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The gross annual value of the self-occupied property is ZERO or NIL. Accordingly, the standard deduction at 30% of the annual value shall also be ZERO or NIL. Therefore, the amount of interest paid by the person against home loan shall be the loss from house property which can be set off against income under any other head or carried forward to next assessment year. Particulars - Amount Gross Annual Value - Nil Less: Municipal taxes paid by the assessee - Nil Net Annual Value (NAV) - Nil Less: Deduction u/s 24 - Amount 1. Standard deduction at 30% of NAV - Nil 2. Interest on borrowed capital - (xxxx) Income from House Property (It’s generally a loss) - ( – )xxxx

If the person has owned more than one self-occupied property, only one of them will be treated as self-occupied & the others will be treated and taxed as deemed to be let-out properties. The taxpayer can claim GAV as ‘Nil’ only for the one house property that he would consider as SOP (any 1 house of his choice). Other properties will be treated as deemed to be let-out & income from the same will be calculated accordingly. In such cases, the house whose income is computed at a higher value would be taken as Self Occupied Property (SOP).

No. In such a case, one of the houses of which the income is higher as compared to the other, shall be treated as a self-occupied house, while the other would be treated as a deemed let out. For the latter, the annual value shall be taken as the higher of the municipal value and the amount of rent it is expected to yield.

Such a property will be treated as been let-out throughout the year and income will be computed accordingly. However, while computing the taxable income in case of such a property, actual rent will be considered only for the let-out period.

No. In case of the property which is considered as deemed let out, the annual value of the property is to be computed for the entire year and not for the part of the year. Therefore, the annual value of the property shall be Rs.120,000/-.

• The part in which you are staying shall be treated as a self-occupied property and the income shall be computed accordingly. • The part which is given on rent shall be treated as a let-out property and income shall be computed as income from let out property. • This can be applied to multiple units of a house property

Yes, as the source of the loan does not matter. However, the loan must be taken and utilized for purchase, construction, acquisition, renovation or repair of the house property. The person from whom loan is taken and to whom interest is paid must be in India and he must be liable for tax on such interest paid by you to him.

In case of a let-out property, there is no limit on the quantum of interest which can be claimed as deduction while computing income from house property.

In such cases, the best approach would be to bifurcate the rent amount into two categories —‘rent’ and ‘service charges’. The amount of rent received is to be charged as Income from House Property and the amount of service charges received is to be treated as ‘Income from other sources’.

Yes, Rental Income received by each co-owner can be taxed proportionately and taxed in the hands of both independently as per your share in the said property.

If you recover any rent that was not previously realized, then such unrealized rent shall be taxed in the year in which such income is realized by you (whether or not you are the owner of that property in that year) after deducting a sum equal to 30% of such unrealized rent. ​

Yes. You can claim deduction for entire amount of property tax paid. The deduction on account of property tax is on a payment basis and not on the basis of charging year of such property tax.

ITR filing refers to Income Tax Return filing, where individuals report their income and taxes paid. TaxBuddy assists in this process, ensuring accuracy and compliance.

The filing deadline varies, but typically it's before July 31st. TaxBuddy helps you determine the right time and file your ITR promptly.

The appropriate ITR form depends on your income sources. TaxBuddy guides you to select the correct form for accurate filing.

Choosing the right ITR form is crucial. TaxBuddy can help you determine the suitable form based on your income and financial activities.

Anyone with taxable income should file ITR. TaxBuddy ensures that individuals who are required to file do so correctly and on time.

Yes, if there's an error in your ITR, you can file a revised return. TaxBuddy guides you through the process to rectify any mistakes.

Failure to file ITR may result in penalties and legal consequences. TaxBuddy advises on the importance of timely and accurate filing.

Yes, you can file ITR for previous years if you missed the deadlines. TaxBuddy helps you catch up on overdue filings.

Filing ITR is mandatory if your income is taxable. TaxBuddy ensures that you understand your filing obligation and helps you comply.

Yes, if your income is above the exemption limit, filing ITR is compulsory. TaxBuddy simplifies the process for mandatory filers.

TaxBuddy streamlines the ITR filing process for small enterprises, ensuring accurate and hassle-free income tax return submissions.

Certainly, TaxBuddy provides expert guidance and support for ITR filing, catering to the specific needs of partnership firms to ensure compliance and efficiency.

TaxBuddy offers small enterprises a significant advantage with ITR filing, optimizing deductions, minimizing tax liabilities, and ensuring transparent financial reporting.

TaxBuddy's experts are skilled in tax planning and optimization, tailoring strategies to your firm's unique requirements and ensuring maximum tax benefits during ITR filing.

TaxBuddy provides highly cost-effective solutions, reducing compliance expenses and optimizing tax efficiency for small enterprises during the ITR filing process.

