about indian tax

1. Income tax in India
From Wikipedia, the free encyclopedia
Income Tax in India
Central Revenue collectionsin 2007-08 (Source:Compiledfrom reportsofComptroller andAuditor General of Indiafor relevant years)
Personal incometax (direct) (17.43%)
Corporate tax (direct) (32.76%)
Other Taxes(direct) (2.83%)
Excise duty (indirect) (20.84%)
Customs duty (indirect) (17.46%)
Other taxes(indirect) (8.68%)
The Central Governmenthas been empowered byEntry 82 of the Union Listof Schedule VII of the Constitution of
India to levy tax on all income other than agricultural income (subjectto Section 10(1)).[1] The Income Tax Law
comprises The Income Tax Act 1961,Income Tax Rules 1962,Notifications and Circulars issued by Central Board of
Direct Taxes (CBDT), Annual Finance Acts and Judicial pronouncements bySupreme Courtand High Courts.
The governmentof India imposes an income tax on taxable income of all persons including individuals, Hindu
Undivided Families (HUFs),companies,firms,association ofpersons,bodyof individuals,local authority and any
other artificial judicial person.Levy of tax is separate on each of the persons.The levy is governed by the Indian

2. Income Tax Act, 1961.The Indian Income Tax Departmentis governed by CBDT and is part of the Departmentof
Revenue under the Ministry of Finance, Govt. of India. Income tax is a key source of funds that the governmentuses
to fund its activities and serve the public.
The Income Tax Departmentis the biggestrevenue mobilizer for the Government.The total tax revenues of the
Central Governmentincreased from ₹1392.26 billion in 1997-98 to ₹ 5889.09 billion in 2007-08.[2]
Contents
[hide]
 1 History
 2 Residential status, Scope of taxable income & Charge
o 2.1 Charge to income-tax
o 2.2 Residential status
o 2.3 Residential status of a person other than an individual
o 2.4 Scope of total income
 3 Heads of income
o 3.1 Income fromsalaries
o 3.2 Income fromhouse property
o 3.3 Profits and Gains of business or profession
o 3.4 Income fromcapital gains
o 3.5 Income fromother sources
 4 Agriculturalincome
o 4.1 Income partly agriculturaland partly business
o 4.2 Scheme of partial integration of non-agriculturalincome w ith agriculturalincome
 5 Permissible deductions fromGross Total Income
o 5.1 Section 80C deductions
o 5.2 Section 80CCC
o 5.3 Section 80CCD
o 5.4 Section 80D: Medical insurance premiums
o 5.5 Section 80DDB : Deduction in respect of medical treatment, etc
o 5.6 Section 80CCG : RGESS
o 5.7 Section 80E : Education loan interest
o 5.8 Section 80TTA : Interest on Savings Account
o 5.9 Section 80U : Disability

3. o 5.10 Section 24 : Interest on housing loans
 6 Due date of submission of return
 7 Advance tax
 8 Tax deducted at source (TDS)
 9 Corporate income tax
o 9.1 Surcharge 1
 10 Tax returns
o 10.1 Normal return
o 10.2 Belated return
o 10.3 Revised return
o 10.4 Defective return
o 10.5 Returns in response To notices
 11 Annualinformation return and statements
o 11.1 Annualinformation return
o 11.2 Statements By producers
o 11.3 Statements by non-resident having a liaison office in India
 12 Tax penalties
 13 See also
 14 References
 15 External links
History[edit source | editbeta]
Income tax was introduced in 1860,abolished in 1873 and reintroduced in1886 Income tax levels in India were very
high during 1950-1980,in 1970-71 there were 11 tax slabs with highesttax rate being 93.5% including surcharges.In
1973-74 highestrate was 97.75%.But to reduce tax evasion tax rates were reduced later on, by 1992-93 maximum
tax rates were reduced to 40%. [3][4]
Residential status, Scope of taxable income & Charge[edit source | editbeta]
Charge to income-tax[edit source | editbeta]
Whose income exceeds the maximum amount, which is not chargeable to the income tax, is an assessee,and shall
be chargeable to the income tax at the rate or rates prescribed under the finance actfor the relevant assessment
year, shall be determined on basis ofhis residential status.
Income tax is a tax payable,[5]
at the rate enacted by the Union Budget(Finance Act) for every AssessmentYear, on
the Total Income earned in the Previous Year by every Person.

