Fast Track: Quick Revision

Tax by KK classes for CA, CMA & CS
Your education in tax is best if you can give tax advise
Fast Track
Quick Revision
Income Tax
CS K.K. Agrawal
Never say die
CA Inter (IPC)
CMA Inter / Final
AY
2014-15
May /
June 14
CS Exe / Prof.
Other Courses
www.taxguru.in
With the blessings of LORD SHRI KRISHNA

Fast Track Quick Revision of Income Tax
First Edition Jan 2013
Third Edition March 2014
APPLICABLE FOR ASSESSMENT YEAR 2014-15
INCORPORATES AMENDMENT MADE BY FINANCE ACT, 2013.
Published by CS K.K. Agrawal
Copyright Kaushal Kumar Agrawal

We have come to know that some unscrupulous elements are not only copying the contents as it is but also
publishing it. This is in gross violation of Copyright Act. If anyone is found voilating the Act, appropriate legal
action shall be taken.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, transmitted or
utilized in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the
prior permission of the copyright owner. Application for such permission should be addressed to the publisher.
Every effort has been made to avoid errors or omissions in this publication. In spite of this, errors may creep
in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the
next edition. It is notified that neither the publisher nor the author or seller will be responsible for any damage
or loss of action to any one, of any kind, in any manner, therefrom. It is suggested that to avoid any doubt the
reader should therefrom all the facts, law and contents of the publication with original Government publication
or notifications.
Printed in India.
Price 40/
www.taxguru.in
Content
Chapter
1
Basic Concepts
2
Residential Status
3
Income from Salaries
4
Income from House Property
5
Depreciation
6
Profits & Gains from Business or Profession
7
Capital Gains
8
Income from Other Sources
9
Clubbing of Income
10
Set off & Carry forward of losses
11
Deductions from Gross Total Income
12
Rates of Tax
13
Agricultural Income
14
Assessment of firm
15
Assessment of charitable trusts
16
Tax deducted at Source
17
Advance Tax
18
Interest payable by assessee
19
Return of Income
20
Whole preview of Income Tax
21
Mixed Topics
Sections
1 to 4
5 to 9
15 to 17
22 to 27
32 & 50
28 to 44D
45 to 55A
56 to 59
60 to 65
70 to 80
80C to 80U
2(1A) & 10(1)
184
11 to 13A
190 to 197
207 to 211
234A, B & C
139A to 140A
Revision Time
10 minutes
20 minutes
40 minutes
20 minutes
15 minutes
50 minutes
25 minutes
10 minutes
10 minutes
15 minutes
25 minutes
15 minutes
15 minutes
10 minutes
15 minutes
25 minutes
10 minutes
10 minutes
20 minutes
15 minutes
35 minutes
Page
1
2&3
4 to 8
9 to 11
12
13 to 16
17 to 19
20 & 21
22 & 23
24 & 25
26 to 28
29
30
31
32
33 to 35
36
37
38 & 39
40
41 to 43
Videos of Fast Track Quick Revision of Income tax

Do you want to revise the above chapters with me.
then visit us at
https://www.youtube.com/user/TheKaushala1
or
http://taxguru.in/tag/kaushal-agrawal/
We have made wonderful and awesome tax videos of
Fast Track Quick Revision Income tax
It will help you to understand this book better.
More than 52,000 views,
More than 82,000 minutes watched.
The fastest growing tax education channel on youtube.
Appreciated and subscribed by many,
Your valuable comments are welcome.
www.taxguru.in
A humble letter for you

Dear Students
I have pleasure in introducing myself as CS K.K. Agrawal. I have work experience of more than 10 years in CA
firms and few companies. I started as a trainee and kept on working very hard. Almost 12 hours daily. Right from
the beginning of my career I was entrusted to handle tax matters. It made me tax crazy. Side by side I used to teach
tax. This combination of practical experience and teaching experience enhanced my teaching skills. Very slowly
I started to learn. It is said slow and steady wins the race. I started making notes on tax. In the students days I
was not able to memorise therefore I started thinking manner of memorising tax which was also incorporated
in my notes. After more than 1 year of continous writing my first book of 40 pages was ready. It was then 1999.
Improving upon my teaching and writing skills both classes and books were taking shape. Today book contains
400 pages which written in easy language. Then I got into internet and started developing tax documents, tax
calculators, tax videos. Internet is thrilling experience. I hope to get many more good comments.
In my school days I came across this quote which I held to myself till know. It is NEVER SAY DIE. Kabhi haar
mat mano. I truly believe in it.
When I was in Job there were many concepts in income tax which though I have read and studied but I was
unable to apply it in practical situations. It seems my knowledge in income tax was not enough. I was feeling
frustrated inspite of the fact that I passed the exam. I do not wanted my students to face the similar situation
which I was facing. When you learn you should learn in such a way that it can be applied in practical situations
also. You should be able to give tax advise otherwise your knowledge in tax is no good. I am happy to share
that I have inbuilt everything in my tax lecture so that students not only pass with good marks but are also able
to apply their knowledge in practical field. With your permission I can say YOUR EDUCATION IN TAX IS
BEST IF YOU CAN GIVE TAX ADVISE. This type of teaching is possible only when I give you indepth
knowledge both theory and practicals.
ICAI also advises in the same direction. I have picked up these sentences from ICAI taxation study material.
Taxation is one of the core competence areas of CA. CAs are expected to ADVISE clients in the area of direct
taxes and indirect taxes.
If you think I can teach you then you can attend our trial classes. We start fresh batch every month. For exact
time and fees I request you to attend our office. We shall be glad to assist you.
Looking forward to meet you.
Thanks and regards
Kaushal Kumar Agrawal
www.taxguru.in
taxbykk.com
Fast Track Quick Revision - Income Tax

Never Say Die
Basic Concepts
Section 1 to 4
Revision Time :
10 minutes
Your time of revising &
memorising -->
1 revision
st
2nd revision
3rd revision
4th revision
Did you
memorise?
If No then you
must memorise
within 24 hours
Concept of Income
Revenue
Every revenue receipt is derived
receipt
from source of income. Source of
income can be a tangible asset or
intangible assets.
Capital
receipt
Tax
treatment
Tax
treatment
Receipt for which there do not

exist a source of income is a
capital receipt.
2. Sale of source of income.
Every capital receipt is not taxable
unless otherwise expressly taxable.
Capital
expenditure
Expenditure incurred for acquisition of

source of income.
Every revenue receipt is taxable,

unless otherwise expressly exempted
under the Act.
Revenue
Expenditure incurred for
expenditure maintenance of source of income.
Definitions
S 2(7) Assessment
Year
Previous
S3
year
Exceptions
to PY
Income of
the PY taxable in the
PY itself
instead of
AY
S 2(31) Person
S 2(9) Assessee
S 2(24) Income
1.
means the period of 12 months commencing on the 1st day of April every year.
(AY = FY in which tax is paid)
means the financial year immediately preceding the assessment year.
(PY = FY in which income is earned)
S 172 Income of a Non-Resident shipping companies.
S 174 Income of persons leaving India with no intention of returning to India.
S
Assessment of AOP / BOI / AJP formed for a particular purpose likely to
174A be dissolved in the same year of formation.
S 175 The assessee is likely to transfer his assets with a view to avoid payment
of tax.
S 176 Income of a discontinued business or profession.
includes Individual; HUF; Company; Firm; AOP; Local Authority; AJP
Person who pays tax, interest or penalty, Any proceeding undertaken; a deemed
assessee; a person who is in default.
includes salary, rent, profit, dividend, gifts, donations, capital gain.
Assessment year
Assessment year is the financial year in
which tax is paid.
Assessment year succeeds previous year.
Assessment year always starts from 1st
of April and ends on 31st of March.
Previous year
Previous year is the financial year in which income is earned.
Previous year precedes assessment year.

All previous year whether first or subsequent shall always end on
31st of March. However start of first previous year shall depend
upon the existence of source of income.
The period of assessment year is fixed 12 The period of previous year is of maximum of 12 months. It can
months.
exist even for a day if the source of income newly coming into
existence, in the said financial year, i.e. on 31st March.
www.taxguru.in
CS K.K. Agrawal
Residential Status
Section 5 to 9
(1)
Ind

Good things take time
1 revision
st
Revision Time :
20 minutes
2nd revision

memorising -->
3rd revision
4th revision
Did you
memorise?
If No then you
must memorise
within 24 hours
Section 6 : Determination of Residential Status

(2)
(3)
(4)
(5)
(6)
HUF, Firm, AOP/BOI Company Local Auth. / AJP
Ind / HUF
Basic Condition
Additional condition
Satisfies
Do not satisfiy
x
Satisfies
Do not satisfy
Resident
Non Resident
R-OR
R-NOR
S 6(1) & 6(6). Determination of Residential Status of Individual.

S 6(1) Basic Condition
If an Individual is present in India
(a)
for period or periods of atleast 182 days in the
Satisfies any one basic Resident
in
relevant PY; or
condition
India.
(b)
for atleast 60 days in the relevant PY & atleast
Do not satisfies any basic Non Resident
365 days in last 4 years immediately preceding
condition
in India.
the relevant PY.
Exceptions-check only 182 days
(a)
If an Indian Citizen leaves India for the purpose of employment or leaves India as a crew
member of Indian Ship.
(b)
If an Indian Citizen or Person of Indian Origin comes to India on a visit from outside India.
As per explancation to S 115C(e) A Person is said to be of Indian Origin if he himself or his Parents
/ Grandparents are borne in undivided India. Check date of birth should be before 15-8-1947 and
place of birth is in India, Pakistan or Bangladesh.
S 6(6) Additional Condition
(a)
Resident in India for atleast 2 years in last 10 years
If satisfies both the Additional
immediately preceding the relevant PY; and
Condition then RS is R-OR otherwise
(b)
Present in India for atleast 730 days in last 7 years
R-NOR.
immediately preceding the relevant PY.
Residential Status of other person

S 6(2)
S 6(4)
HUF / Firm / AOP / BOI

Local authority / AJP
6(3). Residential Status of Company

S 6(3)
Foreign Company
Control & Management of the affairs of the business

In India
Outside India
Wholly / Partially
Wholly
Resident
Non-Resident
Control & Management of the affairs of the business

In India
Outside India
Wholly
Wholly / Partially
Resident
Non-Resident
Note : Residential Status of Indian Company is always resident irrespective of control and management
of affairs of the business.
www.taxguru.in
taxbykk.com
S 5. Incidence of tax
R-OR
R-NOR
NR
1. Income which accrues or arise Taxable
Taxable
Taxable
in India. (Indian Income)
2. Income which accrues or arise Taxable
Not Taxable. However in case of
Not Taxable
outside India.
but if
Business Income
Professional Income
(Foreign Income)
Taxable if business is Taxable if Profession income is
received in
controlled from India
is set up in India
India then
Taxable if any income is received in India.
taxable.
S 9(1). Income deemed to accrue or arise in India
(i)
Income from Business Connection.
Exceptions to the Business Connection.
a. All operation not carried out in India.
Business outside India and part activity
b. Purchase for export.
of business carried out in India.
c. Collection of news.
Also called pernanent establishment or
d. Shooting of film in India by foreign citizen.
territorial nexus.
Assets located in India.
(ii)
(iii)
Services rendered in India by any person.

Services rendered outside India by Indian Citizen. Employer is Govt. of India. However as per
S 10(7) allowances and perquisites are exempt from tax. Only basic salary is taxable.
(iv) Dividend from Indian Company. However it is exempt from tax u/s 10(34)
(v) Interest on Loan which is used in India.
If interest, royalty or FTS is payable by
Govt.
of India then such income deemed to
(vi) Royalty from knowledge which is used in India.
accrue or arise in India whether there is
(vii) Fees from technical services where technical agreebusiness connection or not.
ment is implemented in India.
Section 2(25A). India includes territorial waters of India, its continental
shelf, air space above territorial waters and exclusive economic zone.
Oil Rig
Person of Indian Origin
www.taxguru.in
CS K.K. Agrawal

If not now, when
Revision Time :
40 minutes
Section 15 to 17

memorising -->
Income from Salaries
S 15. Charge
Which income is
charged under the
head Salaries
When is salaries
charged to tax.
1st revision
Did you
memorise?
If No then you
must memorise
within 24 hours
2nd revision
3rd revision
4th revision
Where there exists a relationship of employer and employee. Where an individual is

bound to follow the instructions of other it is said that there exists a relationship of ER
and EE.
Salaries charged to tax either on DUE or RECEIPT whichever matures earlier
Exception : Following salaries charged to tax only on receipt basis.
Salary in lieu of Arrears of salary if salary is increased
Advance salary. Bonus.
notice period
with retrospective effect.
However all perquisites are taxable on provided basis. But LIP on due basis,
Re-imbursement on paid basis.
Allowances = Cash + Particular Purpose + Fixed

S 10(7). ER : CG. EE : Indian Citizen
working abroad then allowances and
perquisites fully exempt.
Fully
Exempted
S 10(7). ER : CG. EE : Indian Citizen
Allowances
working abroad
High Court / Supreme Court Judges
UNO employees
Servant City Compensatory
Fully Taxable
Dearness
Rural
Allowances
(SCOPE
High cost of living
DRAFT)
Physically fit allowance
Allowances to High Court Salary to UNO

/ Supreme Court Judges is employees is
fully exempt.
fully exempt.
Basic Salary
Taxable
Allowances
Exempt
Perquisites
Exempt
Taxable
Exempt
Exempt
Exempt
Taxable
Exempt
Overtime
Project
Entertainment
Absent
Fixed Medical
Tiffin
Marriage
Lunch
Telephone
Breakfast
Holiday Home
Dinner
Part 1
Amount spend towards
exemption official or specified purpose.
Part 2
exemption
Transport
allowance
Children
education
Special
Allowances
Amount as specified in Income Tax Rules.

upto 800 pm / 1600 pm
THAR DUCT
is exempt.
upto 100 pm is exempt.
Transfer Helper
Academic
R&D
Max 2 child.
upto 300 pm is exempt.
Daily Uniform Conveyance Travelling Hostel
Max 2 child.
10,000 p.m. or 70% of
Outstation
allowance whichever is
allowances
lower is exempt.
Partially
exempted
Allowances
(HRA)
Maximum
50% of SAS / 40% of SAS
Actual
Actual
Formula
Rent paid 10% of SAS
SAS = BS + DA() + Commission (if)
www.taxguru.in
Least is
exempt
from tax.
taxbykk.com
Deduction u/s 16(ii) : Entertainment Allowance

Deduction allowed only to Govt. EE.
Maximum 5,000
Least
is
Actual
Actual
deductible
Formula
20% of basic Salary

Deduction u/s 16(iii) : Professional Tax
Professional tax / Employment tax
Deduction allowed in the financial year of
payment. Where this tax is paid by ER on behalf
of EE then it is first added and then deduction is
allowed.
Specified Employee. If any of the 3 condition is satisfied an

employee is treated as specified employee. [17(2)(iii)]
1.
Employee + Director
2.
Employee + Substantial Interest. S 2(32) An employee
holding atleast 20% voting power in a company.
3.
Income from Salary less salary in kind exceeds 50,000
Non Specified Employee.

