+(000 whichever is less) +(000 Ta Aia!ilit# >il :ince in the given case normal income (house propert#) is less than `+(00(000( the deficienc# of `1(-0(000 has !een deducted from long term capital gains and remaining amount of `10(000 has !een ta ed V +0R& The purpose is to give e emption of `+(00(000 1 +(20(000 1 2(00(000 to the persons who have normal income less than `+(00(000 1 +(20(000 1 2(00(000& If the assessee is non-resident individual or non-resident 3indu Fndivided =amil#( the a!ove provisions shall not appl# i&e& if the normal income is less than `+(00(000( deficienc# shall not !e allowed from long term capital gains or short term capital gain under section 111'& Example If in the a!ove case the assessee is non-resident( his ta lia!ilit# shall !e 1(/0(000 -R W `+5(5/0 i&e& deficienc# has not !een allowed from long term capital gain& +0R L (1(/0(000 +0R)

Example :imilarl#( if Br& G is resident individual has short term capital gains covered under section 111' amounting to `*(00(000( in this case( his ta lia!ilit# shall !e (*(00(000 +(00(000) 12R L (/(00(000 12R) -R W `*1(500& If the assessee is non-resident individual or 3F=( in that case( no such deficienc# shall !e allowed and accordingl# ta lia!ilit# shall !e *(00(000 12R L (*(00(000 12R) -R W `)+(400& I++,=# a#4'% /$ .ompute ta lia!ilit# for the assessment #ear +01/-12 in the following situationsJ (i) Br& G is resident in India and has income under the head house propert# `/0(000 and income under the head salar# `-0(000 and long term capital gains `/(50(000&

.omputation Of Total Income 'nd Ta Aia!ilit# (ii) 7resume in the a!ove situation the assessee is Brs& G& (iii) 7resume in the a!ove situation the assessee is Brs& G and she is aged a!out 40 #ears& (iv) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 40 #ears& (v) 7resume in the a!ove situation the assessee is Brs& G and she is aged a!out 52 #ears& (vi) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 52 #ears& (vii) 7resume in all the a!ove situations( the assessee is non-resident in India& 2'+,#4'%$ (4" Computation of Total Income Income under the head :alar# Income under the head 3ouse 7ropert# Income under the head .apital ;ains (AT.;) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total 2(20(000 Computation of Tax Liability Ta on AT.; `-(20(000 (/(50(000 1(-0(000) V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 4+(100 (44" Total Income Computation of Tax Liability Ta on AT.; `-(20(000 (/(50(000 1(-0(000) V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (444" Total Income Computation of Tax Liability Ta on AT.; `-(00(000 (/(50(000 1(50(000) V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (45" Total Income Computation of Tax Liability

-)

` -0(000 /0(000 /(50(000 2(20(000 >il Income

40(000 >il 40(000 1(/00 400

2(20(000 40(000 >il 40(000 1(/00 400 4+(100 2(20(000 *0(000 >il *0(000 1(+00 *00 *1(500 2(20(000

.omputation Of Total Income 'nd Ta Aia!ilit# Ta on AT.; `-(00(000 (/(50(000 1(50(000) V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (5" Total Income Computation of Tax Liability Ta on AT.; `20(000 (/(50(000 /(-0(000) V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (54" Total Income Computation of Tax Liability Ta on AT.; `20(000 (/(50(000 /(-0(000) V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (544" In situation (i) Total Income Computation of Tax Liability Ta on AT.; `/(50(000 V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# In situation (ii) Total Income Computation of Tax Liability Ta on AT.; `/(50(000 V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# In situation (iii)

/0 *0(000 >il *0(000 1(+00 *00 *1(500 2(20(000 10(000 >il 10(000 +00 100 10(-00 2(20(000 10(000 >il 10(000 +00 100 10(-00

2(20(000 )*(000 >il )*(000 1()+0 )*0 )5(550 2(20(000 )*(000 >il )*(000 1()+0 )*0 )5(550

.omputation Of Total Income 'nd Ta Aia!ilit# Total Income Computation of Tax Liability Ta on AT.; `/(50(000 V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# In situation (iv) Total Income Computation of Tax Liability Ta on AT.; `/(50(000 V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# In situation (v) Total Income Computation of Tax Liability Ta on AT.; `/(50(000 V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# In situation (vi) Total Income Computation of Tax Liability Ta on AT.; `/(50(000 V +0R u1s 11+ Ta on `40(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit#

/1 2(20(000 )*(000 >il )*(000 1()+0 )*0 )5(550 2(20(000 )*(000 >il )*(000 1()+0 )*0 )5(550 2(20(000 )*(000 >il )*(000 1()+0 )*0 )5(550 2(20(000 )*(000 >il )*(000 1()+0 )*0 )5(550

De9,&#4'%= ,%9e =e&#4'% 80C #' 80U =Ba++ %'# ;e a++'8e9 7 '( 3'%: Te ( Cap4#a+ Ga4%F 2B' # Te ( Cap4#a+ Ga4%= &'5e e9 ,%9e 2e&#4'% 111A ' Ca=,a+ I%&'(e Example Br& G has income under the head house propert# `+2(000 and long term capital gains `+(+0(000 and deductions allowed under section 50. to 50F are `+(*+(000& In this case( ta lia!ilit# shall !e `+(0*0&

.omputation Of Total Income 'nd Ta Aia!ilit#

/+

In the given case normal income is `+2(000 hence deduction allowed under section 50. to 50F is `+2(000 !ecause deduction under section 50. to 50F cannot e ceed the amount of the normal income& 'ccordingl# normal income shall !e nil and deficienc# of `+(00(000 shall !e allowed from the long term capital gains and remaining long term capital gains of `+0(000 shall !e ta ed V +0R less re!ate u1s 54' plus education cess V +R plus :3<. V1R and ta lia!ilit# shall !e `+(0*0& I++,=# a#4'% 6$ .ompute ta lia!ilit# for the assessment #ear +01/-12 in the following situationsJ (i) Br& G is resident in India and his incomes are as followsJ (a) Income under the head :alar# `1(+0(000 (!) Income under the head 3ouse 7ropert# `*0(000 (c) Aong term capital gains `+(+0(000 (d) :hort term capital gain under section 111' `1(10(000 (e) .asual Income `)0(000 (f) 6eduction under section 50. to 50F `+(00(000 & (ii) 7resume in the a!ove situation the assessee is Brs& G& (iii) 7resume in the a!ove situation the assessee is Brs& G and she is aged a!out 40 #ears& (iv) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 40 #ears& (v) 7resume in the a!ove situation the assessee is Brs& G and she is aged a!out 5- #ears& (vi) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 5- #ears& (vii) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 40 #ears and he is nonresident& (viii) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 5- #ears old and he is nonresident& 2'+,#4'%$ (4" Computation of Total Income Income under the head :alar# Income under the head 3ouse 7ropert# Income under the head .apital ;ains Aong term capital gains :hort term capital gains u1s 111' Income under the head Other :ources (.asual Income) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Computation of Tax Liability Ta on AT.; `+0(000 (+(+0(000 +(00(000) V +0R u1s 11+ Ta on :T.; `1(10(000 V 12R u1s 111' Ta on .asual income `)0(000 V -0R u1s 112,, Ta on normal income at sla! rate AessJ 0e!ate u1s 54' (/4(200 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# /*(5*2 0ounded off u1s +55, (ii) Total Income ` ` 1(+0(000 *0(000 +(+0(000 1(10(000 -(-0(000 )0(000 *(00(000 1(50(000 /(+0(000 /(000 1*(200 +4(000 >il +(000 /2(200 )10 /22 /*(540 /(+0(000

.omputation Of Total Income 'nd Ta Aia!ilit# Computation of Tax Liability Ta on AT.; `+0(000 (+(+0(000 +(00(000) V +0R u1s 11+ Ta on :T.; `1(10(000 V 12R u1s 111' Ta on .asual income `)0(000 V -0R u1s 112,, Ta on normal income at sla! rate AessJ 0e!ate u1s 54' (/4(200 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# /*(5*2 0ounded off u1s +55, (iii) Total Income Computation of Tax Liability Ta on AT.; (+(+0(000 +(+0(000) V +0R u1s 11+ Ta on :T.; `50(000 (1(10(000 -0(000) V 12R u1s 111' Ta on .asual Income `)0(000 V -0R u1s 112,, Ta on normal income at sla! rate AessJ 0e!ate u1s 54' (-)(000 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -5(110 (45" Total Income Computation of Tax Liability Ta on AT.; (+(+0(000 +(+0(000) V +0R u1s 11+ Ta on :T.; `50(000 (1(10(000 -0(000) V 12R u1s 111' Ta on .asual Income `)0(000 V -0R u1s 112,, Ta on normal income at sla! rate AessJ 0e!ate u1s 54' (-)(000 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -5(110 (5" Total Income Computation of Tax Liability Ta on AT.; (+(+0(000 +(+0(000) V +0R u1s 11+ Ta on :T.; (1(10(000 1(10(000) V 12R u1s 111' Ta on .asual Income `)0(000 V -0R u1s 112,, Ta on normal income at sla! rate AessJ 0e!ate u1s 54' (+4(000 or +(000 whichever is less)

/-

/(000 1*(200 +4(000 >il +(000 /2(200 )10 /22 /*(540 /(+0(000 >il 1+(000 +4(000 >il +(000 -4(000 4/0 -40

/(+0(000 >il 1+(000 +4(000 >il +(000 -4(000 4/0 -40

/(+0(000 >il >il +4(000 >il +(000

.omputation Of Total Income 'nd Ta Aia!ilit# Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +2(420 (54" Total Income Computation of Tax Liability Ta on AT.; (+(+0(000 +(+0(000) V +0R u1s 11+ Ta on :T.; (1(10(000 1(10(000) V 12R u1s 111' Ta on .asual Income `)0(000 V -0R u1s 112,, Ta on normal income at sla! rate AessJ 0e!ate u1s 54' (+4(000 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +2(420 (544" Total Income Computation of Tax Liability Ta on AT.; `+(+0(000 V +0R u1s 11+ Ta on :T.; `1(10(000 V 12R u1s 111' Ta on .asual income `)0(000 V -0R u1s 112,, Ta on normal income at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# )0(1+2 0ounded off u1s +55, N'#e$ 0e!ate under section 54' is not allowed to non-resident& (5444" Total Income Computation of Tax Liability Ta on AT.; `+(+0(000 V +0R u1s 11+ Ta on :T.; `1(10(000 V 12R u1s 111' Ta on .asual income `)0(000 V -0R u1s 112,, Ta on normal income at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# )0(1+2 0ounded off u1s +55,

// +2(000 200 +20

/(+0(000 >il >il +4(000 >il +(000 +2(000 200 +20

/(+0(000 //(000 1*(200 +4(000 >il 54(200 1(420 542 )0(1-0

/(+0(000 //(000 1*(200 +4(000 >il 54(200 1(420 542 )0(1-0

.omputation Of Total Income 'nd Ta Aia!ilit# N'#e$ 0e!ate under section 54' is not allowed to non-resident&

/2

D,e=#4'% 4$ W 4#e a %'#e '% #a)a;4+4#6 '7 4%&'(e '7 Pa #%e =B4p 04 (/34(4#e9 34a;4+4#6 Pa #%e =B4p 04 ( a%9 D'(e=#4& C'(pa%6/0' e4:% C'(pa%6. A%=8e $ 1. Pa #%e =B4p 74 (/33P Aong term capital gains are ta a!le V 20H( :T.; u1s 111' shall !e ta a!le V 1/H and casual income V 30H and other incomes are also ta a!le V 30H& :urcharge shall !e applica!le V 10H provided total income is e ceeding ` 1 & ' e& Ma :4%a+ 1e+4e7 7rovided that in the case of partnership firm1AA7 having total income e ceeding one crore rupees( the total amount pa#a!le as income-ta and surcharge on such income shall not e ceed the total amount pa#a!le as income-ta on a total income of one crore rupees !# more than the amount of income that e ceeds one crore rupees& <ducation cess is applica!le V 2H and :3<. is applica!le V 1H 2. D'(e=#4& C'(pa%6 Aong term capital gains are ta a!le V 20HF :T.; u1s 111' shall !e ta a!le V 1/H and casual income V 30H and other incomes are also ta a!le V 30H& :urcharge shall !e applica!le - V /H provided total income is e ceeding `100 +aJB= ;,# 4# 4= ,p#' `1000 +aJB= - V 10H provided total income is e ceeding `1000 +aJB=& 7rovided that in the case of 6omestic .ompan# having total income e ceeding one crore rupees110 crores( the total amount pa#a!le as income-ta and surcharge on such income shall not e ceed the total amount pa#a!le as income-ta on a total income of one crore 1 10 crores rupees !# more than the amount of income that e ceeds one crore rupees 1 10 crores& <ducation cess is applica!le V 2H and :3<. is applica!le V 1H E)a(p+e .ompute the ta lia!ilit# of G Atd&( a domestic compan#( assuming that the total income of G Atd& is `1(01(00(000 and the total income does not include an# income in the nature of capital gains& A%=8e The ta pa#a!le on total income of ` 1(01(00(000 of G Atd& computedV -1&2R (including surcharge V 2R) is ` -1(51(200& 3owever( the ta cannot e ceed the ta of ` -0(00(000 pa#a!le on total income of `1 crore !# more than `1(00(000( !eing the amount of total income e ceeding ` 1 crore& Therefore( the ta pa#a!le on ` 1(01(00(000 would !e ` -1(00(000 (` -0(00(000 L ` 1(00(000)& The marginal relief is ` 51(200 (i&e&( `-1(51(200 ` -1(00(000)& E)a(p+e .ompute the ta lia!ilit# of G Atd&( a domestic compan#( assuming that the total income of G Atd& is `10(01(00(000 and the total income does not include an# income in the nature of capital gains& A%=8e The ta pa#a!le on total income of `10(01(00(000 of G Atd& computedV --R (including surcharge V 10R) is ` -(-0(--(000& 3owever( the ta cannot e ceed the ta of ` -(12(00(000 (-1&2R of ` 10 crore) pa#a!le on total income of ` 10 crore !# more than ` 1(00(000( !eing the amount of total income e ceeding ` 10 crore& Therefore( the ta pa#a!le on ` 10(01(00(000 would !e ` -(1*(00(000 (` -(12(00(000 L ` 1(00(000)& The marginal relief is ` 1/(--(000 (i&e&( ` -(-0(--(000 ` -(1*(00(000)&

.omputation Of Total Income 'nd Ta Aia!ilit#

/*

3. 0' e4:% C'(pa%6 Aong term capital gains are ta a!le V 20HF :T.; u1s 111' shall !e ta a!le V 1/H and casual income V 30H and other incomes are ta a!le V 40H& :urcharge shall !e applica!le - V 2H provided total income is e ceeding `100 +aJB= ;,# 4# 4= ,p#' `1000 +aJB=. - V /H provided total income is e ceeding `1000 +aJB= 7rovided that in the case of =oreign .ompan# having total income e ceeding one crore rupees110 crores( the total amount pa#a!le as income-ta and surcharge on such income shall not e ceed the total amount pa#a!le as income-ta on a total income of one crore 1 10 crores rupees !# more than the amount of income that e ceeds one crore rupees 1 10 crores& <ducation cess is applica!le V 2H and :3<. is applica!le V 1H I++,=# a#4'% 7 (A"$ .ompute ta lia!ilit# of ',. Atd& a domestic compan# in the following situationsJ (i) The compan# has income under the head ,usiness17rofession `20(000& (ii) The compan# has income under the head ,usiness17rofession `1(00(000& (iii) The compan# has income under the head ,usiness17rofession `200(00(000& (iv) The compan# has income under the head ,usiness17rofession `100(00(000& (v) The compan# has long term capital gains of `20(000& (vi) The compan# has long term capital gains of `+00(00(000& (vii) The compan# has long term capital gains of `2(00(000& (viii) The compan# has long term capital gains of `10(+0(000& (i ) The compan# has income under the head ,usiness17rofession `11 crore& 2'+,#4'%$ (i) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `20(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 12(/20 (ii) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `1(00(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()00 (iii) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `200(00(000 V -0R 'ddJ :urcharge V 2R ` 20(000 20(000 12(000 -00 120

1(00(000 1(00(000 -0(000 *00 -00

200(00(000 200(00(000 120(00(000 4(20(000

.omputation Of Total Income 'nd Ta Aia!ilit# 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1*+(++(200 (iv) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `100(00(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()0(000 (v) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `20(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 10(-00 (vi) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `+00(00(000 V +0R 'ddJ :urcharge V 2R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# /-(+*(000 (vii) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `2(00(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(0-(000 (viii) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `10(+0(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(10(1+0 (ix) Computation of Tax Liability Income under the head ,usiness1profession

/4 -(12(000 1(24(200

100(00(000 100(00(000 -0(00(000 *0(000 -0(000

20(000 20(000 10(000 +00 100

+00(00(000 +00(00(000 /0(00(000 +(00(000 5/(000 /+(000

2(00(000 2(00(000 1(00(000 +(000 1(000

10(+0(000 10(+0(000 +(0/(000 /(050 +(0/0

11(00(00(000

.omputation Of Total Income 'nd Ta Aia!ilit# Total Income Ta on `11(00(00(000 V -0R 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -4-(5)(000

/5 11(00(00(000 --0(00(000 --(00(000 -*-(00(000 4(+*(000 -(*-(000

I++,=# a#4'% 7(>"$ 7resume in all the a!ove situations the assessee is a partnership firm & 2'+,#4'%$ (i) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `20(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 12(/20 (ii) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `1(00(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()00 (iii) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `200(00(000 V -0R 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1*)()2(000 (iv) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `100(00(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()0(000 (v) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains)

` 20(000 20(000 12(000 -00 120

1(00(000 1(00(000 -0(000 *00 -00

200(00(000 200(00(000 120(00(000 12(00(000 1*2(00(000 -(-0(000 1(*2(000

100(00(000 100(00(000 -0(00(000 *0(000 -0(000

20(000

.omputation Of Total Income 'nd Ta Aia!ilit# Total Income Ta on `20(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 10(-00 (vi) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `+00(00(000 V +0R 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# /2(-+(000 (vii) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `2(00(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(0-(000 (viii) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `10(+0(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(10(1+0 (ix) Computation of Tax Liability Income under the head ,usiness1profession Total Income Ta on `11(00(00(000 V -0R 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -4-(5)(000 I++,=# a#4'% 7(C"$ 7resume in all the a!ove situations the assessee is a foreign compan#& 2'+,#4'%$ (i) Computation of Tax Liability Income under the head ,usiness17rofession Total Income

/) 20(000 10(000 +00 100

+00(00(000 +00(00(000 /0(00(000 /(00(000 //(00(000 55(000 //(000

2(00(000 2(00(000 1(00(000 +(000 1(000

10(+0(000 10(+0(000 +(0/(000 /(050 +(0/0

11(00(00(000 11(00(00(000 --0(00(000 --(00(000 -*-(00(000 4(+*(000 -(*-(000

` 20(000 20(000

.omputation Of Total Income 'nd Ta Aia!ilit# Ta on `20(000 V /0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +0(*00 (ii) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `1(00(000 V /0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# /1(+00 (iii) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `200(00(000 V /0R 'ddJ :urcharge V +R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +10(1+(000 (iv) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `100(00(000 V /0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# /1(+0(000 (v) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `20(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 10(-00 (vi) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `+00(00(000 V +0R 'ddJ :urcharge V +R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# /+(0+(/00

20 +0(000 /00 +00

1(00(000 1(00(000 /0(000 500 /00

200(00(000 200(00(000 +00(00(000 /(00(000 /(05(000 +(0/(000

100(00(000 100(00(000 /0(00(000 50(000 /0(000

20(000 20(000 10(000 +00 100

+00(00(000 +00(00(000 /0(00(000 50(000 51(*00 /0(500

.omputation Of Total Income 'nd Ta Aia!ilit# (vii) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `2(00(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(0-(000 (viii) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `10(+0(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(10(1+0 (ix) Computation of Tax Liability Income under the head ,usiness1profession Total Income Ta on `11(00(00(000 V /0R 'ddJ :urcharge V 2R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# /42(5*(000 I++,=# a#4'% 8$ :urender >ath (3F=) has incomes as given !elowJ 1& Income under the head ,usiness17rofession `2(00(000 +& Income under the head 3ouse 7ropert# `-(00(000 -& Aong term capital gains `/(00(000 /& :hort term capital gains under section 111' `-(00(000 2& .asual Income `+(00(000 *& 6eductions allowed under section 50. to 50F `-2(000 .ompute ta lia!ilit# of 3F= for the assessment #ear +01/-12& 2'+,#4'%$ Computation of Total Income Income under the head ,usiness17rofession Income under the head 3ouse 7ropert# Income under the head .apital ;ains Aong term capital gains :hort term capital gains u1s 111' Income under the head Other :ources (.asual Income) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Computation of Tax Liability `

21 2(00(000 2(00(000 1(00(000 +(000 1(000

10(+0(000 10(+0(000 +(0/(000 /(050 +(0/0

11(00(00(000 11(00(00(000 //0(00(000 ++(00(000 /*+(00(000 )(+/(000 /(*+(000

` 2(00(000&00 -(00(000&00

/(00(000 -(00(000

4(00(000&00 +(00(000&00 14(00(000&00 -2(000&00 1*(*2(000&00

.omputation Of Total Income 'nd Ta Aia!ilit# Ta on AT.; `/(00(000 V +0R u1s 11+ Ta on :T.; `-(00(000 V 12R u1s 111' Ta on .asual income `+(00(000 V -0R u1s 112,, Ta on `4(*2(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(4*(0/0&00 3'&a+ a,#B' 4#6 On the whole of the total income -0R

2+ 50(000&00 /2(000&00 *0(000&00 5-(000&00 +(*5(000&00 2(-*0&00 +(*50&00

:urcharge shall !e applica!le V 10H provided total income is e ceeding ` 1 & ' e& Barginal relief shall also !e allowed& C'!'pe a#45e 2'&4e#6 (i) Where the total income does not e ceed `10(000 (ii) Where the total income e ceeds ` 10(000 !ut does not e ceed ` +0(000 (iii) Where the total income e ceeds `+0(000 10R of the total income `1(000 plus +0R of the amount !# which the total income e ceeds ` 10(000 `-(000 plus -0R of the amount !# which the total income e ceeds ` +0(000

:urcharge shall !e applica!le V 10H provided total income is e ceeding ` 1 & ' e& Barginal relief shall also !e allowed& Mea%4%: '7 Pe ='% 2e&#4'% 2(31" O7ersonP includesX (i) an individual( (ii) a 3indu undivided famil#( (iii) a compan#( (iv) a firm( (v) an association of persons or a !od# of individuals( whether incorporated or not( (vi) a local authorit#( and (vii) ever# artificial Duridical person( not falling within an# of the preceding su!-clauses& Explanation.X=or the purposes of this clause( an association of persons or a !od# of individuals or a local authorit# or an artificial Duridical person shall !e deemed to !e a person( whether or not such person or !od# or authorit# or Duridical person was formed or esta!lished or incorporated with the o!Dect of deriving income( profits or gains& D,e=#4'% K*. I(p.L$ D4=&,== Pa #4a+ I%#e: a#4'% '7 A: 4&,+#, a+ I%&'(eE O D4=&,== I%94 e&# Ta)4%: '7 A: 4&,+#, a+ I%&'(eE O U%9e #Be C'%=#4#,#4'%F #Be p'8e #' +e56 a #a) '% a: 4&,+#, a+ 4%&'(e 5e=#= 4% #Be 2#a#e=. @'8e5e F Pa +4a(e%# Ba= a+=' +e54e9 a #a) '% =,&B 4%&'(e. E)p+a4% B'8 #B4= Ba= ;ee% a&B4e5e9E A%=8e $ A: 4&,+#, a+ I%&'(e 2e&#4'% 10(1" Fnder section 10(1)( an# a: 4&,+#, a+ 4%&'(e 4% I%94a 4= 7,++6 e)e(p# from income ta !ut if the agricultural income is from outside India( it is chargea!le to ta &

.omputation Of Total Income 'nd Ta Aia!ilit#

2-

I%94 e&# #a)4%: '7 a: 4&,+#, a+ 4%&'(e ' pa #4a+ 4%#e: a#4'% '7 a: 4&,+#, a+ 4%&'(e (U%9e #Be &'%=#4#,#4'%F #Be p'8e #' +e56 a #a) '% a: 4&,+#, a+ 4%&'(e 5e=#= 4% #Be =#a#e=. @'8e5e F pa +4a(e%# Ba= a+=' +e54e9 a #a) '% =,&B 4%&'(e. E)p+a4% B'8 #B4= Ba= ;ee% a&B4e5e9E" If an# person has agricultural income as well as non-agricultural income( his ta lia!ilit# shall !e computed in the manner given !elowJ 1& .ompute ta on the total of agricultural income and non- agricultural income considering it to !e total income of the assessee& +& .ompute ta on e emption limit (`+(00(000 1 +(20(000 1 2(00(000) and agricultural income considering it to !e total income& -& 6educt ta computed under :tep + from :tep 1 and appl# education cess& /& Aong term capital gain( casual income and short term capital gain u1s 111' shall not !e taken into consideration for the purpose of partial integration 2& If 'gricultural income is upto `2(000( or non-agricultural income is upto the limit not chargea!le to ta (`+(00(0001+(20(00012(00(000)( partial integration is not applica!le& *& 7artial integration is not applica!le in case of a partnership firm or a compan#& I++,=# a#4'% 9$ (a" Br& G( aged *5 #ears( has income under the head 3ouse 7ropert# `-(+2(000( agricultural income of `1(00(000( Aong term capital gain amounting to `/2(000 and casual income `-2(000& 3e is eligi!le for deduction under section 50. `+0(000& .ompute ta lia!ilit# of Br& G for assessment #ear +01/-12& 2'+,#4'%$ Computation of Total Income Income under the head 3ouse 7ropert# Income under the head .apital ;ains (Aong term capital gain) Income under the head Other :ources (.asual Income) ;ross Total Income AessJ 6eduction u1s 50. Total Income 'gricultural Income Computation of Tax Liability :tep 1& Ta on (agricultural L non-agricultural income) i&e& Ta on /(02(0001- at sla! rates :tep +& Ta on (`+(20(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 Ta on long term capital gain `/2(000 V +0R u1s 11+ Ta on casual income `-2(000 V -0R u1s 112,, AessJ 0e!ate u1s 54' (+2(000 or +(000) whichever is less Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +-(*)0 ` -(+2(000 /2(000 -2(000 /(02(000 +0(000 -(52(000 1(00(000

12(200 10(000 2(200 )(000 10(200 +(000 +-(000 /*0 +-0

.omputation Of Total Income 'nd Ta Aia!ilit# (;" P e=,(e 4% #Be a;'5e I,e=#4'%F M . X 4= N'% 1e=49e%#. 2'+,#4'%$ Computation of Total Income Income under the head 3ouse 7ropert# Income under the head .apital ;ains (AT.;) Income under the head Other :ources (.asual Income) ;ross Total Income AessJ 6eduction u1s 50. Total Income 'gricultural Income Computation of Tax Liability :tep 1& Ta on (agricultural L non-agricultural income) i&e& Ta on /(02(0001- at sla! rates :tep +& Ta on (`+(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 Ta on long term capital gain `/2(000 V +0R u1s 11+ Ta on casual income `-2(000 V -0R u1s 112,, Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()00 N'#e$ 0e!ate under section 54' is not allowed to non-resident&

2/

` -(+2(000 /2(000 -2(000 /(02(000 +0(000 -(52(000 1(00(000

+0(200 10(000 10(200 )(000 10(200 -0(000 *00 -00

(&" P e=,(e 4% #Be a;'5e I,e=#4'%F M . X 4= e=49e%# a%9 9' %'# Ba5e a%6 4%&'(e 7 '( B',=e p 'pe #6. 2'+,#4'%$ ` There will !e no partial integration& Computation of Total Income Income under the head .apital ;ains (AT.;) Income under the head Other :ources (casual income) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income Computation of Tax Liability Ta on long term capital gain (`/2(000- /2(000) Ta on casual income `-2(000 V -0R u1s 112,, AessJ 0e!ate u1s 54' (10(200 or +(000) whichever is less Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 5(422 0ounded off u1s +55, I++,=# a#4'% 10$ Brs& G has income asunder

/2(000 -2(000 50(000 >IA 50(000 1(00(000 >IA 10(200 +(000 5(200 140 52 5(4*0

.omputation Of Total Income 'nd Ta Aia!ilit# Income under the head :alar# Income under the head .apital ;ains Aong term capital gain :hort term capital gain Income under the head Other :ources (lotter#) 'gricultural income 6eduction allowed under section 50. to 50F .ompute her ta lia!ilit# for the assessment #ear +01/-12 in two situations (i) :he is resident (ii) :he is non-resident& 2'+,#4'%$ (4" 2Be 4= e=49e%# Computation of Total Income Income under the head :alar# Income under the head .apital ;ains Aong term capital gain :hort term capital gain Income under the head Other :ources (lotter#) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural income Computation of Tax Liability :tep 1& Ta on (agricultural L non agricultural income) i&e& Ta on ` -(1+(0001- at sla! rates :tep +& Ta on (`+(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from ta at :tep 1 Ta on long term capital gain `+4(000 V +0R u1s 11+ Ta on casual income `4(000 V -0R u1s 112,, AessJ 0e!ate u1s 54' (5(+00 or +(000) whichever is less Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# *(-5* 0ounded off u1s +55, (44" 2Be 4= %'%! e=49e%# Computation of Total Income Income under the head :alar# Income under the head .apital ;ains Aong term capital gain :hort term capital gain Income under the head Other :ources (.asual Income) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural income Computation of Tax Liability

22 1(22(000 +4(000 2)(000 4(000 1(02(000 4(000

` 1(22(000 +4(000 2)(000 4(000 +(/5(000 4(000 +(/1(000 1(02(000

11(+00 10(200 400 2(/00 +(100 +(000 *(+00 1+/ *+ *(-)0

1(22(000 +4(000 2)(000 4(000 +(/5(000 4(000 +(/1(000 1(02(000

.omputation Of Total Income 'nd Ta Aia!ilit# :tep 1& Ta on (agricultural L non agricultural income) i&e& Ta on ` -(1+(0001- at sla! rates :tep +& Ta on (`+(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from ta at :tep 1 Ta on long term capital gain `+4(000 V +0R u1s 11+ Ta on casual income `4(000 V -0R u1s 112,, Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 5(//* 0ounded off u1s +55, N'#e$ 0e!ate under section 54' is not allowed to non-resident& I++,=# a#4'% 11$ Br& G has agricultural income of `/()00 and non-agricultural income of `+(12(000& .ompute his ta lia!ilit# for the assessment #ear +01/-12& 2'+,#4'%$ 'gricultural Income >on 'gricultural income In this case( 'gricultural income is upto `20001-( there!#( partial integration shall not !e applica!le& Computation of Tax Liability Ta on `+(12(000 at sla! rate AessJ 0e!ate u1s 54' (1(200 or +(000) whichever is less Ta Aia!ilit# >il I++,=# a#4'% 12$ Br& G has agricultural income of `2(00(000 and non-agricultural income of `+(00(000& .ompute his ta lia!ilit# for the assessment #ear +01/-12&

2* 11(+00 10(200 400 2(/00 +(100 5(+00 1*/ 5+ 5(/20

` /()00 +(12(000

1(200 1(200

2'+,#4'%$ 3is ta lia!ilit# shall !e nil( since his non-agricultural income is `+(00(000 and partial integration is not applica!le& I++,=# a#4'% 13$ Br& G (aged 40 #ears) has agricultural income of `-(50(000 and non-agricultural income of `+(/0(000& .ompute his ta lia!ilit# for the assessment #ear +01/-12& 2'+,#4'%$ 3is ta lia!ilit# shall !e nil( since his non-agricultural income is `+(/0(000 and partial integration is not applica!le& I++,=# a#4'% 14$ (a" Brs& G has agricultural income of `1(00(000( income under the head salar# amounting to ` +(22(000( long term capital gain of `10(00(000 and casual income of `1(00(000 (winnings of a game show on T9)& .ompute her ta lia!ilit# for the assessment #ear +01/-12& 3er date of !irth is 0+&0/&1)2-& 2'+,#4'%$ `

.omputation Of Total Income 'nd Ta Aia!ilit# Computation of Total Income Income under the head :alar# Income under the head .apital ;ains (AT.;) Income under the head Other :ources (.asual Income) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income Computation of Tax Liability :tep 1& Ta on (agricultural L non agricultural income) i&e& Ta on ` -(22(0001- at sla! rates :tep +& Ta on (`+(20(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 Ta on long term capital gain of `10(00(000 V +0R u1s 11+ Ta on casual income `1(00(000 V -0R u1s 112,, Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(-4(/12&00 0ounded off u1s +55, N'#e$ 1& .asual income shall include all the activities as per section +(+/)(i )& (;" P e=,(e 4% #Be a;'5e I,e=#4'%F Be 9a#e '7 ;4 #B 4= 01.04.19/4. 2'+,#4'%$ Computation of Total Income Income under the head :alar# Income under the head .apital ;ains (AT.;) Income under the head Other :ources (.asual Income) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income Computation of Tax Liability :tep 1& Ta on (agricultural L non agricultural income) i&e& Ta on ` -(22(0001- at sla! rates :tep +& Ta on (`+(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 Ta on long term capital gain `10(00(000 V +0R u1s 11+ Ta on casual income `1(00(000 V -0R u1s 112,, Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(/+(2*2 0ounded off u1s +55,

24 +(22(000&00 10(00(000&00 1(00(000&00 1-(22(000&00 >il 1-(22(000&00 1(00(000&00

10(200&00 10(000&00 200&00 +(00(000&00 -0(000&00 +(-0(200&00 /(*10&00 +(-02&00 +(-4(/+0&00

` +(22(000 10(00(000 1(00(000 1-(22(000 >il 1-(22(000 1(00(000

12(200 10(000 2(200 +(00(000 -0(000 +(-2(200 /(410 +(-22 +(/+(240

Ta)a;4+4#6 '7 D4549e%9= 6ividend income from the domestic compan# shall !e e empt from ta in the hands of the shareholder as

.omputation Of Total Income 'nd Ta Aia!ilit#

25

per section 10(-/)& (3owever dividends from a foreign compan# shall continue to !e ta ed in the hands of the shareholder&) 's per section 112O( 1127( 112H( the domestic compan# has to pa# additional income ta V 12R L surcharge V 10R L education cess V +R L :3<. V 1R and such additional income ta has to !e paid ma imum within 1/ da#s from the date of declaration or distri!ution of dividend whichever is earlier& Example ',. Atd& is a domestic compan# and has total income `50(00(000& It has declared the dividends of `10(00(000 and one of the shareholders Br& Bohit ,hatia gets dividends of `+2(000& In this case( ta lia!ilit# of the compan# and Br& Bohit ,hatia shall !eJ ` Total Income 50(00(000&00 Income ta V -0R +/(00(000&00 'ddJ <. V -R 4+(000&00 Ta Aia!ilit# +/(4+(000&00 'mount of 6ividend 'dditional Income Ta V 12R 'ddJ :urcharge V 10R 'ddJ <. V -R 'dditional Income Ta Ta lia!ilit# of Br& Bohit ,hatia shall !e nil& 10(00(000&00 1(20(000&00 12(000&00 /()20&00 1(*)()20&00

The compan# has to pa# surcharge on additional income ta in ever# case even if total income is less than `100(00(000 Mea%4%: '7 9'(e=#4& &'(pa%6 's per section +(++')( 6omestic .ompan# means an Indian compan#( or an# other compan# which( has made the prescri!ed arrangements for the declaration and pa#ment( within India( of the 6ividend income& Mea%4%: '7 p e=& 4;e9 a a%:e(e%#= 7' 9e&+a a#4'% a%9 pa6(e%# '7 94549e%9= 84#B4% I%94a 1,+e 27 ' compan# shall !e considered to have made prescri!ed arrangements if it has complied with the following conditionsJ 1) The share-register of the compan# for the shareholders shall !e regularl# maintained at its principal place of !usiness within India in respect of an# assessment #ear from a date not later than 1st 'pril of such #ear& +) The ';B for passing the accounts and for declaring the dividends shall !e held onl# at a place within India& -) The dividends declared( shall !e pa#a!le onl# within India to all shareholders& I++,=# a#4'% 1/(A"$ ',. Atd&( a domestic compan# has current profits of `120 lakhs and the compan# has distri!uted dividends of `22 lakhs& Br& G( one of the shareholder has received dividend of `4(00(000& .ompute income ta lia!ilit# of the compan# and that of shareholder& .alculate additional income ta pa#a!le !# the compan# also& 2'+,#4'%$ Ta) +4a;4+4#6 a%9 a994#4'%a+ #a) +4a;4+4#6 '7 #Be &'(pa%6 =Ba++ ;e a= :45e% ;e+'8$ 7rofit !efore ta Income ta on `120(00(000 V -0R :urcharge V 2R <ducation cess V +R :3<. V 1R Income ta lia!ilit# 6ividend ` 120(00(000&00 /2(00(000&00 +(+2(000&00 )/(200&00 /4(+20&00 /5(**(420&00 22(00(000&00

.omputation Of Total Income 'nd Ta Aia!ilit# 'dditional income ta V 12R of `22 lakhs 'ddJ :urcharge V 10R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R 'dditional income ta 0ounded off u1s +55, Ta lia!ilit# of the shareholder shall !e nil& I++,=# a#4'% 1/(>"$ 7resume in the a!ove case the compan# is the foreign compan#& 2'+,#4'% $ Ta) +4a;4+4#6 a%9 a994#4'%a+ #a) +4a;4+4#6 '7 #Be &'(pa%6 =Ba++ ;e a= :45e% ;e+'8$ 7rofit !efore ta Income ta on `120(00(000 V /0R :urcharge V +R <ducation cess V +R :3<. V 1R Income ta lia!ilit# 'dditional income ta of the foreign compan# shall !e nil& Ta) +4a;4+4#6 '7 #Be =Ba eB'+9e =Ba++ ;e a= :45e% ;e+'8$ 6ividend from foreign compan# Ta on `4(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit#

2) 5(+2(000&00 5+(200&00 15(120&00 )(042&00 )(-/(4+2&00 )(-/(4-0&00

` 120(00(000&00 *0(00(000&00 1(+0(000&00 1(++(/00&00 *1(+00&00 *-(0-(*00&00

4(00(000&00 40(000&00 1(/00&00 400&00 4+(100&00

I%#e e=# ' 94549e%9 4%&'(e 7 '( UTI ' M,#,a+ 7,%9= 2e&#4'% 10(3/" If an# person has received an# interest or dividend from the FTI or Butual =und notified under section 10(+-6)( such income is e empt from income ta & If FTI or Butual =unds have distri!uted an# interest or dividend( as per section 1120( 112:( 112T FTI or Butual =unds( have to pa# additional income ta (.orporate dividend ta ) at the rate of +2R plus surcharge V 10R plus education cess V +R plus :3<. V 1R( if the amount is distri!uted to individual or 3indu Fndivided =amil#& If amount is distri!uted to an# other person( rate shall !e -0R plus surcharge V 10R plus education cess V +R plus :3<. V 1R&

P1ACTICE P1O>3EM2
TOTA3 P1O>3EM2 1/
P ';+e( 1. .ompute ta lia!ilit# in the following cases for the assessment #ear +01/-12& (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (i ) Br& G (resident) has total income of `/(40(000 Br& G (non-resident) has total income of `/(40(000 Brs& G (resident) has total income of `/(40(000 Brs& G (non-resident) has total income of `/(40(000 Br& G (resident)( aged *0 #ears has total income of `/(40(000 Brs& G (resident)( aged *0 #ears has total income of `/(40(000 Br& G (non-resident)( aged *0 #ears has total income of `/(40(000 Brs& G (non-resident)( aged *0 #ears has total income of `/(40(000 Br& G (resident)( aged 50 #ears has total income of `/(40(000

.omputation Of Total Income 'nd Ta Aia!ilit# ( ) ( i) ( ii) Brs& G (resident)( aged 50 #ears has total income of `/(40(000 Br& G (non-resident)( aged 50 #ears has total income of `/(40(000 Brs& G (non-resident)( aged 50 #ears has total income of `/(40(000

*0

A%=8e M (i) Ta Aia!ilit#J `+2(420" (ii) `+4(510" (iii) `+2(420" (iv) `+4(510" (v) `+0(*00" (vi) `+0(*00" (vii) `+4(510" (viii) `+4(510" (i ) >il" ( ) >il" ( i) +4(510" ( ii) `+4(510 P ';+e( 2. .ompute ta lia!ilit# in the following cases for the assessment #ear +01/-12& (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (i ) ( ) ( i) ( ii) Br& G (resident) has total income of `100(02(000 Br& G (non-resident) has total income of `10+(00(000 Brs& G (resident) has total income of `)0(00(000 Brs& G (non-resident) has total income of `/()5(000 Br& G (resident)( aged *0 #ears has total income of `/(02(000 Brs& G (resident)( aged *0 #ears has total income of `10+(02(000 Br& G (non-resident)( aged *0 #ears has total income of `+2(00(000 Brs& G (non-resident)( aged *0 #ears has total income of `/(20(000 Br& G (resident)( aged 50 #ears has total income of `-(50(000 Brs& G (resident)( aged 50 #ears has total income of `110(00(000 Br& G (non-resident)( aged 50 #ears has total income of `))())(000 Brs& G (non-resident)( aged 50 #ears has total income of `1+(00(000

A%=8e M (i) Ta Aia!ilit#J `+)(+0(020" (ii) `-1(+0()00" (iii) `+*(02()00" (iv) `-0(*)0" (v) `1-()10" (vi) `-1(+0()00" (vii) `2()4(/00" (viii) `+2(420" (i ) >il " ( ) `-2(1+(-00" ( i) `+)(1/(2)0" ( ii) `1()2(400 P ';+e( 3. Br& G has income asunderJ Income under the head salar# Income under the head house propert# Income under the head !usiness1profession Aong term capital gains :hort term capital gains .asual income (winnings of lotter#) 6eductions allowed under section 50. to 50F .ompute his ta lia!ilit# for the assessment #ear +01/-12& ` +(/0(000 1(22(000 -(-0(000 1(+0(000 -2(000 *2(000 /2(000

A%=8e M Ta Aia!ilit#J `1(+0(000 (!) 7resume the assessee is Brs& G& A%=8e M Ta Aia!ilit#J `1(+0(000 (c) 7resume the assessee is Br& G( aged *2 #ears& A%=8e M Ta Aia!ilit#J `1(1/(520 (d) 7resume the assessee is Brs& G (non-resident)& A%=8e M Ta Aia!ilit#J `1(+0(000

.omputation Of Total Income 'nd Ta Aia!ilit# (e) 7resume the assessee is Br& G (non-resident) aged *2 #ears& A%=8e M Ta Aia!ilit#J `1(+0(000 (f) 7resume the assessee is Br& G( aged 52 #ears& A%=8e M Ta Aia!ilit#J `5)(100 (g) 7resume the assessee is Br& G (non-resident) aged 52 #ears& A%=8e M Ta Aia!ilit#J `1(+0(000 P ';+e( 4. .ompute ta lia!ilit# for the assessment #ear +01/-12 in the following situationsJ

*1

(i) Br& G is resident in India and has income under the head house propert# `20(000 and income under the head salar# `-0(000 and long term capital gains `5(00(000& (ii) 7resume in the a!ove situation the assessee is Brs& G& (iii) 7resume in the a!ove situation the assessee is Brs& G and she is aged a!out 40 #ears& (iv) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 40 #ears& (v) 7resume in the a!ove situation the assessee is Brs& G and she is aged a!out 54 #ears& (vi) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 54 #ears& (vii) 7resume in all the a!ove situations( the assessee is non-resident in India& A%=8e M (i) `1(/0(050" (ii) `1(/0(050" (iii) `1(+)(450" (iv) `1(+)(450" (v) `45(+50" (vi) `45(+50" (vii) :ituation (i)J `1(*/(500" :ituation (ii)J `1(*/(500" :ituation (iii)J `1(*/(500" :ituation (iv)J `1(*/(500" (v)J `1(*/(500" :ituation (vi)J `1(*/(500 P ';+e( /. .ompute ta lia!ilit# for the assessment #ear +01/-12 in the following situationsJ (i) Br& G is resident in India and his incomes are as followsJ (a) Income under the head :alar# `)0(000 (!) Income under the head 3ouse 7ropert# `*0(000 (c) Aong term capital gains `+(-0(000 (d) :hort term capital gain under section 111' `+(/0(000 (e) .asual Income `40(000 (f) 6eduction under section 50. to 50F `+(00(000 & (ii) 7resume in the a!ove situation the assessee is Brs& G& (iii) 7resume in the a!ove situation the assessee is Brs& G and she is aged a!out 40 #ears& (iv) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 40 #ears& (v) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 40 #ears old and he is nonresident&

.omputation Of Total Income 'nd Ta Aia!ilit# (vi) 7resume in the a!ove situation the assessee is Brs& G and she is aged a!out 5+ #ears& (vii) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 5+ #ears&

*+

(viii) 7resume in the a!ove situation the assessee is Br& G and he is aged a!out 5+ #ears old and he is nonresident& A%=8e M (i) `*/(5)0" (ii) `*/(5)0" (iii) `22(*+0" (iv) `22(*+0" (v) `1(0*(0)0" (vi) `+1(*-0" (vii) `+1(*-0" (viii) `1(0*(0)0 P ';+e( 6. .ompute ta lia!ilit# of ',. Atd& a domestic compan# in the following situations for assessment #ear +01/-12J (i) The compan# has income under the head ,usiness17rofession `40(000& (ii) The compan# has income under the head ,usiness17rofession `120(00(000& (iii) The compan# has income under the head ,usiness17rofession `*(00(000& (iv) The compan# has income under the head ,usiness17rofession `10(-0(000& (v) The compan# has long term capital gains of `400(00(000& (vi) The compan# has long term capital gains of `1(20(000& (vii) The compan# has long term capital gains of `*(00(000& (viii) The compan# has long term capital gains of `10(-0(000& (i ) The compan# has casual income `/00(00(000& A%=8e M (i) Ta Aia!ilit#J `+1(*-0" (ii) `/5(**(420" (iii) `1(52(/00" (iv) `-(15(+40" (v) `121(/1(000" (vi) `-0()00" (vii) `1(+-(*00" (viii) `+(1+(150" (i ) `1+)(45(000 (!) 7resume all the a!ove situations the compan# is a foreign compan#& A%=8e M (i) Ta Aia!ilit#J `+5(5/0" (ii) `*-(0-(*00" (iii) `+(/4(+00" (iv) `/(+/(-*0" (v) `1/4(05(/00" (vi) `-0()00" (vii) `1(+-(*00" (viii) `+(1+(150" (i ) `1+*(04(+00 P ';+e( 7. ;agan 6as (3F=) has incomes as given !elowJ 1& Income under the head ,usiness17rofession `*(00(000 +& Income under the head 3ouse 7ropert# `/(00(000 -& Aong term capital gains `/(20(000 /& :hort term capital gains under section 111' `-(20(000 2& .asual Income `-(20(000

.omputation Of Total Income 'nd Ta Aia!ilit# *& 6eductions allowed under section 50. to 50F `1(+2(000 .ompute ta lia!ilit# of 3F= for the assessment #ear +01/-12& A%=8e M Ta Aia!ilit#J `-(*-(050 P ';+e( 8. .ompute ta lia!ilit# in the following situationsJ (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (i ) Brs& G has income under the head 3ouse 7ropert# `5(/+(-+/& Br& G has income under the head ,usiness 7rofession `1/(/+(--*& Br& G aged ** #ears has long term capital gains `11(-2(--2& Br& G has long term capital gains of `1-(-2(--/&)0& Brs& G has short term capital gains under section 111' `10(+0(--2& Brs& G( non-resident( has long term capital gains `2(/0(--4& Br& G( non-resident( aged a!out ** #ears has winning of a lotter# `4(+0(000& Br& G aged 5* #ears has long term capital gains `12(*2(-52& Br& G( non-resident( aged a!out )0 #ears has winning of a lotter# `10(+0(000&

*-

A%=8e M (i) `1(01(/+0" (ii) `+(40(250" (iii) `1(5+(-50" (iv) `+(--(550" (v) `1(+*(4/0" (vi) `1(11(-10" (vii) `+(++(/50" (viii) `+(1)(/40" (i ) `-(12(150 P ';+e( 9. Br& G has income under the head salar# `-(00(000 and income under the head house propert# `1*(00(000 and long term capital gain `1(00(000 and agricultural income `/(00(000& 6eductions allowed under section 50. to 50F `*0(000& .ompute his income and ta lia!ilit# for 'ssessment Kear +01/-12& A%=8e M Total IncomeJ `1)(/0(000" Ta Aia!ilit#J `/(5*(1*0 (!) 7resume assessee is Brs& G and is aged */ #ears& A%=8e M Total IncomeJ `1)(/0(000" Ta Aia!ilit#J `/(42(5*0 P ';+e( 10. Br& G has income under the head house propert# `-(00(000 and long term capital gain `2(00(000 and agricultural income `-(00(000& 6eductions under section 50. to 50F `1(00(000& .ompute his income and ta lia!ilit# for 'ssessment Kear +01/-12& A%=8e M Total IncomeJ `4(00(000" Ta Aia!ilit#J `1(0-(000 (!) 7resume Br& G is aged 5+ #ears A%=8e M Total IncomeJ `4(00(000" Ta Aia!ilit#J `/1(+00 P ';+e( 11. Brs& G has casual income `2(00(000 and short term capital gain under section 111' `4(00(000 and agricultural income `-(00(000& .ompute her ta lia!ilit# for 'ssessment Kear +01/-12&

.omputation Of Total Income 'nd Ta Aia!ilit# A%=8e M Ta Aia!ilit#J `+(-1(420 (!) 7resume she is non-resident and is aged *- #ears& A%=8e M Ta Aia!ilit#J `+(*+(*20

*/

P ';+e( 12. Br& G has agricultural income `10(00(000 and income from !usiness `1+(00(000 and casual income `2(00(000 and he has completed the age of 50 #ears on -1&0-&+01/& .ompute his ta lia!ilit# 'ssessment Kear +01/-12& A%=8e M Ta Aia!ilit#J `-(40(500 (!) 7resume he has completed 50 #ears on 01&0/&+01/& A%=8e M Ta Aia!ilit#J `/(/5(020 P ';+e( 13. Brs& G has income as given !elowJ Income under the head :alar# Income under the head 3ouse 7ropert# :hort Term .apital ;ain 20(000 :hort Term .apital ;ain111' Aong Term .apital ;ain .asual Income 6eduction u1s 50. to 50F 'gricultural Income .ompute her Ta Aia!ilit# for the '&K&+01/-12 A%=8e M Ta Aia!ilit#J `)1(*40 (!) 7resume in a!ove she is aged 51 #ears& A%=8e M Ta Aia!ilit#J `-2(2/0 (c) 7resume in (a) a!ove she is >on 0esident and deduction u1s 50.-50F is `-(00(000& A%=8e M Ta Aia!ilit#J `5-(/-0 P ';+e( 14. Brs& G has income under the head house propert# `+(00(000 and long term capital gain `10(00(000 and agricultural income `4(00(000& 6eduction under section 50. to 50F `*0(000& .ompute her income and ta lia!ilit# for 'ssessment Kear +01/-12& A%=8e M Total IncomeJ `11(/0(000" Ta Aia!ilit#J `1()-(*/0 (!) 7resume Brs& G is aged 4) #ears and income under the head house propert# is `10(00(000 ` +(00(000 1(00(000 +(00(000 1,20(000 40(000 1(10(000 2(00(000

.omputation Of Total Income 'nd Ta Aia!ilit# A%=8e M Total IncomeJ `1)(/0(000" Ta Aia!ilit#J `/(1/(0*0

*2

P ';+e( 1/. ',. Atd&( a domestic compan# has total income of `200(00(000 and compan# has distri!uted dividend of `*2(00(000 and one of the shareholder Br& G has received dividend of `2(00(000& .ompute ta lia!ilit# and additional ta lia!ilit# of the compan# and also that of the shareholder& A%=8e M Income ta lia!ilit# `1*+(++(200 and additional income ta lia!ilit# `11(0/(*50& Ta lia!ilit# of shareholder is >il& (!) 7resume that ',. Atd& is a foreign compan#& A%=8e M Income ta lia!ilit# `+10(1+(000 and additional income ta lia!ilit# is nil& Ta lia!ilit# of shareholder `+5(5/0&

2O3UTION2
TO

P1ACTICE P1O>3EM2
2'+,#4'% 1$ (i) Computation of Tax Liability Total Income Ta on `/(40(000 at sla! rate AessJ 0e!ate u1s 54' (+4(000 or +(000 whichever is less) ` /(40(000 +4(000 +(000

.omputation Of Total Income 'nd Ta Aia!ilit# Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +2(420 (ii) Computation of Tax Liability Total Income Ta on `/(40(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +4(510 N'#e$ 0e!ate under section 54' is not allowed to non-resident& (iii) Computation of Tax Liability Total Income Ta on `/(40(000 at sla! rate AessJ 0e!ate u1s 54' (+4(000 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +2(420 (iv) Computation of Tax Liability Total Income Ta on `/(40(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +4(510 N'#e$ 0e!ate under section 54' is not allowed to non-resident& (v) Computation of Tax Liability Total Income Ta on `/(40(000 at sla! rate AessJ 0e!ate u1s 54' (++(000 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +0(*00 (vi) Computation of Tax Liability Total Income Ta on `/(40(000 at sla! rate AessJ 0e!ate u1s 54' (++(000 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R

** +2(000 200 +20

/(40(000 +4(000 2/0 +40

/(40(000 +4(000 +(000 +2(000 200 +20

/(40(000 +4(000 2/0 +40

/(40(000 ++(000 +(000 +0(000 /00 +00

/(40(000 ++(000 +(000 +0(000 /00 +00

.omputation Of Total Income 'nd Ta Aia!ilit# Ta Aia!ilit# +0(*00 (vii) Computation of Tax Liability Total Income Ta on `/(40(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +4(510 N'#e$ 0e!ate under section 54' is not allowed to non-resident& (viii) Computation of Tax Liability Total Income Ta on `/(40(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +4(510 N'#e$ 0e!ate under section 54' is not allowed to non-resident& (ix) Computation of Tax Liability Total Income Ta Aia!ilit# >il (x) Computation of Tax Liability Total Income Ta Aia!ilit# >il (xi) Computation of Tax Liability Total Income Ta on `/(40(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +4(510 N'#e$ 0e!ate under section 54' is not allowed to non-resident& (xii) Computation of Tax Liability Total Income Ta on `/(40(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +4(510 N'#e$ 0e!ate under section 54' is not allowed to non-resident&

*4

/(40(000 +4(000 2/0 +40

/(40(000 +4(000 2/0 +40

/(40(000

/(40(000

/(40(000 +4(000 2/0 +40

/(40(000 +4(000 2/0 +40

.omputation Of Total Income 'nd Ta Aia!ilit#

*5

2'+,#4'% 2$ ` (i) Computation of Tax Liability Total Income 100(02(000&00 Ta on `100(02(000 at sla! rate +5(-1(200&00 'ddJ :urcharge V 10R +(5-(120&00 Ta !efore education cess -1(1/(*20&00 Increase in income `2(000 over `100(00(000 and increase in ta in comparison to income of `100(00(000(`+(5/(*20 (-1(1/(*20 +5(-0(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `+(5/(*20 `2(000 +(4)(*20&00 Ta after marginal relief +5(-2(000&00 'ddJ <ducation cess V +R 2*(400&00 'ddJ :3<. V 1R +5(-20&00 Ta Aia!ilit# +)(+0(020&00 (ii) Computation of Tax Liability Total Income 10+(00(000&00 Ta on `10+(00(000 at sla! rate +5()0(000&00 'ddJ :urcharge V 10R +(5)(000&00 Ta !efore education cess -1(4)(000&00 Increase in income `+(00(000 over `100(00(000 and increase in ta in comparison to income of `100(00(000(`-(/)(000 (-1(4)(000 +5(-0(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `-(/)(000 `+(00(000 1(/)(000&00 Ta after marginal relief -0(-0(000&00 'ddJ <ducation cess V +R *0(*00&00 'ddJ :3<. V 1R -0(-00&00 Ta Aia!ilit# -1(+0()00&00 (iii) Computation of Tax Liability Total Income Ta on `)0(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +*(02()00&00 (iv) Computation of Tax Liability Total Income Ta on `/()5(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0(*)/&00 0ounded off u1s +55, (v) Computation of Tax Liability Total Income Ta on `/(02(000 at sla! rate AessJ 0e!ate u1s 54' (12(200 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R )0(00(000&00 +2(-0(000&00 20(*00&00 +2(-00&00

/()5(000&00 +)(500&00 2)*&00 +)5&00 -0(*)0&00 /(02(000&00 12(200&00 +(000&00 1-(200&00 +40&00 1-2&00

.omputation Of Total Income 'nd Ta Aia!ilit# Ta Aia!ilit# 1-()02&00 0ounded off u1s +55,

*)

1-()10&00

(vi) Computation of Tax Liability Total Income 10+(02(000&00 Ta on `10+(02(000 at sla! rate +5(5*(200&00 'ddJ :urcharge V 10R +(55(*20&00 Ta !efore education cess -1(42(120&00 Increase in income `+(02(000 over `100(00(000 and increase in ta in comparison to income of `100(00(000(`-(20(120 (-1(42(120 +5(+2(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `-(20(120 `+(02(000 1(/2(120&00 Ta after marginal relief -0(-0(000&00 'ddJ <ducation cess V +R *0(*00&00 'ddJ :3<. V 1R -0(-00&00 Ta Aia!ilit# -1(+0()00&00 (vii) Computation of Tax Liability Total Income Ta on `+2(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2()4(/00&00 (viii) Computation of Tax Liability Total Income Ta on `/(20(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +2(420&00 (ix) Computation of Tax Liability Total Income Ta on `-(50(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# >il (x) Computation of Tax Liability Total Income Ta on `110(00(000 at sla! rate 'ddJ :urcharge V 10R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -2(1+(-00&00 (xi) Computation of Tax Liability +2(00(000&00 2(50(000&00 11(*00&00 2(500&00

/(20(000&00 +2(000&00 200&00 +20&00

-(50(000&00 >il >il >il

110(00(000&00 -1(00(000&00 -(10(000&00 -/(10(000&00 *5(+00&00 -/(100&00

.omputation Of Total Income 'nd Ta Aia!ilit# Total Income Ta on `))())(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +)(1/(2)1&00 0ounded off u1s +55, (xii) Computation of Tax Liability Total Income Ta on `1+(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1()2(400&00 2'+,#4'% 3$ Computation of Total Income Income under the head :alar# Income under the head 3ouse 7ropert# Income under the head ,usiness17rofession Income under the head .apital gains Aong term capital gains :hort term capital gains Income under the head Other :ources (.asual Income) ;ross Total Income AessJ 6eductions u1s 50. to 50F Total Income Computation of Tax Liability Ta on Aong term capital gains `1(+0(000 V +0R u1s 11+ Ta on .asual Income `*2(000 V -0R u1s 112,, Ta on >ormal income `4(12(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(1)())2 0ounded off u1s +55, 2'+,#4'% 3(;"$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(+0(000 V +0R u1s 11+ Ta on .asual Income `*2(000 V -0R u1s 112,, Ta on >ormal income `4(12(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(1)())2 0ounded off u1s +55, `

40 ))())(000&00 +5(+)(400&00 2*(2)/&00 +5(+)4&00 +)(1/(2)0&00 1+(00(000&00 1()0(000&00 -(500&00 1()00&00

` +(/0(000 1(22(000 -(-0(000

1(+0(000 -2(000

1(22(000 *2(000 )(/2(000 /2(000 )(00(000 +/(000 1)(200 4-(000 1(1*(200 +(--0 1(1*2 1(+0(000 ` )(00(000 +/(000 1)(200 4-(000 1(1*(200 +(--0 1(1*2 1(+0(000

.omputation Of Total Income 'nd Ta Aia!ilit# 2'+,#4'% 3(&"$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(+0(000 V +0R u1s 11+ Ta on .asual Income `*2(000 V -0R u1s 112,, Ta on >ormal income `4(12(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(1/(5/2 0ounded off u1s +55, 2'+,#4'% 3(9"$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(+0(000 V +0R u1s 11+ Ta on .asual Income `*2(000 V -0R u1s 112,, Ta on >ormal income `4(12(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(1)())2 0ounded off u1s +55, 2'+,#4'% 3(e"$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(+0(000 V +0R u1s 11+ Ta on .asual Income `*2(000 V -0R u1s 112,, Ta on >ormal income `4(12(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(1)())2 0ounded off u1s +55, 2'+,#4'% 3(7"$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(+0(000 V +0R u1s 11+ Ta on .asual Income `*2(000 V -0R u1s 112,, Ta on >ormal income `4(12(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit#

41 ` )(00(000 +/(000 1)(200 *5(000 1(11(200 +(+-0 1(112 1(1/(520 ` )(00(000 +/(000 1)(200 4-(000 1(1*(200 +(--0 1(1*2 1(+0(000 ` )(00(000 +/(000 1)(200 4-(000 1(1*(200 +(--0 1(1*2 1(+0(000 ` )(00(000 +/(000 1)(200 /-(000 5*(200 1(4-0 5*2

.omputation Of Total Income 'nd Ta Aia!ilit# 5)(0)2 0ounded off u1s +55, 2'+,#4'% 3(:"$ Total Income Computation of Tax Liability Ta on Aong term capital gains `1(+0(000 V +0R u1s 11+ Ta on .asual Income `*2(000 V -0R u1s 112,, Ta on >ormal income `4(12(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(1)())2 0ounded off u1s +55, 2'+,#4'% 4$ (i) Computation of Total Income Income under the head :alar# Income under the head 3ouse 7ropert# Income under the head .apital ;ains (AT.;) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Computation of Tax Liability Ta on AT.; `*(50(000 (5(00(000 1(+0(000) V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (ii) Total Income Computation of Tax Liability Ta on AT.; `*(50(000 (5(00(000 1(+0(000) V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (iii) Total Income Computation of Tax Liability Ta on AT.; `*(-0(000 (5(00(000 1(40(000) V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess

4+ 5)(100 ` )(00(000 +/(000 1)(200 4-(000 1(1*(200 +(--0 1(1*2 1(+0(000 ` -0(000 20(000 5(00(000 5(50(000 >il 5(50(000 1(-*(000 >il 1(-*(000 +(4+0 1(-*0 1(/0(050 5(50(000 1(-*(000 >il 1(-*(000 +(4+0 1(-*0 1(/0(050 5(50(000 1(+*(000 >il 1(+*(000

.omputation Of Total Income 'nd Ta Aia!ilit# 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (iv) Total Income Computation of Tax Liability Ta on AT.; `*(-0(000 (5(00(000 1(40(000) V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (v) Total Income Computation of Tax Liability Ta on AT.; `-(50(000 (5(00(000 /(+0(000) V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (vi) Total Income Computation of Tax Liability Ta on AT.; `-(50(000 (5(00(000 /(+0(000) V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (vii)In situation (i) Total Income Computation of Tax Liability Ta on AT.; `5(00(000 V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# In situation (ii) Total Income Computation of Tax Liability

4+(2+0 1(+*0 1(+)(450 5(50(000 1(+*(000 >il 1(+*(000 +(2+0 1(+*0 1(+)(450

5(50(000 4*(000 >il 4*(000 1(2+0 4*0 45(+50 5(50(000 4*(000 >il 4*(000 1(2+0 4*0 45(+50 5(50(000 1(*0(000 >il 1(*0(000 -(+00 1(*00 1(*/(500 5(50(000

.omputation Of Total Income 'nd Ta Aia!ilit# Ta on AT.; `5(00(000 V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# In situation (iii) Total Income Computation of Tax Liability Ta on AT.; `5(00(000 V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# In situation (iv) Total Income Computation of Tax Liability Ta on AT.; `5(00(000 V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# In situation (v) Total Income Computation of Tax Liability Ta on AT.; `5(00(000 V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# In situation (vi) Total Income Computation of Tax Liability Ta on AT.; `5(00(000 V +0R u1s 11+ Ta on `50(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2'+,#4'% /$ (i)

4/ 1(*0(000 >il 1(*0(000 -(+00 1(*00 1(*/(500 5(50(000 1(*0(000 >il 1(*0(000 -(+00 1(*00 1(*/(500 5(50(000 1(*0(000 >il 1(*0(000 -(+00 1(*00 1(*/(500 5(50(000 1(*0(000 >il 1(*0(000 -(+00 1(*00 1(*/(500 5(50(000 1(*0(000 >il 1(*0(000 -(+00 1(*00 1(*/(500