You can conveniently file your income tax returns online through TaxBuddy. Visit our website at https://www.taxbuddy.com/ to e-file your returns effortlessly. It's quick, simple, and user-friendly. To avoid paying late costs, you must submit your Income Tax Return (ITR) for the fiscal year 2022–23 (Assessment Year 2023–24) by the deadline of July 31, 2023.

When filing your taxes with TaxBuddy, it is recommended that you choose "Income from Business/Profession" as your source of income. Simplify the process by visiting our user-friendly website at https://www.taxbuddy.com/ to effortlessly e-file your tax returns.

Online ITR filing is known as electronic filing or e-filing. According to the income tax department's most recent notice, only online filing of income tax returns is permitted. Super senior citizens may use the offline paper option for filing ITRs 1 or 4, though.

Individualised approaches and credible income tax-saving techniques that guarantee the greatest tax savings. Quarterly reviews and specialised advice to guarantee you get the most recent and successful tax planning techniques. A comprehensive plan for tax planning for the entire family and assistance with tax authority representation. Get all the help you need with comprehensive tax preparation in one location, including help with advanced taxation, futures and options, cryptocurrency, capital gains, NRIs, domestic, and HNIs.

Yes, it does. The services include: Assistance from professionals when responding to Income Tax or GST notices Careful examination and professional guidance on creating a good response Constant availability of professional assistance during business hours Support in submitting amended returns for Section 139(9) or Section 143(1) notices

ITR filing refers to the process of submitting a prescribed form containing information about one's income from various sources and the corresponding taxes paid to the Income Tax Department for the relevant financial year.

No, it is not necessary to attach any documents with your income tax return. You are only obligated to submit documents if requested by the Income Tax Department.

Generally, the Income Tax Department may request documents dating back six years prior to the current financial year. Therefore, it is recommended to retain your documents for at least this period. However, in certain special cases, the Income Tax Department may require documents from periods older than six years. Henceforth, we recommend retaining your documents till the time you possibly can.

The classes will be live, and you will have access to recorded lectures for one week.

Yes, you will receive free access to study materials for a lifetime.

The price varies for each class, but the starting price is only Rs. 99.

No, there are no prerequisites to attend the masterclass.

Yes, You will receive a signed certificate upon completion of the 2 hour masterclass.

No, once you have paid the registration fee, you are confirming your presence with our team, therefore no refund will be initiated

Yes! You will have access to classes for a week in case you are unable to make it. You can learn post office hours too!

Corporate tax planning refers to the measures to reduce tax liabilities on registered companies. Most corporate houses rely on deductions such as health insurance of employees, office expenses, business transport, retirement planning, charitable contributions, and child care to reduce their tax liability.

With tax planning, individual and business taxpayers can reduce their tax liability by claiming deductions, exemptions, and benefits. In India, tax planning can help them lower the amount payable to the income tax department every financial year. All they have to do is to seek help from an expert to plan ahead.

Tax planning is a crucial financial planning tool for individuals and business owners. Besides facilitating savings on taxes, it ensures that taxpayers adhere to the legal requirements and obligations of the Income Tax Act, of 1961. In the long run, they can save money, mitigate their tax burden, and prevent legal hassles.

Business owners in India can save taxes by adopting some savvy strategies from the start of the financial year. These include: Claiming deductions for business travel, utility expenses, medical insurance premium Hiring family members as employees Always deducting tax at the source Avoiding cash transactions Deductions for depreciation A tax planner is the best person to seek advice in this context.

Saving tax on business income is not a complicated task, provided you do some tax planning from the start of the financial year. It includes keeping thorough records of business income and expenses, claiming genuine deductions, and ensuring authenticity at all times. Hiring a tax planner is also a wise move.

Like business owners, salaried professionals in India can claim several deductions to reduce their tax liability. These include: House Rent Allowance Leave Travel Allowance Employee contribution to Provident Fund Standard deduction Pension Exemption u/s 89(1) A tax planner can guide you regarding additional deductions to maximise them.

Whether you are a business owner, a salaried employee, or a self-employed professional in India, you can save your taxes with timely and proper tax planning. The best way to reduce your liability is by claiming legitimate deductions. Also, maintain proper accounts and records of income and expenses to stay on the right side of tax laws.

Deductions are the key to reducing income tax in India, regardless of job or business. However, claiming deductions can get complicated because you need to validate them with proper evidence. Also, a financial and tax planner can guide you in reducing your tax burden.

Saving maximum income tax is about maximising your deductions. You can seek guidance from a tax planning expert to do it. However, it shouldn’t be a last-minute decision because timely planning is the best way to handle the complications.