4. The chargeabilityis based on nature of income,i.e., whether it is revenue or capital. The rates of taxation of income
are-:
Income Tax Rates/Slabs Rate (%) (applicable for assessmentyear 2014-15)[6]
Net income range (For
resident woman below 60
years on the last day of the
previous year)
Net income range
(For resident
senior citizen1
)
Net income range
(For super senior
citizen2
)
Net income range (For any
other person excluding companies and
co-operative societies)
Income
Tax
rates3
Up to ₹ 200,000 Up to ₹ 250,000 Up to ₹ 500,000 Up to ₹ 200,000 NIL%
₹ 200,001–500,000 ₹ 250,001–500,000 - ₹ 200,001–500,000 10%
₹ 500,001–1,000,000
₹ 500,001–
1,000,000
₹ 500,001–
1,000,000
₹ 500,001–1,000,000 20%
Above ₹ 1,000,000 Above ₹ 1,000,000 Above ₹ 1,000,000 Above ₹ 1,000,000 30%
^1 Senior citizen is one w ho is 60 years or more at any time during the previous year but not more than 80 years on the last day of
the previous year.
^2 Super senior citizen is one w ho is 80 years or more at any time during the previous year.
^3 These slab-rates aren't applicable for the incomes w hich are to be taxed at special rates under section 111A, 112, 115, 161, 164
and 167. For instance, long-term capital gains (except the one mentioned in section 10(38))for allassessees is taxable at 20%.
For individual assesseeswhose totalincome does not exceed ₹500,000 before giving any deduction under Chapter VI A are eligible
for a rebate of up to ₹2,000 under section 87A (applicable from assessment year 2014-15 onwards). A surcharge of 10% on income
tax payable is applicable for every non-corporate assessee, whose totalincome exceeds ₹10 million (applicable for assessment
year 2014-15).
Residential status[edit source | editbeta]
The residential status ofthe assessee is useful in determining the scope or chargeabilityof the income for the
assessee,i.e.,whether taxable or not. For an individual person,to be a resident,any one of the following basic
conditions mustbe satisfied:-
 Presence ofat least182 days in India during the previous year.
 Presence ofat least60 days in India during the previous year and 365 days
during 4 years immediatelypreceding the relevant previous year.

5. However, in case the individual isan Indian citizen who leavesIndiaduring the previousyear for the purpose of employment (or asa
member of a crew of an Indian ship) or in case the individual isa person of Indian originwho comeson a visit to India during the previous
year, then only the first of the above basic condition isapplicable. To determine whether the residentindividual is ordinarily
residentthe following both additional conditions are to be satisfied:-
 Residentin India in at least2 out of 10 years immediatelypreceding the
relevant previous year.
 Presence ofat least730 days in India during 7 years immediatelypreceding
the relevant previous year.
If the individual resident satisfiesonly one or none of the additional conditions, then he isnot ordinarily resident. (In case the person isnot an
individual or an HUF, then the residential statuscan only be either residentor non-resident)
Residential status of a person other than an individual[edit source | editbeta]
Type of person
Control & management of
affairs of the taxpayer is
wholly in India
Control & management of
affairs of the taxpayer is wholly
outside India
Control & management of affairs of
the taxpayer is partly in India partly
outside India
HUF1
Resident Non-resident Resident
Firm Resident Non-resident Resident
Association of
persons
Resident Non-resident Resident
Indian company2
Resident Resident Resident
Foreign company3
Resident Non-resident Non-resident
Any other person
except an individual
Resident Non-resident Resident
^1 After determining w hether an HUF is resident or non-resident, the additional conditions (as laid dow n for an individual) should be
checked for the karta to determine w hether the HUF is ordinary or not-ordinary resident.
^2 An Indian company is the one w hich satisfies the conditions as laid dow n under section 2(26) of the Act.
^3 Foreign company is the one w hich satisfies the conditions as laid dow n under section 2(23A) of the Act.

6. Scope of total income[edit source | editbeta]
Indian income1
is always taxable in India notwithstanding residential status ofthe taxpayer.
Foreign income1
is not taxable in the hands of a non-residentin India.For resident(in case offirm, association of
persons,companyand every other person) or resident& ordinarilyresident(in case ofan individual or an HUF),
foreign income is always taxable. For residentbutnot ordinarilyresidentforeign income is taxable only if it is
business income and business is controlled whollyor partly in India or it is a professional income and profession is
setup in India.
^1 Foreign income is the one w hich satisfies both the following conditions:-
 Income is not received (or not deemed to be received under section 7) in India, and
 Income doesn't accrue (or doesn't deemed to be accrued under section 9) in India.
If such an income satisfies one or none the above conditions then it is an Indian income.
Heads of income[edit source | editbeta]
The total income ofa person is segregated into five heads:-
 Income from salaries
 Income from house property
 Profits and gains ofbusiness or profession
 Capital gains and
 Income from other sources
Income from salaries[edit source | editbeta]
All income received as salaryunder employer-employee relationship is taxed under this head,
on due or receiptbasis,whichever arises earlier.Employers mustwithhold taxcompulsorily(subjectto Section 192),
if income exceeds minimum exemption limit,as Tax Deducted at Source (TDS), and provide their employees with
a Form 16 which shows the tax deductions and netpaid income.The Act contains exemptions including (the listisn't
exhaustive):-
Particulars Relevant section for computing exemption
Leave travel concession 10(5)
Death-cum-Retirement Gratuity 10(10)