.omputation Of Total Income 'nd Ta Aia!ilit# Computation of Total Income Income under the head :alar# Income under the head 3ouse 7ropert# Income under the head .apital ;ains Aong term capital gains :hort term capital gains u1s 111' Income under the head Other :ources (.asual Income) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Computation of Tax Liability Ta on AT.; `-0(000 (+(-0(000 +(00(000) V +0R u1s 11+ Ta on :T.; `+(/0(000 V 12R u1s 111' Ta on .asual Income `40(000 V -0R u1s 112,, Ta on normal income at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# */(5)0 (ii) Total Income Computation of Tax Liability Ta on AT.; `-0(000 (+(-0(000 +(00(000) V +0R u1s 11+ Ta on :T.; `+(/0(000 V 12R u1s 111' Ta on .asual Income `40(000 V -0R u1s 112,, Ta on normal income at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# */(5)0 (iii) Total Income Computation of Tax Liability Ta on AT.; (+(-0(000 +(-0(000) V +0R u1s 11+ Ta on :T.; `+(+0(000 (+(/0(000 +0(000) V 12R u1s 111' Ta on .asual Income `40(000 V -0R u1s 112,, Ta on normal income at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 22(*+0 (iv) Total Income

42 )0(000 *0(000

+(-0(000 +(/0(000

/(40(000 40(000 *()0(000 1(20(000 2(/0(000 *(000 -*(000 +1(000 >il *-(000 1(+*0 *-0

2(/0(000 *(000 -*(000 +1(000 >il *-(000 1(+*0 *-0

2(/0(000 >il --(000 +1(000 >il 2/(000 1(050 2/0

2(/0(000

.omputation Of Total Income 'nd Ta Aia!ilit# Computation of Tax Liability Ta on AT.; (+(-0(000 +(-0(000) V +0R u1s 11+ Ta on :T.; `+(+0(000 (+(/0(000 +0(000) V 12R u1s 111' Ta on .asual Income `40(000 V -0R u1s 112,, Ta on normal income at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 22(*+0 (v) Total Income Computation of Tax Liability Ta on AT.; `+(-0(000 V +0R u1s 11+ Ta on :T.; `+(/0(000 V 12R u1s 111' Ta on .asual Income `40(000 V -0R u1s 112,, Ta on normal income at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(0*(0)0 (vi) Total Income Computation of Tax Liability Ta on AT.; (+(-0(000 +(-0(000) V +0R u1s 11+ Ta on :T.; (+(/0(000 +(/0(000) V 12R u1s 111' Ta on .asual Income `40(000 V -0R u1s 112,, Ta on normal income at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +1(*-0 (vii) Total Income Computation of Tax Liability Ta on AT.; (+(-0(000 +(-0(000) V +0R u1s 11+ Ta on :T.; (+(/0(000 +(/0(000) V 12R u1s 111' Ta on .asual Income `40(000 V -0R u1s 112,, Ta on normal income at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +1(*-0

4* >il --(000 +1(000 >il 2/(000 1(050 2/0

2(/0(000 /*(000 -*(000 +1(000 >il 1(0-(000 +(0*0 1(0-0

2(/0(000 >il >il +1(000 >il +1(000 /+0 +10

2(/0(000 >il >il +1(000 >il +1(000 /+0 +10

.omputation Of Total Income 'nd Ta Aia!ilit# (viii) Total Income Computation of Tax Liability Ta on AT.; `+(-0(000 V +0R u1s 11+ Ta on :T.; `+(/0(000 V 12R u1s 111' Ta on .asual Income `40(000 V -0R u1s 112,, Ta on normal income at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(0*(0)0 2'+,#4'% 6$ (i) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `40(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +1(*-0 (ii) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `120(00(000 V -0R 'ddJ :urcharge V 2R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# /5(**(420 (iii) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `*(00(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(52(/00 (iv) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `10(-0(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -(15(+40

44 2(/0(000 /*(000 -*(000 +1(000 >il 1(0-(000 +(0*0 1(0-0

` 40(000 40(000 +1(000 /+0 +10

120(00(000 120(00(000 /2(00(000 +(+2(000 )/(200 /4(+20

*(00(000 *(00(000 1(50(000 -(*00 1(500

10(-0(000 10(-0(000 -(0)(000 *(150 -(0)0

.omputation Of Total Income 'nd Ta Aia!ilit# (v) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `400(00(000 V +0R 'ddJ :urcharge V 2R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 121(/1(000 (vi) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `1(20(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()00 (vii) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `*(00(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(+-(*00 (viii) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `10(-0(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(1+(150 (ix) Computation of Tax Liability Income under the head Other :ources (.asual Income) Total Income Ta on `/00(00(000 V -0R 'ddJ :urcharge V 2R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1+)(45(000 2'+,#4'% 6(;"$ (i) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `40(000 V /0R 'ddJ <ducation cess V +R

45 400(00(000 400(00(000 1/0(00(000 4(00(000 +()/(000 1(/4(000

1(20(000 1(20(000 -0(000 *00 -00

*(00(000 *(00(000 1(+0(000 +(/00 1(+00

10(-0(000 10(-0(000 +(0*(000 /(1+0 +(0*0

/00(00(000 /00(00(000 1+0(00(000 *(00(000 +(2+(000 1(+*(000

` 40(000 40(000 +5(000 2*0

.omputation Of Total Income 'nd Ta Aia!ilit# 'ddJ :3<. V 1R Ta Aia!ilit# +5(5/0 (ii) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `120(00(000 V /0R 'ddJ :urcharge V +R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# *-(0-(*00 (iii) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `*(00(000 V /0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(/4(+00 (iv) Computation of Tax Liability Income under the head ,usiness17rofession Total Income Ta on `10(-0(000 V /0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# /(+/(-*0 (v) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `400(00(000 V +0R 'ddJ :urcharge V +R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1/4(05(/00 (vi) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `1(20(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -0()00 (vii) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains)

4) +50

120(00(000 120(00(000 *0(00(000 1(+0(000 1(++(/00 *1(+00

*(00(000 *(00(000 +(/0(000 /(500 +(/00

10(-0(000 10(-0(000 /(1+(000 5(+/0 /(1+0

400(00(000 400(00(000 1/0(00(000 +(50(000 +(52(*00 1(/+(500

1(20(000 1(20(000 -0(000 *00 -00

*(00(000

.omputation Of Total Income 'nd Ta Aia!ilit# Total Income Ta on `*(00(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(+-(*00 (viii) Computation of Tax Liability Income under the head .apital ;ains (long term capital gains) Total Income Ta on `10(-0(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(1+(150 (ix) Computation of Tax Liability Income under the head Other :ources (.asual Income) Total Income Ta on `/00(00(000 V -0R 'ddJ :urcharge V +R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1+*(04(+00 2'+,#4'% 7$ Computation of Total Income Income under the head ,usiness17rofession Income under the head 3ouse 7ropert# Income under the head .apital ;ains Aong term capital gains :hort term capital gains u1s 111' Income under the head Other :ources (.asual Income) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Computation of Tax Liability Ta on AT.; `/(20(000 V +0R u1s 11+ Ta on :T.; `-(20(000 V 12R u1s 111' Ta on .asual income `-(20(000 V -0R u1s 112,, Ta on `5(42(000 at sla! rate Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -(*-(042&00 0ounded off u1s +55, 2'+,#4'% 8$ (4" Income under the head 3ouse 7ropert#

50 *(00(000 1(+0(000 +(/00 1(+00

10(-0(000 10(-0(000 +(0*(000 /(1+0 +(0*0

/00(00(000 /00(00(000 1+0(00(000 +(/0(000 +(//(500 1(++(/00

` *(00(000&00 /(00(000&00 /(20(000 -(20(000 5(00(000&00 -(20(000&00 +1(20(000&00 1(+2(000&00 +0(+2(000&00 )0(000&00 2+(200&00 1(02(000&00 1(02(000&00 -(2+(200&00 4(020&00 -(2+2&00 -(*-(050&00 ` 5(/+(-+/&00

.omputation Of Total Income 'nd Ta Aia!ilit# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 0ounded off u1s +55' Computation of Tax Liability Ta on `5(/+(-+0 sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(01(/14&)+ 0ounded off u1s +55, (44" Income under the head ,usiness17rofession ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 0ounded off u1s +55' Computation of Tax Liability Ta on `1/(/+(-/0 sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(40(25-&0* 0ounded off u1s +55, (444" Income under the head .apital ;ains (AT.;) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 0ounded off u1s +55' Computation of Tax Liability Ta on `5(52(-/0 (11(-2(-/0 +(20(000) V +0R u1s 11+ 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(5+(-50&0/ 0ounded off u1s +55, (45" Income under the head .apital ;ains (AT.;) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 0ounded off u1s +55' Computation of Tax Liability Ta on `11(-2(--0 (1-(-2(--0 +(00(000) V +0R u1s 11+ 'ddJ <ducation cess V +R

51 5(/+(-+/&00 >il 5(/+(-+/&00 5(/+(-+0&00 )5(/*/&00 1()*)&+5 )5/&*/ 1(01(/+0&00 1/(/+(--*&00 1/(/+(--*&00 >il 1/(/+(--*&00 1/(/+(-/0&00 +(*+(40+&00 2(+2/&0/ +(*+4&0+ +(40(250&00 11(-2(--2&00 11(-2(--2&00 >il 11(-2(--2&00 11(-2(-/0&00 1(44(0*5&00 -(2/1&-* 1(440&*5 1(5+(-50&00 1-(-2(--/&)0 1-(-2(--/&)0 >il 1-(-2(--/&)0 1-(-2(--0&00 +(+4(0**&00 /(2/1&-+

.omputation Of Total Income 'nd Ta Aia!ilit# 'ddJ :3<. V 1R Ta Aia!ilit# +(--(544&)5 0ounded off u1s +55, (5" Income under the head .apital ;ains (:T.;) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 0ounded off u1s +55' Computation of Tax Liability Ta on `5(+0(-/0 1(+-(021&00 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(+*(4/+&20ounded off u1s +55, (10(+0(-/0 +(00(000) V 12R

5+ +(+40&** +(--(550&00 10(+0(--2&00 10(+0(--2&00 >il 10(+0(--2&00 10(+0(-/0&00 u1s 111' +(/*1&0+ 1(+-0&21 1(+*(4/0&00 2(/0(--4&00 2(/0(--4&00 >il 2(/0(--4&00 2(/0(-/0&00 1(05(0*5&00 +(1*1&-* 1(050&*5 1(11(-10&00 4(+0(000&00 4(+0(000&00 >il 4(+0(000&00 +(1*(000&00 /(-+0&00 +(1*0&00

(54" Income under the head .apital ;ains (AT.;) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 0ounded off u1s +55' Computation of Tax Liability Ta on `2(/0(-/0 V +0R u1s 11+ 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1(11(-10&0/ 0ounded off u1s +55, (544" Income under the head Other :ources (winning from lotter#) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Computation of Tax Liability Ta on `4(+0(000 V -0R u1s 112,, 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(++(/50&00 (5444" Income under the head .apital ;ains (AT.;) ;ross Total Income AessJ 6eduction u1s 50. to 50F

12(*2(-52&00 12(*2(-52&00 >il

.omputation Of Total Income 'nd Ta Aia!ilit# Total Income 0ounded off u1s +55' Computation of Tax Liability Ta on `10(*2(-)0 (12(*2(-)0 2(00(000) V +0R u1s 11+ 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +(1)(/40&-/ 0ounded off u1s +55, (4)" Income under the head Other :ources (winning from lotter#) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Computation of Tax Liability Ta on `10(+0(000 V -0R u1s 112,, 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -(12(150&00 2'+,#4'% 9$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head :alar# Income under the head 3ouse 7ropert# Income under the head .apital ;ains (Aong term capital gains) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 :tep 1& Ta on (agricultural income L non agricultural income) i&e& Ta on ` ++(/0(0001- at sla! rates :tep +& Ta on (`+(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 Ta on long term capital gain `1(00(000 V +0R u1s 11+ Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2'+,#4'% 9(;"$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head :alar# Income under the head 3ouse 7ropert#

512(*2(-52&00 12(*2(-)0&00 +(1-(045&00 /(+*1&2* +(1-0&45 +(1)(/40&00 10(+0(000&00 10(+0(000&00 >il 10(+0(000&00 -(0*(000&00 *(1+0&00 -(0*0&00

` -(00(000 1*(00(000 1(00(000 +0(00(000 *0(000 1)(/0(000 /(00(000

2(0+(000 20(000 /(2+(000 +0(000 /(4+(000 )(//0 /(4+0 /(5*(1*0

` -(00(000 1*(00(000

.omputation Of Total Income 'nd Ta Aia!ilit# Income under the head .apital ;ains (Aong term capital gains) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 :tep 1& Ta on (agricultural income L non agricultural income) i&e& Ta on ` ++(/0(0001- at sla! rates :tep +& Ta on (`+(20(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 Ta on long term capital gain `1(00(000 V +0R u1s 11+ Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2'+,#4'% 10$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head 3ouse 7ropert# Income under the head .apital gains (long term capital gains) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on normal income `+(00(000 at sla! rate Ta on long term capital gain `2(00(000 V +0R u1s 11+ Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2'+,#4'% 10(;"$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head 3ouse 7ropert# Income under the head .apital gains (long term capital gains) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on normal income `+(00(000 at sla! rate Ta on long term capital gain `+(00(000 (`2(00(000 `-(00(000) V +0R u1s 11+ Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R

5/ 1(00(000 +0(00(000 *0(000 1)(/0(000 /(00(000

/()4(000 22(000 /(/+(000 +0(000 /(*+(000 )(+/0 /(*+0 /(42(5*0

` -(00(000 2(00(000 5(00(000 1(00(000 4(00(000 -(00(000 >il 1(00(000 1(00(000 +(000 1(000 1(0-(000

` -(00(000 2(00(000 5(00(000 1(00(000 4(00(000 -(00(000 >il /0(000 /0(000 500 /00

.omputation Of Total Income 'nd Ta Aia!ilit# Ta Aia!ilit#

52 /1(+00

N'#e$ If non-agricultural income is upto the limit not chargea!le to ta ( `+(00(0001+(20(00012(00(000)( partial integration is not applica!le& 2'+,#4'% 11$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head Other :ources (.asual income) Income under the head .apital gains (:T.; u1s 111') ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on :T.; `2(00(000 (`4(00(000 +(00(000) V 12R u1s 111' Ta on casual income `2(00(000 V -0R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# ` 2(00(000 4(00(000 1+(00(000 >il 1+(00(000 -(00(000 42(000 1(20(000 +(+2(000 /(200 +(+20 +(-1(420

N'#e$ On Aong term capital gain( casual income and short term capital gain u1s 111' partial integration shall not !e applica!le& 2'+,#4'% 11(;"$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head Other :ources (.asual income) Income under the head .apital gains (:T.; u1s 111') ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on :T.; `4(00(000 V 12R u1s 111' Ta on casual income `2(00(000 V -0R Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# ` 2(00(000 4(00(000 1+(00(000 >il 1+(00(000 -(00(000 1(02(000 1(20(000 +(22(000 2(100 +(220 +(*+(*20

N'#e$ On Aong term capital gain( casual income and short term capital gain u1s 111' partial integration shall not !e applica!le&

.omputation Of Total Income 'nd Ta Aia!ilit# 2'+,#4'% 12$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head ,usiness17rofession Income under the head Other :ources (.asual income) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural income C'(p,#a#4'% '7 Ta) 34a;4+4#6 :tep 1& Ta on (agricultural income L non agricultural income) i&e& Ta on ` ++(00(0001- at sla! rates :tep +& Ta on (`2(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 Ta on casual income `2(00(000 V -0R u1s 112,, Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2'+,#4'% 12(;"$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head ,usiness17rofession Income under the head Other :ources (.asual income) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural income C'(p,#a#4'% '7 Ta) 34a;4+4#6 :tep 1& Ta on (agricultural income L non agricultural income) i&e& Ta on ` ++(00(0001- at sla! rates :tep +& Ta on (`+(20(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 Ta on casual income `2(00(000 V -0R u1s 112,, Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2'+,#4'% 13$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head :alar# Income under the head 3ouse 7ropert# Income under the head .apital ;ains :hort Term .apital ;ain 20(000

5*

` 1+(00(000 2(00(000 14(00(000 >il 14(00(000 10(00(000

/(*0(000 +(20(000 +(10(000 1(20(000 -(*0(000 4(+00 -(*00 -(40(500

` 1+(00(000 2(00(000 14(00(000 >il 14(00(000 10(00(000

/(52(000 +(00(000 +(52(000 1(20(000 /(-2(000 5(400 /(-20 /(/5(020

` +(00(000 1(00(000

.omputation Of Total Income 'nd Ta Aia!ilit# :hort Term .apital ;ain111' Aong Term .apital ;ain 1,20(000 Income under the head .apital ;ains .asual Income 40(000 ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 :tep 1& Ta on (agricultural income L non agricultural income) i&e& Ta on ` 4(/0(0001- at sla! rates :tep +& Ta on (`+(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 Ta on long term capital gain `1(20(000 V +0R u1s 11+ Ta on short term capital gain `+(00(000 V 12R u1s 111' Ta on casual income `40(000 V -0R u1s 112,, Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2'+,#4'% 13(;"$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head :alar# Income under the head 3ouse 7ropert# Income under the head .apital ;ains :hort Term .apital ;ain 20(000 :hort Term .apital ;ain111' Aong Term .apital ;ain 1,20(000 Income under the head .apital ;ains .asual Income 40(000 ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on normal income `+(/0(000 at sla! rate Ta on long term capital gain >il (`1(20(000-120000) V +0R u1s 11+ Ta on short term capital gain ` )0(000(`+(00(000-`1(10(000) V 12R u1s 111' Ta on casual income `40(000 V -0R u1s 112,, Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit#

54 +(00(000 /(00(000 4(40(000 1(10(000 *(*0(000 2(00(000

45(000 40(000 5(000 -0(000 -0(000 +1(000 5)(000 1(450 5)0 )1(*40

` +(00(000 1(00(000

+(00(000 /(00(000 4(40(000 1(10(000 *(*0(000 2(00(000 >il >il 1-(200 +1(000 -/(200 *)0 -/2 -2(2-2

.omputation Of Total Income 'nd Ta Aia!ilit# 0ounded off u1s +55,

55 -2(2/0

N'#e$ If non-agricultural income is upto the limit not chargea!le to ta (`+(00(0001 +(20(00012(00(000)( partial integration is not applica!le& 2'+,#4'% 13(&"$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head :alar# Income under the head 3ouse 7ropert# Income under the head .apital ;ains :hort Term .apital ;ain 20(000 :hort Term .apital ;ain111' Aong Term .apital ;ain 1,20(000 Income under the head .apital ;ains .asual Income 40(000 ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on normal income `20(000 at sla! rate Ta on long term capital gain `1(20(000 V +0R u1s 11+ Ta on short term capital gain `+(00(000 V 12R u1s 111' Ta on casual income `40(000 V -0R u1s 112,, Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# ` +(00(000 1(00(000

+(00(000 /(00(000 4(40(000 -(00(000 /(40(000 2(00(000 >il -0(000 -0(000 +1(000 51(000 1(*+0 510 5-(/-0

N'#e$ If non-agricultural income is upto the limit not chargea!le to ta (`+(00(0001 +(20(00012(00(000)( partial integration is not applica!le& 2'+,#4'% 14$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head 3ouse 7ropert# Income under the head capital gains (long term capital gains) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on normal income `1(/0(000 at sla! rate Ta on long term capital gain `)(/0(000 (`10(00(000 `*0(000) V +0R u1s 11+ ` +(00(000 10(00(000 1+(00(000 *0(000 11(/0(000 4(00(000 >il 1(55(000

.omputation Of Total Income 'nd Ta Aia!ilit# Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit#

5) 1(55(000 -(4*0 1(550 1()-(*/0

N'#e$ If non-agricultural income is upto the limit not chargea!le to ta (`+(00(0001 +(20(00012(00(000)( partial integration is not applica!le& 2'+,#4'% 14(;"$ C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head 3ouse 7ropert# Income under the head capital gains (long term capital gains) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural income C'(p,#a#4'% '7 Ta) 34a;4+4#6 :tep 1& Ta on (agricultural income L non agricultural income) i&e& Ta on ` 1*(/0(0001- at sla! rates :tep +& Ta on (`+(20(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 Ta on long term capital gain `10(00(000 V +0R u1s 11+ Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2'+,#4'% 1/$ Ta) +4a;4+4#6 a%9 a994#4'%a+ #a) +4a;4+4#6 '7 #Be &'(pa%6 =Ba++ ;e a= :45e% ;e+'8$ 7rofit !efore ta Income ta on `200(00(000 V -0 R :urcharge V 2R <ducation cess V +R :3<. V 1R Income ta lia!ilit# 6ividend 'dditional income ta V 12R of `*2 lakhs 'ddJ :urcharge V 10R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R 'dditional income ta 0ounded off u1s +55, Ta lia!ilit# of the shareholder shall !e nil& 2'+,#4'% 1/(;"$ Ta) +4a;4+4#6 a%9 a994#4'%a+ #a) +4a;4+4#6 '7 #Be &'(pa%6 =Ba++ ;e a= :45e% ;e+'8$ 7rofit !efore ta Income ta on `200(00(000 V /0R :urcharge V +R ` 10(00(000 10(00(000 +0(00(000 *0(000 1)(/0(000 4(00(000

-(14(000 1(12(000 +(0+(000 +(00(000 /(0+(000 5(0/0 /(0+0 /(1/(0*0 ` 200(00(000&00 120(00(000&00 4(20(000&00 -(12(000&00 1(24(200&00 1*+(++(200&00 *2(00(000&00 )(42(000&00 )4(200&00 +1(/20&00 10(4+2&00 11(0/(*42&00 11(0/(*50&00

` 200(00(000&00 +00(00(000&00 /(00(000&00

.omputation Of Total Income 'nd Ta Aia!ilit# <ducation cess V +R :3<. V 1R Income ta lia!ilit# 'dditional income ta of the foreign compan# is nil& Ta) +4a;4+4#6 '7 #Be =Ba eB'+9e =Ba++ ;e a= :45e% ;e+'8$ 6ividend from foreign compan# Ta on `2(00(000 at sla! rate AessJ 0e!ate u1s 54' (-0(000 or +(000) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit#

)0 /(05(000&00 +(0/(000&00 +10(1+(000&00

2(00(000&00 -0(000&00 +(000&00 +5(000&00 2*0&00 +50&00 +5(5/0&00

.omputation Of Total Income 'nd Ta Aia!ilit#

)1

P1ACTICE MANUA3
D,e=#4'% 1 .hoose the correct answer with reference to the provisions of the Income-ta 'ct( 1)*1& <ducation cess V +R and secondar# and higher education cess V 1R is pa#a!le on (a) Income-ta (!) Income-ta plus surcharge( if an# (c) :urcharge (d) >ot pa#a!le !# an# assessee A%=8e (;" i&e& income ta plus surcharge if an#& D,e=#4'% 2 =ill in the !lanksJ Where the total income of an artificial Duridical person is ` -(10(000 the income-ta TTTTT and surcharge pa#a!le is ` TTTT&& A%=8e ` 11(--0" surcharge nil&

pa#a!le is `

D,e=#4'% 3 < plain the concept of OBarginal 0eliefP under the Income-ta 'ct( 1)*1& A%=8e Ma :4%a+ 1e+4e7 If surcharge is not pa#a!le upto a certain limit and after that it !ecomes pa#a!le( in that case increase in ta lia!ilit# shall !e more than the increase in income and it !ecomes an anomal# and in order to rectif# it( marginal relief is allowed and marginal relief is e8ual to increase in ta minus increase in income& e&g& If Br& G has total income of `10+(50(000( his ta lia!ilit# shall !e computed in the manner given !elowJ Total Income 10+(50(000 Ta on `10+(50(000 at sla! rate +)(1/(000 'ddJ :urcharge V 10R +()1(/00 Ta !efore education cess -+(02(/00 Increase in income `+(50(000 over `100(00(000 and increase in ta in comparison to income of `100(00(000( `-(42(/00 (-+(02(/00 +5(-0(000)( !ut increase in ta cannot !e more than increase in income hence marginal relief shall !e `-(42(/00 `+(50(000 )2(/00 Ta after marginal relief -1(10(000 'ddJ <ducation cess V +R *+(+00 'ddJ :3<. V 1R -1(100 Ta Aia!ilit# -+(0-(-00 ' person shall !e eligi!le for marginal relief upto total income of `10/(++(-50 and afterwards he will not !e eligi!le for marginal relief& Onl# when assessee is in the sla! of `+(00(000&

.omputation Of Total Income 'nd Ta Aia!ilit#

)+

EXE1CI2E2 1& The rates of income ta are mentioned in a) Income-ta 'ct( 1)*1 !) The 'nnual =inance 'cts c) ,oth in the Income-ta 'ct( 1)*1 and the 'nnual =inance 'cts& +& The surcharge applica!le in the case of an individual is a) 10R of ta pa#a!le !) 10R of ta pa#a!le if total income e ceeds ` 10 lakh c) 10R of ta pa#a!le if total income e ceeds ` 1 crore -& In respect of a resident assessee( who is of the age of *0 #ears or more at an# time during the previous #ear +01--1/( a) 3igher !asic e emption of ` +(/0(000 is availa!le !) 3igher !asic e emption of ` +(20(000 is availa!le c) 3igher !asic e emption of ` +(*0(000 is availa!le& /& The rate of ta applica!le to a domestic compan# for '&K& +01/-12 is a) -0R !) -2R c) /0R 2& The surcharge applica!le to a domestic compan# for '&K& +01/-12 is a) 10R if total income e ceeds ` 1 crore& !) 2R if total income e ceeds ` 10 crore c) 2R if the total income e ceeds ` 1crore !ut does not e ceed `10 crore( and 10R( if the total income e ceeds `10 crore& *& The surcharge applica!le to a foreign compan# for '&K& +01/-12 is a) 2R( if the total income e ceeds ` 1 crore& !) +R if the total income e ceeds ` 1crore !ut does not e ceed `10 crore and 2R if the total income e ceeds ` 10 crore& c) +R if the total income e ceeds `10 crore&& 4& The rate of ta applica!le to a firm for '&K& +01/-12 is a) -0R !) -2R c) /0R 5& <ducation cess V +R and secondar# and higher education cess V 1R is pa#a!le on a) Income-ta onl# !) Income-ta plus surcharge( if applica!le minus( re!ate under section 54'( if applica!le& c) :urcharge onl#

.omputation Of Total Income 'nd Ta Aia!ilit#

)-

A%=8e = 1. c 2. c" 3. !" 4. a" /. c" 6. !" 7. a 8. !

EXAMINATION DUE2TION2
PCC NO* - 2011
D,e=#4'% 7 (4 Ma J=" 6iscuss the ta a!ilit# of agricultural income under the Income Ta 'ct( 1)*1& 3ow will income !e computed where an individual derives agricultural and non-agricultural incomeY A%=8e $ Fnder section 10(1)( an# a: 4&,+#, a+ 4%&'(e 4% I%94a 4= 7,++6 e)e(p# from income ta !ut if the agricultural income is from outside India( it is chargea!le to ta & I%94 e&# #a)4%: '7 a: 4&,+#, a+ 4%&'(e ' pa #4a+ 4%#e: a#4'% '7 a: 4&,+#, a+ 4%&'(e (U%9e #Be &'%=#4#,#4'%F #Be p'8e #' +e56 a #a) '% a: 4&,+#, a+ 4%&'(e 5e=#= 4% #Be =#a#e=. @'8e5e F pa +4a(e%# Ba= a+=' +e54e9 a #a) '% =,&B 4%&'(e. E)p+a4% B'8 #B4= Ba= ;ee% a&B4e5e9E" If an# person has agricultural income as well as non-agricultural income( his ta lia!ilit# shall !e computed in the manner given !elowJ 1& .ompute ta on the total of agricultural income and non- agricultural income considering it to !e total income of the assessee& +& .ompute ta on e emption limit (`+(00(000 1 +(20(000 1 2(00(000) and agricultural income considering it to !e total income& -& 6educt ta computed under :tep + from :tep 1 and appl# education cess& /& Aong term capital gain( casual income and short term capital gain u1s 111' shall not !e taken into consideration for the purpose of partial integration 2& If 'gricultural income is upto `2(000( or non-agricultural income is upto the limit not chargea!le to ta (`+(00(0001+(20(00012(00(000)( partial integration is not applica!le& *& 7artial integration is not applica!le in case of a partnership firm or a compan#&

PCC MA. - 2007

D,e=#4'% 3 (9 Ma J=" st The !road !reak-up of ta and allied details of Brs& 0inku( !orn on -1 Barch( 1)2/ are as underJ ` Aong-term capital gains on sale of house +(00(000 :hort-term capital gains on sale of shares in , Atd& (:TT paid) -0(000 7riEe winning from a T&9& show +0(000 ,usiness income +(/0(000

.omputation Of Total Income 'nd Ta Aia!ilit# >et agricultural income 6eduction allowed under section 50. to 50F .ompute the ta pa#a!le !# Brs& 0inku for the assessment #ear +01/-12& A%=8e . C'(p,#a#4'% '7 T'#a+ I%&'(e ,usiness Income Aong term capital gain on sale of house :hort-term capital gains on sale of shares in , Atd& (:TT paid) .asual Income (7riEe winning from a T&9& show) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 #a) pa6a;+e ;6 M =. 14%J, 7' #Be A... 2014!1/ Pa #4&,+a = (i) Ta on long-term capital gain of `1(-0(000 (+(00(000 40(000) V +0R (ii) Ta on short term capital gain of `-0(000 V 12R (iii) Ta on winnings of `+0(000 from a T&9& show V -0R (iv) Ta on !alance income of `1(50(000 at sla! rate 6eficienc# of `40(000 has !een allowed from AT.; AessJ 0e!ate u1s 54' (-*(200 or +(000) 'mount of ta !efore <. 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta) pa6a;+e ;6 M =. 14%J, 1',%9e9 '77 ,/= 288>

)/ /(/0(000 *0(000 (Bodified) +(/0(000 +(00(000 -0(000 +0(000 /()0(000 *0(000 /(-0(000 ` +*(000 /(200 *(000 >il +(000 -/(200 *)0 -/2 3/F/3/ 3/F/40

(i) Brs& 0inku has completed *0 #ears of age on -1st Barch( +01/ i&e& she has completed the age of *0 #ears on the last da# of the previous #ear& Therefore( she is entitled to the higher !asic e emption limit of `+(20(000& (ii) 7artial integration is not applica!le !ecause her non-agricultural income is not e ceeding the e emption limit of `+(20(000& (;" 7resume income from !usiness is `2(00(000& C'(p,#a#4'% '7 G '== T'#a+ I%&'(e ,usiness Income Aong term capital gain on sale of house :hort-term capital gains on sale of shares in , Atd& (:TT paid) .asual Income (7riEe winning from a T&9& show) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 #a) pa6a;+e ;6 M =. 14%J, 7' #Be A... 2014!1/ Pa #4&,+a = (i) Ta on long-term capital gain of `+(00(000 V +0R (ii) Ta on short term capital gain of `-0(000 V 12R (iii) Ta on winnings of `+0(000 from a T&9& show V -0R (iv) Ta on !alance income of `/(/0(000 7artial integration

2(00(000 +(00(000 -0(000 +0(000 4(20(000 *0(000 *()0(000 ` /0(000 /(200 *(000

.omputation Of Total Income 'nd Ta Aia!ilit# 1& Ta on /(/0(000 L /(/0(000 W 5(50(000 +& Ta on +(20(000 L /(/0(000 W *()0(000 Ta at step no&1 minus ta at step no&+ 'mount of ta !efore <. 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta) pa6a;+e ;6 M =. 14%J, 1',%9e9 '77 ,/= 288> 1(01(000 *-(000

)2

-5(000 55(200 1(440 552 91F1// 91F160

Brs& 0inku has completed *0 #ears of age on -1st Barch( +01/ i&e& she has completed the age of *0 #ears on the last da# of the previous #ear& Therefore( she is entitled to the higher !asic e emption limit of `+(20(000&

PE!II MA. - 2006

D,e=#4'% 2 (6 Ma J=" (a) The total income of Brs& Z computed for the assessment #ear +01/-12 is `+(50(000( which includes the followingJ ` Aong-term capital gains -0(000 Winnings from lotteries +0(000 :hort-term capital gains covered !# :ec& 111' 10(000 'gricultural income earned !# her was `20(000& .ompute the ta pa#a!le !# Brs& Z& 2'+,#4'%$ C'(p,#a#4'% '7 #a) pa6a;+e ;6 M =. N 7' #Be A... 2014!1/ Ta on 'gricultural income and >on-agricultural income (`20(000 L `+(+0(000 W +(40(000) Ta on ,asic e emption limit and agricultural income (`+(00(000 L `20(000 W +(20(000) Ta on normal income (4(000 2(000) Ta on long-term capital gain of `-0(000 V +0R Ta on lotter# income of `+0(000 V -0R Ta on short-term capital gain covered u1s 111' V 12R of `10(000 AessJ 0e!ate u1s 54' (12(200 or +(000) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta) pa6a;+e ;6 M =. N 1',%9e9 '77 ,/= 288> ` 4(000 2(000 +(000 *(000 *(000 1(200 +(000 1-(200 +40 1-2 13F90/ 13F910 (Bodified)

.omputation Of Total Income 'nd Ta Aia!ilit#

)*

Ta a!ilit# of ;ift

)4

TAXA>I3IT. O0 GI0T 2ECTION /6

TAXA>I3IT. O0 GI0T 2ECTION /6(2"(544"
;ift received !# individual or 3F= shall !e ta a!le and the gifts shall !e divided into - parts& 1. G47# '7 =,( '7 ('%e6 2. G47# '7 4(('5a;+e p 'pe #6 3. G47# '7 a%6 p 'pe #6 '#Be #Ba% 4(('5a;+e p 'pe #6 Ta a!ilit# is as given !elowJ 1. G47# '7 =,( '7 ('%e6 If an# individual or 3F= has received an# =,( '7 ('%e6 from one or more persons without consideration and the aggregate value of all such gifts received during the #ear e ceeds fift# thousand rupees( the whole of the aggregate value of such sum shall !e ta a!le under the head Other :ources !ut if the aggregate value is upto `20(000( entire amount shall !e e empt from income ta & <&g& Br& G has received - gifts of `12(000 each from his - friends( entire amount of `/2(000 is e empt from income ta !ut if he has received - gifts of `+0(000 each( entire amount of `*0(000 shall !e ta a!le& 2. G47# '7 4(('5a;+e p 'pe #6 If an# individual or 3F= has received an# 4(('5a;+e p 'pe #6 without consideration( it will !e e empt if stamp dut# value is upto `20(000 !ut if the stamp dut# value e ceeds fift# thousand rupees( entire stamp dut# value shall !e ta a!le under the head Other :ources& 9alue of individual immova!le propert# shall !e taken into consideration instead of aggregate value of all such properties& (If person is selling immova!le propert#( it C'%5e6a%&e Dee9 shall !e prepared in the office of 0egistrar and some ta has to !e paid to the :tate ;overnment for transferring the propert# and it is called stamp dut# and the value on which such dut# is charged is called stamp dut# value& ' person ma# not disclose the right value hence the value is determined !# :tate ;overnment&) If immova!le propert# has !een received for a consideration which is less than the stamp dut# value of the propert# !# an amount e ceeding fift# thousand rupees( in such cases ta a!le amount shall !e the stamp dut# value of such propert# as e ceeds such consideration& <&g& Br& G purchased immova!le propert# for `-(00(000 !ut stamp dut# value is `2(00(000( ta a!le amount shall !e `+(00(000 The a!ove provision shall not appl# if the date of the agreement fi ing the amount of consideration for the transfer of immova!le propert# and the date of registration are not the same and in such cases( the stamp dut# value on the date of the agreement shall !e taken into consideration !ut part of consideration should have !een paid in an# manner other than cash on or !efore the date of agreement& <&g& Br& G has entered into agreement with a !uilder ',. Aimited on 01&04&+011 for purchase of one !uilding for `+0(00(000 !ut stamp dut# value was `+4(00(000 and advance of `-(00(000 was given !# che8ue !ut propert# was

Ta a!ilit# of ;ift

)5

transferred in his name on 01&04&+01- and on that date stamp dut# value was `-2(00(000( in this case amount of gift shall !e `5(00(000 (-2(00(000 +4(00(000)& 3. G47# '7 a%6 p 'pe #6 '#Be #Ba% 4(('5a;+e p 'pe #6 'n# propert#( other than immova!le propert#(X (i) without consideration( the aggregate fair market value of which e ceeds fift# thousand rupees( the whole of the aggregate fair market value of such propert#" (ii) for a consideration which is less than the aggregate fair market value of the propert# !# an amount e ceeding fift# thousand rupees( the aggregate fair market value of such propert# as e ceeds such consideration J If the stamp dut# value of immova!le propert# is disputed !# the assessee( the 'ssessing Officer ma# refer the valuation of such propert# to a 9aluation Officer& In such a case( the provisions of section 20. and section 122(12) shall( as far as ma# !e( appl# for determining the value of such propert#& TBe :47# 4= e)e(p# 4% #Be 7'++'84%: &a=e= 4.e. 47 :47# Ba= ;ee% e&e45e9 (a) from an# relative" or (b) on the occasion of the marriage of the individual" or (c) under a will or !# wa# of inheritance" or (d) in contemplation of death of the pa#er or donor( as the case ma# !e" or (e) from an# local authorit# as defined in the Explanation to clause (20) of section 10" or (f) from an# fund or foundation or universit# or other educational institution or hospital or other medical institution or an# trust or institution referred to in clause (23C) of section 10" or (g) from an# trust or institution registered under section 1+''& - OP1OPE1T.O means the following capital asset of the assessee( namel#JX (i) immova!le propert# !eing land or !uilding or !oth" (ii) shares and securities" (iii) Deweller#" (iv) archaeological collections" (v) drawings" (vi) paintings" (vii) sculptures" (viii) an# work of art" or (ix) !ullion" I7 4%94549,a+ ' @U0 Ba= e&e45e9 :47# '7 a%6 '#Be p 'pe #6F 4# 84++ %'# ;e #a)a;+e e.:. ('#' &a ' p+a%# a%9 (a&B4%e 6 ' a 8a#&B ' a (';4+e pB'%e e#&. - O1e+a#45eO means(X (i) in case of an 4%94549,a+X (a) spouse of the individual" (!) !rother or sister of the individual" (c) !rother or sister of the spouse of the individual" (d) !rother or sister of either of the parents of the individual" (e) an# lineal ascendant or descendant of the individual" (f) an# lineal ascendant or descendant of the spouse of the individual" (g) spouse of the person referred to in items (!) to (f)" and (ii) in case of a @4%9, ,%94549e9 7a(4+6( (a) an# mem!er thereof"

Ta a!ilit# of ;ift

))

If an# individual or 3F= has received gift of an# propert# other than immova!le propert# without consideration and the aggregate fair market value of such properties received during a particular #ear e ceeds `20(000( it will !e ta a!le under the head Other :ources !ut if aggregate value of all such properties is upto `20(000( it will !e e empt from income ta & If the consideration is less than the aggregate fair market value of such properties !# an amount e ceeding `20(000( aggregate fair market value as e ceeds such consideration shall !e ta a!le under the head Other :ources& The ta!le !elow summarises the scheme of ta a!ilit# of gifts Na#, e '7 a==e# Pa #4&,+a = Ta)a;+e 5a+,e 1 Bone# Without The whole amount if the same e ceeds ` 20(000 .onsideration + Immova!le propert# Without The stamp dut# value of the propert#( if it e ceeds .onsideration `20(000 - Immova!le propert# Inade8uate The difference !etween the stamp dut# value of the .onsideration propert# and the consideration( if such difference e ceeds `20(000 / Bova!le propert# Without The aggregate fair market value of the propert#( if .onsideration it e ceeds `20(000 2 Bova!le propert# Inade8uate The difference !etween the aggregate fair market .onsideration value and the consideration( if such difference e ceeds `20(000 I++,=# a#4'% 1 Br& '( a dealer in shares( received the following without consideration during the 7&K&+01--1/ from his friend Br& ,( (1) .ash gift of ` 42(000 on his anniversar#( 12th 'pril( +01-& (+) ,ullion( the fair market value of which was ` *0(000( on his !irthda#( 1)th Qune( +01-& (-) ' plot of land at =arida!ad on 1st Qul#( +01-( the stamp value of which is ` 2 lakh on that date& Br& , had purchased the land in 'pril( +004& Br& ' purchased from his friend .( who is also a dealer in shares( 1000 shares of G Atd& V ` /00 each on 1)th Qune( +01-( the fair market value of which was ` *00 each on that date& Br& ' sold these shares in the course of his !usiness on +-rd Qune( +01-& =urther( on 1st >ovem!er( +01-( Br& ' took possession of propert# (!uilding) !ooked !# him two #ears !ack at ` +0 lakh& The stamp dut# value of the propert# as on 1 st >ovem!er( +01- was ` -+ lakh and on the date of !ooking was ` +- lakh& 3e had paid ` 1 lakh !# che8ue as down pa#ment on the date of !ooking& .ompute the income of Br& ' chargea!le under the head OIncome from other sourcesP for '&K&+01/-12& (1) (+) (-) (/) Pa #4&,+a = .ash gift is ta a!le under section 2*(+)(vii)( since it e ceeds ` 20(000 :ince !ullion is included in the definition of propert#( therefore( when !ullion is received without consideration( the same is ta a!le( since the aggregate fair market value e ceeds `20(000 :tamp value of plot of land at =arida!ad( received without consideration( is ta a!le under section 2*(+)(vii) 6ifference of ` + lakh in the value of shares of G Atd& purchased from Br& .( a dealer in ` 42(000 *0(000 2(00(000 -

Ta a!ilit# of ;ift shares( is not ta a!le as it represents the stock-in-trade of Br& '& :ince Br& ' is a dealer in shares and it has !een mentioned that the shares were su!se8uentl# sold in the course of his !usiness( such shares represent the stock-in-trade of Br& '& 6ifference !etween the stamp dut# value of `+- lakh on the date of !ooking and the actual consideration of ` +0 lakh paid is ta a!le under section 2*(+)(vii)& I%&'(e 7 '( O#Be 2', &e=

100

(2)

-(00(000 )(-2(000

I++,=# a#4'% 2 6iscuss the ta a!ilit# or otherwise of the following in the hands of the recipient under section 2*(+)(vii) the Income-ta 'ct( 1)*1 (i) 'khil 3F= received ` 42(000 in cash from niece of 'khil (i&e&( daughter of 'khil%s sister)& 'khil is the Carta of the 3F=& (ii) >itisha( a mem!er of her father%s 3F=( transferred a house propert# to the 3F= without consideration& The stamp dut# value of the house propert# is ` )(00(000& (iii) Br& 'kshat received 100 shares of ' Atd& from his friend as a gift on occasion of his +2 th marriage anniversar#& The fair market value on that date was ` 100 per share& 3e also received Deweller# worth `/2(000 (=B9) from his nephew on the same da#& (iv) Cishan 3F= gifted a car to son of Carta for achieving good marks in GII !oard e amination& The fair market value of the car is ` 2(+2(000& 2'+,#4'%$ Ta)a;+e/ N'%!#a)a;+e (i) Ta a!le A(',%# 1ea='% +4a;+e #' #a) (`" 42(000 :um of mone# e ceeding `20(000 received without consideration from a non-relative is ta a!le under section 2* (+) (vii)& 6aughter of Br& 'khil%s sister is not a relative of 'khil 3F=( since she is not a mem!er of 'khil 3F=& >il Immova!le propert# received without consideration !# a 3F= from its relative is not ta a!le under section (2*)(+)(vii)& :ince >itisha is a mem!er of the 3F=( she is a relative of the 3F=& 22(000 's per provisions of section 2*(+)(vii)( in case the aggregate fair market value of propert#( other than immova!le propert#( received without consideration e ceeds ` 20(000( the whole of the aggregate value shall !e ta a!le& In this case( the aggregate fair market value of shares ( ` 10(000) and Deweller# (` /2(000) e ceeds ` 20(000& 3ence( the entire amount of `22(000 shall !e ta a!le& >il .ar is not included in the definition of propert# for the purpose of section 2*(+)(vii)( therefore( the same shall not !e ta a!le&

(ii) (iii )

>on-ta a!le Ta a!le

(iv) >on-ta a!le

Ta a!ilit# of ;ift

101

1U3E2 0O1 DETE1MINATION O0 0AI1 MA1KET *A3UE O0 T@E P1OPE1T. OT@E1 T@AN IMMO*A>3E P1OPE1T.
(a" *a+,a#4'% '7 <e8e++e 6 (i) (ii) (iii) the fair market value of Deweller# shall !e estimated to !e the price which such Deweller# would fetch if sold in the open market on the valuation date" in case the Deweller# is received !# the wa# of purchase on the valuation date( from a registered dealer( the invoice value of the Deweller# shall !e the fair market value" in case the Deweller# is received !# an# other mode and the value of the Deweller# e ceeds `20(000( then( the assessee ma# o!tain the report of registered valuer in respect of the price it would fetch if sold in the open market on the valuation date&

(;" *a+,a#4'% '7 a &Be'+':4&a+ &'++e&#4'%=F 9 a84%:=F pa4%#4%:=F =&,+p#, e= ' a%6 8' J '7 a # (i) the fair market value of archeological collections( drawings( paintings( sculptures or an# work of art (artistic work) shall !e estimated to !e price which it would fetch if sold in the open market on the valuation date" in case the artistic work is received !# the wa# of purchase on the valuation date( from a registered dealer( the invoice value of the artistic work shall !e the fair market value" in case the artistic work is received !# an# other mode and the value of the artistic work e ceeds ` 20(000( then( the assessee ma# o!tain the report of registered valuer in respect of the price it would fetch if sold in the open market on the valuation date&

(ii) (iii)

(&" *a+,a#4'% '7 =Ba e= a%9 =e&, 4#4e= (a) the fair market value of 8uoted shares and securities shall !e determined in the following manner( namel#"(i) if the 8uoted shares and securities are received !# wa# of transaction carried out through an# recogniEed stock e change( the fair market value of such shares and securities shall !e the transaction value as recorded in such stock e change" (ii) if such 8uoted shares and securities are received !# wa# of transaction carried out other than through an# recogniEed stock e change( the fair market value of such shares and securities shall !e((1) (+) the lowest price of such shares and securities 8uoted on an# recogniEed stock e change on the valuation date( and the lowest price of such shares and securities on an# recogniEed stock e change on a date immediatel# preceding the valuation date when such shares and securities were traded on such stock e change( in cases where on the valuation date( there is no trading in such shares and securities on an# recogniEed stock e change&

(!)

the fair market value of un8uoted e8uit# shares shall !e the value( on the valuation date( of such un8uoted e8uit# shares as determined in the following manner namel#"-

Ta a!ilit# of ;ift The fair market value of un8uoted e8uit# shares W

( A L) ( PV ) PE

10+

Where( 'W ,ook value of the assets in ,alance :heet drawn up on the valuation date as reduced !# an# amount paid as advance ta under the Income-ta 'ct and an# amount shown in the !alance sheet including the de!it !alance of the profit and loss account or the profit and loss appropriation account which does not represent the value of an# asset& A W ,ook value of lia!ilities shown in the ,alance :heet drawn up on the valuation date !ut not including the following amountsJ(i) (ii) the paid-up capital in respect of e8uit# shares" the amount set apart for pa#ment of dividends on preference shares and e8uit# shares where such dividends have not !een declared !efore the date of transfer at a general !od# meeting of the compan#" reserves( !# whatever name called( other than those set apart towards depreciation" credit !alance of the profit and loss account" an# amount representing provision for ta ation( other than amount paid as advance ta under the Income-ta 'ct( to the e tent of the e cess over the ta pa#a!le with reference to the !ook profits in accordance with the law applica!le thereto" an# amount representing provisions made for meeting lia!ilities( other than ascertained lia!ilities" an# amount representing contingent lia!ilities other than arrears of dividends pa#a!le in respect of cumulative preference shares&

(iii) (iv) (v)

(vi) (vii)

7< W Total amount of paid up e8uit# share capital as shown in ,alance :heet drawn up on the valuation date& 79 W the paid up value of such e8uit# shares& (c) the fair market value of un8uoted shares and securities other than e8uit# shares in a compan# which are not listed in an# recogniEed stock e change shall !e estimated to !e price it would fetch if sold in the open market on the valuation date and the assessee ma# o!tain a report from a merchant !anker or an accountant in respect of such valuation&

N'#e - P*a+,a#4'% 9a#eQ (ea%= #Be 9a#e '% 8B4&B #Be e=pe&#45e p 'pe #6 4= e&e45e9 ;6 #Be a==e==ee. 2pe&4a+ p '54=4'% 7' 7,++ 5a+,e '7 &'%=49e a#4'% 7' # a%=7e '7 a==e#= '#Be #Ba% &ap4#a+ a==e#= 4% &e #a4% &a=e= 2e&#4'% 43CA (1) Where the consideration received or accruing as a result of the transfer !# an assessee of an asset (other than a capital asset)( !eing land or !uilding or !oth( is less than the value adopted or assessed or assessa!le !# an# authorit# of a :tate ;overnment for the purpose of pa#ment of stamp dut# in respect of such transfer( the value so adopted or assessed or assessa!le shall( for the purposes of computing profits and gains from transfer of such asset( !e deemed to !e the full value of the consideration received or accruing as a result of such transfer&

Ta a!ilit# of ;ift

10-

(+) The provisions of su!-section (+) and su!-section (-) of section 20. shall( so far as ma# !e( appl# in relation to determination of the value adopted or assessed or assessa!le under su!-section (1)& (-) Where the date of agreement fi ing the value of consideration for transfer of the asset and the date of registration of such transfer of asset are not the same( the value referred to in su!-section (1) ma# !e taken as the value assessa!le !# an# authorit# of a :tate ;overnment for the purpose of pa#ment of stamp dut# in respect of such transfer on the date of the agreement& (/) The provisions of su!-section (-) shall appl# onl# in a case where the amount of consideration or a part thereof has !een received !# an# mode other than cash on or !efore the date of agreement for transfer of the asset& I++,=# a#4'% 3 Br& 3ari( a propert# dealer( sold a !uilding in the course of his !usiness to his friend 0aDesh( who is a dealer in automo!ile spare parts( for ` )0 lakh on 01&01&+01/( when the stamp dut# value was ` 120 lakh& The agreement was( however( entered into on 01&04&+01- when the stamp dut# value was ` 1/0 lakh& Br& 3ari had received a down pa#ment of ` 12 lakh !# che8ue from 0aDesh on the date of agreement& 6iscuss the ta implications in the hands of 3ari and 0aDesh( assuming that Br& 3ari has purchased the !uilding for ` 42 lakh on 1+th Qul#( +01+& Would #our answer !e different if 3ari was a share !roker instead of a propert# dealerY 2'+,#4'% Ca=e 1$ Ta) 4(p+4&a#4'%= 47 M . @a 4 4= a p 'pe #6 9ea+e I% #Be Ba%9= '7 M . @a 4 I% #Be Ba%9= '7 M . 1a<e=B In the hands of 3ari( the provisions of section /-.' :ince Br& 0aDesh is a dealer in automo!ile spare would !e attracted( since the !uilding represents his parts( the !uilding purchased would !e a capital asset stock-in-trade and he has transferred the same for a in his hands& The provisions of section 2*(+)(vii) consideration less than the stamp dut# value on the would !e attracted in the hands of Br& 0aDesh who date of agreement& has received immova!le propert#( !eing a capital Therefore( ` 6/ +aJB( !eing the difference !etween asset( for inade8uate consideration& Therefore( ` /0 the stamp dut# value on the date of agreement (i&e&( +aJBF !eing the difference !etween the stamp dut# `1/0 lakh) and the purchase price (i&e&( ` 42 lakh)( value of the propert# (i&e&( ` 1/0 lakh) and the actual would !e chargea!le as ;,=4%e== 4%&'(e in the consideration (i&e&( ` )0 lakh) would !e ta a!le under hands of Br& 3ari& section 2*(+)(vii) in the hands of M . 1a<e=B& Ca=e 2$ Ta) 4(p+4&a#4'%= 47 M . @a 4 4= a =#'&J ; 'Je I% #Be Ba%9= '7 M . @a 4 I% #Be Ba%9= '7 M . 1a<e=B In case Br& 3ari is a share !roker and not a propert# There would !e no difference in the ta a!ilit# in the dealer( the !uilding would represent his capital asset hands of Br& 0aDesh( whether Br& 3ari is a propert# and not stock-in-trade& In such a case( the provisions dealer or a stock !roker& of section 20. would !e attracted in the hands of Br& Therefore( the provisions of section 2*(+)(vii) would 3ari and ` 7/ +aJBF ;e4%: #Be 9477e e%&e ;e#8ee% !e attracted in the hands of Br& 0aDesh who has received immova!le propert#( !eing a capital asset( #Be =#a(p 9,#6 5a+,e '% #Be 9a#e '7 e:4=# a#4'% (4.e.F ` 1/0 +aJB" a%9 #Be p, &Ba=e p 4&e (4.e.F ` 7/ for inade8uate consideration& Therefore( ` /0 +aJBF +aJB" 8',+9 ;e &Ba :ea;+e a= =B' #!#e ( &ap4#a+ !eing the difference !etween the stamp dut# value of the propert# (i&e&( ` 1/0 lakh) and the actual :a4%=. It ma# !e noted that under section 20.( there is no consideration (i&e&( ` )0 lakh) would !e ta a!le under option to adopt the stamp dut# value on the date of section 2*(+)(vii) in the hands of Br& 0aDesh& agreement( even if the date of agreement is different from the date of registration and part of the consideration has !een received on or !efore the date of agreement otherwise than !# wa# of cash&

Ta a!ilit# of ;ift

10/

Example (i) Br& G has received three gifts from his three friends (a) `22(000 in cash (!) Aand with market value `2(00(000 !ut the value for the purpose of charging stamp dut# `/(00(000& (c) Qeweller# with market value `-(00(000 In this case( ta a!le amount shall !e 22(000 L /(00(000 L -(00(000 W 4(22(000 (ii) Br& 3itesh Cumar has received gift of `20(000 in cash from his friend( in this case it will not !e considered to !e his income& (iii) Br& 9ick# Qain has received gift of `1(20(000 in cash from his !rother( in this case it will not !e considered to !e his income& (iv) Br& Camal :apra has received gift of `1(20(000 in cash from his mother%s sister( in this case it will not !e considered to !e his income& (v) Br& 'kash .houdhar# has received gift of `1(20(000 in cash from his father%s !rother( in this case it will not !e considered to !e his income& (vi) Br& :aket Bittal has received gift of `1(20(000 in cash from his cousin( in this case it will !e chargea!le to ta & (vii) Br& 9ikram ,aDaD has received gift of `1(20(000 in cash from !rother of his spouse( in this case it will not !e considered to !e his income& (viii) Br& 3arsh 'rora has received gift of `1(20(000 in cash from his grand father( in this case it will not !e considered to !e his income& (i ) Br& 'manpreet :ingh has received gift of `1(20(000 in cash from spouse of his !rother( in this case it will not !e considered to !e his income& ( ) Br& 'mit ,haskar has received gift of `1(20(000 in cash from hus!and of his sister( in this case it will not !e considered to !e his income& ( i) Br& :unil 6ua has received gift of `1(20(000 in cash from sister of his !rother%s wife( in this case it will !e considered to !e his income& ( ii) Br& 'khilesh Cumar has received gift of `1(20(000 in cash from the sister of his spouse( in this case it will not !e considered to !e his income& ( iii) Br& :uresh Kadav has received gift of `2(000 in cash on his !irthda# from each of his eleven friends( in this case it will !e considered to !e his income !ecause the total amount is e ceeding `20(000& ( iv) Br& 0am :ingh has received gift of `1(20(000 in kind from his friend( in this case it will !e considered to !e his income& ( v) Br& >aresh Cumar has received gift of `1(20(000 in cash from his friend on the occasion of his marriage( in this case it will not !e considered to !e his income& ( vi) Br& 'Da# >arula has received gift of `42(000 in cash and `42(000 in kind from his fiancee( in this case gift in cash will !e considered to !e his income and the gift in kind shall also !e considered to !e his income& G47#= #' #Be E(p+'6ee= 2e&#4'% 17(2"(5444" 1,+e 3(7"(45" ;ift given !# the emplo#er in kind upto `2(000 in aggregate during a particular #ear is e empt and e cess

Ta a!ilit# of ;ift

102

over it is ta a!le& If the emplo#er has given an# voucher or token in lieu of which such gift ma# !e received( it will also !e e empt in the similar manner& G47#= 4% &a=B ' :47#= &'%5e #4;+e 4%#' &a=B 4.e. :47# &BeI,e= e#&. =Ba++ ;e 7,++6 &Ba :ea;+e #' #a). G47#= ' Pe I,4=4#e= 7 '( C+4e%#= 2e&#4'% 28 The value of an# !enefit or per8uisite( whether converti!le into mone# or not( arising from !usiness or the e ercise of a profession& If an# person has received an# gift or per8uisite or !enefit either in cash or in kind from an# of his clients( it will !e considered to !e !usiness receipt and shall !e taken into consideration while computing income under the head !usiness1profession& Example ',. Atd& has engaged one 'dvocate with regard to its legal proceedings& The compan# has provided him facilities of free travelling( !oarding1lodging and has incurred `+2(000( it will !e considered to !e professional receipt of the 'dvocate& 2&B'+a =B4p 2e&#4'% 10(16" 'n# scholarship received !# a person for meeting the cost of education shall !e e empt from income ta & A8a 9/ 1e8a 9 2e&#4'% 10(17A" 'n# award or reward whether in cash or in kind instituted !# the .entral ;overnment or the :tate ;overnment shall !e e empt from income ta & :imilarl# an# private award or reward shall !e e empt from income ta if approved !# the .entral ;overnment&

Ta a!ilit# of ;ift

10*

P1ACTICE P1O>3EM2
TOTA3 P1O>3EM2 /
P ';+e( 1. 6iscuss ta a!ilit# in the following casesJ (i) (ii) Br& Qeevan .hauhan has received gift of ` 20(000 in cash from his friend& Br& :udhanshu Bittal has received gift of ` +(20(000 in cash from his !rother&

(iii) Br& 9ishal Qain has received gift of ` +(20(000 in cash from his mother%s sister& (iv) Br& 6ruv ;oel has received gift of ` +(20(000 in cash from his father%s !rother& (v) Br& >imit 'ggarwal has received gift of ` +(20(000 in cash from his cousin&

(vi) Br& >aveen Qain has received gift of ` +(20(000 in cash from !rother of his spouse& (vii) Br& :achin ,hatia has received gift of ` +(20(000 in cash from his grand father& (viii) Br& :unn# 'rora has received gift of ` +(20(000 in cash from spouse of his !rother& (i ) Br& 0itesh ,ansal has received gift of ` +(20(000 in cash from hus!and of his sister& ( ) Br& Bohit :ingh has received gift of ` +(20(000 in cash from sister of his !rother%s wife&

( i) Br& 0ahul Cumar has received gift of ` +(20(000 in cash from the sister of his spouse& ( ii) Br& 3unn# Qindal has received gift of `*(000 in cash on his !irthda# from each of his eleven friends& ( iii) Br& :at!eer :ingh has received gift of ` +(20(000 in kind from his friend&

( iv) Br& 'shok Cumar has received gift of `+(20(000 in cash from his friend on the occasion of his marriage& ( v) Br& Bukesh 9erma has received gift of `1(00(000 in cash and `1(00(000 in kind from his fianc[e& P ';+e( 2. Br& Tarun ;ulati su!mits the particulars for the previous #ear +01--1/ as given !elowJ 1& 3e has received a gift of `+4(000 from one of his friend on 01&0)&+01-& +& 3e has received a gift of `11(000 on 01&10&+01- from his wife Brs& Tan#a ;ulati& -& 3e has received a gift of `+)(000 from his step daughter on 01&01&+01/& /& 3e has received a gift of `+4(000 from grand mother of Brs& Tan#a ;ulati on 04&01&+01/&

Ta a!ilit# of ;ift 2& 3e has received a gift of `+0(000 in kind from his emplo#er on 01&0-&+01/& *& 3e has received gold as gift from his friend on 01&1+&+01- with value `+(00(000& 4& 3e has received `+4(000 as gift from his maternal aunt (mother%s sister) on 10&1+&+01-& 5& 3e has received dividend of `+(00(000 from a domestic compan# on -1&0-&+01/& )& 3e has received two gifts of `-0(000 each from his neigh!ours on 01&0*&+01-& .ompute his ta lia!ilit# for assessment #ear +01/-12& A%=8e M Ta Aia!ilit#J `5(/20

104

P ';+e( 3. Br& G received gift in cash `-(00(000 from son of his father%s !rother and gift of `1(00(000 in cash from !rother of father of Brs& G& 3e has agricultural income `2(00(000& .ompute his ta lia!ilit# for 'ssessment Kear +01/-12& A%=8e M Ta Aia!ilit#J `-)(1/0 (!) 3e is aged 51 #ears& A%=8e M Ta Aia!ilit#J >il (c) 3e is non-resident and he has completed age of 50 #ears as on -1&0-&+01/& A%=8e M Ta Aia!ilit#J `/1(+00 P ';+e( 4. Br& G received Deweller# valued `2(00(000 from !rother of his grand father and his agricultural income is `1(00(000& .ompute his income and ta lia!ilit# for 'ssessment Kear +01/-12& A%=8e M Total IncomeJ `2(00(000" Ta Aia!ilit#J `-)(1/0 P ';+e( /. =ollowing gifts are received !# Brs& :weet#( who is carr#ing on Deweller# !usiness( during the previous #ear +01--1/J (i) On the occasion of her marriage on 04&0)&+01-( she has received `1(+0(000 as gift out of which `52(000 are from relatives and !alance from friends& (ii) On 0-&10&+01-( she has received cash gift of `+(20(000 from cousin of her mother& (iii) ' mo!ile phone worth `12(000 is gifted !# her friend on +1&0)&+01-& (iv) :he gets a cash gift of `+(/0(000 from the elder !rother of her hus!and\s grandfather on 10&1+&+01-& (v) :he has received a cash gift of `*(00(000 from her friend on +4&01&+01/& (vi) :he has received !ullion( the fair market value of which was `/(42(000 on her !irthda#(1)&01&+01/& Brs& :weet# purchased from her friend( who is also carr#ing Deweller# !usiness( Deweller# at ` +(20(000 on +2&01&+01/( the fair market value of which was `2(00(000 on that date&

Ta a!ilit# of ;ift .ompute total income and ta lia!ilit# of Brs& :weet# for '&K&+01/-12& A%=8e M Total IncomeJ `12(*2(000" Ta Aia!ilit#J `-(05(/)0

105

2O3UTION2
TO

P1ACTICE P1O>3EM2
2'+,#4'% 1$ (i) Br& Qeevan .hauhan has received gift of `20(000 in cash from his friend( in this case it will not !e considered to !e his income& (ii) Br& :udhanshu Bittal has received gift of `+(20(000 in cash from his !rother( in this case it will not !e considered to !e his income& (iii) Br& 9ishal Qain has received gift of ` +(20(000 in cash from his mother%s sister( in this case it will not !e considered to !e his income& (iv) Br& 6ruv ;oel has received gift of `+(20(000 in cash from his father%s !rother( in this case it will not !e considered to !e his income& (v) Br& >imit 'ggarwal has received gift of `+(20(000 in cash from his cousin( in this case it will !e chargea!le to ta & (vi) Br& >aveen Qain has received gift of `+(20(000 in cash from !rother of his spouse( in this case it will not !e considered to !e his income& (vii) Br& :achin ,hatia has received gift of `+(20(000 in cash from his grand father( in this case it will not !e considered to !e his income& (viii) Br& :unn# 'rora has received gift of `+(20(000 in cash from spouse of his !rother( in this case it will not !e considered to !e his income& (i ) Br& 0itesh ,ansal has received gift of `+(20(000 in cash from hus!and of his sister( in this case it will not !e considered to !e his income& ( ) Br& Bohit :ingh has received gift of `+(20(000 in cash from sister of his !rother%s wife( in this case it will !e considered to !e his income& ( i) Br& 0ahul Cumar has received gift of `+(20(000 in cash from the sister of his spouse( in this case it will not !e considered to !e his income& ( ii) Br& 3unn# Qindal has received gift of `*(000 in cash on his !irthda# from each of his eleven friends( in this case it will !e considered to !e his income !ecause the total amount is e ceeding `20(000& ( iii) Br& :at!eer :ingh has received gift of `+(20(000 in kind from his friend( in this case it will !e considered to !e his income&

Ta a!ilit# of ;ift

10)