In India, you can rely on several tax-saving instruments to reduce your liability and maximise your savings. These include: Equity-linked savings scheme Public provident fund Senior Citizen Saving Scheme Tax Saver Fixed Deposit (FD) National Pension Scheme (NPS) Unit Linked Insurance Plans (ULIP) National Savings Certificates (NSC) Life Insurance

You can save tax on income by utilizing deductions and exemptions under the Income Tax Act of India. You can also invest in tax-saving instruments to reduce your burden. A tax planner is the best person to show the way.

Yes, a flexible benefit plan (FBP) can help employees reduce their tax burden. They have to declare FBP allowance and provide relevant receipts. Essentially, FBP components such as travel allowance and food allowance are non-taxable. Restructuring employees' CTC with these components can limit their tax rate without affecting the take-home salary

Reducing income tax for a salaried person in India is as simple as claiming deductions and exemptions such as employee contribution to the Provident Fund, House Rent Allowance, Leave Travel Allowance, pension, and standard deduction.

Besides claiming deductions and exemptions, a salaried employee in India can save maximum tax by investing in tax-saving instruments such as life insurance, PPF, NPS, ULIP, and FDs. A tax planner is the best person to seek advice regarding deductions and tax-saving instruments.

With the new tax regime coming into effect in FY24, taxpayers can save taxes by paying attention to the changes and opportunities taxes. Planning your investments and claiming all tax deductions are the basics of minimising your liability. You can also leverage Section 80C investing in schemes qualifying for deductions, such as ELSS, NPS, PPF, etc. The maximum limit for Section 80C is ₹1.5 lakh.

When you own a property, which may be a building, flat, house, bungalow, gala, factory building or a shop, it may or may not yield a rental income. Such income which you have received or could have received if the property was given on rent is subject to tax. This income is categorized under the head ‘Income from House Property’.

Three conditions are necessary to bring income under the head, ‘Income from House Property’:

‘House Property’ implies ‘a building or buildings with lands connected thereto’. It means that it should be a superstructure which is capable of occupation, and the building must be the most prominent part of the said property comprising of land and building. Where the property comprises a mere vacant land or site, the income from that will not be brought under the head ‘Income from house property’ but will be assessed as income from ‘other sources’.

A self-occupied property is the one which is used by the person for his own residential purpose. If the person owns more than one self-occupied property, then only one property will be treated as self-occupied and the other will be considered as the property which is deemed to be let out. Accordingly, income from house property shall be determined for both these properties.

Yes. As per the Income tax law, if there is a property, there will be income. This income may be NIL or negative or positive. But there shall be income computed. The only exception to this rule is that ‘the property is occupied by the owner for the purpose of his business.’ Once there is a house property, the income from the same has to be computed as per the applicable provisions. This may result in NIL income or loss or taxable positive income. Based on this principle, the taxation of house property is different for ‘Self Occupied Property’, ‘Vacant Property’ and ‘Let out Property’.

The income or receipt can be taxed as ‘income from house property’ only when you own the property. This property is not owned by you and you are not entitled to legally receive income from such property. You are the tenant in the said property. Hence, the income received by you from sub-letting or partly sub-letting this property cannot be taxed as Income from House Property, but has to be taxed under ‘Income from other sources.’

You need not be the absolute owner of the house property. It will suffice if you are the beneficial owner and are entitled to receive the income from such house property. This income is liable to be taxed in your hands as income from house property.

The income or receipt can be taxed as ‘income from house property’ only when you own the property and you are entitled to legally receive income from such property.

In such a case, you shall be the owner of the house property and hence the income shall be taxed in your hands. (Section 27(i) of the I T Act)

As per section 27(i) of the IT Act, your spouse shall be the owner of the house property and hence the income shall be taxed in her/his hands, since the property stands transferred in connection with an agreement to live apart.

As per section 27(i) of the IT Act, you shall be the owner of the house property and hence the income shall be taxed in your hands.

The rental income is received by a person against renting out of his property. The computation of income from house property is NOT solely dependent on this rental income. If you are not receiving rental income, it does not mean that there will be no income from House Property. The Income from house property is computed as per the relevant provisions of the Income tax Act after certain deductions from the rental income received by the person.

The income from house property is computed after making certain deductions to the annual value or annual lettable value of the property. The first and most important step is the computation of annual value (AV) or (ALV) of the said property. The steps for computation of net income from house property are:(img)

This is the term used in the Income tax Act for computation of income from house property. It is the amount which can be yielded from the property in a year as income, as rent, service charges, etc. This is the starting point for computation of ‘income from house property’. This base value is used to make relevant additions/subtractions and then to compute the ‘income from house property’. The annual value of the property is actually the gross annual value (GAV) stated in the above example.

Shop being a building, rental income received from a shop is charged under Income from House Property.