If none of the conditions are satisfied
then employee is treated as non
specified employee.
S 17(2). Perquisites. [Category A Perquisites : AFLO SUL GMHCC EA].

Taxable in both the case of employees : Specified EE and Non Specified EE.
A Accommodation
Cities having a population (Census of 2001) of
Accommodation is
upto 10 Lakhs
Owned by
employer
Hired by employer
7.5% of AS is
taxable
more than 10 Lakhs

& upto 25 Lakhs
10% of AS is
taxable
exceeds
25 Lakhs
15% of AS is
taxable
Lease rent or 15% of AS whichever is lower is taxable
AS shall be computed on due basis for the period accommodation is occupied by EE.
AS = Accommodation Salary = BS + DA() + Commission + all taxable allowances + Fees (excluding
perquisites, ERs contribution towards PF and DA not forming part of salary.
Hotel Accommodation : 24% of AS or hire charges whichever is lower is taxable. Exempt for upto 15
days if hotel accommodation is provided to EE if transferred from one city to another city.
F
Furniture
Life
Paid by EE.
Deduction allowed u/s 80C.
Insurance Paid by ER on behalf of EE. Taxable under head Salary on due basis and deduction
Premium
allowed u/s 80C on paid basis.
Exempt.
Staff group insurance is fully exempt from tax.
Obligation of EE
discharged by ER
Official Purpose
Personal Purpose
Sale of movable
assets.
Purchase price of the movable asset

Less : Depreciation for completed year
a.
Computer or electronic item related to computer 50% WDV
b.
Motor Car
20% WDV
c.
Other Asset
10% SLM
Cost of the asset to the employer
Less : Sale price of asset to employee
Value of sale of movable asset
EXEMPT if :
of SIT by
1. Sale
ER to EE
of asset
2. Gift
upto 5,000.
U
Use of asset
Owned by Employer :
Hired by Employer :
10% pa of the original cost of the asset is taxable.

Actual hire charges is taxable.
Fully exempt
Amount re imbursed is fully taxable.
Taxable on
paid basis.
xxx
(xxx)
xxx
(xxx)
xxx
Owned by Employer : 10% pa of the original cost of the asset is taxable.

Hired by Employer : Actual hire charges is taxable.
Exempt
Use of computer, laptop and telephone is exempt from tax.
www.taxguru.in
CS K.K. Agrawal
Loan Facility from

ERs own account
Gifts
Meal
Own
Facility canteen
Holiday Home /
Facility :
Tour, Travel
& Accommodation
Credit Card
Facility
Club
Facility
Personal Purpose Amount paid / re imbursed is taxable

Official Purpose Exempt. Proper record has to be maintained for claiming exemption.
Exempt
Corporate membership is exempt.
Health Club for all EE is exempt.
ESOP
FMV on exercise date less recovery is taxable.
Approved Superannuation Fund
SBI lending rate as on 1-4 x amount of each loan outstanding on the last day of
each month.
Not taxable if 1. If aggregate of loan amount do not exceeds 20,000.
2. Loan is taken for medical treatment of specified disease.
in Kind
in cash
upto 5,000 is exempt from tax.

fully taxable. It is bonus taxable on receipt basis.
Meals provided during office

hours at office premises.
Taxable
Cost to the employer
Exempt
upto 50 per meal
Outsourced Meals provided during office
Taxable
Amount paid
canteen
hours and eatable at eating joints. Exempt
upto 50 per meal
Exempt
Tea or snacks fully exempt from tax.
Meal provided in remote area or off shore installation fully exempt from tax.
Provided uniformly to all
Cost to the employer is taxable.
employees
Provided only to keyman / selected
Market fees of similar guest house /
employees.
hotel is taxable.
Exempt
Official purpose is exempt.
Personal Purpose Amount paid / re imbursed is taxable

Official Purpose Exempt. Proper record has to be maintained for claiming exemption.
ERs contribution in excess of 1,00,000 is taxable.
Category B Perquisites. [GET MSc]. Taxable only in case of Specified EE on provided basis.
If GETMSc is re- imbursed then it becomes obligation of EE discharged by ER. Any amount re-imbursed is taxable in both the cases of EE - specified EE / Non Specified EE
G Gas/ Electricity / Water
Own
Manufacturing cost per unit is taxable
facility
Purchase from outside agency Cost to the employer is taxable
E
Education
Facility
Own
Taxable
Market fees Exempt
Hired
Cost to the employer is taxable
Exempt Scholarship is exempt u/s 10(16)
Transport Facility
M
(m
e
d
i
c
a
l)
1.
2.
3.
4.
Servant Facility
5.
Railways / Airline
Employers Own Hospital

Private Hospital
Govt. Hospital
Treatment of prescribed
disease in approved hospital
Re imbursement
1,000 p.m. per child is exempt

Training of employee is exempt.
Exempt
Fully exempt.
Family members :
Exempt upto 15,000.
Box 1
Box 2
Fully exempt.
Self, Spouse
Parents, Brother
Fully exempt.
& children (depen& Sister (only
dent / not dependent)
dependent)
Exempt upto 15,000.
Cost to the employer is taxable or Salary of servant is taxable.
www.taxguru.in
taxbykk.com
C
C
A
R
f
a
c
i
l
i
t
y
Car
Facility
RE =
Regular
expenses
Use :
10%
of
original
cost
7
RE
borne by
ER
Cas
es
A
Cat
B
Car is owned
or hired by
ER
Car used wholly for

Car is used for
personal purpose
mixed purpose
Use+ regular
upto 1600 cc
1,800 p.m. taxable
expenses + salary of Exceeds 1600cc 2,400 p.m. taxable
driver recovery is
Driver
900 p.m. taxable
taxable.
B
Cat
B
ER
EE
Use+ salary of
driver recovery is
taxable.
Upto 1600cc
Exceeds 1600cc
Driver
C
Cat
A
EE
ER
regular expenses +
salary of driver
recovery is taxable.
Upto 1600cc
Exceeds 1600cc
Driver
600 p.m. taxable

900 p.m. taxable
900 p.m. taxable
recov
ery
not
applic
able
1,800 p.m. exempt.

2,400 p.m. exempt.
900 p.m. exempt.
Recovery is applicable.
Category C Perquisites : FULLY EXEMPTED PERQUISITES

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Staff group insurance.

Use of laptop, computer & telephone is exempt.
Gifts in kind upto 5,000 is exempt.
Sale of SIT to its employees is exempt.
The other asset which is 10 year old is exempt.
Loan facility upto 20,000 is exempt.
Loan given for treatment of specified disease.
Credit card / club if given for official purpose.
Health club for all employees
Corporate membership initial fees is exempt
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
HHF official purpose exempt.

Meal upto 50 per meal is exempt.
Meal in remote area is exempt.
Hotel accommodation transfer and upto 15 days.
Education facility upto 1,000 p.m. / child.
Training of EEs
S 10(16). Scholarship.
Medical facilities upto 15,000.
Medical facility in Own / Govt. hospital.
Medical treatment of specified disease in an
approved hospital
Say whether following allowances and perquisites taxable or not?

Medical allowance
Medical facilities
Fully taxable
Exempt upto 15,000
Car Allowance (Mixed) / Conveyance allowance Car facilities (Mixed)
Official : Exempt. Personal : Taxable
1,800 / 2,400 / 600 / 900 p.m. taxable
Transport Allowance
Conveyance facility (resi to office and back)
Exempt upto 800 p.m.
Fully exempt
HRA
Accommodation
Least of MAF is exempt
7.5% / 10% / 15% of AS is taxable
Servant Allowance
Servant Facilities
Fully taxable
Fully taxable
Meal Allowance
Meal Facilities
Fully taxable
Upto 50 per meal is exempt
Children Education Allowance
Education Facilities
100 p.m. + 300 p.m. Max 2 child is exempt
Collective enjoyment : Market fees is taxable. 1,000 p.m. /
child is exempt. (no limit to number of child)
Telephone Allowance
Telephone facilities for personal purpose
Fully taxable
Fully exempt.
Use of furniture
10% p.a. of cost of furniture is taxable
Gift in kind
Exempt upto 5,000
Loan Facility
SBI lending rate is taxable
Gift in cash (Bonus)
Fully taxable
www.taxguru.in
CS K.K. Agrawal
PROVIDENT FUND
1. Employers
contribution towards
PF.
SPF
PPF
Not
Taxable
Does not
contribute
2. Employees
contribution towards
PF. Whether deduction Available
u/s 80C available?
URPF
Not Taxable
At the time
of lump sum
withdrawal
Available
Not
Taxable
At the time
of lump sum
withdrawal
Taxable
EET
S 10(10). Gratuity
Govt.
Employees covered under the
employees
Payment of Gratuity Act, 1972
Maximum Fully
10,00,000 (life time exemption)
Least
exempt
Actual
Actual
is
from tax
Formula
BS + 100% of DA
ex----------------------- x 15 x CYSr empt
26
Salary
NA
BS + 100% of DA at the time of
retirement
if completed year of service is more
than 6 month take it as 1 year
S 10(10A). Pension
Uncommuted pension
Fully taxable whether Government Employee
Govt. EE or Private EE. Fully exempt from tax
S 10(10AA). Leave Salary

Govt. Employees
Maximum
Fully
Actual
exempt
Formula 1
Formula 2
from
SAS
tax.
Not Taxable since

already taxed.
Not Taxable
Interest on
Taxed under
At the time
ERs
the head
of lump sum contrib.
SALARY
withdrawal
EEs
Taxed under
contrib. the head OS
4. Lump sum withdrawal Exempted Exempted

from PF.
u/s 10(11) u/s 10(11)
EEE
EEE
CYS. Completed year

of service
Taxable under the head

SALARY
RPF
Excess
of 12%
of SAS is
taxable
Not Available
3. Interest credited to PF.

Not
Taxable
Available
Excess of
9.5%
is taxable
Exempted
u/s 10(12)
EEE
Other Employees (as per terms of

contract of employment)
Least
Actual
is
Avg SAS
ex------------ x 15 x CYSi
empt
30
SAS = BS + DA () + Commission (if)
Avg SAS is computed for last 10
months immediately preceding the
MONTH of retirement.
ignore the part of month.
Commuted pension
Private Employees
Receives gratuity
Do not receive Gratuity
1/3 of Full Value of
1/2 of Full Value of
Pension is exempt.
Pension is exempt.
Private Employees
Least is
exempt
Actual Leave Salary
from
10 x Average SAS
tax
Earned leave (in months) x Average SAS
SAS = BS + DA () + Commission (if)
Avg SAS is computed for last 10 months immediately preceding the
DATE of retirement.
www.taxguru.in
taxbykk.com

Remember why you started...
Revision Time :
20 minutes
Section 22 to 27

memorising -->
Income from House Property
Did you
memorise?
If No then you
must memorise
within 24 hours
1st revision
2nd revision
3rd revision
4th revision
Section 22. Charge

LAW : The Annual Value of building or land attached thereto of which assessee is the owner not occupying
the building for his own business or profession.
Annual Value
It represents the earning capacity of building. Section 23.
Building. (Construction Residential
Four walls with roof.
should be completed)
Commercial
Four walls optional roof.
Land attached
Land attached with building Charged under the head House Property.
with building
Independent Land
Charged under the head Other Sources.
Owner
Registered Owner
Register maintained with Stamp Valuation
Authority.
Deemed Owner
6 cases of deemed owner specified in
Section 27.
Owner not occupying
Let out to employees
Charged under the head Business.
the building for his own
Let out to others
Charged under the head House Property.
business or profession.
Section 27. Deemed Owner (6 points)
(i) An individual (Transferrer) who transfers House Property to
spouse without consideration, then individual who transfers the
property is treated as deemed owner.
(ii)
Exception : Property is transferred with an agreement to live

apart then registered owner (transferee) is treated as owner.
An individual (Transferrer) who transfers House Property to a
minor child, without consideration such individual who transfers
the property is treated as deemed owner.
Exception : Where the minor child is a married daughter then
deemed owner concept is not applicable. Income from HP
chargeable in the hands of minor married daughter itself.
Transferrer
Husband - DO
Wife - DO
Transferee
Wife
Husband
Husband
Wife - RO
Transferrer
Transferee
Father - DO
Minor Child
Mother - DO
Minor Child
Father / Mother
Minor married
daughter - RO
(iii) Holder of an impartible estate.