( iv) Br& 'shok Cumar has received gift of `+(20(000 in cash from his friend on the occasion of his marriage( in this case it will not !e considered to !e his income& ( v) Br& Bukesh 9erma has received gift of `1(00(000 in cash and `1(00(000 in kind from his fiancee( in this case gift in cash will !e considered to !e his income and the gift in kind shall also !e considered to !e his income& 2'+,#4'% 2$ C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 2a+a 6 ;ift in kind from his emplo#er (+0(000 2(000) Income under the head :alar# C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 O#Be 2', &e= ;ift received from friend ;ifts received from neigh!ours ;ift received from friend in kind Income under the head Other :ources ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `-(0+(000 at sla! rate AessJ 0e!ate u1s 54' (10(+00 or +(000) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, N'#e$ 6ividend received !# Br& Tarun ;ulati from domestic compan# is e empt u1s 10(-/)& 2'+,#4'% 3$ ` C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 O#Be 2', &e= ;ift received from son of his father%s !rother ;ift received from !other of father%s of Brs& G Income under the head Other :ources ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 :tep 1& Ta on (agricultural income L non agricultural income) i&e& Ta on ` )(00(0001- at sla! rates :tep +& Ta on (`+(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 AessJ 0e!ate u1s 54' (/0(000 or +(000) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -(00(000 1(00(000 /(00(000 /(00(000 >il /(00(000 2(00(000 ` 12(000&00 12(000&00 +4(000&00 *0(000&00 +(00(000&00 +(54(000&00 -(0+(000&00 >il -(0+(000&00 10(+00&00 +(000&00 5(+00&00 1*/&00 5+&00 5(//*&00 5(/20&00

1(10(000 40(000 /0(000 +(000 -5(000 4*0 -50 -)(1/0

Ta a!ilit# of ;ift

110

2'+,#4'% 3(;"$ Total Income 'gricultural Income Ta Aia!ilit#

/(00(000 2(00(000 >il

N'#e$ If non-agricultural income is upto the limit not chargea!le to ta (`+(00(0001 +(20(00012(00(000)( partial integration is not applica!le& 2'+,#4'% 3(&"$ Total Income 'gricultural Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 :tep 1& Ta on (agricultural income L non agricultural income) i&e& Ta on ` )(00(0001- at sla! rates :tep +& Ta on (`+(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# N'#e$ 0e!ate under section 54' is not allowed to non-resident& 2'+,#4'% 4$ ` C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 O#Be 2', &e= ;ift in kind from !rother of his grand father Income under the head Other :ources ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 :tep 1& Ta on (agricultural income L non agricultural income) i&e& Ta on ` *(00(0001- at sla! rates :tep +& Ta on (`+(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 AessJ 0e!ate u1s 54' (/0(000 or +(000) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2'+,#4'% /$ C'(p,#a#4'% '7 T'#a+ I%&'(e '7 M =. 28ee#6 7' #Be A... 2014!1/ ;ift received on the occasion of marriage are e empt .ash gift received from cousin of Brs& :weet#%s mother is ta a!le under section 2* ` -+(20(000 2(00(000 2(00(000 2(00(000 >il 2(00(000 1(00(000 /(00(000 2(00(000

1(10(000 40(000 /0(000 500 /00 /1(+00

20(000 10(000 /0(000 +(000 -5(000 4*0 -50 -)(1/0

Ta a!ilit# of ;ift (.ousin of Brs& :weet#%s mother is not a relative) Bo!ile phone gifted !# her friend is not ta a!le since it is not included in the definition of Opropert#P under section 2* .ash gift received from elder !rother of hus!and%s grandfather is ta a!le (,rother of hus!and%s grandfather is not a relative) .ash gift from friend is ta a!le :ince !ullion is included in the definition of propert#( therefore( when !ullion is received without consideration( the same is ta a!le( since the aggregate fair market value e ceeds `20(000 6ifference of `+&2 lakh in the value of Deweller# purchased from her friend( is not ta a!le as it represents the stock-in-trade of Brs& :weet#& :ince Brs& :weet# is carr#ing Deweller# !usiness and it has !een mentioned that the Deweller# were su!se8uentl# sold in the course of her !usiness( such Deweller# represent the stock-in-trade of Brs& :weet#& Income under the head Other :ources ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on ` 12(*2(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55,

111

-+(/0(000 *(00(000

/(42(000

>il 12(*2(000 12(*2(000 >il 12(*2(000 +())(200 2())0 +())2 -(05(/52 -(05(/)0

Ta a!ilit# of ;ift

11+

EXAMINATION DUE2TION2
PCC MA. - 2012
D,e=#4'% 1 (1 Ma J=" :tate whether the following are chargea!le to ta and the amount lia!le to ta & ' sum of `1(+0(000 was received as gift from non-relatives !# 0aD on the occasion of the marriage of his son 7ravin& A%=8e $ 's per section 2*( if an# gift has !een received on the occasion of marriage( it will !e e empt from income ta !ut if gift has !een received !# the parents of the person getting married( such gift shall !e ta a!le hence in this case gift received !# Br& 0aD is ta a!le !ecause marriage is that of his son 7ravin&

IPCC MA. - 2011

D,e=#4'% 7 (4 Ma J=" The following details have !een furnished !# Brs& 3emali( pertaining to the #ear ended -1&0-&+01/J (i) .ash gift of `21(000 received from her friend on the occasion of her O:hastiaptha 7oorthiP( a wedding function cele!rated on her hus!and completing *0 #ears of age& This was also her +2th wedding anniversar#& (ii) On the a!ove occasion( a diamond necklace worth `+ lacs was presented !# her sister living in 6u!ai& (iii) When she cele!rated her daughter%s wedding on +1&0+&+01/( her friend assigned in Brs& 3emali%s favour( a fi ed deposit held !# the said friend in a scheduled !ank" the value of the fi ed deposit and the accrued interest on the said date was `21(000& .ompute the income( if an#( assessa!le as income from other sources& A%=8e $ (i) 'n# sum of mone# received !# an individual on the occasion of the marriage of the individual is e empt& This provision is( however( not applica!le to a cash gift received during a wedding function cele!rated on completion of *0 #ears of age& The gift of `21(000 received from a non-relative is( therefore( chargea!le to ta under section 2* in the hands of Brs& 3emali& (ii) The provisions of section 2* are not attracted in respect of an# sum of mone# or propert# received from a relative& Thus( the gift of diamond necklace received from her sister is not ta a!le under section 2*( even though Deweller# falls within the definition of Opropert#P& (iii) To !e e empt from applica!ilit# of section 2*( the propert# should !e received on the occasion of the marriage of the individual( not that of the individual%s son or daughter& Therefore( this e emption provision is not attracted in this case& 'n# sum of mone# received without consideration !# an individual is chargea!le to ta under section 2*( if the aggregate value e ceeds `20(000 in a #ear& O:um of mone#P has( however( not !een defined under section 2*&

Ta a!ilit# of ;ift

11-

Therefore( there are two possi!le views in respect of the value of fi ed deposit assigned in favour of Brs& 3emali (1)The first view is that fi ed deposit does not fall within the meaning of Osum of mone#P and therefore( the provisions of section 2* are not attracted& =i ed deposit is also not included in the definition of Opropert#P& (+) 3owever( another possi!le view is that fi ed deposit assigned in favour of Brs& 3emali falls within the meaning of Osum of mone#P received& I%&'(e a==e==a;+e a= PI%&'(e 7 '( '#Be =', &e=Q If the first view is taken( the total amount chargea!le to ta as OIncome from other sourcesP would !e `21(000( !eing cash gift received from a friend on her :hastiaptha 7oorthi& 's per the second view( the provisions of section 2* would !e attracted in respect of the fi ed deposit assigned and the OIncome from other sourcesP of Brs& 3emali would !e `1(0+(000 (`21(000 L `21(000)&

PE!II NO* - 2008

D,e=#4'% 2 (6 Ma J=" .heck the ta a!ilit# of the following gifts received !# Brs& 0ashmi during the previous #ear +01--1/ and compute the ta a!le income from gifts for 'ssessment Kear +01/-12J (i) On the occasion of her marriage on 1/&05&+01-( she has received `)0(000 as gift out of which `40(000 are from relatives and !alance from friends& (ii) On 1+&0)&+01-( she has received gift of `15(000 from cousin of her mother& (iii) ' cell phone of `+1(000 is gifted !# her emplo#er on 12&05&+01-& (iv) :he gets a gift of `+2(000 from the elder !rother of her hus!and\s grandfather on +2&10&+01-& (v) :he has received a gift of `+(000 from her friend on 1/&0/&+01-& (Bodified)

A%=8e $ C'(p,#a#4'% '7 #a)a;+e 4%&'(e '7 M =. 1a=B(4 7 '( :47#= 7' A... 2014!1/ Pa #4&,+a = Ta)a;+e a(',%# 1ea='% 7' #a)a;4+4#6 ' ` '#Be 84=e '7 ea&B :47# 0elatives and friends >il ;ifts received on the occasion of marriage are not ta a!le& mother is not a relative& 3ence( the gift is ta a!le& <lder !rother of hus!and%s grandfather grandfather is =riend 4/F000 +(000 +2(000 ,rother of hus!and%s .ousin of Brs& 0ashmi%s mother 15(000 .ousin of Brs& 0ashmi%s

not a relative& 3ence( the gift is ta a!le& ;ift from friend is ta a!le&

A:: e:a#e 5a+,e '7 :47#=

Ta a!ilit# of ;ift

11/

:ince the aggregate value of gifts received !# Brs& 0ashmi during the previous #ear +01--1/ does not e ceed `20(000( the same is not chargea!le to ta under section 2* of the Income-Ta 'ct( 1)*1& ;ift received from the emplo#er in kind upto `2(000 is e empt from income ta !ut e cess over it is ta a!le hence in this case ta a!le amount of gift shall !e `1*(000 (+1(000 2(000) and it will !e ta a!le under the head :alar#&

PE!II MA. - 2008

D,e=#4'% 3 .hoose the correct answer with reference to the provisions of the Income-ta 'ct( 1)*1J 0akesh received `40(000 from his friend on the occasion of his !irthda#& (a) The entire amount of `40(000 is ta a!le (!) `+2(000 is ta a!le (c) The entire amount is e empt (d) >one of the a!ove& A%=8e $ (a) The entire amount of `40(000 is ta a!le& (1 Ma J="

PE!II MA. - 200/

D,e=#4'% 1 (1 Ma J=" ;ift of `2(00(000 received on 10 th Qul#( +01- through account pa#ee che8ue from a non-relative regularl# assessed to income-ta ( is (a) ' capital receipt not chargea!le to ta (!) .hargea!le to ta as income from other sources (c) .hargea!le to ta as !usiness income (d) < empt upto `20(000 and !alance chargea!le to ta as income from other sources& A%=8e $ (!) .hargea!le to ta as income from other sources

'dvance 7a#ment Of Ta

112

AD*ANCE PA.MENT O0 TAX

O1

PA. A2 .OU EA1N 2C@EME

2ECTION 207 TO 219
2ECTION2 PA1TICU3A12 +04 Aia!ilit# for pa#ment of advance ta +05 .onditions of lia!ilit# to pa# advance ta +0) .omputation of advance ta +0)' Omitted !# the 6irect Ta Aaws ('mendment) 'ct( 1)54( w&e&f& 1-/-1)55 7a#ment of advance ta !# the assessee of his own accord or in pursuance of order of 'ssessing +10 Officer +11 Instalments of advance ta and due dates +1+ Omitted +1Omitted +1/ Omitted +12 Omitted +1* Omitted +14 Omitted +15 When assessee deemed to !e in default +1) .redit for advance ta

'dvance 7a#ment Of Ta

11*

AD*ANCE PA.MENT O0 TAX 2ECTION2 207 TO 219 3IA>I3IT. 0O1 PA.MENT O0 AD*ANCE TAX 2ECTION 207/208
Ta shall !e pa#a!le in advance during an# financial #ear( in accordance with the provisions of sections +05 to +1)( in respect of an assessee%s current income i&e& the total income of the assessee which would !e chargea!le to ta for the assessment #ear immediatel# following that financial #ear ?:ection +04@& Fnder section +05( o!ligation to pa# advance ta arises in ever# case where the advance ta pa#a!le is `10(000 or more& 'n assessee who is lia!le to pa# advance ta of less than ` 10(000 will not !e saddled with interest under sections +-/, and +-/. for defaults in pa#ment of advance ta & 3owever( the conse8uences under section +-/' regarding interest for !elated filing of return would !e attracted& 'n assessee has to estimate his current income and pa# advance ta thereon& 3e need not su!mit an# estimate or statement of income to the 'ssessing Officer( e cept where he has !een served with notice !# the 'ssessing Officer& Where an o!ligation to pa# advance ta has arisen( the assessee shall himself compute the advance ta pa#a!le on his current income at the rates in force in the financial #ear and deposit the same( whether or not he has !een earlier assessed to ta &

PA.MENT O0 AD*ANCE TAX >. 2ENIO1 CITINEN2

In case of senior citiEens who have passive source of income like interest( rent( etc&( the re8uirement of pa#ment of advance ta causes genuine compliance hardship& Therefore( in order to reduce the compliance !urden on such senior citiEens( e emption from pa#ment of advance ta has now !een provided to a resident individual (1) not having an# income chargea!le under the head O7rofits and gains of !usiness or professionP" and (+) of the age of *0 #ears or more&

PA.MENT O0 IN2TA33MENT2 O0 AD*ANCE TAX AND DUE DATE2 2ECTION 211

'dvance ta shall !e pa#a!le !# companies and other assessees as per the following schedule of installmentsJ C'(pa%4e= ! 0', 4%=#a++(e%#= D,e 9a#e '7 4%=#a++(e%# On or !efore the 12th Qune On or !efore the 12th :eptem!er A(',%# pa6a;+e >ot less than 12R of advance ta lia!ilit#& >ot less than /2R of advance ta lia!ilit#( as reduced !# the amount( if an#( paid in the

'dvance 7a#ment Of Ta earlier installment& On or !efore the 12th 6ecem!er >ot less than 42R of advance ta lia!ilit#( as reduced !# the amount or amounts( if an#( paid in the earlier installment or installments& The whole amount of advance ta lia!ilit# as reduced !# the amount or amounts( if an#( paid in the earlier installment or installments&

114

On or !efore the 12th Barch

Example =or the previous #ear +01--1/( ',. Atd& has estimated its ta pa#a!le to !e `+(00(000( in this case advance ta shall !e paid !# the compan# as given !elowJ Fpto 12&0*&+01Fpto 12&0)&+01Fpto 12&1+&+01Fpto 12&0-&+01/ N'%!&' p' a#e a==e==ee= ! TB ee 4%=#a++(e%#= D,e 9a#e '7 4%=#a++(e%# On or !efore the 12th :eptem!er On or !efore the 12th 6ecem!er A(',%# pa6a;+e >ot less than -0R of advance ta lia!ilit# >ot less than *0R of advance ta lia!ilit#( as reduced !# the amount( if an#( paid in the earlier installment& the whole amount of such advance ta as reduced !# the amount or amounts( if an#( paid in the earlier installment or installments& -0(000 )0(000 1(20(000 +(00(000

On or !efore the 12th Barch

Example Br& 0aD Cumar has estimated his ta pa#a!le for previous #ear +01--1/ `1(00(000( in this case he should pa# advance ta in the manner given !elowJ Fpto 12&0)&+01Fpto 12&1+&+01Fpto 12&0-&+01/ -0(000 *0(000 1(00(000

If the last da# for pa#ment of an# installment of advance ta is a da# on which the receiving !ank is closed( the assessee can make the pa#ment on the ne t immediatel# following working da#&

INTE1E2T PA.A>3E 0O1 DE0E1MENT O0 AD*ANCE TAX 2ECTION 234C

(1) Interest under section +-/. is attracted for deferment of advance ta !e#ond the due dates&

'dvance 7a#ment Of Ta (+) The interest lia!ilit# would !e 1R per month( for a period of - months( for ever# deferment&

115

(-) 3owever( for the last installment of 12th Barch( the interest lia!ilit# under this section would !e 1R for one month& (/) The interest is to !e calculated on the difference !etween the amount arrived at !# appl#ing the specified percentage of ta on returned income and the actual amount paid !# the due date& The last date for pa#ment of the whole amount of advance ta is 12th Barch of the relevant financial #ear& 3owever( an# amount paid !# wa# of advance ta on or !efore -1st Barch is also considered as advance ta paid for the financial #ear& Interest lia!ilit# for late pa#ment will arise in such a case& I++,=# a#4'% 1$ Br& 7radeep .hauhan has estimated his ta lia!ilit# to !e `1(-2(000 and has paid advance ta accordingl# !ut su!se8uentl# his ta lia!ilit# was found to !e `1()0(000( in this case( interest pa#a!le !# him under section +-/. shall !e ` 12&0)&+0124(000 /0(200 W 1*(200 1R - W /)2 12&1+&+0112&0-&+01/ 1(1/(000 51(000 W --(000 1R 1R - W ))0 1 W 220 +(0-2

1()0(000 1(-2(000 W 22(000

Total Interest 7a#a!le

INTE1E2T 0O1 NON!PA.MENT O1 2@O1T!PA.MENT O0 AD*ANCE TAX 2ECTION 234>

(1) Interest under section +-/, is attracted for non-pa#ment of advance ta or pa#ment of advance ta of an amount less than )0R of assessed ta & (+) The interest lia!ilit# would !e 1R per month or part of the month from 1st 'pril following the financial #ear upto the date of determination of income under section 1/-(1)& (-) :uch interest is calculated on the amount of difference !etween the assessed ta and the advance ta paid& (/) 'ssessed ta is the ta calculated on total income less ta deducted at source&

INTE1E2T 0O1 PA.MENT O0 INCOME TAX A0TE1 EXPI1. O0 T@E 3A2T DATE O0 0I3ING T@E 1ETU1N O0 INCOME 2ECTION 234A
If an# person has paid income ta after e pir# of the last date of filing of return of income( interest shall !e pa#a!le V 1R p&m& or part of the month for the period su!se8uent to the last date of filing of return of income& <&g& If in the last e ample( income ta of `1(00(000 has !een paid !# Br& 0aD Cumar on 10&1+&+01/ and last date of filing of return of income is -0&0)&+01/( in this case interest pa#a!le under section +-/' shall !e 1(00(000 1R - W `-(000

'lso the assessee has to pa# interest under section +-/, and interest pa#a!le under section +-/, shall !e 1(00(000 1R ) W `)(000

'dvance 7a#ment Of Ta

11)

I++,=# a#4'% 2$ ',. Atd& has estimated its ta pa#a!le to !e `1(00(000 and the compan# has paid advance ta as given !elowJ Fpto 12&0*&+01Fpto 12&0)&+01Fpto 12&1+&+01Fpto 12&0-&+01/ 12(000 /2(000 42(000 1(00(000

3owever( the compan# has computed its ta pa#a!le to !e `1(50(000 at the time of filing the return of income& .ompute interest pa#a!le !# the compan# under section +-/. 2'+,#4'%$ Installments if ta pa#a!le is `1(50(000 12&0*&+0112&0)&+0112&1+&+0112&0-&+01/ +4(000 51(000 1(-2(000 12(000 W 1+(000 /2(000 W -*(000 42(000 W *0(000 1R 1R 1R 1R - W ` -*0

- W 1(050 - W 1(500 1 W 500 /(0/0

1(50(000 1(00(000 W 50(000

Total Interest 7a#a!le

The interest so computed has to !e paid at the time of self assessment i&e& at the time of filing the return of income& The amount of ta pa#a!le should !e paid as advance ta and if there is an# deficienc#( it should !e paid upto -1st Barch of that particular previous #ear otherwise assessee has to pa# interest under section +-/, also and if ta is paid after the last date of filing the return of income( assessee has to pa# interest under section +-/' also& I++,=# a#4'% 3$ ',. Atd& has ta lia!ilit# of `4(00(000 for the previous #ear +01--1/ and the compan# has not paid an# advance ta and entire ta amount was paid !# the compan# on -1&1+&+01/& In this case( interest shall !e calculated in the manner given !elowJ 1. I%#e e=# 4% &a=e '7 9e7a,+#/%'%!pa6(e%# '7 a95a%&e #a) =e&#4'% 234C 6efault in instalment pa#a!le on 12&0*&+01- 1(02(000 6efault in instalment pa#a!le on 12&0)&+01- -(12(000 6efault in instalment pa#a!le on 12&1+&+01- 2(+2(000 6efault in instalment pa#a!le on 12&0-&+01/ 4(00(000 Total interest pa#a!le 1R 1R 1R 1R ` - W -(120 - W )(/20 - W 12(420 1 W 4(000 -2(-20

2. I%#e e=# 4% &a=e '7 pa6(e%# '7 #a) a7#e #Be e%9 '7 e+e5a%# p e54',= 6ea =e&#4'% 234> 4(00(000 1R ) W *-(000 3. I%#e e=# 4% &a=e '7 pa6(e%# '7 #a) a7#e #Be +a=# 9a#e '7 74+4%: '7 e#, % '7 4%&'(e =e&#4'% 234A

'dvance 7a#ment Of Ta 4(00(000 1R - W Total Interest 7a#a!le +1(000 1(1)(-20

1+0

PA.MENT O0 AD*ANCE TAX IN CA2E O0 CAPITA3 GAIN2/CA2UA3 INCOME 2ECTION 234C

(1) 'dvance ta is pa#a!le !# an assessee on his1its total income( which includes capital gains and casual income like income from lotteries( crossword puEEles etc& (+) :ince it is not possi!le for the assessee to estimate his capital gains( income from lotteries( etc&( it has !een provided that if an# such income arises after the due date for an# installment( then( the entire amount of ta pa#a!le (after considering ta deducted at source) on such capital gains or casual income should !e paid in the remaining installments of advance ta which are due& (-) Where no such installment is due( the entire ta should !e paid !# -1st Barch of the relevant financial #ear& (/) >o interest lia!ilit# would arise if the entire ta lia!ilit# is so paid& N'#eJ In case of casual income (winnings from lotteries( crossword puEEles( card games( gam!ling( !etting( races including horse races etc&)( the entire ta lia!ilit# is full# deducti!le at sourceV-0R under section 1)/, and 1)/,,& Therefore( advance ta lia!ilit# would arise onl# in respect of the education cess and secondar# and higher education cess element of such ta ( if the same( along with ta lia!ilit# in respect of other income( if an#( is ` 10(000 or more& I++,=# a#4'% 4$ Br& G has paid advance ta as given !elowJ Fpto :eptem!er 12( +01Fpto 6ecem!er 12( +01`/2(000 `)2(000

3e has not estimated an# capital gain !ut he had long term capital gains of `-(00(000 on 01&01&+01/& 3e has paid advance ta upto 12th Barch +01/ `1(40(000& 3is actual income other than capital gains was found to !e `11(00(000& 3e has filed return of income on 10&1+&+01/ and has paid difference of the ta on 10&1+&+01/& Aast date for filing of return is -1&04&+01/& .ompute interest pa#a!le under section +-/'( +-/, and +-/.& 2'+,#4'%$ C'(p,#a#4'% '7 Ta) 34a;4+4#6 >ormal Income Aong term capital gains Total Income Ta on `11(00(000 at sla! rate Ta on `-(00(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R ` 11(00(000 -(00(000 1/(00(000 1(*0(000 *0(000 /(/00 +(+00

'dvance 7a#ment Of Ta Ta Aia!ilit# (Ta lia!ilit# e cluding capital gains `11(00(000 at sla! rate L <. V -R

1+1 +(+*(*00 1(*/(500)

C'(p,#a#4'% '7 I%#e e=# ,%9e =e&#4'% 234C :ince capital gains arises on 1st Qanuar# +01/( installments for 12th :eptem!er and 12th 6ecem!er shall !e checked without including ta on capital gain and shall !e as given !elowJ A(',%# pa6a;+e a= a95a%&e #a) ` /)(//0 )5(550 A(',%# a&#,a++6 pa49 ;6 8a6 '7 a95a%&e #a) ` /2(000 )2(000 2B' #7a++ ` /(//0 (/(/00 1R -(550 (-(500 1R I%#e e=# ` 1-+ -) 11/ -)

Fpto :eptem!er 12( +01(1(*/(500 -0R) Fpto 6ecem!er 12( +01(1(*/(500 *0R)

Installment for 12th Barch shall !e including ta on capital gains and is as given !elowJ A(',%# pa6a;+e a= a95a%&e #a) ` +(+*(*00 A(',%# a&#,a++6 pa49 ;6 8a6 '7 a95a%&e #a) ` 1(40(000 2B' #7a++ ` 2*(*00 (2*(*00 1R I%#e e=# ` 2** 1) ` 51+ `2(0)/ `+(5-0

Fpto Barch 12( +01/ (+(+*(*00 100R)

I%#e e=# pa6a;+e ,%9e =e&#4'% 234C I%#e e=# ,%9e =e&#4'% 234> 2*(*00 1R ) I%#e e=# ,%9e =e&#4'% 234A 2*(*00 1R 2

2pe&4a+ P '54=4'% 7' C'(pa%6 2e&#4'% 234C If the advance ta paid !# the compan# ,p#' 1/#B A,%e 4= 12H of the ta pa#a!le and ,p#' 1/#B 2ep#e(;e F 4# 4= 36H of the ta pa#a!le( in such cases no interest shall !e charged for default in such instalment& I%#e e=# '% 1e7,%9= 2e&#4'% 244A If an# assessee is eligi!le for refund( he will !e allowed interest V 0&2R per month or part of the month from the 1st 'pril of the assessment #ear upto the date on which the refund is granted however no interest is pa#a!le if the amount of refund is less than 10R of the ta lia!ilit#& Example =or the previous #ear +01--1/( ',. Atd& has paid advance ta of `2(00(000 !ut actual ta lia!ilit# of the compan# is `-(00(000 and a refund of `+(00(000 was granted on 10&04&+01/( in this case interest pa#a!le to the assessee shall !e +(00(000 0&2R / W `/(000

If in the a!ove case actual ta lia!ilit# is `/(50(000( no interest is pa#a!le !ecause the amount of refund is less than 10R of the ta lia!ilit#& 1',%94%: '77 7' #Be p, p'=e '7 &a+&,+a#4%: I%#e e=# 1,+e 119A 's per rule 11)'( the principal amount shall !e rounded off in the multiples of `100 and for this purpose

'dvance 7a#ment Of Ta an# fraction of `100 shall !e ignored& <&g& `1(*0(+42 shall !e rounded off as 1(*0(+00&

1++

POWE12 O0 A22E22ING O00ICE1 TO DI1ECT T@E A22E22EE TO PA. AD*ANCE TAX 2ECTION 209F 210
1) In the case of a person who has !een alread# assessed !# wa# of a regular assessment in respect of the total income of an# previous #ear( the 'ssessing Officer( if he is of the opinion that such person is lia!le to pa# advance ta ( can serve an order in writing under section +10(-) re8uiring the assessee to pa# advance ta in =orm >o&+5& +) =or this purpose( the total income of the latest previous #ear in respect of which the assessee has !een assessed !# wa# of regular assessment or the total income returned !# the assessee in an# return of income for an# su!se8uent previous #ear( whichever is higher( shall !e taken as the !asis for computation of advance ta pa#a!le& -) The a!ove order can !e served !# the 'ssessing Officer at an# time during the financial #ear !ut not later than the last date of =e!ruar#& /) If( after sending the a!ove notice( !ut !efore 1st Barch of the financial #ear( the assessee furnishes a return relating to an# later previous #ear or an assessment is completed in respect of a later return of income( the 'ssessing Officer ma# amend the order for pa#ment of advance ta on the !asis of the computation of the income so returned or assessed& 2) If the assessee feels that his own estimate of advance ta pa#a!le would !e less than the one sent !# the 'ssessing Officer( he can file estimate of his current income in =orm >o&+5' and advance ta pa#a!le thereon& *) Where the advance ta pa#a!le on assessee%s estimation is higher than the ta computed !# the 'ssessing Officer( then( the advance ta shall !e paid !ased upon such higher amount& 4) In all cases( the ta calculated shall !e reduced !# the amount of ta deducti!le at source& 5) The amount of advance ta pa#a!le !# an assessee in the financial #ear calculated !# (i) the assessee himself !ased on his estimation of current income" or (ii) the 'ssessing Officer as a result of an order under section +10(-) or amended order under section +10(/) is su!Dect to the provisions of section +0)(+)( as per which the net agricultural income has to !e considered for the purpose of computing advance ta & )) Where advance ta is pa#a!le !# virtue of the notice of demand issued under section 12* !# the 'ssessing Officer( the whole or the appropriate part of the advance ta specified in such notice shall !e pa#a!le on or !efore each of such due dates as fall after the date of service of notice of demand& Where the assessee does not pa# an# installment !# the due date( he shall !e deemed to !e an assessee in default in respect of such installment& (:ection +15) Example =or the previous #ear +01--1/( ',. Atd& has not paid an# advance ta till 10&10&+01- and in the earlier #ears the compan# was assessed in the manner given !elowJ +010-11 +011-1+ 1/-(-) (:crutin# 'ssessment) 1// (,est Qudgement 'ssessment) 4(00(000 10(00(000

'dvance 7a#ment Of Ta +01+-10OI 5(00(000

1+-

In this case 'ssessing officer shall have the powers to give notice to the assessee and its estimated income shall !e considered to !e `10(00(000& If an# assessee has received a notice in form no& +5 !ut he finds that his ta lia!ilit# shall !e less than the amount computed !# the 'ssessing Officer( in that case he can give a repl# in form no& +5' and can pa# ta as per his own estimate&

W@EN A22E22EE DEEMED TO >E IN DE0AU3T 2ECTION 218

If an# assessee does not pa# on the date specified in su!-section (1) of section +11( an# instalment of the advance ta that he is re8uired to pa# !# an order of the 'ssessing Officer under su!-section (-) or su!section (/) of section +10 and does not( on or !efore the date on which an# such instalment as is not paid !ecomes due( send to the 'ssessing Officer an intimation under su!-section (2) of section +10 or does not pa# on the !asis of his estimate of his current income the advance ta pa#a!le !# him under su!-section (*) of section +10( he shall !e deemed to !e an assessee in default in respect of such instalment or instalments&

C1EDIT 0O1 AD*ANCE TAX 2ECTION 219

'n# sum( other than interest or penalt#( paid !# or recovered from an assessee as advance ta ( is treated as a pa#ment of ta in respect of the income of the previous #ear and credit thereof shall !e given in the regular assessment& N' e9,&#4'% '7 R#a) 9e9,&#4;+e ;,# %'# 9e9,&#e9S 8B4+e &'(p,#4%: a95a%&e #a) +4a;4+4#6 (i) 's per the provisions of section +0)( the amount of advance ta pa#a!le !# a person is computed !# reducing the amount of income-ta which would !e deducti!le at source during the financial #ear from an# income which has !een taken into account in computing the total income& :ome courts have opined that in case where the pa#er pa#s an# amount (on which ta is deducti!le at source) without deduction of ta at source( the pa#ee shall not !e lia!le to pa# advance ta to the e tent ta is deducti!le from such amount& With a view to make such a person (pa#ee) lia!le to pa# advance ta ( the proviso to section +0)(1) (d) provides that the amount of ta deducti!le at source !ut not so deducted !# the pa#er shall not !e reduced from the income ta lia!ilit# of the pa#ee for determining his lia!ilit# to pa# advance ta & In effect( onl# if ta has actuall# !een deducted at source( the same can !e reduced for computing advance ta lia!ilit# of the pa#ee& Ta deducti!le !ut not so deducted cannot !e reduced for computing advance ta lia!ilit# of the pa#ee& P3EA2E 2TUD. IT ON3. A0TE1 2TUD.ING T@E C@APTE1 DEDUCTION O0 TAX AT 2OU1CE

(ii)

(iii)

(iv)

I++,=# a#4'% /$ ' partnership firm made the following pa#ments of advance ta during the financial #ear +01--1/J Fpto :eptem!er 12( +01Fpto 6ecem!er 12( +01Fpto Barch 12( +01/ ` 5(+2(000 1*(*/(000 +*(+-(000

'dvance 7a#ment Of Ta

1+/

The income returned !# the firm is `55(00(000 under the head Oprofits and gains of !usiness or professionP and `)(20(000 !# wa# of long term capital gains on sale of a propert# effected on 6ecem!er 1( +01-& What is the interest pa#a!le !# the assessee under section +-/, and section +-/. for assessment #ear +01/-12Y 'ssume that the return of income was filed on -0&0)&+01/ i&e& the due date and ta was full# paid on self assessment& 2'+,#4'%$ C'(p,#a#4'% '7 Ta) 34a;4+4#6 ,usiness income Aong term capital gains Total Income Ta on `55(00(000 V -0R Ta on `)(20(000 V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# (Ta lia!ilit# e cluding capital gains `55(00(000 ` 55(00(000 )(20(000 )4(20(000 +*(/0(000 1()0(000 2*(*00 +5(-00 +)(1/()00 +4(1)(+00)

-0R L <.V -R

I%#e e=# ,%9e =e&#4'% 234C :ince capital gains arises on 1st 6ecem!er +01-( installment for 12th :eptem!er shall !e checked without including ta on capital gain and shall !e as given !elowJ A(',%# pa6a;+e a= a95a%&e #a) ` 5(12(4*0 A(',%# a&#,a++6 pa49 ;6 8a6 '7 a95a%&e #a) ` 5(+2(000 2B' #7a++ ` >il I%#e e=# ` >il

Fpto :eptem!er 12( +01(+4(1)(+00 -0R)

Installments for 12th 6ecem!er and 12th Barch shall !e including ta on capital gains and is as given !elowJ A(',%# pa6a;+e a= a95a%&e #a) ` 14(/5()/0 +)(1/()00 A(',%# a&#,a++6 pa49 ;6 8a6 '7 a95a%&e #a) ` 1*(*/(000 +*(+-(000 2B' #7a++ ` 5/()/0 (5/()00 1R - month) +()1()00 (+()1()00 1R 1 month) I%#e e=# ` +(2/4 +()1)

Fpto 6ecem!er 12( +01(+)(1/()00 *0R) Fpto Barch 12( +01/ (+)(1/()00 100R)

I%#e e=# pa6a;+e ,%9e =e&#4'% 234C I%#e e=# ,%9e =e&#4'% 234> +()1()00 1R *

`2(/** `14(21/

I++,=# a#4'% 6$ ',. Atd& has estimated its ta lia!ilit# for assessment #ear +01/-12 `/(/0(000 and has paid advance ta accordingl# !ut actual ta lia!ilit# was found to !e `10(00(000& The compan# has paid !alance amount on 0+&01&+012&

'dvance 7a#ment Of Ta .ompute interest pa#a!le under section +-/'( +-/,( and +-/.& 2'+,#4'%$ Ta pa#a!le is `/(/0(000 Fpto 12&0*&+01**(000 Fpto 12&0)&+011()5(000 Fpto 12&1+&+01-(-0(000 Fpto 12&0-&+01/ /(/0(000 I%#e e=# 4% &a=e '7 9e7a,+#/%'%!pa6(e%# '7 a95a%&e #a) =e&#4'% 234C Installments if ta pa#a!le is `10(00(000 12&0*&+011(20(000 **(000 W 5/(000 12&0)&+01/(20(000 1()5(000 W +(2+(000 12&1+&+014(20(000 -(-0(000 W /(+0(000 12&0-&+01/ 10(00(000 /(/0(000 W 2(*0(000 Total interest pa#a!le u1s +-/. 1R 1R 1R 1R ` - W +(2+0 - W 4(2*0 - W 1+(*00 1 W 2(*00 +5(+50

1+2

I%#e e=# 4% &a=e '7 pa6(e%# '7 #a) a7#e #Be e%9 '7 #Be e+e5a%# p e54',= 6ea =e&#4'% 234> 10(00(000 /(/0(000 W 2(*0(000 ` 2(*0(000 1R 10 W I%#e e=# 4% &a=e '7 pa6(e%# '7 #a) a7#e #Be +a=# 9a#e '7 74+4%: '7 e#, % '7 4%&'(e =e&#4'% 234A 2(*0(000 1R / W Total interest pa#a!le (+5(+50 L 2*(000 L ++(/00)

2*(000 ` ++(/00 1(0*(*50

'dvance 7a#ment Of Ta

1+*

P1ACTICE P1O>3EM2
TOTA3 P1O>3EM2 3
P ';+e( 1. Br& G has incomes as given !elowJ 1& Income under the head house propert# `12(00(000 +& ;ift of a painting from a friend with market value `+(00(000 -& ;ift of shares and securities from Brs& G valued `-(00(000 /& 'gricultural income `-(00(000 3e has paid advance ta as given !elowJ Fpto 12th :ept +01Fpto 12th 6ec +01Fpto 12th Barch +01/ `-0(000 `20(000 `*0(000

,alance amount of ta was paid on 10th :ept +01/& .ompute his ta lia!ilit# for the 'ssessment Kear +01/-12 and also interest under section +-/'( +-/, and +-/.& A%=8e M Ta Aia!ilit#J `/(1+(000" Interest under section +-/'J `4(0/0" Interest under section +-/,J `+1(1+0" Interest under section +-/.J `1+(+// P ';+e( 2. GK 7artnership =irm has income as given !elowJ 1& Income from ,usiness `+0(00(000 +& Income under the head 3ouse 7ropert# `4(00(000 The firm has paid advance ta as given !elowJ Fpto 12th Qune +01Fpto 12th :ept +01Fpto 12th 6ec +01Fpto 12th Barch +01/ ` +0(000 ` -0(000 ` 50(000 `1(00(000

,alance amount of ta was paid on 10th 6ec +01/& 6ue date for filing of 0OI in case of partnership firm is -1&04&+01/& .ompute ta lia!ilit# for the 'ssessment Kear +01/-12 and also interest under section +-/'( +-/, and +-/.& A%=8e M Ta Aia!ilit#J `5(-/(-00" Interest under section +-/'J `-*(412" Interest under section +-/,J `**(054" Interest under section +-/.J `+*(2*/ (!) 7resume the assessee is ',. Atd& an Indian compan#& A%=8e M Ta Aia!ilit#J `5(-/(-00" Interest under section +-/'J `++(0+)" Interest under section +-/,J `**(054" Interest under section +-/.J `-4(++)

'dvance 7a#ment Of Ta

1+4

P ';+e( 3. Brs& G has income under the head house propert# `15(00(000 and she has received gift of `-(00(000 in cash from her hus!and%s sister and `1(00(000 from her sister%s hus!and and `1(+0(000 from sister of her mother in law& :he has agricultural income of `/(00(000& :he has paid advance ta as given !elowJ Fpto 12th :ept +01Fpto 12th 6ec +01Fpto 12th Barch +01/ ` -0(000 ` 50(000 `1(00(000

,alance amount of ta was paid on 10th 6ec +01/& .ompute her ta lia!ilit# for the 'ssessment Kear +01/-12 and also interest under section +-/'( +-/, and +-/.& A%=8e M Ta Aia!ilit#J `/()0(+50" Interest under section +-/'J `1)(210" Interest under section +-/,J `-2(115" Interest under section +-/.J `1-(5-2

'dvance 7a#ment Of Ta

1+5

2O3UTION2
TO

P1ACTICE P1O>3EM2
2'+,#4'% 1$ ` C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head 3ouse 7ropert# Income under the head Other :ources ;ift in kind received from a friend ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 :tep 1& Ta on (agricultural income L non agricultural income) i&e& Ta on ` +0(00(0001- at sla! rates :tep +& Ta on (`+(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# A(',%# pa6a;+e a= a95a%&e #a) ` 1(+-(*00 +(/4(+00 /(1+(000 A(',%# a&#,a++6 pa49 ;6 8a6 '7 a95a%&e #a) ` -0(000 20(000 *0(000 2B' #7a++ ` )-(*00 ()-(*00 1R - month) 1()4(+00 (1()4(+00 1R - month) -(2+(000 (-(2+(000 1R 1 month) 12(00(000 +(00(000 14(00(000 >il 14(00(000 -(00(000

/(-0(000 -0(000 /(00(000 5(000 /(000 /(1+(000 I%#e e=# ` +(505 2()1* -(2+0

Fpto 12 :ept( +01(/(1+(000 -0R) Fpto 12th 6ec( +01(/(1+(000 *0R) Fpto 12th Barch( +01/ (/(1+(000 100R)

th

I%#e e=# +4a;4+4#6 ,%9e =e&#4'% 234C I%#e e=# ,%9e =e&#4'% 234> -(2+(000 1R * I%#e e=# ,%9e =e&#4'% 234A -(2+(000 1R + 4(0/0

`1+(+// `+1(1+0 `

'dvance 7a#ment Of Ta 2'+,#4'% 2$

1+)

` C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head ,usiness17rofession Income under the head 3ouse 7ropert# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `+4(00(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# A(',%# pa6a;+e a= a95a%&e #a) ` +(20(+)0 2(00(250 5(-/(-00 A(',%# a&#,a++6 pa49 ;6 8a6 '7 a95a%&e #a) ` -0(000 50(000 1(00(000 2B' #7a++ ` +(+0(+)0 (+(+0(+00 1R - month) /(+0(250 (/(+0(200 1R - month) 4(-/(-00 (4(-/(-00 1R 1 month) +0(00(000 4(00(000 +4(00(000 >il +4(00(000 5(10(000 1*(+00 5(100 5(-/(-00 I%#e e=# ` *(*0* 1+(*12 4(-/-

Fpto 12th :ept( +01(5(-/(-00 -0R) Fpto 12th 6ec( +01(5(-/(-00 *0R) Fpto Barch 12( +01/ (5(-/(-00 100R)

I%#e e=# +4a;4+4#6 ,%9e =e&#4'% 234C I%#e e=# ,%9e =e&#4'% 234> 4(-/(-00 1R ) I%#e e=# ,%9e =e&#4'% 234A 4(-/(-00 1R 2 2'+,#4'% 2(;"$ Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `+4(00(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# A(',%# pa6a;+e a= a95a%&e #a) ` 1(+2(1/2 A(',%# a&#,a++6 pa49 ;6 8a6 '7 a95a%&e #a) ` +0(000 2B' #7a++ ` 1(02(1/2 (1(02(100 1R -)

`+*(2*/ `**(054 `-*(412 ` +4(00(000 5(10(000 1*(+00 5(100 5(-/(-00 I%#e e=# ` -(12-

Fpto 12 Qune +01(5(-/(-00 12R)

th

'dvance 7a#ment Of Ta Fpto 12th :ept( +01(5(-/(-00 /2R) Fpto 12th 6ec( +01(5(-/(-00 42R) Fpto 12th Barch( +01/ (5(-/(-00 100R) -(42(/-2 *(+2(4+2 5(-/(-00 -0(000 50(000 1(00(000 -(/2(/-2 (-(/2(/00 1R - month) 2(/2(4+2 (2(/2(400 1R - month) 4(-/(-00 (4(-/(-00 1R 1 month)

1-0 10(-*+ 1*(-41 4(-/-

I%#e e=# +4a;4+4#6 ,%9e =e&#4'% 234C I%#e e=# ,%9e =e&#4'% 234> 4(-/(-00 1R ) I%#e e=# ,%9e =e&#4'% 234A 4(-/(-00 1R 2'+,#4'% 3$

`-4(++) `**(054 `++(0+) `

C'(p,#a#4'% '7 T'#a+ I%&'(e Income under the head 3ouse 7ropert# Income under the head Other :ources ;ift received from sister of her mother in law ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 'gricultural Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 :tep 1& Ta on (agricultural income L non agricultural income) i&e& Ta on ` +-(+0(0001- at sla! rates :tep +& Ta on (`+(00(000 L agricultural income) at sla! rates :tep -& 6educt Ta at :tep + from Ta at :tep 1 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# A(',%# pa6a;+e a= a95a%&e #a) ` 1(/4(05/ +()/(1*5 /()0(+50 A(',%# a&#,a++6 pa49 ;6 8a6 '7 a95a%&e #a) ` -0(000 50(000 1(00(000 2B' #7a++ ` 1(14(05/ (1(14(000 1R - month) +(1/(1*5 (+(1/(100 1R - month) -()0(+50 (-()0(+00 1R 1 month)

15(00(000 1(+0(000 1)(+0(000 >il 1)(+0(000 /(00(000

2(+*(000 20(000 /(4*(000 )(2+0 /(4*0 /()0(+50 I%#e e=# ` -(210 *(/+-()0+

Fpto 12th :ept( +01(/()0(+50 -0R) Fpto 12th 6ec( +01(/()0(+50 *0R) Fpto 12th Barch( +01/ (/()0(+50 100R)

'dvance 7a#ment Of Ta I%#e e=# +4a;4+4#6 ,%9e =e&#4'% 234C I%#e e=# ,%9e =e&#4'% 234> -()0(+00 1R ) I%#e e=# ,%9e =e&#4'% 234A -()0(+00 1R 2

1-1 `1-(5-2 `-2(115 `1)(210

'dvance 7a#ment Of Ta

1-+

EXAMINATION DUE2TION2
IPCC MA. - 2013
D,e=#4'% 7(a" (4 Ma J=" ,riefl# discuss the provisions relating to pa#ment of advance ta in case of capital gains and casual income& 2'+,#4'%$ Pa6(e%# '7 a95a%&e #a) 4% &a=e '7 &ap4#a+ :a4%= a%9 &a=,a+ 4%&'(e (1) 'dvance ta is pa#a!le !# an assessee on his1its total income( which includes capital gains and casual income like income from lotteries( crossword puEEles etc& (+) :ince it is not possi!le for the assessee to estimate his capital gains( income from lotteries( etc&( it has !een provided that if an# such income arises after the due date for an# installment( then( the entire amount of ta pa#a!le (after considering ta deducted at source) on such capital gains or casual income should !e paid in the remaining installments of advance ta which are due& (-) Where no such installment is due( the entire ta should !e paid !# -1st Barch of the relevant financial #ear& (/) If the entire ta lia!ilit# is so paid( no interest lia!ilit# under section +-/. would arise for deferment of advance ta ( N'#eJ In case of casual income (winnings from lotteries( crossword puEEles( card games( gam!ling( !etting( races including horse races etc&)( the entire ta lia!ilit# is full# deducti!le at sourceV-0R under section 1)/, and 1)/,,& Therefore( advance ta lia!ilit# would arise onl# in respect of the education cess and secondar# and higher education cess element of such ta ( if the same( along with ta lia!ilit# in respect of other income( if an#( is ` 10(000 or more&

PCC NO* - 2009

D,e=#4'% / (4 Ma J=" Interest is chargea!le under section +-/' for dela# or default in furnishing return of income& 6iscuss !riefl#& A%=8e . I%#e e=# 7' 9e7a,+# 4% 7, %4=B4%: e#, % '7 I%&'(e (2e&#4'% 234A" If an# person has not paid the amount of income ta till the last date of filing the return of income( such person has to pa# interest under section +-/' V 1R per month or part of the month for the period of dela# !e#ond the last date of filing the return of income& The assessee has to pa# interest under section +-/, also for the same period& 's per the language of the 'ct( interest shall !e charged for dela# in filing the return of income !ut as per decision of 6elhi 3igh .ourt in 6r& 7ranno# 0o# v& .IT (+001)( interest shall !e charged onl# if there was dela# in pa#ment of income ta i&e& if income ta has !een paid till the last date of filing of return of income !ut return was filed after the last date( no interest should !e charged under section +-/'& 0a&#= '7 #Be &a=e '7 D . P a%%'6 1'6 5. CIT The petitioner had earned su!stantial capital gains for the assessment #ear 1))2-)* for which the return was due to !e filed on -1-10-1))2& 3owever( ta es due were paid on +2-)-1))2( i.e.( !efore the due date of filing of the return( !ut the return was filed on +)-)-1))*( i.e.( after a dela# of a!out 11 months& Interest had !een charged under the provisions of section +-/'& 's per the Qudgement of the 3igh .ourt interest was deleted&

'dvance 7a#ment Of Ta

1--

PCC AUNE - 2009

D,e=#4'% / <nlist the installments of advance ta and due dates thereon in case of companies& A%=8e . A95a%&e #a) =Ba++ ;e pa6a;+e ;6 &'(pa%4e= a= pe #Be 7'++'84%: =&Be9,+e '7 4%=#a++(e%#=$ C'(pa%4e= ! 7', 4%=#a++(e%#= D,e 9a#e '7 4%=#a++(e%# A(',%# pa6a;+e th On or !efore the 12 Qune >ot less than 12R of ta pa#a!le On or !efore the 12th :eptem!er On or !efore the 12th 6ecem!er On or !efore the 12th Barch >ot less than /2R of ta pa#a!le >ot less than 42R of ta pa#a!le The whole amount of ta pa#a!le (4 Ma J="

PCC MA. - 2008

D,e=#4'% / (4 ) 2 M 8 Ma J=" (a" ,riefl# discuss a!out the interest chargea!le under :ection +-/' for dela# or default in furnishing return of income& (;" What are the due dates of instalments and the 8uantum of advance ta pa#a!le !# companiesY A%=8e /(a". 0efer to 'nswer given in 7.. >O9 +00) Huestion >o&2 A%=8e /(;". 0efer to 'nswer given in 7.. QF>< +00) Huestion >o&2

PCC NO* - 2007

D,e=#4'% / (4 Ma J=" ,riefl# discuss the provisions relating to pa#ment of advance ta on income arising from capital gains and casual income& A%=8e . 0efer to 'nswer given in I7.. B'K +01- Huestion >o&4(a)

'dvance 7a#ment Of Ta
] Important J 7lease see notes overleaf !efore filling up the challan

1-/
:ingle .op# (to !e sent to the Z'O)

C@A33AN NO./ ITN2 280

7ermanent 'ccount =ull >ame

Ta) App+4&a;+e (Tick One)T (0020" INCOME!TAX ON COMPANIE2 (CO1PO1ATION TAX" (0021" INCOME TAX (OT@E1 T@AN COMPANIE2" >um!er

'ssessment Kear
-

.omplete 'ddress with .it# M :tate

Tel& >o&
T6pe '7 Pa6(e%# (Tick One)

7in 2, #a) (102" Ta) '% D4=# 4;,#e9 P '74#= '7 D'(e=#4& C'(pa%4e= (106" Ta) '% D4=# 4;,#e9 I%&'(e #' U%4# @'+9e = (107" 'mount (in 0s& Onl#)
0O1 U2E IN 1ECEI*ING >ANK

A95a%&e Ta) (100" 2e+7 A==e==(e%# Ta) (300" Ta) '% 1e:,+a A==e==(e%# (400"
DETAI32 O0 PA.MENT2

Income Ta :urcharge <ducation .ess Interest 7enalt# Others Total Total (in words)
.0O0<: A'.: T3OF:'>6: 3F>60<6: T<>: F>IT:

6e!it to '1c 1 .he8ue credited on 6 6 B B K

2PACE 0O1 >ANK 2EA3

7aid in .ash16e!it to '1c 1.he8ue >o& 6rawn on (>ame of the ,ank and ,ranch) 6ateJ

6ated

0s& :ignature of person making pa#ment

pa#er)

Ta)pa6e = C',%#e 7'4+ (To !e filled up !# ta

7'> 0eceived from

2PACE 0O1 >ANK 2EA3

(>ame) .ash1 6e!it to '1c 1.he8ue >o& =or 0s& 0s& (in words) 6rawn on (>ame of the ,ank and ,ranch) on account of .ompanies1Other than .ompanies1Ta Income Ta on (:trike out whichever is not applica!le) T#pe of 7a#ment (To !e filled up !# person making the pa#ment) for the 'ssessment Kear -

0s&

'dvance 7a#ment Of Ta ]>OT<:

1-2

1. P+ea=e ,=e a =epa a#e &Ba++a% 7' ea&B #6pe '7 pa6(e%#. +& 7lease note that 8uoting #our 7ermanent 'ccount >um!er (7'>) is mandator#& -& 7lease note that 8uoting false 7'> ma# attract a penalt# of `10(0001- as per section +4+, of I&T& 'ct( 1)*1& /& 7lease note that to deposit 'ppeal =ees either Ma<' @ea9 020 ' 021 (depending upon the ta pa#er%s status) has to !e ticked under $Ta 'pplica!le%& =ollowed !# this" M4%' @ea9$ 2e+7 A==e==(e%# Ta) (300" has to !e ticked under $T#pe of 7a#ment% and the amount is to filled under O#Be = in $6etails of 7a#ments%& 2& To deposit ta es( appeal fees( etc& in respect of !lock period cases( enter the first 'ssessment Kear of the !lock period followed !# the last 'ssessment Kear of the period& =or e ample( if the !lock period is 110/152 to 21-1)*( it would !e entered as 1)5*-)4 in the space indicated for 'ssessment Kear& If ta es are !eing deposited( tick the !o :elf 'ssessment (-00) under T#pe of 7a#ment and fill up amount under $Ta % while in respect of appeal fees( enter amount under $Others%& 7A<':< F:< T3I: .3'AA'> =O0 6<7O:ITI>; T'G<: (TK7<: O= 7'KB<>T) B<>TIO><6 O9<0A<'=& CI>6AK 6O >OT F:< T3I: .3'AA'> =O0 6<7O:ITI>; T'G 6<6F.TIO> 'T :OF0.< (T6:) CI>6AK <>:F0< T3'T T3< ,'>C%: '.C>OWA<6;<B<>T .O>T'I>: T3< =OAAOWI>;J 1& 4 6I;IT ,:0 .O6< O= T3< ,'>C ,0'>.3 +& 6'T< O= 6<7O:IT O= .3'AA'> (66 BB KK) -& .3'AA'> :<0I'A >FB,<0 T3<:< WIAA 3'9< TO ,< HFOT<6 I> KOF0 0<TF0> O= I>.OB<&

'dvance 7a#ment Of Ta

1-*

0O1M NO. 28
?:ee rule -5@

N'#4&e '7 9e(a%9 ,%9e =e&#4'% 1/6 '7 #Be I%&'(e!#a) A&#F 1961 7' pa6(e%# '7 a95a%&e #a) ,%9e =,;!=e&#4'% (3" ' =,;!=e&#4'% (4" '7 =e&#4'% 210 To This is to give #ou notice under section +10 of the Income-ta 'ct( 1)*1( that the sum of ` UUUUUUUUUUUUUUUUUUUUUUUUUUUU as specified in the enclosed order has !een determined to !e pa#a!le !# #ou during the financial #ear UUUUUUUUUUUUUUUUUU +& The amount is pa#a!le in two instalments as mentioned in the Ta!le& T',A< 6ue date of instalment On or !efore the 12th 6ecem!er On or !efore the 12th Barch 'mount pa#a!le >ot less than fift# per cent ] of such advance ta & The whole amount of such advance ta as reduced !# the amount( or amounts( if an#( paid in the earlier instalment or instalments ]:i t# per cent with effect from 1-/-1))+ vide =inance 'ct( 1))+& The amount is pa#a!le to Banager( authorised !ank1 Banager( :tate ,ank of India10eserve ,ank of India at When( if the amount is paid( #ou will !e granted a receipt UUUUUUUUUUUUUUUUUUUUUUUUU .hallan(s) is1are enclosed for the purpose( in which #ou should enter the amount of each instalment at the time of pa#ment& -& If at an# time !efore the 1st instalment as aforesaid is due( #ou estimate that #our income su!Dect to advance ta for the previous #ear relevant to the assessment #ear commencing on the 1st da# of 'pril( UUUUUUUUUUUUUUUUUUUUUU is less than the income on which #ou have !een asked to pa# advance ta as a!ove and accordingl# #ou wish to pa# an amount less than the amount which #ou have !een so re8uired to pa# #ou ma# send to the 'ssessing Officer in =orm +5' reasons for the lower estimate made !# #ou and enclose an estimate of the advance ta so pa#a!le on such income calculated in the manner laid down in section +0) and in that event #ou should pa# such amount (less an# instalment alread# paid in accordance with paragraph + of this notice) as accords with #our estimate in such proportions on such dates specified therein& =or this purpose #ou should enter in the appropriate challans the amount pa#a!le according to #our estimate& Kou ma# revise the amount pa#a!le at an# time !efore the last instalment is due and ma# adDust an# e cess or deficienc# in respect of the instalment alread# paid in the su!se8uent instalment& /& If in #our estimation( the advance ta pa#a!le on #our current income e ceeds the amount of advance ta specified in an order of the 'ssessing Officer under su!-section (-) or su!-section (/) of section +10 or as intimated !# #ou under su!-section (2) of that section( #ou will pa# on or !efore the due date of last instalment specified in section +11( an appropriate part or( as the case ma# !e( the whole of such higher amount of advance ta according to #our estimate& 2& If #ou are lia!le to pa# advance ta under section +05 and have failed to pa# such ta or the advance ta paid !# #ou under the provisions of section +10 is less than )0R of the assessed ta ( #ou will !e lia!le to pa# interest according to the provisions of section +-/,& If #ou have failed to pa# the instalments of advance ta !# the specified dates( interest will !e charged as per section +-/. of the Income-ta 'ct( 1)*1& 7lace UUUUUUUUUUUU 6ate UUUUUUUUUUUUU 'ssessing Officer 'ddress

'dvance 7a#ment Of Ta ENC3O2U1E TO 0O1M NO. 28 Order under section +10 of the Income-ta 'ct( 1)*1 >ame of the assessee :tatus ] 6istrict or area 7ermanent 'ccount >um!er

1-4

'ddress UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU 1. Total income on the !asis of which regular assessment has !een made1return of income has !een filed !# #ou( for a su!se8uent #ear( !eing that for the #ear 2. Income su!Dect to advance ta & 3. >et agricultural income( if an#( to !e taken into account for purposes of computing advance ta & 4. ;ross income-ta chargea!le on $income su!Dect to advance ta %& /. :ums included in $income su!Dect to advance ta % in respect of which income-ta is not pa#a!le or on which a re!ate of income-ta is admissi!le(i) :hare of income from an association of persons or !od# of individuals or an unregistered firm on the profits of which ta has alread# !een paid (ii) Interest on income-ta free securities (iii) Other items& 6. Total amount on which ta is not pa#a!le and the proportionate ta on such an amount 7. 6educt J Ta which is deducti!le under sections 1)+ to 1)2 on an# income (as computed !efore allowing an# deductions admissi!le under the 'ct) and which has !een taken into account in computing the $income su!Dect to advance ta % 8. >et amount of income-ta 9. Aess J 'mount on account of estimated dou!le income-ta relief( if an# 10. ,alance pa#a!le 11. Aess J Ta alread# paid in the financial #ear under section +10 in compliance with the previous notice of demand served on ><T 'BOF>T O= T'G 7'K',A< 12. Total sum pa#a!le (in figures as well as words) ` 6ate UUUUUUUUUUUUUU ` ` ` ` ` ` ` ` ` `

` ` ` ` ` ` 'ssessing Officer UUUUUUUUUUUUU

]>ote J In the case of a 3indu undivided famil#( please state whether the 3indu undivided famil# has at least one mem!er whose total income of the relevant previous #ear e ceeds the ma imum amount not chargea!le to income-ta in his case&

0O1M NO. 28A

'dvance 7a#ment Of Ta ?:ee rule -)@ Intimation to the 'ssessing Officer under section +10(2) regarding the notice of demand under section 12* of the Income-ta 'ct( 1)*1 for pa#ment of advance ta under section +10(-)1+10(/) of the 'ct 6ated To The 'ssessing Officer( :ir( 0e&J >otice of demand under section 12* of the I&T& 'ct( 1)*1 for pa#ment of income-ta under section +10(-)1+10(/) of the 'ct in the case of UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU=or assessment #earUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU&

1-5

The notice of demand under section 12* of the Income-ta 'ct for pa#ment of advance ta and the order under section +10(-)1+10(/) of the 'ct( datedUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUhas !een served on me on (date of service of notice) 2. I do here!# intimate that the estimate of income and the advance ta pa#a!le made !# #ou and contained in the enclosure to =orm >o& +5( is high !ecause of the following reasons J (i)There is an arithmetical error in the computation shown in =orm >o& +5& (ii) In respect of the income assessed for assessment #ear UUUUUUUUUUUUUUUUUUUUUUUUUU( there was a mistake apparent from record within the meaning of section 12/ of the Income-ta 'ct( 1)*1 for which the application has !een filed on UUUUUUUUUUUUUUUUUUUUUUUUUUUU1 is !eing filed& (iii) There has !een loss1no income under the head $.apital gains% in the current #ear& (iv) There has !een no income of the nature referred to in section +(+/)(i ) in the current #ear& (v) 'n# other reasons (specif#ing the reasons)& 3. The estimate of income for the previous #ear relevant to the assessment #ear UUUUUUUUUUUUUUUUUUUU taking into account the reasons mentioned in para + a!ove is as follows J <stimated $income su!Dect to advance ta % J (1) Income from $salaries%J (+) Income from capital gains J (-) Income from house propert# J (/) 7rofits and gains of !usiness or profession J (a) 7rofits and gains from !usiness and profession carried on !# me1us& >ame 'ddress (!) :hare from firm(s) J >ame of the firm 'ddress Whether firm has !een :hare of income registered in the last completed assessment

(c) Income from an association of persons or !od# of individuals& Total J (a) L (!) L (c) (2) Income from other sources

'dvance 7a#ment Of Ta (i) 6ividends (ii) Interest (iii) Other incomes ?including income referred to in section +(+/)(i )@ Total 'ggregate of su!-items (1) to (2) Aess J 1& (i) carried forward losses( etc&( eligi!le for set off (ii) deductions admissi!le under .hapter 9I-'& Income su!Dect to advance ta J +& <stimated net agricultural income -& ;ross income-ta chargea!le on income su!Dect to advance ta & /& :ums included in income su!Dect to advance ta in respect of which no ta is pa#a!le on which a re!ate of ta is admissi!le(i) :hare of income from an unregistered firm on which the ta will !e paid !# the firm& (ii) :hare from an association of persons or !od# of individuals on which ta will !e paid !# the association or !od#& (iii) Interest on income-ta free securities (iv) Other items Total amount on which ta is not pa#a!le and the proportionate ta on such amount& 2& < cess of - over /& *& 6educt J 'mount of ta deducti!le under sections 1)+ to 1)2 on an# income (as computed !efore allowing an# deduction admissi!le under the 'ct) and which has !een taken into account in computing the income su!Dect to advance ta & 4& >et amount of income-ta & 5& Aess J 'mount on account of estimated dou!le income-ta relief( if an# )& >et amount pa#a!le& 10& Aess J (i) ta alread# paid in the financial #ear under section +10& 11& ,alance pa#a!le 7lace J 6ate J To The 'ssessing Officer( :ignature of the person making the estimate :tatus

1-)

N'#e= $ 1& The estimate of ta should !e signed !# a person who is authorised to sign a return of income as provided in section 1/0 of the Income-ta 'ct( 1)*1& +& In the case of a registered firm( the firm has to su!mit an estimate of the advance ta pa#a!le( if an#( !# it in accordance with 7art III of the =irst :chedule to the annual =inance 'ct& The individual partners have also to su!mit an estimate of the advance ta pa#a!le !# each including therein the share of income from the registered firm& -& In the case of an assessee !eing a 3indu undivided famil# which has no mem!er whose total income of

'dvance 7a#ment Of Ta

1/0

the previous #ear is likel# to e ceed the ma imum amount not chargea!le to income-ta in his case please attach declaration(s) to this effect from all mem!ers& /& Item + to !e filled in onl# !# individuals( 3indu undivided families( unregistered firms( other associations of persons or !odies of individuals( whether incorporated or not( referred to in su!-clause (v) of clause (-1) of section + of the Income-ta 'ct( 1)*1( and artificial Duridical persons referred to in su!-clause (vii) of the said clause (-1)& 2& In this =orm( $net agricultural income% shall have the meaning assigned to it in the relevant =inance 'ct& *& 6etails of arithmetical error if an# in the order of the 'ssessing Officer referred to in para + of this =orm( ma# !e anne ed&

0esidential :tatus M :cope of Total Income

1/1

1E2IDENTIA3 2TATU2
?

