income Tax on various entity

Taxation of various entities
1. Individual
2. Hindu undivided family ( Huf)
3. Partnership Firm
4. Company
5. Limited liability Partnership ( LLP)
6. Association of person ( AOP)
7. Body of individual(BOI)
8. Local Authority
9. Artificial juridical Person ( AJP)
10. Co-operative societies.

Rates of taxes
• For finance Act 2016 ( AY 2017-18 )
– Every individual , HUF , AOP , BOI, AJP
– If Taxable Income Rate of tax
• Upto 2,50,000/- , Nil
• From 2,50,010/- to 5,00,000/- 10%
• From 5,00,010/- to 10,00,000/- 20%
• From 10,00,010/- and above 30%
* If a individual ( male & Female Both ) is resident of india who is aged 60
year or above but less then 80 year, during the previous year the basic
exemption limit is 300000/-
** If a individual ( male & Female Both ) is resident of india who is aged
80 year and above, during the previous year the basic exemption limit
is 500000/-
If the total income exceed 1 crore surcharge will be applicable @ 15 %
Education cess @ 2 % and SHEC @ 1% also chargeable

Rates of taxes
– Every Partnership Firm*
• Rate of Taxes 30%
– Every LLP*
• Rate of Taxes 30%
– Every Company
• Domestic ** 30% or 29%
• Foreign company*** 40%
• Domestic company(Start up) 25%
*if the total income exceed 1 crore surcharge will be applicable @ 12%
** if the total income exceed
1 crore to 10 crore then surcharge will be applicable @ 7%
10 crore or more then surcharge will be applicable @ 12%
*** if the total income exceed
**** Cess is applicable to all above

Rates of taxes
– Every Co-operative Society
• Up to 10000/- 10%
• From 10000/- to 20000/- 20%
• From 20000/- and above 30%
• If the total income exceed 1 crore surcharge will be
applicable @ 12 %

Steps of Computation of
income of individual– Calculate the income from different head after
the deduction mentioned in respective heads of
income.
– Clubbing of income u/s 60 to 64.
– Carry forward and set off losses.
– Deduction u/s 80 C to 80 U.
– Calculate the Tax Liability.
– Relief u/s 89 if Any.
– Deduct TDS/Advance Tax.
– Refund or self assessment tax.

Income taxable in hand of individual
1. Earned by himself with different Head of income
( 5 Head of income Respectively )
2. Earned as a partner of firm / LLP.
1. Profit from the firm/ LLP- Exempt
2. Remuneration - Taxable
3. Interest on Capital – Taxable
3. Earned as a member of AOP.- as per respective
rules.
4. Received as a member of HUF. – exempt.
5. Clubbing of income u/s 60 to 64.

Rate of income tax for individual
1. Income from winning of lotteries crosswords
horserace , gambling u/s 115BB @30%.
2. Short term capital gain on equity share or units ,
where STT paid @15%.
3. Long term capital gain u/s 112 @ 20%
4. Balance of other income
Rate of tax
• Upto 2,50,000/- , Nil
• From 2,50,000/- to 5,00,000/- 10%
• From 5,00,000/- to 10,00,000/- 20%
• From 10,00,000/- and above 30%

Income taxable in hand of HUF
 Formation of HUF is based on grounds of 2 Acts
 Hindu succession Act 1956
 Hindu marriage Act 1955
– Hindu law is applicable also on Jains , Sikhs,
Buddist
– Now Daughter is also a coparcener and can be a
karta of her fathers HUF w.e.f. 09.09.2005.
– Creation of HUF
• By way if inheritant property
• Partition of Bigger HUF
• By way of Gift

income of HUF
– Calculate the income from different head after
the deduction mentioned in respective heads of
income other than salary.
– Deduction u/s 80 C to 80 U.
– Calculate the Tax Liability.

Other benefits of HUF
– Capital Gain on Sale of Property u/s 54.
– Capital Gain on Transfer of Agriculture land 54 B.
– Capital Gain on Compulsory Acquisition 54D.
– Capital Gain on Long Term Capital Assets u/s 54 EC
– Capital Gain on investment made u/s 54 F
– Capital Gain on Transfer of Shifting u/s 54G

Rate of income tax for HUF
1. Income from winning of lotteries crosswords
horserace , gambling u/s 115BB @30%.
4. Balance of other income
– Rate of tax
• Up to 2,50,000/- , Nil
• From 2,50,000/- to 5,00,000/- 10%
• From 5,00,000/- to 10,00,000/- 20%
• From 10,00,000/- and above 30%

Assessment of Firm / LLP
• Act cover
– Indian Partnership Act 1932.
– Limited Liability Partnership Act 2008.