(iv) A member of a Co-operative society, Company or other Registered Owner Deemed Owner
association of person who is allotted a building under a house
Co-operative Society
Member
building scheme of such society.
(v) A person who is allowed to take or retain possession of any Seller (received the Buyer (has key
full price)
of property)
building or part thereof in part performance of a contract where
every formality of sale is completed except registration of
Registered Owner Deemed Owner
property with Stamp Valuation Authority.
Lessee
(vi) A person who acquires any right in any building by way of lease Lease Terms Lessor
for a term of atleast 12 years.
12 years
RO
DO
11 years
Section 23. Annual Value

LAW : Annual Value is value after deduction of municipal tax.
RO
Tenant
GAV
Municipal Tax. Its deduction is allowed in the financial year in which payment is made Less : MT
by the owner. PAID basis + Owner. Tenant pays dedn not allowed.
NAV
www.taxguru.in
xxx
(xxx)
xxx
10
CS K.K. Agrawal
(1)
Let out property
(b)
AR
(a)
ER
ER = MV or FR
whichever is higher
or SR
whichever is lower.
AR = Rent received or
receivable. = Let out period
+ Vacant Period unrealised
rent of current financial year.
(ignore SOP - R)
(c)
Loss on account of
vacancy
Property is lying vacant
inspite of the best effort
of the owner to let the
property.
GAV = ER or AR whichever is higher less

loss on account of vacancy.
(2) & (3)

SOP Residence
for
whole
year
GAV = ER
= Nil
(4)
DLOP
(owns more than
1 SOP - R : one
property whose
GAV is highest
treated as SOP - R
remaining property
as DLOP)
GAV = ER
Section 24a. Standard Deduction

Standard Deduction allowed is 30% of NAV. It is automatic deduction i.e. even if question do not provide
it this deduction must be allowed. No Standard deduction if NAV is nil or negative.
Section 24b. Interest on borrowed capital
1. The loan should be borrowed for PCR5. 2. The
interest
is 3. Interest is allowed as
Purchase, Construction, Re - construction,
allowed as deduction
deduction from that PY
Repairs. Renovation, Renewal, Repayment
on accrual basis. Even
in which construction of
of existing housing loan. Note : Dedn. not
if interest is not paid
building is completed or
allowed if loan is borrowed for payment of
deduction is allowed.
building is purchased.
MT, interest on interest or penal interest.
Pre construction period interest

Post construction period interest
Total Interest before the FY in
allowed from
Allowed from FY in which building comes
which building comes into existence FY in which
into existence. This interest keeps on
--------------------------------------------- = building comes decreasing with the re payment of loan.
5
into existence.
Let out / DLOP /
SOP - Residence
Vacant
Any amount
Interest both pre + post limited to
of
1,50,000 if all the following 3
otherwise 30,000.
interest is
conditions are satisfied.
allowed
1. The loan is borrowed on or after 1-4-1999
The loan is borrowed
as deduction.
before 1-4-1999
(No Limit)
2. The loan is borrowed for purchase or construction of
The loan is borrowed
residential house property.
for repairs, renewal.
3. The building comes into existence within 3 years from The building comes into
the FY in which loan is borrowed. [FYloan + 3 years]
existence after 3 years.
Section 25. Restriction on deduction of interest
Where interest is payable outside India but is paid without deducting tax at source then such interest is not
allowed as deduction.
Section 25AA. Recovery of unrealised Rent
Timing of taxation
Head
Standard Dedn.
In the year of receipt

House Property even if building is
transferred
Not available
Section 25B. Receipt of arrears of rent
In the year of receipt

House Property even if building is
transferred
Available @ 30% of arrears of rent.
Section 26. Co-owner

1.
Co - owner not assessed as AOP.
2.
Each owner treated as individual.
www.taxguru.in
taxbykk.com
3.
4.
11
Each owner entitled to benefit of SOP-R whose GAV is nil.

Each co owner entitled to deduction of interest to a max of 30,000 / 1,50,000.
Computation of Income from House Property (23 24 + 25AA + 25B)
MV
GAV
HP
FR
MT
+ 25AA (SD not allowed)
SR
NAV
+ 25B (30% of arrears of rent allowed)
ER
SD
HP
AR
Interest
Loss on account of vacancy
HP
GAV
www.taxguru.in
CS K.K. Agrawal
Depreciation
Section 2(11), 32, 38, 43, 50
12

No negative thoughts allowed
Revision Time :
15 minutes
memorising -->
Did you
memorise?
If No then you
must memorise
within 24 hours
1st revision
2nd revision
3rd revision
4th revision
Section 2(11). Block of Asset

The term block of assets means a group of assets falling within a class of assets in respect of which same
percentage of depreciation is prescribed. (Similar assets having same rate of depreciation).
Eligible assets and its rate of depreciation
Full rate of depreciation Half rate of depreciation
Asset
1. Building. It means superstructure only and does not include site
Asset is purchased and put
10% to use in the same previous
a.
General
b.
Residential Building
5% year for less than 180 days.
Nil depreciation if
c.
Hotel Building
10%
d.
Temporary Building
100%
Closing WDV is nil
1.
or negative; or
2. Furniture or fittings including electrical fittings
10%
2. BOA do not exists.
3. Plant &
Plant includes ships, vehicles, books, scientific apparatus
Machinery and surgical equipment used for the purposes of the business
Section 32. Conditions for
or profession. It does not include tea bushes or livestock or
claiming depreciation
[S 43(3)]
buildings or furniture and fittings.
15% 1. Asset is owned
a.
General
wholly or partly by
b.
Motor Vehicle
15%
the assessee.
c.
Annual books used by professional
100%
d.
Other books used by professional
e.
Any books used in business
f.
Computer including software
g.
Ships
h.
Aeroplane and aero engines
i.
Pollution control equipment
4. Intangible Know-how, patents, copyrights, trade marks,
Assets
licences, franchises or any other business or
commercial rights of similar nature (Brokership
rights and goodwill of business) [KPCTLF b/c r]
60%
15%
60%
20%
40%
100%
25%
2.
Asset is put to use in

the relevant previous
year.
3.
Asset is put to use

for the purpose
of business or
profession.
It is mandatory to claim
depreciation. In passive use
depreciation is available.
Section 43(6). Computation of depreciation

Opening WDV + Purchase of assets (Actual Cost) Sale of assets = Closing WDV Depreciation = Opening
WDV
Section 43(1). Actual Cost
Invoice Price Subsidy + Duties and taxes if credit not claimed + Transportation Cost + Insurance of asset
+ Training of employees + Interest till the asset is put to use + Travelling expenses incurred by employees
for making survey of asset.
Sale of asset / Destruction of asset
Money value of asset / Insurance claim received shall be deducted from opening WDV.
Section 50. Computation of Capital Gain in case sale of depreciable asset
In case when depreciation becomes nil capital gain arises. (always STCG)
Computation : Sale consideration Opening WDV Purchase of asset Transfer expenses = STCG
www.taxguru.in
taxbykk.com
PGBP
Section 28 to 44D
13

Against all odds ... I will
Revision Time :
50 minutes
memorising -->
1 revision
st
2nd revision
3rd revision
4th revision
Did you
memorise?
If No then you must
memorise within 24 hours
Section 28. Charge

1. The profit of business or profession carried on by the assessee at any time during the relevant PY.
2(13)
Business includes trade, commerce or manufacture or any adventure or
concern in the nature of trade, commerce or manufacture
2(36)
Profession includes vocation. (Hobby turns into economic activity)
Assessee
The person who carries on the business
Commencement of business The financial year in which trial run is completed.
2. Export incentives
a.
Profit on sale of import licence
b.
Subsidy
c.
Duty Drawback.
3. Professional Gifts
4. Any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received
by, a partner of a firm from such firm. However share of profit from firm is exempt in the hands of
partners u/s 10(2A).
5. Non - competing fees. Not doing any competitive business or not sharing any business secrets.
6. Any sum received under a Keyman insurance policy including the sum allocated by way of bonus on
such policy.
7. Income from speculative transaction.
43(5) Speculative transaction means a transaction in which a contract for the purchase or sale of any
commodity, including stocks and shares, is periodically or ultimately settled otherwise than by
the actual delivery or transfer of the commodity or scrips.
Section 30. Rent, rates and taxes of premises
Section 31. Insurance, repairs of plant, machinery &

furniture (PMF).
1. Rent of the premises paid to others / Firm is
1. Rent of the PMF paid to others / Firm is allowed
as deduction u/s 37.
2. Insurance of premises is allowed as deduction. 2. Insurance of PMF is allowed as deduction.
3. Municipal tax, land revenue subject to S 43B 3. Not applicable
is allowed as deduction.
4. Current repairs is allowed as deduction. On
4. Current repairs is allowed as deduction. On capital
capital repairs depreciation can be claimed.
repairs depreciation can be claimed.
Current Repairs
Capital Repairs
1. Replacement of part of asset.
1. Replacement of whole of asset / Addition of asset.
2. Renovation of that premises from where sale 2. Renovation of administrative premises. E.g.
is made. E.g. Resturant.
Godown.
Section 38(2). Asset partly used for business / Profession
Above expenditure shall be apportioned to that part of asset which is used for the purpose of business.
Section 36(1). Amount expressly allowed as deduction
36(1)(i)
Insurance premium of stock in trade is allowed as deduction.
Insurance premium on health of employees is allowed as deduction if
36(1)(ib) a. Health Insurance is taken on health of all employees; and
b. Health insurance premium is not paid in cash.
www.taxguru.in
14
CS K.K. Agrawal
Bonus or commission to employees is allowed as

43B : Bonus is allowed as deduction
deduction.
if actually paid.
Interest on borrowed capital used for the purpose of business or profession is allowed as de36(1)(iii) duction. Interest till the asset is put to use is not allowed as deduction. As per S 43B if interest
to Banks / FI is actually paid then deduction is allowed.
Restriction on deduction
Employers contribution paid towards recognised
36(1)(iv) provident fund or an approved superannuation fund is S 40A(7) : Contribution towards
unapproved gratuity fund is not
Employers contribution towards pension scheme referred allowed as deduction.
36(1)(iva)
in section 80CCD is allowed as deduction.
S 40A(9) : Contribution towards any
Non-Statutory fund or unapproved
Employers contribution paid towards an approved
fund is not allowed as deduction. Also
gratuity fund is allowed as deduction.
36(1)(v)
As per S 43B if ERs contribution to above funds is ac- contribution made towards any other
tually paid in respective funds then deduction is allowed. fund not allowed as deduction.
Bad Debts is allowed as deduction if debt was treated as income in the earlier PY. Recovery
36(1)(vii) of bad debt is taxable under the head business if earlier it was allowed as deduction. Such
recovery always taxed under the head business even if business is closed down.
Applicable to Company who incurs expenditure on
Revenue expenses. Capital expenses
36(1)(ix) promotion of family planning amongst employees.
100% allowed
1/5th allowed
Securities transaction paid allowed as deduction if
Business
Capital Gain
36(1)(xv) profit from shares is charged under the head business.
Allowed
Not Allowed
36(1)(ii)
Section 35. Expenditure on Scientific Research

Inhouse research : Research should be related to the business
After COB
Before COB (only 100%)
(100% / 200%)
(only 3 years)
Revenue expenditure
a. Rent of premises
allowed
Not allowed
allowed except
b. Salary to scientist
allowed
perquisites of scientist
c. Raw material / inputs
allowed
allowed
d. Salary of support staff
allowed
not allowed
Capital Expenditure
allowed
a. Cost of building
allowed
(only 100%)
b.
Cost of plant &

machinery
allowed
allowed
Contribution to outsiders
Research may or may not be
related to the business.
National Laboratory
IITs
Approved University,
Colleges, institution.
Social statistical
research
200%
200%
200%
200%
200% if
a.
b.
Company
Research in all products
except tobacco, cold drinks
c.
Research is approved and

expenses audited
Section 35D. Amortisation of Preliminary Expenses

Eligible expenses : Incurred before COB (trial run) or incurred for extension / expansion of business.
a. Preparation of feasibility report.
f.
Legal charges for drafting, printing of MOA & AOA.
b. Conducting market survey or any other
g.
Registration fees of a company paid to Registrar of
survey necessary for the business.
Companies. (Stamp duty).
c. Preparation of project report.
h.
Expenses and legal charges incurred in drafting, printing
and advertising for prospectus.
d. Engineering services relating to the
i.
Expenditure incurred on issue of shares or debentures like
business.
underwriting commission, brokerage. (Entire public issue
expenses).
e. Legal charges for drafting any agreement Note : What is not preliminary expenses.
relating to the setting up or conduct of
(a) Salary to employees (b) Rent of premises.(c) Interest
the business.
www.taxguru.in
taxbykk.com
15
Applicability
1. Indian
Company
Amount of deduction
5% of Cost of project or 5% of capital employed whichever is higher; or
lower
}
5
Eligible expenses
2. Other
5% of Cost of project or Eligible expenses whichever is lower
Residents
5
Cost of project : All cost of assets
Capital employed : Share capital + long term loans
Section 37. General Deduction
Expenditure is not covered u/s
1.
30 to 36.
2.
3.
4.
5.
1.
2.
3.
4.
5.
6.
7.
8.
Losses covered u/s 28. E.g. Under valuation / Over valuation of

stock.
Maintenance of assets.
Expenditure is incurred wholly Expenditure incurred on EEs.
& exclusively for the purpose Expenditure incurred on
Expenditure incurred on
of business.
clients.
reputation of organisation.
Expenditure is not of capital in E.g. Public issue expenses is
Note : Advertisement expenses
nature.
capital expenditure.
incurred in a brochure of political
Expenditure is not personal
party not allowed as deduction.
E.g. Household expenses.
nature.
Expenditure should not be in
Payment of bribe, Penalty for infringement of law not allowed as
nature of offence or prohibited
deduction. Payment of ransom money, hafta is allowed as deduction.
by Law.
Expenditure incurred on development of website

Salary to Staff
Expenditure incurred on issue of
bonus shares
Listing fees
Rent of building which is owned by
proprietor
Interest on loan taken for payment
of dividend.
Income Tax / Wealth Tax
Indirect Tax
Business
Personal
Revenue
Capital
Expenditure Expenditure Expenditure Expenditure
Yes
No
Yes
No
Whether
allowed?
allowed
Yes
Yes
No
No
Yes
Yes
No
No
allowed
allowed
Yes
Yes
No
Yes
Yes
Yes
No
No
Yes
No
Yes
No
allowed
Not
allowed
allowed
No
Yes
Yes
No
Yes
Yes
No
No
Not allowed
allowed
Section 40A(2). Unreasonable payment to relatives / substantial interest

Unreasonable payment made to relative as determined by AO is not allowed as deduction. Market price
shall be determined as per Arms Length Price. ALP is determined u/s 92C.
Section 40A(3). Cash Expenditure
Applicability
Expenses in cash exceeding 20,000 in a single day
to same person shall not be allowed as deduction.
Note : For truck operator take 35,000.
1.
2.
3.
Non Applicability
Payment made to Banks, FI, Govt.
Payment made to farmers for its produce.
Payment made at a place not served by Bank.
Section 43B. Certain expenses deduction allowed on actual payment basis