2COPE O0 TOTA3 INCOME

2ECTION / TO 9
PA1TICU3A12 2ECTION2 2&'pe '7 #'#a+ 4%&'(e/4%&49e%&e '7 #a) / 1e=49e%&e 4% I%94a 6 1,+e= 7' 9e#e (4%4%: #Be e=49e%#4a+ =#a#,= '7 a% 4%94549,a+ 6(1"F 6(6"(a" 1,+e= 7' 9e#e (4%4%: #Be e=49e%#4a+ =#a#,= '7 a% @4%9, U%94549e9 0a(4+6/04 (/ 6(2"F 6(6"(;" A=='&4a#4'% '7 pe ='%/>'96 '7 4%94549,a+ 1,+e= 7' 9e#e (4%4%: #Be e=49e%#4a+ =#a#,= '7 a &'(pa%6 6(3" 1,+e= 7' 9e#e (4%4%: #Be e=49e%#4a+ =#a#,= '7 a%6 '#Be pe ='% 6(4" I%&'(e= 9ee(e9 #' ;e e&e45e9 7 I%&'(e 9ee(e9 #' a&& ,e ' a 4=e 4% I%94a 9 RPe ='%S 9e74%e9 2(31"

T@EO1. DUE2TION
D1 KI(p.L W 4#e a %'#e '% 9e#e (4%a#4'% '7 e=49e%#4a+ =#a#,= '7 a% 4%94549,a+. D2. W 4#e a %'#e '% 9e#e (4%a#4'% '7 e=49e%#4a+ =#a#,= '7 a @4%9, U%94549e9 0a(4+6. D3$ W 4#e a %'#e '% 9e#e (4%a#4'% '7 1e=49e%#4a+ 2#a#,= '7 a 04 (/ A=='&4a#4'% '7 Pe ='%=/>'96 '7 I%94549,a+. D4. W 4#e a %'#e '% 9e#e (4%a#4'% '7 e=49e%#4a+ =#a#,= '7 a C'(pa%6. D/. > 4e7+6 94=&,== #Be p '54=4'%= e+a#4%: #' 9e#e (4%a#4'% '7 e=49e%#4a+ =#a#,= '7 a%6 pe ='% '#Be #Ba% 4%94549,a+F @4%9, U%94549e9 0a(4+6F C'(pa%6F 04 (F A=='&4a#4'% '7 Pe ='%= ' >'96 '7 I%94549,a+. D6. K*. I(p.L W 4#e =B' # %'#e '% 4%&'(e 9ee(e9 #' a&& ,e ' a 4=e 4% I%94a. D7. E)p+a4% 4%&'(e e&e45e9 4% I%94a. D8. E)p+a4% 4%&'(e 9ee(e9 #' ;e e&e45e9 4% I%94a. D9. E)p+a4% #a)a;4+4#6 '7 4%&'(e a&& ,4%:/a 4=4%: a; 'a9 a%9 a+=' e&e45e9 a; 'a9. D10. K*. I(p.L W 4#e a %'#e '% =&'pe '7 #'#a+ 4%&'(e. O W 4#e a %'#e '% #a) 4%&49e%&e 4% &a=e '7 9477e e%# =#a#,=.

0esidential :tatus M :cope of Total Income

1/+

1E2IDENTIA3 2TATU2 AND 2COPE O0 TOTA3 INCOME

De#e (4%a#4'% '7 e=49e%#4a+ =#a#,=J The residential status of a person has to !e determined to ascertain which income is to !e included in computing the total income& The residential status as per the Income-ta 'ct are shown !elow 0<:I6<>TI'A :T'TF: F>6<0 T3< I>.OB< T'G '.T( 1)*1

0<:I6<>T

>O>-0<:I6<>T

0<:I6<>T '>6 O06I>'0IAK 0<:I6<>T

0<:I6<>T ,FT >OT O06I>'0IAK 0<:I6<>T

In the case of an individual( the duration for which he is present in India determines his residential status& ,ased on the time spent !# him( he ma# !e (a) resident and ordinaril# resident( (!) resident !ut not ordinaril# resident( or (c) non-resident& The residential status of a person determines the ta a!ilit# of the income& <&g&( income earned outside India will not !e ta a!le in the hands of a non-resident !ut will !e ta a!le in case of a resident and ordinaril# resident&

1E2IDENTIA3 2TATU2 2ECTION 6

The incidence of ta on an# assessee depends upon his residential status under the 'ct& Therefore( after determining whether a particular amount is capital or revenue in nature( if the receipt is of a revenue nature and chargea!le to ta ( it has to !e seen whether the assessee is lia!le to ta in respect of that income& The ta a!ilit# of a particular receipt would thus depend upon not onl# on the nature of the income and the place of its accrual or receipt !ut also upon the assessee%s residential status& =or all purposes of income-ta ( ta pa#ers are classified into three !road categories on the !asis of their residential status& viE (1) 0esident and ordinaril# resident (+) 0esident !ut not ordinaril# resident (-) >on-resident The residential status of an assessee must !e ascertained with reference to each previous #ear& ' person who is resident and ordinaril# resident in one #ear ma# !ecome non-resident or resident !ut not ordinaril# resident in another #ear or vice versa& The provisions for determining the residential status of assessees areJ

0esidential :tatus M :cope of Total Income

1/-

1E2IDENTIA3 2TATU2 O0 INDI*IDUA32 2ECTION 6(1"/6(6"(a"

Fnder section *(1)( an individual is said to !e resident in India in an# previous #ear( if he satisfies an# one of the following conditionsJ (i) 3e has !een in India during the previous #ear for a total period of 15+ da#s or more( or (ii) 3e has !een in India during the / #ears immediatel# preceding the previous #ear for a total period of -*2 da#s or more and has !een in India for at least *0 da#s in the previous #ear& If the individual satisfies an# one of the conditions mentioned a!ove( he is a resident( otherwise the individual is a non-resident& N'#e$ (a) The term Osta# in IndiaP includes sta# in the territorial waters of India (i&e& 1+ nautical miles into the sea from the Indian coastline)& <ven the sta# in a ship or !oat moored in the territorial waters of India would !e sufficient to make the individual resident in India& (1 nautical mile W 1&1212 miles W 1&52+ Cms)& (!) (c) (d) It is not necessar# that the period of sta# must !e continuous or active nor is it essential that the sta# should !e at the usual place of residence( !usiness or emplo#ment of the individual& =or the purpose of counting the num!er of da#s sta#ed in India( !oth the date of departure as well as the date of arrival are considered to !e in India& The residence of an individual for income-ta purpose has nothing to do with citiEenship( place of !irth or domicile& 'n individual can( therefore( !e resident in more countries than one even though he can have onl# one domicile&

E)&ep#4'%=$ The following categories of individuals will !e treated as residents onl# if the period of their sta# during the relevant previous #ear amounts to 15+ da#s& In other words even if such persons were in India for -*2 da#s during the / preceding #ears and *0 da#s in the relevant previous #ear( the# will not !e treated as resident& (1) (+) Indian citiEens( who leave India in an# previous #ear as a mem!er of the crew of an Indian ship or for purposes of emplo#ment outside India( or Indian citiEen or person of Indian origin] engaged outside India in an emplo#ment or a !usiness or profession or in an# other vocation( who comes on a visit to India in an# previous #ear

] ' person is said to !e of Indian origin if he or either of his parents or either of his grandparents were !orn in undivided India& N'#!' 94%a 4+6 e=49e%# - Onl# individuals and 3F= can !e resident !ut not ordinaril# resident in India& 'll other classes of assessees can !e either a resident or non-resident& ' not ordinaril# resident person is one who satisfies an# one of the conditions specified under section *(*)& (i) (ii) If such individual has !een non-resident in India in an# ) out of the 10 previous #ears preceding the relevant previous #ear( or If such individual has during the 4 previous #ears preceding the relevant previous #ear !een in India for a period of 4+) da#s or less&

0esidential :tatus M :cope of Total Income

1//

N'#e$ In simpler terms( an individual is said to !e a resident and ordinaril# resident if he satisfies !oth the following conditionsJ (i) (ii) 3e is a resident in an# + out of the last 10 #ears preceding the relevant previous #ear( and 3is total sta# in India in the last 4 #ears preceding the relevant previous #ear is 4-0 da#s or more&

If the individual satisfies !oth the conditions mentioned a!ove( he is a resident and ordinaril# resident !ut if onl# one or none of the conditions are satisfied( the individual is a resident !ut not ordinaril# resident& I++,=# a#4'% 1$ :teve Waugh( the 'ustralian cricketer comes to India for 100 da#s ever# #ear& =ind out his residential status for the '&K& +01/-12& 2'+,#4'% =or the purpose of his residential status in India for '&K& +01/-12( the relevant previous #ear is +01--1/& 2#ep 1$ The total sta# of :teve Waugh in the last / #ears preceding the previous #ear is /00 da#s (i&e&100 ^ /) and his sta# in the previous #ear is 100 da#s& Therefore( since he has satisfied the second condition in section *(1)( he is a resident& 2#ep 2$ :ince his total sta# in India in the last 4 #ears preceding the previous #ear is 400 da#s (i&e& 100 ^ 4)( he does not satisf# the minimum re8uirement of 4-0 da#s in 4 #ears& 'n# one of the conditions not !eing satisfied( the individual is resident !ut not ordinaril# resident& Therefore( the residential status of :teve Waugh for the assessment #ear +01/-12 is resident !ut not ordinaril# resident& I++,=# a#4'% 2$ Br& ,( a .anadian citiEen( comes to India for the first time during the 7&K&+00)-10& 6uring the financial #ears +00)-10( +010-11( +011-1+( +01+-1- and +01--1/ he was in India for 22 da#s( *0 da#s( )0 da#s( 120 da#s and 40 da#s respectivel#& 6etermine his residential status for the '&K&+01/-12& 2'+,#4'% 6uring the previous #ear +01--1/( Br& , was in India for 40 da#s and during the / #ears preceding the previous #ear +01--1/( he was in India for -22 da#s (i&e& 22 L *0 L )0 L 120 da#s)& Thus( he does not satisf# section *(1)& Therefore( he is a non-resident for the previous #ear +01--1/& I++,=# a#4'% 3$ Br& .( a Qapanese citiEen left India after a sta# of 10 #ears on 01&0*&+011& 6uring the financial #ear +01+-1-( he comes to India for /* da#s& Aater( he returns to India for 1 #ear on 10&10&+01-& 6etermine his residential status for the '&K& +01/-12& 2'+,#4'% 6uring the previous #ear +01--1/( Br& . was in India for 14- da#s (i&e& ++ L -0 L -1 L -1L +5 L -1 da#s)& 3is sta# in the last / #ears isJ +01+-1- +011-1+ +010-11 +00)-10 /* *+ (i&e& -0 L -1 L 1) -*2 (since he left India on 01&0*&+011 after 10 #ears) -*2 (since he left India on 01&0*&+011 after 10 #ears) 5-5 Br& . is a resident since his sta# in the previous #ear +01--1/ is 14- da#s and in the last / #ears is more than -*2 da#s& =or the purpose of !eing ordinaril# resident( it is evident from the a!ove calculations( that (i) his sta# in the last 4 #ears is more than 4-0 da#s and

0esidential :tatus M :cope of Total Income (ii)

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since he was in India for 10 #ears prior to 01&0*&+011( he was a resident in at least + out of the last 10 #ears preceding the relevant previous #ear&

Therefore( Br& . is a resident and ordinaril# resident for the '&K&+01/-12& I++,=# a#4'% 4$ Br& 6( an Indian citiEen( leaves India on ++&0)&+01- for the first time( to work as an officer of a compan# in =rance& 6etermine his residential status for the '&K& +01/-12& 2'+,#4'% 6uring the previous #ear +01--1/( Br& 6( an Indian citiEen( was in India for 142 da#s (i&e& -0 L -1L -0 L -1 L -1 L ++ da#s)& 3e does not satisf# the minimum criteria of 15+ da#s& 'lso( since he is an Indian citiEen leaving India for the purposes of emplo#ment( the second condition under section *(1) is not applica!le to him& Therefore( Br& 6 is a non-resident for the '&K&+01/-12& I++,=# a#4'% /$ 6etermine residential status of Br& 'tul#a :inghal for the assessment #ear +01/-12( who sta#s in India during various financial #ears asunderJ P e54',= .ea = +01--1/ +01+-1+011-1+ +010-11 +00)-10 +005-0) +004-05 2'+,#4'%$ .ea = +01--1/ +01+-1+011-1+ +010-11 +00)-10 2#a#,= 0esident 0esident >on-resident >on-resident >on-resident +005-0) +004-05 +00*-04 +002-0* +00/-02 +00--0/ >on-resident >on-resident >on-resident >on-resident >on-resident >on-resident 2#a6 100 +00 )1 )0 5) 54 5+ +00*-04 +002-0* +00/-02 +00--0/ +00+-0+001-0+ +000-01 1)))-00 )1 )0 55 5) 5* 54 5) )0

(a) 3e is non-resident in ) out of 10 previous #ears preceding the previous #ear +01--1/& (!) Total sta# in 4 #ears preceding the previous #ear +01--1/ is 4-0 da#s& :ince the assessee is a!le to compl# with at least one of the condition of :ection *(*)(a) as listed !elow( he will !e considered to !e >O0& 1& 3e is %'%! e=49e%# 4% I%94a in at least %4%e 6ea = ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= 6ea = preceding that #ear !een in India for a period of 729 9a6= ' +e==& I++,=# a#4'% 6$ 6etermine residential status of Br& Bukesh :rivasta for the assessment #ear +01/-12( who sta#s in India during various financial #ears asunderJ

0esidential :tatus M :cope of Total Income P e54',= .ea = +01--1/ +01+-1+011-1+ +010-11 +00)-10 +005-0) +004-05 2'+,#4'%$ .ea = +01--1/ +01+-1+011-1+ +010-11 +00)-10 2#a#,= 0esident 0esident >on-resident >on-resident >on-resident +005-0) +004-05 +00*-04 +002-0* +00/-02 +00--0/ >on-resident >on-resident >on-resident >on-resident >on-resident >on-resident 2#a6 42 1)4 )/ 5) )0 5) )1 +00*-04 +002-0* +00/-02 +00--0/ +00+-0+001-0+ +000-01 1)))-00 50 )1 5* 52 5) 4+ *) )+

1/*

(a) 3e is non-resident in ) out of 10 previous #ears preceding the previous #ear +01--1/& (!) Total sta# in 4 #ears preceding the previous #ear +01--1/ is 4-0 da#s or more& :ince the assessee is a!le to compl# with at least one of the condition of section *(*)(a)( he will !e considered to !e >O0& I++,=# a#4'% 7$ Br& :mith an 'merican citiEen has come to India for the first time on 10&04&+00)( as an emplo#ee of a multinational compan#& The particulars of his arrival and departure are as given !elowJ Da#e '7 a 45a+ 10&04&+00) 04&0+&+010 +4&11&+010 +/&10&+011 10&0)&+01+ +0&1+&+01>ot #et returned Da#e '7 9epa #, e 04&05&+00) +4&0-&+010 04&01&+011 -1&1+&+011 0+&01&+011-&0+&+01/

6etermine his residential status for previous #ear +00)-10 to +01--1/& 2'+,#4'%$ P e54',= .ea 2009!10 _Qul# ++( 'ugust 4( =e!ruar# ++( Barch +4` 6a#s of sta# in India are 45( so Br& :mith is non-resident& P e54',= .ea 2010!11 _>ovem!er /( 6ecem!er -1( Qanuar# 4` 6a#s of sta# in India are /+( so Br& :mith is non-resident&

0esidential :tatus M :cope of Total Income P e54',= .ea 2011!12 _Octo!er 5( >ovem!er -0( 6ecem!er -1` 6a#s of sta# in India are *)( so Br& :mith is non-resident& P e54',= .ea 2012!13 _:eptem!er +1( Octo!er -1( >ovem!er -0( 6ecem!er -1( Qanuar# +` 6a#s of sta# in India are 112( so Br& :mith is non-resident& P e54',= .ea 2013!14 _6ecem!er 1+( Qanuar# -1( =e!ruar# 1-` 6a#s of sta# in India are 2*( so Br& :mith is non-resident&

1/4

I++,=# a#4'% 8$ Br& 0aDeev 'rora an 'merican citiEen has come to India for the first time on 01&04&+010 as an e ecutive of a multinational compan#& 3is emplo#er has allowed him to visit F:' ever# #ear and for this purpose he will !e leaving India ever# #ear on 1st >ovem!er and shall come !ack on -1st 6ecem!er( !esides that he has visited 3ong Cong on several occasions in connection with the official work( !ecause he is looking after the emplo#er%s operations in 3ong Cong also( with details asunderJ Da#e '7 +ea54%: I%94a 10&0)&+010 04&0+&+011 11&04&+011 10&0+&+01+ 11&0+&+0101&0+&+01/ Da#e '7 a 454%: 4% I%94a -0&0)&+010 05&02&+011 +1&10&+011 +-&04&+01+ 1+&0*&+0110&0/&+01/

6etermine his residential status for the previous #ears +010-11 to +01--1/& 2'+,#4'%$ P e54',= .ea 2010!11 _Qul# -1( 'ugust -1( :eptem!er 11( Octo!er -1( >ovem!er 1( 6ecem!er 1( Qanuar# -1( =e!ruar# 4` 6a#s of sta# in India are 1// so Br& 0aDeev 'rora is non-resident& P e54',= .ea 2011!12 _Ba# +/( Qune -0( Qul# 11( Octo!er 11( >ovem!er 1( 6ecem!er 1( Qanuar# -1( =e!ruar# 10` 6a#s of sta# in India are 11) so he is non-resident& P e54',= .ea 2012!13 _Qul# )( 'ugust -1( :eptem!er -0( Octo!er -1( >ovem!er 1( 6ecem!er 1( Qanuar# -1( =e!ruar# 11` 6a#s of sta# in India are 1/2 so he is non-resident& P e54',= .ea 2013!14 _Qune 1)( Qul# -1( 'ugust -1( :eptem!er -0( Octo!er -1( >ovem!er 1( 6ecem!er 1( Qanuar# -1( =e!ruar# 1`

0esidential :tatus M :cope of Total Income

1/5

6a#s of sta# in India are 14*& 6uring the preceding / #ears( his sta# is for -*2 da#s or more so he is resident& 3is sta# during 4 #ears is 4+) da#s or less( hence he is resident !ut not ordinaril# resident& I++,=# a#4'% 9$ Br& Aokesh 9ermani and Brs& Aokesh 9ermani are settled outside India and the# came to India on 12&10&+01- on a visit for 4 months& ,oth of them are Indian citiEens& In the earlier #ears the# were in India as followsJ .ea +01+ +01+011 +01+ +010 +011 +00) +010 M . 3'Je=B *e (a%4 +-2 6a#s --0 6a#s >il 115 6a#s M =. 3'Je=B *e (a%4 -*2 6a#s -0 6a#s +5 6a#s 1+0 6a#s

=ind out the residential status of Br& Aokesh 9ermani and Brs& Aokesh 9ermani for the assessment #ear +01/-12& 2'+,#4'%$ ,oth are >0 for the assessment #ear +01/-12 :ta# of Aokesh 9ermani in India P e54',= .ea 2013!14 _14 L -0 L -1 L -1 L +5 L -1` :ta# of Brs& Aokesh 9ermani in India P e54',= .ea 2013!14 _14 L -0 L -1 L -1 L +5 L -1` 1*5 6a#s 1*5 6a#s

:ince the# are covered in special categor# the# will !e resident onl# if their sta# in India in relevant previous #ear is 15+ da#s or more( hence the# are nonresident& I++,=# a#4'% 10$ On 01&0*&+011 Br& Zeen( a Bala#sian citiEen leaves India after sta# of 10 #ears& 6uring the financial #ear +01+-1- he comes to India for a period of /* da#s& Aater( he returns to India for one #ear on 10&10&+01-& 6etermine Zeen%s residential status for the assessment #ear +01/-12& 2'+,#4'%$ >o& of da#s of sta# in India P... 2013!14 _++ L -0 L -1 L -1 L +5 L -1` P... 2012!13 P... 2011!12 _-0 L -1 L 1` P... 2010!11 P... 2009!10 P... 2008!09

14- 6a#s /* 6a#s *+ 6a#s -*2 6a#s -*2 6a#s -*2 6a#s

0esidential :tatus M :cope of Total Income P... 2007!08 P... 2006!07 P... 200/!06 P... 2004!0/ P... 2003!04 -** 6a#s -*2 6a#s -*2 6a#s -*2 6a#s -** 6a#s

1/)

The person is e=49e%# a%9 ' 94%a 4+6 e=49e%#& Br& Zeen was in India for *0 da#s in +01--1/ and for -*2 da#s or more in the / #ears immediatel# preceding the relevant previous #ear and he does not satisf# even a single condition of section *(*)(a)&

1E2IDENTIA3 2TATU2 O0 @U0 2ECTION 6(2"/6(6"(;"

' 3F= would !e resident in India if the control and management of its affairs is situated wholl# or partl# in India& If the control and management of the affairs is situated wholl# outside India it would !ecome a nonresident& The e pression $control and management% referred to under section * refers to the central control and management and not to the carr#ing on of da#-to-da# !usiness !# servants( emplo#ees or agents& The !usiness ma# !e done from outside India and #et its control and management ma# !e wholl# within India& Therefore( control and management of a !usiness is said to !e situated at a place where the head and !rain of the adventure is situated& The place of control ma# !e different from the usual place of running the !usiness and sometimes even the registered office of the assessee& This is !ecause the control and management of a !usiness need not necessaril# !e done from the place of !usiness or from the registered office of the assessee& ,ut control and management do impl# the functioning of the controlling and directing power at a particular place with some degree of permanence& If the 3F= is resident( then the status of the Carta determines whether it is resident and ordinaril# resident or resident !ut not ordinaril# resident& If the karta is resident and ordinaril# resident( then the 3F= is resident and ordinaril# resident and if the karta is resident !ut not ordinaril# resident( then 3F= is resident !ut not ordinaril# resident& I++,=# a#4'% 11$ The !usiness of a 3F= is transacted from 'ustralia and all the polic# decisions are taken there& Br& <( the karta of the 3F=( who was !orn in Colkata( visits India during the 7&K&+01--1/ after 12 #ears& 3e comes to India on 01&0/&+01- and leaves for 'ustralia on 01&1+&+01-& 6etermine the residential status of Br& < and the 3F= for '&K& +01/-12& 2'+,#4'% (a) 6uring the 7&K&+01--1/( Br& < has sta#ed in India for +/2 da#s (i&e& -0 L -1 L -0 L -1 L -1 L -0 L -1 L -0 L 1 da#s)& Therefore( he is a resident& 3owever( since he has come to India after 12 #ears( he cannot satisf# an# of the conditions for !eing ordinaril# resident& Therefore( the residential status of Br& < for the 7&K&+01--1/ is resident !ut not ordinaril# resident& (!) :ince the !usiness of the 3F= is transacted from 'ustralia and nothing is mentioned regarding its control and management( it is assumed that the control and management is also wholl# outside India& Therefore( the 3F= is a non-resident for the 7&K& +01--1/&

0esidential :tatus M :cope of Total Income

120

I++,=# a#4'% 12$ Carta of one 3indu Fndivided =amil# comes to India ever# #ear for minimum *0 da#s and ma imum )1 da#s& 6etermine residential status of the 3indu Fndivided =amil# and also that of the Carta for the assessment #ear +01/-12& 2'+,#4'%$ 3indu Fndivided =amil# is resident since the Carta has come to India for at least *0 da#s !ut the sta# of Carta during seven #ears can !e ma imum *-4 da#s hence 3indu Fndivided =amil# shall !e considered to !e resident !ut not ordinaril# resident& Carta in his individual capacit# is non-resident !ecause he cannot compl# with even one of the two !asic conditions& I++,=# a#4'% 13$ One 3indu Fndivided =amil# is !eing managed partl# from Bum!ai and partl# from >epal& 6heeraD :ingh (a foreign citiEen)( Carta of 3indu Fndivided =amil#( comes on a visit to India ever# #ear since 1)51 in month of 'pril for 102 da#s& 6etermine residential status of the 3indu Fndivided =amil# and also that of the Carta in his individual capacit# for the assessment #ear +01/-12& 2'+,#4'%$ =or the previous #ear +01--1/( the control and management of the affairs of 3indu Fndivided =amil# is !eing partl# managed from India& 3ence 3indu Fndivided =amil# is resident !ut Br& 6heeraD :ingh cannot compl# with an# of the conditions of section *(*)(!)( hence 3indu Fndivided =amil# is resident and ordinaril# resident& Carta shall !e considered to !e resident and ordinaril# resident !ecause his sta# during 4 #ears is 4-2 da#s& 'lso( he will not !e non-resident in nine #ears out of ten #ears preceding the relevant previous #ear&

1E2IDENTIA3 2TATU2 O0 0I1M2 AND A22OCIATION O0 PE12ON2 2ECTION 6(2"

' firm and an 'O7 would !e resident in India if the control and management of its affairs is situated wholl# or partl# in India& Where the control and management of the affairs is situated wholl# outside India( the firm and 'O7 would !ecome a non-resident&

1E2IDENTIA3 2TATU2 O0 COMPANIE2 2ECTION 6(3"

' compan# is said to !e resident in India if (i) it is an Indian compan# as defined under section +(+*)( or (ii) its control and management is situated wholl# in India during the accounting #ear& Thus( ever# Indian compan# is resident in India irrespective of the fact whether the control and management of its affairs is e ercised from India or outside& ,ut a compan#( other than an Indian compan#( would !ecome resident in India onl# if the entire control and management of its affairs is in India& The control and management of the affairs of compan# are said to !e e ercised from the place where the director%s meetings (not shareholders% meetings) are held( decisions taken and directions issued&

0esidential :tatus M :cope of Total Income

121

I++,=# a#4'% 14$ Wipro Atd& an Indian compan# has most of its !usiness outside India& 6etermine its residential status& 2'+,#4'%$ 'n Indian compan# shall alwa#s !e considered to !e resident in India& I++,=# a#4'% 1/$ 'fcon Infrastructure Atd& is a Qapanese compan#( !ut it is !eing controlled from India& 6etermine its residential status for the assessment #ear +01/-12& 2'+,#4'%$ =oreign compan# shall !e resident in India onl# if its control and management is wholl# in India& 3ence( 'fcon infrastructure Atd& is resident compan#& I++,=# a#4'% 16$ ,ista Atd&( a foreign compan#( has made prescri!ed arrangements for declaration and pa#ment of dividend within India in accordance with section 1)/& ,ista Atd& carries on maDorit# of its operations and decision making activities from .alcutta and 'ssam !ut some part of operational activities and few decisions are !eing taken from the place at which registered office of ,ista Atd& is located( i&e& 6haka& 6etermine its residential status for the assessment #ear +01/-12& 2'+,#4'%$ ,ista Atd& is neither an Indian compan# nor its control and management is wholl# situated in India& ,ista Atd& is( therefore( nonresident in India for the assessment #ear +01/-12&

1E2IDENTIA3 2TATU2 O0 3OCA3 AUT@O1ITIE2 AND A1TI0ICIA3 AU1IDICA3 PE12ON2 2ECTION 6(4"
Aocal authorities and artificial Duridical persons would !e resident in India if the control and management of its affairs is situated wholl# or partl# in India& Where the control and management of the affairs is situated wholl# outside India( the# would !ecome non-residents& N'#e$ In simpler terms( an individual is said to !e a resident and ordinaril# resident if he satisfies !oth the following conditionsJ (i) 3e is a resident in an# + out of the last 10 #ears preceding the relevant previous #ear( and (ii) 3is total sta# in India in the last 4 #ears preceding the relevant previous #ear is 4-0 da#s or more& If the individual satisfies !oth the conditions mentioned a!ove( he is a resident and ordinaril# resident !ut if onl# one or none of the conditions are satisfied( the individual is a resident !ut not ordinaril# resident&

0esidential :tatus M :cope of Total Income

12+

2COPE O0 TOTA3 INCOME 2ECTION 6(/"

:ection 2 provides the scope of total income in terms of the residential status of the assessee !ecause the incidence of ta on an# person depends upon his residential status& The scope of total income of an assessee depends upon the following three important considerationsJ (i) the residential status of the assessee (as discussed earlier)" (ii) the place of accrual or receipt of income( whether actual or deemed" and (iii) the point of time at which the income had accrued to or was received !# or on !ehalf of the assessee& The am!it of total income of the three classes of assessees would !e as followsJ (1" 1e=49e%# a%9 ' 94%a 4+6 e=49e%# ! The total income of a resident assessee would( under section 2(1)( consist ofJ (i) income received or deemed to !e received in India during the previous #ear" (ii) income which accrues or arises or is deemed to accrue or arise in India during the previous #ear" and (iii) income which accrues or arises outside India even if it is not received or !rought into India during the previous #ear& In simpler terms( a resident and ordinaril# resident has to pa# ta on the total income accrued or deemed to accrue( received or deemed to !e received in or outside India& (2" 1e=49e%# ;,# %'# ' 94%a 4+6 e=49e%# Fnder section 2(1)( the computation of total income of resident !ut not ordinaril# resident is the same as in the case of resident and ordinaril# resident stated a!ove e cept for the fact that the income accruing or arising to him outside India is not to !e included in his total income& 3owever( where such income is derived from a !usiness controlled from or profession set up in India( then it must !e included in his total income even though it accrues or arises outside India& (3" N'%! e=49e%# - ' non-resident%s total income under section 2(+) includesJ (i) income received or deemed to !e received in India in the previous #ear" and (ii) income which accrues or arises or is deemed to accrue or arise in India during the previous #ear& N'#e$ 'll assessees( whether resident or not( are chargea!le to ta in respect of their income accrued( arisen( received or deemed to accrue( arise or to !e received in India whereas residents alone are chargea!le to ta in respect of income which accrues or arises outside India& 1e=49e%# a%9 O 94%a 4+6 1e=49e%# Income received1 deemed to !e received1 accrued or arisen1 deemed to accrue or arise in or outside India& 1e=49e%# ;,# N'# O 94%a 4+6 1e=49e%# Income which is received1deemed to !e received1accrued or arisen1 deemed to accrue or arise in India& a%9 Income which accrues or arises outside India !eing derived from a !usiness controlled from or profession set up in India& N'%!1e=49e%# Income received1deemed to !e received1 accrued or arisen1 deemed to accrue or arise in India&

0esidential :tatus M :cope of Total Income

12-

DEEMED 1ECEIPT AND ACC1UA3 O0 INCOME IN INDIA

Mea%4%: '7 I%&'(e 9ee(e9 #' a&& ,e ' a 4=e 4% I%94a K2e&#4'% 9L TBe 7'++'84%: 4%&'(e= =Ba++ ;e 9ee(e9 #' a&& ,e ' a 4=e 4% I%94a$ U 1& 'll incomes accruing or arising( whether directl# or indirectl#( through or from an# ;,=4%e== &'%%e&#4'% in India( or from a%6 p 'pe #6 4% I%94a( or 7 '( a%6 a==e# ' =', &e '7 4%&'(e in India( or through the transfer of a &ap4#a+ a==e# situated in India( i&e& if the source of income is in India( income shall !e accruing1arising in India& If the source is partl# in India and partl# outside India( income shall !e accruing1arising in India onl# to the e tent the source is in India& Example Br& ,haskar 0amamurthi is emplo#ed in 7unDa! >ational ,ank and is posted in 6elhi !ranch on the remuneration of `+2(000 p&m& In this case( his income shall !e deemed to !e accruing1arising in India !ut if he is transferred to the Aondon !ranch w&e&f 01&01&+01/( his income accruing1arising in India shall !e `+(+2(000 i&e& salar# upto -1&1+&+01- and the income which is accruing1arising a!road shall !e `42(000 (i&e& salar# from 01&01&+01/ to -1&0-&+01/) >,=4%e== &'%%e&#4'% If an# person has !usiness in India as well as outside India( it will !e called !usiness connection and in case of such !usiness( the income of the !usiness deemed to accrue or arise in India shall !e onl# such part of the income as is reasona!l# attri!uta!le to the operations carried out in India& De#e (4%a#4'% '7 4%&'(e 4% #Be &a=e '7 %'%! e=49e%#= 1,+e 10 In an# case in which the 'ssessing Officer is of opinion that the actual amount of the income accruing or arising to an# non-resident person whether directl# or indirectl#( from an# !usiness connection in India or from an# propert# in India or from an# asset or source of income in India or from an# mone# lent at interest cannot !e definitel# ascertained( the amount of such income for the purposes of assessment to income-ta ma# !e calculatedJX (i) at such percentage of the turnover as the 'ssessing Officer ma# consider to !e reasona!le( or (ii) on an# amount which !ears the same proportion to the total profits and gains of the !usiness of such person( as the receipts so accruing or arising !ear to the total receipts of the !usiness or (iii) in such other manner as the 'ssessing Officer ma# deem suita!le& P>,=4%e== &'%%e&#4'%Q shall also include an# !usiness activit# carried out through a person who acting on !ehalf of the non-resident(X (a) ha!ituall# e ercises in India( an a,#B' 4#6 #' &'%&+,9e &'%# a&#= '% ;eBa+7 '7 #Be %'%! e=49e%# ( !ut if his activities are limited to the purchase of goods or merchandise for the non-resident( it will not !e considered to !e !usiness connection& (!) ha!ituall# (a4%#a4%= 4% I%94a a =#'&J '7 :''9= from which he regularl# delivers goods on !ehalf of the non-resident or (c) ha!ituall# =e&, e= ' 9e = 4% I%94a( for the non-resident& There is %' ;,=4%e== &'%%e&#4'% 4% #Be 7'++'84%: #B ee &a=e=$

0esidential :tatus M :cope of Total Income

12/

(4" In the case of a non-resident( no income shall !e deemed to accrue or arise in India to him from operations which are &'%74%e9 #' #Be p, &Ba=e '7 :''9= 4% I%94a 7' #Be p, p'=e '7 e)p' #& Example Br& 'shok QhunDhunwala a non-resident has one shop in >ew Kork for selling Indian read#made garments and all these garment are purchased from India& In this case( there is no !usiness connection& 3owever( if assessee is carr#ing out an# other activit# in India( it will !e considered to !e !usiness connection& Example If in the a!ove case the assessee has manufacturing unit in India( it will !e considered to !e a !usiness connection& (44" In the case of a non-resident( !eing a person engaged in the ;,=4%e== '7 ,%%4%: a %e8= a:e%&6 ' '7 p,;+4=B4%: %e8=pape =F (a:aV4%e= ' <', %a+= ( no income shall !e deemed to accrue or arise in India to him from activities which are confined to the collection of news and views in India for transmission out of India& (444" In the case of a non-resident( !eingJ (a) an individual who is not a citiEen of India or (!) a firm which does not have an# partner who is a citiEen of India or who is resident in India or (c) a compan# which does not have an# shareholder who is a citiEen of India or who is resident in India& >o income shall !e deemed to accrue or arise in India to such individual( firm or compan# from 'pe a#4'%= 8B4&B a e &'%74%e9 #' #Be =B''#4%: '7 a%6 &4%e(a#': apB 74+( 4% I%94a. >a e%9 a P a=a9 1a6 5. ITO K1981L 129 IT1 29/ (2C" The e pression $!usiness% does not necessaril# mean onl# trade or manufacture rather it will include profession( vocation and calling& In the conte t in which the e pression $!usiness connection% is used in section )(1)( there is no warrant for giving a restricted meaning to it e cluding $professional% connection( from its scope& 2. If an# person is holding shares of an# Indian compan#( an# capital gain on transfer of such shares shall !e considered to !e income accruing1arising in India even if shares were sold outside India& 'n asset or a capital asset !eing an# share or interest in a compan# or entit# registered or incorporated outside India shall !e deemed to !e situated in India( if the share or interest derives( directl# or indirectl#( its value su!stantiall# from the assets located in India& (the amendment is to overrule the Dudgement in 9odafone case)& 3. Income which falls under the head O:alariesP( if it is earned in India& :alar# income pa#a!le for the rest period or leave period which is preceded and succeeded !# services rendered in India and forms part of the service contract of emplo#ment( shall !e regarded as income earned in India& 4. Income chargea!le under the head O:alariesP pa#a!le !# the ;overnment to a citiEen of India for services outside India& Example Br& 'nil 7ra!hakar is citiEen of India and is an I=:& 3e is posted in Indian em!ass# in F:'( in this case( his salar# income shall !e accruing1arising in India& (3owever under section 10(4)( allowances and per8uisites to such person are e empt from ta &) /. ' dividend paid !# an Indian compan# outside India&

0esidential :tatus M :cope of Total Income

122

(3owever( dividends received from a domestic compan# shall !e e empt from income ta in the hands of the shareholder under section 10(-/)( !ut the domestic compan# has to pa# additional income ta V 12R plus surcharge V 2R plus education cess V +R plus :3<. V 1R ( as per section 112O&) 6. Income !# wa# of 4%#e e=# pa#a!le !#X (a" the G'5e %(e%# Example If .entral ;overnment has taken a loan from an agenc# in F:'( e8uivalent to Indian `1(000 lakh V 10R( in this case( interest of `100 lakhs paid !# the ;overnment to such agenc# shall !e considered to !e the income of such agenc# accruing1arising in India& (;" a person who is a e=49e%#( e cept where the interest is pa#a!le in respect of an# mone#s !orrowed and used( for the purposes of a !usiness or profession carried on !# such person outside India or for the purposes of making or earning an# income from an# source outside India& Example ',. Atd& an Indian compan# has taken a loan from an agenc# in F:' and the amount was utilised in F:'& In this case( interest income shall !e accruing1arising in F:'& (&" a person who is a %'%! e=49e%#( where the interest is pa#a!le in respect of an# mone#s !orrowed and used( for the purposes of a ;,=4%e== ' p '7e==4'% &a 4e9 '% ;6 =,&B pe ='% 4% I%94a& Example Z Atd& a non-resident compan# has taken a loan from outside India and loan amount was utilised in India in house propert#& In this case( interest income shall !e accruing1arising a!road& 7. Income !# wa# of '6a+#6 pa#a!le !#X (a) the G'5e %(e%# or (!) a person who is a e=49e%# ' %'%! e=49e%#( e cept where the ro#alt# is pa#a!le in respect of an# right etc& utilised for the purposes of making or earning an# income from a%6 =', &e ',#=49e I%94a& 8. Income !# wa# of fees for #e&B%4&a+ =e 54&e= pa#a!le !#X (a) the G'5e %(e%# or (!) a person who is a e=49e%# ' %'%! e=49e%#( e cept where the fees are pa#a!le in respect of services utilised outside India for the purposes of earning an# income from an# source outside India& =ees for Technical :ervices means an# consideration for the rendering of Banagerial( Technical or .onsultanc# :ervices& If an# income is accruing and arising in India relating to ro#alt# or technical fees etc&( it will !e ta a!le in India in case of non-resident even if the non-resident do not have an# Territorial >e us with India i&e& such non-resident do not have a residence or place of !usiness or !usiness connection in India and also the nonresident has not rendered services in India&

0esidential :tatus M :cope of Total Income

12*

INCOME 1ECEI*ED IN INDIA

'll assessees are lia!le to ta in respect of the income received or deemed to !e received !# them in India during the previous #ear& The receipt of income refers to onl# the first occasion when the recipient gets the mone# under his control& Therefore( when once an amount is received as income( remittance or transmission of that amount from one place or person to another does not constitute receipt of income in the hands of the su!se8uent recipient or at the place of su!se8uent receipt& Example Br& 0avi 7uliani has one house in F:' and rent has !een received directl# in India& It will !e considered to !e income received in India and it is chargea!le to ta in case of all the three status( !ut if Br& 0avi 7uliani has one !ank account with ,ank of 'merica( >ew Kork and rent has !een deposited in that account and su!se8uentl# the !ank has transferred the amount to Br& 0avi 7uliani in India( it will !e considered to !e income received outside India( !ecause income has alread# !een received outside India and su!se8uentl# it was remitted to India& :imilarl#( if Br& 0avi 7uliani has income from agriculture in >epal and it was deposited in the !ranch of an Indian !ank in >epal( su!se8uentl# the amount was remitted in India( it will !e considered to !e income received outside India&

MEANING O0 INCOME DEEMED TO >E 1ECEI*ED IN INDIA 2ECTION 7

Fnder section 4( the following shall !e deemed to !e received !# the assessee during the previous #ear irrespective of whether he had actuall# received the same or not (i) The annual accretion in the previous #ear to the !alance to the credit of an emplo#ee participating in a recognised provident fund (07=)& Thus( the contri!ution of the emplo#er in e cess of 1+R of salar# or interest credited in e cess of )&2R p&a& is deemed to !e received !# the assessee& The ta a!le transferred !alance from unrecogniEed to recogniEed provident fund (!eing the emplo#er%s contri!ution and interest thereon)& The contri!ution made !# the .entral ;overnment or an# other emplo#er in the previous #ear to the account of an emplo#ee under a pension scheme referred to under section 50..6&

(ii) (iii)

I++,=# a#4'% 17$ Brs& G is a citiEen of India and is emplo#ed in ',. Atd& in India and is getting salar# of `20(000 p&m& and she was transferred out of India w&e&f 01&0)&+01- and for this purpose she left India on 01&0)&+01- for the first time and she visited India from +4&1+&+01- to 04&01&+01/ and her salar# for the month of 6ec% +01- was received in India& <mplo#er and emplo#ee !oth have contri!uted V 1-R (each) of salar# to the recogniEed provident fund and during the #ear interest of `20(000 was credited to the recogniEed provident fund V 10R p&a& .ompute her total income and ta lia!ilit# in India for assessment #ear +01/-12& (!) 7resume she was transferred w&e&f 01&11&+01- and she left India on 01&11&+01- for the first time& 2'+,#4'%$ In this case( Brs& G is covered in special categor# and her sta# in India is less than 15+ da#s hence she will !e non-resident and her incomes ta a!le in India shall !e `

0esidential :tatus M :cope of Total Income Income accruing1arising in India 20(000 2 Income received in India 20(000 1 Income deemed to !e received in India <mplo#er contri!ution (20(000 1+) 1R (1-R - 1+R) Interest in e cess of )&2R 20(000 110R 0&2R W +(200 Interest on emplo#er contri!ution +(200 1+ (Interest on emplo#ee contri!ution i&e& `1(+20 shall !e ta a!le under the head Other :ources) ;ross :alar# Income under the head :alar# Income under the head Other :ources ;ross Total Income AessJ 6eduction u1s 50. .ontri!ution to recogniEed provident fund (20(000 1+) 1-R Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `+(-0(200 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, N'#e$ >o re!ate is allowed under section 54' !ecause assessee is a >on-resident&

124 +(20(000&00 20(000&00

*(000&00

1(+20&00

-(04(+20&00 -(04(+20&00 1(+20&00 -(05(200&00 45(000&00 +(-0(200&00 -(020&00 *1&00 -0&20 -(1/1&20 -(1/0&00

2'+,#4'% (;"$ In this case( Brs& G is covered in special categor# and her sta# in India is more than 15+ da#s hence she will !e 0O0 and her incomes ta a!le in India shall !e ` Income accruing1arising in India -(20(000&00 20(000 4 Income received in India 20(000&00 20(000 1 Income accruing1arising a!road 1 received a!road +(00(000&00 20(000 / Income deemed to !e received in India <mplo#er contri!ution (20(000 1+) 1R (1-R - 1+R) Interest in e cess of )&2R 20(000 110R 0&2R W +(200 Interest on emplo#er contri!ution 1(+20&00 *(000&00

0esidential :tatus M :cope of Total Income +(200 1+ (Interest on emplo#ee contri!ution i&e& `1(+20 shall !e ta a!le under the head Other :ources) ;ross :alar# Income under the head :alar# Income under the head Other :ources ;ross Total Income AessJ 6eduction u1s 50. .ontri!ution to recogniEed provident fund (20(000 1+) 1-R Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `2(-0(200 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55,

125

*(04(+20&00 *(04(+20&00 1(+20&00 *(05(200&00 45(000&00 2(-0(200&00 -*(100&00 4++&00 -*1&00 -4(15-&00 -4(150&00

INCOME ACC1UING/A1I2ING A>1OAD AND 1ECEI*ED A>1OAD

A= pe =e&#4'% /( if an# income is accruing1arising a!road and is also received a!road( such income shall !e e empt in case of non-resident and in case of not ordinaril# resident& ,ut resident and ordinaril# resident has to pa# ta on such income in India& If there is an# income from a ;,=4%e== which is outside India !ut is &'%# '++e9 7 '( I%94a( income shall !e ta a!le in case of resident and ordinaril# resident and also in case of not ordinaril# resident !ut non-resident shall !e e empt& :imilarl#( if the income is from a p '7e==4'% which was =e# ,p 4% I%94a( income shall !e ta a!le in case of resident and ordinaril# resident and also in case of not ordinaril# resident !ut non-resident shall !e e empt& 7rofession set up in India means that it was originall# setup in India and su!se8uentl# there was an e pansion outside India& A%6 pa=# ,%#a)e9 p '74#= =Ba++ %'# ;e &'%=49e e9 #' ;e #Be 4%&'(e '7 #Be &, e%# 6ea 4% a%6 =#a#,= 4.e. 1O1F NO1F N1. Example Br& 0ohit :olanki had income of `-(00(000 in the #ear +010-11 !ut he has not disclosed the income& It was detected in the previous #ear +01--1/& In this case( it will not !e considered to !e income of +01--1/ in an# status( rather it will !e considered to !e income of the #ear +010-11& I++,=# a#4'% 18$ Br& 'kash Tanwar has income asunderJ 1& +& -& /& 3e has income from a !usiness in ;erman# amounting to `-(00(000 and half of it was received in India& 3e has interest income of `1(00(000 from FC 6evelopment ,ond and entire interest income was credited to a !ank account in FC& :u!se8uentl#( the amount was transferred in India& 3e has a !usiness in ,om!a# and entire income of `-(00(000 was received in FC& 3e has one house propert# in ;haEia!ad and income of `2(00(000 was received in FC&

0esidential :tatus M :cope of Total Income 2&

12)

3e has received salar# income of `2(00(000 (computed) in India and half of the services were rendered in FC and half in India&

(7resume all the a!ove incomes are computed incomes) .ompute his income presuming that he is >O0( >0 and 0O0& 2'+,#4'%$ 1O1 1(20(000 1(20(000 1(00(000 -(00(000 2(00(000 2(00(000 17F00F000 NO1 1(20(000 N1 1(20(000

1& Income received in India Income accruing1arising a!road and received a!road +& Income accruing1arising a!road and received a!road -& Income accruing1arising in India /& Income accruing1arising in India 2& Income received in India T'#a+

-(00(000 2(00(000 2(00(000 14F/0F000

-(00(000 2(00(000 2(00(000 14F/0F000 ` *0(000 )(00(000 -0(000 20(000 -(00(000 4(00(000 +(00(000 20(000 +0(000 5(000 )0(000 50(000 +0(000 *0(000 1(00(000

I++,=# a#4'% 19$ Br& >ishant Churana earns the following income during the financial #ear +01--1/J (1) (+) (-) (/) (2) (*) (4) (5) ()) Income from house propert# in Aondon( received in India 7rofits from !usiness in Qapan and managed from there (received in Qapan) 6ividend from foreign compan#( received in India 6ividend from Indian compan#( received in <ngland 7rofits from !usiness in Cen#a( controlled from India( 7rofits received in Cen#a 7rofits from !usiness in 6elhi( managed from Qapan .apital gains on transfer of shares of Indian companies( sold in F:' and gains were received there 7ension from former emplo#er in India( received in Qapan 7rofits from !usiness in 7akistan( deposited in !ank there

(10) 7rofit on sale of asset in India !ut received in Aondon (11) 7ast unta ed profits of FC !usiness of +01+-1- !rought into India in +01--1/ (1+) Interest on ;overnment securities accrued in India !ut received in 7aris (1-) Interest on F:' ;overnment securities( received in India (1/) :alar# earned in ,om!a#( !ut received in FC (12) Income from propert# in 7aris( received there

0esidential :tatus M :cope of Total Income (7resume all the a!ove incomes are computed incomes)

1*0

6etermine the gross total income of Br& >ishant Churana if he is (i) resident and ordinaril# resident( resident !ut not ordinaril# resident( non-resident in India during the financial #ear +01--1/& 2'+,#4'%$ 1O1 *0(000 )(00(000 -0(000 X -(00(000 4(00(000 +(00(000 20(000 +0(000 5(000 X 50(000 +0(000 *0(000 1(00(000 2/F28F000 NO1 *0(000 X -0(000 X -(00(000 4(00(000 +(00(000 20(000 X 5(000 X 50(000 +0(000 *0(000 X 1/F08F000 N1 *0(000 X -0(000 X X 4(00(000 +(00(000 20(000 X 5(000 X 50(000 +0(000 *0(000 X 12F08F000

(1) (+) (-) (/) (2) (*) (4) (5) ()) (10 ) (11 ) (1+ ) (1) (1/ ) (12 )

Income received in India Income accruing1arising and received outside India Income received in India Income accruing in India !ut e empt under section 10(-/) Income accruing1arising and received outside India( !ut !usiness controlled from India Income accruing1arising in India Income accruing1arising in India Income accruing1arising in India Income accruing1arising and received outside India Income accruing1arising in India 7ast unta ed profits Income accruing1arising in India Income received in India Income accruing1arising in India Income accruing1arising and received outside India G '== T'#a+ I%&'(e

I++,=# a#4'% 20$ Aensel Optics 7vt& Atd&( an Indian compan# has an income of `-0 lakhs from a !usiness in India& This compan# has a !usiness income of `1+ lakhs from outside India& Out of which 4 lakhs were received in India and !alance outside India& .ompute ta lia!ilit# of the Indian compan# for the assessment #ear +01/-12& 2'+,#4'%$ Income from !usiness in India Income from outside India Income under the head ,usiness17rofession ;ross Total Income AessJ 6eductions u1s 50. to 50F Total Income Computation of Tax Liability Ta on `/+(00(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# ` -0(00(000 1+(00(000 /+(00(000 /+(00(000 >il /+(00(000

1+(*0(000 +2(+00 1+(*00

0esidential :tatus M :cope of Total Income 1+()4(500

1*1

Note: Indian compan# is alwa#s considered to !e resident in India and its incomes even earned and received outside India shall !e chargea!le to ta in India& I++,=# a#4'% 21$ .isco :#stems partnership firm has an income of `- lakhs in India and income accruing1arising a!road and also received a!road `+- lakhs& It consists of two partners& Br& TaDender :ingh who is an active partner( is sta#ing outside India throughout the #ear& Br& 9irender :ingh is a dormant partner and is sta#ing in India throughout the #ear& .ompute ta lia!ilit# of the partnership firm in India for the assessment #ear +01/-12& (!) 'lso compute ta lia!ilit# of the firm if Br& 9irender :ingh is also an active partner& 2'+,#4'%$ (a) 7artnership firm is non-resident Income from !usiness1profession in India ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Ta V -0R L <ducation cess V +R L :3<. V 1R (!) 7artnership firm is resident Income from !usiness1profession ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Ta V -0R L <ducation cess V +R L :3<. V 1R I++,=# a#4'% 22$ 'shish had following income during the previous #ear ended -1st Barch( +01/J (1) :alar# received in India for three months (!eing computed income) (+) Income from house propert# in India (-) Interest on savings !ank deposit in :,I( in India (/) 'mount !rought into India out of the past-unta ed profits earned in ;erman# (2) Income from !usiness in ,angladesh( !eing controlled from India (*) 6ividends received in ,elgium from =rench companies( out of which `+(200 were remitted to India Kou are re8uired to compute his gross total income for the assessment #ear +01/-12( if he is a (a) resident and ordinaril# resident" (!) not ordinaril# resident" and (c) non-resident& 7resume all the a!ove income is computed income& 2'+,#4'%$ ` -(00(000 -(00(000 >il -(00(000 )+(400 +*(00(000 +*(00(000 >il +*(00(000 5(0-(/00 ` +2(000 15(000 /(000 +0(200 1+(2/+ +-(120

0esidential :tatus M :cope of Total Income 1O1 +2(000 15(000 /(000 X NO1 +2(000 15(000 /(000 X

1*+ N1 +2(000 15(000 /(000 X X X 47F000

(1) :alar# received in India Ta a!le on receipt !asis (+) Income from house propert# in India Income accruing1arising in India (-) Interest on savings !ank deposit in :,I( in India Income accruing1arising in India (/) 7ast unta ed profits !rought in India >ot an income of the previous #ear +01--1/ hence not ta a!le (2) Income from !usiness in ,angladesh !eing controlled from India >ot ta a!le in case of non resident (*) 6ividend received in ,elgium Income accrued M received outside India G '== T'#a+ I%&'(e

1+(2/+ 1+(2/+ +-(120 82F692 X /9F/42

I++,=# a#4'% 23$ 3emant Cumar( a foreign citiEen (not !eing a person of Indian origin) came to India for the first time on +nd 6ecem!er( +01- for a visit of +10 da#s& 3emant Cumar had the following income during the previous #ear ended -1st Barch( +01/J ` (1) :alar# (computed) received in India for three months (+) Income from house propert# in Aondon (received there) (-) 'mount !rought into India out of the past-unta ed profits earned in ;erman# (/) Income from agriculture in :ri Aanka( received and invested there (2) Income from !usiness in >epal( !eing controlled from India (*) Income from house propert# in F:' received in F:' (`4*(000 is used in .anada for meeting the educational e penses of 3emant%s daughter and ` 10(000 is later on remitted in India) Kou are re8uired to compute his total income for the assessment #ear +01/-12& 2'+,#4'%$ 3emant Cumar is a foreign citiEen& 3e was in India during the previous #ear +01--1/ for 1+0 (-0 L -1 L +5 L -1) da#s& Thus( he does not satisf# the first condition of 15+ da#s& The second condition is also not satisfied as 3emant Cumar came to India for first time during the previous #ear +01--1/& 3emant Cumar is therefore nonresident in India& The total income of 3emant Cumar for the assessment #ear +01/-12 will !eJ ` (1) :alar# (computed) received in India for three months Ta a!le on receipt !asis (+) Income from house propert# in Aondon (received there) >ot ta a!le as income is accruing M arising outside India and is also received outside India 1(00(000 X 1(00(000 +(42(+00 50(000 1+(-00 -2(000

5*(000

0esidential :tatus M :cope of Total Income (-) 'mount !rought in India out of the past unta ed-profits earned in ;erman# >ot ta a!le as it is not income (/) Income from agriculture in :ri Aanka !eing invested there Income accrued and received outside India (2) Income from !usiness in >epal( !eing controlled from India >ot ta a!le in the case of non- resident (*) Income from house propert# in F:' received in F:' (` 4*(000 is used in .anada or meeting the educational e penses of 3emant%s daughter and ` 10(000 is later on received in India) Income accrued and received outside India ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income I++,=# a#4'% 24$ Br& 9ineet T#agi earns the following incomes during the financial #ear +01--1/& (1) 7rofits from a !usiness in Qapan( controlled from India( (half of the profits received in India) (+) Income from propert# in ,om!a#( received in FC (-) Income from a propert# in F:'( received there !ut su!se8uentl# remitted to India (/) Income from propert# in F:'( received there (`20(000 remitted in India) (2) :alar# received in India for services rendered in F:' (*) Income from profession in 7aris( which was set up in India( received in 7aris (4) Interest from deposit with an Indian compan#( received in Qapan (5) Income from profession in ,om!a# received in 7aris ()) 7rofits of !usiness in Iran( deposited in a !ank there( !usiness controlled from India (out of `/(00(000( ` 1(00(000 is remitted in India) (10) Interest on ;erman development !onds( half of which is received in India

1*X X

X 1(00(000 >il 1(00(000 ` /0(000 40(000 +(00(000 50(000 20(000 50(000 )(000 -0(000 /(00(000 10(000

(11) Income from propert# in .anada( one-fifth is received in India 20(000 (7resume all the a!ove incomes are computed income i&e& all the e emptions and deductions have alread# !een allowed) 6etermine the gross total income of Br& 9ineet T#agi if he is (i) resident and ordinaril# resident( (ii) resident !ut not ordinaril# resident( (iii) non-resident in India during the financial #ear +01--1/& 2'+,#4'%$ 1O1 NO1 N1

0esidential :tatus M :cope of Total Income (1) Income accruing1arising outside India from a !usiness controlled in India( half of the income received in India (+) Income accruing1arising in India (-) Income accruing1arising outside India and received outside India (/) Income accruing1arising outside India and received outside India (2) Income received in India (*) Income accruing1arising and received outside India( !ut profession set up in India (4) Income accruing1arising in India (5) Income accruing1arising in India ()) Income accruing1arising outside India and received outside India( !ut !usiness controlled from India (10) Income accruing1arising outside India( half received outside India and half in India (11) Income accruing1arising outside India( /12th received outside India and 112th in India G '== T'#a+ I%&'(e /0(000 40(000 +(00(000 50(000 20(000 50(000 )(000 -0(000 /(00(0 00 10(000 20(000 10F19F000 /0(000 40(000 X X 20(000 50(000 )(000 -0(000 /(00(000 2(000 10(000 6F94F000

1*/ +0(000 40(000 X X 20(000 X )(000 -0(000 X 2(000 10(000 1F94F000

I++,=# a#4'% 2/$ 6etermine the ta a!ilit# of the following incomes in the hands of a resident and ordinaril# resident( resident !ut not ordinaril# resident( and non-resident for the '&K& +01/-12 Pa #4&,+a = (1) Interest on FC 6evelopment ,onds( 20R of interest received in India (+) Income from a !usiness in .hennai (20R is received in India) (-) 7rofits on sale of shares of an Indian compan# received in Aondon (/) 6ividend from ,ritish compan# received in Aondon (2) 7rofits on sale of plant at ;erman# 20R of profits are received in India (*) Income earned from !usiness in ;erman# which is controlled from 6elhi (`/0(000 is received in India) (4) 7rofits from a !usiness in 6elhi !ut managed entirel# from Aondon (5) Income from propert# in Aondon deposited in a Indian ,ank at Aondon( !rought to India ()) Interest for de!entures in an Indian compan# received in Aondon& (10) =ees for technical services rendered in India !ut received in Aondon (11) 7rofits from a !usiness in ,om!a# managed from Aondon (1+) 7ension for services rendered in India !ut received in ,urma (1-) Income from propert# situated in 7akistan received there (1/) 7ast foreign unta ed income !rought to India during the previous #ear (12) Income from agricultural land in >epal received there and then !rought to India (1*) Income from profession in Cen#a which was set up in India( received there !ut spent in India (14) ;ift received on the occasion of his wedding (15) Interest on savings !ank deposit in :tate ,ank of India (1)) Income from a !usiness in 0ussia( controlled from 0ussia (+0) 6ividend from 0eliance 7etroleum Aimited( an Indian .ompan# (+1) 'gricultural income from a land in 0aDasthan 2'+,#4'%$ C'(p,#a#4'% '7 G '== T'#a+ I%&'(e 7' #Be A...2014!1/ Pa #4&,+a = 1e=49e%# a%9 1e=49e%# ;,# %'# ' 94%a 4+6 e=49e%# ' 94%a 4+6 e=49e%# N'% e=49e%# A(',%# (` " 10(000 +0(000 +0(000 2(000 /0(000 40(000 12(000 20(000 1+(000 5(000 +*(000 /(000 1*(000 2(000 15(000 2(000 +0(000 10(000 +0(000 2(000 12(000

0esidential :tatus M :cope of Total Income (1) Interest on FC 6evelopment ,onds( 20R of interest received in India (+) Income from a !usiness in .hennai (20R is received in India) (-) 7rofits on sale of shares of an Indian compan# received in Aondon (/) 6ividend from ,ritish compan# received in Aondon (2) 7rofits on sale of plant at ;erman# 20R of profits are received in India (*) Income earned from !usiness in ;erman# which is controlled from 6elhi( out of which `/0(000 is received in India (4) 7rofits from a !usiness in 6elhi !ut managed entirel# from Aondon (5) Income from propert# in Aondon deposited in a ,ank at Aondon( later on remitted to India ()) Interest for de!entures in an Indian compan# received in Aondon& (10) =ees for technical services rendered in India !ut received in Aondon (11) 7rofits from a !usiness in ,om!a# managed from Aondon (1+) 7ension for services rendered in India !ut received in ,urma (1-) Income from propert# situated in 7akistan received there (1/) 7ast foreign unta ed income !rought to India during the previous #ear (12) Income from agricultural land in >epal received there and then !rought to India (1*) Income from profession in Cen#a which was set up in India( received there !ut spent in India (14) ;ift received on the occasion of his wedding ?not an income@ (15) Interest on savings !ank deposit in :tate ,ank of India (1)) Income from a !usiness in 0ussia( controlled from 0ussia (+0) 6ividend from 0eliance 7etroleum Aimited( an Indian .ompan# ?it is e empt u1s 10(-/)@ (+1) 'gricultural income from a land in 0aDasthan ?it is e empt u1s 10(1)@ G '== T'#a+ I%&'(e ` 10(000 +0(000 +0(000 2(000 /0(000 40(000 12(000 20(000 1+(000 5(000 +*(000 /(000 1*(000 15(000 2(000 10(000 +0(000 -(/)(000 ` 2(000 +0(000 +0(000 +0(000 40(000 12(000 1+(000 5(000 +*(000 /(000 2(000 10(000 +(12(000

1*2 ` 2(000 +0(000 +0(000 +0(000 /0(000 12(000 1+(000 5(000 +*(000 /(000 10(000 1(50(000

0esidential :tatus M :cope of Total Income

1**

P1ACTICE P1O>3EM2
TOTA3 P1O>3EM2 24
P ';+e( 1 TO 10 6etermine residential status of Br& >aresh Qindal for the assessment #ear +01/-12( who sta#s in India during various financial #ears asunderJ P e54',= 1 2 3 4 / 6 7 8 9 10 .ea = +01--1/ *2 15151 *) -00 40 4+ )2 150 )+01+-1)1 )0 54 110 )4 )) )/ )+ )1 )0 +011-1+ 1)0 45 )5 )1 1010/ 101 100 )) 50 +010-11 5) 1+0 15) 1)* 110 )5 )4 )* )2 )0 +00)-10 54 )1 )+ ))/ )2 )/ ))+ 100 +005-0) 5* )) )+ )2 )) 100 101 100 )) )0 +004-05 5/ ** ))/ -** +10 +0) +05 +04 50 +00*-04 102 +10 )1 )X 0 )1 )+ )1 )0 +002-0* 110 110 )+ )+ -*+ -00 +00 100 X 100 +00/-02 11+ )/ ))1 10 )) 55 44 ** 110 +00--0/ 100 )* )1 )0 -10 100 )) )+ )/ 1+0 +00+-0)1 1)) )0 5) +10 )+ )/ )* )5 1-0 +001-0+ )/ 51 5) 5 )+ 50 40 *0 20 100 +000-01 )4 5+ 55 54 55 22 *2 42 52 50 1)))-00 )) 554 5* 5/ /0 20 *0 40 *0 A%=8e M (1) 0O0" (+) 0O0" (-) 0O0" (/) 0O0" (2) 0O0" (*) >O0" (4) 0O0" (5) 0O0" ()) 0O0" (10) >0 P ';+e( 11. Br& 'ndrew( a citiEen of F:'( has come to India for the first time on 01&04&+00)& The particulars of his arrival and departure are as given !elowJ Da#e '7 a 45a+ 01&04&+00) +4&0-&+010 10&0)&+010 01&01&+01+ 01&0+&+0111&0+&+01/ 6etermine his residential status for various #ears& A%=8e M +00)-10 >on-0esident (>0) Da#e '7 9epa #, e 11&1+&+00) +1&04&+010 01&0-&+011 +-&0)&+01+ 01&04&+01XX

0esidential :tatus M :cope of Total Income +010-11 0esident !ut not ordinaril# resident (>O0) +011-1+ 0esident !ut not ordinaril# resident (>O0) +01+-1- 0esident !ut not ordinaril# resident (>O0) +01--1/ 0esident and ordinaril# resident (0O0)

1*4

P ';+e( 12. Br& 6aniel( a citiEen of F&C&( has come to India for the first time on 01&04&+00)& The particulars of his arrival and departure are as given !elowJ Da#e '7 a 45a+ 01&04&+00) 01&01&+010 11&04&+010 10&0+&+011 01&01&+01+ 11&0-&+01+4&0-&+01/ 6etermine his residential status for various #ears& A%=8e M +00)-10 >on-0esident (>0) +010-11 >on-0esident (>0) +011-1+ >on-0esident (>0) +01+-1- 0esident !ut not ordinaril# resident (>O0) +01--1/ 0esident !ut not ordinaril# resident (>O0) P ';+e( 13. Br& Banmohan :harma goes out of India ever# #ear for +4/ da#s& 6etermine his residential status for the previous #ear +01--1/& A%=8e M 0esident !ut not ordinaril# resident (>O0) P ';+e( 14. Br& 0isha! 7atil( a citiEen of Qapan( has come to India for the first time on 01&10&+01- for +00 da#s& 6etermine his residential status for the assessment #ear +01/-12& A%=8e M 0esident !ut not ordinaril# resident (>O0) P ';+e( 1/. Br& Batthew( a citiEen of F&C& came to India for the first time on 01&04&+00- in connection with his emplo#ment& 3e left India on 01&11&+01+ for taking up a Do! in F:'& 3e again came to India on 01&01&+01/ on a visit and left India on 01&0-&+01/& 6etermine his residential status for the assessment #ear +01/-12& A%=8e M 0esident and ordinaril# resident (0O0) P ';+e( 16. Br& 9ikas ,edi( a citiEen of India( is emplo#ed in :oliton Technologies( an Indian compan#& 3is emplo#er has transferred him to his !ranch in Qapan& Br& 9ikas ,edi left India on +)&0)&+01- for his new posting in Qapan& Da#e '7 9epa #, e 04&0)&+00) 05&0-&+010 +0&0)&+010 0)&02&+011 +0&02&+01+ +1&0*&+01XX

0esidential :tatus M :cope of Total Income 6etermine his residential status for the assessment #ear +01/-12&

1*5

7rior to this( Br& 9ikas ,edi was posted outside India for 11 months in the previous #ear +005-0) and for 10&2 months in the #ear +00/-02& A%=8e M 0esident and ordinaril# resident (0O0) P ';+e( 17. Br& :ameer Channa( a ;erman citiEen( came to India on +-&02&+01+ and left India on -0&02&+01-& 6etermine his residential status for the assessment #ear +01--1/( +01/-12& A%=8e M 'ssessment Kear +01--1/J 0esident !ut not ordinaril# resident (>O0) 'ssessment Kear +01/-12J >on- 0esident (>0)

