This document outlines the different heads of income under which a person's taxable income is classified and assessed in India. The key heads of income are: salary, house property, profits from business/profession, capital gains, and other sources. It provides details on what constitutes income from each of these heads, such as the types of allowances and deductions included in salary income or the conditions for business/profession income to be taxed.
This is a presentation made by me to a batch of Indian tax officers at their training academy on 28th May 2012. It is on the head of income called "Income from Other Sources"
Meaning of agricultural Income, Examples, Non Agricultural Income , Is Agricultural Income taxable? Case study, Examples of Agricultural Income and Non-Agricultural Income
Every assessee earning more than the basic exemption are eligible to seek deduction from Gross Total Income by way of deductions allowed for investments or payments made, under Chapter VI-A of the Income Tax Act. Chapter VI-A helps an assessee to reduce the overall tax burden to the extent of investment and expenses made within the ambit of law and fulfilemt of prescribed conditions. In this Webinar, we shall be focusing on the provisions of Chapter VI-A which are essential for Individuals, HUF and Firms for the purpose of claiming deductions against their total income.
Key Takeaways:
- Provisions dealing with set-off and carry forward
- Inter-head and Inter-Source Set-off of Losses
- Carry Forward and Set-off of Losses in Special Cases
Lecture notes on scope of total income and residental status under income ta...Dr. Sanjay Sawant Dessai
Lecture notes prepared for the students of Income tax , based on Income tax Act of India 1961. topic covered are Residential status and scope of total income of assessee.
This is a presentation made by me to a batch of Indian tax officers at their training academy on 28th May 2012. It is on the head of income called "Income from Other Sources"
Meaning of agricultural Income, Examples, Non Agricultural Income , Is Agricultural Income taxable? Case study, Examples of Agricultural Income and Non-Agricultural Income
Every assessee earning more than the basic exemption are eligible to seek deduction from Gross Total Income by way of deductions allowed for investments or payments made, under Chapter VI-A of the Income Tax Act. Chapter VI-A helps an assessee to reduce the overall tax burden to the extent of investment and expenses made within the ambit of law and fulfilemt of prescribed conditions. In this Webinar, we shall be focusing on the provisions of Chapter VI-A which are essential for Individuals, HUF and Firms for the purpose of claiming deductions against their total income.
Key Takeaways:
- Provisions dealing with set-off and carry forward
- Inter-head and Inter-Source Set-off of Losses
- Carry Forward and Set-off of Losses in Special Cases
Lecture notes on scope of total income and residental status under income ta...Dr. Sanjay Sawant Dessai
Lecture notes prepared for the students of Income tax , based on Income tax Act of India 1961. topic covered are Residential status and scope of total income of assessee.
An individual can seek bail if he has any fear or anticipation of being arrested in a non-bailable offence. An anticipatory bail is meant to safeguard a person accused of false charges, in the evnet of he/ she being sought to be arrested by the police in the name of custodial interrogation.
The Easiest way to understand International taxation , Concept of Double taxation and its avoidance agreements (DTAA) and its types . Tax implication of activities of foreign enterprise in India: Mode of entry and taxation respectively.
A security deposit is not included in rental income when
received if you plan to return it to the tenant at the end of the
lease. If any amount is kept during the year because the tenant
did not live up to the terms of the lease, include that amount
as rental income. If an amount called a security deposit is to
be used as a final payment of rent,
A simple presentation that explains the complex subject of Capital Gains and its taxation in India. Not meant for tax professionals but only for the common man.
Tax Planning with Reference to Managerial Decisions_NC.pdfDayanand Huded
This chapter comprises of Financial Decisions: Capital Structure Decisions; Dividend Policy; Bonus Shares and Capital Gains; Bond Washing Transactions; Own or Lease of an Asset, Installment or Hire Purchase, Make or Buy Decisions, Buying an Asset with Own Fund or Borrowed Fund and Repair, Replace, Renewal or Renovation; Shutdown or Continue: Tax Planning in respect of Amalgamation or De-Merger of Companies, Conversion of a Firm into a Company; Conversion of Sole Proprietorship into Company, Conversion of Company into Limited Liability Partnership.
Cost of Capital and also expenditure incurred in raising of such capital. Expectation of shareholders by way of dividend, growth etc. Expansion need of the business i.e. the rate by which profits of the business shall be again ploughed back in the business.
If the return on investment > rate of interest , maximum debt funds may be used, since is shall increase the rate of return on equity . However, cost of raising debt fund should be kept in mind.
if rate of return on investment < rate of interest, minimum debt funds should be used.