Payment covered
Timing of Deduction
Payment before Due Date
Payment after Due Date
1. Interest payment to banks
2. Indirect tax payment to Govt.
In the year of accrual of expenses
In the year of payment
3.
ERs contribution to PF, Gratuity

Fund, Leave salary, Bonus & com
Note : For payment not covered u/s 43B expenses deduction

allowed on the basis of accounts maintained by the assessee
www.taxguru.in
CS K.K. Agrawal
16
Section 44AD & 44AE. Presumptive basis of Taxation

Common points
1. Section 30 to 44D is not applicable. It means further business deduction is neither allowed nor disallowed. Section 32(2) not applicable. Section 40 to 43B not applicable. Other income can be added to
this income.
Where however the business is carried on a
2. Losses u/s 70 to 80 can be adjusted with this income.
partnership basis, remuneration to partner and
3. Deduction u/s 80C to 80U is allowed from this income.
interest to partner is allowed as deduction u/s
4. Administrative a. S 44AA & 44AB not applicable
37 but subject to section 40b.
convenience.
b. No need to pay advance tax
Section 44AD
Section 44AE
Applicability a.
Ind / HUF / Firm
a. Any person.
b.
Resident
b. Resident / Non Resident
Turnover
upto 1 Crore
No such requirement instead total truck should not
exceed 10 at any time during the PY.
Not applicable Profession, Agency Business,
No such requirement
Commission or brokerage income.
Presumptive
8% of Turnover
Heavy Truck
5,000 p.m.
during which
income
truck
is owned
Medium / Light
4,500 p.m.
www.taxguru.in
taxbykk.com
17

Focus and do it
Capital Gain
Section 45 to 55A
Did you
memorise?
If No then you
must memorise
within 24 hours
1 revision
st
Revision Time :
25 minutes
2nd revision

memorising -->
3rd revision
4th revision
Section 45(1). Charge

Profit arising
45(1) = 2(14) +
Exceptions to YOC = YOT : In following cases capital gain is charged to
from transfer
2(47).
taxed on receipt basis.
of capital asset YOC = YOT
S 45(1A). Insurance compensation. YOC = Year in which insurance
is chargeable
compensation is received.
under the head Capital asset : 2(14)
S 45(2). Conversion of asset into SIT. YOC = Year in which SIT is sold.
Transfer : 2(47)
capital gain
in the year of
S 45(5). Compulsory acquisition of the property. YOC = Year in which
transfer.
whole or part of initial compensation is received.
Section 2(14). Capital Asset
Capital Asset means property (bundle of
rights) of any kind.
Excludes
1.
2.
3.
4.
whether (it means every kind of right is a capital asset)

movable
immovable
Personal use
Business use
SIT, RM, Consumable stores held for business.

Agricultural Land situated in rural
Urban area : Municipal limits and upto 2 /6 / 8 k.m. (aerial
area.
distance)
Personal Assets held for daily use.
Not personal assets : JAD P SA therefore it is capital asset.
Gold Bonds 1999
5.
Special Bearer Bond 1991
Nature of Asset
STCA
Depreciable assets
always STCA
Financial assets are
a. Shares of company
b. Listed bonds
1 year or less
c. Govt. Securities
d. Units of MF
e. ZCB
(c) Other capital assets
3 years or less
Note : In computing period of holding the day the asset is transferred is excluded.
LTCA
always STCA
(a)
(b)
more than 1 year

more than 3 years
Section 2(47). Transfer

1. Sale, Exchange and Relinquishment of the asset.
2.
The extinguishment of any rights therein.
3. The compulsory acquisition of the asset by the Govt.
4.
Conversion of asset into stock-in-trade.
5. Possession of any immovable property in part 6.

performance of a contract.
7. Maturity or redemption of zero coupon bond.
Section 47. What is not transfer
Any transaction which has the effect of transferring, or

enabling the enjoyment of, any immovable property.
Gift, will or inheritance of property
Section 48. Computation of STCG

Full value of consideration
() Cost of Acquisition (COA)
() Cost of Improvement (COI)
() Expenses on transfer
STCG
xxx
(xxx)
(xxx)
(xxx)
xxx
Section 48. Computation of LTCG

Full value of consideration
() Indexed Cost of Acquisition (COA)
() Indexed Cost of Improvement (COI)
() Expenses on transfer
LTCG
Formula for indexation

Indexed COA =
Index value of transfer year
---------------------------------------------------Index value of acquisition year in which the
assessee first acquired the asset
Indexed COI =
x COA
Index value of transfer year

------------------------------------------ x COI
Index value of improvement year
Note : No Indexation bonds or debentures even if LTCA. [Proviso 3 to S 48]
www.taxguru.in
xxx
(xxx)
(xxx)
(xxx)
xxx
18
CS K.K. Agrawal
General
cases
Special
Cases
S 48. Full Value of Consideration (FVC)

Consideration in cash
Amount received or receivable.
Consideration in kind
FMV of asset.
50C
Land & Building : Higher of Stamp value or consideration.
45(1A)
Insurance claim.
45(2)
FMV on date of conversion of asset into SIT.
45(3)
Admission of partner. Amount recorded in books of accounts.
45(4)
Dissolution of firm. FMV as on date of distribution.
45(5)
Initial compensation.
General
COA if asset is acquired
before 1-4-1981
COA of shares.
STT is ignored both at the
time of purchase & at the
time of sale.
S 55(2). Cost of Acquisition (COA)

Purchase price + Brokerage paid on acquisition of asset
(Purchase price + Brokerage) or FMV as on 1-4-1981 whichever is higher.
a.
b.
c.
d.
COA of self generated
assets.
Note : If the asset is
purchased then purchase
price is the COA.
Note : FMV as on
1-4-1981 is ignored.
Section 49(1).
Deemed cost of acquisition
Section 49(4).
Deemed cost of acquisition
where value is taxed u/h
Other Sources
a.
b.
c.
d.
In case of original shares

In case of bonus shares
However if bonus shares are
allotted before 1-4-1981
Right shares
Existing shareholder
New Shareholder
Right share entitlement
Purchase price + brokerage.

Nil
FMV as on 1-4-1981.
Purchase price paid to Company

Price paid to Co.+ Price paid to renouncer.
Nil
Brand name & Trademark associated with the

business. (not of a profession)
Tenancy rights.
Goodwill of a business (not of a profession)
Right to manufacture, produce or process any
article or thing, for a consideration (Patent)
COA
Nil
COI
NA
Nil
Nil
Nil
NA
Nil
Nil
In case the asset is acquired through a mode given in section 47 (Gift to relative or will)
then cost of acquisition is cost to the previous owner. Previous owner is the person
who acquires the asset by paying the price. Period of holding shall be computed from
the date the previous owner acquires the asset.
In case of Land and Building is gifted and
Amount taxed under the head OS.
S 56(2) is applicable then COA =
In case of Land and Building is sold and Purchase price + Amount taxed under the
head OS.
In case of JAD PB SAS is gifted and
Amount taxed under the head OS.
In case of JAD PB SAS is sold and Purchase price + Amount taxed under the
head OS.
Expenses on Transfer
Expenditure incurred on transfer of asset. E.g. Brokerage on transfer of asset etc. However STT is ignored.
Title
Full value of
consideration
Special cases of computation (Deemed Transfer)

45(1A)
45(2)
45(3)
45(4)
Insurance claim
Conversion of
Admission of
Retirement
on destruction of
capital asset
partner
of partner or
assets.
into SIT
dissolution of firm
Insurance claim
FMV on the
Amount recorded FMV on the date
date of
in books of
of distribution
conversion
accounts
www.taxguru.in
45(5)
Compulsory
acquisition
Initial
compensation
taxbykk.com
YOC
Indexation
19
Year of receipt of
insurance claim
Year of sale
of SIT
YOT
Year of destruction Year of conversion

to Year of
to Year of
acquisition
acquisition
YOT
Year of receipt
of initial
compensation
Year of
Year of
distribution to
compulsory
year of acquisition acquisition to year
of acquisition
Year of transfer
to year of
acquisition
Section 54 to 54GB
Exemptions YOC = Year of Chargeability
AE = Actual Exemption
TE = Temporary exemption
54
54B
54EC
1. Title
RHP transferred . UAL
Any LTCA transRHP acquired
transferred. UAL/ ferred.
RAL acquired
2 specified
assets acquired.
NHAI+RECL
Lock in 3yrs
2. Conditions
a Eligible
Ind/HUF
Individual / HUF Any assessee
Assessee
b Eligible asset
RHP+LTCA
Urban AG land
Any LTCA
which is being
Atleast 2 yr old
transferred
ST / LT
c Time limit of
(P)1 yr <-ZD-->2 yrs (P)
ZD-->6 months
purchase new ZD-->2(P)/3(C)
asset
yr
d Deposit
Applicable
Applicable
Not
scheme
Applicable
3. Amount of
AE+TE
AE+TE
AE. Max
exemption
50 Lakhs
4. Consequences 1 TE AE=LT
Deposited amount
unutilised
YOC = ZD+3yr
TEAE=ST/LT
Consequences 2
New asset
transferred
within 3 years
from the date of
acquisition
LT/ST+ST=ST
(YOC=YOT) *
* Where RAL
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
LT+ST=ST
YOC=YOT
YOC=ZD+2yrs
is transferred no
capital gain arises,
since not a capital
asset.
100
109
116
125
133
140
150
161
172
NA
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
LT=LT
ST=ST
(YOC=YOT)
Cost Inflation Index

182
1999-00
199
2000-01
223
2001-02
244
2002-03
259
2003-04
281
2004-05
305
2005-06
331
2006-07
351
2007-08
YOT = Year of transfer

ZD = Date of sale of original asset
54F
54GA
Any LTCA
Acquired land,
(other than
building, plant &
RHP)
machinery transtransferred. RHP ferred. Acquired
acquired.
LBPM in SEZ
Ind/HUF
Any assessee
Any LTCA other Land, Bldg, Plant

RHP
of urban area
(P)1 yr<-- ZD->2(P)/3(C) yr
(P/C)1 yr<-- ZD->3(P/C) yr
Applicable
Applicable
LTCG
--------xRHP
NSC
Proportionate
(TEAE)=LT
AE+TE
YOC=ZD+3yrs
LT=LT
ST=ST
(YOC=YOT)
389
406
426
447
463
480
497
519
551
www.taxguru.in
TEAE=ST/LT
(YOC=ZD+3yrs)
LT+ST=ST
(YOC=YOT
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
582
632
711
785
852
939
20
CS K.K. Agrawal
Whats stopping you?
Revision Time :
15 minutes
Section 56 to 59
Your time of revising

& memorising -->
Income from Other Sources

Sections Particulars
Charge
56
57
58
59
Amount expressly
allowed as
deduction.
Restriction on
deduction.
Deemed income
Nature of gift
Donor
Donee
Consideration
In excess of

1st revision
2nd revision
3rd revision
4th revision
Did you
memorise?
If No then you
must memorise
within 24 hours
Provisions
Any income which is not charged under the first 4 head is charged
under the head Income from Other Sources. E.g.
56(1)
Directors, MPs, Rent from
Income from
Interest
MLAs, salary
vacant land. sub letting.
Royalty
Following incomes are always charged under the OS
56(2)
Gifts
Dividend
Lottery income Rent of Plant
Expenditure should be incurred wholly and exclusively for earning S 56
income. E.g. (a) Interest on loan taken for purchase of bond. (b) Collection
charges. (c) Contribution towards PF.
Following deductions are not allowed. E.g. Expenses incurred in earning
lottery income.
As per S 41. (Refer PGBP)
Part A
Cash Gift
Any person
Ind / HUF
Nil
Cash in excess of
50,000.
Whole of aggregate
amount taxed u/h OS
Exceptions to Part A, B & C
1. Gifts received from any relative.
3. Gifts received under a will or
inheritance.
5. Money received from local
authority.
7. Money received from any fund,
institution.
S 56(2). GIFTS
Part B
Land & Building
on or after 1-10-2009
Any person
Ind / HUF other than relative
Nil
(a)
Stamp value exceeds
50,000.
(b) Difference = (SDV PP)
in excess of 50,000
Part C
JAD PB SAS
on or after 1-10-2009
Any person
Ind / HUF other than relative
Nil or inadequate consideration
(a)
FMV in excess of
50,000.
(b) Difference = (FMV PP)
in excess of 50,000
Whole amount
taxed u/h OS
Whole of aggregate amount

taxed u/h OS
Taxable
2.
4.
Gifts received on the marriage of the individual.