P ';+e( 18. 6r& 0edd#%s Aa!s is an Indian compan# and has !orrowed funds from !ank of 'merica( >ew Kork for investing it in one of its proDects in F:'& In this case( interest paid !# 6r& 0edd#%s Aa!s to !ank of 'merica shall !e accruing1arising UUUUUUUUUU& A%=8e M Outside India P ';+e( 19. .alculate ta a!le income of an individual on the !asis of the following informations( for the assessment #ear +01/-12( if he isJ (a) Ordinaril# 0esident (!) >ot Ordinaril# 0esident" and (c) >on-0esident (i) 7rofit from !usiness in Qapan received in India& (ii) Income from agriculture in 7akistan it is all spent on the education of children there (iii) Income accrued in India !ut received in <ngland (iv) Income from house propert# in 7akistan deposited in a !ank there ` 10(000 2(000 10(000 +(000

(v) 7rofits of !usiness in 'merica deposited in a !ank there& This !usiness is controlled from India 20(000 (vi) 7rofits earned from !usiness in Beerut (vii) 7ast unta ed foreign income !rought into India during the previous #ear (7resume that all the incomes are computed incomes) A%=8e $ Ta a!le IncomeJ 0esident and ordinaril# resident (0O0)J `5)(000" 0esident !ut not ordinaril# resident (>O0) J `5+(000" >on-0esident (>0) J `-+(000 1+(000 10(000

0esidential :tatus M :cope of Total Income P ';+e( 20. Br& '!hishek earns the following income during the previous #ear +01--1/& .ompute his gross total income for assessment #ear +01/-12 if he is (i) resident and ordinaril# resident& (ii) resident !ut not ordinaril# resident& (iii) non-resident& (1) (+) (-) (/) (2) (*) (4) (5) Income from agricultural land in ,hutan received there and remitted to India later on 6ividend from foreign compan#( received in India 7ension for service rendered in India( !ut received in 7aris 7ast unta ed profits of +01+-1- !rought into India in +01--1/ 7rofits from !usiness in 7aris( deposited in !ank there 7rofits from !usiness in .anada( controlled from India( profits received there Interest on saving !ank deposit in 7unDa! >ational ,ank( in India .apital gain on sale of a house in 6elhi( amount received in 7aris 0esident and ordinaril# resident (0O0)J `*(00(000 0esident !ut not ordinaril# resident (>O0)J `/(*0(000 >on-0esident (>0)J `+(52(000

1*)

` /0(000 20(000 12(000 20(000 1(00(000 1(42(000 +0(000 +(00(000

A%=8e $

P ';+e( 21. Br& ,riD Bohan earns the following income during the previous #ear +01--1/& .ompute his ;ross total income for assessment #ear +01/-12 if he is (i) resident and ordinaril# resident& (ii) resident !ut not ordinaril# resident& (iii) non-resident& (1) (+) (-) (/) (2) 6ividend from an Indian compan#( received in Qapan 7rofit on sale of machiner# in India( !ut received in Qapan 7rofits from !usiness in ,om!a#( managed from Qapan 7rofits from !usiness in Qapan( managed from there( received there Income from house propert# in India ` *0(000 1(+0(000 +(+2(000 1(/2(000 1(20(000

0esidential :tatus M :cope of Total Income (*) (4) (5) ()) Income from propert# in Qapan and received there Income from agriculture in Qapan !eing invested there =ees for technical services rendered in India !ut received in Qapan Interest on ;overnment securities accrued in India !ut received in Qapan

140 1(20(000 42(000 *2(000 50(000 /0(000

(10) Interest on Qapan ;overnment securities( received in India (7resume that all the incomes are computed incomes) A%=8e $ 0esident and ordinaril# resident (0O0)J `10(20(000 0esident !ut not ordinaril# resident (>O0)J `*(50(000 >on-0esident (>0)J `*(50(000

P ';+e( 22. Br& 'shish ,hatia earns the following incomes during the financial #ear +01--1/& (1) (+) (-) (/) (2) (*) (4) (5) ()) 7rofits from a !usiness in Qapan( controlled from India( half of the profits received in India Income from agriculture in >epal( !rought to India Income u1h house propert# in ,om!a#( received in FC Income u1h house propert# in F:'( received there !ut su!se8uentl# remitted to India Income u1h house propert# in F:'( received there (`20(000 remitted in India) :alar# received in India for services rendered in F:' Income from profession in 7aris( which was set up in India( received in 7aris Interest from deposit with an Indian compan#( received in Qapan Income from profession in ,om!a# received in 7aris

` *0(000 10(000 1(40(000 +(+0(000 1(00(000 *0(000 )0(000 1)(000 -)(000 /(50(000 1+(000 20(000

(10) 7rofits of !usiness in Iran( deposited in a !ank there( !usiness controlled from India (out of `/(50(000( ` 1(00(000 is remitted in India) (11) Interest on ;erman development !onds( half of which is received in India (1+) Income under the head house propert# in .anada( one-fifth is received in India

(7resume all the a!ove incomes are computed income i&e& all the e emptions and deductions have alread# !een allowed) 6etermine the gross total income of Br& 'shish ,hatia if he is (i) resident and ordinaril# resident( (ii) resident !ut not ordinaril# resident(

0esidential :tatus M :cope of Total Income (iii) non-resident in India during the financial #ear +01--1/& A%=8e $ 0esident and ordinaril# resident (0O0)J `1-(10(000 0esident !ut not ordinaril# resident (>O0)J `)(-/(000 >on-0esident (>0)J `-(-/(000

141

P ';+e( 23. Br& G is a citiEen of India and is emplo#ed in ',. Atd and is getting a salar# of `*0(000 p&m& 3e purchased one !uilding in India on 1st Ba#( +01- for `10(00(000 and its market value is `++(00(000 and value for the purpose of charging stamp dut# is `1-(00(000& 3e purchased gold for `5(00(000 and its market value is `11(00(000& 3e was transferred out of India w&e&f& 1st :ept( +01- and he left India on 1st :ept(+01- and one of his friend gifted him one colour T9 on this occasion( market value `1(00(000& 3e has gone out of India in earlier #ears also& 7&K& +01+-17&K& +011-1+ 100 da#s +00 da#s

3e visited India from 01&0+&+01/ to 1/&0+&+01/ and salar# for Qanuar#( +01/ was received in India& 3e has taken a loan from outside India on 01&01&+01/ and amount was invested in shares of an Indian .ompan# and received dividend of `-0(000 outside India& 3e has purchased one house propert# in F:' in 6ecem!er +01- and sold in Barch +01/ and there were short term capital gain of `*(00(000 and the amount was received in F:'& .ompute his ta lia!ilit# for the '&K&+01/-12& A%=8e $ Ta Aia!ilit#J `1(+2(**0 P ';+e( 24. Brs& G is emplo#ed in ',. Atd in India and she is an 'merican citiEen and is getting a salar# of `+(00(000 p&m& :he purchased shares of a foreign .ompan# on 01&04&+01- and received dividend of `-(00(000 on 01&05&+01- in India and again dividend of `+(00(000 on 01&0-&+01/ in F:'& :he received gift of one painting in India from her friend on 01&04&+01- and its market value is `/)(000 and she also received gift in cash of `/)(000 from the same friend and gift of immova!le propert# with value for the purpose of charging stamp dut# is `21(000 from the same friend& :he purchased FC 6evelopment !ond and interest e8uivalent of `+(00(000 was received in F:'& :he visited F:' for 15+ da#s during 7&K&+01--1/& In the earlier #ear her sta# in India was 7&K& +01+-17&K& +011-1+ 7&K& +010-11 7&K& +00)-10 7&K& +005-0) 7&K& +004-05 7&K& +00*-04 110 da#s 1+0 da#s -00 da#s 15+ da#s 152 da#s +00 da#s -00 da#s

.ompute her ta lia!ilit# in India for the '&K& +01/-12&

0esidential :tatus M :cope of Total Income A%=8e $ Ta Aia!ilit#J `4()5(2*0

14+

2O3UTION2
TO

P1ACTICE P1O>3EM2
2'+,#4'% 1$ +01--1/ 0esident +01+-1- 0esident +011-1+ 0esident +010-11 >on-0esident +00)-10 0esident +005-0) 0esident +004-05 0esident +00*-04 0esident +002-0* 0esident +00/-02 0esident +00--0/ 0esident Total sta# in 4 #ears preceding the relevant previous #ear is 4-+ da#s& :ince the assessee is not a!le to compl# with an# of the conditions of section *(*)(a)( as listed !elow( he will !e considered to !e 0O0& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less& 2'+,#4'% 2$ +01--1/ 0esident +01+-1- 0esident +011-1+ 0esident +010-11 0esident +00)-10 0esident +005-0) 0esident +004-05 0esident +00*-04 0esident +002-0* 0esident +00/-02 0esident +00--0/ 0esident

0esidential :tatus M :cope of Total Income Total sta# in 4 #ears preceding the relevant previous #ear is 42/ da#s&

14-

:ince the assessee is not a!le to compl# with an# of the conditions of section *(*)(a)( as listed !elow( he will !e considered to !e 0O0& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less& 2'+,#4'% 3$ +01--1/ 0esident +01+-1- 0esident +011-1+ 0esident +010-11 0esident +00)-10 0esident +005-0) 0esident +004-05 0esident +00*-04 0esident +002-0* >on-0esident +00/-02 >on-0esident +00--0/ >on-0esident Total sta# in 4 #ears preceding the relevant previous #ear is 4/+ da#s& :ince the assessee is not a!le to compl# with an# of the conditions of section *(*)(a)( as listed !elow( he will !e considered to !e 0O0& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less& 2'+,#4'% 4$ +01--1/ 0esident +01+-1- 0esident +011-1+ 0esident +010-11 0esident +00)-10 0esident +005-0) 0esident +004-05 0esident +00*-04 >on-0esident +002-0* >on-0esident +00/-02 >on-0esident +00--0/ >on-0esident Total sta# in 4 #ears preceding the relevant previous #ear is 44+ da#s& :ince the assessee is not a!le to compl# with an# of the conditions of section *(*)(a)( as listed !elow( he will !e considered to !e 0O0& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear&

0esidential :tatus M :cope of Total Income or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less& 2'+,#4'% /$ +01--1/ 0esident +01+-1- 0esident +011-1+ 0esident +010-11 0esident +00)-10 0esident +005-0) 0esident +004-05 0esident +00*-04 >on-0esident +002-0* 0esident +00/-02 >on-0esident +00--0/ 0esident Total sta# in 4 #ears preceding the relevant previous #ear is 5*) da#s&

14/

:ince the assessee is not a!le to compl# with an# of the conditions of section *(*)(a)( as listed !elow( he will !e considered to !e 0O0& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less& 2'+,#4'% 6$ +01--1/ 0esident +01+-1- 0esident +011-1+ 0esident +010-11 0esident +00)-10 0esident +005-0) 0esident +004-05 0esident +00*-04 >on-0esident +002-0* 0esident +00/-02 >on-0esident +00--0/ >on-0esident Total sta# in 4 #ears preceding the relevant previous #ear is 40* da#s& :ince the assessee is a!le to compl# with an# of the conditions of section *(*)(a)( as listed !elow( he will !e considered to !e >O0& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less& 2'+,#4'% 7$ +01--1/ 0esident +01+-1- 0esident

0esidential :tatus M :cope of Total Income +011-1+ +010-11 +00)-10 +005-0) +004-05 +00*-04 +002-0* +00/-02 +00--0/ 0esident 0esident 0esident 0esident 0esident 0esident 0esident >on-0esident >on-0esident

142

Total sta# in 4 #ears preceding the relevant previous #ear is 454 da#s& :ince the assessee is not a!le to compl# with an# of the conditions of section *(*)(a)( as listed !elow( he will !e considered to !e 0O0& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less& 2'+,#4'% 8$ +01--1/ 0esident +01+-1- 0esident +011-1+ 0esident +010-11 0esident +00)-10 0esident +005-0) 0esident +004-05 0esident +00*-04 0esident +002-0* >on-0esident +00/-02 >on-0esident +00--0/ >on-0esident Total sta# in 4 #ears preceding the relevant previous #ear is 451 da#s& :ince the assessee is not a!le to compl# with an# of the conditions of section *(*)(a)( as listed !elow( he will !e considered to !e 0O0& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less& 2'+,#4'% 9$ +01--1/ 0esident +01+-1- 0esident +011-1+ 0esident +010-11 0esident +00)-10 0esident +005-0) >on-0esident +004-05 0esident +00*-04 >on-0esident +002-0* >on-0esident

0esidential :tatus M :cope of Total Income +00/-02 >on-0esident +00--0/ >on-0esident Total sta# in 4 #ears preceding the relevant previous #ear is 44/ da#s&

14*

:ince the assessee is not a!le to compl# with an# of the conditions of section *(*)(a)( as listed !elow( he will !e considered to !e 0O0& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less& 2'+,#4'% 10$ Br& >aresh Qindal is in India for *0 da#s or more in +01--1/ !ut for less than -*2 da#s in / #ears immediatel# preceding +01--1/( so he is non-resident in +01--1/& 2'+,#4'% 11$ :ta# of Br& 'ndrew in various #ears is as given !elow& I% P... 2009!10 _Qul# -1( 'ugust -1( :eptem!er -0( Octo!er -1( >ovem!er -0( 6ecem!er 11( Barch 2` 6a#s of sta# in India are 1*)( so Br& 'ndrew is non-resident& I% P... 2010!11 _'pril -0( Ba# -1( Qune -0( Qul# +1( :eptem!er +1( Octo!er -1( >ovem!er -0( 6ecem!er -1( Qanuar# -1( =e!ruar# +5( Barch 1` 6a#s of sta# in India are +52& :o( he is resident and also he is non-resident in at least ) #ears out of 10 #ears preceding the relevant previous #ear( hence he is >O0& I% P... 2011!12 _Qanuar# -1( =e!ruar# +)( Barch -1` 6a#s of sta# in India are )1& :o( he is resident and also he is non-resident in at least ) #ears out of 10 #ears preceding the relevant previous #ear( hence he is >O0& I% P... 2012!13 _'pril -0( Ba# -1( Qune -0( Qul# -1( 'ugust -1( :eptem!er +-( =e!ruar# +5( Barch -1` 6a#s of sta# in India are +-2& :o( he is resident and also his sta# during seven #ears preceding the relevant previous #ear is 4+) da#s or less( hence he is >O0& I% P... 2013!14 _'pril -0( Ba# -1( Qune -0( Qul# 1( =e!ruar# 15( Barch -1` 6a#s of sta# in India are 1/1 and during the previous / #ears his sta# is for -*2 da#s or more so he is resident and also he is 0O0 !ecause he is not a!le to fulfil an# of the conditions of section *(*)(a)& i&e& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less&

0esidential :tatus M :cope of Total Income 3ence he is 0O0 & 2'+,#4'% 12$ I% P... 2009!10 _Qul# -1( 'ugust -1( :eptem!er 4( Qanuar# -1( =e!ruar# +5( Barch 5` 6a#s of sta# in India are 1-*( so Br& 6aniel is non-resident& I% P... 2010!11 _Qul# +1( 'ugust -1( :eptem!er +0( =e!ruar# 1)( Barch -1` 6a#s of sta# in India are 1++( so( he is non-resident& I% P... 2011!12 _'pril -0( Ba# )( Qanuar# -1( =e!ruar# +)( Barch -1` 6a#s of sta# in India are 1-0( so( he is non-resident& I% P... 2012!13 _'pril -0( Ba# +0( Barch +1`

144

6a#s of sta# in India are 41 and also he sta#s for -*2 da#s or more during / #ears preceding the relevant previous #ear and also he is a!le to compl# with at least one of the conditions of section *(*)(a) as given !elow& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less& 3ence he is >O0& I% P... 2013!14 _'pril -0( Ba# -1( Qune +1( Barch 2` 6a#s of sta# in India are 54 and during the previous / #ears his sta# is more than -*2 da#s& :o he is resident !ut not ordinaril# resident !ecause he is a!le to fulfill at least one of the two condition given u1s *(*)(a)& 2'+,#4'% 13$ :ince he is out of India ever# #ear for +4/ da#s so his da#s of sta# in India are In +01--1/ In +01+-1In +011-1+ In +010-11 In +00)-10 )1 6a#s )1 6a#s )+ 6a#s )1 6a#s )1 6a#s

:o his sta# in India during the seven #ears immediatel# preceding the relevant previous #ear is less than 4+)

0esidential :tatus M :cope of Total Income da#s( so he is resident !ut not ordinaril# resident& 2'+,#4'% 14$ 6a#s of sta# in India in 7&K& +01--1/ are 15+& _Octo!er -1( >ovem!er -0( 6ecem!er -1( Qanuar# -1( =e!ruar# +5( Barch -1`

145

:o he is resident and also he will !e a!le to compl# with at least one of the conditions of section *(*)(a) as given !elow& 1& 3e is %'% e=49e%# 4% I%94a in at least %4%e ',# '7 #e% p e54',= 6ea = preceding that #ear& or +& 3e has 9, 4%: #Be =e5e% p e54',= #ears preceding that #ear !een in India for a period of 4+) da#s or less& 3ence he is >O0& 2'+,#4'% 1/$ 3is da#s of sta# in India are as under I% P... 2003!04 +42 da#s _Qul# -1( 'ugust -1( :eptem!er -0( Octo!er -1( >ovem!er -0( 6ecem!er -1( Qanuar# -1( =e!ruar# +)( Barch -1` I% P... 2004!0/ I% P... 200/!06 I% P... 2006!07 I% P... 2007!08 I% P... 2008!09 I% P... 2009!10 I% P... 2010!11 I% P... 2011!12 36/ 36/ 36/ 366 36/ 36/ 36/ 366

I% P... 2012!13 21/ _'pril -0( Ba# -1( Qune -0( Qul# -1( 'ugust -1( :eptem!er -0( Octo!er -1( >ovem!er 1` I% P... 2013!14 *0 _Qanuar# -1( =e!ruar# +5( Barch 1` 3e is resident in +01--1/ !ut he is not a!le to compl# with an# of the conditions of section *(*)(a) hence he is resident and ordinaril# resident& 2'+,#4'% 16$ 3is da#s of sta# in India during +01--1/ are 15+& _'pril -0( Ba# -1( Qune -0( Qul# -1( 'ugust -1( :eptem!er +)`

0esidential :tatus M :cope of Total Income

14)

:o Br& 9ikas ,edi is resident in previous #ear +01--1/ and also he is not a!le to compl# with an# of the conditions of section *(*)(a) hence he will !e considered to !e 0O0& 2'+,#4'% 17$ 3is da#s of sta# in India in #ear +01+-1- are -1-& _Ba# )( Qune -0( Qul# -1( 'ugust -1( :eptem!er -0( Octo!er -1( >ovem!er -0( 6ecem!er -1( Qanuar# -1( =e!ruar# +5( Barch -1` :o he is resident and he is also a!le to compl# with one of the condition of section *(*)(a) hence he will !e considered to !e resident !ut not ordinaril# resident& 3is da#s of sta# in India in +01--1/ are *0& _'pril -0 and Ba# -0` :o he is nonresident in the #ear +01--1/& 2'+,#4'% 18$ It will !e accruing arising a!road !ecause if an# loan has !een taken !# a person resident in India from outside India then interest income shall !e accruing arising in India onl# if such resident has utilised the loan amount in India& 2'+,#4'% 19$ Pa #4&,+a = (i) Income accruing1arising outside India !ut received in India (ii) Income accruing1arising outside India and also received a!road& (iii) Income accruing1arising in India (iv) Income accruing1arising outside India and also received a!road& (v) Income accruing1arising outside India and also received outside India !ut from a !usiness controlled from India (vi) Income accruing1arising in India (vii) 7ast profits Ta)a;+e I%&'(e 2'+,#4'% 20$ Pa #4&,+a = (1) Income accruing1arising outside India and received outside India (+) Income received in India (-) Income accruing1arising in India (/) 7ast profits (2) Income accruing1arising and received outside India (*) Income accruing1arising and received outside India( !ut !usiness controlled from India (4) Income deemed to !e accruing1 arising in India (5) Income deemed to !e accruing1 arising in India G '== T'#a+ I%&'(e 2'+,#4'% 21$ Pa #4&,+a = (1) Income accruing1arising in India !ut e empt u1s 10(-/) 1O1 -------NO1 -------N1 -------1O1 /0(000 20(000 12(000 ------1(00(000 1(42(000 +0(000 +(00(000 6F00F000 NO1 ------20(000 12(000 ------------1(42(000 +0(000 +(00(000 4F60F000 N1 ------20(000 12(000 ------------------+0(000 +(00(000 2F8/F000 1O1 10(000 2(000 10(000 +(000 20(000 1+(000 -------89F000 NO1 10(000 -------10(000 -------20(000 1+(000 ------82F000 N1 10(000 -------10(000 --------------1+(000 -------32F000

0esidential :tatus M :cope of Total Income (+) Income accruing 1arising in India (-) Income accruing1arising in India (/) Income accruing1arising and received outside India (2) Income accruing1arising in India (*) Income accruing1arising outside India and received outside India (4) Income accruing1arising outside India and received outside India (5) Income accruing1arising in India ()) Income accruing1arising in India (10) Income received in India G '== T'#a+ I%&'(e 2'+,#4'% 22$ 1O1 *0(000 10(000 1(40(000 +(+0(000 1(00(000 *0(000 )0(000 1)(000 -)(000 /(50(000 1+(000 20(000 NO1 *0(000 -----1(40(000 ----------*0(000 )0(000 1)(000 -)(000 /(50(000 *(000 10(000 1(+0(000 +(+2(000 1(/2(000 1(20(000 1(20(000 42(000 *2(000 50(000 /0(000 10F/0F000 1(+0(000 +(+2(000 ------1(20(000 ------------*2(000 50(000 /0(000 6F80F000

150 1(+0(000 +(+2(000 ------1(20(000 ------------*2(000 50(000 /0(000 6F80F000

(1) Income accruing1arising outside India from a !usiness controlled in India( half of the income received in India (+) Income accruing1arising outside India and received outside India (-) Income accruing1arising in India (/) Income accruing1arising outside India and received outside India (2) Income accruing1arising outside India and received outside India (*) Income received in India (4) Income accruing1arising and received outside India( !ut profession set up in India (5) Income accruing1arising in India ()) Income accruing1arising in India (10) Income accruing1arising outside India and received outside India( !ut !usiness controlled from India (11) Income accruing1arising outside India( half received outside India and half in India (1+) Income accruing1arising outside India( /12th received outside India and 112th in India G '== T'#a+ I%&'(e

N1 -0(000 -----1(40(000 ----------*0(000 -----1)(000 -)(000 -----*(000 10(000 3F34F000

13F10F000 9F34F000

2'+,#4'% 23$ :ince Br& G is covered in special categor# and will !e resident( if his sta# in India in relevant previous #ear is 15+ da#s or more( hence Br& G is a nonresident as his sta# in India is less than 15+ da#s and his income ta a!le in India shall !e ` I%&'(e ,%9e #Be Bea9 2a+a 6 Income accruing1arising in India -(00(000&00 (*0(000 2) Income received in India *0(000&00 (*0(000 1) ;ross :alar# -(*0(000&00 Income under the head :alar# -(*0(000&00 I%&'(e ,%9e #Be Bea9 O#Be 2', &e= ;ift of gold (`11(00(000 `5(00(000) ;ift of !uilding (`1-(00(000 `10(00(000) Income under the head Other :ources -(00(000&00 -(00(000&00 *(00(000&00

0esidential :tatus M :cope of Total Income ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `)(*0(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# N'#e$ :T.; is received in F:' is not ta a!le in India as the assessee is a non-resident& 2'+,#4'% 24$

151 )(*0(000&00 >il )(*0(000&00 1(++(000&00 +(//0&00 1(++0&00 1(+2(**0&00

In this case( Brs& G sta#s in India for more than 15+ da#s during the previous #ear +01--1/ and also she is not a!le to compl# with an# of the conditions of section *(*)(a)( she will !e considered to !e 0O0& 3er incomes ta a!le in India shall !e ` I%&'(e ,%9e #Be Bea9 2a+a 6 Income accruing1arising in India (+(00(000 1+) ;ross :alar# Income under the head :alar# I%&'(e ,%9e #Be Bea9 O#Be 2', &e= 6ividend from foreign compan# (0eceived in India) ;ift from friend (immova!le propert#) 6ividend from foreign compan# (0eceived in F:') Interest from FC 6evelopment !ond (0eceived in F:') Income under the head Other :ources ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `-1(21(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, +/(00(000&00 +/(00(000&00 +/(00(000&00 -(00(000&00 21(000&00 +(00(000&00 +(00(000&00 4(21(000&00 -1(21(000&00 >il -1(21(000&00 4(42(-00&00 12(20*&00 4(42-&00 4()5(22)&00 4()5(2*0&00

0esidential :tatus M :cope of Total Income

15+

EXAMINATION DUE2TION2
PCC MA. - 2012
D,e=#4'% 3 (4 Ma J=" 6iscuss the correctness or otherwise of the statement OIncome deemed to accrue or arise in India to a nonresident !# wa# of interest( ro#alt# and fees for technical services is to !e ta ed irrespective of territorial ne usP& A%=8e $ 's per section )( if an# income is accruing and arising in India relating to ro#alt# or technical fees etc&( it will !e ta a!le in India in case of non-resident even if the non-resident do not have an# Territorial >e us with India i&e& such non-resident do not have a residence or place of !usiness or !usiness connection in India and also the non-resident has not rendered services in India& <&g& If :uEuki Incorporation of Qapan a nonresident compan# has provided technical know-how in India to Baruti Fd#og Aimited( an Indian compan# in ;urgaon and has received `-00(00(000 in this case( such income is deemed to !e accruing1arising in India and is ta a!le in India even if :uEuki Incorporation do not have an# Territorial >e us with India i&e& the compan# do not have place of residence or place of !usiness in India&

IPCC NO* - 2011

D,e=#4'% 6 (4 Ma J=" ,rett Aee( an 'ustralian cricket pla#er visits India for 100 da#s in ever# financial #ear& This has !een his practice for the past 10 financial #ears& =ind out his residential status for the assessment #ear +01/-+012& A%=8e $ 'n individual is said to !e resident in India in an# previous #ear( if he complies with at least one of the following conditionsJ(a) 3e is in India in that #ear for a period amounting in all to 15+ da#s or more( or (!) 3e is in India in that #ear for a period amounting in all to *0 da#s or more and also for -*2 da#s or more during four #ears preceding the relevant previous #ear& :ince( ,rett Aee has complied with the second condition hence he is resident& =urther more( an individual shall !e considered to !e not ordinaril# resident in India in case his sta# in India is 4+) da#s or less during preceding seven #ears or he is non-resident in atleast ) #ears during preceding 10 #ears& :ince sta# of ,rett Aee during preceding seven #ears is 400 da#s& 3ence( he is >O0&

PCC NO* - 2011

D,e=#4'% / (/ Ma J=" Br& 6avid (.itiEen of India) a ;overnment emplo#ee serving in the Binistr# of < ternal 'ffairs left India for the first time on -1&0-&+01- due to his transfer to Indian 3igh .ommission in .anada& 3e did not visit an# time during previous #ear +01--1/& 3e has received the following income for the 7revious Kear +01-1/& `

0esidential :tatus M :cope of Total Income (i) :alar# (ii) Interest on fi ed deposit from !ank in India (iii) Income from agriculture in 7akistan (iv) Income from house propert# in 7akistan

152(00(000 1(00(000 +(00(000 +(20(000

.ompute his gross total income for 'ssessment Kear +01/-12& (Bodified) A%=8e $ Br& 6avid is a non-resident in the previous #ear +01--1/ as he doesn%t come to India during the #ear& C'(p,#a#4'% '7 G '== #'#a+ 4%&'(e '7 M . Da549 7' A... 2014!1/ ` I%&'(e ,%9e #Be Bea9 2a+a 6 :alar# income _Ta a!le as it is deemed to !e earned in India u1s )` 2(00(000 Income under the head :alar# 2(00(000 I%&'(e ,%9e #Be Bea9 O#Be 2', &e= Interest on =60 Income from agriculture in 7akistan (assumed to !e received outside India) Income under the head Other :ources I%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 Income from house propert# in 7akistan (assumed to !e received outside India) G '== T'#a+ I%&'(e 1(00(000 >il 1(00(000 >il 6F00F000

IPCC MA. - 2011

D,e=#4'% 2 (4 Ma J=" Biss 9ivitha paid a sum of 2000 F:6 to Br& Culasekhara( a management consultant practicing in .olom!o( specialiEing in proDect financing& The pa#ment was made in .olom!o& Br& Culasekhara is a non-resident& The consultanc# related to a proDect in India with possi!le .e#lonese colla!oration& Is this pa#ment chargea!le to ta in India in the hands of Br& Culasekhara( since the services were used in IndiaY A%=8e $ ' non-resident is chargea!le to ta in respect of income received outside India onl# if such income accrues or arises or is deemed to accrue or arise to him in India& The income deemed to accrue or arise in India under section ) comprises( inter alia( income !# wa# of fees for technical services( which includes an# consideration for rendering of an# managerial( technical or consultanc# services& Therefore( pa#ment to a management consultant relating to proDect financing is covered within the scope of Ofees for technical servicesP& Income !# wa# of fees for technical services( from services utiliEed in India would !e deemed to accrue or arise in India in case of a non-resident and !e included in his total income( whether or not such services were rendered in India& In the instant case( since the services were utiliEed in India( the pa#ment received !# Br& Culasekhara( a non-resident( in .olom!o is chargea!le to ta in his hands in India( as it is deemed to accrue or arise in India& (inter alia means in addition to)

0esidential :tatus M :cope of Total Income

15/

PCC NO* - 2010

D,e=#4'% 1 (/ Ma J=" Br& 0am an Indian citiEen left India on ++&0)&+01- for the first time to work as an officer of a compan# in ;erman#& 6etermine the residential status of 0am for the assessment #ear +01/-12 and e plain the conditions to !e fulfilled for the same under the Income-ta 'ct( 1)*1& (Bodified) A%=8e . Fnder section *(1)( an individual is said to !e resident in India in an# previous #ear if he satisfies an# one of the following conditions (i) 3e has !een in India during the previous #ear for a total period of 15+ da#s or more( or (ii) 3e has !een in India during the / #ears immediatel# preceding the previous #ear for a total period of -*2 da#s or more and has !een in India for atleast *0 da#s in the previous #ear& In the case of Indian citiEens leaving India for emplo#ment( the period of sta# during the previous #ear must !e 15+ da#s instead of *0 da#s given in (ii) a!ove& 6uring the previous #ear +01--1/( Br& 0am( an Indian citiEen( was in India for 142 da#s onl# (i&e& -0 L -1 L -0 L -1 L -1 L ++ da#s)& Thereafter( he left India for emplo#ment purposes& :ince he does not satisf# the minimum criteria of 15+ da#s( he is a non-resident for the '&K& +01/-12&

IPCC MA. - 2010

D,e=#4'% 3 (10 Ma J=" =rom the following particulars of Income furnished !# Br& 'nirudh pertaining to the #ear ended -1&0-&+01/( compute the total income for the assessment #ear +01/-12( if he isJ (i) 0esident and ordinar# resident" (ii) 0esident !ut not ordinar# resident" (iii) >on-residentJ Pa #4&,+a = (a) 7rofit on sale of shares in Indian .ompan# received in ;erman# (!) 6ividend from a Qapanese .ompan# received in Qapan (c) Income from !usiness in Aondon deposited in a !ank in Aondon( later on remitted to India through approved !anking channels (d) 6ividend from 07 Atd&( an Indian .ompan# A(',%# (`" 12(000 10(000 42(000 *(000

(e) 'gricultural income from lands in ;uDarat +2(000 A%=8e . (Bodified) C'(p,#a#4'% '7 T'#a+ I%&'(e '7 M . A%4 ,9B 7' #Be A... 2014!1/ Pa #4&,+a = 1e=49e%# ? 1e=49e%# ;,# N'%! ' 94%a 4+6 %'# ' 94%a 4+6 1e=49e%# e=49e%# e=49e%# a) 7rofit on sale of shares of an Indian compan#( received in 12(000 12(000 12(000 ;erman# !) 6ividend from a Qapanese compan#( received in Qapan& 10(000 -

0esidential :tatus M :cope of Total Income c) Income from !usiness in Aondon deposited in a !ank in Aondon d) 6ividend from 07 Atd&( an Indian .ompan# ?:ee >ote (i) !elow@ e) 'gricultural income from land in ;uDarat ?:ee >ote (ii) !elow@ TOT'A I>.OB< N'#e= (4" 6ividend from Indian compan# is e empt under section 10(-/) (44" 'gricultural income is e empt under section 10(1)& 42(000 1(00(000 12(000

152 12(000

PCC MA. - 2010

D,e=#4'% 1 (2 Ma J= ea&B" 'nswer the following with reasons having regard to the provisions of the Income-Ta 'ct( 1)*1 for the 'ssessment Kear +01/-12J (4" :tate the :cope of total income in the case of an individual( whose residential status is $non-resident% with reference to section 2(+) of the 'ct& (44" Br& G a citiEen of India received salar# from the ;overnment of India for the services rendered outside India& Is the salar# income chargea!le to ta Y A%=8e . (4" The scope of total income of a non-resident as per section 2(+) includes following incomesJ (i) an# income which is received or is deemed to !e received in India during the relevant previous #ear !# or on !ehalf of such person" or (ii) an# income which accrues or arises or is deemed to accrue or arise to him in India during the relevant previous #ear& (44" 's per :ection )( salaries pa#a!le !# the ;overnment to a citiEen of India for services rendered outside India is deemed to accrue or arise in India& 3ence( salar# received !# Br& G( a citiEen of India( from the ;overnment of India for services rendered outside India is chargea!le to ta under the head $:alaries%&

PCC NO* - 2009

D,e=#4'% 4 (7 Ma J=" 6etermine the ta a!ilit# of income of F: !ased compan# 3eli Atd&( in India on entering following transactions during the financial #ear +01--1/J (i) `2 lacs received from an Indian domestic compan# for providing technical know how in India& (ii) `* lacs from an Indian firm for conducting the feasi!ilit# stud# for the new proDect in =inland& (iii) `/ lacs from a non-resident for use of patent for a !usiness in India& (iv) `5 lacs from a non-resident Indian for use of know how for a !usiness in :ingapore&

0esidential :tatus M :cope of Total Income (v) `10 lacs for suppl# of manuals and designs for the !usiness to !e esta!lished in :ingapore&

15*

< plain the rate of ta applica!le on ta a!le income for F: !ased compan#( 3eli Atd&( in India& (Bodified) A%=8e . ' non resident is chargea!le to ta in India in respect of following incomesJ (i) Income received or deemed to !e received in India& (ii) Income accruing or arising or deemed to accrue or arise in India& In view of the a!ove provisions( ta a!ilit# of income is determined in following mannerJ 2. N'. T a%=a&#4'% 9e#a4+= (i) 'mount received from an Indian domestic compan# for providing technical know how in India is ta a!le in India (ii) (iii) (iv) (v) .onducting the feasi!ilit# stud# for the new proDect in =inland for the Indian firm is not ta a!le in India as it is for the !usiness outside India& Bone# received from a non resident for use of patent for a !usiness in India is ta a!le in India Bone# received from a non resident Indian for use of know-how for a !usiness in :ingapore is for the !usiness outside India( therefore not ta a!le in India& 7a#ment received for suppl# of manuals and designs for the !usiness to !e esta!lished in :ingapore is not ta a!le in India& T'#a+ I%&'(e 4% I%94a A(',%# (`" 2 Aacs >il / Aacs >il >il 9 3a&=

The !asic normal rate applica!le for the F: !ased compan# who is a foreign compan# is /0R In case the ta a!le income is more than 1 crore !ut upto `10 crore in the previous #ear( the surcharge V +R is applica!le& The education cess( :econdar# and 3igher education cess is pa#a!le V -R&

PCC AUNE - 2009

D,e=#4'% 1 (2 MA1K2" :tate with reason( whether the following statements are True or =alseJ Br& G( Carta of 3F=( claims that the 3F= is non-resident as the !usiness of 3F= is transacted from FC and all the polic# decisions are taken there& A%=8e . True( ' 3F= is considered to !e a non-resident where the control and management of its affairs are situated wholl# outside India& In the given case( since all the polic# decisions of 3F= are taken from FC( the 3F= is a non-resident&

PE!II NO* - 2009

D,e=#4'% 1 (10 Ma J=" Br& 0akesh and Br& 'nish are !rothers and the# earned the following incomes during the financial #ear +01--1/& Br& 0akesh settled in F&C& in the #ear 1)42 and Br& 'nish settled in :urat& .ompute the gross total income for the 'ssessment Kear +01/-12& 2 . N'. 1& Pa #4&,+a = M . 1aJe=B M . A%4=B Interest on F&C& development !onds( 20R of interest received in +2(000 +0(000 India

0esidential :tatus M :cope of Total Income +& -& /& 2& *& 4& 5& )& 6ividend from ,ritish .ompan# received in Aondon 7rofit from a !usiness in Bum!ai( !ut managed directl# from Aondon 7rofit on sale of shares of an Indian compan# received in India Income from a !usiness in 6elhi =ees for technical services rendered in India( !ut received in Aondon Interest on fi ed deposit in :,I( ,angalore 'gricultural income from a land situated in 0aDasthan Income under the head 3ouse 7ropert# at ,angalore 5(000 10(000 20(000 +0(000 1(00(000 2(000 +2(000 20(/00

154 10(000 1+(000 50(000 +0(000 12(000 +2(000 --(*00

A%=8e $ C'(p,#a#4'% '7 T'#a+ I%&'(e '7 M . 1aJe=B a%9 M . A%4=B 7' #Be A... 2014!1/ 2+. Pa #4&,+a = N'. 1& Interest on F&C& 6evelopment ,onds +& -& /& 2& *& 4& 5& )& 6ividend from ,ritish .ompan# received in Aondon 7rofit from a !usiness in Bum!ai !ut managed directl# from Aondon 7rofit on sale of shares of an Indian compan# received in India Income from a !usiness in 6elhi =ees for technical services rendered in India !ut received in Aondon Interest on fi ed 6eposit in :,I ,angalore 'gricultural income from a land in 0aDasthan ?(< empt u1s&10(1)@ Income under the head 3ouse propert# at ,angalore G '== T'#a+ I%&'(e M . 1aJe=B N'%!1e=49e%# 1+(200 10(000 20(000 +0(000 1(00(000 2(000 20(/00 2F47F900 M . A%4=B 1O1 +0(000 10(000 1+(000 50(000 +0(000 12(000 --(*00 1F90F600

N'#e=$ 1& 6ividend received from ,ritish compan# in Aondon( !# a non-resident assessee is not ta a!le income( while the same received !# an 0O0 assessee is ta a!le and is not e empt under section 10(-/) of Income Ta 'ct( 1)*1& +& 'gricultural income from a land situated in the :tate of 0aDasthan( is e empted under section 10(1) of Income ta 'ct( 1)*1 in case of !oth non-resident and resident assessee&

0esidential :tatus M :cope of Total Income

155

PE!II MA. - 2008

D,e=#4'% 3 .hoose the correct answer with reference to the provisions of the Income-ta 'ct( 1)*1J Income accruing in Qapan and received there is ta a!le in India in the case of (a) 0esident and ordinaril# resident onl# (!) ,oth resident and ordinaril# resident and resident !ut not ordinaril# resident (c) ,oth resident and non-resident (d) >on-resident A%=8e $ (a) 0esident and ordinaril# resident onl# (1 Ma J="

PCC MA. - 2007

D,e=#4'% 1 (2 Ma J=" :tate with reasons( whether the following statements are true or false( with regard to the provisions of the Income-ta 'ct( 1)*1J Onl# individuals and 3F=s can !e resident( !ut not ordinaril# resident in India" firms can !e either a resident or non-resident& A%=8e . T ,e$ ' person is said to !e Onot-ordinaril# residentP in India if he satisfies either of the conditions given in su!-section (*) of section *& This su!-section relates to onl# individuals and 3indu Fndivided =amilies& Therefore( onl# individuals and 3indu undivided families can !e resident( !ut not ordinaril# resident in India& 'll other classes of assessees can !e either a resident or non-resident for the purpose of income-ta & ' firm can( therefore( either !e a resident or non-resident&

PE!II MA. - 2006

D,e=#4'% 2 (4 Ma J=" Br& '( left for F:' on 01&02&+01-& 3e has not visited India thereafter& Br& ' !orrows mone# from his friend Br& ,( who left India one week !efore Br& '\s departure( to the e tent of `10 lakhs and !u#s shares in G Atd&( an Indian compan#& 6iscuss the ta a!ilit# of the interest charged V10R in ,\s hands where the same has !een received in >ew Kork& A%=8e $ :ta# of Br& ' and Br& , during the previous #ear +01--1/ is less than *0 da#s hence !oth of them are nonresidents as per section *(1)& 's per section )( if an# non-resident has taken loan from outside India and the loan was utilised in India in an# source other than !usiness or profession( interest received !# the person who has given the loan shall not !e considered to !e accruing1arising in India and is not ta a!le in India& In the given case( loan amount was invested in the shares of an Indian compan# hence interest received !# Br& , shall not !e considered to !e income accruing1arising in India&

PE!II NO* - 2002

D,e=#4'% 3 (3 Ma J=" In the #ear +01--+01/ (7revious #ear)( a sailor has remained on ship for a private compan# owning ocean going ships as followsJ (1) Outside the territorial waters of India for 15- da#s& (+) Inside the territorial waters of India for 15+ da#s&

0esidential :tatus M :cope of Total Income

15)

Is he considered to !e resident or not for the 'ssessment Kear +01/-12 (7revious Kear +01--+01/)& .omment& A%=8e $ 'n individual is treated as a resident in India in an# previous #ear if he fulfills atleast one of the following two conditions laid down in section *(1)J (a) 3e is in India for a period or periods amounting to 15+ da#s or more in that #ear" or (!) In the preceding four #ears( he has !een India for -*2 da#s or more( and has !een in India for *0 da#s or more in that #ear& In the given case( period of sta# in India is 15+ da#s& Therefore( the sailor is treated as a resident in India for the assessment #ear&

PE!II MA. - 1998

D,e=#4'% 2 (9 Ma J=" Br& >i on( an 'merican citiEen( is appointed !# a multi-national compan# to its !ranch in >ew 6elhi in +010& Br& >i on has never !een to India !efore this appointment& 3e arrives in ,om!a# on 12th 'pril( +010 and Doins the >ew 6elhi office on +0 th 'pril( +010& 3is wife and children Doin him in India on +0 th Octo!er( +010& The compan# allotted him a leased residence for purposes of his sta#& This residence is occupied !# him from the !eginning of Octo!er( +010& On 10th =e!ruar#( +011( he is transferred !# his emplo#er( on deputation !asis( to !e the 0egional .hief of his emplo#er%s operations in :outh <ast 'sia having head8uarters in 3ongkong& 3e leaves >ew 6elhi on 11th =e!ruar# and arrives in 3ongkong on 1+th =e!ruar#( +011& Br& >i on leaves !ehind his wife and children in India till 1/th 'ugust( +01+( when the# leave along with him for 3ongkong& Br& >i on had come to India earlier on 12th Qune( +01+( on two months% leave& The mem!ers of the famil# occupied the residence till date of departure to 3ongkong& 't the end of the period of deputation( Br& >i on is reposted to India and Doins the >ew 6elhi office of his emplo#er as .hief of Indian operations on +nd =e!ruar#( +01/& In what residential status Br& >i on will !e assessa!le( for the various #ears( to income ta in IndiaY A%=8e $ The period of sta# of Br& >i on for various #ears is given !elowJ P... 2010!11/ A... 2011!12 7eriod of sta# -0- da#s

('pril 1*( Ba# --1( Qune -0( Qul# -1( 'ugust -1( :eptem!er -0( Octo!er -1( >ovem!er -0( 6ecem!er -1( Qanuar# -1( =e!ruar# 11) P... 2011!12/ A... 2012!13 P... 2012!13/ A... 2013!14 (Qune 1*( Qul# -1( 'ugust 1/) P... 2013!14/ A... 2014!1/ (=e!ruar# +4( Barch -1) Fnder section *(1) of the 'ct( an individual is said to !e resident in India in an# previous #ear if he satisfies one of the following !asic conditionsJ 7eriod of sta# 25 da#s 7eriod of sta# 7eriod of sta# >il *1 da#s

0esidential :tatus M :cope of Total Income

1)0

(i) is in India in the previous #ear for a period of 15+ da#s or more " (ii) is in India for a period of *0 da#s or more in the previous #ear and -*2 da#s or more during the four #ears preceding the previous #ear& ' person will !e considered to !e $not ordinaril# resident% if he satisfies an# of the following two conditions viE" (i) he has !een a non resident in India in ) out of 10 previous #ears preceding the relevant previous #ear " or (ii) he has !een in India for a period of 4+) da#s or less in 4 previous #ears preceding the relevant previous #ear& Baintenance of a residence in India or the sta# of the wife and children in India are not relevant for determining the residential status of Br& >i on& In the a!ove !ackground( Br& >i on%s case will !e decided as underJ (i) P... 2010!11/A... 2011!12$ has !een in India for -0- da#s& 3e will !e a resident under the !asic conditions& :ince his sta# in seven #ears preceding the relevant previous #ear is >il i&e& 4+) da#s or less( hence he will !e >O0 (ii) P... 2011!12/A. .. 2012!13J has not !een in India at all " though his wife and children continue to reside in >ew 6elhi( he will !e a non-resident for this #ear& (iii) P... 2012!13/A... 2013!14$ has !een in India for *1 da#s& 3e satisfies one limit of the !asic condition !ut having !een in India for a period amounting to -0- da#s onl# in the four previous #ears preceding this #ear and not -*2 da#s( he will !e non-resident for this #ear& (iv) P... 2013!14/A... 2014!1/$ has !een in India for 25 da#s( he will !e non-resident&

0esidential :tatus M :cope of Total Income EXE1CI2E2

1)1

1& If 'nirudh has sta#ed in India in the 7&K& +01--1/ for 151 da#s( and he is non-resident in ) out of 10 #ears immediatel# preceding the current previous #ear and he has sta#ed in India for -*2 da#s in all in the / #ears immediatel# preceding the current previous #ear and /+0 da#s in all in the 4 #ears immediatel# preceding the current previous #ear ( his residential status for the '&K&+01/-12 would !e a) 0esident and ordinaril# resident !) 0esident !ut not ordinaril# resident c) >on-resident +& 0aman was emplo#ed in 3industan Aever Atd& 3e received a salar# at ` /0(000 p&m& from 01&0/&+01- to +4&0)&+01-& 3e resigned and left for 6u!ai for the first time on 01&10&+01- and got salar# of rupee e8uivalent of `50(000 p&m& from 01&10&+01- to -1&0-&+01/& 3is salar# for Octo!er to 6ecem!er +01was credited in his 6u!ai !ank account and the salar# for Qanuar# to Barch +01/ was credited in his ,om!a# account directl#& 3e is lia!le to ta in respect of a) Income received in India from 3industan Aever Atd" !) Income received in India and in 6u!ai" c) Income received in India from 3industan Aever Atd& and income directl# credited in India" -& ' compan#( other than an Indian compan#( would !e a resident in India for the 7&K&+01-- 1/ if( during that #ear( its control and management is situated a) wholl# in India !) partl# in India c) wholl# or partl# in India& /& Income accruing in Aondon and received there is ta a!le in India in the case of a) resident and ordinaril# resident onl# !) !oth resident and ordinaril# resident and resident !ut not ordinaril# resident c) !oth resident and non-resident 2& When is an individual said to !e O0esident and ordinaril# residentP under the Income-ta 'ct( 1)*1Y *& 6efine ro#alt# as per section ) of the Income-ta 'ct( 1)*1Y 4& Write short notes on a) ,usiness connection !) Income deemed to accrue or arise in India& 5& 6iscuss the provisions relating to determination of residential status of individuals& )& When are the following income deemed to accrue or arise in IndiaY a) Interest !) =ees for technical services& 10& 6iscuss the correctness or otherwise of the statement OIncome deemed to accrue or arise in India to a non-resident !# wa# of interest( ro#alt# and fees for technical services is to !e ta ed irrespective of territorial ne us&P 11& < plain the term O,usiness .onnectionP under section )(1)& A%=8e = 1. !" 2. !" 3. a" 4. a&

Income Fnder The 3ead 3ouse 7ropert#

1)+

INCOME UNDE1 T@E @EAD

@OU2E P1OPE1T.
2ECTION 22 TO 27
PA1TICU3A12
I%&'(e 7 '( B',=e p 'pe #6UCBa :ea;4+4#6 a%9 (ea%4%: '7 B',=e p 'pe #6 A%%,a+ 5a+,eU @',=e +e# ',# #B ',:B',# #Be 6ea /pa #+6 +e# ',#/pa #+6 5a&a%#/5a&a%# #B ',:B',# #Be 6ea O%e B',=e 8B4&B 4= =e+7!'&&,p4e9 @',=e pa #+6 =e+7!'&&,p4e9/pa #+6 +e# ',#F (a6 ' (a6 %'# ;e 5a&a%# M' e #Ba% '%e B',=e 8B4&B a e =e+7!'&&,p4e9 M,%4&4pa+ #a) T ea#(e%# '7 ,% ea+4=e9 e%# De9,&#4'%= 7 '( a%%,a+ 5a+,e - 2#a#,#' 6 9e9,&#4'% I%#e e=# '% &ap4#a+ ;' '8e9 I%#e e=# 8Be% %'# 9e9,&#4;+e 7 '( PI%&'(e 7 '( @',=e P 'pe #6Q U% ea+4=e9 e%# ea+4=e9 =,;=eI,e%#+6 A ea = '7 e%# P 'pe #6 '8%e9 ;6 &'!'8%e = Dee(e9 '8%e =B4p U% ea+4=e9 e%#

2ECTION2
22 23(1" 23(2" 23(3" 23(4" P '54=' #' =e& 23(1" E)p+a%a#4'% #' 23(1" 24(a" 24(;" 2/ 2/AA 2/> 26 27 1,+e 4

T@EO1. DUE2TION2
D1. KI(p.L W 4#e a %'#e '% 4%&'(e= &Ba :ea;+e #' #a) ,%9e #Be Bea9 @',=e P 'pe #6. O E)p+a4% #Be (ea%4%: '7 #Be #e ( R@',=e P 'pe #6S. D2. K*. I(p.L$ W 4#e a %'#e '% &'(p,#a#4'% '7 a%%,a+ 5a+,eF 4% &a=e '7 a B',=e +e# ',# #B ',:B',# #Be 6ea . D3. W 4#e a %'#e '% &'(p,#a#4'% '7 a%%,a+ 5a+,eF 4% &a=e '7 (4" A B',=e 8B4&B 4= pa #+6 +e# ',# a%9 pa #+6 5a&a%# ' (44" A B',=e 5a&a%# #B ',:B',# #Be 6ea . D4 K*. I(p.L W 4#e a %'#e '% 2e# O77 a%9 Ca 6 0' 8a 9 '7 3'==e= ,%9e #Be Bea9 @',=e P 'pe #6. D/. K*. I(pL D4=&,== #Be # ea#(e%# '7 ,% ea+4=e9 e%# a%9 4#= e&'5e 6 4% =,;=eI,e%# 6ea =. D6. K*. I(pL W 4#e a %'#e '% 9e9,&#4'% ,%9e =e&#4'% 24(;". D7. @'8 4= 4%&'(e 7 '( =e+7 '&&,p4e9 p 'pe #6 ' p 'pe #6 (ea%# 7' '8%e '&&,pa#4'%F ;,# e(a4%4%: pa #+6 ' 8B'++6 ,%'&&,p4e9F &'(p,#e9E D8.W 4#e a %'#e '% &'(p,#a#4'% '7 4%&'(e '7 (' e #Ba% '%e B',=e 8B4&B a e =e+7!'&&,p4e9. D9.W 4#e a %'#e '% &'(p,#a#4'% '7 4%&'(e 4% &a=e '7 a B',=e p 'pe #6 8B4&B 4= 4% ;,=4%e== ' p '7e==4'% '7 #Be a==e==ee. D10$ W 4#e a %'#e '% pa #+6 =e+7!'&&,p4e9 a%9 pa #+6 +e# ',# B',=e. D11. W 4#e a %'#e '% &'(p,#a#4'% '7 4%&'(e '7 a B',=e p 'pe #6 8B4&B 4= 94549e9 4%#' 9477e e%#

Income Fnder The 3ead 3ouse 7ropert#

1)-

p' #4'%=. D12. W 4#e a %'#e '% &'(p'=4#e e%#. D13. D4=&,== #Be #a) +4a;4+4#6 4% e=pe&# '7 a ea = '7 e%#. D14. W 4#e a %'#e '% #a)a;4+4#6 '7 #Be 4%&'(e 7 '( =,;+e##4%: '7 B',=e p 'pe #6. D1/. @'8 #Be p 'pe #6 '8%e9 ;6 &'!'8%e = 4= #a)e9E D16. K*. I(p.L O8%e =B4p 4= #Be & 4#e 4'% 7' a==e==(e%# '7 4%&'(e 7 '( p 'pe #6 ,%9e =e&#4'% 22. @'8e5e F #Be e a e 4%=#a%&e= 4% 8B4&B #Be 4%&'(e 7 '( p 'pe #6 4= a==e==a;+e 4% #Be Ba%9= '7 a% a==e==eeF 8B' 4= %'# #Be +e:a+ '8%e #Be e'7. E%,(e a#e #Be=e &a=e=. ' I# 4= '%+6 #Be '8%e '7 #Be B',=e p 'pe #6 8B' 4= +4a;+e #' pa6 4%&'(e #a) 4% e=pe&# '7 4%&'(e 7 '( B',=e p 'pe #6F ;,# #Be e a e &e #a4% e)&ep#4'%= #' #B4= :e%e a+ ,+e. 34=# #Be &4 &,(=#a%&e= ,%9e 8B4&B a pe ='% 84++ ;e a 9ee(e9 '8%e '7 B',=e p 'pe #6 ,%9e #Be I%&'(e Ta) A&#E D17. D4=&,== #Be &4 &,(=#a%&e= 8Be e a pe ='% Ba= #Be 4%&'(e ,%9e #Be Bea9 B',=e p 'pe #6 84#B',# a%6 B',=e p 'pe #6 4% B4= Ba%9=E

C@A1GEA>I3IT. O0 INCOME UNDE1 T@E @EAD @OU2E P1OPE1T.

Income Fnder The 3ead 3ouse 7ropert#

1)/

2ECTION 22
I%&'(e 7 '( +e##4%: ',# '7 B',=e p 'pe #6 4= &Ba :ea;+e #' #a) ,%9e #Be Bea9 @',=e P 'pe #6 If the income is from sale or purchase of house propert#( it will !e ta a!le under the head .apital ;ains( however if the sale or purchase is part of a !usiness( income is ta a!le under the head ,usiness17rofession& Mea%4%: '7 B',=e p 'pe #6 The term house propert# shall include not onl# the !uildings !ut also the lands appurtenant thereto i&e& the term house propert# shall include even an# open land which is part and parcel of the !uilding& Example Br& ,hagawan 7ri#adarshi has one !ig house and it includes vast open area within its !oundaries& The house has !een let out at a rent of `1(00(000 p&m&( out of which rent of `+2(000 p&m& is attri!uta!le to the open land& In this case( entire rental income is ta a!le under the head house propert#& Aand appurtenant shall also include land connected with the !uilding like garden( garage etc& =urther( house propert# includes all t#pes of house properties i&e& residential houses( shops( godowns( cinema !uilding( workshop !uilding( hotel !uildings etc& I%&'(e 7 '( +e##4%: ',# '7 +a%9 If an# person has let out onl# land( which is not essential part of an# !uilding( income is ta a!le under the head other sources& Example Br& :aura!h has one !ig piece of land which is let out for arranging e hi!itions or for the purpose of marriage parties etc&( rent received or receiva!le is ta a!le under the head other sources& I%&'(e 7 '( ;,=4%e== '7 +e##4%: ',# B',=e p 'pe #6/P 'pe #6 Be+9 a= =#'&J!4%!# a9e If an# person is holding house propert# as stock-in-trade or for the purpose of letting out as !usiness( income shall !e ta a!le under the head house propert#& Example ',. Atd& is holding 200 flats for the purpose of letting out( income shall !e ta a!le under the head house propert#& I%&'(e 7 '( B'#e+ ;,=4%e==/pa64%: :,e=# a&&'(('9a#4'%/8a eB',=e If an# person has an# hotel !uilding which has !een let out( income from such hotel !uilding shall !e ta a!le under the head house propert# !ut if he is running the hotel !usiness or he is running the !usiness of providing pa#ing guest accommodation( income shall !e ta a!le under the head ,usiness17rofession& :imilarl#( if he is engaged in the !usiness of warehousing( income is ta a!le under the head ,usiness17rofession& C'(p,#a#4'% '7 I%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 G '== A%%,a+ *a+,e (GA*" (=air 0ent or Bunicipal 9aluation whichever is higher !ut it cannot e ceed standard rent and the rent so computed is called e pected rent or annual letting value < pected rent shall !e compared with rent received or receiva!le and higher of the two shall !e the gross annual value&) 3e==$ Ta)e= pa49 ;6 '8%e #' +'&a+ a,#B' 4#6 Ne# A%%,a+ *a+,e (NA*" 3e==$ De9,&#4'% a++'8e9 ,%9e =e&#4'% 24 ! 2#a#,#' 6 9e9,&#4'% G 30H '7 NA* K2e&#4'% 24(a"L ! I%#e e=# '% ;' '8e9 &ap4#a+ K2e&#4'% 24(;"L I%&'(e ,%9e #Be Bea9 P@',=e P 'pe #6Q `WWWWW.

`W.WWWW. `W.W.WWW `WW..WWW `WWWWW. `WWWWW..

Income Fnder The 3ead 3ouse 7ropert#

1)2

I% ' 9e #' &'(p,#e 4%&'(e ,%9e #Be Bea9 B',=e p 'pe #6F #Be B',=e p 'pe #4e= =Ba++ ;e 94549e9 4%#' 745e &a#e:' 4e= CATEGO1. I 3ouses which are let out throughout the #ear :ec +-(1)(a)1(!)