7. Particulars Relevant section for computing exemption
Commuted value of Pension (not taxable for specified Government employees) 10(10A)
Leave encashment 10(10AA)
Retrenchment Compensation 10(10B)
Compensation received at time of Voluntary Retirement 10(10C)
Tax on perquisitepaid by employer 10(10CC)
Amount received from Superannuation Fund to legal heirs of employee 10(13)
House Rent Allowance 10(13A)
Some Special Allowances 10(14)
The Act contains listofperquisites which are always taxable in all cases and a listof perquisites which are exemptin
all cases (ListI). All other perquisites are to be calculated according to specified provision and rules for each.Only
two deductions are allowed under Section 16,viz. Professional Tax and EntertainmentAllowance (the latter only
available for specified governmentemployees).
[show]Computation of exemption for gratuity[Section 10(10)]
[show]Computation of exemption ofHouseRentAllowance(HRA) [Section 10(13A)]
[show]Computation of exemption for pension [Section 10(10A)]
[show]Computation of exemption for Leave encashment [Section 10(10AA)]
[show]Computation of exemption for Retrenchment compensation [Section 10(10B)]
[show]Computation of exemption for Voluntary Retirement Scheme[Section 10(10C)]
Income from house property[edit source | editbeta]

8. Income under this head is taxable if the assessee is the owner of a property consisting ofbuilding or land appurtenant
thereto and is not used by him for his business or professional purpose.An individual or an Hindu Undivided Family
(HUF) is eligible to claim any one property as Self-occupied ifit is used for own or family's residential purpose.In that
case,the Net Annual Value (as explained below) will be nil. Such a benefit can only be claimed for one house
property. However, the individual (or HUF) will still be entitled to claim Intereston borrowed capital as deduction
under section 24,subjectto some conditions.In the case of a selfoccupied house deduction on accountofinterest
on borrowed capital is subjectto a maximum limitof₹150,000 (if loan is taken on or after 1 April 1999 and
construction is completed within 3 years) and ₹30,000 (if the loan is taken before 1 April 1999). For let-out property,
all interestis deductible,with no upper limits.The balance is added to taxable income.
The computation ofincome from let-outproperty is as under:-
Gross annual value (GAV)1
xxxx
Less:MunicipalTaxes paid (xxx)
Net Annual value (NAV) xxxx
Less:Deductions under section 242
(xxx)
Income from House property xxxx
^1 The GAV is higher of AnnualLetting Value (ALV) and Actualrent received/receivable during the year. The ALV is higher of fair
rent and municipal value, but restricted to standard rent fixed by Rent Control Act.
^2 Only two deductions are allow ed under this head by virtue of section 24, viz.,
 30% of Net annual value as Standard deduction
 Interest on capital borrow ed forthe purpose of acquisition, construction, repairs, renewals
or reconstruction of property(subject to certain provisions).
Profits and Gains of business or profession[edit source | editbeta]
The income referred to in section 28, i.e., the incomes chargeable as "Income from Business or Profession"shall be
computed in accordance with the provisions contained in sections 30 to 43D.However, there are few more sections
under this Chapter,viz., Sections 44 to 44DA (except sections 44AA, 44AB & 44C), which contain the computation
completelywithin itself.Section 44C is a disallowance provision in the case non-residents.Section 44AA deals with
maintenance ofbooks and section 44AB deals with auditof accounts.
In summary,the sections relating to computation ofbusiness income can be grouped as under: -
Specific deductions
Sections 30 to 37 cover expenses which are expressly allowed as deduction while computing business
income.
Specific
disallowance
Sections 40, 40A and 43B cover inadmissible expenses.

9. Deemed Incomes Sections 33AB, 33ABA, 33AC, 35A, 35ABB, 41.
Special provisions Sections 42, 43C, 43D, 44, 44A, 44B, 44BB, 44BBA, 44BBB, 44DA, 44DB.
PresumptiveIncome Sections 44AD, 44AE.
The computation ofincome under the head "Profits and Gains of Business or Profession"depends on the particulars
and information available.[7]
If regular books ofaccounts are not maintained,then the computation would be as under: -
Income (including deemed income) chargeable as income under this head xxx
Less: Expenses deductible (net of disallowances) under this head (xx)
However, if regular books of accounts have been maintained and profitand loss accounthas been prepared,then the
computation would be as under: -
Net Profit as per profit and loss account xxx
Add : Inadmissible expenses debited to profit and loss account xx
Add: Deemed incomes not credited to profit and loss account xx
Less: Deductible expenses not debited to profit and loss account (xx)
Less: Incomes chargeable under other heads credited to Profit & Loss A/c (xx)
Income from capital gains[edit source | editbeta]
Transfer of capital assets results in capital gains.A Capital assetis defined under section 2(14) ofthe I.T. Act, 1961
as property of any kind held by an assessee such as real estate,equityshares,bonds,jewellery,paintings,artetc.
but does notinclude some items like anystock-in-trade for businesses and personal effects.Transfer has been
defined under section 2(47) to include sale,exchange,relinquishmentofasset extinguishment ofrights in an asset,
etc. Certain transactions are notregarded as 'Transfer'under section 47.
Computation ofCapital Gains:-
Full value of consideration1
xxx
Less:Cost of acquisition2
(xx)
Less:Cost of improvement2
(xx)