• This is the amount for which a particular property is expected to be given on rent in a particular year OR an amount of potential rent. This is also known as ‘fair value of rent’, ‘expected amount of rent’, etc. • It is computed as annual value or Gross Annual Value (GAV) in case of the property which is vacant throughout the year. • It is higher of the following: • Municipal value of the property–It

In such a case, the GAV of the property shall be the annual expected rent from the property. The annual expected rent of the property shall be computed in following manner, depending on whether or not the property is governed by The Rent Control Act: Does not fall under Rent Control Act Rent as per municipal valuation (A), Fair amount of rent (B), Expected Rent (C) = Higher of (A) or (B) Gross Annual Value = Expected Rent (C) Falls under Rent Control Act - Rent as per municipal valuation (A), Fair amount of rent (B) Expected Rent (C) = Higher of (A) or (B) Standard Rent (D) Gross Annual Value = Higher of (C) or (D) Thus, in case of a property not falling under Rent Control Act, the expected rent from a property shall be the Gross Annual Value of the property.

For small taxpayers generating business income or professional income, the Income Tax Law provides a scheme whereby you don’t need to keep and maintain books of account, if you declare business profits or professional profits above certain fixed percentage. This scheme is called as Presumptive Taxation Scheme (PTS).

The presumptive taxation scheme is prescribed in the following sections of Income-tax Act ​ 1. Section 44AD - Small business having a turnover of less than Rs.2 crores Eligible business covered - Small business having a turnover of less than Rs.2 crores ​ 2. Section 44AD - Taxpayers engaged in any profession Eligible business covered - Taxpayers engaged in any profession ​ 3. Section 44AE - Small transporters having 10 or less vehicles Eligible business covered - Small transporters having 10 or less vehicles

Resident Individual. Resident Hindu Undivided Family. Resident Partnership Firm (not Limited Liability Partnership Firm). A person who has “NOT” made any claim towards deductions under section 10A/10AA/10B/ 10BA or under sections 80HH to 80RRB in the relevant year.

The following businesses are not eligible for the presumptive taxation scheme: ​ A person who is carrying on any agency business A person who is earning an income of commission or brokerage Any business whose total turnover or gross receipts exceeds two crore rupees Business of plying, hiring, or leasing goods carriages referred to in sections 44AE

A person who is earning income in the nature of commission or brokerage cannot adopt the presumptive taxation scheme of section 44AD. Insurance agents earn income by way of commission. Hence, they cannot adopt the presumptive taxation scheme of section 44AD.

No. He has to adopt the presumptive taxation scheme as given in section 44ADA and not in section 44AD.

No, a person whose total turnover or gross receipts for the year exceed Rs. 2,00,00,000 cannot adopt the presumptive taxation scheme of section 44AD.

For the purpose of computing taxable business income in the above manner, then you have to maintain books of account of the business, and income will be computed by deducting expenses from receipts as follows: ​ 1. Particulars - Turnover or gross receipts from the business Amount - XXXXX ​ 2. Particulars - Less: Expenses incurred in relation to earning of the income Amount - XXXX ​ 2. Particulars - Taxable Business Income Amount - XXXXX ​ ​In case, you are claiming any deductions from the business income, the same needs to be deducted from the business income before arriving at taxable business income.

In the case of a person adopting the presumptive taxation scheme, the taxable business income shall be 8% or more of the turnover or gross receipts of the eligible business for the year. This rate shall be 6% for that portion of the turnover which is received through banking channels or other than cash.

No. The income computed at the given rates shall be the final taxable income on which you have to compute tax and no further deductions are allowed from this income.

No.

In this case, you are required to pay advance tax once, i.e. on or before 15th March of a financial year. However, any amount paid by way of advance tax on or before 31st day of March shall also be treated as advance tax paid during the financial year ending on that day.

If you fail to pay the advance tax by 15th March of the previous year, you will be liable to pay interest as per section 234C.

You can not opt for PTS if you are declaring profits at a rate lesser than the mandated rate. In such a case, you need to maintain the books of account and get them audited from a Chartered Accountant, and based on the report of such audit you have to declare income when filing returns.

Once you opt for PTS then you have to continue with it for the next five years if your turnover is less than 2 crore rupees. Even after having a turnover of less than 2 crores in any of the subsequent five years if you declare profits lesser than 8% (or 6%), then it is considered as withdrawal from PTS, and you are barred from availing PTS for the next five years from the assessment year in which you had withdrawn from PTS.

Any person resident in India, engaged in the following professions, and having a turnover of Rs.50 lacs or less are eligible to take advantage of PTS. ​ Legal Medical Engineering or architectural Accountancy Technical consultancy Interior decoration Any other profession as notified by CBDT

As a professional, if you adopt PTS, then your taxable income shall be 50% of your turnover or receipts. For example, if you have received receipts of, or your annual turnover is Rs.48 lacs, then you must declare taxable profits at 50% of such turnover i.e Rs.24 lacs.