CATEGO1. II 3ouses which are partl# let out and partl# vacant or houses l#ing vacant throughout the #ear :ec +-(1)(c) & CATEGO1. III :elf occupied house propert# (a) One house( which is self occupied throughout the #ear or unoccupied propert#& :ec +-(+)& (!) Bore than one house which is self occupied :ec +-(/)& (c) 3ouse propert# in the !usiness or profession of the assessee :ec ++ CATEGO1. I* 3ouses which are partl# let out and partl# self occupied and ma# or ma# not !e vacant CATEGO1. * 3ouse propert# which is divided into different portions& :ec +-(-)&

CATEGO1. I W@E1E T@E P1OPE1T. I2 3ET OUT T@1OUG@OUT T@E P1E*IOU2 .EA1 2ECTION 23(1"(a"/(;"
Where the propert# is let out for the whole #ear( then the ;'9 would !e the higher of (a) 'nnual Aetting 9alue ('A9) or < pected 0ent and (!) 'ctual rent received or receiva!le during the #ear ;ross annual value means the reasona!le rental value of a house& It is computed with the help of / rents& 1& =air rent i&e& the rent of similar t#pes of !uildings in the same localit#& +& Bunicipal valuation i&e& rental value determined !# the municipalit# for the purpose of charging municipal ta & -& :tandard rent i&e& the highest possi!le rent as per 0ent .ontrol 'ct& /& 0ent received or receiva!le G '== a%%,a+ 5a+,e =Ba++ ;e &'(p,#e9 4% #Be (a%%e :45e% ;e+'8$ 1& .ompare =air 0ent and Bunicipal 9aluation and select the higher& +& .ompare the rent so selected with :tandard 0ent and the lower of the two shall !e considered to !e < pected 0ent& (It is also called 'nnual Aetting 9alue) -& .ompare < pected 0ent with 0ent 0eceived or 0eceiva!le and the higher shall !e considered to !e ;ross 'nnual 9alue& Example If =air rent is `12(000 p&m& and Bunicipal valuation is `1*(000 p&m& and :tandard rent is `12(200 p&m&( e pected rent shall !e `12(200 p&m& If in the a!ove case( rent received or receiva!le is `14(000 p&m&( ;ross 'nnual 9alue shall !e `14(000 p&m&

Income Fnder The 3ead 3ouse 7ropert#

1)*

I++,=# a#4'% 1$ Br& G has one house propert# which is let out V `50(000 p&m& =air rent ` )0(000 p&m&( Bunicipal 9aluation `40(000 p&m&( :tandard 0ent `51(000 p&m& Bunicipal ta paid `*0(000 and interest paid on loan for construction of house propert# is ` 20(000& .ompute his Income Ta Aia!ilit# for '&K +01/-12& 2'+,#4'%$ ` C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ent ()0(000 1+) (!) Bunicipal 9alue (40(000 1+) (c) 3igher of (a) or (!) (d) :tandard 0ent (51(000 1+) (e) < pected 0ent _Aower of c or d` )(4+(000 (f) 0ent received /receiva!le (50(000 1+) ;'9 shall !e higher of (e) or (f) AessJ Bunicipal Ta >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `2(55(/00 at sla! rate 'ddJ <. V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, )(4+(000&00 ` 10(50(000 5(/0(000 10(50(000 )(4+(000 )(*0(000 )(4+(000 *0(000&00 )(1+(000&00 +(4-(*00&00 20(000&00 2(55(/00&00 2(55(/00&00 >IA 2(55(/00&00 /4(*50&00 )2-&*0 /4*&50 /)(110&/0 /)(110&00

I++,=# a#4'% 2$ Brs& G has let out one 3ouse propert# V `*+(000 p&m&( Bunicipal 9aluation `4+(000 p&m&( =air 0ent `)0(000 p&m&( :tandard 0ent `1(00(000 p&m&( Bunicipal Ta paid `/0(000 and Interest on loan taken for construction `*0(000 :he has completed the age of *0 #ears on 01&0/&+01/& .ompute Income Ta Aia!ilit# for the '&K +01/-12& 2'+,#4'%$ ` C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ent ()0(000 1+) (!) Bunicipal 9alue (4+(000 1+) (c) 3igher of (a) or (!) (d) :tandard 0ent (1(00(000 1+) (e) < pected 0ent _Aower of c or d` 10(50(000&00 ` 10(50(000 5(*/(000 10(50(000 1+(00(000 10(50(000

Income Fnder The 3ead 3ouse 7ropert# (f) 0ent received /receiva!le (*+(000 1+) ;'9 shall !e higher of (e) or (f) AessJ Bunicipal Ta >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income from house propert# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `*(*5(000 at sla! rate 'ddJ <. V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, 4(//(000 10(50(000

1)4

/0(000&00 10(/0(000&00 -(1+(000&00 *0(000&00 *(*5(000&00 *(*5(000&00 >IA *(*5(000&00 *-(*00&00 1(+4+&00 *-*&00 *2(205&00 *2(210&00

I++,=# a#4'% 3$ Qa#ashree owns five houses in .hennai( all of which are let-out& .ompute the ;'9 of each house from the information given !elow Pa #4&,+a = @',=e I @',=e II @',=e III @',=e I* @',=e * Bunicipal 9alue 50(000 22(000 *2(000 +/(000 42(000 =air 0ent )0(000 *0(000 *2(000 +2(000 50(000 :tandard 0ent >&'& 42(000 25(000 >&'& 45(000 'ctual rent received1 receiva!le 4+(000 4+(000 *0(000 -0(000 4+(000 2'+,#4'%$ ;'9 )0(000 4+(000 *0(000 -0(000 45(000

P1OPE1T. TAXE2 (MUNICIPA3 TAXE2" P1O*I2O TO 2ECTION 23(1"

(1) 7ropert# ta es are allowa!le as deduction from the ;'9 su!Dect to the following two conditionsJ (a) It should !e !orne !# the assessee (owner)" and (!) It should !e actuall# paid during the previous #ear& (+) If propert# ta es levied !# a local authorit# for a particular previous #ear is not paid during that #ear( no deduction shall !e allowed in the computation of income from house propert# for that #ear& (-) 3owever( if in an# su!se8uent #ear the arrears are paid( then the amount so paid is allowed as deduction in computation of income from house propert# for that #ear& (/) 3ence( irrespective of the previous #ear in which the lia!ilit# to pa# such ta es arise according to the method of accounting regularl# emplo#ed !# the owner( the deduction in respect of such ta es will !e allowed onl# in the #ear of actual pa#ment& (2) In case of propert# situated outside India( ta es levied !# local authorit# of the countr# in which the propert# is situated is deducti!le& [CIT v. . Ven!gopala eddiar (1)*2) 25 IT0 /-) (Bad)." Example 6uring the previous #ear +01--1/ municipalit# has levied ta es `+0(000( !ut the assessee has paid `12(000&

Income Fnder The 3ead 3ouse 7ropert#

1)5

In this case( amount allowed to !e deducted is `12(000& In the ne t #ear( municipalit# has levied ta es of `/2(000 !ut the assessee has paid ` 22(000 which includes `2(000 for the earlier #ear and `2(000 for the su!se8uent #ear& In this case( amount allowed to !e deducted shall !e `22(000&

CATEGO1. II
@OU2E 3.ING *ACANT 0O1 2OME PE1IOD/*ACANT T@1OUG@OUT T@E .EA1

2ECTION 23(1"(&"
If the house is partl# let out and partl# vacant( in such cases e pected rent shall !e computed for 1+ months !ut while computing rent received 1receiva!le( rent for the period for which the house was vacant shall !e e cluded and ;'9 shall !e higher of e pected rent and rent received1receiva!le !ut if the rent received1receiva!le is less than the e pected rent owing to vacanc#( in that case rent received1receiva!le shall !e gross annual value& e&g& If e pected rent is `+0(000 p&m& and rent received1receiva!le is `12(000 p&m& and there is vacanc# for 2 months( in this case ;'9 shall !e the e pected rent !ecause even if there was no vacanc#( still rent received1receiva!le was less than e pected rent& If in this case rent received1receiva!le is `+2(000 p&m& and it is vacant for 2 months( gross annual value shall !e the rent received1receiva!le !ecause if there was no vacanc#( rent 010 would have !een higher than e pected rent accordingl# in the given case( 010 is lower than e pected rent owing to vacanc#& If the house is vacant throughout the #ear( its ;'9 shall !e nil& I++,=# a#4'% 4$ .ompute gross annual value in the following cases for the assessment #ear +01/-12J Pa #4&,+a = 24#,a#4'% 1 24#,a#4'% 2 24#,a#4'% 3 =air 0ent (p&m&) )(000 1-(000 1+(000 Bunicipal 9aluation (p&m&) 10(000 )(000 )(000 :tandard 0ent (p&m&) 1+(000 11(000 4(000 0ent received1 receiva!le (p&m&) 4(000 11(200 +0(000 9acanc# 1 month 1 month + month 2'+,#4'%$ 24#,a#4'% 1 C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent ()(000 1+) (!) Bunicipal 9aluation (10(000 1+) (c) 3igher of (a) or (!) (d) :tandard 1(//(000 (1+(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (4(000 11) If there was no vacanc#( in that case rent received1receiva!le would have !een `5/(000 and It was still less than e pected rent( therefore ;'9 shall !e e pected rent& ;ross 'nnual 9alue 24#,a#4'% 2 C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (1-(000 1+) 24#,a#4'% 4 1*(000 15(000 1*(000 1*(200 + months ` 1(05(000 1(+0(000 1(+0(000 0ent 1(+0(000 44(000

1(+0(000 ` 1(2*(000

Income Fnder The 3ead 3ouse 7ropert# (!) Bunicipal 9aluation ()(000 1+) (c) 3igher of (a) or (!) (d) :tandard 1(-+(000 (11(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (11(200 11) In this case( if there was no vacanc#( rent received1receiva!le would have !een `1(-5(000 hence rent received1receiva!le is lower in this case due to vacanc#( therefore ;'9 shall !e the rent received1receiva!le& ;ross 'nnual 9alue 24#,a#4'% 3 C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (1+(000 1+) (!) Bunicipal 9aluation ()(000 1+) (c) 3igher of (a) or (!) (d) :tandard 5/(000 (4(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (+0(000 10) In this case( rent 010 is higher than the e pected rent( ;'9 shall !e 0ent 010 ;ross 'nnual 9alue 24#,a#4'% 4 C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (1*(000 1+) (!) Bunicipal 9aluation (15(000 1+) (c) 3igher of (a) or (!) (d) :tandard 1()+(000 (1*(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (1*(200 10) In this case( if there was no vacanc#( rent received1receiva!le would have !een `1()5(000 hence rent received1receiva!le is lower in this case owing to vacanc#( therefore ;'9 shall !e the rent received1receiva!le& ;ross 'nnual 9alue

1)) 1(05(000 1(2*(000 0ent 1(-+(000 1(+*(200

1(+*(200 ` 1(//(000 1(05(000 1(//(000 0ent 5/(000 +(00(000 +(00(000 ` 1()+(000 +(1*(000 +(1*(000 0ent 1()+(000 1(*2(000

1(*2(000

2ET O00 AND CA11. 0O1WA1D O0 3O22E2 UNDE1 T@E @EAD @OU2E P1OPE1T. 2ECTION 70/71/71>

Income Fnder The 3ead 3ouse 7ropert#

+00

I%#e 2', &e a9<,=#(e%# 2e&#4'% 70 A= pe =e&#4'% 70( if an# person has loss from an# house propert#( such loss can !e set off from income of an# other house propert# and it is called inter-source adDustment or intra-head adDustment& <&g& Br& G has two housesJ there is loss of `-/(000 from one house and income of `50(000 from the other house( in this case( loss of one source (house) can !e set off from income of the other source (house)& I%#e @ea9 a9<,=#(e%# 2e&#4'% 71 A= pe =e&#4'% 71( unadDusted loss can !e set off from incomes of other heads !ut as per section 25(/)( such loss can not !e set off from casual income and it is called inter-head adDustment& <&g& Br& G has loss from house propert# `-(00(000 and income from !usiness1profession `2(00(000( in this case( loss is allowed to !e set off !ut if he has an# casual income( loss can not !e set off from casual income& Ca 6 0' 8a 9 a%9 2e# O77 2e&#4'% 71> A= pe =e&#4'% 71>( unadDusted loss is allowed to !e carried forward to the su!se8uent #ears !ut for a ma imum period of 5 #ears starting from the #ear su!se8uent to the #ear in which the loss was incurred and in the su!se8uent #ears( loss can !e set off onl# from income under the head house propert#& <&g& Br& G has incurred loss under the head house propert# in the previous #ear +01--1/1assessment #ear +01/-12 and it could not !e set off in the same #ear( it can !e carried forward upto 7revious Kear +0+1-++1'ssessment Kear +0++-+- (as shown !elow) Kear 1 Kear + Kear Kear / Kear 2 Kear * Kear 4 Kear 5 7revious #ear +01/-12 7revious #ear +012-1* 7revious #ear +01*-14 7revious #ear +014-15 7revious #ear +015-1) 7revious #ear +01)-+0 7revious #ear +0+0-+1 7revious #ear +0+1-++ 'ssessment Kear +012-1* 'ssessment Kear +01*-14 'ssessment Kear +014-15 'ssessment Kear +015-1) 'ssessment Kear +01)-+0 'ssessment Kear +0+0-+1 'ssessment Kear +0+1-++ 'ssessment Kear +0++-+-

<&g& Br& G has loss under the head house propert# of the previous #ear +002-0*1assessment #ear +00*-04 `2(00(000 and income under the head house propert# `2(00(000 in previous #ear +01--1/1assessment #ear +01/-12( in this case( loss shall !e allowed to !e set off !ecause it will !e allowed to !e carried forward upto a period of 5 #ears starting from 7revious Kear +00*-041'ssessment Kear +004-05 and is as shown !elowJ Kear 1 Kear + Kear Kear / Kear 2 Kear * Kear 4 Kear 5 7revious #ear +00*-04 7revious #ear +004-05 7revious #ear +005-0) 7revious #ear +00)-10 7revious #ear +010-11 7revious #ear +011-1+ 7revious #ear +01+-17revious #ear +01--1/ 'ssessment Kear +004-05 'ssessment Kear +005-0) 'ssessment Kear +00)-10 'ssessment Kear +010-11 'ssessment Kear +011-1+ 'ssessment Kear +01+-1'ssessment Kear +01--1/ 'ssessment Kear +01/-12

If the loss can !e set off( it has to !e set off compulsoril# i&e& it is not voluntar#& <&g& Br& G has loss under the head house propert# `1(50(000 in previous #ear +01--1/1assessment #ear +01/-12 and income under the head !usiness1profession `1(50(000 in the same #ear( in this case loss has to !e set off&

T1EATMENT O0 UN1EA3I2ED 1ENT EXPLANATION TO 2ECTION 23(1"/1U3E 4

Fnrealised rent means such rent which is irrecovera!le and is considered to !e loss i&e& !ad de!t and while computing rent received or receiva!le( such unrealised rent shall !e e cluded and ;'9 shall !e higher of e pected rent and rent received1receiva!le (no special treatment like vacanc#)&

Income Fnder The 3ead 3ouse 7ropert#

+01

0ent shall !e considered to !e unrealised rent onl# if all the conditions of 0ule / have !een complied with and such conditions areJ (a) the tenanc# is bona fide" (!) the defaulting tenant has vacated( or steps have !een taken to compel him to vacate the propert#" (c) the defaulting tenant is not in occupation of an# other propert# of the assessee" (d) the assessee has taken all reasona!le steps to institute legal proceedings for the recover# of the unpaid rent or satisfies the 'ssessing Officer that legal proceedings would !e useless&

UN1EA3I2ED 1ENT 1ECEI*ED 2U>2EDUENT3. TO >E C@A1GED TO INCOME!TAX 2ECTION 2/AA

Where the assessee cannot realise rent from a propert# let to a tenant and su!se8uentl# the assessee has realised an# amount in respect of such rent( the amount so realised shall !e deemed to !e income chargea!le under the head SIncome from house propert#S and accordingl# charged to income-ta as the income of that previous #ear in which such rent is realised whether or not the assessee is the owner of that propert# in that previous #ear& I++,=# a#4'% /$ .ompute gross annual value in the following cases for the assessment #ear +01/-12J Pa #4&,+a = =air 0ent (p&m&) Bunicipal 9aluation (p&m&) :tandard 0ent (p&m&) 0ent received1 receiva!le (p&m&) 9acanc# Fnrealised rent 24#,a#4'% 1 11(000 1+(000 1-(000 5(000 1 month 24#,a#4'% 2 1-(000 11(000 1+(000 1+(200 + months 24#,a#4'% 3 1/(000 )(000 5(000 +1(000 1 month - month 24#,a#4'% 4 1*(000 15(000 14(000 14(000 - month 1 month

2'+,#4'%$ 24#,a#4'% 1 C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (11(000 1+) (!) Bunicipal 9aluation (1+(000 1+) (c) 3igher of (a) or (!) (d) 1(2*(000 (1-(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (5(000 11) ;'9 W 3igher of (e) or (f) ;ross 'nnual 9alue 24#,a#4'% 2 C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (1-(000 1+) (!) Bunicipal 9aluation

` 1(-+(000 1(//(000 :tandard 1(//(000 0ent 1(//(000 55(000 1(//(000 1(//(000 ` 1(2*(000 1(-+(000

Income Fnder The 3ead 3ouse 7ropert# (11(000 1+) (c) 3igher of (a) or (!) (d) :tandard 1(//(000 (1+(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (1+(200 10) In this case( if there was no vacanc#( rent received1receiva!le would have !een `1(20(000 hence rent received1receiva!le is lower in this case due to vacanc#( therefore ;'9 shall !e the rent received1receiva!le& ;ross 'nnual 9alue 24#,a#4'% 3 C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (1/(000 1+) (!) Bunicipal 9aluation ()(000 1+) (c) 3igher of (a) or (!) (d) :tandard )*(000 (5(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (+1(000 5) In this case( rent 010 is higher than the e pected rent( ;'9 shall !e 0ent 010 ;ross 'nnual 9alue 24#,a#4'% 4 C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (1*(000 1+) (!) Bunicipal 9aluation (15(000 1+) (c) 3igher of (a) or (!) (d) :tandard +(0/(000 (14(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (14(000 5) If there was no vacanc#( in that case rent received1receiva!le would have !een `1(54(000 and It was still less than e pected rent( therefore ;'9 shall !e e pected rent& ;ross 'nnual 9alue

+0+ 1(2*(000 0ent 1(//(000 1(+2(000

1(+2(000 ` 1(*5(000 1(05(000 1(*5(000 0ent )*(000 1(*5(000 1(*5(000 ` 1()+(000 +(1*(000 +(1*(000 0ent +(0/(000 1(-*(000

+(0/(000

I++,=# a#4'% 6$ Br& G has let out one house propert# to Br& K V ` 50(000 p&m& =air rent `)0(000 p&m& Bunicipal valuation `50(000 p&m& and :tandard rent of the house `4*(000 p&m& The house remained vacant for + months and there was unrealised rent for - months& Br& G has paid municipal ta of `*0(000 and interest on loan for construction of house propert# is `*)(000& .ompute his Income Ta Aia!ilit# for '&K&+01/-12&

Income Fnder The 3ead 3ouse 7ropert# 2'+,#4'%$

+0`

C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 B',=e p 'pe #6 ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ent ()0(000 1+) 10(50(000 (!) Bunicipal 9aluation (50(000 1+) )(*0(000 (c) 3igher of (a) or (!) 10(50(000 (d) :tandard 0ent (4*(000 1+) )(1+(000 (e) < pected 0ent _Aower of (c) or (d)` )(1+(000 (f) 0ent received /receiva!le (50(000 4) 2(*0(000 If there was no vacanc#( in that case rent received receiva!le would have !een `4(+0(000 and it was still less than e pected rent (therefore ;'9 shall !e e pected rent ;'9 )(1+(000 AessJ Bunicipal Ta >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on ` 2(+4(/00 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55,

)(1+(000&00

*0(000&00 5(2+(000&00 +(22(*00&00 *)(000&00 2(+4(/00&00 2(+4(/00&00 >IA 2(+4(/00&00 -2(/50&00 40)&*0 -2/&50 -*(2//&/0 -*(2/0&00

I++,=# a#4'% 7$ 'nirudh has a propert# whose municipal valuation is ` 1(-0(000 p&a& The fair rent is ` 1(10(000 p&a& and the standard rent fi ed !# the 0ent .ontrol 'ct is ` 1(+0(000 p&a& The propert# was let out for a rent of ` 11(000 p&m& throughout the previous #ear& Fnrealised rent was ` 11(000 and all conditions prescri!ed !# 0ule / are satisfied& 3e paid municipal ta es V 10R of municipal valuation& Interest on !orrowed capital was ` /0(000 for the #ear& .ompute the income from house propert# of 'nirudh& 2'+,#4'%$ C'(p,#a#4'% '7 I%&'(e 7 '( B',=e p 'pe #6 '7 M . A%4 ,9B 7' A... 2014!1/ Pa #4&,+a = A(',%# 4% ` C'(p,#a#4'% '7 GA* :tep 1 .ompute 'A9 'A9 W 3igher of B9 of ` 1(-0(000 p&a& and =0 of ` 1(10(000 p&a&( 1(+0(000 !ut restricted to :0 of ` 1(+0(000 p&a& :tep + .ompute actual rent received1receiva!le 'ctual rent received1receiva!le less unrealiEed rent as per 0ule / W 1(+1(000 `1(-+(000 - ` 11(000 :tep .ompare 'A9 of ` 1(+0(000 and 'ctual rent received1receiva!le of 1(+1(000 `1(+1(000 :tep / ;'9 is the higher of 'A9 and 'ctual rent received1receiva!le 1F21F000

Income Fnder The 3ead 3ouse 7ropert# G '== A%%,a+ *a+,e (GA*" AessJ Bunicipal ta es (paid !# the owner during the previous #ear) W 10R of ` 1(-0(000 Ne# A%%,a+ *a+,e (NA*" 3e==$ De9,&#4'%= ,%9e =e&#4'% 24 (a) -0R of >'9 (!) Interest on !orrowed capital (actual without an# ceiling limit) I%&'(e 7 '( B',=e p 'pe #6 1-(000 1F08F000 -+(/00 /0(000 4+(/00 3/F600

+0/

I++,=# a#4'% 8$ ;anesh has a propert# whose municipal valuation is ` +(20(000 p&a& The fair rent is ` +(00(000 p&a& and the standard rent fi ed !# the 0ent .ontrol 'ct is ` +(10(000 p&a& The propert# was let out for a rent of ` +0(000 p&m& 3owever( the tenant vacated the propert# on -1&01&+01/& Fnrealised rent was ` +0(000 and all conditions prescri!ed !# 0ule / are satisfied& 3e paid municipal ta es V 5R of municipal valuation& Interest on !orrowed capital was ` *2(000 for the #ear& .ompute the income from house propert# of ;anesh for '&K&+01/-12& 2'+,#4'%$ C'(p,#a#4'% '7 4%&'(e 7 '( B',=e p 'pe #6 '7 Ga%e=B 7' A...2014!1/ Pa #4&,+a = C'(p,#a#4'% '7 GA* :tep 1 .ompute 'A9 'A9 W 3igher of B9 of ` +(20(000 p&a& and =0 of ` +(00(000 p&a&( !ut restricted to :0 of ` +(10(000 p&a& :tep + .ompute 'ctual rent received1receiva!le 'ctual rent received1receiva!le for let out period less unrealiEed rent as per 0ule / W ` +(00(000 - ` +0(000 :tep .ompare 'A9 and 'ctual rent received1receiva!le :tep / In this case the actual rent of ` 1(50(000 is lower than 'A9 of ` +(10(000 owing to vacanc#( since( had the propert# not !een vacant the actual rent would have !een ` +(+0(000 (` 1(50(000 L ` /0(000)& Therefore( actual rent is the ;'9& G '== A%%,a+ *a+,e (GA*" AessJ Bunicipal ta es (paid !# the owner during the previous #ear) W 5R of `+(20(000 Ne# A%%,a+ *a+,e (NA*" 3e==$ De9,&#4'%= ,%9e =e&#4'% 24 (a) -0R of >'9 W -0R of ` 1(*0(000 (!) Interest on !orrowed capital (actual without an# ceiling limit) I%&'(e 7 '( B',=e p 'pe #6

A(',%# 4% ` +(10(000 1(50(000 1(50(000

1F80F000 +0(000 1F60F000 /5(000 *2(000 1(1-(000 47F000

WBe#Be #Be e &a% ;e %e:a#45e Ne# A%%,a+ *a+,e If municipal ta es paid are more than the amount of ;ross 'nnual 9alue( there can !e negative >et 'nnual 9alue and in such cases( no deduction is allowed under section +/(a)( however( deduction under section +/(!) is allowed and accordingl# there can !e loss under the head house propert# and such loss can !e set off from an# income under an# head e cept casual income& Example Br& Bukesh has let out one house propert# for `/(000 p&m& and has paid municipal ta es of `2+(000 relating to the earlier ten #ears& Interest on the capital !orrowed for construction of house is `1(+0(000& In this case( he has loss under the head house propert# amounting to `1(+/(000 and this loss can !e set off from an# income under an# head e cept casual income& It can !e carried forward as per provisions of section 41,&

Income Fnder The 3ead 3ouse 7ropert#

+02

DEDUCTION2 01OM NET ANNUA3 *A3UE 2ECTION 24

1. 2#a#,#' 6 9e9,&#4'% ' =#a%9a 9 9e9,&#4'% 2e&#4'% 24(a" 2. De9,&#4'% 7' 4%#e e=# '% #Be &ap4#a+ ;' '8e9 2e&#4'% 24(;" 2#a#,#' 6 De9,&#4'% ' 2#a%9a 9 De9,&#4'% 2e&#4'% 24(a" n!e" section #$(a)% ever# assessee shall !e allowed a notional e penditure e8ual to thirt# per cent of the net annual value of the house for the various e penditures incurred !# him& 'ctual e penditure incurred !# the assessee shall not !e taken into consideration& Example >et annual value of one house is `-(00(000 and actual e penditure incurred on repairs are `42(000( deduction allowed under section +/(a) shall !e `)0(000& I%#e e=# '% ;' '8e9 &ap4#a+ 4= a++'8e9 a= 9e9,&#4'% ,%9e =e&#4'% 24(;" (a) Interest pa#a!le on loans !orrowed for the purpose of a&I,4=4#4'%F &'%=# ,&#4'%F epa4 =F e%e8a+ ' e&'%=# ,&#4'% can !e claimed as deduction& (!) (c) (d) Interest pa#a!le on a 7 e=B +'a% #aJe% #' epa6 #Be ' 4:4%a+ +'a% raised earlier for the aforesaid purposes is also admissi!le as a deduction& Interest relating to the #ear of completion of construction can !e full# claimed in that #ear irrespective of the date of completion& I%#e e=# pa6a;+e '% ;' '8e9 &ap4#a+ 7' #Be pe 4'9 p 4' #' #Be p e54',= 6ea in which the propert# has !een ac8uired or constructed( can !e claimed as deduction over a period of 2 #ears in e8ual annual installments commencing from the #ear of ac8uisition or completion of construction& De9,&#4'% ,%9e =e&#4'% 24(;" 7' 4%#e e=# 4= a5a4+a;+e '% a&& ,a+ ;a=4= & Therefore interest accrued !ut not paid during the #ear can also !e claimed as deduction& Where a !u#er enters into an arrangement with a seller to pa# the sale price in installments along with interest due thereon( the seller !ecomes the lender in relation to the unpaid purchase price and the !u#er !ecomes the !orrower& In such a case( unpaid purchase price can !e treated as capital !orrowed for ac8uiring propert# and interest paid thereon can !e allowed as deduction under section +/(!)& I%#e e=# '% ,%pa49 4%#e e=# 4= %'# 9e9,&#4;+e&

(e) (f)

(g)

I++,=# a#4'% 9$ 'rvind had taken a loan of ` 2(00(000 for construction of propert# on 01&10&+01+& Interest was pa#a!le V 10R p&a& The construction was completed on -0&0*&+01-& >o principal repa#ment has !een made up to -1&0-&+01/& .ompute the interest allowa!le as deduction under section +/(!) for the '&K&+01/12& 2'+,#4'%$ Interest for the #ear (01&0/&+01- to -1&0-&+01/) W 10R of ` 2(00(000 W ` 20(000 7re-construction interest W10R of ` 2(00(000 for * months (from 01&10&+01+ to -1&0-&+01-)W` +2(000 7re-construction interest to !e allowed in 2 e8ual annual installments of ` 2(000 from the #ear of completion of construction i&e& in this case( 7&K&+01--1/&

Income Fnder The 3ead 3ouse 7ropert# Therefore( total interest deduction under section +/(!) W 20(000 L 2000 W ` 22(000& I++,=# a#4'% 10$ .ompute +01/-12& 24#,a#4'%= 6ate of loan 'mount of loan 0ate of interest 6ate of completion1 6ate of purchase 6ate of repa#ment

+0*

interest allowed under section +/(!) in the following cases for assessment #ear A 01&04&+010 *(00(000 *R -1&0-&+0101&0/&+011 > 01&04&+011 *(00(000 *R -1&0-&+01+ 01&0/&+01/ C 01&04&+011 *(00(000 *R 01&01&+0101&01&+01/ D 01&0/&+01+ *(00(000 *R 01&04&+0101&1+&+01E 01&0-&+01*(00(000 *R 01&0/&+01>il ` >il

2'+,#4'%$ 24#,a#4'% A C'(p,#a#4'% '7 4%#e e=# a++'8e9 ,%9e =e&#4'% 24(;" .urrent period interest 7rior period interest =rom 01&04&+010 to -1&0-&+01+ (!ut interest will !e calculated upto -1&0-&+011 !ecause the loan has !een repaid on 01&0/&+011) *(00(000 *R )11+ W +4(000 Installment W +4(00012 W 2(/00 Total interest allowed 24#,a#4'% > C'(p,#a#4'% '7 4%#e e=# a++'8e9 ,%9e =e&#4'% 24(;" .urrent period interest =rom 01&0/&+01- to -1&0-&+01/ *(00(000 *R W -*(000 7rior period interest :ince there is no prior period hence interest is nil Total interest allowed 24#,a#4'% C C'(p,#a#4'% '7 4%#e e=# a++'8e9 ,%9e =e&#4'% 24(;" .urrent period interest =rom 01&0/&+01- to -1&1+&+01*(00(000 *R )11+ W +4(000 7rior period interest =rom 01&04&+011 to -1&0-&+01+ *(00(000 *R )11+ W +4(000 Installment W +4(00012 W 2(/00 Total interest allowed ?+4(000 L 2(/00@ 24#,a#4'% D C'(p,#a#4'% '7 4%#e e=# a++'8e9 ,%9e =e&#4'% 24(;" .urrent period interest =rom 01&0/&+01- to -0&11&+01*(00(000 *R 511+ W +/(000 7rior period interest =rom 01&0/&+01+ to -1&0-&+01*(00(000 *R W -*(000 Installment W -*(00012 W 4(+00

2(/00

-*(000

-+(/00

Income Fnder The 3ead 3ouse 7ropert# Total interest allowed ?+/(000 L 4(+00@ 24#,a#4'% E C'(p,#a#4'% '7 4%#e e=# a++'8e9 ,%9e =e&#4'% 24(;" .urrent period interest =rom 01&0/&+01- to -1&0-&+01/ *(00(000 *R W -*(000 7rior period interest =rom 01&0-&+01- to -1&0-&+01*(00(000 *R 111+ W -(000 Installment W -(00012 W *00 Total interest allowed ?-*(000 L *00@

+04 -1(+00

-*(*00

I++,=# a#4'% 11$ Br& :hivang ;autam took a loan of `2(00(000 on 01&10&+010 V 10R p&a& for construction of house which was completed on -1&0-&+01/& .ompute interest on capital !orrowed for the previous #ear +01--1/& 2'+,#4'%$ 7rior period interest &"om '()(')#'(' to *()'*)#'(* W 2(00(000 10R -011+ W `1(+2(000 Installment W `1(+2(00012 W `+2(000 .urrent #ear interest &"om '()'$)#'(* to *()'*)#'($ W 2(00(000 10R W `20(000 Total Interest W `+2(000 L `20(000 W `42(000 I++,=# a#4'% 12$ Br& G has taken a loan of `12(00(000 on 01&04&+00) V 1+R p&a& for construction of one house which was completed on 01&02&+01- and was let out V `*0(000 p&m& w&e&f 01&04&+01- and =air rent is `40(000 p&m& and the assessee has paid municipal ta of `-0(000 in 7&K& +01--1/ and the assessee has repaid the loan amount in annual instalment of `1(00(000 starting from 01&01&+01+& .ompute his income ta lia!ilit# for the assessment #ear +01/-12& 2'+,#4'%$ ` C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ent (40(000 11) 4(40(000 (!) < pected 0ent 4(40(000 (c) 0ent received /receiva!le (*0(000 )) 2(/0(000 If there was no vacanc#( in that case rent received1receiva!le would have !een `*(*0(000 and it was still less than e pected rent (therefore ;'9 shall !e e pected rent ;'9 4(40(000 AessJ Bunicipal Ta >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ ` .urrent period Interest 0 '( 01.04.2013 #' 31.03.2014 4(40(000&00

-0(000&00 4(/0(000&00 +(++(000&00 +(5/(/00&00

Income Fnder The 3ead 3ouse 7ropert# (1-(00(000 1+R )11+) L (1+(00(000 1+R 7rior period interest 0 '( 01.07.2009 #' 31.03.2013 12(00(000 1+R -011+ W /(20(000 1/(00(000 1+R 1+11+ W 1(*5(000 1-(00(000 1+R -11+ W -)(000 Instalment W *(24(000 1 2 W Total Interest W `1(2-(000 L `1(-1(/00W Income under the head house propert# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on normal income `+(--(*00 at sla! rate AessJ 0e!ate u1s 54' (-(-*0 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, (45" @',=e p 'pe #6 +e#!',# 7' pa # '7 #Be 6ea a%9 =e+7!'&&,p4e9 7' pa # '7 #Be 6ea Pa #4&,+a = C'(p,#a#4'% '7 GA* :tep 1 .ompute 'A9 for the whole #ear 'A9 W 3igher of B9 and =0( !ut restricted to :0 :tep + .ompute 'ctual rent received1receiva!le 'ctual rent received1receiva!le for the period let out less unrealiEed rent as per 0ule / :tep - .ompare 'A9 for the whole #ear with the actual rent received1 receiva!le for the let out period :tep / ;'9 is the higher of 'A9 computed for the whole #ear and 'ctual rent received1receiva!le computed for the let-out period& G '== A%%,a+ *a+,e (GA*" AessJ Bunicipal ta es (paid !# the owner during the previous #ear) Ne# A%%,a+ *a+,e (NA*" M (A!>" 3e==$ De9,&#4'%= ,%9e =e&#4'% 24 (a) -0R of >'9 6 (!) Interest on !orrowed capital (actual without an# ceiling limit) < I%&'(e 7 '( B',=e p 'pe #6 (C!D!E" - 11+) W 1(2-(000

+05

1(-1(/00 +(5/(/00 +(--(*00&00 +(--(*00&00 >il +(--(*00&00 -(-*0&00 +(000&00 1(-*0&00 +4&+0 1-&*0 1(/00&50 1(/00&00 A(',%#

' , .

I++,=# a#4'% 13$ :mt& 0aDalakshmi owns a house propert# at 'd#ar in .hennai& The municipal value of the propert# is `2(00(000( fair rent is ` /(+0(000 and standard rent is ` /(50(000& The propert# was let-out for ` 20(000 p&m& up to 6ecem!er +01-& Thereafter( the tenant vacated the propert# and :mt& 0aDalakshmi used the house for self-occupation& 0ent for the months of >ovem!er and 6ecem!er +01- could not !e realised in spite of the owner%s efforts& 'll the conditions prescri!ed under 0ule / are satisfied& :he paid municipal ta es V 1+R during the #ear& :he had paid interest of ` +2(000 during the #ear for amount !orrowed for repairs for the house propert#& .ompute her income from house propert# for the '&K& +01/-12& 2'+,#4'%$

Income Fnder The 3ead 3ouse 7ropert#

+0)

C'(p,#a#4'% '7 4%&'(e 7 '( B',=e p 'pe #6 '7 2(#. 1a<a+aJ=B(4 7' #Be A...2014!1/ Pa #4&,+a = A(',%# 4% ` C'(p,#a#4'% '7 GA* :tep 1 .ompute 'A9 for the whole #ear 'A9 W 3igher of B9 of ` 2(00(000 and =0 of ` /(+0(000( !ut /(50(000 restricted to :0 of ` /(50(000 :tep + .ompute 'ctual rent received1receiva!le 'ctual rent received1receiva!le for the period let out less unrealiEed -(20(000 rent as per 0ule / W (` 20000^)) - (`20(000 ^ +) W `/(20(000 `1(00(000 W :tep - .ompare 'A9 for the whole #ear with the actual rent received1receiva!le for the let out period i&e& `/(50(000 and ` -(20(000 :tep / ;'9 is the higher of 'A9 computed for the whole #ear and 'ctual rent /(50(000 received1receiva!le computed for the let-out period& G '== A%%,a+ *a+,e (GA*" 4F80F000 AessJ Bunicipal ta es (paid !# the owner during the previous #ear) W 1+R of *0(000 ` 2(00(000 Ne# A%%,a+ *a+,e (NA*" 4F20F000 3e==$ De9,&#4'%= ,%9e =e&#4'% 24 (a) -0R of >'9 W -0R of ` /(+0(000 1(+*(000 (!) Interest on !orrowed capital +2(000 1(21(000 I%&'(e 7 '( B',=e p 'pe #6 2F69F000 (5" Dee(e9 #' ;e +e# ',# p 'pe #6 Pa #4&,+a = G '== A%%,a+ *a+,e (GA*" 'A9 is the ;'9 of house propert# 'A9 W 3igher of B9 and =0( !ut restricted to :0 AessJ Bunicipal ta es (paid !# the owner during the previous #ear) Ne# A%%,a+ *a+,e (NA*" M (A!>" 3e==$ De9,&#4'%= ,%9e =e&#4'% 24 (a) -0R of >'9 (!) Interest on !orrowed capital (actual without an# ceiling limit) I%&'(e 7 '( B',=e p 'pe #6 (C!D!E" A(',%# ' , .
D E F

INADMI22I>3E DEDUCTION2 - 3OAN TAKEN 01OM OUT2IDE INDIA 2ECTION 2/

Interest chargea!le under this 'ct which is pa#a!le outside India shall not !e deducted if (a) ta has not !een paid or deducted from such interest and (!) there is no person in India who ma# !e treated as an agent under section 1*-& I++,=# a#4'% 14$ Br& 9ikas Cumar has constructed one house on 01&0)&+01- and it was let out V `20(000 p&m& and municipal ta es paid are `-2(000& The house was constructed after taking a loan from outside India and interest allowed under section +/(!) is `+(10(000( !ut the assessee has not deducted ta at source& .ompute assessee%s ta lia!ilit# for assessment #ear +01/-12& 2'+,#4'%$ ;ross 'nnual 9alue (20(000 AessJ Bunicipal Ta es 4) ` -(20(000&00 -2(000&00

Income Fnder The 3ead 3ouse 7ropert# >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert# Computation of Tax Liability Ta on `+(+0(200 at sla! rate AessJ 0e!ate u1s 54' (+(020 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 21&20 0ounded off u1s +55,

+10 -(12(000&00 )/(200&00 >il +(+0(200&00 +(020&00 +(000&00 20&00 1&00 0&20 20&00

I++,=# a#4'% 1/$ 7resume in the a!ove 8uestion( the person who has given the loan has one agent in India as per section 1*-& .ompute ta lia!ilit# for the assessment #ear +01/-12& 2'+,#4'%$ ` ;ross 'nnual 9alue (20(000 4) -(20(000 AessJ Bunicipal Ta es -2(000 >et 'nnual 9alue -(12(000 AessJ -0R of >'9 u1s +/(a) )/(200 AessJ Interest on capital !orrowed u1s +/(!) +(10(000 Income under the head 3ouse 7ropert# 10(200 Ta Aia!ilit# >il I++,=# a#4'% 16$ 7resume in the a!ove 8uestion( the assessee has deducted ta at source& .ompute ta lia!ilit# for the assessment #ear +01/-12& 2'+,#4'%$ ;ross 'nnual 9alue (20(000 4) AessJ Bunicipal Ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert# Ta Aia!ilit# >il

` -(20(000 -2(000 -(12(000 )/(200 +(10(000 10(200

CATEGO1. III ONE @OU2E W@IC@ I2 2E30!OCCUPIED O1 UNOCCUPIED P1OPE1T. 2ECTION 23(2"
Where the propert# is self-occupied for own residence or unoccupied throughout the previous #ear( its 'nnual 9alue will !e >il& >o deduction for municipal ta es is allowed in respect of such propert#& The !enefit of e emption of one self-occupied house is availa!le onl# to an individual13F=&

Income Fnder The 3ead 3ouse 7ropert#

+11

The e pression OFnoccupied propert#P refers to a propert# which cannot !e occupied !# the owner !# reason of his emplo#ment( !usiness or profession at a different place and he resides at such other place in a !uilding not !elonging to him& <&g& Br& G has one house at 'gra and it is l#ing vacant !ecause Br& G has his emplo#ment at 6elhi( in this case( it will !e considered to !e unoccupied propert# and income shall !e computed in the similar manner as in case of one self-occupied propert#& Interest under section +/(!) shall !e allowed to !e deducted in the manner given !elowJ 'ssessee will !e allowed a deduction on account of interest (including 112th of the accumulated interest of pre-construction period) as under (a) Where the propert# has !een ac8uired( constructed( repaired( renewed or reconstructed with !orrowed capital !efore 01&0/&1)))& Where the propert# is ac8uired or constructed with capital !orrowed on or after 01&0/&1))) and such ac8uisition or construction is completed within - #ears from the end of the financial #ear in which the capital was !orrowed& Where the propert# is repaired( renewed or reconstructed with capital !orrowed on or after 01&0/&1)))& 'ctual interest pa#a!le su!Dect to ma imum of `-0(000& 'ctual interest pa#a!le su!Dect to ma imum of `1(20(000( if certificate mentioned !elow is o!tained&

(!)

(c)

'ctual interest pa#a!le su!Dect to a ma imum of ` -0(000&

=or the purpose of claiming deduction of ` 1(20(000 as per (!) in the ta!le given a!ove( the assessee should furnish a certificate from the person to whom an# interest is pa#a!le on the capital !orrowed( specif#ing the amount of interest pa#a!le !# the assessee for the purpose of such ac8uisition or construction of the propert#& The ceiling prescri!ed for one self-occupied propert# as a!ove in respect of interest on loan !orrowed does not appl# to a deemed let-out propert#& I++,=# a#4'% 17$ 7oorna has one house propert# at Indira >agar in ,angalore& :he sta#s with her famil# in the house& The rent of similar propert# in the neigh!ourhood is `+2(000 p&m& The municipal valuation is ` +-(000 p&m& Bunicipal ta es paid is `5(000& The loan of `+0(00(000 was taken on 01&01&+004 from :,I 3ousing =inance Atd& The construction was completed on -0&11&+00)& The accumulated interest up to -1&0-&+00) is `1(20(000& 6uring the previous #ear +01--1/( 7oorna paid ` 1(55(000 which included `1(//(000 as interest& .ompute 7oorna%s income from house propert# for '&K& +01/-12& 'll the conditions for higher deduction of interest in case of self-occupied propert# is satisfied& 2'+,#4'%$ C'(p,#a#4'% '7 4%&'(e 7 '( B',=e p 'pe #6 '7 2(#. P'' %a 7' A...2014!1/ Pa #4&,+a = A%%,a+ *a+,e '7 '%e B',=e ,=e9 7' =e+7!'&&,pa#4'% ,%9e =e&#4'% 23(2" Less De9,&#4'% ,%9e =e&#4'% 24 : I%#e e=# '% ;' '8e9 &ap4#a+ Interest on loan was taken for construction of house on or after 01&0/&1))) and same was completed within - #ears - interest paid or pa#a!le su!Dect to a ma imum of `1(20(000 (including apportioned preconstruction interest) will !e allowed as deduction& A(',%# >il 1(20(000

Income Fnder The 3ead 3ouse 7ropert# In this case the total interest is ` 1(//(000 L ` -0(000 (,eing 112th of ` 1(20(000) W `1(4/(000& 3owever( the interest deduction is restricted to ` 1(20(000& 3'== 7 '( B',=e p 'pe #6

+1+

-1(20(000

I++,=# a#4'% 18(a"$ Br& 9ivek Cumar has taken a loan of `2(00(000 on 01&10&1))5 V 10R p&a& for construction of a house which was completed on 01&10&+01+ and the house remained self-occupied throughout the previous #ear +01--1/& The assessee has income under the head salar# `-(00(000& .ompute ta lia!ilit# for assessment #ear +01/-12& 2'+,#4'%$ ` >et 'nnual 9alue >il AessJ Interest on capital !orrowed u1s +/(!) (-0(000) W' J4%: N'#e$ ` .urrent period Interest 0 '( 01.04.2013 #' 31.03.2014 2(00(000 10R W 20(000 7rior period interest 0 '( 01.10.1998 #' 31.03.2012 2(00(000 10R 1*+11+ W *(42(000 Instalment W *(42(000 1 2 W 1(-2(000 Total Interest W `20(000 L `1(-2000 W 1(52(000 :u!Dect to ma imum `-0(000 Aoss under the head 3ouse 7ropert# (-0(000) Income under the head :alar# -(00(000 ;ross Total Income +(40(000 AessJ 6eduction u1s 50. to 50F >il Total Income +(40(000 Computation of Tax Liability Ta on `+(40(000 at sla! rate 4(000 AessJ 0e!ate u1s 54' (4(000 or +(000 whichever is less) +(000 Ta !efore education cess 2(000 'ddJ <ducation cess V +R 100 'ddJ :3<. V 1R 20 Ta Aia!ilit# 2(120 I++,=# a#4'% 18(;"$ 7resume in a!ove 8uestion( the loan was taken on 01&10&+00)& The assessee has su!mitted a certificate confirming the amount of interest& 2'+,#4'%$ ` >et 'nnual 9alue >il AessJ Interest on capital !orrowed u1s +/(!) (42(000) W' J4%: N'#e$ ` .urrent period Interest 0 '( 01.04.2013 #' 31.03.2014 2(00(000 10R W 20(000 7rior period interest 0 '( 01.10.2009 #' 31.03.2012 2(00(000 10R -011+ W 1(+2(000 Instalment W 1(+2(000 1 2 W +2(000 Total Interest W `20(000 L `+2(000 W 42(000 Aoss under the head 3ouse 7ropert# (42(000) Income under the head :alar# -(00(000

Income Fnder The 3ead 3ouse 7ropert# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Computation of Tax Liability Ta on `+(+2(000 at sla! rate AessJ 0e!ate u1s 54' (+(200 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 212 0ounded off u1s +55,

+1+(+2(000 >il +(+2(000 +(200 +(000 200 10 2 2+0

CATEGO1. III MO1E T@AN ONE @OU2E W@IC@ A1E 2E30!OCCUPIED (DEEMED TO >E 3ET OUT P1OPE1T." 2ECTION 23(4"
(a) Where the assessee owns more than one propert# for self-occupation( then the income from an# one of such propert#( at the option of the assessee( shall !e computed under the self-occupied propert# categor# and its annual value will !e nil& The other self-occupied1unoccupied properties shall !e treated as Odeemed let out propertiesP& (!) This option can !e changed #ear after #ear in a manner !eneficial to the assessee& (c) In case of deemed let-out propert#( the 'A91< pected 0ent shall !e taken as the ;'9& (d) The 8uestion of considering actual rent received1receiva!le does not arise& .onse8uentl#( no adDustment is necessar# on account of propert# remaining vacant or unrealiEed rent& (e) Bunicipal ta es actuall# paid !# the owner during the previous #ear can !e claimed as deduction& N'#4'%a+ 4%&'(e 4%=#ea9 '7 ea+ 4%&'(e Thus( under this head of income( there are circumstances where notional income is charged to ta instead of real income& =or e ample Where the assessee owns more than one house propert# for the purpose of self occupation( the annual value of an# one of those properties( at the option of the assessee( will !e nil and the other properties are deemed to !e let-out and income has to !e computed on a notional !asis !# taking the 'A91< pected 0ent as the ;'9& In the case of let-out propert# also( if the 'A9 e ceeds the actual rent( the 'A91< pected 0ent is taken as the ;'9& I++,=# a#4'% 19$ ;anesh has two houses( !oth of which are self-occupied& The particulars of the houses for the 7&K&+01--1/ are as underJ Pa #4&,+a = Bunicipal valuation p&a& =air rent p&a& @',=e I 1(00(000 42(000 @',=e II 1(20(000 1(42(000

Income Fnder The 3ead 3ouse 7ropert# :tandard rent p&a& 6ate of completion Bunicipal ta es paid during the #ear Interest on mone# !orrowed for repair of propert# during the current #ear )0(000 -1&0-&1))) 1+R -

+1/ 1(*0(000 -1&0-&+001 5R 22(000

.ompute ;anesh%s income from house propert# for '&K&+01/-12 and suggest which house should !e opted !# ;anesh to !e assessed as self-occupied so that his ta lia!ilit# is minimum& 2'+,#4'%$ C'(p,#a#4'% '7 4%&'(e 7 '( B',=e p 'pe #6 '7 Ga%e=B 7' #Be A... 2014!1/ Aet us first calculate the income from each house propert# assuming that the# are deemed to !e let out& Pa #4&,+a = G '== A%%,a+ *a+,e (GA*" 'A9 is the ;'9 of house propert# 'A9 W 3igher of B9 and =0( !ut restricted to :0 AessJ Bunicipal ta es (paid !# the owner during the previous #ear) Ne# A%%,a+ *a+,e (NA*" 3e==$ De9,&#4'%= ,%9e =e&#4'% 24 (a) -0R of >'9 (!) Interest on !orrowed capital I%&'(e 7 '( B',=e p 'pe #6 OPTION 1 (@',=e I - =e+7!'&&,p4e9 a%9 @',=e II - 9ee(e9 #' ;e +e# ',#" If 3ouse I is opted to !e self-occupied( the income from house propert# shall !e Pa #4&,+a = 3ouse I (:elf-occupied) 3ouse II (6eemed to !e let-out) I%&'(e 7 '( B',=e p 'pe #6 OPTION 2 (@',=e I - 9ee(e9 #' ;e +e# ',# a%9 @',=e II - =e+7!'&&,p4e9" If 3ouse II is opted to !e self-occupied( the income from house propert# shall !e Pa #4&,+a = 3ouse I (6eemed to !e let-out) 3ouse II (:elf-occupied) (interest deduction restricted to ` -0(000) I%&'(e 7 '( B',=e p 'pe #6 A(',%# 4% ` >il /5(*00 48F600 A(',%# 4% ` @',=e I @',=e II )0(000 1+(000 78F000 +-(/00 ! /4F600 1(*0(000 1+(000 1F48F000 //(/00 22(000 48F600

A(',%# 4% ` 2/(*00 --0(000 24F600

:ince Option + is more !eneficial( ;anesh should opt to treat 3ouse II as self-occupied and 3ouse I as deemed to !e let out& 3is income from house propert# would !e ` +/(*00 for the '&K& +01/-12& I++,=# a#4'% 20$ Br& 9ineet Cathuria has - houses which are self occupied and the details of these houses is as under& Pa #4&,+a = =air rent Bunicipal valuation :tandard rent Bunicipal ta es paid @',=e I (I% `" 1(10(000 1(+/(000 1(10(000 10(000 @',=e II (I% `" 1(+0(000 1(15(000 1(-2(000 5(000 @',=e III (I% `" 1(+-(000 1(1+(000 1(+)(000 )(000

Income Fnder The 3ead 3ouse 7ropert# Interest on capital !orrowed on -+(000 01&0/&+005 and all the necessar# conditions are complied with to avail higher amount of interest& 0epair charges 10(000 6ate of completion of house 01&10&+010 .ompute income under the head house propert#& 2'+,#4'%$ Op#4'% I @',=e I 4= 2e+7 O&&,p4e9 Aoss @',=e II 4= 9ee(e9 #' ;e 3e# O,# ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air rent (!) Bunicipal valuation (c) 3igher of (a) or (!) (d) :tandard rent (e) < pected rent _Aower of (c) or (d)` ;'9 W < pected rent AessJ Bunicipal Ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income @',=e III 4= 9ee(e9 #' ;e 3e# O,# ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air rent (!) Bunicipal valuation (c) 3igher of (a) or (!) (d) :tandard rent (e) < pected rent _Aower of (c) or (d)` ;'9 W < pected rent AessJ Bunicipal Ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income Income under Option I ?(-+(000) L -)(/00 L 21(500@ Op#4'% II @',=e I 4= 9ee(e9 #' ;e 3e# O,# ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air rent (!) Bunicipal valuation (c) 3igher of (a) or (!) (d) :tandard rent (e) < pected rent _Aower of (c) or (d)` ;'9 W < pected rent AessJ Bunicipal Ta es -)(000 +5(000

+12

-(000 01&10&+010

5(000 01&10&+010 ` (-+(000) 1(+0(000

` 1(+0(000 1(15(000 1(+0(000 1(-2(000 1(+0(000 1(+0(000 5(000 1(1+(000 --(*00 -)(000 -)(/00 1(+-(000 ` 1(+-(000 1(1+(000 1(+-(000 1(+)(000 1(+-(000 1(+-(000 )(000 1(1/(000 -/(+00 +5(000 21(500 2)(+00

1(10(000 ` 1(10(000 1(+/(000 1(+/(000 1(10(000 1(10(000 1(10(000 10(000

Income Fnder The 3ead 3ouse 7ropert# >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income @',=e II 4= 2e+7 O&&,p4e9 Aoss @',=e III 4= 9ee(e9 #' ;e 3e# O,# Income Income under Option II ?-5(000 L (-)(000) L 21(500@ Op#4'% III @',=e I 4= 9ee(e9 #' ;e 3e# O,# Income @',=e II 4= 9ee(e9 #' ;e 3e# O,# Income @',=e III 4= 2e+7 O&&,p4e9 Aoss Income under Option III ?-5(000 L -)(/00 L (+5(000)@ Third Option is the !est Income under the head 3ouse 7ropert#

+1* 1(00(000 -0(000 -+(000 -5(000 (-)(000) 21(500 20(500

-5(000 -)(/00 (+5(000) /)(/00 /)(/00

CATEGO1. III @OU2E P1OPE1T. OWNED >. T@E A22E22EE AND U2ED 0O1 OWN >U2INE22/P1O0E22ION 2ECTION 22/2ECTION 30
If an# person owns an# house propert# and it is !eing used !# him in his own !usiness1profession( income of such !uilding shall not !e computed under the head house propert# rather income shall !e computed under the head !usiness1profession and as per section -0( for this purpose( while computing the income under the head !usiness1profession( no rent shall !e allowed to !e de!ited to the profit M loss account in connection with such !uilding& The income of !usiness or profession shall get increased to that e tent and all the e penses of the house propert# shall !e de!ited to the profit and loss account and deduction under section +/(a) is not allowed rather actual e penditure shall !e de!ited to the profit and loss account& :uch e penditure ma# !e municipal ta ( repairs( depreciation( land revenue( ground rent etc& I++,=# a#4'% 21$ Brs& G aged *+ #ears is engaged in a !usiness in her own !uilding and furnishes the following information& Barket rent of the !uilding is `1(00(000 p&m& and e penses incurred on repairs are `-4(000 and interest on loan taken for construction of the !uilding is `*2(000 and depreciation `-0(000 and municipal ta paid `-0(000 and land revenue paid `10(000 and premium paid for insurance of the house `4(000& ground rent paid `5(000& Income from !usiness !efore de!iting an# e pense of house propert# is `1*(00(000& .ompute her income ta lia!ilit# for 'ssessment Kear +01/-12& 2'+,#4'%$ Income from !usiness !efore de!iting an# e pense of house propert# AessJ 0epair of ,uilding ` 1*(00(000&00 -4(000&00

Income Fnder The 3ead 3ouse 7ropert# AessJ Interest on loan taken for construction of !uilding AessJ 6epreciation AessJ Bunicipal Ta es AessJ Aand revenue AessJ Insurance premium of the house AessJ ;round rent Income under the head ,usiness17rofession ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `1/(1-(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55,

+14 *2(000&00 -0(000&00 -0(000&00 10(000&00 4(000&00 5(000&00 1/(1-(000&00 1/(1-(000&00 >il 1/(1-(000&00 +(/5()00&00 /()45&00 +(/5)&00 +(2*(-*4&00 +(2*(-40&00

CATEGO1. I* W@E1E A @OU2E P1OPE1T. I2 3ET!OUT 0O1 PA1T O0 T@E .EA1 AND 2E30!OCCUPIED 0O1 PA1T O0 T@E .EA1 2ECTION 23(3"
(a) If a single unit of a propert# is self-occupied for part of the #ear and let-out for the remaining part of the #ear( then the 'A9 for the whole #ear shall !e taken into account for determining the ;'9& (!) The 'A9 for the whole #ear shall !e compared with the actual rent for the let out period and whichever is higher shall !e adopted as the ;'9& (c) 3owever( propert# ta es for the whole #ear is allowed as deduction provided it is paid !# the owner during the previous #ear& I++,=# a#4'% 22$ Br& 'nkit :harma constructed one house in 1)52 and it is let out for / months and self occupied for * months and vacant for + months during previous #ear +01--1/& Bunicipal valuation of the house is `+0(000 p&m& and fair rent `15(000 p&m& :tandard rent of the house is `1)(000 p&m& It was let out V `11(000 p&m& Bunicipal ta levied is `*(000 out of which `+(000 was paid !# the tenant and `+(000 !# the assessee and !alance `+(000 #et to !e paid& Interest on the capital !orrowed for construction of the house is `-0(000& .ompute his income under the head house propert# for the assessment #ear +01/-12& 2'+,#4'%$ Computation of income f"om +ouse P"ope"ty of ,") An-it ./a"ma ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ent (15(000 1+) (!) Bunicipal 9aluation (+0(000 1+) (c) 3igher of (a) or (!) (d) :tandard 0ent (1)(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (11(000 /) ` +(+5(000 ` +(1*(000 +(/0(000 +(/0(000 +(+5(000 +(+5(000 //(000

Income Fnder The 3ead 3ouse 7ropert# If there was no vacanc#( in that case rent received1receiva!le would have !een `**(000 and it was still less than e pected rent( therefore ;'9 shall !e e pected rent& ;'9 +(+5(000 AessJ Bunicipal Ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert#

+15

+(000 +(+*(000 *4(500 -0(000 1(+5(+00

CATEGO1. * @OU2E P1OPE1T. W@IC@ I2 DI*IDED INTO DI00E1ENT PO1TION2/UNIT2

If an# house propert# is divided into different portions( ever# portion shall !e considered to !e a separate house and income shall !e computed accordingl#& There is no need to treat the whole propert# as a single unit for computation of income from house propert#& Bunicipal valuation1fair rent1standard rent( if not given separatel#( shall !e apportioned !etween the let-out portion and self-occupied portion either on plinth area or !uilt-up floor space or on such other reasona!le !asis& 7ropert# ta es( if given on a consolidated !asis can !e !ifurcated as attri!uta!le to each portion or floor on a reasona!le !asis& I++,=# a#4'% 23$ 7rem owns a house in Badras& 6uring the previous #ear +01--1/( +1-rd portion of the house was self-occupied and 11-rd portion was let out for residential purposes at a rent of ` 5(000 p&m& Bunicipal value of the propert# is ` -(00(000 p&a&( fair rent is ` +(40(000 p&a& and standard rent is ` -(-0(000& 3e paid municipal ta es V 10R of municipal value during the #ear& ' loan of ` +2(00(000 was taken !# him during the #ear +00) for ac8uiring the propert#& Interest on loan paid during the previous #ear +01--1/ was ` 1(+0(000& .ompute 7rem%s income from house propert# for the '&K& +01/-12& 'll the conditions for higher deduction of interest in case of self-occupied propert# is satisfied& 2'+,#4'%$ There are two units of the house& Fnit I with +1-rd area is used !# 7rem for self-occupation throughout the #ear and no !enefit is derived from that unit( hence it will !e treated as self-occupied and its annual value will !e nil& Fnit + with 11-rd area is let-out through out the previous #ear and its annual value has to !e determined as per section +-(1)& C'(p,#a#4'% '7 4%&'(e 7 '( B',=e p 'pe #6 '7 M . P e( 7' A...2014!1/ Pa #4&,+a = U%4# I (2/3 9 a ea - =e+7!'&&,p4e9" 'nnual 9alue AessJ 6eduction under section +/(!) +1-rd of ` 1(+0(000 I%&'(e 7 '( U%4# I (=e+7!'&&,p4e9" U%4# II (1/3 9 a ea - +e# ',#" C'(p,#a#4'% '7 GA* :tep I .ompute 'A9 'A9 W 3igher of B9 and =0( restricted to :0& 3owever( in this case( :0 of `1(10(000 (11-rd of ` -(-0(000) is more than the higher of B9 of ` 1(00(000 (11-rd of ` -(00(000) and =0 of ` )0(000 (11-rd of ` +(40(000)& 3ence the higher of B9 and A(',%# 4% ` >il 50(000 !80F000

1(00(000

Income Fnder The 3ead 3ouse 7ropert# =0 is the 'A9& In this case( it is the B9& :tep + .ompute actual rent received1 receiva!le ` 5(000^1+ W `)*(000 :tep - ;'9 is the higher of 'A9 and actual rent received1receiva!le i&e& higher of `1(00(000 and ` )*(000 G '== A%%,a+ *a+,e (GA*" AessJ Bunicipal ta es paid !# the owner during the previous #ear relating to let-out portion 11-rd of (10R of ` -(00(000) W ` -0(0001- W ` 10(000 Ne# A%%,a+ *a+,e (NA*" AessJ 6eductions under section +/ (a) -0R of >'9 W -0R of ` )0(000 (!) Interest paid on !orrowed capital (relating to let out portion) 11- rd of ` 1(+0(000 I%&'(e 7 '( U%4# II (+e#!',#" 3'== ,%9e #Be Bea9 PI%&'(e 7 '( B',=e p 'pe #6Q M ` !80F000 X ` 23F000 )*(000 1(00(000

+1)

1F00F000 10(000 90F000 +4(000 /0(000 *4(000 23F000 !/7000

I++,=# a#4'% 24$ Br& 3emant Cumar has one !ig house& +2R of it is !eing used !# the assessee in his own !usiness1profession and 20R of the house is let out V `10(000 p&m& 3owever( it remained vacant for one month and there is unrealised rent for 1a month& 0emaining +2R is self occupied throughout the #ear& =air rent of the entire house is `+2(000 p&m&( municipal valuation `++(000 p&m& and municipal ta paid is `++(000& Insurance premium paid is `*(000( repair charges `5(000( land revenue paid `/(000( ground rent is `-(000 and depreciation of the house is `1+(000& 'ssessee%s income under the head !usiness1profession !efore charging e penditure relating to house propert# is `+(00(000& .ompute his total income and ta lia!ilit# for assessment #ear +01/-12& 2'+,#4'%$ Computation of income un!e" t/e /ea! +ouse P"ope"ty I%&'(e 7 '( =e+7 '&&,p4e9 p' #4'% Income of self occupied portion I%&'(e '7 +e# ',# p' #4'% ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ent (1+(200 1+) 1(20(000 (!) Bunicipal 9aluation (11(000 1+) 1(-+(000 (c) < pected rent _3igher of (a) or (!)` 1(20(000 (d) 0ent 0eceived10eceiva!le (10(000 )&2) )2(000 If there was no vacanc#( in that case rent received1receiva!le would have !een `1(02(000 and it was still less than e pected rent( therefore ;'9 shall !e e pected rent ;'9 1(20(000 AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert# Computation of income un!e" t/e /ea! 0usiness1P"ofession Income !efore de!iting an# e pense of the house propert# >il 1(20(000&00 `

11(000&00 1(-)(000&00 /1(400&00 >il )4(-00&00 +(00(000&00

Income Fnder The 3ead 3ouse 7ropert# AessJ Bunicipal ta es AessJ Insurance premium AessJ 0epairs charges AessJ Aand revenue AessJ ;round 0ent AessJ 6epreciation Income under the head ,usiness17rofession Computation of Total Income Income under the head 3ouse 7ropert# Income under the head ,usiness17rofession ;ross Total Income AessJ 6eductions u1s 50. to 50F Total Income Computation of Tax Liability Ta on `+(5-(220 at sla! rate AessJ 0e!ate u1s 54' (5(-22 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55,

++0 2(200&00 1(200&00 +(000&00 1(000&00 420&00 -(000&00 1(5*(+20&00 )4(-00&00 1(5*(+20&00 +(5-(220&00 >il +(5-(220&00

5(-22&00 +(000&00 *(-22&00 1+4&10 *-&22 *(2/2&*2 *(220&00

COMPO2ITE 1ENT
The owner of a propert# ma# sometimes receive rent in respect of !uilding as well as (1) other assets like sa#( furniture( plant and machiner#& (+) for different services provided in the !uilding( for eg& (a) Aifts" (!) :ecurit#" (c) 7ower !ackup" The amount so received is known as Ocomposite rentP& Where composite rent includes rent of !uilding and charges for different services (lifts( securit# etc&)( the composite rent has to !e split up in the following manner (a) (!) the sum attri!uta!le to use of propert# is to !e assessed under section ++ as income from house propert#" the sum attri!uta!le to use of services is to charged to ta under the head O7rofits and gains of !usiness or professionP or under the head OIncome from other sourcesP&

Where composite rent is received from letting out of !uilding and other assets (like furniture) and the two lettings are not separa!le (a) (!) If the letting out of !uilding and other assets are not separa!le i&e& the other part# does not accept letting out of !uildings without other assets( then the rent is ta a!le either as !usiness income or income from other sources" This is applica!le even if sum receiva!le for the two lettings is fi ed separatel#&

I++,=# a#4'% 2/$ Br& 'kshat Qain has let out one house alongwith generator facilit# and has charged a sum of `+2(000 p&m& as rent( out of which `-(000 p&m& is attri!uta!le to the generator& 3e has paid `+(-00 and the

Income Fnder The 3ead 3ouse 7ropert#

++1

tenant has paid `)00 towards municipal ta es& The interest on the capital !orrowed for construction of the house is `4(000& Br& 'kshat Qain has paid repair charge of the generator `-(/00( fuel charges `2(*00 and operator%s salar# `-00 p&m& .ompute the ta lia!ilit# of Br& 'kshat Qain for assessment #ear +01/-12& 2'+,#4'%$ ` Computation of income un!e" t/e /ea! +ouse P"ope"ty ;ross 'nnual 9alue (++(000 1+) +(*/(000&00 AessJ Bunicipal Ta es +(-00&00 >et 'nnual 9alue +(*1(400&00 AessJ -0R of >'9 u1s +/(a) 45(210&00 AessJ Interest on capital !orrowed u1s +/(!) 4(000&00 Income under the head 3ouse 7ropert# 1(4*(1)0&00 Computation of income un!e" t/e /ea! Ot/e" .ou"ces Income from generator (-(000 1+) AessJ 0epair charges AessJ =uel charges AessJ Operator :alar# (-00 1+) Income under the head Other :ources Computation of Total Income Income under the head 3ouse 7ropert# Income under the head Other :ources ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Ta Aia!ilit# >il -*(000&00 -(/00&00 2(*00&00 -(*00&00 +-(/00&00 1(4*(1)0&00 +-(/00&00 1())(2)0&00 >il 1())(2)0&00

3ETTING OUT I2 2UPP3EMENTA1. TO T@E MAIN >U2INE22

(i) Where the propert# is let out with the o!Dect of carr#ing on the !usiness of the assessee in an efficient manner( then the rental income is ta a!le as !usiness income( provided letting is not the main !usiness !ut it is supplementar# to the main !usiness&

(ii)

In such a case( the letting out of the propert# is supplementar# to the main !usiness of the assessee and deductions1allowances have to !e calculated as relating to profits1gains of !usiness and not relating to house propert#& Example If a 7u!lic school has let out a part of its !uilding to a ,ank( in this case rent received shall !e considered to !e income under the head ,usiness17rofession and all e penses of such house propert# shall !e de!ited to profit and loss account& If an# compan# has constructed houses for the emplo#ees in their premises and it is let out to the emplo#ees( rental income is ta a!le under the head ,usiness17rofession&

TAX 3IA>I3IT. IN 1E2PECT O0 A11EA12 O0 1ENT 2ECTION 2/>

Where the assessee receives an# amount !# wa# of arrears of rent in respect of an# propert# consisting of

Income Fnder The 3ead 3ouse 7ropert#

+++

!uildings or land appurtenant thereto( of which he is the owner( the amount so received shall !e chargea!le to ta under the head OIncome from 3ouse 7ropert#P& It shall !e charged to ta as the income of the previous #ear in which such rent is received even if the assessee is no longer the owner of such propert#& In computing the income chargea!le to ta in respect of the arrears so received( -0R shall !e allowed as a deduction and conse8uentl# 40R alone shall !e chargea!le to ta & The deduction of -0R is irrespective of the actual e penditure incurred& There is no specific provision given in the Income Ta 'ct relating to advance pa#ment of rent& I++,=# a#4'% 26$ Br& :idhant ;oel has let out his house to :tate ,ank V `+0(000 p&m& The !ank has increased the rent on 1st Qul#( +01- to `+4(000 p&m& retrospectivel# w&e&f& 01&11&+01+& The assessee has paid municipal ta es of `4(000 during the previous #ear +01--1/& .ompute income under the head 3ouse 7ropert# for assessment #ear +01/-12& 2'+,#4'%$ Computation of income un!e" t/e /ea! +ouse P"ope"ty ;ross 'nnual 9alue (+4(000 1+) AessJ Bunicipal Ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) 'ddJ 'rrears of rent (:ec +2,) (4(000 AessJ -0R of `-2(000 Income under the 3ouse 7ropert# 2)

` -(+/(000 4(000 -(14(000 )2(100 >il +(+1()00 +/(200 +(/*(/00

-2(000 10(200

C'(pa 4='% '7 e&'5e 6 '7 ,% ea+4=e9 e%# ? a ea = '7 e%# e&e45e9 (i) Fnrealised rent is deducted from actual rent in determination of annual value under section +-( su!Dect to fulfillment of conditions under 0ule /& :u!se8uentl#( when the amount is realiEed( it gets ta ed under section +2'' in the #ear of receipt& (ii) If the assessee has increased the rent pa#a!le !# the tenant and the same has !een in dispute and later on the assessee receives the increase in rent as arrears( such arrears is assessa!le under section +2,& U% ea+4=e9 e%# K2e&#4'% 2/AAL A ea = '7 e%# K2e&#4'% 2/>L U% ea+4=e9 e%# K2e&#4'% 2/AAL A ea = '7 e%# K2e&#4'% 2/>L (a) Ta a!le in the hands of the assessee whether he is Ta a!le in the hands of the assessee whether the owner of that propert# or not& he is the owner of that propert# or not& (!) Ta a!le as income of the previous #ear in which Ta a!le as income of the #ear in which he he recovers the unrealiEed rent& receives the arrears of rent& (c) >o deduction shall !e allowed& -0R of the amount of arrears shall !e allowed as deduction& (d) Fnrealised rent means the rent which has !een 'rrears of rent is in respect of rent not deducted from actual rent in an# previous #ear for charged to income-ta for an# previous #ear& determining annual value&