10. Less:Expenditure pertaining to transfer incurred by the transferor (xx)
^1 In case of transfer of land or building, if sale consideration is less than the stamp duty valuation, then such stamp duty value shall
be taken as full value of consideration by virtue of Section 50C. The transferor is entitled to challenge the stamp duty valuation
before the Assessing Officer.
^2 Cost of acquisition & cost of improvement shall be indexed in case the capital asset is long term.
For tax purposes,there are two types of capital assets:Long term and shortterm.Transfer of long term assets gives
rise to long term capital gains.The benefitof indexation is available only for long term capital assets.If the period of
holding is more than 36 months,the capital assetis long term,otherwise itis shortterm. However, in the below
mentioned cases,the capital assetheld for more than 12 months will be treated as long term:-
 Any share in any company
 Governmentsecurities
 Listed debentures
 Units of UTI or mutual fund,and
 Zero-coupon bond
Also, in certain cases,indexation benefitis not be available even though the capital assetis long term.Such cases
include depreciable asset(Section 50),Slump Sale (Section 50B), Bonds/debentures (other than capital indexed
bonds) and certain other express provisions in the Act. There are different scheme oftaxation of long term capital
gains.These are:
1. As per Section 10(38) of Income Tax Act, 1961 long term capital gains on
shares or securities or mutual funds on which Securities Transaction Tax
(STT) has been deducted and paid,no tax is payable. STT has been
applied on all stock markettransactions since October 2004 butdoes not
apply to off-market transactions and companybuybacks;therefore,the
higher capital gains taxes will apply to such transactions where STTis not
paid.
2. In case of other shares and securities,person has an option to either
index costs to inflation and pay 20% of indexed gains,or pay 10% of non
indexed gains.The costinflation index rates are released bythe I-T
departmenteach year.
3. In case of all other long term capital gains,indexation benefitis available
and tax rate is 20%.
All capital gains thatare not long term are shortterm capital gains,which are taxed as such:

11.  Under section 111A, for shares or mutual funds where STT is paid,tax rate is
10% from AssessmentYear (AY) 2005-06 as per Finance Act 2004. With effect
from AY 2009-10 the tax rate is 15%.
 In all other cases,it is part of gross total income and normal tax rate is
applicable.
For companies abroad,the tax liability is 20% of such gains suitablyindexed (since STT is not paid).
Besides exemptions under section 10(33),10(37) & 10(38) certain specific exemptions are available under section
54, 54B, 54D, 54EC,54F, 54G & 54GA.
Section 54
Secti
on
54B
Sectio
n 54D
Sectio
n
54EC
Section 54F Section 54G Section 54GA
Section
54GB
Who is
eligible
to
claim
exempt
ion
Individual/HUF
Individu
al
Any pers
on
Any pers
on
Individual/HUF Any person Any person
Individual/
HUF
Which
asset is
eligible
for
exempt
ion
A residential
house property
(long term)
Agricult
ural land
(if used
by
individu
al or his
parents
for
agricultu
ral
purpose
during at
least 2
years
immedia
tely
prior to
transfer)
Land/buil
ding
forming
part of an
industrial
undertaki
ng which
is
compulso
rily
acquired
by the
Governm
ent &
which is
used
during 2
years for
industrial
purposes
prior to
acquisitio
n
Any long
term
capital
asset
Any long term
capital asset
(other than
house property)
provided that
on the date of
transfer the
assessee does
not own more
than one
residential
house property
Land/building/plant/
machinery in order
to shift an industrial
undertaking from
urban area to rural
area
Land/building/plant/
machinery in order
to shift an industrial
undertaking from
urban area to
any Special
Economic Zone
Long-term
residential
property if
transfer
takes place
between if
transfer
takes place
during
April1,
2012 and
March 31,
2017
Which
asset
should
be
acquire
Residential
house property
Agricult
ural land
in rural
or urban
Land/buil
ding for
industrial
purpose
Bonds
of Nation
al
Highways
Authority
A residential
house property
Land/building/plant/
machinery in order
to shift undertaking
to rural area
Land/building/plant/
machinery in order
to shift undertaking
to any SEZ
Equity
shares in
eligible
company

12. Section 54
Secti
on
54B
Sectio
n 54D
Sectio
n
54EC
Section 54F Section 54G Section 54GA
Section
54GB
d to
claim
exempt
ion
area of
India or R
ural
Electrific
ation
Corporati
on
Limited;
Maximu
m
exemptio
n in one
financial
year is ₹
5 million
What is
the
time
limit
for
acquiri
ng the
new
asset
Purchase: 1-
year backward
or 2 years
forward;Constr
uction:3 years
forward
2 years
forward
3 years
forward
6 months
forward
Purchase: 1-
year backward
or 2 years
forward;Constr
uction:3 years
forward
1-year backward or
3 years forward
1-year backward or
3 years forward
Equity
shares in
an eligible
company
to be
acquired
on or
before due
date of
filing
return of
income as
under
section
139(1).
The
eligible
company
should
utilize this
amount for
the
purchase
of a new
asset
within one
year from
the date of
subscriptio
n in equity
shares
How
much is
exempt
Investment in
the new asset or
capital gain,
whichever is
Investm
ent in
the new
asset or
Investme
nt in the
new asset
or capital
Investme
nt in the
new asset
or capital
Investment in
the new
asset÷Net sale
consideration×
Investment in the
new asset or capital
gain, whichever is
lower (The new
Investment in the
new asset or capital
gain, whichever is
lower (The new
Investment
in the new
asset ×
capital