You are not required to pay advance tax in all the four quarters of a financial year but you are required to pay advance tax only once i.e. on or before 15th March of a financial year. However, any amount paid by way of advance tax on or before the 31st day of March shall also be treated as advance tax paid during the financial year ending on that day.

Clause(a) of section 15 provides that any Salary due from an employer or a former employer to an assessee in the previous year whether paid or not, is chargeable to income-tax under the head ‘Salaries’. In other words, the Salary accrued or which becomes due need not be actually paid in order to make it chargeable income. What is relevant is whether the Salary is due to an employee from an employer. Income from ‘Salary’ is chargeable to tax on “due basis” or “receipt basis” whichever is earlier.Clause(a) of section 15 provides that any Salary due from an employer or a former employer to an assessee in the previous year whether paid or not, is chargeable to income-tax under the head ‘Salaries’. In other words, the Salary accrued or which becomes due need not be actually paid in order to make it chargeable income. What is relevant is whether the Salary is due to an employee from an employer. Income from ‘Salary’ is chargeable to tax on “due basis” or “receipt basis” whichever is earlier.

You cannot opt for PTS if you are declaring profits at a rate lesser than the mandated rate. In such case, you need to maintain the books of account and get them audited from a Chartered Accountant and based on the report of such audit, you have to declare income in the income tax return.

What is a presumptive taxation scheme (PTS) for transporters? The PTS is available for persons who are engaged in the business of transport (plying and hiring) through goods vehicles and own 10 or lesser number of vehicles. In such cases, the taxable income shall be computed as follows: In the case of a Heavy Goods Vehicle (the gross vehicle weight exceeds 12 tons), the taxable income shall be Rs. 1,000 per ton of gross vehicle weight for every month or part of a month during which the heavy goods vehicle is owned by the assessee in the previous year. In the case of vehicles other than heavy goods vehicles, the income shall be Rs. 7,500 for every month or part of the month during which the carriage of the goods is owned by the assessee in the previous yea

Everyone i.e. Individual, Firm, HUF, Company, etc. can take advantage of the presumptive taxation scheme of section 44AE and all businesses are also eligible for it.

As per the presumptive taxation scheme of section 44AE, the income of a taxpayer will be computed at the rate of Rs. 7,500 per goods vehicle per month and in such a case the taxpayer can claim any further deductions from the presumptive income declaration. ​ As per the PTS of section 44AE, no expenses shall be allowed or disallowed. The income computed at the presumptive rate will be the final taxable income. However, in the case of the taxpayer is a partnership firm opting for the presumptive taxation scheme, the deduction can be claimed on account of remuneration and interest paid to partners (computed as per the Income-tax Act) from the income computed at the presumptive rate. No separate deduction on account of depreciation is available. However, the written down value of any asset used in such business shall be calculated as if depreciation as per section 32 is claimed and has actually been allowed.

No

Yes. In case of PTS for transporters, advance tax needs to be paid in all quarters and not only in last quarter unlike the PTS for section 44AD and 44ADA.

Yes, this bond can be held in the name of a single holder as well as jointly. Keep in mind that even if you make separate applications, individually or jointly, the aggregate investment should not exceed Rs. 50 lakh, or both of you may lose the benefit under section 54EC. You will be able to avail a nomination facility on these bonds.

There is no tax deductible at source on the interest paid by these bonds. But the interest earned on these bonds is taxable. You will need to pay tax on the interest income as advance tax.

The bond comes with minimum risk and does not need daily monitoring. Moreover, you do not need to pay a commission to get the bond. The bond also comes with AAA/stable rating by Crisil Ltd and AAA(Ind)/(Affirmed) by Fitch.

The NHAI /REC bond can be fully redeemed at maturity after three years. You cannot transfer these bonds in another person’s name. Also, it is a non-negotiable financial instrument, hence one should not expect to get money by keeping the bond as a security against any loan or advance, since this is not permitted.

Currently, an interest rate (coupon rate) of 6%, payable annually, is being offered on this bond annually on 1st April and final interest is payable at the time of maturity.

You can invest a minimum of Rs. 10,000 and a maximum of Rs. 50 lakh. The face value is Rs. 10,000 per bond, so you can buy up to 500 bonds.

Yes, provided you invest the amount in three year bonds issued by REC/NHAI. Want to know more about REC/NHAI Bonds?

In that case, the income from long term capital gains shall be taxed in the Assessment Year in which such redemption is done

The benefits of exemption u/s 54EC can be clubbed with those under either section 54 or 54F but not both.

No. It is applicable only to benefits under sections 54 and 54F

No. After amendment in the Finance Act (No.2) 2014, it is not possible to invest more than Rs.50 lakhs for benefits under section 54EC of the Act. But you may consider investment u/s 54F or 54.

If bonds of assessee’s choice are not available throughout period of six months as provided under section 54EC, time to invest in bonds would get automatically extended till bonds are available in market; and assessee can purchase same and claim exemption under section 54EC accordingly.