2U>!3ETTING O0 @OU2E P1OPE1T. 2ECTION /6

If an# person has su!-let an# house propert#( an# income received shall !e ta a!le under the head other sources as per section 2* and further total income shall !e( rent received minus e penses incurred& Example Br& 'nurag ;upta has taken one house on rent `10(000 p&m& and he has su!-let *0R of the house for a rent

Income Fnder The 3ead 3ouse 7ropert#

++-

of `)(000 p&m& 3e has incurred `-00 p&m& for collection of the rent& In this case( his income shall !e considered to !e ` 0ent 0eceived ()(000 1+) 1(05(000 AessJ < penses incurred (-00 1+) -(*00 AessJ 0ent 7aid (10(000 *0R 1+) 4+(000 Income under the head Other :ources -+(/00 I%&'(e 7 '( @',=e P 'pe #6 24#,a#e9 O,#=49e I%94a (i) In case of a resident in India (resident and ordinaril# resident in case of individuals and 3F=)( income from propert# situated outside India is ta a!le( whether such income is !rought into India or not& (ii) In case of a non-resident or resident !ut not ordinaril# resident in India( income from a propert# situated outside India is ta a!le onl# if it is received in India& I++,=# a#4'% 27$ 0aDesh( a ,ritish national( is a resident and ordinaril# resident in India during the 7&K&+01-1/& 3e owns a house in Aondon( which he has let out at b 10(000 p&m& The municipal ta es paid to the Bunicipal .orporation of Aondon is b 5(000 during the 7&K&+01--1/& The value of one b in Indian rupee to !e taken at ` 5+&20& .ompute 0aDesh%s ta a!le income for the '&K& +01/-12& 2'+,#4'%$ =or the 7&K&+01--1/( Br& 0aDesh( a ,ritish national( is resident and ordinaril# resident in India& Therefore( income received !# him !# wa# of rent of the house propert# located in Aondon is to !e included in the total income in India& Bunicipal ta es paid in Aondon is !e to allowed as deduction from the gross annual value& C'(p,#a#4'% '7 I%&'(e 7 '( B',=e p 'pe #6 '7 M . 1a<e=B 7' A...2014!1/ Pa #4&,+a = ;ross 'nnual 9alue (b 10(000 ^ 1+ ^ 5+&20) AessJ Bunicipal ta es paid (b 5(000 ^ 5+&20) >et 'nnual 9alue (>'9) AessJ 6eduction under section +/ (a) -0R of >'9 W -0R of ` )+(/0(000 I%&'(e 7 '( B',=e p 'pe #6 ` ))(00(000 *(*0(000 )+(/0(000 +4(4+(000 64F68F000

T ea#(e%# '7 4%&'(e 7 '( &'!'8%e9 p 'pe #6 K2e&#4'% 26L (i) Where propert# is owned !# two or more persons( whose shares are definite and ascertaina!le( then the income from such propert# cannot !e ta ed as income of an 'O7& (ii) The share income of each such co-owner should !e determined in accordance with sections ++ to +2 and included in his individual assessment& (iii) Where the house propert# owned !# co-owners is self occupied !# each of the co-owners( the annual value of the propert# of each co-owner will !e >il and each co-owner shall !e entitled to a deduction of `-0(000 1 ` 1(20(000( as the case ma# !e( under section +/(!) on account of interest on !orrowed capital& (iv) Where the house propert# owned !# co-owners is let out( the income from such propert# shall !e computed as if the propert# is owned !# one owner and thereafter the income so computed shall !e apportioned amongst each co-owner as per their specific share& T ea#(e%# '7 4%&'(e 7 '( p 'pe #6 '8%e9 ;6 a pa #%e =B4p 74 ( (i) Where an immova!le propert# or properties is included in the assets of a firm( the income from such propert# should !e assessed in the hands of the firm onl#&

Income Fnder The 3ead 3ouse 7ropert#

++/

(ii) 3ence( the propert# income cannot !e assessed as income of the individual partner in respect of his share in the firm&

W@O I2 3IA>3E TO PA. INCOME TAX ON T@E INCOME 01OM @OU2E P1OPE1T.
's per section ++( the owner of house propert# shall !e lia!le to pa# income ta and other aspects are as given !elowJ (a) (!) (c) (d) (e) (f) (g) Owner is the person who is entitled to receive income from the propert# in his own right& The re8uirement of registration of the sale deed is not warranted& Ownership includes !oth free-hold and lease-hold rights& Ownership includes deemed ownership& The person who owns the !uilding need not also !e the owner of the land upon which it stands& The assessee must !e the owner of the house propert# during the previous #ear& It is not material whether he is the owner in the assessment #ear& If the title of the ownership of the propert# is under dispute in a court of law( the decision as to who will !e the owner chargea!le to income-ta under section ++ will !e of the Income-ta 6epartment till the court gives its decision to the suit filed in respect of such propert#&

DEEMED OWNE12@IP 2ECTION 27

's per section +4( the following persons( though not legal owners of a propert#( are deemed to !e the owners for the purposes of section ++ to +*& (4" T a%=7e #' a =p',=e K2e&#4'% 27(4"L In case of transfer of house propert# !# an individual to his or her spouse otherwise than for ade8uate consideration( the transferor is deemed to !e the owner of the transferred propert#& E)&ep#4'% In case of transfer to spouse in connection with an agreement to live apart( the transferor will not !e deemed to !e the owner& The transferee will !e the owner of the house propert#& (44" T a%=7e #' a (4%' &B4+9 K2e&#4'% 27(4"L In case of transfer of house propert# !# an individual to his or her minor child otherwise than for ade8uate consideration( the transferor is deemed to !e the owner of the house propert# transferred& E)&ep#4'% In case of transfer to a minor married daughter( the transferor is not deemed to !e the owner. N'#e ! Where cash is transferred to spouse1minor child and the transferee ac8uires propert# out of such cash( then the transferor shall not !e treated as deemed owner of the house propert#& 3owever( clu!!ing provisions will !e attracted& (444" @'+9e '7 a% 4(pa #4;+e e=#a#e K2e&#4'% 27(44"L The imparti!le estate is a propert# which is not legall# divisi!le& The holder of an imparti!le estate shall !e deemed to !e the individual owner of all properties comprised in the estate& 'fter enactment of the 3indu :uccession 'ct( 1)2*( all the properties comprised in an imparti!le estate !# custom is to !e assessed in the status of a 3F=& 3owever( section +4(ii) will continue to !e applica!le in relation to imparti!le estates !# grant or covenant(& (45" Me(;e '7 a &'!'pe a#45e ='&4e#6 e#&. K2e&#4'% 27(444"L ' mem!er of a co-operative societ#( compan# or other association of persons to whom a !uilding or part thereof is allotted or leased under a

Income Fnder The 3ead 3ouse 7ropert#

++2

3ouse ,uilding :cheme of a societ#1compan#1association( shall !e deemed to !e owner of that !uilding or part thereof allotted to him although the co-operative societ#1compan#1 association is the legal owner of that !uilding& (5" Pe ='% 4% p'==e==4'% '7 a p 'pe #6 K2e&#4'% 27(444a"L ' person who is allowed to take or retain the possession of an# !uilding or part thereof in part performance of a contract of the nature referred to in section 2-' of the Transfer of 7ropert# 'ct shall !e the deemed owner of that house propert#& This would include cases where the (1) (+) (-) possession of propert# has !een handed over to the !u#er sale consideration has !een paid or promised to !e paid to the seller !# the !u#er sale deed has not !een e ecuted in favour of the !u#er( although certain other documents like power of attorne#1agreement to sell1will etc& have !een e ecuted&

In all the a!ove cases( the !u#er would !e deemed to !e the owner of the propert# although it is not registered in his name& (54" Pe ='% Ba54%: 4:B# 4% a p 'pe #6 7' a pe 4'9 %'# +e== #Ba% 12 6ea = K2e&#4'% 27(444;"L ' person who ac8uires an# rights in or with respect to an# !uilding or part thereof( !# virtue of an# transaction as is referred to in section +*)F'(f) i&e& transfer !# wa# of lease for not less than 1+ #ears( shall !e deemed to !e the owner of that !uilding or part thereof& E)&ep#4'% 'n# rights !# wa# of lease from month to month or for a period not e ceeding one #ear& Ca=e= 8Be e 4%&'(e 7 '( B',=e p 'pe #6 4= e)e(p# 7 '( #a) 2+. N' 1 + / 2 * 4 5 ) 10 2e&#4'% 10(1) 10(1)') 10(+0) 10(+1) 10(+-.) 10(+/) 11 1-' ++ +-(+) Pa #4&,+a = Income from an# farm house forming part of agricultural income& 'nnual value of an# one palace in the occupation of an e -ruler& Income from house propert# of a local authorit#& Income from house propert# of an approved scientific research association& 7ropert# income of universities( educational institutions( etc& 7ropert# income of an# registered trade union& Income from house propert# held for charita!le or religious purpose& 7ropert# income of an# political part#& 7ropert# used for own !usiness or profession One self-occupied propert# of an individual13F=

INCOME UNDE1 T@E @EAD @OU2E P1OPE1T. WIT@OUT @A*ING AN. @OU2E P1OPE1T.
:ometimes a person has the income under the head house propert# even though he does not have house propert#& :uch instances areJ (1" U% ea+4=e9 1e%# - 2e&#4'% 2/AA Where the assessee cannot realise rent from a propert# let out to a tenant and su!se8uentl# the assessee has realised an# amount in respect of such rent( the amount so realised shall !e deemed to !e income chargea!le under the head OIncome from house propert#P and accordingl# charged to income-ta as the income of that previous #ear in which such rent is realised whether or not the assessee is the owner of that propert# in that previous #ear&

Income Fnder The 3ead 3ouse 7ropert#

++*

(2" A ea = '7 e%# - 2e&#4'% 2/> Where the assesseeX (a) is the owner of an# propert# consisting of an# !uildings or lands appurtenant thereto which has !een let to a tenant and (!) has received an# amount( !# wa# of arrears of rent from such propert#( not charged to income-ta for an# previous #ear( the amount so received( after deducting a sum e8ual to -0R of such amount( shall !e deemed to !e the income chargea!le under the head OIncome from house propert#P and accordingl# charged to income-ta as the income of that previous #ear in which such rent is received( whether the assessee is the owner of that propert# in that #ear or not& (3" Dee(e9 O8%e =B4p - 2e&#4'% 27(4" 'n individual who transfers otherwise than for ade8uate consideration an# house propert# to his or her spouse( not !eing a transfer in connection with an agreement to live apart( or to a minor child not !eing a married daughter( shall !e deemed to !e the owner of the house propert# so transferred& :o even in this case such an individual shall !e deemed to !e the owner of the propert# even though he is not actuall# owning the propert#&

P1ACTICE P1O>3EM2
TOTAL P2O0LE,. #3
P ';+e( 1$ Br& G has let out one !uilding V ` )0(000 p&m& and fair rent is ` 50(000 p&m& standard rent ` 1(00(000 p&m& Bunicipal valuation ` 51(000 p&m&( Bunicipal Ta paid ` 40(000 p&a&( Interest on loan for construction of house propert# ` 5+(000& 3e is engaged in a !usiness and is registered under 69'T and he purchased goods for ` 12(00(000 and paid 69'T V1+&2R and the goods were sold in 6elhi V profit of +0R on sale price and output 6elhi 9'T is 1+&2R .ompute his ta lia!ilit# for assessment #ear +01/-12 and also show the treatment for 9'T& (ignore provisions of section //'6) A%=8e $ Ta Aia!ilit#J `1(--()00" >et 9'T 7a#a!leJ `/*(542 P ';+e( 2$ G Atd& has let out one !uilding to ',. Atd& V `-(00(000 p&m& and G Atd& has paid municipal ta of `*(00(000 p&a& G Atd& has paid interest of `-(00(000 on loan taken for construction of !uilding& =air rent of the !uilding is `+(20(000 p&m& and Bunicipal 9aluation is `+(42(000 p&m& and :tandard 0ent is `+(50(000 p&m& .ompute Income Ta Aia!ilit# for assessment #ear +01/-12& A%=8e $ Income Ta Aia!ilit#J `2(2*(+00 P ';+e( 3$ GKZ Atd& is registered under .entral < cise 'ct 1 6elhi 9alue 'dded Ta 'ct and is engaged in manufacturing activities and the compan# purchased raw material for ` -00(00(000 and paid e cise dut# V 10R plus <. plus :3<. 7lus .entral :ales Ta V +R& GKZ Atd& incurred `-(00(000 during the process of manufacturing during the #ear& 'll the goods manufactured !# the compan# were sold at a profit of +0R on sale price and output e cise dut# rate is 10R plus <. plus :3<. and output 9'T rate is 1+&2R&

Income Fnder The 3ead 3ouse 7ropert#

++4

The compan# has let out one !uilding to ',. Atd& V `+(00(000 p&m& =air rent is `1(50(000 p&m& and standard rent `+(+0(000 p&m& The compan# paid municipal ta of `*(00(000 during the #ear& .ompute income ta Aia!ilit# of GKZ Atd& and also show ta treatment for .envat credit and 9'T credit& A%=8e $ Income Ta Aia!ilit#J `+4(51(1/0 (!) 7resume the goods were sold to a registered dealer in some other state and output .entral sales ta was V +R and also raw material was purchased from 6elhi and 6elhi 9'T was paid V 1+&2R A%=8e $ Income Ta Aia!ilit#J `+4(-0(0+0

P ';+e( 4. .ompute gross annual value in the following cases for the assessment #ear +01/-12J Pa #4&,+a = =air 0ent (p&m&) Bunicipal 9aluation (p&m&) :tandard 0ent (p&m&) 0ent received1 receiva!le (p&m&) 9acanc# Fnrealised rent 24#,a#4'% 1 10(000 11(000 1+(000 4(000 1 month 24#,a#4'% 2 1+(000 10(000 11(000 11(200 + months 24#,a#4'% 3 1-(000 5(000 4(000 +0(000 1 month - month 24#,a#4'% 4 12(000 14(000 1*(000 1*(000 - month 1 month

A%=8e M ;ross 'nnual 9alueJ :ituation 1J `1(-+(000" :ituation +J `1(12(000" :ituation -J `1(*0(000" :ituation /J `1()+(000 P ';+e( /. Br& G has let out one house propert# V `40000 per month and there is unrealised 0ent of + months and there is vacanc# of - month& =air rent `*0(000 per month( municipal valuation `22(000 per month and standard rent `50(000 per month& Bunicipal ta paid `*+(000& Interest on loan for construction of the house propert# is `42(000&The assessee has unrealised 0ent of `+(00(000 in 7&K& +010-11 and he has recovered `1(20(000 in 7&K& +01--1/ and interest of `15(000 and he has incurred `11(000 as legal e pense& 3e is registered under 69'T1.:T and he has purchased goods for `+0(00(000 from 7unDa! and paid .:T V +R and goods were sold in 6elhi at a profit of -0R on sale price and 69'T is charged V 1+&2R& .ompute his ta lia!ilit# for assessment #ear +01/-12 and show the treatment for 9'T& (ignore provisions of section //'6) A%=8e $ Ta Aia!ilit#J `+(**(1+0" >et 9'T 7a#a!leJ `-(*/(+5* P ';+e( 6. Br& 'nil Cumar ,haskar (non-resident) has one house with fair rent `+0(000 p&m&( municipal valuation `10(000 p&m&( standard rent `15(000 p&m& It was let out for `1+(000 p&m& !ut it remains vacant for 1a months and there was unrealised rent for + months& Bunicipal ta es paid are `11(000 and interest on capital !orrowed for construction of the house is `-(00(000&

Income Fnder The 3ead 3ouse 7ropert# Br& 'nil Cumar ,haskar has income under the head other sources `4(00(000& .ompute his total income and ta lia!ilit# for the assessment #ear +01/-12& A%=8e M Total IncomeJ `2(/-(200" Ta Aia!ilit#J `-)(5*0 P ';+e( 7. .ompute interest allowed under section +/(!) in the following cases for assessment #ear +01/-12& 24#,a#4'%= 6ate of loan 'mount of loan 0ate of interest 6ate of completion1 6ate of purchase 6ate of repa#ment A 01&04&+010 2(00(000 *R -1&0-&+0101&0/&+011 > 01&04&+011 2(00(000 *R -1&0-&+01+ 01&0/&+01/ C 01&04&+011 2(00(000 *R 01&01&+0101&01&+01/ D 01&0/&+01+ 2(00(000 *R 01&04&+0101&1+&+01-

++5

E 01&0-&+012(00(000 *R 01&0/&+01>il

A%=8e M :ituation 'J .urrent period interestJ >il" 7rior period interestJ `/(200" Total interest allowedJ `/(200 :ituation ,J .urrent period interestJ `-0(000" 7rior period interestJ >il" Total interest allowedJ `-0(000 :ituation .J .urrent period interestJ `++(200" 7rior period interestJ `/(200" Total interest allowedJ `+4(000 :ituation 6J .urrent period interestJ `+0(000" 7rior period interestJ `*(000" Total interest allowedJ `+*(000 :ituation <J .urrent period interestJ `-0(000" 7rior period interestJ `200" Total interest allowedJ `-0(200 P ';+e( 8. Brs& G has taken a loan of ` 11(00(000 on 01&04&+004 at a rate of 10R per annum for construction of one house which was completed on -1&0-&+00) and the house was let out at a rate of `50(000 per month w&e&f& 01&11&+01+ and fair rent is `1(00(000 per month& Bunicipal ta es paid in previous #ear +01--+01/ `-0(000& :he has taken a fresh loan of `11(00(000 on 01&04&+01+ V 11R per annum and it was utiliEed to repa# the original amount& :he is registered dealer under 69'T and has purchased goods for `11(00(000 which is inclusive of 69'T 1+&2R and the goods were sold at a profit of /0R on sale price& .ompute her income ta lia!ilit# for assessment #ear +01/-12 and also show the treatment of 9'T& (ignore provisions of section //'6) A%=8e $ Income Ta Aia!ilit#J `+(/+(000" >et 9'T 7a#a!leJ `51(/5+ P ';+e( 9. Br& G has taken a loan on 01&04&+010 from :,I V 11R p&a& of `12(00(000 for construction of one house which was completed on 01&11&+01+ and was self occupied and municipal ta es paid in previous #ear +01--+01/ `-+(000& 3e has given repa#ment of loan of `40(000 on 01&01&+01/& 3e has su!mitted a certificate confirming the amount of interest& 3e has income under the head :alar# `*(00(000 .ompute income ta lia!ilit# for assessment #ear +01/-12&

Income Fnder The 3ead 3ouse 7ropert# A%=8e $ Ta Aia!ilit#J `1*(/50

++)

P ';+e( 10. Brs& G has taken a loan on 01&11&+00) from 7>, V 10R p&a& of `10(00(000 for purchase of one house which was purchased on 01&01&+010 and was self occupied and municipal ta es paid in previous #ear +01-+01/ `-0(000& :he has repaid the loan amount in annual installments of `20(000 starting from 01&01&+011& The house was vacant for 1 month in previous #ear +01--1/& :he has su!mitted a certificate confirming the amount of interest& :he has short term capital gains under section 111' `10(00(000& .ompute Income Ta Aia!ilit# for assessment #ear +01/-12& A%=8e $ Ta Aia!ilit#J `1(10(**0 P ';+e( 11. Br& G is a 0egistered 6ealer under 6elhi 9alue 'dded Ta 'ct and he has purchased certain goods from 6elhi for `++(20(000 which includes 6elhi 9'T V 1+&2R he sold all the goods in 6elhi at a profit of +0R on sale price and output ta charged is 1+&2R& 3e has taken a loan of `12(00(000 from :tate ,ank on 01&04&+011 V 10R p&a& and the residential house was completed on 01&02&+01- and was let out w&e&f& 01&0*&+01- V /0(000 p&m& and fair rent of the house is `20(000 p&m& 3e repaid half of the loan amount on 01&01&+01/& .ompute his Income Ta Aia!ilit# for assessment #ear +01/-12 and also show ta treatment for 6elhi 9'T& (ignore provisions of section //'6) A%=8e M Total IncomeJ `*(01(+20" Ta Aia!ilit#J `21(4*0" 9'T 7a#a!leJ `*+(200 P ';+e( 12. Br& G (0egistered 6ealer) has taken a loan of `11(00(000 on 01&04&+010 V 10R p&a& for construction of one house which was completed on 01&0)&+01+ and the house is self occupied during the previous #ear +01--1/ and Br& G has paid municipal ta of `1+(000& The assessee has su!mitted a certificate confirming the amount of interest& Br& G is a trader and he has purchased goods for `11(00(000 and has paid 9'T V 10R& The goods were sold !# him for `15(00(000 and 9'T pa#a!le is V 10R& 3e is eligi!le for 9'T credit& Other e penses incurred !# him of `+(00(000& .ompute his income from !usiness and also income from house propert# and also show working of 9'T and compute Income Ta Aia!ilit# for the assessment #ear +01/-12& (ignore provisions of section //'6) A%=8e $ Income from ,usinessJ ` 2(00(000" Income =rom 3ouse 7ropert#J ` (1(/5(200)" Ta Aia!ilit#J `1-(2/0" >et 9'T 7a#a!leJ `40(000 P ';+e( 13.

Income Fnder The 3ead 3ouse 7ropert#

+-0

Br& G has let out one showroom !uilding in 7itam 7ura V 1(00(000 p&m& and has paid municipal ta `52(000 and fair rent of the house is `)5(000 p&m& 3e has received arrears of rent `-(00(000 relating to the previous #ear +01+-1-& 3e has also received unrealiEed rent of `/(00(000 of previous #ear +011-1+ and also interest of `+0(000 on such unrealised rent and he has paid `+4(000 to the advocate in connection with recover# of unrealiEed rent& 3e is engaging in trading and has furnished informations as given !elowJ 0aw material purchased `20(00(000 plus 9'T V /R& Banufacturing e penses (revenue nature) `10(00(000& 7lant M machiner# ac8uired for `10(00(000 plus 9'T V /R eligi!le for input ta credit in the #ear of ac8uisition itself& 6eprecation allowed on plant and machiner# is `1(20(000& :ale price `50(00(000 plus 9'T V /R 3e has dela#ed pa#ment of 9'T and has paid interest of `2(000 and penalt# `10(000& .ompute his income ta lia!ilit# for assessment #ear +01/-12 and also show ta treatment for 9'T under gross product variant& A%=8e $ Ta Aia!ilit#J `5(-0(520" 9'T 7a#a!leJ `1(+0(000 P ';+e( 14. Br& 'adish Talwar took a loan of ` *(10(200 V 4R p&a& on 01&0)&+010 for construction of one house which was completed on 01&0*&+01- and it was let out V `)(000 p&m& It remained vacant for 1a month and there is unrealised rent of `1(000& The fair rent of house is `10(000 p&m& 'ssessee has repaid half of the loan amount on 01&04&+01+ and remaining amount on 01&0+&+01/& 3e has also paid municipal ta of `-(000& 3is income from salar# `+(*2(000& .ompute his total income and ta lia!ilit# for the assessment #ear +01/-12& A%=8e M Total IncomeJ `+()*(++0" Ta Aia!ilit#J `4(520 P ';+e( 1/. Br& :hashank Qain has let out one house V `+2(000 p&m&( !ut this house was vacated on 01&11&+01-& The house was self occupied w&e&f& 01&01&+01/& =air rent of this house is `-0(000 p&m&( municipal valuation is `+4(000 p&m& and standard rent is `+5(000 p&m& The assessee has paid municipal ta es V 10R of municipal valuation& Interest on capital !orrowed is `/+(000& Aand revenue paid !# the assessee is `11(000 and ground rent paid !# him is `-(000& The assessee has taken a loan for pa#ment of municipal ta and interest paid on loan is `200& .ompute his income under the head house propert# and ta lia!ilit# for assessment #ear +01/-12& A%=8e M Income under the head 3ouse 7ropert#J `1(40(2+0" Ta Aia!ilit#J >il P ';+e( 16. Br& Ba#ank ;arg has two houses one of which is self occupied throughout the #ear& Its fair rent is `10(000 p&m&( municipal valuation `11(000 p&m& and standard rent is `10(200 p&m& Bunicipal ta es paid are `*(000 and interest on capital !orrowed is `/1(000& The assessee has taken the loan for construction of the house on

Income Fnder The 3ead 3ouse 7ropert#

+-1

01&0/&1))5& :econd house is self occupied for / months and let out for 5 months V of `/2(000 p&m& Its fair rent is `+0(000 p&m&( municipal valuation is `15(000 p&m& and standard rent `12(000 p&m& Bunicipal ta es paid are `+0(000 and interest on capital !orrowed is `/2(000& The assessee has taken the loan for construction of the house on 01&0/&1))5& .ompute his income under the head house propert# for the assessment #ear +01/-12& A%=8e M Income under the head 3ouse 7ropert#J ` 1(*-(000 P ';+e( 17. Br& KuvraD :ingh has + houses& =irst is self occupied with fair rent `+0(000 p&a&( municipal valuation is `22(000 p&a&& =air rent as per 0ent .ontrol 'ct is `20(000 p&a&& 3owever the house remains vacant for + months 'rchitect has issued completion certificate on 01&04&+011& Br& KuvraD :ingh has taken loan for addition to house `-(20(000 on 01&0/&+01- V 1-R p&a& The loan was repaid on 01&0-&+01/ and assessee has su!mitted a certificate from the person from whom he has taken the loan certif#ing that the amount of interest claimed !# Br& KuvraD :ingh is correct& In the earlier #ears( the house was let out and the assessee has recovered unrealised rent of `+(000 in the previous #ear +01--1/& The assessee has also incurred legal e penses of `-20& The second house is also self-occupied& 3owever its similar !uilding rent is `*/(000 p&a& and rent determined !# municipalit# for charging house ta is `**(000 p&a& Its standard rent is `*(000 p&m& municipal ta pa#a!le are `2(000& 3e has long term capital gains `+0(00(000& .ompute his income ta lia!ilit# for 'ssessment Kear +01/-12& A%=8e M Income Ta Aia!ilit#J `-(*)(5-0 P ';+e( 18. Br& :hivam :harma occupied two flats for his residential purposes( particulars of which are as followsJ Pa #4&,+a = Bunicipal 9aluation =air 0ent =air 0ent under 0ent .ontrol 'ct Bunicipal ta es paid =ire Insurance paid ;round rent due Aand revenue paid Interest pa#a!le on capital !orrowed for purchase of flat 0+a# I (in `) )2(000 p&a& 1(+2(000 p&a& 52(000 p&a& 10R 1(200 400 *00 /2(000 0+a# II (in `) 20(000 p&a& /2(000 p&a& >ot availa!le 10R *20 )00 500 >il

Income of Br& :hivam :harma from his proprietar# !usinesswarehousing corporation is `4(00(000& 6etermine the total income and ta lia!ilit# for the assessment #ear +01/-12 on the assumption that he contri!utes `40(000 towards pu!lic provident fund account( #ou are informed that Br& :hivam :harma could not occup# flat for + months commencing from 6ecem!er 1 st( +01- and that he has attained the age of 5+ on +-&05&+01-& A%=8e M Total IncomeJ `*(-1(200" Ta Aia!ilit#J `+4(0)0 P ';+e( 19.

Income Fnder The 3ead 3ouse 7ropert#

+-+

Br& 7rateek :inghal and Br& Kashpal :ingh constructed their houses on a piece of land purchased !# them at >ew 6elhi& The !uilt up area of each house was 1(000 s8& ft& ground floor and an e8ual area at the first floor& Br& 7rateek :inghal started construction of the house on 01&0/&+01+ and completed it on -1&0-&+01-& Br& 7rateek :inghal occupied the entire house on 01&0/&+01-& Br& 7rateek :inghal has availed a housing loan of `+2 lakhs V 1+R p&a& on 01&0/&+01+ and has also su!mitted a certificate from the lender certif#ing the amount of interest& Br& Kashpal :ingh started construction on 01&0/&+01+ and completed it on -0&0*&+01-& Br& Kashpal :ingh occupied the ground floor on 01&04&+01- and let out the first floor for a rent of `+0(000 per month& 3owever( the tenant vacated the house on -1&1+&+01- and Br& Kashpal :ingh occupied the entire house during the period 01&01&+01/ to -1&0-&+01/& Br& Kashpal :ingh has availed a housing loan of `12 lakhs V 10R p&a& on 01&04&+01+ and has also su!mitted a certificate from the lender certif#ing the amount of interest& &ollo4in5 a"e t/e ot/e" info"mation: (i) =air rental value of each unit (;round floor 1 first floor) (ii) Bunicipal value of each unit (;round floor 1 first floor) (iii) Bunicipal ta es paid !# (iv) 0epair and maintenance charges paid !# ` 1(+0(000 7er annum )+(000 7er annum 7rateek :inghal Kashpal :ingh 7rateek :inghal Kashpal :ingh 10(000 10(000 -0(000 -+(000

>o repa#ment was made !# either of them till -1&0-&+01/& .ompute income from house propert# for 7rateek :inghal and Kashpal :ingh for the previous #ear +01--1/ (assessment #ear +01/-12)& A%=8e M 7rateek :inghalJ ` (1(20(000)" Kashpal :inghJ ` ()+(000) P ';+e( 20. Brs& Cavita is the owner of a house propert#& :he !orrowed `*0(000 from life insurance corporation of India on 1st :eptem!er +004 V 12R p&a& for the construction of this house& The construction was completed on -1&0-&+00)& :ince then the house is under her self-occupation& On 1 st Qune +01- the house was let out V `-(000 p&m& The tenant vacated the house on 1 st 'ugust +01-& :he occupied the house for self-occupanc#& The house is again let out V `-(200 p&m& from 1st Octo!er +01-& Other particulars of the house for the previous #ear +01--1/& Bunicipal 9aluation Bunicipal ta es disputed( hence not paid ;round rent for the previous #ear +01--1/ outstanding Insurance premium paid 0efund of first loan instalment to AI. on 01&10&+01.ompute the income from house propert# for assessment #ear +01/-12& A%=8e M Income under the head 3ouse 7ropert#J `11(0+2 P ';+e( 21. ,hupesh owns a residential house propert#& It has two identical unitsXunit I and unit II& Fnit I is self occupied !# ,hupesh and his famil# mem!ers( unit II is let out (rent !eing `4(200 per month( this unit remained vacant for one month during which it was self-occupied)& Bunicipal value of the propert# is ` ++(000 p&a& +(+00 p&a& -(+00 1(+00 12(000

Income Fnder The 3ead 3ouse 7ropert#

+--

`1(-0(000& :tandard rent is `1(/0(000 and fair rent is `1(2-(000& Bunicipal ta es is imposed V 1+R (on municipal value) which is paid !# ,hupesh& Other e penses for the previous #ear +01--1/ !eing repairs `2(100 and insurance `*(-00& ,hupesh !orrowed `)(00(000 on 01&04&+010 from AI. V 1+R p&a& to construct the propert#& .onstruction of the house was completed on -0&0*&+01+& The entire loan is still unpaid& .ompute the total income and ta lia!ilit# of Br& ,hupesh for the assessment #ear +01/-12 on the assumption that income of ,hupesh from other sources is `+()0(000& A%=8e M Total IncomeJ `+(-)(-)0" Ta Aia!ilit#J `+(000 P ';+e( 22. 6inesh has a house propert# situated in Bum!ai which has two units& Fnit I has a floor area of 40R whereas the unit II has a floor area of -0R& ,oth the units were self-occupied !# the assessee& 's the assessee was allowed a rent free accommodation !# his emplo#er w&e&f& 01&0/&+01-( he vacated !oth of the units and let out unit I at a rent of `1-(000 p&m& and unit II for `2(000 p&m& unit I remained vacant for 1a months whereas unit II was vacant for one month& Other particulars of the house propert# are asunderJ ` Bunicipal 9aluation 1(22(000 =air 0ent 1(42(000 :tandard 0ent 1(*2(000 Bunicipal ta es paid -2(000 ;round rent due 12(000 .ompute income from house propert# for the assessment #ear +01/-12& A%=8e M Income under the head 3ouse 7ropert#J `1(0)(220 P ';+e( 23. :aura!h is the owner of a residential house whose construction was completed on -1&05&+00)& It has !een let out from 01&01&+010 for residential purposes& Its particulars for the financial #ear +01--1/ are given !elowJ ` (i) Bunicipal 9aluation (p&a&) *5(000 (ii) (iii) 4(+00 < pected =air 0ent (p&a&) :tandard 0ent under the 0ent .ontrol 'ct (p&m&) 4(+00 +1(000 2(100 42(000

(iv) 'ctual 0ent (p&m&) (v) Bunicipal ta es paid (including `4(000 paid !# tenant) (vi) Water1sewerage !enefit ta ( levied !# :tate ;overnment paid under protest (vii) Interest on loan taken for the construction of the house& The interest has !een paid outside India to a non-resident without deduction of ta at source (non-resident has agreed to pa# income-ta on such interest direct to the ;overnment) (viii) :tamp dut# and registration charges incurred in respect of the lease agreement of the house (i ) The unrealised rent for previous #ear +01+-1- amounts to `/+(000& There is recover# of `++(000 from the defaulting tenant&

+0(000 +(200

Income Fnder The 3ead 3ouse 7ropert# Aegal charges for the recover# of rent .ompute income from house propert# for the assessment #ear +01/-12& A%=8e M Income under the head 3ouse 7ropert#J `4+(*50 P ';+e( 24. Br& :urender Qaswal has three houses with details given !elowJ

+-/ /(200

@',=e I It is self occupied with fair rent of `+0(000( municipal valuation `22(000( rent as per 0ent .ontrol 'ct is `20(000& 3owever the house remains vacant for + months& 'rchitect has issued completion certificate on 01&04&+011& Aoan taken for addition to the house `2(00(000 on 01&0/&+01- V 1-R p&a& and loan amount was repaid on 01&0-&+01/& The assessee has su!mitted a certificate from the person from whom he has taken the loan certif#ing the amount of the interest claimed& In the earlier #ears the house was let out and the assessee has recovered unrealised rent of `+(000 in the previous #ear +01--1/ and interest on such unrealised rent also amounting to `+20& 3owever the assessee has incurred legal e penses of `-20& @',=e II It is self occupied& Its similar !uilding rent is `*/(000 and rent determined !# municipalit# for charging house ta is `**(000 and its fair rent under 0ent .ontrol 'ct (p&m&) is `*(000& Bunicipal ta es pa#a!le `2(000& The assessee has also recovered unrealised rent of `+(000 in the previous #ear +01+-1- !ut the e penses thereon are paid in the #ear +01--1/ amounting to `+00& @',=e III It is let out V `20(000 p&m& and fair rent is `*0(000 p&m& Water ta and house ta paid to municipalit# is `11(000& Insurance premium paid `*(200 and e penses on repairs `-(000& Interest on capital !orrowed for purchase of house is `22(000& 3e has long term capital gains of `-(20(000& .ompute his total income and ta lia!ilit# for assessment #ear +01/-12& A%=8e M Total IncomeJ `4(*5()40" Ta Aia!ilit#J `)/(*20 P ';+e( 2/. 6etermine the income head under which the following incomes shall !e ta a!le& (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (i ) Br& 'tul ;andhi has income from letting out house propert#& Br& Bandeep :ingh has sold one house propert#& ',. Atd& has 200 flats for the purpose of sale1purchase& Br& Tushar Qain has let out an open land& ',. Atd& has 200 flats for the purpose of letting out& ',. Atd& has constructed flats within its premises for letting out to the emplo#ees& Br& 'mit 'huDa is engaged in the !usiness of providing pa#ing guest accommodation in his own !uilding& Br& 9inod Qain is engaged in the !usiness of warehousing& Br& Culdeep has su!let one house propert#&

Income Fnder The 3ead 3ouse 7ropert# ( ) Br& Cartik ;uglani has let out his hotel !uilding&

+-2

A%=8e M (i) 3ouse 7ropert#" (ii) .apital ;ains" (iii) ,usiness17rofession" (iv) Other :ources" (v) 3ouse 7ropert#" (vi) ,usiness17rofession" (vii) ,usiness17rofession" (viii) ,usiness17rofession" (i ) Other :ources" ( ) 3ouse 7ropert#

2O3UTION2
TO

P1ACTICE P1O>3EM2
2'+,#4'% 1$ C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ent ( ` 50(000 1+) (!) Bunicipal 9aluation (` 51(000 1+) (c) 3igher of (a) or (!) (d) :tandard 0ent (` 1(00(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent received (`)0(000 1+) ;'9 W 3igher of (e) or (f) AessJ Bunicipal Ta >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert# ` 10(50(000 )(*0(000 )(4+(000 )(4+(000 1+(00(000 )(4+(000 10(50(000 10(50(000 40(000 10(10(000 -(0-(000 5+(000 *(+2(000

C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 >,=4%e==/P '7e==4'% Income from !usiness (` 12(00(000 +0150) Income under the head ,usiness17rofession Income under the head 3ouse 7ropert# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6

-(42(000 -(42(000 *(+2(000 10(00(000 >il 10(00(000

Income Fnder The 3ead 3ouse 7ropert# Ta on `10(00(000 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Total ta lia!ilit# Ca+&,+a#4'% '7 *AT ;oods purchased 69'T V 1+&2R 7urchase price 7rofit (` 12(00(000 :ale 7rice Output Ta 1+&2R +0150)

+-* 1(-0(000 +(*00 1(-00 1(--()00 12(00(000 1(54(200 12(00(000 -(42(000 15(42(000 +(-/(-42 +(-/(-42 1(54(200 /*(542 `

Ca+&,+a#4'% '7 Ne# *AT Output 9'T AessJ Input 9'T .redit >et 9'T pa#a!le 2'+,#4'% 2$ C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ent (+(20(000 1+) (!) Bunicipal 9alue (+(42(000 1+) (c) 3igher of (a) or (!) (d) :tandard 0ent (+(50(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent received /receiva!le (-(00(000 1+) ;'9 shall !e higher of (e) or (f) AessJ Bunicipal Ta >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `15(00(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2'+,#4'% 3. 7urchase 7rice 'ddJ < cise 6ut# V 10R 'ddJ <. V +R 'ddJ :3<. V 1R

-*(00(000&00 ` -0(00(000 --(00(000 --(00(000 --(*0(000 --(00(000 -*(00(000 -*(00(000 *(00(000&00 -0(00(000&00 )(00(000&00 -(00(000&00 15(00(000&00 15(00(000&00 >il 15(00(000&00 2(/0(000&00 10(500&00 2(/00&00 2(2*(+00&00 ` -00(00(000&00 -0(00(000&00 *0(000&00 -0(000&00 --0()0(000&00

Income Fnder The 3ead 3ouse 7ropert# 'ddJ .entral :ales Ta V +R :ince( 7rofit is +0R of sale price( .ost of (-00(00(000 L *(*1(500 L -(00(000) `-0)(*1(500 is 50R of :ale 7rice 3ence( :ale 7rice shall !e -0)(*1(500 100R 1 50R W `-54(0+(+20 ;oods sold 'ddJ < cise 6ut# V 10R 'dd <. V +R 'dd J:3<. V 1R 'ddJ 9'T V 1+&2R :elling 7rice

+-4 *(*1(500&00 --4(21(500&00

-54(0+(+20&00 -5(40(++2&00 44(/0/&20 -5(40+&+2 /+*(55(251&42 2-(-*(04+&4+ /50(+/(*2/&/4

Ne# Ta) Pa6a;+e Output Ta Input Ta >et Ta 7a#a!le 0ounded off < cise 6ut# -5(40(++2 -0(00(000 5(40(++2 5(40(++2 <. V +R 44(/0/&20 *0(000&00 14(/0/&20 14(/02&00 :3<. V 1R -5(40+&+2 -0(000&00 5(40+&+2 5(40+&00 69'T 2-(-*(04+&4+ >il 2-(-*(04+&4+ 2-(-*(04-&00 +/(00(000&00 ` +1(*0(000 +*(/0(000 +1(*0(000 +/(00(000 +/(00(000 *(00(000&00 15(00(000&00 2(/0(000&00 >il 1+(*0(000&00 44(/0(/20&00 )0(00(/20&00 >il )0(00(/20&00 +4(00(1-2&00 2/(00+&40 +4(001&-2 +4(51(1-)&02 +4(51(1/0&00 ` -00(00(000&00 -0(00(000&00

C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross 'nnual 9alue (+(00(000 1+) W' J4%: N'#e$ (a) =air 0ent (1(50(000 1+) (!) :tandard 0ent (+(+0(000 1+) (c) < pected 0ent (lower of (a) or (!) (d) 0ent 0eceived10eceiva!le (+(00(000 1+) ;'9 W 3igher of (c) or (d) AessJ Bunicipal Ta >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert#

Income under the head ,usiness17rofession (-54(0+(+20 -0)(*1(500 ) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `)0(00(/20 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, 2'+,#4'% 3(;"$ 7urchase 7rice 'ddJ < cise 6ut# V 10R

Income Fnder The 3ead 3ouse 7ropert# 'ddJ <. V +R 'ddJ :3<. V 1R 'ddJ 9'T V 1+&2R :ince( 7rofit is +0R of sale price( .ost of (-00(00(000 L -(00(000) `-0-(00(000 is 50R of :ale 7rice 3ence( :ale 7rice shall !e -0-(00(000 100R 1 50R W `-45(42(000 ;oods sold 'ddJ < cise 6ut# V 10R 'dd <. V +R 'dd J:3<. V 1R 'ddJ .:T V +R :elling 7rice Ne# Ta) Pa6a;+e < cise 6ut# <. V +R :3<. V 1R 69'T .:T Output Ta -4(54(200 42(420 -4(542 --5(-2(2++&20 Input Ta -0(00(000 *0(000 -0(000 /1(-*(+20 -->et Ta 7a#a!le 4(54(200 12(420 4(542 -->il ,alance 9'T credit --------(00(4+4&20 (Ta credit for 69'T can !e set off from output .:T& /1(-*(+20 5(-2(2++&20 W --(00(4+4&20) C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross 'nnual 9alue (+(00(000 1+) W' J4%: N'#e$ (a) =air 0ent (1(50(000 1+) (!) :tandard 0ent (+(+0(000 1+) (c) < pected 0ent (lower of (a) or (!)) (d) 0ent 0eceived10eceiva!le (+(00(000 1+) ;'9 W 3igher of (c) or (d) AessJ Bunicipal Ta >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert#

+-5 *0(000&00 -0(000&00 --0()0(000&00 /1(-*(+20&00 -4+(+*(+20&00

-45(42(000&00 -4(54(200&00 42(420&00 -4(542&00 /14(4*(1+2&00 5(-2(2++&20 /+*(11(*/4&20

+/(00(000&00 ` +1(*0(000 +*(/0(000 +1(*0(000 +/(00(000 +/(00(000 *(00(000&00 15(00(000&00 2(/0(000&00 >il 1+(*0(000&00 42(42(000&00 55(-2(000&00 >il 55(-2(000&00 +*(20(200&00 2-(010&00 +*(202&00 +4(-0(012&00 +4(-0(0+0&00

Income under the head ,usiness17rofession (-45(42(000 -0-(00(000) ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `55(-2(000 V -0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, 2'+,#4'% 4$

Income Fnder The 3ead 3ouse 7ropert# 24#,a#4'% 1

+-)

` Computation of 6"oss Annual 7alue (a) =air 0ent (10(000 1+) (!) Bunicipal 9aluation (11(000 1+) (c) 3igher of (a) or (!) (d) 1(//(000 (1+(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (4(000 11) ;'9 W 3igher of (e) or (f) ;ross 'nnual 9alue 24#,a#4'% 2 ` Computation of 6"oss Annual 7alue (a) =air 0ent (1+(000 1+) (!) Bunicipal 9aluation (10(000 1+) (c) 3igher of (a) or (!) (d) :tandard 1(-+(000 (11(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (11(200 10) In this case( if there was no vacanc#( rent received1receiva!le would have !een `1(-5(000 hence rent received1receiva!le is lower in this case due to vacanc#( therefore ;'9 shall !e the rent received1receiva!le& ;ross 'nnual 9alue 24#,a#4'% 3 ` Computation of 6"oss Annual 7alue (a) =air 0ent (1-(000 1+) (!) Bunicipal 9aluation (5(000 1+) (c) 3igher of (a) or (!) (d) 5/(000 (4(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (+0(000 5) 1(2*(000 )*(000 :tandard 1(2*(000 0ent 5/(000 1(*0(000 1(//(000 1(+0(000 1(//(000 0ent 1(-+(000 1(12(000 1(+0(000 1(-+(000 :tandard 1(-+(000 0ent 1(-+(000 44(000 1(-+(000 1(-+(000

1(12(000

Income Fnder The 3ead 3ouse 7ropert# In this case( rent 010 is higher than the e pected rent( ;'9 shall !e 0ent 010 ;ross 'nnual 9alue 24#,a#4'% 4

+/0

1(*0(000 `

Computation of 6"oss Annual 7alue (a) =air 0ent (12(000 1+) (!) Bunicipal 9aluation (14(000 1+) (c) 3igher of (a) or (!) (d) :tandard 1()+(000 (1*(000 1+) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (1*(000 5) If there was no vacanc#( in that case rent received1receiva!le would have !een `1(4*(000 and it was still less than e pected rent( therefore ;'9 shall !e e pected rent& ;ross 'nnual 9alue 2'+,#4'% /$ I%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross annual value W' J4%: N'#e$ ` (a) =air rent (*0(000 1+) 4(+0(000 (!) Bunicipal valuation (22(000 1+) *(*0(000 (c) 3igher of (a) or (!) 4(+0(000 (d) :tandard 0ent (50(000 1+) )(*0(000 (e) < pected 0ent _Aower of (c) or (d)` 4(+0(000 (f) 0ent 0eceived (40(000 4) /()0(000 If there was no vacanc# ( then 0ent 0eceiva!le shall !e 40(000 10 W 4(00(000( which is lower than the e pected rent ( hence the ;'9 shall !e 4(+0(000 AessJ Bunicipal ta es paid >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Fnrealised rent recovered of +00)-10 section +2'' I%&'(e ,%9e #Be Bea9 >,=4%e== a%9 P '7e==4'% :ales (+0(/0(000 1 40R) 7urchases (+0(00(000 L /0(000) 7rofit Income under the head 3ouse 7ropert# Income under the head ,usiness17rofession Income from other sources ;ross Total Income AessJ 6eduction u1s 50. to 50F

1(50(000 +(0/(000 +(0/(000 0ent 1()+(000 1(+5(000

1()+(000 ` 4(+0(000&00

*+(000&00 *(25(000&00 1()4(/00&00 42(000&00 -(52(*00&00 1(20(000&00 2(-2(*00&00 +)(1/(+5*&00 +0(/0(000&00 5(4/(+5*&00 2(-2(*00&00 5(4/(+5*&00 15(000&00 1/(+4(55*&00 >IA

Income Fnder The 3ead 3ouse 7ropert# Total Income 0ounded off u1s +55' C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `1/(+4(5)0 at sla! rate 'ddJ <. V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, T ea#(e%# '7 D*AT Output 9'T (+)(1/(+5* Input ta credit 9'T 7a#a!le 0ounded off 2'+,#4'% 6$ ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ent (+0(000 1+) +(/0(000 (!) Bunicipal 9aluation (10(000 1+) 1(+0(000 (c) 3igher of (a) or (!) +(/0(000 (d) :tandard 0ent (15(000 1+) +(1*(000 (e) < pected 0ent _Aower of (c) or (d)` +(1*(000 (f) 0ent 0eceiva!le W (1+(000 5&2) 1(0+(000 If there was no vacanc#( in that case rent received1receiva!le would have !een `1(+0(000 and it was still less than e pected rent( therefore ;'9 shall !e e pected rent& ;'9 +(1*(000 AessJ Bunicipal Ta >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Aoss under the head 3ouse 7ropert# Income under the head Other :ources ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Computation of Tax Liability Ta on `2(/-(200 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -)(5*1&00 0ounded off u1s +55, 2'+,#4'% 7$ 1+&2R)

+/1 1/(+4(55*&00 1/(+4(5)0&00 +(25(-*4&00 2(1*4&-/ +(25-&*4 +(**(115&01 +(**(1+0&00 -(*/(+52&42 >il -(*/(+52&42 -(*/(+5*&00 ` +(1*(000&00

11(000&00 +(02(000&00 *1(200&00 -(00(000&00 (1(2*(200&00) 4(00(000&00 2(/-(200&00 >il 2(/-(200&00 -5(400&00 44/&00 -54&00 -)(5*0&00 `

24#,a#4'% A Computation of inte"est allo4e! un!e" section #$(b) .urrent period interest

>il

Income Fnder The 3ead 3ouse 7ropert# 7rior period interest 0 '( 01.07.2010 #' 31.03.2012 (!ut interest will !e calculated upto -1&0-&+011 !ecause the loan has !een repaid on 01&0/&+011) 2(00(000 *R )11+ W ++(200 Instalment W ++(20012 W /(200 Total interest allowed 24#,a#4'% > Computation of inte"est allo4e! un!e" section #$(b) .urrent period interest 0 '( 01.04.2013 #' 31.03.2014 2(00(000 *R W -0(000 7rior period interest :ince there is no prior period hence interest is nil Total interest allowed 24#,a#4'% C Computation of inte"est allo4e! un!e" section #$(b) .urrent period interest 0 '( 01.04.2013 #' 31.12.2013 2(00(000 *R )11+ W ++(200 7rior period interest 0 '( 01.07.2011 #' 31.03.2012 2(00(000 *R )11+ W ++(200 Instalment W ++(20012 W /(200 Total interest allowed ?++(200 L /(200@ 24#,a#4'% D Computation of inte"est allo4e! un!e" section #$(b) .urrent period interest 0 '( 01.04.2013 #' 30.11.2013 2(00(000 *R 511+ W +0(000 7rior period interest 0 '( 01.04.2012 #' 31.03.2013 2(00(000 *R W -0(000 Instalment W -0(00012 W *(000 Total interest allowed ?+0(000 L *(000@ 24#,a#4'% E Computation of inte"est allo4e! un!e" section #$(b) .urrent period interest 0 '( 01.04.2013 #' 31.03.2014 2(00(000 *R W -0(000 prior period interest 0 '( 01.03.2013 #' 31.03.2013 2(00(000 *R 111+ W +(200 Instalment W +(20012 W 200 Total interest allowed ?-0(000 L 200@ 2'+,#4'% 8$ I%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross annual value W' J4%: N'#e$

+/+

/(200

-0(000

+4(000

+*(000

-0(200 ` 1+(00(000&00 `

Income Fnder The 3ead 3ouse 7ropert# =air rent (1(00(000 1+) 0ent received (50(000 1+) 3igher shall !e the ;'9 i&e& AessJ Bunicipal ta es paid >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ 7rior period interest .urrent #ear interest 11(00(000 11R W 1(+1(000 Income under the head 3ouse 7ropert# I%&'(e ,%9e #Be Bea9 >,=4%e==/P '7e==4'% :ales ()(44(4451*0R) 7urchases (11(00(000111+&2R) 7rofit ;ross Total Income (*()5(000 L *(21(52+) AessJ 6eduction u1s 50. to 50F Total Income 0ounded off u1s +55' C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `1-(/)(520 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, +(/+(000&00 T ea#(e%# '7 D*AT Output 9'T (1*(+)(*-0 1+&2R) AessJ Input ta credit ()(44(445 1+&2R) 9'T 7a#a!le 2'+,#4'% 9$ I%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross 'nnual 9alue AessJ Bunicipal ta es paid >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ P 4' pe 4'9 4%#e e=# 01&04&+010 to -1&0-&+01+ 12( 00(000 11 R +111+W +(55(420 Installment +(55(42012 W C, e%# 6ea 4%#e e=# 12(00(000 11R )11+ W 1(+-(420 1/(-0(000 11R -11+ W -)(-+2 :u!Dect to ma imum of 1(20(000& 1+(00(000 )(*0(000 1+(00(000

+/-

-0(000&00 11(40(000&00 -(21(000&00 1(+1(000&00 >il *()5(000&00 1*(+)(*-0&00 )(44(445&00 *(21(52+&00 1-(/)(52+&00 >il 1-(/)(52+&00 1-(/)(520&00

+(-/()22&00 /(*))&10 +(-/)&22 +(/+(00-&*2

+(0-(40/&00 1(++(+++&00 51(/5+&00 ` >IA >IA >IA >IA 1(20(000&00 `

24(420 1(*-(042 +(+0(5+2

Income Fnder The 3ead 3ouse 7ropert# Aoss under the head 3ouse 7ropert# Income under the head :alar# ;ross Total Income AessJ 6eduction u1s 50. Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `-(50(000 at sla! rate AessJ 0e!ate u1s 54' (15(000 or +(000 whichever is less) Ta !efore <ducation cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 2'+,#4'% 10$ I%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross 'nnual 9alue AessJ Bunicipal ta es paid >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) Aess J Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ P 4' pe 4'9 4%#e e=# C, e%# 6ea 4%#e e=# =rom 01&0/&+01- to -1&0-&+01/ 5(20(000 10R )11+ W *-(420 5(00(000 10R -11+ W +0(000 Aoss under the head 3ouse 7ropert# Income under the head capital gains (:T.; u1s 111') ;ross Total Income AessJ 6eduction u1s 50. Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `4(1*(+20(`)(1*(+20 +(00(000) V 12R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, 2'+,#4'% 11$ 7urchase 7rice 9'T (++(20(000 1+&2R 1 11+&2R) 7urchase price net of Ta Input ta credit :ince( 7rofit is +0R of sale price( .ost of `+0(00(000 is 50R of :ale 7rice 3ence( :ale 7rice shall !e +0(00(000 100R 1 50R W `+2(00(000 ;oods sold in 6elhi 'ddJ 9'T V 1+&2R ` >il

+// (1(20(000&00) *(00(000&00 /(20(000&00 40(000&00 -(50(000&00 15(000&00 +(000&00 1*(000&00 -+0&00 1*0&00 1*(/50&00 ` >IA >IA >IA >IA 55(420&00

5-(420 (5-(420&00) 10(00(000&00 )(1*(+20&00 >il )(1*(+20&00 1(04(/-4&20 +(1/5&42 1(04/&-5 1(10(**0&*1(10(**0&00 ++(20(000&00 +(20(000&00 +0(00(000&00 +(20(000&00

+2(00(000&00 -(1+(200&00

Income Fnder The 3ead 3ouse 7ropert# :elling 7rice Output ta AessJ Input ta credit >et 9'T 7a#a!le C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ent (20(000 11) 2(20(000 (!) < pected 0ent 2(20(000 (c) 0ent 0eceived10eceiva!le (/0(000 10) /(00(000 If there was no vacanc#( in that case rent received1receiva!le would have !een `/(/0(000 and it was still less than e pected rent( therefore ;'9 shall !e e pected rent& ;'9 2(20(000 AessJ Bunicipal Ta >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ 7rior period interest 0 '( 01.07.2011 #' 31.03.2013 W (12(00(000 10R 1) L (12(00(000 10R )11+) W `1(20(000 L `1(1+(200 W `+(*+(200 Installment W `+(*+(20012 W `2+(200 .urrent period interest 0 '( 01.04.2013 #' 31.03.2014 W (12(00(000 10R )11+) L (4(20(000 10R -11+) W `1(1+(200 L `15(420 W `1(-1(+20 Total interest on capital !orrowed W `2+(200 L ` 1(-1(+20 W `1(5-(420 Income under the head 3ouse 7ropert# Income under the head ,usiness17rofession (+2(00(000 +0(00(000) ;ross Total Income AessJ 6eduction u1s 50. _0epa#ment of housing loan` Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `*(01(+20 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, 2'+,#4'% 12$ C'(p,#a#4'% '7 *AT pa6a;+e Output ta (15(00(000 10R) 1(50(000&00 AessJ Ta credit (11(00(000 10R) >et 9'T pa#a!le C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 @',=e P 'pe #6

+/2 +5(1+(200&00 -(1+(200&00 +(20(000&00 *+(200&00 2(20(000&00

>il 2(20(000&00 1(*2(000&00 1(5-(420&00

+(01(+20&00 2(00(000&00 4(01(+20&00 1(00(000&00 *(01(+20&00 20(+20&00 1(002&00 20+&20 21(424&20 21(4*0&00 `

1(10(000&00 40(000&00

Income Fnder The 3ead 3ouse 7ropert# >et 'nnual 9alue AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ .urrent period interest 01.04.2013 #' 31.03.2014 11(00(000 10R W 7rior period interest 0 '( 01.07.2010 #' 31.03.2012 11(00(000 10R +111+ W Instalment W 1()+(20012 W Total interest W 1(10(000 L -5(200 W Aoss under the head 3ouse 7ropert# C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 >,=4%e==/P '7e==4'% :ale AessJ .ost of goods sold AessJ < penses Income under the head ,usiness 7rofession AessJ Aoss under the head 3ouse 7ropert# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `-(21(200 at sla! rate AessJ 0e!ate u1s 54' (12(120 or +(000 whichever is less) Ta !efore <ducation cess 'ddJ <. V +R 'ddJ :3<. V 1R Ta lia!ilit# 0ounded off u1s +55, 2'+,#4'% 13$ ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air rent ()5(000 1+) (!) 0ent receiva!le (1(00(000 1+) ;'9 _3igher of (a) or (!)` AessJ Bunicipal Ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) 'ddJ 'rrears of rent (:ec +2,) AessJ -0R of `-(00(000 'ddJ Fnrealised 0ent Income under the head 3ouse 7ropert# Income under the head Other :ources ` ` 11(4*(000 1+(00(000 1+(00(000

+/* >il 1(/5(200&00

` 1(10(000 1()+(200 -5(200 1(/5(200 (1(/5(200&00) 15(00(000&00 11(00(000&00 +(00(000&00 2(00(000&00 (1(/5(200&00) -(21(200&00 >il -(21(200&00 12(120&00 +(000&00 1-(120&00 +*-&00 1-1&20 1-(2//&20 1-(2/0&00 ` 1+(00(000&00

52(000&00 11(12(000&00 -(-/(200&00 >il 4(50(200&00 -(00(000 )0(000 +(10(000&00 )()0(200&00 /(00(000&00 1-()0(200&00 +0(000&00

Income Fnder The 3ead 3ouse 7ropert# C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 >,=4%e==/p '7e==4'% :ale price AessJ 7urchase price AessJ Banufacturing e penses AessJ 6epreciation on plant and machiner# AessJ Interest on dela#ed pa#ment of 9'T Income under the head ,usiness17rofession ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `-+(22(200 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, 0aw material purchased 'dd J 9'T V /R :ale 7rice 'ddJ 9'T V /R P+a%# a%9 Ma&B4%e 6 7urchased 'ddJ 9'T /R Ne# Ta) Pa6a;+e Output Ta AessJ Ta credit >et Ta 7a#a!le 2'+,#4'% 14$ ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ent (10(000 10) 1(00(000 (!) < pected 0ent 1(00(000 (c) 0eceived10eceiva!le W )(000 5&2 W 4*(200 1(000 W 42(200 If there was no vacanc#( in that case rent received1receiva!le would have !een `5)(000 and it was still less than e pected rent( therefore ;'9 shall !e e pected rent& ;'9 1(00(000 AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ .urrent 7eriod interest

+/4

50(00(000&00 20(00(000&00 10(00(000&00 1(20(000&00 2(000&00 15(/2(000&00 -+(22(200&00 >il -+(22(200&00 5(0*(*20&00 1*(1--&00 5(0**&20 5(-0(5/)&20 5(-0(520&00 20(00(000&00 +(00(000&00 2+(00(000&00 50(00(000&00 -(+0(000&00 5-(+0(000&00 10(00(000&00 /0(000&00 10(/0(000&00 -(+0(000&00 +(00(000&00 1(+0(000&00 ` 1(00(000&00

-(000&00 )4(000&00 +)(100&00 -*(*50&55

Income Fnder The 3ead 3ouse 7ropert# 0 '( 01.04.2013 #' 31.01.2014 W -(02(+20 4R 1011+ W `14(50*&+2 7rior period interest 0 '( 01.09.2010 #' 31.03.2013 0 '( 01.09.2010 #' 30.06.2012 W *(10(200 4R ++11+ W `45(-/4&2 0 '( 01.07.2012 #' 31.03.2013 W -(02(+20 4R )11+ W `1*(0+2&*Total W `)/(-4-&1Instalment W `)/(-4-&1-12 W `15(54/&*Total interest W `14(50*&+2 L `15(54/&*- W `-*(*50&55 Income under the head 3ouse 7ropert# Income under the head :alar# ;ross Total Income AessJ 6eductions u1s 50. Total Income (rounded off u1s +55') Computation of Tax Liability Ta on `+()*(++0 at sla! rate AessJ 0e!ate u1s 54' ()(*++ or +(000 whichever is less) Ta !efore <ducation cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 4(520&** 0ounded off u1s +55, 2'+,#4'% 1/$ ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ent (-0(000 1+) -(*0(000 (!) Bunicipal 9aluation (+4(000 1+) -(+/(000 (c) 3igher of (a) or (!) -(*0(000 (d) :tandard 0ent (+5(000 1+) -(-*(000 (e) < pected rent _Aower of (c) or (d)` -(-*(000 (f) 0ent 0eceiva!le (+2(000 4) 1(42(000 If there was no vacanc#( in that case rent received1receiva!le would have !een `+(+2(000 and it was still less than e pected rent( therefore ;'9 shall !e e pected rent ;'9 -(-*(000 AessJ Bunicipal Ta >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income Ta Aia!ilit# >il

+/5

-1(+1)&1+ +(*2(000&00 +()*(+1)&1+ >il +()*(++0&00 )(*++&00 +(000&00 4(*++&00 12+&// 4*&++ 4(520&00 ` -(-*(000&00

-+(/00&00 -(0-(*00&00 )1(050&00 /+(000&00 1(40(2+0&00 1(40(2+0&00 >il 1(40(2+0&00

Income Fnder The 3ead 3ouse 7ropert# 2'+,#4'% 16$

+/) `

Income from self occupied house >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income from self occupied house Income from partl# self occupied and partl# let out house ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ent (+0(000 1+) (!) Bunicipal 9aluation (15(000 1+) (c) 3igher of (a) or (!) (d) :tandard 0ent (12(000 1+) (e) < pected 0ent (f) 0ent 0eceiva!le (/2(000 5) ;'9 W 3igher of (e) or (f) AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income from 3ouse 7ropert# Income under the head 3ouse 7ropert# ?`1()-(000 L `(-0(000)@

>il >il -0(000 (-0(000) -(*0(000 ` +(/0(000 +(1*(000 +(/0(000 1(50(000 1(50(000 -(*0(000 -(*0(000 +0(000 -(/0(000 1(0+(000 /2(000 1()-(000 1(*-(000

2'+,#4'% 17$ ` Op#4'% I 3ouse I is self-occupied Income from house I 3ouse II is deemed to !e let out ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) (d) :tandard 0ent (*(000 1+) (e) < pected rent _Aower of (c) or (d)` ;'9 W < pected 0ent AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income from house II Income under option I ?/*(+00 L (-0(000)@ Op#4'% II 3ouse I is deemed to !e let out ;ross 'nnual 9alue W' J4%: N'#e$ (-0(000&00) **(000&00 ` */(000 **(000 **(000 4+(000 **(000 **(000 >il **(000&00 1)(500&00 >il /*(+00&00 1*(+00&00

20(000&00 `

Income Fnder The 3ead 3ouse 7ropert# (a) =air 0ent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) (d) :tandard 0ent (e) < pected 0ent _Aower of (c) or (d)` ;'9 W < pected 0ent AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ .urrent period interest 0 '( 01.04.2013 #' 28.02.2014 -(20(000 1-R 1111+ W `/1(405&-Income from house I 3ouse II is self occupied Income from house II Income under option II Option II is !etter Income under the head 3ouse 7ropert# 'ddJ Fnrealised rent received Aoss under the head 3ouse 7ropert# Income under the head .apital ;ains (AT.;) ;ross Total Income AessJ 6eduction u1s 50. Total Income 0ounded off u1s +55' C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `14()2(+)0 (`1)()2(+)0 `+(00(000) V +0R 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# -(*)(5+)&4/ 0ounded off u1s +55, 2'+,#4'% 18$ +0(000 22(000 22(000 20(000 20(000 20(000

+20

>il 20(000&00 12(000&00 /1(405&--

(*(405&--) >il (*(405&--) (*(405&--) +(000&00 (/(405&--) +0(00(000&00 1)()2(+)1&*4 >il 1)()2(+)1&*4 1)()2(+)0&00 -(2)(025&00 4(151&1* -(2)0&25 -(*)(5-0&00 `

Op#4'% I &lat I is self occupie! Income &lat II is !eeme! to be let out ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) < pected 0ent ;'9 W < pected 0ent AessJ Bunicipal ta es