Gifts received in contemplation of death of the payer.
6.
Money received from a registered charitable institute.
foundation, university, other educational institution, medical

S 56(2). Relative
www.taxguru.in
taxbykk.com
21
Assessee
Other than above

persons are not
relative
1.
3.
5.
7.
Other Incomes charged under the head other sources

Life insurance maturity proceeds if premium
2. Family pension less (1/3rd or 15,000 whichfor any year exceeds 10% of assured amount.
ever is lower).
Owning & maintaining race horses.
4. Letting of plant & machinery.
Composite letting of building + P & M.
6. Lottery income. No deduction.
Maturity proceeds of keyman insurance policy. Maturity amount received by
Charged under the head
Assessee
Business S 28
Employee
Salary S 17(3)
Legal heir on death of employee Other Sources S 56(1)
Securities held
as
Post office
scheme
Interest on Securities
Stock in
Interest charged under the head Business. S 28 to
Trade
44D.
Investment Interest charged under the head Other Sources. S
56 to 59.
S 10(15). Following interest exempt from tax.
Full
(a) Cash Certificates (b) Fixed deposit
exemption
(c) Cumulative time deposit account (CTD).
Partial
(d) Saving Single
upto 3,500 exempt
exemption
account
Joint
upto 7,000 exempt
S 57. Interest on loan

& collection charges
Note : Interest on
Monthly scheme is
not exempt but interest is fully taxable.
Interest on
(a)
Interest on RBI Relief bonds. Interest on other Govt. Securities are fully taxable
Govt. Securities (b)
under the head Other Sources.
Interest on Gold Bonds.
S 10(4)
Interest on Non Resident External Account is fully exempt from tax.
Dividend
Securities Stock in Trade Dividend always charged from Indian Company from foreign Company
held as
under the head Other
Exempt u/s 10(34)
Taxable
Investment
Sources. S 56 to 59.
S 57. Interest on loan & collection charges allowed as deduction if dividend is taxable.
Interim Dividend : Taxable in the year of receipt.
Final Dividend : Taxable in the year of declaration.
S 10(35). Income from units of mutual fund is exempt from tax.
www.taxguru.in
CS K.K. Agrawal
Clubbing of Income
Section 60 to 65
22

Positive thoughts only
Revision Time :
10 minutes
& memorising -->
1st revision
2nd revision
3rd revision
4th revision
Did you
memorise?
If No then you
must memorise
within 24 hours
Section 60
Transfer of income without transfer of assets: Clubbed in the hands of transferrer.
Section 64(1)(ii), (iv) & (vii). Clubbing provisions relating to Spouse
S 64(1)(ii)
Condition : Remuneration received by spouse shall be clubbed in the hands of that individual
Remuneration who has substantial interest in a concern. If both husband and wife is having substantial
to Spouse
interest in a concern then remuneration shall be clubbed in the hands of that spouse whose
total income excluding the remuneration to be clubbed is greater.
No clubbing: If spouse possess knowledge or experience and remuneration is attributable
to such knowledge or experience then remuneration is not clubbed.
Substantial Interest : A person has substantial interest if he along with relatives holds
atleast 20% voting power or 20% Profits in a concern.
S 2(41). Relative : Husband
Father
Grand father
Lineal ascendant Wife
Mother
Grand mother
& Descendant
Children
Brother
Grand son
Sister
Grand daughter
Condition
S 64(1)(iv)
Applicable : Clubbing
provision shall be applicable
Asset
1. Asset transferred by individual to his or her spouse,
only when marriage subsist
transferred to
2.
without
adequate
consideration
both at the time of transfer
spouse
3. then income arising to spouse from the transferred asset shall of asset & at the time when
income arises.
be clubbed in the hands of transferrer.
S 64(1)(vii)
Condition
Exception : Where the
Asset
asset is transferred with
1. Asset transferred by individual to his or her spouse,
transferred to
an agreement to live apart
for the benefit 2. without adequate consideration
then clubbing provision is
of spouse
3. then income arising to spouse from the transferred asset shall not applicable.
be clubbed in the hands of transferrer to the extent benefit
arises to spouse.
Section 64(1)(vi) & (viii). Clubbing provisions relating to Sons Wife
S 64(1)(vi)
Condition
Applicable if :
Asset
1. Asset transferred by individual to his or her sons Father in Law & Daughter in Law
transferred to
wife,
Mother in Law & Daughter in Law
sons wife.
2. without adequate consideration
relationship subsists both at the
3. then income arising to sons wife from the transferred time of transfer of asset & at the
time of accrual of income.
asset shall be clubbed in the hands of transferrer.
S 64(1)(viii) Condition
A transfers asset to Mrs. A. Mrs
Asset
1. Asset transferred by individual to his or her sons A transfer same asset to her sons
wife. The income arising to sons
transferred to
wife,
wife shall be clubbed ?
for the ben2.
without
adequate
consideration
efit of sons
Genuine Transfer Fraud Transfer
wife
3. then income arising to sons wife from the transferred
Mr. A
Mrs. A
asset shall be clubbed in the hands of transferrer to the
extent benefit arises to sons wife.
www.taxguru.in
taxbykk.com
23
Section 64(1A). Clubbing provisions relating to minor child

All income accruing
to minor child shall
be clubbed in the
hands of that parent
whose total income
excluding the income
of the minor child is
greater.
No clubbing if
Exception :
S 10(32). Exemption
1. Where the marriage of the parent do not subsist, the income upto 1,500 per child
of the minor child shall be clubbed in the hands of that parent exemption to that parent
who maintains the minor child in the relevant PY.
in whose hands income
is clubbed.
2. If once the income is included in the hands of father or No clubbing from the
mother it shall be be continued to be clubbed in the same date minor child attains
hands unless AO do otherwise.
majority.
1. Minor child is suffering from any disability specified The income earned by
u/s 80U. All income shall not be clubbed.
minor child shall be
2. Minor child has earned any income from his own skill taxable in their hands
or talent. Only income earned through talent shall not only. ROI shall be in
their name and signed
be clubbed remaining income shall be clubbed.
by guardian.
Other Points.
1.
2.
3.
Income from transferred asset is to be clubbed.

Income from income cannot be clubbed.
Income from accretion of asset cannot be clubbed.
Spouse / Sons Wife

Correct
Correct
Correct
www.taxguru.in
Minor Child
Correct
Wrong
Wrong
24
CS K.K. Agrawal
10
Set off & Carry Forward of Losses

Section 70 to 80
S 70. Whether set

off allowed within
same head?
Sky above me, Earth below me, Fire within me

1st revision
Did you
Revision Time :
memorise?
15 minutes
2nd revision
If No then you
3rd revision
must memorise
& memorising -->
4th revision
within 24 hours
S 71B to 74A
Rules to carry forward &
set off past year losses.
S 71. Whether set

off allowed with
different head?
Section 71B.
House
Property
Loss
Business
loss
Yes
Yes
Yes
Yes except
salary.
Brought forward HP loss can be set off only with HP.

It can be carried forward for 8 AYs.
Section 80 is not applicable. It means even if return of loss
is not filed or filed late loss can be carried forward & set off.
Section 72
Set off with both business income & speculation income.

Carry forward for 8AY.
Section 80 applicable. It means if return of loss is not filed

or filed late business loss cannot be carried forward.
Assessee who has incurred the loss can only set off that loss
[6 exception]
Section 73
Speculation loss
(Same
day sale
& purchase i.e.
without
taking
delivery)
S 43(5)
Yes
Loss
under
the head
capital
gain
Yes
LT can be set off
only with LT. ST
can be set off with
both LT & ST.
Loss from
activity of
owning &
maintaining race
horses
Even if business is discontinued business loss can be set off.
No
No
Past year speculation loss can be set off only with speculation income.

or filed late speculation loss cannot be carried forward.
[exception not applicable]
Even if business is discontinued business loss can be set off.
Section 74
LT can be set off only with LT. ST can be set off with both
LT & ST.

or filed late capital gain (loss) cannot be carried forward.
Section 74A
Past year horse loss can be set off only with horse income.
Carry forward for 4 AY.
Yes
No
or filed late business loss cannot be carried forward.
[exception not applicable]
If business is discontinued then loss cannot be set off.
No
No
No
Loss from
lotteries Note: No other loss can be set off against this income. Deduction u/s 57 not available. Deduction u/s 80C
etc
to 80U not available. Basic exemption not available. Flat rate 30%.
Other
Yes
Yes
No
losses
In case of choice this loss should be set off first since it cannot be carried forward.
www.taxguru.in
taxbykk.com
25
S 32(1)
Current year depreciation
S 32(2)
Unabsorbed depreciation
Rules to set off unabsorbed depreciation

1. The unabsorbed depreciation can be set off with any heads of income except casual income and salary
income. But it shall be first set off with Business Income then with any other income. Do note that
current year depreciation can be set off only with business income if cannot be set off then it shall be
carried forward which becomes unabsorbed depreciation.
2. The unabsorbed depreciation can be carried forward for unlimited period.
3. Section 80 is not applicable. It means even if return of loss is not filed or filed late loss can be carried
forward & set off.
4. Even if business is discontinued business loss can be set off.
5. Assessee who has incurred the loss can only set off that loss [6 exception]
1.
2.
3.
Rules to set off the losses

First S 71, then S 72 and then adjust past year losses.
Income exempted u/s 10 cannot be set off with taxable income.
It is mandatory to set off the loss.
1.
2.
Priority to set off the losses

Current year depreciation u/s 32(1).
Brought forward business loss u/s 72.
3.
Unabsorbed depreciation u/s 32(2)
Exceptions to the rule that assessee who has incurred the loss can only set off that loss. This exception is
applicable only to S 72 & S 32(2).
1. 72A. Accumulated business loss of amalgamating company can be carried forward and set off by
amalgamated company.
2. 72A. Accumulated business loss of demerged company can be carried forward and set off by resulting
company.
3. 72A. Conversion of sole proprietorship concern into a company.
4. 72A. Conversion of firm into a company.
5. 72A. Conversion of Pvt. limited Company to LLP or Unlisted Company to LLP. (Limited Liability
Partnership).
6. 78(2). Losses of business acquired on inheritance. Father dies and son inherits the business then son can
set off the business loss.
S 71B
HP loss
1.
Set off under which head
2.
Carry forward for how

many years
Section 80
Should business be
continued to set off the
loss
The assessee who has
incurred the loss can
only set of that loss
(True or False)
Any exceptions
3.
4.
5.
6.
Same
Head
8 AY
S 72
Business
loss
Same
Head
8 AY
S 73
Speculation
loss
Same Head
S 74A
Horse race
loss
Same Head
S 32(2)
Unabsorbed
dep
Any Head
4 AY
S 74
Capital
gain loss
Same
Head
8 AY
4 AY
A
No
A
No
A
NA
A
Yes
unlimited
period
NA
No
NA
NA
NA
True
True
NA
True
True
NA
Yes
No
NA
No
Yes
www.taxguru.in
taxbykk.com
26
11
Worrying solves nothing
Deduction from GTI

Section 80C to 80U
Section Assessee
80C
Contribution to
LIP, PF,
NSC,
ELSS etc
Saving &
Expenditure

& memorising -->
2nd revision
3rd revision
4th revision
Amount of dedn Other Points
1. LIP for self, spouse & child. (max 10% of assured

amount). Maturity amount exempt if (a) premium for all
years do not exceed 10% of assured amount. (b) on death.
Resident
Otherwise taxable u/h other sources.
/
2. ULIP
8. All PF (SPF, RPF, PPF,
Non
ASAF) except URPF.
3. FD for 5 years
resident
4. ELSS
5. NSC
9. Tuition fees in India (max 2
Indian / 6. Infrastructure shares
child) (formal school/univerForeign
sity/college)
/ bonds
Citizen
7. Pension funds of MF 10. Repayment of housing loan
Assessee
80CCD
Ind
R/NR
IC/FC
Section
80CCG
Rajiv Gandhi
equity scheme
Nature of payment
Nature of payment
Assessee
Resident
Individual
Amount of Deduction
Nature of payment
Other Points
Other Points
Payment should
be made out of
taxable income.
Amount of Deduction
Investment in equity shares or units 50% of amount invested in the specified

of equity oriented fund as per Rajiv scheme or 25,000 whichever is lower for 3
Gandhi Equity Scheme.
years if GTI do not exceeds 12 lakhs.
Assessee Nature of payment
80D
Ind /
HUF
R/ NR
IC/FC
Contribution to
health insurance
Health
premium & for
Insurance
preventive health
Premium
check up.
Contribution in CGHS scheme dedn
allowed.. Over all deduction cannot exceed 15,000 / 20.000 / 35,000 / 40,000.
Section
80DD
Only
resident
IC/FC
1. Payment
out of loan
or exempted
income
deduction
allowed.
2. Deduction
is allowed
in the FY of
payment.
Combined Maximum deduction

Payment should
u/s 80C + 80CCC + 80CCD (only be made out of
EEs contribution) 1,00,000
taxable income.
Contribution to Pen- max 10% SAS for ER + max 10% of SAS for EE but
sion Fund set up by
CG. (New Pension
Maximum combined deduction u/s 80C + 80CCC +
Scheme)
80CCD (only EEs contribution) 1,00,000
Section
Ind /
HUF
Combined
Maximum
deduction u/s
80C + 80CCC
+ 80CCD (only
EEs
contribution)
1,00,000
Amount of Deduction
Contribution to Pension Fund of insurance companies. (Annuity scheme or

any other Pension Plan)
Section
Did you
memorise?
If No then you
must memorise
within 24 hours
1st revision
Ind /
HUF
80CCC Ind
R/NR
Pension
IC/FC
fund
Disabled
dependent
Revision Time :
25 minutes
Nature of payment
Section Assessee
Pension
fund
Maintenance +
normal medical
treatment of
dependent
person with
disability.
Amount of Deduction
Self, Spouse &
Dependent children
Max 15,000. (Resident
Senior Citizen max
20,000)
Parents (dependent /
Not dependent)
Max 15,000. (Resident
Senior Citizen max
20,000)
Other Points
Payment
should be made
out of taxable
income.
Payment of
Preventive health check up Preventive health check up premium in
max 5,000 even in cash. max 5,000 even in cash. cash deduction
not allowed.
Amount of Deduction
Spouse & children
Other Points
Brothers, Sisters & Parents Certificate of

disability is
wholly or mainly dependent on such individual for his furnished.
support and maintenance.
Double benefit
Normal disability (atleast 40%) Fixed 50,000
of 80DD & 80U
Severe disability (atleast 80%) Fixed 1,00,000
not available.
www.taxguru.in
27
CS K.K. Agrawal
Section
80DDB
Only
resident
Medical
treatment of
specified
disease
Ind /
HUF
Medical
treatment of
specified disease.
IC/FC
Section
Assessee
80U
Only
resident
Ind (IC/FC)
Disabled
80E
Ind (R/NR /
IC/FC)
Section
Assessee
Section
80G
Donation
Assessee
Assessee
80GG
Ind (R/
NR / IC/
FC)
Brothers, Sisters & Parents
Amount of Deduction
Other Points
Fixed 50,000
Double benefit
of 80DD & 80U
not available.
Fixed 1,00,000
Amount of Deduction
Other Points
Interest on loan
Any amount of interest is allowed as deducLoan is taken by ind
taken for higher
tion for max 8 years. Repayment of loan is not for himself, spouse
education after + 2. allowed as deduction.
or for child.
Title
Amount of Deduction
Additional
Interest for
first time
home
buyers.
One time deduction of interest

payable not exceeding 1,00,000
shall be allowed in PY 2013-14.
If interest payable is less than
1,00,000 then balance interest
deduction can be claimed in PY
2014-15.
Title
Condition
1.
2.
3.
4.
Lender : Bank or FI
Loan sanctioned upto 25 Lakhs in
FY 2013-14.
Purchase price upto 40 Lakhs.
Do not own any house on the date of
sanction of loan.
Amount of Deduction
All assessee Donations Part A (Govt. fund)

any amount
donated is eligible
for deduction.
Section
Other Points
Specified
disease.
wholly or mainly dependent on such individual for his
Cancer,
support and maintenance.
AIDS,
Neurological
Actual expenditure or 40,000 (in case of RSC take
60,000) whichever is lower less medical insurance is the disease etc
amount of deduction.
Title
Part A fund
National Defence Fund
Zila Saksharta Samiti
PM National Relief Fund
National Eminent University/
Educational Institution
National Children Fund
Jawaharlal Nehru Memorial Fund
PM Drought Relief Fund
Indira Gandhi Memorial Trust
Rajiv Gandhi Foundation
Rent
Self, Spouse & children
Assessee himself Normal disability (atleast 40%)

is disabled.
Severe disability (atleast 80%)
Assessee
80EE Ind (R/NR

Ad/ IC/FC)
ditional
Interest
Amount of Deduction
Title
Section
Interest on
higher ed.
Dedn allowed
100%
100%
100%
100%
100%
50%
50%
50%
50%
Other Points
Part B (Private fund)

only 10% of AGTI is
eligible for deduction.
(AGTI = GTILTCG
STCG STT paid all
deductions except 80G)
Cash donation
upto 10,000
allowed
excess of
not
10,000
allowed
Part B fund
Dedn allowed
Donation to Govt. / approved Local
Authority, Institution, to be utilised.
a. for promoting family planning
100%
b. for charitable purpose other
50%
than promoting family planning
Donation to any notified temple,
50%
mosque, gurudwara, church or other
place for renovation or repair.
100%
Donation made by a company to the
Indian Olympic association
Condition
Amount of Deduction (Least is deductible)
Deduction for rent paid.