Section 54 does not explicitly state that the purchase to be made or the construction to be put up by the taxpayer should be in the name of the taxpayer. What is material is the investment of the sale consideration in acquiring the residential premises or constructing a residential premises. Once the sale consideration is invested in the above manner, the taxpayer would be entitled to the benefit conferred on him under this provision.

Yes. The word ‘purchase’ in section 54 ordinarily means buying for a price or equivalent of price by payment in kind or adjustment towards an old debt or for other monetary consideration. There is no stress in the section on ‘cash and carry’.

Yes. Agreement to purchase coupled with substantial payments is enough for claim of exemption. The date of possession is more important than the date of sale deed or purchase deed. However, if possession is beyond your control, you can claim so before the Assessing Officer (AO).

Yes. The taxpayer himself may not be required to construct the house.

Yes. As per CBDT Circular 667 (dated 18.10.1993), the cost of the plot purchased for construction of a new house can be included for computation of benefits u/s 54 of the Act.

Yes. The key condition is utilization of sale proceeds for investment in a new residential house. If you could demonstrate that the delayed possession is beyond your control and you have paid substantial amounts to the builder, you are eligible for benefits u/s 54 of the Act.

No. Since you have demolished the said building yourself and what you sold is actually your rights in the land, you may not be eligible for benefits under section 54 of the Act.

GST-Calendar-Jan-2020-taxbuddy-comIn this case, you will NOT be eligible for exemption under section 54 of the Act.

In order to be eligible for the benefit under this section the NEW house must be constructed within a period of THREE years AFTER the sale of original asset.

In order to be eligible for the benefit under this section the NEW house must be purchased within a period of ONE year BEFORE or TWO years AFTER the sale of original asset.

The benefit under this section is applicable in case of profit from sale of a residential house with appurtenant land. This means the ‘house’ has the prominent weight-age. If the land exists so as to serve the purpose of residential house, then it is an appurtenant land, like verandah, garden, or compound which exists so as to serve the purpose of a residential structure. In case an insignificant residential quarter exists on a large open plot, the said structure does not qualify for the purpose of a residential house within the meaning of sec. 54 of the Act.

The firm can not claim the benefit u/s 54. However, if the property owned by a firm was ocupied by partners for residence and on dissolution of the firm, partners sell their share of the property, they may exercise the option of benefit under this section.

If you have a profit from sale of a residential house and you have not invested such profits before filing return of income or before due date of RoI, then such an amount of capital gains needs to be deposited in the Capital Gains Account Scheme before due date of RoI and whenever the assessee purchases a new residential house, this amount can be withdrawn with permission from the Assessing Officer.

Yes. You can claim exemption under all these sections together, but you have to exhaust exemption under section 54 first, since it doesn’t have a ceiling limit which is present in the other two.

No. The section specifically mentions that the new asset being a residential house must be acquired in India.

If other conditions as regards time limit etc. are fulfilled, exemption under section 54 is allowable where capital gains arising from sale of two residential houses are invested in a single residential house.

Yes. Where capital gain is assessed on notional basis under section 50C, whatever amount is invested in new residential house within prescribed period under section 54F would get benefit of deduction irrespective of fact that funds from other sources are also utilized for new residential house.

As per section 194A of the Act, the core banking solutions of the banks and societies have to be taken into account for considering whether the TDS has to be applied or not.

No. Section 194A has exempted specifically such payments from the TDS liability.

No. Section 194A has exempted specifically such payments from the TDS liability.

Income under the head Salaries includes Wages, Annuity, Pension, Gratuity, Fees, Commission, Perquisites, Profits in lieu of or in addition to Salary or Wages, Advance of Salary, Annual accretion to the balance of Recognized Provident Fund, Transferred balance in Recognized Provident Fund, Contribution by Central Government or any other employer to Employees Pension Account, etc.

An employee sometimes receives a bonus or commission or remuneration for something that he has done during the course of employment. This is included in the income from Salary as Profits in lieu of Salary.

As an employee, you tend to receive certain benefits from your employer like rent-free accommodation, motor car, interest-free loans, advances, etc. Such benefits received on account of the employer-employee relationships are ‘perquisites’ or ‘perks’.

The perquisites or perks received by an employee are valued in monetary terms as per the computation provided in Income Tax Act and Rules and such a value or amount is included in Income under the head ‘Salaries’. These are also included for the purpose of computation of TDS.

No. The tax amount on such non-monetary perquisite is exempt u/s 10(10CC) of the IT Act.

An allowance is a financial benefit allowed by the employer to an employee with a specific purpose attached to such amount of allowances. Some of such allowances are for incurring expenses in the discharge of duties by the employee.