13. Section 54
Secti
on
54B
Sectio
n 54D
Sectio
n
54EC
Section 54F Section 54G Section 54GA
Section
54GB
lower (The new
asset should not
be transferred
within 3 years
of its
acquisition)
capital
gain,
whichev
er is
lower
(The
new
asset
should
not be
transferr
ed
within 3
years of
its
acquisiti
on)
gain,
whicheve
r is lower
(The new
asset
should
not be
transferre
d within 3
years of
its
acquisitio
n)
gain,
whicheve
r is lower
(The new
asset
should
not be
transferre
d within 3
years of
its
acquisitio
n); The
new asset
should
not be
converted
into
money or
any
loan/adva
nce
should
not be
taken on
the
security
of the
new asset
within 3
years
from the
date of its
acquisitio
n
Capital gain;
The assessee
should not
complete
construction of
another
residential
house property
within 3 years
from the date of
transfer of
original asset
nor should he
purchase within
2 years from
the date of
transfer of
original asset
another house
property
asset should not be
transferred within 3
years of its
acquisition)
asset should not be
transferred within 3
years of its
acquisition)
gain ÷ net
sale
considerati
on. (The
exemption
is revoked
if equity
shares are
sold/transf
erred
within 5
years from
acquisition
or the new
asset is
sold/transf
erred by
the
company
within 5
years from
acquisition
)
Income from other sources[edit source | editbeta]
This is a residual head,under this head income which does notmeetcriteria to go to other heads is taxed. There are
also some specific incomes which are to be always taxed under this head.
1. Income by way of Dividends.
2. Income from horse races/lotteries.
3. Employees'contribution towards staffwelfare scheme.
4. Intereston securities (debentures,Governmentsecurities and bonds).
5. Any amountreceived from keyman insurance policyas donation.
6. Gifts (subjectto certain conditions and exemptions).
7. Intereston compensation/enhanced compensation.

14. Agricultural income[edit source | editbeta]
Agricultura income is exemptfrom tax by virtue of section 10(1).Section 2(1A) defines agricultural income as :-
 Any rent or revenue derived from land,which is situated in India and is used for
agricultural purposes.
 Any income derived from such land by agricultural operations including
processing ofagricultural produce,raised or received as rent-in-kind so as to
render it fit for the marketor sale of such produce.
 Income attributable to a farm house (subjectto some conditions).
 Income derived from saplings or seedlings grown in a nursery.
Income partly agricultural and partly business[edit source | editbeta]
Income in respectof the below mentioned activities is initiallycomputed as ifit is business income and after
considering permissible deductions.Thereafter,40,35 or 25 percentof the income as the case maybe, is treated as
business income,and the rest is treated as agricultural income.
Incomea Business
income
Agricultural
income
Growing & manufacturing tea in India 40% 60%
Sale of latex or cenex or latex based crepes or brown crepes manufactured from field latex or
coalgum obtained from rubber plants grown by a seller in India
35% 65%
Sale of coffee grown & cured by seller in India 25% 75%
Sale of coffee grown, cured, roasted & grounded by seller in India 40% 60%
^a For apportionment of a composite business-cum-agriculturalincome, other than the above mentioned, the market value of any
agriculturalproduce, raised by the assessee or received by himas rent-in-kind and utilized as raw materialin his business, should
be deducted. No further deduction is permissible in respect of any expenditure incurred by the assessee as a cultivator or receiver
of rent-in-kind.
Scheme of partial integration of non-agricultural income with agricultural income[edit
source | editbeta]
Permissible deductions from Gross Total Income[edit source | editbeta]

15. This section
requires expansion.(November 2012)
Deductions allowed under Chapter VI-A i.e., sections 80C to 80U, cannotexceed gross total income ofan assessee
excluding shortterm capital gains under section 111Aand any long term capital gains.Some deductions under
sections 80C to 80DDB are listed below.
Section 80C deductions[edit source | editbeta]
Deduction under this section is available onlyto an individual or an HUF.
Section 80C of the Income Tax Act allows certain investments and expenditure to be deducted from total income up
to the maximum ofRs 100,000.[8]
1. Contribution to approved superannuation fund/public provident
fund/recognized providentfund/statutory providentfund. Provident fund
contribution should notexceed 1
/5 of salary& public providentfund.
2. Payment of life insurance premium.It is allowed on premium paid on self,
spouse and children even if they are not dependenton father or mother
(subjectto a maximum of20% of sum assured up to FY 2012-13,from FY
2013-14 20% has been reduced to 10%).
3. Payment in respectof non-commutable deferred annuity.
4. Unit linked Insurance policyof UTI/LIC Mutual fund Dhanraksha.
5. Subscriptions to National Savings Certificates VIII issues.
6. Deposits with National Housing Bank.
7. Principal partof loan taken for acquiring Residential House Property;
provided that the house should notbe transferred within 5 years Loan for
land costfor residential house is also qualified.
8. Subscriptions to schemes ofPSU's providing long term finance for
housing,or of housing boards constituted in India for infrastructural
developmentofcities/towns.
9. Notified annuity plan of LIC or of any other approved insurer.
10. Units of Mutual Fund or UTI.
11. Notified pension fund by UTI or approved mutual fund.
12. Tuition fees (not including donation or developmentfees) towards full-time
education including play-school activities,pre-nursery& nurseryclasses,