Rent is paid to third person or to the ER.
He is not in receipt of HRA
Rent is not paid to HUf, spouse or his minor
child.
M
F
F
2,000 p.m.
25% of adjusted GTI
Rent Paid 10% of adjusted GTI
www.taxguru.in
taxbykk.com
Section
28
Assessee
80GGA All assessee

not having
Donation business
for SR
income
Title
Donation is made to
Donation
for scientific
research
/ rural
development
1.
2.
3.
4.
Other Points
Approved research association for research.

PSU / Local authority for eligible project or
scheme.
Institution for Rural development programme
National Urban Poverty Eradication Fund /
National Fund for Rural Development.
Applicable to
Not applicable to
80GGB
Indian Company
Others
Contribution to
Amount of deduction
Cash donation any amount
Political party or Electoral Trusts

100% of contribution
not allowed
Cash donation
upto
allowed
10,000
Corresponding section
of PGBP is S 35,
35AC, 35CCA.
80GGC
All assessee
Local authority & every artificial juridical
person wholly or partly funded by the Govt.
Political party or Electoral Trusts
100% of contribution
not allowed
Section
Assessee
Title
Amount of Deduction
Nature of income
80JJA
All assessee
Profit from bio

degradable wastes
100% of profits for consecutive 5 years from the year of

start of business.
Collecting & processing or treating of biodegradable

wastes for generating power or producing biofertilizer, bio-pesticides or bio-gas, for fuel or
organic manure.
Section
Assessee
80QQB / Resident
Ind / HUF
80RRB
Section
80TTA
Assessee
Resident
Ind / HUF
Title
Royalty
from
books /
Patents
Title
Amount of Dedn
Amount of royalty or
3,00,000
whichever is
lower
Nature of income
Books : Literary, Artistic or Scientific nature.
Annual Royalty : cannot
If royalty is earned outside
exceeds 15% of sales.
India then it should be
brought into India within 6
Lumpsum royalty : Any
months by 30th Sept.
amount.
Nature of income
Interest Banks
on sav- Co-operative Banks
ing bank
Land Co-operative Banks
a/c.
Post office
Amount of Deduction
Max 10,000.
Deduction is not available on interest on fixed
deposits. It is only on interest on saving.
www.taxguru.in
29
CS K.K. Agrawal
More is possible
12
Rates of Tax
20% flat
STCG STT
15% flat
Total Income exceeds 1 Cr.

Total Income exceeds 10
Cr.
5,00,001 to 10,00,000
Exceeds 10,00,000
1.
2.
Resident super senior citizen
3.
4.
Woman (R / NR)
Non resident senior citizen /
super senior citizen
HUF / AOP / BOI / AJP
3rd revision
4th revision
30% flat
Indian Company
/ Firm
Foreign
Company
Ind / HUF
/ AOP / BOI
30% flat
40% flat
Slab rate
Surcharge (Tax on Tax)
See the last table
Education cess & SHEC
3%
3%
3%
Domestic
Foreign Firm / Ind / HUF/ AOP /
Local
Company Company LLP
BOI / AJP
Authority
5%
2%
10%
10%
10%
10%
5%
NA
NA
TAX CONCESSION
Age
atleast 60 years at any time during
the relevant PY.
atleast 80 years at any time during
the relevant PY.
less than 60 years
Any age
Tax on Long Term Capital Gain

Tax on Short Term Capital Gain (STT paid)
Tax on Lottery Income. (Casual Y)
Tax on Normal Income
TI exceeds 1 Cr. and upto 10 Cr.
TI exceeds 10 Cr.
Whether marginal relief available
Education cess & SHEC
Surcharge
Did you
memorise?
If No then you
must memorise
within 24 hours
1 revision
2nd revision
NA
Co-operative society
10%
NA
SLAB RATE
Rate of Tax (Method 1)
Amount of Tax (Method 2)
Nil
Nil
10% of (NI 2,00,000) upto 2,000 for 10% of NI 20,000 upto 2,000
resident individual. S 87A
for resident individual. S 87A
20% of (NI 5,00,000) + 30,000
20% of NI 70,000
30% of (NI 10,00,000) + 1,30,000
30% of NI 1,70,000
Person
Resident senior citizen
5.

memorising -->
Lottery Income
etc
Basic exemption allowed from

SI if NI < BE. But 1st allowed
from NI & then from SI.
Rebate u/s 87A is available.
Income
Upto 2,00,000
2,00,001 to 5,00,000
Revision Time :
15 minutes
st
TAX ON TOTAL INCOME

Casual Income
Normal Income [NI = TI SI CI]
Special Income
LTCG
Basic Exemption
2,50,000
Tax concession
5,000
5,00,000
30,000
2,00,000
2,00,000
nil
nil
2,00,000
nil
NA
Domestic
Company
20% flat
15% flat
30% flat
Foreign
Company
20% flat
15% flat
30% flat
Firm / LLP
30% flat
40% flat
30% flat
5%
10%
Yes
3%
2%
5%
Yes
3%
10%
NA
Yes
3%
www.taxguru.in
20% flat
15% flat
30% flat
Individual / HUF /
AOP / BOI / AJP
20% flat
15% flat
30% flat
slab rate with
rebate u/s 87A.
10%
NA
Yes
3%
taxbykk.com
30
13

I am strong
Agricultural Income
Section 2(1A) & 10(1)
Revision Time :
15 minutes
& memorising -->
Did you
memorise?
If No then you
must memorise
within 24 hours
1 revision
st
2nd revision
3rd revision
4th revision
Section 10(1). Agricultural Income is exempt from tax

Agricultural income as defined under section 2(1A) is fully exempt from tax but with a rider. Since agricultural
income is exempt from tax it doesnt form part of total income. Also Constitution of India gives exclusive
powers to the State Legislature to make laws with respect to taxes on agricultural income. (Entry No. 46 of
State List)
Section 2(1A). Meaning of Agricultural Income
(a)
(b)
(c)
Rent from agricultural land
Growing of crops from land situated
Rent from building situated
situated in India used for
in India. Also saplings in a nursery.
in the immediate vicinity of
agricultural purpose
Basic
Yes Yes No agricultural land situated in India
and used for agricultural purpose
operation
and not situated in urban area.
Subsequent
Yes
No Yes
Exception
: If let out for purpose
operation
other than agriculture then NAI
Whether AI?
Yes Yes No
Computation u/h Other Sources
S 56 to 59
Rent
Less : taxes on land
Less : Collection
charges
OS AI
xxx
xxx
xxx
xxx
Computation u/h Business
S 28 to 44D
Sale of crops
Less : all business expenses
Salary
Irrigation expenses
Depreciation
BI AI
Computation u/h House Property
S 22 to 27
xxx
xxx
xxx
GAV
Less : MT
NAV
Less : SD
Less : Interest
HP AI
xxx
xxx
xxx
xxx
xxx
xxx
Computation of income which is partly agricultural & partly non agricultural

Rule 7A
Rule 7B(1)
Rule 7B(1A)
Rule 8
1.
2.
3.
Manufacture of rubber.
Sale of coffee grown and cured by seller.
Sale of coffee grown, cured, roasted and grounded by seller in India
with or without mixing chicory or other flavouring ingredients.
Growing and manufacturing tea in India.
AI
65%
75%
60%
NAI
35%
25%
40%
60%
40%
Computation of tax if assessee is earning both AI & NAI (Partial Integration)

Computation of tax
The assessee is an Individual or HUF or BOI, or AOP
or artificial juridical person.
Tax on (NAI + AI) at slab rate
Non-agricultural income i.e normal income exceeds
Less : Tax on (AI + BE) at slab rate
basic exemption.
Tax
Agricultural Income exceeds 5,000.
www.taxguru.in
A
(B)
A B
31
CS K.K. Agrawal
14
Assessment of Firm
Section 184, 28, 37, 40b

No maybes....
1 revision
st
Revision Time :
10 minutes
2nd revision

& memorising -->
Section 184. Assessment of firm

Compulsory clauses
1. There is written agreement amongst partners.
(Partnership Deed : PD)
2. Profit sharing ration (PSR) is specified in PD.
3. PD is filed with tax department with first ROI.
All the above 3 points satisfied then a Firm is
created. Once created always assessed as Firm.
1.
3rd revision
4th revision
Did you
memorise?
If No then you
must memorise
within 24 hours
Optional agreement
Interest on loan or capital contributed partners.
2.
Remuneration payable to partners.
If conditions of S 184 satisfied then interest and
remuneration to partners is allowed as deduction in
the hands of firm and taxable in the hands of partners
u/h PGBP
Rate of tax of firm : 30% flat + education cess @ 3%

Section 40b. Maximum deduction of interest & remuneration allowed in the hands of Firm
Interest
Remuneration to working partner
upto 12% p.a.
Remuneration to working partner as specified in PD or remuneration as per following
or rate of
table whichever is lower.
interest
Book Profit
Limit
specified
First 3,00,000
1,50,000 or 90% of book profit whichever is more
in PD
Balance
60%
whichever
Remuneration
should
be
distributed
in
remuneration ratio.
is lower.
Computation of Book Profit
Net profit as per P & L A/c after making all adjustments u/ss 28 to 44D except S 40b
Less : Interest allowed to partners under section 40b
Book profit
www.taxguru.in
A
(B)
C
taxbykk.com
32
15

Be better
Charitable Trusts
Section 2(15), 11 to 12AA
Revision Time :
15 minutes
memorising -->
1 revision
st
2nd revision
3rd revision
4th revision
S 2(15). Meaning of charitable purpose

Relief to Education Medical Preservation of Preservation of
the poor
Relief
environment
monuments
Exception
No exception any amount charged or not charged
activities shall be treated as charitable purpose.
S 11 & 12. Income of charitable purpose

Income of property held under trusts
Less : 15% statutory deduction
Less : Income accumulated
Less : Income not received
Less : Income received in last moment
Less : Income applied
Income of charitable trust.
Section 12AA. Registration of Trusts
Application to whom?
When should application may be made
for registration?
What CIT shall check before it grants
registration?
By what time CIT shall grant registration?
What if CIT neither grant registration
nor refuses registration within 6 month.
What is the effective date of registration.
Yes
Advancement of object of
general public utility
If amount from specified
activity
upto 25
Charitable
Lakhs
exceeds
Non
25
Charitable
xxx
(xxx)
(xxx) Max period of accumulation : 5 years.
(xxx) To be applied in the year of receipt or by next year.
(xxx) To be applied by next year.
(xxx)
xxx
CIT
At any time after the creation of trust.
He shall satisfy himself about the objects of the trust or institution
and the genuineness of its activities.
He shall grant registration within 6 month after the expiry of
month of application.
Registration shall be deemed to be granted.
1st April of the year in which registration is granted.
Tax Treatment of Anonymous donation

Wholly charitable
Anonymous donation
whether taxable?
Did you
memorise?
If No then you
must memorise
within 24 hours
Wholly religious Trusts
Both charitable & religious trust
No
Only specific donation that such

donation is for any university /
educational institution /medical
institution.
Anonymous donation
Less : 5% of total donation or 1,00,000 whichever is higher
Taxable anonymous donation (Flat 30%)
www.taxguru.in
xxx
xxx
xxx
taxbykk.com
33
16
Get comfortable with uncomfortable
Tax Deducted at Source

Section 192 to 206C
Section
192
Nature of
payment
Salary
Tax Deductor
Employer
Revision Time :
25 minutes
& memorising -->
When to deduct
tax at source
Payment (P)
Did you
memorise?
If No then you
must memorise
within 24 hours
1st revision
2nd revision
3rd revision
4th revision
Basic Rate of TDS