Gratuity is given by the employers to their employees for the services rendered by them during the period of employment. It is usually paid at the time of retirement but it can be paid before also. An employee becomes eligible for gratuity only after the completion of five years of service with the employer. It is taxed as ‘Income from Salary’. However, the taxable amount of gratuity should be computed properly.

Since in addition to Salary payable, you also receive incentive bonus/commission based on the insurance business brought by you, the additional income so derived during the course of and pursuant to the terms and conditions of the employment can be brought to tax only under the head ‘Salaries’, and not under ‘Business Income’.

If the employee is allowed a leave travel allowance or concession by his employer towards travel for himself and his family (includes spouse, dependent parents, and siblings of the employee and his two children) in India, such an amount of allowance is exempt from tax. This is not allowed for travel outside India nor is it allowed beyond the actual expenses incurred by the employee on his travel. The exemption can be availed only in respect of two journeys performed in a block of four calendar years.

Salaries received by employees of the UNO or any person covered under the UN (Privileges and Immunities) Act, 1947 as well as pension received by them from the UN will be exempt from income tax.

An income can be taxed as income from Salary only when there is an employer-employee relationship. Your relation with the person paying income to you may be tested on the parameters: 1. Whether the payer is in complete control of your activity 2. Whether he controls how you carry it out, 3. Whether the payer has unquestioned right to control the manners and method of your activity and you have to obey him. If the answers to these questions are ‘YES’ then the income may be taxed as income from ‘Salary’, and if the answer to any of these or all of these is’ NO’ then the income may not be taxed as income from ‘Salary’.

A director of a company is not a servant but an agent inasmuch as the company cannot act in its own person but has only to act through directors who qua the company have a relationship of an agent with the company. In this case, their income is taxable as income from ‘Other sources’. However, if the director is working to carry out certain functions for a company and the company can prove it on facts then he may be treated as an employee of the company and his income may be taxed accordingly as income from ‘Salary’

Whether or not a managing director is a servant of the company apart from being a director can only be determined by the Articles of Association and the terms of his employment. If the company is itself carrying on the business in terms of its articles, and the managing director is employed to manage its affairs under the agreement, he could be dismissed or his employment could be terminated by the company if his work is not satisfactory, his income from the company deserves to be treated as income from ‘Salary’.

No. On these facts, there doesn’t exist an employer-employee relationship since you get paid for your services and time spent. The income may be liable to be taxed as business income.

No. It has to be treated as and taxed as income from Businesses and Professions.

The Salary of a Judge of a High Court and the Supreme Court is income and is taxable by the Act of Parliament in the same manner as the income of any other citizen. It is true that such judges have no employer but that, ipso facto, does not mean that they do not receive salaries. They are constitutional functionaries. Articles 125 and 221 of the Constitution deal with the salaries of such judges and expressly state what the judges received a salary. Hence, their income is treated as Income from ‘Salaries’.

Pay and allowances received by the Chief Ministers are assessable as Salary and not as income from other sources, in view of the provisions of article 164 of the Constitution.

The basic ingredient of employer-employee relationship is missing in the case of MLAs and MPs, as they are not employed by anybody, rather, they are elected by the public, forming their election constituencies, and it is consequent upon such election, that they acquire constitutional position, and discharge constitutional functions and obligations. They may be receiving remuneration after swearing in but that is not attracted by section 15 of the Income tax Act. Hence, remuneration received by MLAs/MPs/elected representatives is taxes as ‘Income from other sources’.

Since the basic ingredients of employer-employee relationships are missing in this scenario, the income from tips is not to be taxed as income from Salary but is to be taxed as income from other sources. But if such tips are paid by an Employer to an Employee, this income is to be taxed as Income from ‘Salary’.

Clause(a) of section 15 provides that any Salary due from an employer or a former employer to an assessee in the previous year whether paid or not, is chargeable to income-tax under the head ‘Salaries’. In other words, the Salary accrued or which becomes due need not be actually paid in order to make it chargeable income. What is relevant is whether the Salary is due to an employee from an employer. Income from ‘Salary’ is chargeable to tax on “due basis” or “receipt basis” whichever is earlier.Clause(a) of section 15 provides that any Salary due from an employer or a former employer to an assessee in the previous year whether paid or not, is chargeable to income-tax under the head ‘Salaries’. In other words, the Salary accrued or which becomes due need not be actually paid in order to make it chargeable income. What is relevant is whether the Salary is due to an employee from an employer. Income from ‘Salary’ is chargeable to tax on “due basis” or “receipt basis” whichever is earlier.

Compensation on account of VRS is taxable as profits in lieu of Salary as per section 17(3) of the Income Tax Act. But in case of VRS by employees of Government/Semi-Government/Local Authorities/PSUs etc, this compensation is exempt up to the amount of Rs. 500,000/-. However, no exemption under any other section for this amount is admissible to the taxpayer nor is he eligible to claim the benefits u/s 89(1) of the Act.