(-0(000&00) 20(000&00 ` /2(000 20(000 20(000 20(000 20(000 2(000&00

Income Fnder The 3ead 3ouse 7ropert# >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income Income under option I ?(-0(000) L -1(200@ Op#4'% II &lat I is !eeme! to be let out ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) (d) :tandard 0ent (e) < pected 0ent _Aower of (c) or (d)` ;'9 W < pected 0ent AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income &lat II is self occupie! Income Income under option II is `4(520 3ence Option I is !etter& Computation of Total Income Income under the head 3ouse 7ropert# Income under the head ,usiness 7rofession ;ross Total Income AessJ 6eduction u1s 50. Total Income Computation of Tax Liability Ta on `*(-1(200 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# +4(05)&00 0ounded off u1s +55, 2'+,#4'% 19$

+21 /2(000&00 1-(200&00 >il -1(200&00 1(200&00

52(000&00 ` 1(+2(000 )2(000 1(+2(000 52(000 52(000 52(000 )(200&00 42(200&00 ++(*20&00 /2(000&00 4(520&00 >il

1(200&00 4(00(000&00 4(01(200&00 40(000&00 *(-1(200&00 +*(-00&00 2+*&00 +*-&00 +4(0)0&00 `

Computation of income f"om +ouse P"ope"ty of ,") P"atee- .in5/al >et annual value is >il (:ince house is self occupied) AessJ 6eduction u1s +/(!) Interest paid on !orrowed capital +2(00(000 V 1+R W `-(00(000 's per second proviso to section +/(!) interest deduction restricted to `1(20(000 Aoss under the head O3ouse 7ropert#P

>il 1(20(000

(1(20(000)

Income Fnder The 3ead 3ouse 7ropert# Computation of income f"om /ouse p"ope"ty of ,") 8as/pal .in5/ G ',%9 0+'' (2e+7 O&&,p4e9" >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ .urrent period interest 0 '( 01.04.2013 #' 31.03.2014 W 12(00(000 10R 11+ W `42(000 7rior period interest 0 '( 01.07.2012 #' 31.03.2013 W 12(00(000 10R ) 1 1+ W 1(1+(200 1(1+(200 allowed in 2 e8ual instalments W 1(1+(200 1 2 W ` ++(200 per annum W ++(200 1 + W `11(+20 Total interest W `42(000 L ` 11(+20 W `5*(+20 Income from house propert# 04 =# 0+'' (3e# O,#" ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ent (1(+0(000 )11+) )0(000 (!) Bunicipal 9alue ()+(000 )11+) *)(000 (c) 3igher of (a) or (!) )0(000 (d) < pected 0ent )0(000 (e) 0ent 0eceived10eceiva!le W +0(000 * 1(+0(000 ;'9 W 3igher of (d) or (e) 1(+0(000 AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ .urrent period interest 0 '( 01.04.2013 #' 31.03.2014 W 12(00(000 10R 11+ W `42(000 7rior period interest 0 '( 01.07.2012 #' 31.03.2013 W 12(00(000 10R ) 1 1+ W 1(1+(200 1(1+(200 allowed in 2 e8ual instalments W 1(1+(200 1 2 W ` ++(200 per annum W ++(200 1+ W `11(+20 Total Interest W `42(000 L `11(+20 W `5*(+20 Income from house propert# Aoss under the head Oincome from house propert#P of Br& Kashpal :ingh (,oth ground floor and first floor) Aoss under the head house propert# of Br& Kashpal :ingh 2'+,#4'% 20$

+2+

>il >il 5*(+20

(5*(+20) 1(+0(000

2(000 1(12(000 -/(200 5*(+20

(2(420) ()+(000) ()+(000) `

Computation of income un!e" t/e /ea! +ouse P"ope"ty

Income Fnder The 3ead 3ouse 7ropert# ;ross 'nnual 9alue W' J4%: N'#e$ (a) Bunicipal 9aluation (!) < pected 0ent (c) 0ent 0eceived10eceiva!le (-(000 +) L (-(200 *) ;'9 W 3igher of (!) or (c) AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ W ?(*0(000 12R *11+) L (/2(000 12R *11+)@ W `4(542 Income under the head 3ouse 7ropert# 2'+,#4'% 21$

+2+4(000 ` ++(000 ++(000 +4(000 +4(000 >il +4(000 5(100 4(542

11(0+2

C'(p,#a#4'% '7 4%&'(e '7 U%4#!I :ince the unit is self-occupied throughout the #ear& 3ence its income shall !e computed under section +-(+)( accordingl# there will !e loss `-0(000& C'(p,#a#4'% '7 4%&'(e '7 U%4#!II It will !e considered to !e partiall# self-occupied and partiall# let out and income shall !e computed under section +-(-) in the manner given !elowJ ` ;ross 'nnual 9alue 5+(200&00 W' J4%: N'#e$ ` (a) =air 0ental 9alue 4*(200 (!) Bunicipal 9aluation *2(000 (c) 3igher of (a) or (!) 4*(200 (d) :tandard 0ent 40(000 < pected 0ent _Aower of (c) or (d) 40(000 (e) < pected 0ent 40(000 (f) 0ent 0eceived10eceiva!le (4(200 11) 5+(200 ;'9 W 3igher of (e) or (f) 5+(200 AessJ Bunicipal ta es 4(500&00 >et 'nnual 9alue 4/(400&00 AessJ -0R of >'9 u1s +/(a) ++(/10&00 AessJ Interest on capital !orrowed u1s +/(!) 4+()00&00 W' J4%: %'#e$ .urrent period interest 0 '( 01.04.2013 #' 31.03.2014 W )(00(000 1+R W `1(05(000 7rior period interest 0 '( 01.07.2010 #' 31.03.2012 W )(00(000 1+R +1 1 1+ W1(5)(000 Installment W 1(5)(000 1 2 W -4(500 Total interestW 1(05(000 L -4(500 W 1(/2(500 Interest allowed for one unit W 1(/2(500 1 + W `4+()00 Aoss from house propert# (+0(*10&00) Aoss under the head 3ouse 7ropert# is (`+0(*10) L (`-0(000) (20(*10&00) Income under the head Other :ources +()0(000&00

Income Fnder The 3ead 3ouse 7ropert# ;ross Total Income AessJ 6eductions u1s 50. to 50F Total Income Computation of Tax Liability Ta on `+(-)(-)0 at sla! rate AessJ 0e!ate u1s 54' (-()-) or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 1())4&14 0ounded off u1s +55,

+2/ +(-)(-)0&00 >il +(-)(-)0&00 -()-)&00 +(000&00 1()-)&00 -5&45 1)&-) +(000&00

N'#e$ :ince condition regarding certificate has not !een complied with hence interest has !een allowed ma imum to the e tent of `-0(000& 2'+,#4'% 22$ ` U%4# I ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ental 9alue (1(42(000 40R) 1(++(200 (!) Bunicipal 9aluation (1(22(000 40R) 1(05(200 (c) 3igher of (a) or (!) 1(++(200 (d) :tandard 0ent (1(*2(000 40R) 1(12(200 (e) < pected 0ent _Aower of (c) or (d)` 1(12(200 (f) 0ent 0eceived10eceiva!le (1-(000 10&2) 1(-*(200 In this case( rent 010 is higher than the e pected rent( ;'9 shall !e 0ent 010 ;'9 1(-*(200 AessJ Bunicipal ta es (-2(000 40R) >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head 3ouse 7ropert# U%4# II ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ental 9alue (1(42(000 -0R) (!) Bunicipal 9aluation (1(22(000 -0R) (c) 3igher of (a) or (!) (d) :tandard 0ent (1(*2(000 -0R) (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (2(000 11) In this case( rent 010 is higher than the e pected rent( ;'9 shall !e 0ent 010 ;'9 AessJ Bunicipal ta es (-2(000 -0R) >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income under the head house propert# 1(-*(200

+/(200 1(1+(000 --(*00 >il 45(/00 22(000

` 2+(200 /*(200 2+(200 /)(200 /)(200 22(000 22(000 10(200 //(200 1-(-20 >il -1(120

Income Fnder The 3ead 3ouse 7ropert# Total income from house propert# (45(/00 L -1(120) 2'+,#4'% 23$ ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ental 9alue 42(000 (!) Bunicipal 9aluation *5(000 (c) 3igher of (a) or (!) 42(000 (d) :tandard 0ent (4(+00 1+) 5*(/00 (e) < pected 0ent _Aower of (c) or (d)` 42(000 (f) 0ent 0eceived10eceiva!le (4(+00 1+) 5*(/00 ;'9 W 3igher of (e) or (f) 5*(/00 AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Interest paid to non-resident without deducting ta at source is not deducti!le Income from house propert# 'ddJ 0ecover# of unrealised rent sec +2'' Income under the head 3ouse propert# 2'+,#4'% 24$

+22 1(0)(220 ` 5*(/00

1/(000 4+(/00 +1(4+0 >il 20(*50 ++(000 4+(*50 `

Op#4'% I @',=e I It is assumed to !e self-occupied Income from house propert# I (-0(000&00) Interest on the capital !orrowed W `2)(25-&-(2(00(000 1-R 1111+ W 2)(25-&--)& ,ut su!Dect to ma imum of `-0(000 Interest upto `1(20(000 is allowed onl# if the loan is taken for purchase or construction of the house i&e& if the loan is taken for reconstruction( higher amount is not allowed& @',=e II 'ssumed to !e let out house ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air rent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) (d) :tandard 0ent (*(000 1+) (e) < pected 0ent _Aower of (c) or (d)` ;'9 W < pected 0ent AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income from house propert# II Op#4'% II @',=e I

**(000&00 ` */(000 **(000 **(000 4+(000 **(000 **(000 >il **(000&00 1)(500&00 >il /*(+00&00

Income Fnder The 3ead 3ouse 7ropert# 'ssumed to !e let out ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air rent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) (d) :tandard 0ent (e) < pected 0ent _Aower of (c) or (d)` ;'9 W < pected 0ent AessJ Bunicipal Ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income from house propert# I @',=e II 'ssumed to !e self occupied Income from house II Income under option I W (-0(000) L /*(+00 W `1*(+00 Income under Option II W (`+/(25-&--) 3ence option II is !etter& @',=e III ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air rent (*0(000 1+) (!) < pected 0ent (c) 0ent 0eceived10eceiva!le (20(000 1+) ;'9 W < pected 0ent AessJ Bunicipal Ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income from house III I%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 3ouse I and II option II 3ouse III 0ecover# of unrealised rent (house I) I%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 Computation of Total Income Income under the head 3ouse 7ropert# Income under the head .apital ;ains (long term capital gain) Income from Other :ources ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income 0ounded off u1s +55' Computation of Tax Liability Ta on `/(15()40 at sla! rate

+2* 20(000&00 ` +0(000 22(000 22(000 20(000 20(000 20(000 >il 20(000&00 12(000&00 2)(25-&-(+/(25-&--)

>il

4(+0(000 ` 4(+0(000 4(+0(000 *(00(000 4(+0(000 11(000&00 4(0)(000&00 +(1+(400&00 22(000&00 /(/1(-00&00 (+/(25-&--) /(/1(-00&00 +(000&00 4F18F716.67 /(15(41*&*4 -(20(000&00 +20&00 4(*5()**&*4 >il 4(*5()**&*4 4(*5()40&00 +1(5)4&00

Income Fnder The 3ead 3ouse 7ropert# Ta on `-(20(000 V +0R u1s 11+ Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# )/(*2-&)1 0ounded off u1s +55, 2'+,#4'% 2/$ (i) Income under the head 3ouse 7ropert#& (ii) Income under the head .apital ;ains& (iii) Income under the head ,usiness17rofession& (iv) Income under the head Other :ources& (v) Income under the head 3ouse 7ropert#& (vi) Income under the head ,usiness17rofession& (vii) Income under the head ,usiness17rofession& (viii) Income under the head ,usiness17rofession& (i ) Income under the head Other :ources& ( ) Income under the head 3ouse 7ropert#&

+24 40(000&00 )1(5)4&00 1(5-4&)/ )15&)4 )/(*20&00

EXAMINATION DUE2TION2
IPCC MA. - 2012
D,e=#4'% 2 (4 Ma J=" < plain the treatment of unrealiEed rent and its recover# in su!se8uent #ears under the provisions of Income Ta 'ct( 1)*1& A%=8e $ U% ea+4=e9 1e%# KE)p+a%a#4'% #' 2e&#4'% 23(1" ea9 84#B 1,+e 4L While computing gross annual value of a let out propert#( the unrealiEed rent is to !e deducted from actual rent received or receiva!le& The unrealiEed rent is deducti!le onl# on the fulfilment of the conditions prescri!ed under 0ule /& If the unrealiEed rent is su!se8uentl# recovered( it is ta a!le under section +2''( in the #ear in which it is recovered and the deduction like legal e pense etc is not allowed from unrealiEed rent so recovered& 1,+e 4 - Fnrealised rent means the rent which the owner cannot realiEe& It shall !e e8ual to the amount of rent pa#a!le !ut not paid !# a tenant of the assessee and so proved to !e lost and irrecovera!le where(X (a) the tenanc# is !onafide&

Income Fnder The 3ead 3ouse 7ropert#

+25

(!) the defaulting tenant has vacated( or steps have !een taken to compel him to vacate the propert#& (c) the defaulting tenant is not in occupation of an# other propert# of the assessee& (d) the assessee has taken all reasona!le steps to institute legal proceedings for the recover# of the unpaid rent or satisfies the 'ssessing Officer that legal proceedings would !e useless& 2e&#4'% 2/AA - Where the assessee cannot realise rent from a propert# let to a tenant and su!se8uentl# the assessee has realised an# amount in respect of such rent( the a(',%# =' ea+4=e9 =Ba++ ;e 9ee(e9 #' ;e 4%&'(e &Ba :ea;+e ,%9e #Be Bea9 PI%&'(e 7 '( B',=e p 'pe #6Q and accordingl# charged to incometa as the income of that previous #ear in which such rent is realised whether or not the assessee is the owner of that propert# in that previous #ear& If the assessee has 4%&, e9 a%6 e)pe%94#, e '% e&'5e 6F 4# 84++ %'# ;e a++'8e9 #' ;e 9e9,&#e9. If the assessee has received an# interest( it will !e considered to !e income under the head other sources&

PCC MA. - 2012

D,e=#4'% 1 (/ Ma J=" Br& 9ai!hav owns five houses at .ochin& .ompute the gross annual value of each house from the information given !elowJ ` @',=e!I @',=e!II @',=e!III @',=e!I* @',=e -* Bunicipal value 1(+0(000 +(/0(000 1(10(000 )0(000 42(000 =air rent 1(20(000 +(/0(000 1(1/(000 5/(000 50(000 :tandard rent 1(05(000 >&'& 1(//(000 >&'& 45(000 'ctual rent received1 1(50(000 +(10(000 1(+0(000 1(05(000 4+(000 receiva!le A%=8e $ @',=e I C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) (d) 1(05(000 (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (g) 3igher of (e) or (f) shall !e ;'9 @',=e II C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) (d) :tandard 0ent (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (g) 3igher of (e) or (f) shall !e ;'9 @',=e III C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) ` 1(20(000 1(+0(000 1(20(000 0ent 1(05(000 1(50(000 1(50(000 ` +(/0(000 +(/0(000 +(/0(000 >&' +(/0(000 +(10(000 +(/0(000 ` 1(1/(000 1(10(000 1(1/(000

:tandard

Income Fnder The 3ead 3ouse 7ropert# (d) 1(//(000 (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (g) 3igher of (e) or (f) shall !e ;'9 @',=e I* C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) (d) :tandard 0ent (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (g) 3igher of (e) or (f) shall !e ;'9 @',=e * C'(p,#a#4'% '7 G '== A%%,a+ *a+,e (a) =air 0ent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) (d) :tandard 0ent (e) < pected 0ent _Aower of (c) or (d)` (f) 0ent 0eceived10eceiva!le (g) 3igher of (e) or (f) shall !e ;'9 :tandard

+2) 0ent 1(1/(000 1(+0(000 1(+0(000 ` 5/(000 )0(000 )0(000 >&' )0(000 1(05(000 1(05(000 ` 50(000 42(000 50(000 45(000 45(000 4+(000 45(000

IPCC NO* - 2010

D,e=#4'% 7 < plain !riefl# the applica!ilit# of section ++ for chargea!ilit# of income ta forJ (i) 3ouse propert# situated in foreign countr# and (ii) 3ouse propert# with disputed ownership& A%=8e $ 'pplica!ilit# of section ++ for chargea!ilit# of income-ta for (4" @',=e p 'pe #6 =4#,a#e9 4% 7' e4:% &',%# 6 ' resident assessee is ta a!le under section ++ in respect of annual value of a house propert# situated in foreign countr#& ' resident !ut not ordinaril# resident or a non resident is ta a!le in respect of income from such propert# if the income is received in India during the previous #ear& Once incidence of ta is attracted under section ++( the annual value will !e computed as if the propert# is situated in India& (44" @',=e p 'pe #6 84#B 94=p,#e9 '8%e =B4p If the title of ownership of the house propert# is under dispute in a court of law( the decision a!out who is the owner lies with the Income ta 6epartment& The assessment cannot !e held up for such dispute& ;enerall#( a person who receives the income or who enDo#s the possession of the house propert# as owner( though his claim is under dispute( is assessa!le to ta under section ++& (2 Ma J= ea&B "

IPCC NO* - 2009

D,e=#4'% 2 Br& 0aman is a co-owner of a house propert# alongwith his !rother& (6 MA1K2"

Income Fnder The 3ead 3ouse 7ropert# Bunicipal value of the 7ropert# =air 0ent :tandard 0ent under the 0ent .ontrol 'ct 0ent received

+*0 1(*0(000 1(20(000 1(40(000 12(000 p&m&

The loan for the construction of this propert# is Dointl# taken and the interest charged !# the !ank is `+2(000 out of which `+1(000 have !een paid& Interest on the unpaid interest is `/20& To repa# this loan( 0aman and his !rother have taken a fresh loan and interest charged on this loan is `2(000& The Bunicipal ta es of `2(100 have !een paid !# the tenant& Br& 0aman has 20R share in the house propert#& .ompute the income from this propert# chargea!le in the hands of Br& 0aman for '&K& +01/-12&(Bodified) A%=8e . C'(p,#a#4'% '7 4%&'(e 7 '( B',=e p 'pe #6 '7 M . 1a(a% 7' A... 2014!1/ ` ` ;ross 'nnual 9alue 1(50(000 W' J4%: N'#e$ (a) Bunicipal value of propert# 1(*0(000 (!) =air rent 1(20(000 (c) 3igher of (a) and (!) 1(*0(000 (d) :tandard rent 1(40(000 (e) 'nnual Aetting 9alue 1 < pected 0ent ?lower of (c) and (d)@ 1(*0(000 (f) 'ctual rent ?12(000 1+@ 1(50(000 (g) ;ross 'nnual 9alue ?higher of (e) and (f)@ 1(50(000 Le##$ Bunicipal ta es paid !# the tenant( hence not deducti!le >il >et 'nnual 9alue (>'9) 1(50(000 Le##$ 6eductions under section +/ (i) -0R of >'9 u1s +/(a) (ii) Interest on housing loan u1s +/(!) Interest on loan taken from !ank Interest on fresh loan to repa# old loan for this propert# Income from house propert# 20R share ta a!le in the hands of Br& 0aman 2/(000 +2(000 2(000

5/(000 96F000 48F000

N'#e=$ Interest on housing loan is allowa!le as a deduction under section +/ on accrual !asis& =urther( interest on fresh loan taken to repa# old loan is also allowa!le as deduction& 3owever( interest on unpaid interest is not allowa!le as deduction under section +/&&

PCC NO* - 2009

D,e=#4'% 3 (7 Ma J=" Brs& Indu( a resident and ordinaril# resident individual( owns a house in F&:&'& :he receives rent V c +(000 per month& :he paid municipal ta es of c 1(200 during the financial #ear +01--1/& :he also owns a two storied house in Bum!ai( ground floor is used for her residence and first floor is let out at a monthl# rent of `10(000& :tandard rent for each floor is `11(000 per month&

Income Fnder The 3ead 3ouse 7ropert#

+*1

Bunicipal ta es paid for the house amounts to `4(200& Brs& Indu had constructed the house !# taking a loan from a nationaliEed !ank on +0&0*&+010& :he repaid the loan of `2/(000 including interest of `+/(000& The value of one dollar is to !e taken as `/2& .ompute total income from house propert# and also ta lia!ilit# of Brs& Indu for assessment #ear +01/-12& (Bodified) A%=8e . C'(p,#a#4'% '7 I%&'(e 7 '( @',=e P 'pe #6 '7 M =. I%9, 7' #Be A==e==(e%# .ea 2014!1/ ` ;'9 of the house in F:' (c+000 p&m& `/2 per F:6 1+ months) 10(50(000&00 Le##$ Bunicipal ta es paid (c1200 `/2 per F:6) *4(200&00 Ne# A%%,a+ *a+,e 10F12F/00.00 Le##$ :tatutor# deduction under section +/(a) V -0R of >'9 -(0-(420&00 I%&'(e 7 '( @',=e p 'pe #6 ;'9 of house at Bum!ai (let out portion)- Ist =loor 0ent received (`10(000 1+) 1(+0(000 A%%,a+ 3e##4%: *a+,e/E)pe&#e9 1e%# 1(+0(000 ;ross 'nnual 9alue Le##$ Bunicipal ta es paid (11+ of `4(200) Ne# A%%,a+ *a+,e (NA*" Le##$ :tatutor# deduction under section +/(a) V -0R of >'9 Interest on 3ousing loan (11+ of `+/(000) +/(!) I%&'(e 7 '( @',=e p 'pe #6 ;'9 of house at Bum!ai (self occupied portion) ;round =loor Le##$ Bunicipal ta es Ne# A%%,a+ *a+,e Le##$ :tatutor# deduction under section +/(a) V -0R of >'9 Interest on 3ousing Aoan (11+ of `+/(000) +/(!) Aoss from 3ouse propert# I%&'(e 7 '( @',=e p 'pe #6 G '== T'#a+ I%&'(e AessJ 6eduction u1s 50. (0epa#ment of housing loan) T'#a+ I%&'(e ( ',%9e9 '77 288A" 7F36F130.00 C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `4(-*(1-0 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55, 4(05(420&00

1(+0(000&00 -(420&00 1F16F2/0.00 -/(542 1+(000 *)(-42&00 >il >il >il >il (1+(000&00) (1+(000&00) 7F66F12/.00 7F66F12/.00 -0(000&00

44(++*&00 1(2//&2+ 44+&+* 4)(2/+&45 4)(2/0&00

PCC NO* - 2008

D,e=#4'% 3 (9 Ma J="

Income Fnder The 3ead 3ouse 7ropert#

+*+

Br& G owns one residential house in Bum!ai& The house is having two units& =irst unit of the house is self occupied !# Br& G and another unit is rented for `5(000 p&m& The rented unit was vacant for + months during the #ear& The particulars of the house for the previous #ear +01--1/ are as underJ :tandard rent Bunicipal valuation =air rent Bunicipal ta Aight and water charges paid !# the tenant Interest on !orrowed capital Insurance charges paid !# Br& G 0epairs ` 1(*+(000 p&a& ` 1()0(000 p&a& ` 1(52(000 p& a 12R of municipal valuation ` 200 p&m& ` 1(200 p&m& ` -(000 p&a& ` 1+(000 p&a& (Bodified)

.ompute income from house propert# of Br& G for the '&K& +01/-12& A%=8e . C'(p,#a#4'% '7 I%&'(e 7 '( B',=e p 'pe #6 7' A... 2014!1/ (A" 1e%#e9 ,%4# (/0H '7 #'#a+ a ea" G '== A%%,a+ *a+,e W' J4%: %'#e$ ` (a) =air rent (`1(52(000 a) (!) Bunicipal valuation (`1()0(000 a) (c) 3igher of (a) or (!) (d) :tandard rent (`1(*+(000 a) (e) < pected rent (lower of (c) or (d) (f) 0ent received or receiva!le (`5(000 10) :ince( owing to vacanc# the actual rent received is lower than the annual letting value( the actual rent received is the ;ross 'nnual value i&e& `50(000 AessJ Bunicipal ta es (12R of `)2(000) Ne# A%%,a+ 5a+,e AessJ 6eductions under section +/ (i) -0R of net annual value u1s +/(a) (ii) Interest on !orrowed capital (`420 1+) u1s +/(!) Ta)a;+e 4%&'(e 7 '( +e# ',# p' #4'% (>" 2e+7 '&&,p4e9 ,%4# (/0H '7 #'#a+ a ea" 'nnual value AessJ 6eduction under section +/ Interest on !orrowed capital (`420 1+) u1s +/(!) I%&'(e 7 '( @',=e p 'pe #6

` 80F000

)+(200 )2(000 )2(000 51(000 51(000 50(000

1/(+20 6/F7/0 1)(4+2 )(000 +5(4+2 37F02/

>il )(000 ()(000) 28F02/

N'#e=$ (i) It is assumed that !oth the units are of identical siEe& Therefore( the rented unit would represent 20R of total area and the self-occupied unit would represent 20R of total area& (ii) >o deduction will !e allowed separatel# for light and water charges( insurance charges and repairs&

PCC MA. - 2008

D,e=#4'% 4 (6 Ma J="

Income Fnder The 3ead 3ouse 7ropert#

+*-

Br& Calpesh !orrowed a sum of `-0 lakhs from the >ational 3ousing ,ank towards purchase of a residential flat& The loan amount was dis!ursed directl# to the flat promoter !# the !ank& Though the construction was completed in Ba#( +01/( repa#ments towards principal and interest had !een made during the #ear ended -1&0-&+01/& In the light of the a!ove facts( stateJ (i) Whether Br& Calpesh can claim deduction under :ection +/ in respect of interest for the assessment #ear +01/-12& (Bodified) A%=8e . Interest on !orrowed capital is allowed as deduction under section +/(!) Interest pa#a!le on loans !orrowed for the purpose of ac8uisition( construction( repairs( renewal or reconstruction of house propert# can !e claimed as deduction under section +/(!)& Interest pa#a!le on !orrowed capital for the period prior to the previous #ear in which the propert# has !een ac8uired or constructed( can !e claimed as deduction over a period of 2 #ears in e8ual annual installments commencing from the #ear of ac8uisition or completion of construction& It is stated that the construction is completed onl# in Ba#( +01/& 3ence( deduction in respect of interest on housing loan cannot !e claimed in the assessment #ear +01/-12&

PCC MA. - 2007

D,e=#4'% 4 (14 Ma J=" Biss .harlie( an 'merican national( got married to Br& 0adhe# of India in F:' on 0+&0-&+01- and came to India for the first time on 1*&0-&+01-& :he left for F:' on +-&0)&+01-& :he returned to India again on +4&0-&+01/& While in India( she had purchased a show room in Bum!ai on ++&0/&+01-( which was leased out to a compan# on a rent of `+2(000 p&m& from 01&02&+01-& :he had taken loan from a !ank for purchase of this show room on which !ank had charged interest of `)4(200 upto -1&0-&+01/& :he had received the following gifts from her relatives and friends during 01&0/&+01- to -0&0*&+01-J - =rom parents of hus!and ` 21(000 - =rom married sister of hus!and ` 11(000 - =rom two ver# close friends of her hus!and( `1(21(000 and `+1(000 `1(4+(000 6etermine her residential status and compute the total income chargea!le to ta alongwith the amount of ta pa#a!le on such income for the 'ssessment Kear +01/-12& (Bodified) A%=8e . 's per section *(1)( an individual is considered to !e resident in India if he sta#s in India for 15+ da#s or more or he sta#s in India for *0 da#s or more during the relevant previous #ear and also for -*2 da#s or more during / #ears preceding the relevant previous #ear& :ince Biss .harlie is not a!le to compl# with an# of the condition mentioned a!ove( she is non-resident in previous #ear +01--1/& 3er sta# in India during the previous #ear +01--1/ and in the preceding four #ears is as underJP... 2013!14 01&0/&+01- to +-&0)&+01+4&0-&+01/ to -1&0-&+01/ Total 0', p e&e94%: p e54',= 6ea = 7&K& +01+- +01- ?1*&0-&+01- to -1&0-&+01-@ 7&K& +011- +01+ ?01&0/&+011 to -1&0-&+01+@ 7&K& +010- +011 ?01&0/&+010 to -1&0-&+011@ 7&K& +00)- +010 ?01&0/&+00) to -1&0-&+010@ - 14* da#s - 2 da#s 151 da#s - 1* da#s >il >il >il

Income Fnder The 3ead 3ouse 7ropert# Total 1* da#s

+*/

C'(p,#a#4'% '7 #'#a+ 4%&'(e '7 M4== CBa +4e 7' #Be A... 2014!1/ ` I%&'(e 7 '( B',=e p 'pe #6 :how room located in Bum!ai remained on rent from 01&02&+01- to -1&0-&+01/ V `+2(0001- p&m& ;ross 'nnual 9alue ?+2(000 11@ AessJ Bunicipal ta es Ne# A%%,a+ *a+,e AessJ 6eduction under section +/ -0R of >'9 +/(a) Interest on loan +/(!) I%&'(e ,%9e #Be @ea9 @',=e P 'pe #6 I%&'(e 7 '( '#Be =', &e= ;ifts received from non-relatives is chargea!le to ta as per section 2*(+) if the aggregate value of such gifts is in e cess of `20(000& - `21(000 received from parents of hus!and would !e e empt( since parents of hus!and fall within the definition of relative and gifts from a relative are not chargea!le to ta & - `11(000 received from married sister of hus!and is e empt( since sister falls within the definition of relative and gifts from a relative are not chargea!le to ta & - =rom two friends of hus!and `1(21(000 and `+1(000 aggregating to `1(4+(000& :ince the aggregate of `1(4+(000 e ceeds `20(000( the entire amount is ta a!le under section 2*(+)& Income under the head Other :ources T'#a+ I%&'(e C'(p,#a#4'% '7 #a) pa6a;+e ;6 M4== CBa +4e 7' #Be A... 2014!1/ ` Ta on total income of `+(*4(000 *(400 'ddJ <ducation cess V +R 1-/ 'ddJ :3<. V 1R *4 Ta) 34a;4+4#6 6F901 1',%9e9 '77 ,/= 288> 6F900 N'#e= 1& 'ctual rent received has !een taken as the gross annual value in the a!sence of other information (i&e& Bunicipal value( fair rental value and standard rent) in the 8uestion& +& 0e!ate under section 54' is not allowed to non-resident&

+(42(000 >il 2F7/F000 (5+(200) ()4(200) 9/F000

>il

>il

1(4+(000 1(4+(000 2F67F000

PE!II NO* - 2003

D,e=#4'% 2 (12 Ma J="

Br& ' and , constructed their houses on a piece of land purchased !# them at >ew 6elhi& The !uilt up area of each house was 1(000 s8& ft& ground floor and an e8ual area in the first floor&

Income Fnder The 3ead 3ouse 7ropert#

+*2

' started construction on 01&0/&+01+ and completed on -1&0-&+01-& ' occupied the entire house on 01&0/&+01-& ' has availed a housing loan of `+0 lakhs V 1+R p&a& on 01&0/&+01+ and has also su!mitted a certificate from the lender certif#ing the amount of interest& , started construction on 01&0/&+01+ and completed on 01&04&+01-& , occupied the ground floor on 01&04&+01- and let out the first floor for a rent of `12(000 per month& 3owever( the tenant vacated the house on -1&1+&+01- and , occupied the entire house during the period 01&01&+01/ to -1&0-&+01/& , has availed a housing loan of `1+ lakhs V 10R p&a& on 01&04&+01+ and has also su!mitted a certificate from the lender certif#ing the amount of interest& =ollowing are the other informationJ (i) =air rental value of each unit (;round floor 1 =irst floor) (ii) Bunicipal value of each unit (;round floor 1 =irst floor) (iii) Bunicipal ta es paid !# (iv) 0epair and maintenance charges paid !# ' , ' , 5(000 5(000 +5(000 -0(000 ` 1(00(000 per annum 4+(000 per annum

>o repa#ment was made !# either of them till -1&0-&+01/& ,ut the# have su!mitted a certificate confirming the amount of interest& .ompute income from house propert# for ' and , for the assessment #ear +01/-12& A%=8e $ C'(p,#a#4'% '7 4%&'(e 7 '( @',=e P 'pe #6 '7 M . A >et 'nnual 9alue AessJ -0R of >'9 +/(a) AessJ Interest on capital !orrowed u1s +/(!) Interest paid on !orrowed capital W +0(00(000 V 1+ R W `+(/0(000 Interest deduction restricted to `1(20(000 Aoss under the head O3ouse 7ropert#P (Bodified) ` >il >il 1(20(000

(1(20(000)

C'(p,#a#4'% '7 4%&'(e 7 '( @',=e P 'pe #6 '7 M . > G ',%9 7+'' (=e+7 '&&,p4e9" >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ 7rior period interest &"om '()'9)#'(# to *()'*)#'(* W 1+(00(000 10R ) 1 1+ W )0(000 )0(000 allowed in 2 e8ual instalments W )0(000 1 2 W ` 15(000 per annum W 15(000 1 + W `)(000 .urrent period interest

>il >il *)(000

Income Fnder The 3ead 3ouse 7ropert# &"om '()'$)#'(* to *()'*)#'($ W 1+(00(000 10R 11+ W `*0(000 Total Interest W `*0(000 L ` )(000 W `*)(000 Income from 3ouse 7ropert# 04 =# 7+'' (3e# ',#" ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ent (1(00(000 )11+) (!) Bunicipal 9aluation (4+(000 )11+) (c) 3igher of (a) or (!) (d) < pected 0ent (e) 0ent 0eceived10eceiva!le (12(000 *) ;'9 W 3igher of (d) or (e) AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) W' J4%: N'#e$ 7rior period interest &"om '()'9)#'(# to *()'*)#'(* W 1+(00(000 10R ) 1 1+ W )0(000 )0(000 allowed in 2 e8ual instalments W )0(000 1 2 W ` 15(000 per annum W 15(000 1 + W `)(000 .urrent period interest &"om '()'$)#'(* to *()'*)#'($ W 1+(00(000 10R 11+ W 0s&*0(000 Total Interest W `*0(000 L ` )(000 W `*)(000 Income from 3ouse 7ropert# Aoss under the head OIncome from 3ouse 7ropert#P of Br& , (,oth ground floor and first floor)

+**

(*)(000) )0(000 ` 42(000 2/(000 42(000 42(000 )0(000 )0(000 /(000 5*(000 +2(500 *)(000

(5(500) (44(500)

PE!II MA. - 2002

D,e=#4'% 3 (6 Ma J=" Br& 0amesh owns a house propert# which is let out& 6uring the previous #ear ending -1&0-&+01/ he receives (i) arrears of rent of `-0(000 and (ii) unrealised rent of `+0(000& Kou are re8uested to (a) state( how the# should !e dealt with as per the provisions of the 'ct( and (!) compute the income chargea!le under the head OIncome from house propert#P& (Bodified) A%=8e $ (a) 's per provisions of section +2,( arrears of rent will !e charged to ta as income from house propert# in the previous #ear in which such rent is received( after deducting a sum e8ual to -0R of such amount& The ta a!ilit# shall !e there whether Br& 0amesh remains as the owner of the propert# in the concerned #ear or not& In this case( it shall !e ta ed as income from house propert# in the #ear of receipt of such arrear rent& (!) 's per the provisions of section +2''( the unrealised rent when received( it shall !e deemed to !e the income chargea!le under the head OIncome from house propert#P and shall !e charged to ta in the #ear of receipt& In this case also( the ta a!ilit# shall !e there( irrespective of the fact whether Br& 0amesh is the owner of propert# or not in the #ear of receipt& The section does not provide for an# deduction thereunder& C'(p,#a#4'% '7 4%&'(e 7 '( B',=e p 'pe #6

Income Fnder The 3ead 3ouse 7ropert# 'rrears of rent Aess J 6eduction V -0R of `-0(0001- u1s +2, 'dd J Fnrealised rent received Income from house propert#

+*4 ` -0(000 )(000 +1(000 +0(000 /1(000

PE!II NO* - 2001

D,e=#4'% 1 (12 Ma J=" =rom the following particulars furnished !# Br& Ciran for the previous #ear ending -1&0-&+01/& .ompute the ta a!le income and ta lia!ilit# for assessment #ear +01/-12J (i) 3e owns a house propert# at metro cit#& The fair rental value per annum is ` +4(000 and the municipal value is ` +/(000& (ii) The house was let out from 01&0/&+01- to -1&05&+01- V `+(100 per month& =rom 01&0)&+01- Br& Ciran occupies the house for his residence& (iii) < penditure incurred on propert# and paidJ (a) Bunicipal ta (!) =ire insurance (c) Aand revenue (d) 0epairs `/(000 `+(200 `/(*00 `1(000 `+1(*00 `1+()*0 (Bodified) ` +4(000&00

(iv) Interest paid on !orrowings for constructionJ (a) =or the current #ear (!) Instalment of prior period

3e has long term capital gains of `2(00(000& A%=8e $ C'(p,#a#4'% '7 4%&'(e ,%9e #Be Bea9 @',=e P 'pe #6 ;ross 'nnual 9alue W' J4%: N'#e$ ` (a) =air 0ent +4(000 (!) Bunicipal 9aluation +/(000 (c) 3igher of (a) or (!) +4(000 (d) < pected rent +4(000 (e) 0ent 0eceived10eceiva!le (+(100 2) 10(200 ;'9 W 3igher of (d) or (e) +4(000 AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) (+1(*00 L1+()*0) Aoss from house propert# Income under the head .apital ;ains (AT.;) Income under the head .apital gains after adDusting loss from house propert# ;ross Total Income AessJ 6eduction u1s 50. to 50F Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6

/(000&00 +-(000&00 *()00&00 -/(2*0&00 (15(/*0&00) 2(00(000&00 /(51(2/0&00 /(51(2/0&00 >il /(51(2/0&00

Income Fnder The 3ead 3ouse 7ropert# Ta on `+(51(2/0 (`/(51(2/0 `+(00(000) V +0R u1s 11+ AessJ 0e!ate u1s 54' (2*(-05 or +(000 whichever is less) Ta !efore education cess 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 22()-4&+/ 0ounded off u1s +55,

+*5 2*(-05&00 +(000&00 2/(-05&00 1(05*&1* 2/-&05 22()/0&00

PE!II MA. - 2000

D,e=#4'% 4 (7 Ma J=" 'rvind commenced construction of a residential house intended e clusivel# for his residence( on 01&11&+01+& 3e raised a loan from 7>, of `2(00(000 at 1* per cent interest for the purpose of construction on 01&11&+01+& =inding that there was an over-run in the cost of construction he raised a further loan of `5(00(000 at the same rate of interest on 01&10&+01-& The assessee has su!mitted a certificate confirming the amount of interest& What is the interest allowa!le under section +/( assuming that the construction was completed !# -1&0-&+01/Y (Bodified) A%=8e $ :ince the house was for self-occupation onl#( the annual value of the propert# would !e $nil% under section +-(+)& The interest allowa!le for the current #ear has to !e considered with respect to !oth the loans& Interest on loan !orrowed after 01&0/&1))) is eligi!le for deduction su!Dect to a ma imum of `1(20(000 in the case of self occupied propert#& 7rior period interest (upto -1&0-&+01-) (2(00(000 1*R 2 1 1+ ) This is to !e allowed over 2 #ears !eginning with assessment #ear +01/-12& 'mount allowa!le for each #ear Interest eligi!le for deduction for the assessment #ear +01/-12 7rior period interest J One-fifth of `--(--Interest on first loan J .urrent #ear interest J 2(00(000 V 1*R Interest on second loan J 5(00(000 V 1*R *11+ Total interest Aimited to Therefore( interest allowa!le under section +/ would !e `1(20(000&

--(--*(**4 *(**4 50(000 */(000 1(20(**4 1(20(000

PE!II NO* - 1999

D,e=#4'% 3 7ritam occupied two flats for his residential purposes( particulars of which are as followsJ Pa #4&,+a = Bunicipal 9aluation =air 0ent =air rent under 0ent .ontrol 'ct (i&e& :tandard 0ent) 0+a# I(4% `" )0(000 1(+0(000 50(000 (14 Ma J=" 0+a# II(4% `" /2(000 /0(000 >ot availa!le

Income Fnder The 3ead 3ouse 7ropert# Bunicipal ta es paid =ire insurance paid Interest pa#a!le on capital !orrowed for purchase of flat

+*)

10R of municipal valuation 10R of municipal valuation 1(000 /0(000 *00 >il

Income of 7ritam from his 7roprietar# !usiness7ritam Warehousing .orporation is `*(20(000& 6etermine the ta a!le income and ta lia!ilit# for the assessment #ear +01/-12 on the assumption that he contri!utes `40(000 towards pu!lic provident fund account( #ou are informed that 7ritam could not occup# flat for + months commencing from 6ecem!er 1 st( +01- and that he has attained the age of *2 on +-&05&+01-& (Bodified) A%=8e : I%&'(e =Ba++ ;e &'(p,#e9 a= pe 2e&#4'% 23(4" Option I =lat I is :elf Occupied :ec +-(+) Income =lat II is Aet out :ec +-(1) ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ent (!) Bunicipal 9aluation (c) < pected 0ent _3igher of (a) or (!) ;'9 W < pected 0ent AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income +5(-20&00 Income under Option I Option II =lat I is Aet out :ec +-(1) ;ross 'nnual 9alue W' J4%: N'#e$ (a) =air 0ent (!) Bunicipal 9aluation (c) 3igher of (a) or (!) (d) :tandard 0ent (e) < pected 0ent _Aower of (c) or (d)` ;'9 W < pected 0ent AessJ Bunicipal ta es >et 'nnual 9alue AessJ -0R of >'9 u1s +/(a) AessJ Interest on capital !orrowed u1s +/(!) Income )(400&00 `

(-0(000&00) /2(000&00 ` /0(000 /2(000 /2(000 /2(000 /(200&00 /0(200&00 1+(120&00 >il (1(*20&00)

50(000&00 ` 1(+0(000 )0(000 1(+0(000 50(000 50(000 50(000 )(000&00 41(000&00 +1(-00&00 /0(000&00

Income Fnder The 3ead 3ouse 7ropert# =lat II is :elf occupied :ec +-(+) Income Income under Option II is 3ence Option I is !etter& C'(p,#a#4'% '7 G '== T'#a+ I%&'(e Income under the head 3ouse 7ropert# Income under the head ,usiness17rofession ;ross Total Income AessJ 6eduction u1s 50. _.ontri!ution in 7u!lic provident fund` Total Income C'(p,#a#4'% '7 Ta) 34a;4+4#6 Ta on `2(45(-20 at sla! rate 'ddJ <ducation cess V +R 'ddJ :3<. V 1R Ta Aia!ilit# 0ounded off u1s +55,

+40 >il )(400&00

(1(*20&00) *(20(000&00 *(/5(-20&00 40(000&00 2(45(-20&00 /0(*40&00 51-&/0 /0*&40 /1(5)0&10 /1(5)0&00

EXE1CI2E2 1& ;anesh is a mem!er of a house !uilding co-operative societ#& The societ# is the owner of the flats constructed !# it& One of the flats is allotted to ;anesh& The income from that flat will !e assessed in the hands of a) .o-operative :ociet# !) ;anesh c) >either of the a!ove&

Income Fnder The 3ead 3ouse 7ropert# +& 9acant site lease rent is ta a!le as a) Income from house propert# !) ,usiness income c) Income from other sources or !usiness income( as the case ma# !e -& Treatment of unrealiEed rent for determining income from house propert# a) To !e deducted from annual letting value !) To !e deducted from actual rent c) To !e deducted under section +/ from annual value /& Bunicipal ta es to !e deducted from ;'9 should !e a) 7aid !# the tenant during the previous #ear !) 7aid !# the owner during the previous #ear c) 'ccrued during the previous #ear 2& 6eduction under section +/(a) is a) 11-rd of >'9 !) repairs actuall# incurred !# the owner c) -0R of >'9

+41

*& Interest on !orrowed capital accrued up to the end of the previous #ear prior to the #ear of completion of construction is allowed a) as a deduction in the #ear of completion of construction !) in 2 e8ual annual installments from the #ear of completion of construction c) In the respective #ear in which the interest accrues 4& The ceiling limit of deduction under section +/(!) in respect of interest on loan taken on 01&0/&+011 for repairs of a self-occupied house is a) ` -0(000 p&a& !) ` 1(20(000 p&a& c) >o limit 5& Where an assessee has two house properties for self-occupation( the !enefit of nil annual value will !e availa!le in respect of a) ,oth the properties !) The propert# which has !een ac8uired1constructed first c) 'n# one of the properties( at the option of the assessee )& Aeena received ` -0(000 as arrears of rent during the 7&K& +01--1/& The amount ta a!le under section +2, would !e a) -0(000 !) +1(000 c) +0(000

Income Fnder The 3ead 3ouse 7ropert#

+4+

10& 9id#a received ` )0(000 in Ba#( +01- towards recover# of unrealised rent( which was deducted from actual rent during the 7&K& +01+-1- for determining annual value& The amount ta a!le under section +2'' for '&K&+01/-12 would !e a) )0(000 !) *-(000 c) *0(000 11& ;anesh and 0aDesh are co-owners of a self-occupied propert#& The# own 20R share each& The interest paid !# each co-owner during the previous #ear on loan (taken for ac8uisition of propert# during the #ear +00/) is ` 1(*+(000& The amount of allowa!le deduction in respect of each co-owner is a) 1(*+(000 !) 42(000 c) 1(20(000 1+& 'n assessee( who was deriving income from house propert#( realised a sum of ` 2+(000 on account of displa# of advertisement hoardings of various concerns on the roof of the !uilding& 3e claims that this amount should !e considered under the head OIncome from house propert#P and not OIncome from other sourcesP& 3ow do #ou deal with the following issue under the provisions of the Income-ta 'ct( 1)*1Y 1-& 0am owned a house propert# at .hennai which was occupied !# him for the purpose of his residence& 3e was transferred to Bum!ai in Qune( +01- and therefore( he let out the propert# w&e&f& 01&04&+01- on a monthl# rent of ` 5(000& The corporation ta pa#a!le in respect of the propert# was ` +(000 of which 20R was paid !# him !efore -1&-&+01/& Interest on mone# !orrowed for the construction of the propert# amounted to ` 1+(000& .ompute the income from house propert# for the '&K&+01/-12& 1/& What do #ou understand !# O.omposite 0entPY What is the ta treatment of .omposite 0ent under the Income-ta 'ct( 1)*1Y A%=8e = 1. !" 2. c" 3. !" 4. !" /. c" 6. !" 7. a" 8. c" 9. !" 10. a" 11. c( 13. ` -4(400

+4-

2TUD. P3AN - KE. TO E00ECTI*E 3EA1NING

Pa # - I$ I%&'(e!#a) Income-ta is a direct ta i&e&( it is a ta levied directl# on the income of a person& Income-ta ( at the Intermediate (I7.) level( largel# involves application of provisions of the Income-ta 'ct( 1)*1 to solve computational pro!lems& It is( therefore( ver# interesting and at the same time( a d#namic su!Dect( on account of the maDor changes which take place in the income-ta law ever# #ear& :ince the su!Dect of income-ta is new to #ou( it is essential that #ou need to have an idea of the constituents or elements which make up the income-ta law& Kou also need to understand the !asic concepts( especiall#( the concept of OincomeP( on which ta is levied under this 'ct& The concepts of Oassessment #earP and Oprevious #earP are e8uall# imperative& Bost importantl#( #ou need to comprehend the manner of computation of total income( on which incometa is levied& K%'8 6', =6++a;,= a%9 e)pe&#e9 +e5e+ '7 J%'8+e9:e It is important that #ou are aware of the scope of s#lla!us and the level of knowledge e pected( so that #ou can plan #our stud# accordingl#& The s#lla!us of 7art IJ Income-ta of I7.. 7aper / J Ta ation comprises of Important definitions in the Income-ta 'ct( 1)*1( ,asis of charge( rates of ta es applica!le for different t#pes of assessees( .oncepts of previous #ear and assessment #ear( 0esidential status and scope of total income( Incomes which do not form part of total income( 3eads of income and the provisions governing computation of income under different heads( Income of other persons included in assessee%s total income( 'ggregation of income( set-off or carr# forward and set-off of losses( 6eductions from gross total income( .omputation of total income and ta lia!ilit#" re!ates and reliefs( 7rovisions concerning advance ta and ta deduction at source and 7rovisions for filing return of income&

Working knowledge of the a!ove topics is re8uired at the I7.. level& Kou are e pected to gain knowledge of the provisions of income-ta law related to the topics mentioned a!ove and also gain a!ilit# to solve simple pro!lems concerning assessees with the status of individual covering the areas mentioned in the a!ove paragraph& >e 4%7' (e9 '7 #Be 04%a%&e A&# a%9 A==e==(e%# .ea e+e5a%# 7' 6', e)a(4%a#4'% The =inance 'ct of a particular #ear would !e applica!le for the Ba# and >ovem!er e aminations of the ne t #ear& =or instance( the amendments made !# the =inance 'ct( +01- would !e applica!le for Ba#( +01/ and >ovem!er +01/ e aminations& The relevant assessment #ear for Ba# +01/ and >ovem!er +01/ e aminations is( therefore( '&K&+01/-12& Kou are e pected to !e updated with the notifications( circulars and other legislative amendments made upto * months prior to the e amination& =or Ba# +01/ e amination( such amendments made upto -1st Octo!er(

+4/ +01- would !e relevant and for >ovem!er +01/ e amination( such amendments made upto -0th 'pril( +01/ would !e relevant& D a8 ,p a 9e#a4+e9 =#,96 p+a% a%9 a++'&a#e #4(e 7' ea&B #'p4&/&Bap#e '7 #Be =,;<e&# 7reparing a comprehensive stud# time ta!le well in advance would !e of great help in organiEing #our stud# in an effective manner& In fact( #ou should start #our stud# immediatel# after passing #our .7T e amination and registering for Intermediate (I7.) .ourse& Ideall#( #ou should allocate at least - to / hours ever# da# for the su!Dect of income-ta & Ftilise #our stud# period effectivel#& The ne t step is to estimate the time to !e allocated for each topic1chapter of the su!Dect& The scope of s#lla!us( the contents of each chapter in the :tud# Baterial and 7ractice Banual would help #ou to !roadl# assess the time which each topic of the su!Dect would consume& Of course( since the su!Dect of income-ta is new to #ou( #ou have to keep some percentage margin over and a!ove the time assessed !# #ou to take care of possi!le difficult# in understanding new concepts( particularl# relating to !usiness ta ation( capital gains and provisions concerning deduction of ta at source& MaJe 7,++ ,=e '7 a++ #Be J%'8+e9:e 4%p,#= '7 >O2 The ,oard of :tudies !rings out various pu!lications from time to time with a view to assist the students in education& Kou are advised to make full use of the :tud# Baterial and other educational inputs provided to #ou& These educational inputs are also hosted at the :tudent 3ome 7age of I.'I httpJ11students&icai&org& The intention of creation of this portal is primaril# to ensure free and unrestricted flow of knowledge and information to the students across the countr# !# wa# of eas# access to the latest pu!lications of the Institute& Our efforts will( however( !ear fruit onl# if #ou make it a ha!it to !rowse the portal as often as possi!le andassimilate the knowledge inputs contained therein& It is of utmost importance that #ou read these knowledge inputs to attain conceptual clarit#( to remain updated with the developments in all the su!Dects and also to ac8uire the a!ilit# to appl# the concepts to solve computational pro!lems& :ome of the important pu!lications of ,O: in the area of Income-ta are P,;+4&a#4'% :tud# Baterial O;<e&#45e The aim of the :tud# Baterial is to !uild a strong conceptual !ase !# e plaining the comple income-ta law in an eas# wa#& Ke6 0ea#, e= The chapters are organised in a logical se8uence for clear comprehension" The provisions of income-ta law have !een e plained in a lucid manner to facilitate eas# understanding" Illustrations have !een given( wherever possi!le( to e plain the provisions of income-ta law" The latest amendments have !een given in !old and italics" The .irculars1 >otifications issued !# the .,6T have !een discussed along with the respective sections to which the# relate& The :upplementar# :tud# 7aper is also divided into chapters( so that #ou can co-relate the same with the :tud# Baterial" Illustrations have !een given( wherever possi!le( for !etter

:upplementar# 7aper

:tud# This is a ver# important knowledge input in the area of ta ation e plaining the amendments made !# the relevant =inance 'ct and latest circulars and notifications issued !# .,6T&

+42 understanding of the amendments" 0elated sections are grouped together and e plained to facilitate interlinking and reading of interconnected provisions" In respect of each notification( the relevant provision of the 'ct which confers the power to issue such notification is descri!ed !riefl#( so that #ou can relate the notification to the appropriate provisions of the 'ct& The 8uestions in each chapter of the 7ractice Banual are taken from the past eleven #ears 8uestion papers set at the 7<-II( 7.. and I7.. e aminations& In addition( other 8uestions from past 0T7s etc& are also included" The 8uestions are adapted as per the provisions of income-ta law as amended !# the latest relevant =inance 'ct" 'nswers to the 8uestions are !ased on the provisions of income-ta law as amended !# the latest relevant =inance 'ct" %or exa&ple' in t(e A!g!#t 20)3 edition of t(e Practice *an!al' t(e +!e#tion# and an#,er# are ba#ed on t(e provi#ion# of inco&e-tax la, a# a&ended b. t(e %inance Act' 20)3 and are (ence' relevant for *a. 20)/ and 0ove&ber 20)/ exa&ination#. T(e relevant a##e##&ent .ear i# A.1.20)/-)2. Ce# points are given at the !eginning of each chapter to facilitate 8uick revision" :elf-e amination 8uestions are added at the end of each chapter to test #our understanding of the concepts e plained in the corresponding chapter of the :tud# Baterial& The 0T7 is divided into two parts Pa # I $ 2#a#,#' 6 Up9a#e Aatest >otifications M .irculars

7ractice Banual

The 7ractice Banual has also !een grouped chapter-wise and contains a variet# of pro!lems in each topic for the !etter understanding and application of the concepts e plained in the :tud# Baterial&

0evision Test 7apers (0T7)

The 0T7s are prepared with the twin o!Dective of (1) updating #ou on the latest developments on the statutor# front&

+4* (+) helping #ou to self-assess the effectiveness of #our stud# and revision !# solving the 8uestions given in 7art II independentl# and comparing the same with the answers given& Pa # II $ D,e=#4'%= ? A%=8e = ' :elf-assessment test& The 8uestions in 7art II are framed to test #our awareness and understanding of the provisions of income-ta law forming part of the s#lla!us for Intermediate (I7.) .ourse& The answers are prepared with a view to assist the students in education" The :uggested 'nswers generall# represent the ideal manner in which 8uestions should !e answered" Therefore( it contains references to sections (including su!sections and clauses)( notifications and circulars issued !# the .,6T" In solutions to computational pro!lems( the reasons for treatment of items are e plained !# wa# of >otes( giving reference to the related provisions of income-ta law&

:uggested 'nswers

's the name depicts( this pu!lication contains the 8uestions set at the .' e amination( as well as the suggested answers to such 8uestions&

0'++'8 =6=#e(a#4& =#,96 pa##e % Ideall#( for the su!Dect of Income-ta ( #our stud# pattern should !e in the following se8uence as !riefed in the ta!le !elow 2#ep= 4% P epa a#4'% :tep I :tep II O;<e&#45e '7 =#,96 1e+e5a%# P,;+4&a#4'%

:tep III

:tep I9

:tud# each topic of #our s#lla!us thoroughl# :tud# Baterial (9ol& I) as for conceptual clarit# amended !# the =inance 'ct relevant for #our e amination& Fnderstand the latest developments on the :upplementar# :tud# 7aper statutor# front( i&e&( the amendments made !# the latest =inance 'ct and recent >otifications and .irculars issued !# .,6T& Work out the pro!lems and solve the 8uestions 7ractice Banual (9olume II of the after completing stud# of each chapter in the :tud# Baterial) :tud# Baterial to test #our level of understanding of concepts e plained in the said chapter& 0ote After .o! co&plete #t!d. of t(e entire #.llab!# content' #olve all t(e proble&# in t(e Practice *an!al once again to &a3e #!re t(ere are no gre. area#. Fpdate #ourself with the latest developments on 0evision Test 7aper (0T7) the statutor# front( i&e&( significant notifications and circulars issued si months prior to the

+44 respective e amination( and self-assess #our preparation& Test #our level of preparation !# solving past :uggested 'nswers 8uestion papers within the given time frame of three hours and compare #our answers with the answers pu!lished !# the ,O:& Kou can also check #our progress !# solving the Bock Test 7apers hosted on the :tudents% 3ome 7age& Bock tests are also held at the Bock Test 7apers various regional offices and !ranches of the Institute&

:tep 9

2#ep I - 2#,96 #Be P2#,96 Ma#e 4a+Q #' :e# 6', &'%&ep#= &+ea Ideall#( when #ou take up an# topic for stud#( #ou must first go through the relevant chapter of the :tud# Baterial for !uilding a strong conceptual !ase& Bake sure #ou read the :tud# Baterial updated on the !asis of the provisions of income-ta law as amended !# the =inance 'ct relevant for #our e amination& In case #ou have the earlier edition of the :tud# Baterial( then( #ou must go through the :upplementar# :tud# 7aper( which e plains the amendments made !# the =inance 'ct relevant for #our e amination& 2#ep II - 2#a6 &, e%# 84#B #Be P2,pp+e(e%#a 6Q Kou are advised to update #ourself with the help of :upplementar# :tud# 7aper which is !rought out ever# #ear& In this pu!lication( the amendments made in income-ta law !# the =inance 'ct of that #ear are categoriEed chapter-wise and e plained with the aid of illustrations and ta!ular presentations to facilitate eas# understanding& =urther( the latest notifications and circulars issued !# the .,6T (up to -0th 'pril of the #ear) are also e plained in the :upplementar# :tud# 7aper& 'ccordingl#( the :upplementar# :tud# 7aper-+01- e plains the amendments made !# the =inance 'ct( +01- and significant notifications and circulars issued !etween 1&4&+01+ and -0&/&+01-& Kou must carefull# peruse the amendments e plained in the :upplementar# :tud# 7aper and update #ourself& The related sections are grouped together and discussed at one place in the :upplementar# :tud# 7aper and therefore( #ou would not face an# difficult# in com!ined reading and understanding of the interconnected provisions& <ven if #ou have the latest :tud# Baterial( we would still advise #ou to go through the :upplementar# :tud# 7aper( since the amendments are discussed in detail therein& It would also help #ou understand and assimilate the recent amendments in a more effective manner& 2#ep III - App+6 #Be &'%&ep#= #' ='+5e p a&#4&a+ p ';+e(= 4% #Be P a&#4&e Ma%,a+ 'fter reading each chapter in the :tud# Baterial( tr# to work out the pro!lems in the parallel chapter of the 7ractice Banual on #our own( and thereafter compare #our answers with the answers given therein& This would help #ou to identif# #our mistakes and also learn from #our mistakes& =urther( this process would help in revision of the concepts and principles contained in each chapter of the :tud# Baterial and application of the same while solving computation pro!lems& The computation pro!lems in the 7ractice Banual are worked out in detail( with working notes1notes( giving reference to the related provisions of income-ta law& Once #ou complete stud# of all the topics in the s#lla!us( tr# solving the pro!lems in the 7ractice Banual once again to test if #ou are clear with all the concepts or whether there are still an# gre# areas which re8uire further understanding& 2#ep I* - Up9a#e ? 1e54=e 84#B #Be a49 '7 #Be 1TP Up9a#e 6', =e+7 '% #Be =#a#,#' 6 7 '%#

+45 The :tud# Baterial is generall# updated on the !asis of the =inance 'ct of that #ear and notifications and circulars issued up to -0th 'pril of that #ear& The :tud# Baterial( so updated( would !e relevant for Ba# and >ovem!er e aminations held in the following #ear& 3owever( for the Ba# e amination to !e held in the following #ear( the significant notifications and circulars issued upto -1st Octo!er of the previous #ear are relevant& The 0T7 for Ba# e amination( therefore( contains the significant notifications and circulars issued !etween 1st Ba# and -1st Octo!er of the previous #ear& Aikewise( for the >ovem!er e amination of the following #ear( the significant notifications and circulars issued upto -0th 'pril of that #ear are relevant& The 0T7 for >ovem!er e amination would( therefore( contain the significant circulars and notifications issued !etween 1st Ba# of the previous #ear and -0th 'pril of the ne t #ear& =or instance( the 'ugust +01- edition of the :tud# Baterial is updated on the !asis of the amendments made !# the =inance 'ct( +01- and circulars and notifications issued upto -0 th 'pril( +01-& This edition of the :tud# Baterial is relevant for Ba# +01/ and >ovem!er +01/ e aminations& 3owever( for Ba# +01/ e amination( the amendments made !# circulars and notifications issued !etween 1st Ba#( +01- and -1st Octo!er( +01- are also relevant( and hence( the same would !e e plained in the 0T7 for Ba# +01/ e amination& Aikewise( for >ovem!er +01/ e amination( the amendments made !# circulars and notifications issued !etween 1st Ba#( +01- and -0th 'pril( +01/ would also !e relevant( and the same would !e given in the 0T7 for >ovem!er +01/ e amination& 1e54=e 8Ba# 6', Ba5e +ea %# :olving the 8uestions and pro!lems in the 0evision Test 7apers and comparing the same with the answers given would help #ou to self-assess the effectiveness of #our stud# and revision& 2#ep * ! CBe&J 6', +e5e+ '7 p epa a#4'% 2'+5e pa=# 6ea =S I,e=#4'% pape = a%9 &'(pa e 84#B 2,::e=#e9 A%=8e = Kou should also make an honest attempt to solve the immediatel# preceding e amination papers within a time span of three hours and compare #our answers with the :uggested 'nswers pu!lished !# the ,oard of :tudies& This will help #ou to identif# the areas where #ou are deficient and ena!le #ou to take corrective steps to avoid such mistakes in #our e amination& 3owever( remem!er that :uggested 'nswers are prepared on the !asis of the provisions applica!le for the assessment #ear relevant for that particular e amination& =or e ample( the :uggested 'nswers for Ba# +01e amination are !ased on the provisions applica!le for '&K&+01--1/& In case #ou are appearing for the e amination in Ba# +01/ or >ovem!er +01/( the relevant assessment #ear would !e '&K&+01/-12& Therefore( while checking #our answers with the answers given in the :uggested 'nswers( #ou should keep in mind that #our answer would var# to the e tent of amendments made !# the =inance 'ct( +01- and notifications and circulars issued after -1&10&+01+& 2'+5e M'&J Te=# Pape = Kou ma# also tr# attempting Bock Test 7apers hosted on the :tudents% 3ome 7age of I.'I to complete the process of revision& Kou can also appear for the Bock Tests conducted at the regional offices and !ranches of the Institute and check #our level of progress& 0a&e #Be e)a(4%a#4'% 84#B &'%749e%&e 3aving prepared well for the e amination( it is also important that #ou approach the e amination with a positive attitude& 6o keep in mind the following points to score well in this paper (i) A%=8e #Be I,e=#4'%= 84#B 9,e e(pBa=4= '% p '54=4'%= '7 4%&'(e!#a) +a8 - :upport #our answers1conclusions with proper reasoning& 'nswers should !e !ased on relevant legal provisions rather than a mere common sense and1or guess work& 2,pp+e(e%# 6', &'(p,#a#4'% 84#B W' J4%: N'#e= ! ;ive complete working notes while solving computational pro!lems&

(ii)

+4) =or e ample( if #ou are computing ta a!le 30' while calculating salar# income( the working note should specif# the three limits and the corresponding figures( the least of which would !e e empt under section 10(1-')& The !alance 30' would !e ta a!le and taken to the main computation sheet& (iii) (iv) T 6 #' I,'#e e+e5a%# =e&#4'% %,(;e = - Huoting section num!ers would definitel# add value to #our answers& 3owever( it is !etter not to 8uote than to mis8uote a section num!er& 2#a#e 6', a==,(p#4'%=/54e8= &+ea +6 ! The provisions of income-ta law are su!Dect to different interpretations( and hence there is a possi!ilit# of alternate views in the ta treatment of a particular item of income or e pense or loss or deduction& 's a student( #ou should state #our view1assumption clearl# and proceed to answer the 8uestion on that !asis& A5'49 ,=4%: =B' # 7' (= - Fse of short forms like 'O( ITO( IT 'ct( etc& should !e avoided& Write the full names of the statutes( like( OIncome-ta 'ct( 1)*1P& P e=e%# 6', a%=8e = 8e++ ! Fnderline important points and section references as and when #ou answer each 8uestion& 'lso( make sure that #our handwriting is neat and legi!le& 'nswer all parts of a 8uestion one after the other& 6o not answer different parts of the same 8uestion at different places&

(v) (vi)