Slab rate + Ed cess
No TDS
upto base amount
Basic exemption
Other
Points
193
194
194A
Employee can give all other income details to his employer on which tax shall be deducted.
However employee cannot provide detail of losses of other heads. But he can provide losses
under the head house property which the employer shall adjust while computing TDS.
Interest on securities Company or
Payment or credit
10%
5,000 (listed /
Govt.
whichever date is
unlisted | ind/ huf |
earlier (PCD)
acc payee cheque)
No TDS also on
1. DEMAT
2. Central / State
3. Interest on Gold
4. Zero Coupon
followings
securities. Tax Govt. securities. Tax Deposit Bonds since
Bonds. Tax free
free securities
free securities
exempt u/s 10(15).
securities
Dividend u/s 2(22)(e) Closely held
Payment (P)
20%
nil
Loan / advance
company
10(34)
Other interest
All person ex- Payment or credit

cept ind/ HUF* whichever date is
earlier (PCD)
Domestic Co
20% 10,000 paid by

Bank / Post Office
Ind /HUF/ Firm 10% 5,000 other
Interest
3. Exempted interest
4. Interest from
u/s 10(15)
micro banks.
30%
10,000
No TDS also on
1. Interest to
2. Interest paid by
followings
banks.
firm to its partners.
194B
Winning from
Any person
Payment (P)
Lottery/crossword
puzzles
194BB Winning from horse
Any person
Payment (P)
30%
5,000
race
194C
Payment to contracAll person
Payment or credit
Firm / D. Co
2% Single : 30,000.
tor. Works / labour
except ind/
which ever date is
Ind / HUF
1% Aggregate :
contract : Advt, CaHUF*
earlier (PCD)
75,000.
Truck + PAN
nil
tering, TV, TransportPersonal contract :
Truck no PAN
20% No TDS
ers, Job Work.
What is job Essential condition : Material is supplied by client. TDS only on labour contract. But if indiwork
visible bill is generated for both material and labour then TDS on both labour and material.
194D
Insurance
Any person
Payment or credit
Domestic Co.
20% 20,000
commission
which ever date is
Ind /HUF/ Firm 10%
earlier (PCD)
194G
194H
194I
Commission on sale
of lottery tickets
Any person
Payment or credit
which ever date is
earlier (PCD)
Commission or
brokerage other than cept ind/ HUF* which ever date is
share brokerage.
earlier (PCD)
Examples : 1. Order procurement 2. Guarantee
commission
Rent
cept ind/ HUF* which ever date is
earlier (PCD)
10%
1,000
10%
5,000
3. Recruitment
commission
4. Property dealer
commission
P&M
Building &
Furniture
www.taxguru.in
2% 1,80,000.
10% Rent paid to Govt
/ Local authority
/ RBI
taxbykk.com
194IA
34
TDS on transfer of
land & building other
than agricultural land
194J
Professional /
technical fees / Royalty / Non competing
fees / Director fees.
194LA Compensation on
compulsory
acquisition of L & B.
195
Any sum except salary to Non-resident or
to a foreign company
*
PY 12-13
Turnover exceeds
1 Crore / 25 Lakhs
Any person
(buyer)
Payment or credit
which ever date is
earlier (PC)
cept ind/ HUF* which ever date is
earlier (PCD)
1%
less than
50,00,000
10%
Govt
Payment (P)
10%
30,000 for each

income except director fees where
base amount is nil
2,00,000
Any person
Payment or credit
which ever date is
earlier (PC)
Rate of TDS the

amount of tax payable
by NR in India.**
PY 13-14
TDS is required to be deducted
by Ind / HUF
Turnover exceeds
1 Crore / 25 Lakhs
10(34)
PY 14-15
TDS is required to be deducted

by Ind / HUF
** Surcharge and education cess as applicable shall be added to basic rate for deduction of tax at source.
Section 197
Title
Certificate of TDS at lower deduction or
nil rate.
Issued by
Assessing Officer
Application by Assessee
Income
All kinds of incomes which are subjected
to TDS
Condition for If assessee is of the opinion that his final
application
income tax amount shall be lower than tax
to be deducted.
198
199
200
Section 197A
Declaration of nil deduction of tax.
Assessee
on its own.
Only interest income subjected to TDS
u/s 193 & 194A.
For ind / HUF
For senior citizen
If interest < Basic
If interest > Basic
exemption &
exemption but tax on
Tax on TI is nil.
TI is nil.
Since tax is deducted from income therefore tax deducted is treated as assessees income. Gross
Income = Income (net of TDS) + amount of TDS
The tax deducted at source shall be treated as tax paid in PY which shall be adjusted from final
tax computed in AY. Tax computed in AY Tax paid in PY = Self assessment tax.
Due date of deposit of TDS with Govt.
TDS return
S 203. TDS certificate
th
th
th
th
April 7 May Aug 7 Sep Dec 7 Jan
AMJ 15 July
AMJ
30th July
May 7th June Sept 7th Oct Jan
7th Feb
JAS
15th Oct
JAS
30th Oct
June 7th Jul
Oct 7th Nov Feb 7th Mar
OND
15th Jan
OND
30th Jan
July 7th Aug Nov 7th Dec Mar 30th Apr
JFM 15th May
JFM
30th May
E filing / E payment compulsory
200A
201
203
Form 16 (others)/ 16A (Salary)
Correction in TDS return if there is arithmetical errors, error in rate of TDS, wrong deduction
1. of tax then intimation shall be sent to assessee for correct deposit of TDS alongwith interest.
2. Intimation shall be sent within a period of 1 year from the end of the financial year in which
statement was filed.
Consequences of not deduction of tax at source or deducted but not deposited with the Govt.
a. Interest @ 1% p.m. / 1.5% p.m.
b. Penalty : Max tax c. In PGBP these expenses shall
in arrears
not allowed as deduction
TDS certificate should be furnished quarterly within 15 days of deposit of tax. Tax deductor
shall provide Unique Transaction Number to payee. It is proof of deposit of TDS with the Govt.
www.taxguru.in
CS K.K. Agrawal
35
203A
Tax Deduction & Collection Account No. TDCAN should be applied in Form No 49B by
every assessee who is required to deduct tax at source. This TDCAN should be quoted in every
challan, return & in every correspondence with income tax department.
203AA Annual tax statement in Form No 26AS should be issued in E-Mail by NSDL to every assessee
whose tax has been deducted at source by any tax deductor.
206AA If assessee do not furnishes PAN to the tax deductor then tax deductor shall deduct tax at source
at following higher rates.
a.
Basic rate of TDS /
PAN should be quoted in all declaration and application.
TDS at slab rate
Wrong quotation of PAN shall also entail higher deduction of tax.
b.
20%
Gross income =
Grossing up of income
Amount (net of TDS) Mr. Taxcrazy receives interest on listed debentures of 9,000
-------------------------- (net of TDS). Find out the gross interest which is included in his
income. Ans : 10,000
100 rate of TDS
www.taxguru.in
taxbykk.com
36
17

You changed...
Revision Time :
10 minutes
Advance Tax
2nd revision

memorising -->
Section 207 to 211
Did you
memorise?
If No then you
must memorise
within 24 hours
1 revision
st
3rd revision
4th revision
Section 207. Liability to pay advance tax

What is advance tax
The tax which is required to be paid in AY but is paid in PY is called advance tax.
Is advance tax
Yes, advance tax is payable on all income whether it can be estimated or not. In case of
payable on all income. that income which cannot be estimated like LTCG, STCG STT paid, Gifts advance tax is
required to be paid in the same PY in which it arises.
Section 208. When does liability to pay advance tax arise.
Who is required to pay
Every person.
advance tax?
When a person is required If his estimated advance tax after deduction of TDS exceeds 10,000.
to pay advance tax?
Any exceptions ?
Yes. 2 exceptions
Exception 1
Exception 2. All conditions should be satisfied.
Assessee claiming income under 1. Person is resident individual aged atleast 60
section 44AD or 44AE (presumptive
years.
basis of taxation) is not required to 2. Such individual is not earning any business
pay advance tax.
income.
Section 209. Computation of advance tax

Estimate gross total income
Less: Estimated deduction u/s 80C to 80U
Estimated total income
Tax on the estimated total income
Add: Surcharge if applicable
Tax and surcharge
Add: Education cess
Tax liability
Less: Relief u/s 89
Tax
Less: Tax deducted at source and collected at source
Advance tax payable
10,00,000
(1,00,000)
9,00,000
2,00,000
20,000
2,20,000
6,600
2,26,600
26,600
2,00,000
1,90,000
10,000
Section 211. Due date of payment of advance tax

Corporate Assessee
15%
45%
75%
100%
By 15th June
By 15th September
By 15th December
By 15th March
Section 234C. Deferment in payment of advance tax

Due date
Advance Tax to be paid (a)
Advance tax paid (b)
By 15th June
15%
If advance tax paid is atleast
12% then interest is nil
By 15th September
45%
If advance tax paid is atleast
36% then interest is nil
By 15th December
75%
no relaxation
By 15th March
100%
no relaxation
www.taxguru.in
Non-Corporate Assessee
Nil
30%
60%
100%
Shortfall
(a) (b)
Interest
1% of shortfall x 3
(a) (b)
1% of shortfall x 3
(a) (b)
1% of shortfall x 3
(a) (b)
1% of shortfall x 1
37
CS K.K. Agrawal

Enjoy your own company
18
Revision Time :
10 minutes
Section 234A, B & C

& memorising -->
Interest payable by assessee
2nd revision
3rd revision
4th revision
Default period
Due date to filing date
234B
Advance tax < 90% of
assessed tax.
1-4 to assessment date
Tax due
Assessed tax TDS

Ad. Tax
Assessed tax TDS

Ad. Tax
Nature of default
234A
ROI not filed by DD
1st revision
www.taxguru.in
Did you
memorise?
If No then you
must memorise
within 24 hours
234C
Advance tax not paid in
time
Payment after 15th quarter
3331
Returned tax TDS
Ad. Tax
taxbykk.com
38
19

Authenticity is Magnetic
Return of Income
Section 139, 140, 140A
Revision Time :
20 minutes
& memorising -->
1st revision
2nd revision
3rd revision
4th revision
Did you
memorise?
If No then you
must memorise
S 139(1). Who should file the return of income

Individual / HUF / AOP / BOI / AJP
Company / Firm
If GTI exceeds basic exemption then they They should file ROI irrespective of income or loss. Irrespective whether
should file the ROI.
business has started or not. As soon as the company is incorporated or
partnership deed is signed they are required to file ROI.
Person [Explanation to Section 139(1)]
Last day of filing of ROI
1. Any person who is required to file transfer pricing audit report.
30th - 11 of AY1
2. A company.
30th - 9 of AY1
3. A person (other than a company) whose accounts are required to be audited under any
30th - 9 of AY1
LAW (Audit is compulsory u/s 44AB, Section 11, 12 or 13A etc).
4. A working partner of a firm whose a/cs are required to be audited under any LAW.
30th - 9 of AY1
5. In case of any other assessee. (Salary, HP, Capital Gain or Income from other sources)
31st - 7 of AY1
S 142(1). Compulsory filing of return of income.
1. Can AO issue notice to assessee for filing of ROI?
2. Is assessee bound to file ROI u/s 142(1)?
3. What is the time limit of filing of ROI?
4. When can notice u/s 142(1) be issued?
S 139(3). Loss return?
1. Is it compulsory to file loss
return?
2. What is the time limit of filing
loss return?
3. Consequences if loss return is
not filed in time?
4. What if loss return is filed in

time as specified in S 142(1)?
S 139(4). Belated Return
1. What is belated return?
2. What is the time limit of
filing belated return?
3. Consequences of filing of
belated return?
Yes
Yes, even if his TI is less than basic exemption.
As specified in the notice
At any time after due date or after AY1
Yes, if assessee wishes to carry forward the losses. For Company / Firm it is
compulsory to file ROI whether loss or profit.
Loss return should be filed on or before the due date of filing of return i.e. on
or before 30-9 or 31-7 then only loss can be carried forward and set off.
Following losses cannot be carried
Following loss can be carried
forward ?
forward & set off even if loss
(a) Business loss (b) Speculation loss (c) return is not filed.
Capital gain loss (d) Loss from activity (a) Loss from house property &
of owning & maintaining race horses.
(b) Unaborsbed depreciation
Loss cannot be carried forward since loss return is filed after due date.
The return which is not filed in time. i.e. the return which is filed after due date of
filing of return u/s 139(1) or filed after time specified in notice u/s 142(1).
It should be filed by AY2 or before the completion of best judgement assessment
order whichever date is earlier.
a.
The losses mentioned u/s 139(3) is not allowed to be carried forward.
b. Belated return cannot be revised.
c.
Liable for payment of interest u/s 234A.
d. Penalty can be levied u/s 271F.
S 139(5). Revised Return

1. Why the return should be
The return is revised if there is any mistake in the original return. Mistakes are
revised?
of 2 types. (a) Wrong statement. (b) Omission.
2. Which return can be revised? Only original return can be revised. The return which is filed in time as per
S 139(1) or u/s 142(1) is called original return.
3. What is the time limit of
It should be filed by AY2 or before the completion of assessment (Best
filing revised return?
judgement assessment or scrutiny assessment) whichever date is earlier.
www.taxguru.in
39
CS K.K. Agrawal
4. Consequences of filing of
revised return?
5. Other points?
A revised return substitutes the original return from the date original return is
filed.
a.
A belated return cannot be revised.
b.
A revised return can further be revised if filed in time allowed.
S 140. Signing of return.

Individual
a.
b.
c.
d.
in general.
If he is absent from India.
where he is mentally incapacitated.
for any other reason.
HUF
a.
b.
in general.
If he is absent from India.
Company
by the individual himself.