Salary paid by a foreign Government to its employees serving in India is taxable under the head “Salaries” u/s 15 of the 1961 Act. The words ‘an employer’ occurring in clause (a) of that section are wide enough to include a foreign Government. But if you are not a citizen of India then you enjoy exemption on such income.

Some employers allow the employees to accumulate leave in case the employee is not availing the admissible leave. This unavailed leave is eligible to be encashed in monetary terms by the employees from employer. This monetary encashment is called is Leave Salary or Leave Encashment Salary (Sec. 17, Income Tax Act)

Yes. As per section 17(1) (va) of the Income Tax Act, leave encashment is taxable as income from ‘Salary’

This receipt in the hands of the family is not in the nature of one from an employer to an employee. The deceased had no right or interest in this receipt. This payment is only by way of financial benefit to the family of the deceased Government servant, which would not have been due or paid had the Government servant been alive. In view thereof, the amount will not be liable to income-tax.

Salary accrues where the services are rendered even if it is paid outside India; Hence, the income received outside India against services rendered in India will be taxable in India. (Sec 15 & 9, Income Tax Act).

If a Citizen of India renders services outside India, and receives Salary from the Government of India, it would be taxable as Salary deemed to have accrued in India. (Sec. 15 & 9, Income Tax Act)

The definitions of various items specified in section 17 are exhaustive and comprehensive. They are also inclusive of the items which are not specified in any of the respective sections. Therefore, if the income received from the employer satisfies the criteria of receipt on account of ’employer-employee’ relationship, then the income qualifies as ‘Income from Salary’.

When the employer agrees to pay tax on the Salary paid to the employee without applying any cap on the amount of tax to be paid, it can be said to be a Tax Free Salary.

Yes. The amount of tax paid or payable by the employer must be included in the income from salaries.

Yes. It is a part of income from salaries.

In the event of receipt of a lumpsum amount of Salary or other such sums, the tax on the total income may be more than the tax on the normal income. To safeguard the taxpayer from this additional tax burden, benefit is provided in section 89(1) of the Act. It is available only in respect of income from Salary and income from other sources (family pension). It is not available when the taxpayer avails exemption from tax in respect of VRS compensation.

You have to calculate the amount of tax after availing benefits of deduction u/s 89 of the Act and submit it to your employer in Form No.10E. (Rule 21A, Income tax Rules, 1962).

Yes. It is his duty as per law to deduct tax from the income paid to you by him. In case you think that you may not have any tax liability, you may inform your employer about your claims (including loss for setting off) and demonstrate that there is no tax liability in your hand for that particular year.

As per Rule 26B, you may inform about your other incomes, your loss or TDS deducted somewhere else through a statement prepared with requisite proofs.

There is no fixed rate of deduction in case of Salary income unlike other incomes or payments. However, the TDS is deducted considering the likely tax amount on your income as per the rates in force for that particular assessment year.

Any person who is entitled to receive the amount (income) on which tax is deductible, must provide PAN to the deductor. If you have not provided your PAN then your employer may deduct tax from your income at higher of the rates in force or 20% of the income credited to your account.

The consequences of providing wrong PAN are identical to those of not providing the PAN.

You may inform your employer so as to enable him to determine the correct tax deductible from your income. In case you don’t provide these details to your employer, you may wish to pay advance tax on the income other than income from Salary.

Loss other than loss from house property is not eligible to be considered for set off against tax liability on the income from Salary. Hence the information would be irrelevant to the employer.

The deductor of income tax is required to inform the deductee about the amount paid to deductee and the amount of tax deducted and deposited on behalf of the employee by the deductor. This information is provided by the deductor to the deductee through a certificate in Form No. 16. Learn More about Form No. 16(Link)

The certificate in Form No. 16 is issued by the employer in case of income from Salary. In respect of other types of incomes, certificate in Form 16A is issued.

When a taxpayer sells an immovable property for a sale consideration more than Rs. 50 lakhs, the person purchasing is required to deduct tax at the rate of ONE percent of such sales consideration. After such deduction., the purchaser has to issue Form 16B to the seller indicating the details of such a transaction of immovable property.

When a taxpayer pays rent more than Rs. 50000 per month to any person, he is required to deduct tax at the rate of 5% on such rent paid. After such deduction, the deductor is required to issue a certificate of deduction in Form No. 16C to the deductee.

No. There cannot be a loss under the head of ‘income from salaries’.

No. It cannot be set off against income from salaries.

No. It cannot be set off against income from salaries.

No. It cannot be set off against income from salaries.

No. It cannot be set off against income from salaries.

Yes, it can be set off against income from salaries BUT only up to Rs. 2,00,000.

No. The income computed at the given rate shall be the final taxable income on which you have to compute tax and no further deductions are allowed from this income.