Where assessee enjoys tax holidays under various provisions of Income-Tax in such case minimum debt fund should be used, since the profit arising from business is fully exempt from tax which increase the rate of return of equity capital. But the borrowed funds reduces the profits ( profits less interest) before tax and to the extent exemption is reduce.
bond washing transaction can be defined as a transaction where some securities are sold sometime before the due date of Interest and reacquired after the due date is over. In order to discourage such transactions section 94 was introduced.
Where the owner of any securities (in this sub- section and in subsection (2) referred to as" the owner") sells or transfers those securities, and buys back or reacquires the securities, then, if the result of the transaction is that any interest becoming payable in respect of the securities is receivable otherwise.
Bond washing is the practice of selling a bond just before it pays a coupon payment and then buying it back once the coupon has been paid. Bond washing previously could result in apparently tax-free capital gains because after the coupon has been paid, the bond will often sell for less. However, the practice has been banned in most major jurisdictions.
2. Introduction
A person receives income i.e. taxable income
from different sources. All these different
sources of income are classified & Assessed
under certain group or heads. These are know
as “ Heads of Income”.
3. Heads of Income
• Income From Salary
• Income From House Property
• Income From Profit or Gain from Business or
Profession
• Income From Capital Gain
• Income From Other Sources
4. What is Salary
• Remuneration which is received by an
individual for services rendered by him to
undertake a contract whether it is expressed
or implied
• There has to be “employer – employee”
relationship.
5. Income From Salary
Salaries U/ S 17 ( 1 ) include the following
1.Wages
2.Pension
3.Gratuity
4.Any Fees, Commission, Perquisite, Profit in Lieu of Salary
5.Any Advance Salary
6.Bonus
7.Annuity
8. Income From Provident Fund
9.Leave Encashment
10.Allowances
6. List of Allowances Exempted From Tax
• Conveyance Allowance
• House Rent Allowances
• Entertainment Allowance
• Any Allowance granted to an employee to
meet the hostel expenditure of his child
• Children Education Allowance
• Overtime Allowance
7. Income From House Property
It is defined as income which is earned by a
person through his house or land
The building can be house, office building, go
downs etc.
Points to be remembered
1.Assessee should be Owner of the Property
2.Should be not be used for Business or Profession
3.In case of dispute regarding title
Tax is based on Annual Value
8. Annual Value
Fair Rent – The rent which a similar property will fetch at the same or
nearby similar locality
Municipal Rent – The value fixed by municipal or local authority
Fair Rent or Municipal Rent whichever is higher taken into consideration
Standard Rent – Rent which a owner can claim maximum from his tenant
Actual Rent – Rent for which property has been let out.
Standard Rent or Actual Rent whichever is lesser is taken into
Consideration
9. Income From Profit/ Gain From
ConditionBs usiness/Profession
1.There must be a business/profession
2.Business/profession is being carried by
assessee
3.Business/ profession have been carried out by
assessee in assessment year for which income
tax is filling.
10. Income From Profit/ Gain From
Business/Profession
• Profit/Gain from any businesses/profession
• Profit on sale of import entitlement License
• Income derived by trade/profession
• Any interest, salary, bonus, commission or
remuneration received by partner of firm
11. • The deductions allowed are depreciation of
assets used for
• Business;
• Rent for premises;
• Insurance and repairs for machinery and
furniture; advertisements;
• Travelling and many more.
12. Income From Capital Gain
What is Capital Gain
- Income which is derived from the transfer of
capital asset held as investments are
chargeable to tax under the head “ Capital
Gains”
- Two Type of Capital Asset
1.Short Term Capital Asset
2.Long Term Capital Asset
13. Capital Gain tax liability when following
conditions gets satisfied
1.There should be a capital asset
2.There should be transfer
3.Transfer should be of previous year
4.Result of Transfer should be profit or gain
E.g. Goodwill of business
14. Exceptions
1.Stock of goods and raw materials used by
assessee for his business or profession
2.Movable Property ( wearing apparel,
furniture, automobile, phone etc.) held by the
assessee. Jewellery which is a movable asset
comes under the head of Capital Asset
15. Income From Other Sources
• Any income that does not fall under the four
heads above is taxed under the head “ Income
From Other Sources”.
• E.g. – Dividend, Winning of Lottery, Income
from Royalty, Income by way of interest on
Securities, Income From Letting out
machinery, plant or Furniture on Hire basis.