Calculation of Book Profits
• Income from Business and profession as per
section 28 to 44 D under Business Head .
• Add:- interest paid to partner excess of 12%
• Add:- Remuneration paid / payable to all
partner

Remuneration Payable
• As per section 40 (b)
– On first 300000/- of the book profit or in case of
loss ---------------- 150000/- or 90% of book profit
whichever is more.
– Balance of book profit ---------------- @ 60%.

income of Partnership / LLP
– Calculate the income from PGBP head
• Net profit as per profit and loss account u/s 28 to 44D
• Add- Remuneration Paid
• Add- Excess of interest paid to partner
• Less- Remuneration payable u/s 40(b)
– Calculation of other head of income
– Deduction under Chapter VI- A .
– Calculate the Tax Liability, if AMT ( Alternative
Minimum Tax applies then it will prevail )

Rate of income tax for Firm / LLP
3. Balance of other income @ 30%

Assessment of AOP / BOI
• AOP/ BOI includes
– Society registered U/s 1860
• Private Trust
– Specific
– Discretionary
• Charitable Trust(Registered u/s 12A or
Unregistered )
• Oral Trust
• Joint Venture
• Mutual Association
• Any other AOP/BOI

Rate of income tax AOP/BOI(with earn and
distributed the profit)
1. Where share of members are unknown or
indertermine @ 30% plus Cess
2. where the share of members are known or
determined
1. If one of members has total income ( excluding
income of AOP ) exceeding exemption limit then @
30% ( Maximum Marginal Rate )
2. If none of the members has total income exceeding
the exemption limit then @ normal individual slab
rate will be applicable.
3. If a member of the AOP is a Foreign company then @
30% ( Maximum Marginal Rate )

Taxation of AOP/AOP(TRUST) NPO
• Income to be recognised without any head of
Income.
• After the Application of Fund if any Surplus is
available then
• We can avail the benefit of Basic Exemption limit
Rs. 250000 /- (Trust and Society).
• Benefit of slab available
• But in case of company no Basic exemption is
available.
• ITR NO 7 to be filed with audit report in form no
10B ( if registered u/s 12AA)

Taxation of AOP/AOP(TRUST) NPO
Charged @ maximum marginal rate (@30%)
• Any direct or indirect benefits transfer to the
related person refer section 13(3).( excess of
Market Rate.)
• Any part of the income applied to related
person refer section 13(3). ( excess of Market
Rate.)
• Income received from the investment which
are not as per section 11(5).
• Anonymous donation as per section 115 BBC

Assessment of Co-operative Society
• Act cover
– Co-operative societies Act 1912.

income Co- operative society
– Calculate the income from Four head
– Deduction under Chapter VI- A ( 80 G to 80 P).
– Tax calulation

Deduction u/s 80 P
• 100% deduction is allowed of the profits
– Profit attributable to certain specified Activity
• Carrying of business of banking and credit facility to its
members.
• cottage industry
• Marketing of agriculture produce by its members
• Fishing and allied Activities by its members
• Society engaged in supply of milk ,oil seeds , vegetable fruits
by its member
• Income from investments with other co-operative society
• Income from letting out of go down or where house for
agriculture produce

Deduction u/s 80 P
• Where the co- operative society engaged in
other Activity mentioned above
– If consumer co-operative society then 100000/-
– If other society then it will be 50000/-

Rates of taxes co-operative society
– Every Co-op rative Society
• Up to 10000/- 10%
• From 10000/- to 20000/- 20%
• From 20000/- and above 30%
• If the total income exceed 1 crore surcharge will be
applicable @ 12 %

Assessment of Companies
– Calculate the income from all four head
– Deduction under Chapter VI- A .
– Calculate the Tax Liability, if MAT (Minimum
Alternative Tax applies then it will prevail )

Rates of taxes of companies
1. Income from winning of lotteries crosswords horserace ,
gambling u/s 115BB @30%.
2. Short term capital gain on equity share or units , where STT
paid @15%.
4. Tax of income by way of dividend declared or paid by foreign
company u/s 115 BBB @15%
5. Every Company
• Domestic ** 30%
• Foreign company*** 40%
** if the total income exceed
*** if the total income exceed
**** Cess is applicable to all above

Tax payable under companies
 Income Tax payable –Which ever is higher of
following amounts
• Tax on total income computed as per normal
provision of the act (Normal and special rate)
• 18.5% of book profit (Under MAT)

Calculation of MAT
• Profit as per profit and loss account
– Where amount shown is debited in the profit and
loss account to be added back
• Income tax paid or payable
• Amount transfer to any reserve
• Amount by way of provision of loss by subsidiary
company
• Amount of proposed dividend
• Amount of depreciation
• Amount of deferred tax provision

Calculation of MAT
• Profit as per profit and loss account
– Where amount shown is credited in the profit and loss
account to be Reduced
• Withdrawal of any reserve or provisions.
• Amount of income u/s 10
• Amount of depreciation ( excluding depreciation of
revaluation of fixed assets )
• Amount withdrawal from revaluation reserve.
• Amount of loss brought forward or unabsorbed depreciation
whichever is less as per books of accounts
• Amount of profit derived from tonnage taxation scheme 115
VO

Taxability of entity – income are
exempt u/s 10 (23) (c)
• Prime minister national relief fund.
• Any university or institutions wholly or substantially financed by
government.
• Any hospital or institutions substantially financed by government.
• Any university or institution solely for education purpose whom
annual receipt do not exceed 1 crore.
• Any hospital or institute who’s gross receipt do not exceed 1 crore.
• Any fund or institutions for charitable purpose approved by
prescribed authority of any states.
• Any university or education institute solely for education purpose
who’s annual receipt exceed 1 crore Approved with income tax
Authority.
• Any hospital or other institute who’s gross receipt exceed 1 crore
and Approved with income tax authority.

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