16. of any 2 children of an individual,paid to University, College or School in
India.
13. Investments in shares or debentures with a lock-in-period of3 years, of
approved public companyexclusively engaged in infrastructure facilityor
power sector.
14. Subscription to the bonds issued byNABARD as specified by Central
Government.
15. Any sum deposited as 5 years time depositunder PostOffice Term
Deposit.
16. Any sum deposited in Senior Citizen Savings Scheme.
17. Any sum deducted from salaryof Governmentemployee (subjectto
maximum 20% ofsalary) towards deferred annuity plan for benefit of self,
spouse or any children.
18. Term depositwith scheduled bank for a period of not less than 5 years as
per scheme notified byCentral Government.
19. Investing in units of notified mutual fund investing in approved public
companies engaged in infrastructure facilityor power sector.
Section 80CCC[edit source | editbeta]
Payments made to LIC or to any other approved insurer under an approved pension plan is admissible for deduction
under this section.Then pension plan policyshould be for individual himselfoutof his taxable income.The deduction
is leastof the amountpaid or ₹ 100,000
Section 80CCD[edit source | editbeta]
Contribution made bythe assessee and byemployer to New Pension Scheme is admissible for deduction under this
section.The assessee should be an individual who is employed on or after 1 January 2004. The deduction shall be
equal to the amountcontributed by the assessee and/or by the employer,not exceeding 10% of his salary
(basic+dearness allowance).Even a self-employed person can claim this deduction which will be restricted to 10% of
gross total income.
The total deduction available to an assessee under sections 80C,80CCC & 80CCD is restricted to ₹ 100,000 per
annum.However,employer's contribution to Notified Pension Scheme under section 80CCD is nota part of the limit
of ₹ 100,000.
Section 80D: Medical insurance premiums[edit source | editbeta]
Health insurance,popularlyknown as Mediclaim Policies,provides a deduction ofup to 35,000.00 (₹15,000.00 for
premium payments towards policies on self,spouse and children and ₹15,000.00 for premium paymenttowards non -

17. senior citizen dependentparents or ₹20,000.00 for premium paymenttowards senior citizen dependent).This
deduction is in addition to ₹100,000 savings under ITdeductions clause 80C.For consideration under a senior citizen
category, the incumbent's age should be 60 years during any part of the currentfiscal,e.g. for the fiscal year 2010 -
11, the incumbentshould alreadybe 60 as on 31 March 2011),This deduction is also applicable to the cheques paid
by proprietor firm.
Section 80DDB : Deduction in respect of medical treatment, etc[edit source | editbeta]
Deduction is allowed to residentindividual or HUFin respectof expenditure actually during the PY incurred for the
medical treatmentofspecified disease or ailmentas specified in the rules 11DD for himselfor a dependentrelative or
a member ofa HUF[9]
Section 80CCG : RGESS[edit source | editbeta]
Deduction of 50% is allowed on investments up to Rs:50,000 under the Rajiv Gandhi Equity Savings Scheme on
selectsecurities.[10]
Section 80E : Education loan interest[edit source | editbeta]
Interestpayment on education loan for education in India or abroad gets deduction under this section.Education loan
should be for self,spouse,child or the one whose legal guardian the assessee is.[11]
Section 80TTA : Interest on Savings Account[edit source | editbeta]
Up to Rs 10,000 earned as interestfrom savings accountin bank, postoffice or a co-operative society can be
claimed for deduction under this section.This rebate is applicable for individuals and HUFs .[12]
Section 80U : Disability[edit source | editbeta]
Disabled persons can geta flat deduction on Income Tax on producing their disabilitycertificate. If disabilityis severe
Rs 1 lakh can be claimed else Rs 50,000.[13]
Section 24 : Interest on housing loans[edit source | editbeta]
For selfoccupied properties,interestpaid on a housing loan up to Rs150,000 per year is exemptfrom tax. This
deduction is in addition to the deductions under sections 80C,80CCFand 80D.However, this is only applicable for a
residence constructed within three financial years after the loan is taken and also the loan if taken after 1 April 1999.
If the house is notoccupied due to employment,the house will be considered selfoccupied.
For let out properties,the entire interestpaid is deductible under section 24 ofthe Income Tax act. However, the rent
is to be shown as income from such properties.30% ofrent received and municipal taxes paid are available for
deduction of tax.
P. Chidambaram while announcing his Budget2013 speech on 28 Feb 2013 also announced thatfor the year 2013 -
14, an additional deduction of₹ 100,000 would be allowed to be deducted for the paymentof Interest on Home Loan