By any person who holds a valid power of attorney.
By his guardian.
By any person who holds a valid power of attorney.
by Karta
Any member of the family not being a minor
a.
in general.
Managing Director.
b.
c.
e.
f.
If MD is not able to sign or where there is no MD

A Non-resident company.
Company in process of being wound up.
Where the mgt of Co. is taken over by the Govt.
Any Director
A person who holds valid power of attorney.
Liquidator of company.
The principal officer.
Firm
a.
b.
in general.
where managing partner is not able to sign.
LLP
a.
b.
in general.
where designated partner is not able to sign.
Managing Partner.
Any Partner
Designated Partner.
Any Partner
SECTION 140A. SELF-ASSESSMENT TAX

Tax on TI (Returned Tax)
Less : Advance tax
Less : Tax Deducted at Source
Less : Relief u/s 89 (Salary relief)
Less : Relief u/s 90, 90A, 91 (DTAA)
Less : Tax credit u/s 115JAA (MAT credit)
Self Assessment Tax
Other Points
What is the time limit of payment of SAT?
Is proof required to be attached with the return?
What if tax paid is less than SAT?
xxx
(xxx)
(xxx)
(xxx)
(xxx)
(xxx)
xxx
Before furnishings the return of income
Yes. CIN. Challan Identification Number.
The amount so paid shall be first adjusted towards interest and
then balance towards tax.
SECTION 139A. PERMANENT ACCOUNT NUMBER (PAN)

What is PAN?
It is permanent account number allotted by assessing officer for the purpose of identification.
Its number contains 10 digit both numeral and alphabet.
Who should apply? Every person who is required to file return of income. Apply in Form No 49A.
No PAN for whom? Non Resident Charitable Trusts Person earning only agricultural Income
Compulsory
On all returns.
Motor Vehicle
Land & Building exceeds Jewellery exceeds
quotation of PAN? Bank account
5,00,000
5,00,000
Hotel bill exceeds
Shares
exceeds 50,000
25,000.
What if PAN not
quoted
Section 272B : Penalty 10,000
Higher deduction of tax at source.
E payment & E filing compulsory for

Company
Every other person if they are required to get their accounts audited u/s 44AB.
www.taxguru.in
40
CS K.K. Agrawal
20
Dont Settle
Whole Income Tax

Preview
Heads
Sections
Revision Time :
15 minutes
& memorising -->
1 revision
st
Did you
memorise?
If No then you
must memorise
2nd revision
3rd revision
4th revision
Salary
15 to 17
House Property
22 to 27
PGBP
28 to 44D
Capital Gain
45 to 55A
Other Sources
56 to 59
Nature of
Income
(Chargeability)
15
ER & EE
relationship
22
Annual value of
building
28
Profit on sale of
SIT
45
Profit on transfer
of capital asset
In which year
income is
recognised
to tax
(Taxable event)
Nature of
expenses
Due or receipt
whichever
matures earlier
Annual Value
Method of
accounting
followed by the
assessee (145)
In the year of
transfer
56
If income is not
charged under first
4 head
Method of
accounting followed
by the assessee (145)
Only specified
expenses are
allowed as
deduction which
are only 2
PT + EA
17 16
Only specified
expenses are
allowed as
deduction which
are only 3
MT + SD + Int
23 24 + 25AA
+ 25B
Expenditure
incurred for
the purpose
of business or
profession.
(many expenses)
28 (30 to 36
+ 37) subject to
section 40 to 43B
(restriction)
Normal Income
Normal Income
Normal Income
Computation
of Income.
Exempted
income
specified u/s
10 do not form
part of TI
Rates of Tax
Set off and

carry forward
of losses
Only specified
Expenditure incurred
expenses are
for the purpose of
allowed as
earning such income
deduction which
(many expenses)
are only 3
COA + COI + TE
FVC
xx 56 57 subject to 58
(restriction)
() COA
xx
() COI
xx
() TE
xx
CG
xx
LTCG
STCG
STT
STCG
Lottery
TV
games
etc
Other
income
Normal Income : Ind / HUF

slab rate
Company
Flat 30% / 40%
Normal
LTCG
20% Special Normal Casual
Income Income Income
Income
STCG STT
15%
Causal Income
30% flat
No losses arises
Can be set off
Can be set off
LT with LT
Can be set off with
with any head of with any head of ST with both ST any head of income.
income
income except
and LT
However lottery
salary (Spec Loss
losses cannot be set
only with SP)
off with any heads.
www.taxguru.in
taxbykk.com
41

Never stop learning
21
Revision Time :
35 minutes
Mixed Topics
Entertainment allowance
Gratuity covered
Gratuity others
Leave Salary
HRA
Accommodation
80CCD

memorising -->
Did you
memorise?
If No then you
must memorise
within 24 hours
1 revision
st
2nd revision
3rd revision
4th revision
Salary for different purpose

Basic Salary
Basic salary + 100% of DA
SAS. Average of last 10 months preceding the month of retiring
SAS Average of last 10 month preceding the date of retirement
SAS
Basic Salary+ DA () + Any commission + taxable allowances
SAS
Members of household
Family Members
Both the above words are used in Chapter Salary.
Relative
Relative word is used in 3 chapters. PGBP,
Other Sources & Clubbing of Income.
Section 2(41). Meaning of Relative

Box 1
Self, Spouse
& children
Box 2
Brother &
Sister
Lineal ascendent
Lineal descendent
Box 3
Father, mother, grandfather, grandmother
Son, Daughter, Grandson, Granddaughter
The above definition of relative is used in following 2 places

PGBP
Section 40A(2)
Payment made to relatives
Clubbing of income Section 64(1)(ii)
Remuneration to spouse from a concern in which such
individual has substantial interest.
Section 56(2). Meaning of relative with respect to that person who is receiving gift
Assessee
Other than above

persons are not
relative
A person receiving gifts from above person is not taxable.

Meaning of relative at different places
Income
Medical
from
facilities
Spouse, children (dependant or not dependant), Parents, brothers, sisters
Salaries
Leave Travel wholly and mainly dependent on such individual.
Concession.
Other
Members of
Self, spouse, children and their spouses, parents, servants
Perquisites.
Household
and dependants.
Rule 3
www.taxguru.in
42
CS K.K. Agrawal
PGBP
Other
Sources
Payment to
specified
persons. S
2(41)
Gifts,
S 56(2)
Clubbing Substantial
of Income interest.
Deduction 80C
u/s
80D
80C to
80U
80DD,
80DDB
80E
Charitable S 11
Trusts
Relative, partner, director, or person having a substantial interest or relative

of any such person. Relative means spouse, brother, sister or any lineal
ascendant or descendant of such individual.
(i)
Spouse of the individual,
(ii)
Brother or sister of the individual,
(iii) Brother or sister of the spouse of the individual,
(iv) Brother or sister of either of the parents of the individual,
(v)
Any lineal ascendant or descendant of the individual,
(vi) Any lineal ascendant or descendant of the spouse of individual.
(vii) Spouse of a person referred to in items (ii) to (vi)
S 2(41). Relative means spouse, brother, sister or any lineal ascendant or
descendant of such individual.
Ind : LIP on life of self, spouse and
HUF : any member of HUF
children
Ind : Self, Spouse &
Parents (dependant or not HUF : any member of
dependant children.
dependant)
HUF
Individual, Parents, brothers and sisters wholly
HUF : any member of
Spouse & and mainly dependent on such
HUF
children
individual
Self, Spouse, children of individual
Interested person. Relative is as defined in S 56(2).
Interest and Deposits

1.
Interest on NSC VIII
issue.
2.
3.
4.
5.
6.
10(15)
No
Deduction u/s 80C to 80U

TDS
Interest
Yes u/s 80C
No since tax free.
Deposit
Yes u/s 80C
Interest on saving bank
No
Interest
Yes u/s 80TTA Yes u/s 194A if
interest
Deposit
No
exceeds 10,000.
Interest on FD for 5
No
Interest
No
Yes u/s 194A if
years in Bank.
interest
Deposit
Yes u/s 80C
exceeds 10,000.
Interest on FD for 5
Yes
Interest
No
Yes u/s 194A if
years in post office /
interest
Deposit
Yes u/s 80C
under CTD scheme.
exceeds 10,000.
Interest on saving in
Yes (Single : upto Interest
Yes u/s 80TTA Yes u/s 194A if
post office
3,500) (Joint upto Deposit
interest
No
7,000)
exceeds 10,000.
Interest on Post Office
No
Interest
No
Yes u/s 194A if
Monthly Income
interest
Deposit
No
Scheme
exceeds 10,000.
Professional tax paid by ER on behalf of EE

Entertainment allowance
LIP payable by ER on behalf of EE
ERs contribution to New Pension Scheme
Professional tax is first added to GS and then deduction

is allowed u/s 16(iii)
Entertainment allowance is first added to GS and then
deduction is allowed u/s 16(ii)
LIP payable by ER is first added in Gross Salary on due
basis and then deduction is allowed u/s 80C on paid
basis.
ERs contribution first added to gross salary and then
deduction allowed u/s 80CCD.
www.taxguru.in
43
CS K.K. Agrawal
Exempted Income
Deduction of income
Income is not a part of total income. All exempted incomes are in section 10.
Income is taxable income it is first added and then deduction is allowed u/s 80C
to 80U.
Section 27
Section 64(1A)
Income from house property All other income of minor married daughter shall be clubbed
taxed in the hands of minor in the hands of either of the parents whose total income
married daughter itself.
excluding the income of the minor child is greater.
Minor
married
daughter
Donation in cash
Section 80G : Donation / 80GGA : Donation for SR upto 10,000
Allowed
excess of 10,000
not allowed
Section 80GGB / 80GGC : Political party donation
any amount not allowed as deduction
Following deductions are allowed on paid basis
Professional Tax
Municipal Tax
Certain payments like IDT, Interest to
banks, Retirement benefits to employees
S 16(iii)
S 23
S 43B
allowed is paid in relevant allowed is paid in relevant PY if
allowed if paid on or before due date of
PY either by ER or EE.
paid by owner.
furnishing of return.
S 2(32)
Substantial Interest
S 10(32)
Exemption to parent if income minor child is clubbed.
Depreciation rates
in Salary chapter
Computer or electronic items
50%
Children Education
allowance & Hostel
Allowance
Limit of upto 2 child
to claim exemption.
S 10(14)
Education
facility
in PGBP chapter
Computer of software
60%
Limit to number of child

Leave Travel Concession
No limit on
number of
child
Limit 2 number of child. First

child if twins then second child
shall be counted as third child.
S 17(2)
First child if single and second

child twin then twin shall be
counted as one.
S 10(5)
Clubbing of
income
Tuition Fees
No limit
on number
of child
for claim
exemption.
Limit of upto
2 child
S 10(32)
80C
Double deduction not available of the following

Stamp Duty
Depreciation
Once in S 80C and next in Capital gain
Once in PGBP and next in Capital Gain
Difference between
Gold Bonds issued under Gold Deposit Scheme 1999
Gold
On sale of gold bonds capital gain do not arise since
On sale of gold capital gain arises since treated
not treated as capital asset.
as capital asset.
Interest is available and exempted u/s 10(15)
No interest
Gold bonds are as good as gold. Purchase and sale at
the price of gold.
www.taxguru.in
About our publications

Direct
Tax
Income Tax.
This is Indias
No. 1 book on tax
Fast track quick

revision Income
tax
Wealth Tax.
30 only
40 only
370 only.
Indirect
Tax
Value
Added
Tax.
30 only
Central
Sales Tax.
Excise
Act.
30 only
40 only
Service
Tax and
CCR
www.taxguru.in
Customs
Act
With the blessings of

LORD
SHRI
KRISHNA
KK Sir
can
inspire,
hope,
ignite the
imagination &
instill a
love of tax
in any
student
own his
own style
& stories.
KK sir is able
to put
himself
in the
place
of those
who find
learning
hard
in tax.
www.taxguru.in
Tax by KK Classes for CA, CMA & CS

Your education in tax is best if you can give tax advise.
By CS K.K. Agrawal | Never Say Die

Batches
Start Date
Days
Timing
Duration
Attempt
Income
tax + IDT
5-6-2014
TTS
8.30 to 11
a.m.
3 -4
months
Nov 2014 /
Dec 2014
Income
tax + IDT
2-6-2014
MWF
8.30 to 11
a.m.
3 -4
months
Nov 2014 /
Dec 2014
Income
tax + IDT
To be
announced
TTS
11 to 2.30
p.m.
5 months
Nov 2014 /
Dec 2014
Income
tax + IDT
To be
announced
MWF
11 to 2.30
p.m.
5 months
Nov 2014 /
Dec 2014
IDT
To be
announced
MWF /
TTS
3 to 5
3 months
Dec 2014
Fees
CA
Inter
(IPC)
7,500
CMA
Inter
DT
6,500
CMA
Inter
IDT
4,000
50% off
for re
appearing
students
Office and Class room

D 223, Office No 55, Ground Floor, Laxmi Chambers, Metro Gate No 5, Delhi 92
Call : 9999 22 7381; 98186 71320
www.taxguru.in

Fast Track: Quick Revision

Uploaded by

Copyright:

Available Formats

Fast Track: Quick Revision

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Fast Track: Quick Revision

Uploaded by

Copyright:

Available Formats

Tax by KK classes for CA, CMA & CS

Your education in tax is best if you can give tax advise

With the blessings of LORD SHRI KRISHNA

Published by CS K.K. Agrawal

Copyright Kaushal Kumar Agrawal

Videos of Fast Track Quick Revision of Income tax

A humble letter for you

Fast Track Quick Revision - Income Tax

Receipt for which there do not

Expenditure incurred for acquisition of

Every revenue receipt is taxable,

Previous year precedes assessment year.

Fast Track Quick Revision - Income Tax

Your time of revising &

Section 6 : Determination of Residential Status

S 6(1) & 6(6). Determination of Residential Status of Individual.

Residential Status of other person

HUF / Firm / AOP / BOI

6(3). Residential Status of Company

Control & Management of the affairs of the business

Control & Management of the affairs of the business

Fast Track Quick Revision - Income Tax

Services rendered in India by any person.

Person of Indian Origin

Fast Track Quick Revision - Income Tax

Your time of revising &

Income from Salaries

Where there exists a relationship of employer and employee. Where an individual is

Allowances = Cash + Particular Purpose + Fixed

Allowances to High Court Salary to UNO

Amount as specified in Income Tax Rules.

Deduction u/s 16(ii) : Entertainment Allowance

Fast Track Quick Revision - Income Tax

Specified Employee. If any of the 3 condition is satisfied an

Non Specified Employee.

S 17(2). Perquisites. [Category A Perquisites : AFLO SUL GMHCC EA].

more than 10 Lakhs

Lease rent or 15% of AS whichever is lower is taxable

Purchase price of the movable asset

10% pa of the original cost of the asset is taxable.

Owned by Employer : 10% pa of the original cost of the asset is taxable.

Fast Track Quick Revision - Income Tax

Loan Facility from

Personal Purpose Amount paid / re imbursed is taxable

FMV on exercise date less recovery is taxable.

Approved Superannuation Fund

upto 5,000 is exempt from tax.

Meals provided during office

Personal Purpose Amount paid / re imbursed is taxable

ERs contribution in excess of 1,00,000 is taxable.

Employers Own Hospital

1,000 p.m. per child is exempt

Cost to the employer is taxable or Salary of servant is taxable.

Fast Track Quick Revision - Income Tax

Car used wholly for

600 p.m. taxable

1,800 p.m. exempt.

Category C Perquisites : FULLY EXEMPTED PERQUISITES

Staff group insurance.