18. u/s 80ee. This deduction would be allowed provided thatthe total value of the loan is not more than ₹ 2.5 million and
the total value of the house is not more than ₹ 4 million and the loan should be a fresh loan taken during the financial
year 2013-14.This deduction would be over and the ₹ 150,000 deduction
The losses from all properties shall be allowed to be adjusted againstsalaryincome atthe source itself.Therefore,
refund claims ofT.D.S. deducted in excess,on this count, will no more be necessary.[14]
Due date of submission of return[edit source | editbeta]
The due date of submission ofreturn shall be ascertained according to section 139(1) of the Act as under:-
30 September of the Assessment
Year(AY)
-If the assessee is a company (not having any inter-nation transaction), or
-If the assessee is any person other than a company whosebooks of accounts are required to
be audited under any law, or
-If the assessee is a working partner in a firm whose books of accounts are required to be
audited under any law.
30 November of theAY
If the assessee is a company and it is required to furnish report under section 92E pertaining
to international transactions.
31 July of the AY In any other case.
If the Income of a Salaried Individual is less than ₹ 500,000 and he has earned income through salaryor Interestor
both, such Individuals are exempted from filing their Income Tax return provided that such paymenthas been
received after the deduction of TDS and this person has not earned interestmore than ₹ 10,000 from all source
combined.Such a person should nothave changed jobs in the financial year.[15]
CBDT has announced thatall individual/HUFtaxpayers with income more than ₹ 500,000 are required to file their
income tax returns online.However, digital signatures wontbe mandatoryfor such class oftaxpayers.[15]
Advance tax[edit source | editbeta]
Under this scheme,every assessee is required to pay tax in a particular financial year, preceding the assessmen t
year, on an estimated basis.However,if such estimated income is less than ₹ 10000,then no advance tax is
payable.[16]
The due dates of payment of advance tax are:-
In case of corporate assessee Otherwise
On or before 15 June of the previous year Up to 15% of advance tax payable -

19. On or before 15 September of theprevious year Up to 45% of advance tax payable Up to 30% of advance tax payable
On or before 15 December of theprevious year Up to 75% of advance tax payable Up to 60% of advance tax payable
On or before 15 March of theprevious year Up to 100% of advance tax payable Up to 100% of advance tax payable
Any defaultin paymentof advance tax attracts penalty under section 234B and any defermentof advance tax attracts
penalty under section 234C.[17]
Tax deducted at source (TDS)[edit source | editbeta]
The general rule is that the total income of an assessee for the previous year is taxable in the relevant assessment
year. However, income-taxis recovered from the assessee in the previous year itselfby way of TDS. The relevant
provisions therein are listed below.(To be used for reference only. The detailed provisions therein are not listed
below.1
)
Section Nature of payment
Threshold limit (up to which no
tax is deductible)
TDS to be deducted
192 Salary to any person Exemption limit
As specified for individual in Part III
of I Schedule
193 2
Interest on securities to any resident
Subject to detailed provisions of
given section
10%
194A 2 Interest (other than interest on securities) to
any resident
₹ 10000 (for Bank/cooperative
bank) & ₹ 5000 otherwise
10%
194B Winning from lotteries etc. to any person ₹ 10000 30%
194BB Winning from horse races to any person ₹ 5000 30%
194C 2
Payment to resident contractors
₹ 30000 (for single contract) & ₹
75000 (for aggregate
consideration in a financial year)
2% (for companies/firms) & 1%
otherwise

20. 194D Insurance commission to resident ₹ 20000 10%
194E
Payment to non-resident sportsmen or
sports association
Not applicable 10%
194EE
Payment of deposit under National Savings
Scheme to any person
₹ 2500 20%
194G
Commission on sale of lottery tickets to any
person
₹ 1000 10%
194H 2
Commission/brokerage to a resident ₹ 5000 10%
194-I 2
Rents paid to any resident ₹ 180000
2% (for plant,machinery,equipment)
& 10% (for land,building,furniture)
194IA
Payment for Purchase of Immovable
Property
₹ 5000000 1%
194J 2 Fees for professional/technical services;
Royalty
₹ 30000 10%
194LB
Interest paid by InfrastructureDevelopment
Fund under section 10(47) to non-resident
or foreign company
- 5%
195
Interest or other sums (not being salary)
paid to non-residents or foreign company
except under section 115O
-
As per double taxation avoidance
treaty
^1 At w hat time tax has to be deducted at source and some other specifications are subject to the above sections.
^2 In most cases, these payments shallnot to deducted by an individual or an HUF if books of accounts are not required to be
audited in the immediately preceding financialyear.
In mostcases,the tax deducted should be deposited within 7 days from the end of the month in which tax was
deducted.
Corporate income tax[edit source | editbeta]

21. Income-wise number of corporate assessee in India
For companies,income is taxed at a flat rate of 30% for Indian companies.Foreign companies payat the income tax
at the rate of 40%.[18]
An education cess of3% (on both the tax and the surcharge) are payable. [19]
From 2005-06,
electronic filing of companyreturns is mandatory.[20]
Surcharge 1
[edit source | editbeta]
Totalincome in the range of ₹10 million to ₹100 million Totalincome above ₹100 million
Domestic company 5% of income tax payable 10% of income tax payable
Foreign company 2% of income tax payable 5% of income tax payable
^1 Applicable from assessment year 2014-15 onwards.
Tax returns[edit source | editbeta]
There are five categories ofIncome Tax returns.
1. Normal return
2. Belated return
3. Revised return
4. Defective return
5. Returns in response to notices
Normal return[edit source | editbeta]
Returns filed within the return filing due date, that is 31 July or 30 September of concerned assessmentyear.[21]
Belated return[edit source | editbeta]
In case of failure to file the return on or before the due date, belated return can be filed before the expiry of one year
from the end of the relevant assessmentyear.

22. Revised return[edit source | editbeta]
In case of any omission or anywrong statementmentioned in the normal return can be revised at any time befo re the
expiry of one year from the end of the relevant assessmentyear.
Defective return[edit source | editbeta]
Assessing Officer considers thatthe return is defective, he may intimate the defect. One has to rectify the defect
within a period of fifteen days from the date of such intimation.If the assessee wants more time,he can file an
application to the A O and a further 15 days can be granted at the instance ofthe A O.
Returns in response To notices[edit source | editbeta]
Assessing officer in the process ofmaking assessment,mayserve a notice under various sections like 142(1),
148(1),153A(a) or 153C. Returns are required to be furnished within the date specified on the respective notices.
Annual information return and statements[edit source | editbeta]
Annual information return[edit source | editbeta]
Those who are responsible for registering,or,maintaining books ofaccountor other documents containing a record
of any specified financial transaction,[22]
shall furnish an annual information return in Form No.61A.
Statements By producers[edit source | editbeta]
Producers ofa cinematographic film during the financial year shall,prepare and deliver to the Assessing Officer a
statementin the Form No.52A,
 within 30 days from the end of such financial year or
 within 30 days from the date of the completion ofthe production ofthe film,
whichever is earlier.
Statements by non-resident having a liaison office in India[edit source | editbeta]
With effect from 01,June 2011, Non-Residenthaving a liaison office in India shall prepare and deliver a statementin
Form No. 49C to the Assessing Officer within sixty days from the end of such financial year.
Tax penalties[edit source | editbeta]
The major number ofpenalties initiated every year as a ritual by I-T Authorities is under section 271(1)(c)[23] which is
for either concealmentofincome or for furnishing inaccurate particulars ofincome.
"If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course ofany proceedings under
this Act, is satisfied thatany person-

23. (b) has failed to complywith a notice under sub-section (1) of section 142 or sub-section (2) ofsection 143 or fails to
complywith a direction issued under sub-section (2A) of section 142,or
(c) has concealed the particulars ofhis income or furnished inaccurate particulars ofsuch income,
he may directthat such person shall payby way of penalty,-
(ii) in the cases referred to in clause (b), in addition to any tax payable by him,a sum often thousand rupees for each
such failure;
(iii) in the cases referred to in clause (c), in addition to any tax payable by him,a sum which shall notbe less than,but
which shall notexceed three times,the amountof tax soughtto be evaded by reason of the concealmentof
particulars ofhis income or the furnishing ofinaccurate particulars ofs uch income.
See also[edit source | editbeta]
 Service tax in India
 Central Excise (India)
 Value Added Tax (India)
[24]
References[edit source | editbeta]
1. ^ Institute of Chartered Accountants of India (2011). Taxation. ISBN 978-81-8441-
290-1.
2. ^ "Grow th of Income Tax revenue in India". Retrieved 16 November 2012.
3. ^ 50-year trend of Indian personaltax rates - Business Today - Business New s
4. ^ Income Tax India
5. ^ "Tax Planning – How to save tax in FY 2013-14 (AY: 2014-15)". Retrieved 30
March 2013.
6. ^ "Latest Income tax slab India". Retrieved 28 February 2013.
7. ^ Business Income
8. ^ "Deduction under section 80C and tax planning". IndianTaxUpdates.in. Retrieved
16 March 2013.
9. ^ The institute of Cost accountants of India (Jan 2012). Applied direct taxation.
Directorate of Studies,The Institute of Cost accountants of India. p. 238.
10. ^ 80CCG 23rd November 2012, Government of India
11. ^ http://www.tax.fintotal.com/Sections/80E-Tax-Rebate/5913/68
12. ^ http://www.tax.fintotal.com/Sections/80TTA-Tax-Rebate/6212/68

24. 13. ^ http://www.tax.fintotal.com/Sections/80U-Tax-Rebate/5916/68
14. ^http://www.incometaxindia.gov.in/publications/1_Compute_Your_Salary_Income/2
_Income_from_house_property.asp
15. ^ a b
http://www.caclubindia.com/articles/e-filing-is-mandatory-income-is-more-than-
5-lacs-17646.asp
16. ^ "Due Dates and Calculation of Advance Tax". IndianTaxUpdates.com. Retrieved
23 March 2013.
17. ^ "Interest and Penalty on Non Payment of Advance Tax". IndianTaxUpdates.com.
Retrieved 25 March 2013.
18. ^ Income Tax Act, tax rates for foreign companies
19. ^ Finance Act 2010
20. ^ Surcharge has been revised from10% to 7.5% w .e.f AY 2010-11.Corporate
taxpayers must file electronically, point 4 of I T circular.
21. ^ "Return Filing Due Dates". Retrieved 21 July 2012.
22. ^ "AnnualInformation return".
23. ^ Section 271 of India IT Act
24. ^ Penalties and Limitations of late filing of I-T returns
External links[edit source | editbeta]
 Union budgetand Economic Survey
 DepartmentofPublic Expenditure and Reform
 Indian Income Tax Department
 Electronic Filing of Income Tax returns
Categories:
 Income tax in India
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