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9th Edition, CA Simplified, , DT – Simplified, [Amended as per Finance Act 2021], , CA FINAL, May 2022, PART I, Basic Concepts, , CA Dhaval Patanvadia, www.theinvictus.in

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DT-Simplified, , 1st Edition:, 2nd Edition:, 3rd Edition:, 4th Edition:, 5th Edition:, 6th Edition:, 7th Edition:, 8th Edition:, 9th Edition:, , February 2018, June 2018, January 2019, June 2019, January 2020, June 2020, February 2021, July 2021, January 2022, , Price: Your commitment towards sincere preparation :), , Published by: The Invictus Institute, Ahmedabad, , We welcome your valuable feedbacks & suggestions, Connect with us for regular updates…, www.theinvictus.in, , /ca_dhaval, , The Invictus - CA Simplified, , +91-87800 58699

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About “DT-Simplified”, 9th Edition (January 2022), I believe that students learn best when they read with enjoyment., With intent to developing the interest of students in reading and enable them to cover the entire, syllabus with multiple revision in very short span of time, I have brought out an abridged version, of Direct Tax Laws. I hope It will prove to be a significant preparation resource for the students, 1st Edition was introduced in February 2018 and It gives immense pleasure to introduce 9th, Edition of “DT – Simplified” to the students of Final Level. In order to make it more simplified and, smarter and benefit of student at large, I am introducing this as E-Book, so students can easily store, on digital devices and read the same at any time anywhere. It is not just summary book but Smart, Book., I will urge all students to take maximum benefit out of it. Multiple revisions will develop better, understanding of the concepts and provide stronger grip on the subject, for which “DT – Simplified”, will certainly serve as a means., I would like express my sincere gratitude to CA Prarthana Bhatt, Students and other academic and, technical members of the team for the constant support & motivation. It would never have been, possible for me to take this work to completion without their incredible support and, encouragement, Based on your feedbacks, this book has been divided in three parts, ▪, ▪, ▪, , Part I, Part II, Part III, , – Basic Chapters, - Assessment of Various entities, Assessment procedure, Appeals etc., - Non Resident & International Taxation, , Features of this E-Book, ▪ Covers the recent amendments [Written with RED colour], ▪ Section wise approach., ▪ Covers the Selected Case Studies., ▪ No need to carry physical book, Read anytime anywhere., , Enjoy Reading…, My best wishes to you all...!, CA Dhaval Patanvadia, , Thanks for your love and support

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Index, , Part I – BASIC CHAPTERS, CHAPTER, , PARTICULARS, , PAGE NO., , 1, , BASIC CONCEPTS, , 1.1, , 2, , INCOME FROM HOUSE PROPERTY, , 2.1, , 3, , PROFIT & GAINS FROM BUSINESS OR PROFESSION, , 3.1, , 4, , CAPITAL GAINS, , 4.1, , 5, , INCOME FROM OTHER SOURCES, , 5.1, , 6, , CLUBBING PROVISIONS, , 6.1, , 7, , AGGREGATION, SETOFF AND CARRY FORWARD OF LOSSES, , 7.1, , 8, , EXEMPT INCOME, , 8.1, , 9, , DEDUCTIONS FROM GROSS TOTAL INCOME, , 9.1, , 10, , DEDUCTION, COLLECTION AND LEVY OF TAX, , 10.1

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DT - Simplified, , CHAPTER – 1, BASIC CONCEPTS, Income Tax Rates for A.Y. 2022-23 [Finance Act 2021], , Assessee, , Total Income, , Rate, , ❖ Individual/HUF/AOP/BOI/AJP, −, , −, , Income Tax, ▪, , All Individual < 60 Years &, HUF/AOP/BOI/AJP, , BEL = 2,50,000, , NIL, , ▪, , Resident Individual, Age ≥ 60 Years but < 80 Years, , BEL = 3,00,000, , NIL, , ▪, , Resident Individual, Age ≥ 80 Years, , BEL = 5,00,000, , NIL, , Above BEL but upto 5,00,000, , 5%, , 5,00,001 to 10,00,000, , 20%, , > 10,00,000, , 30%, , if Total Income ≤ 5,00,000, No Rebate on LTCG taxable @10% u/s, 112A, , Lower of, 12,500 or Actual Tax, , Rebate to Resident Individual (Sec 87A), , Concessional Tax Rates [Section 115BAC], ▪, , Individuals & HUF, [Other than Income Chargeable at Special, Rates e.g. 111A, 112, 112A etc.], , Upto 2,50,000, , NIL, , ▪, , BEL for Senior Citizen and Very Senior, Citizen is also 2,50,000 i.e. Not entitled for, Higher BEL, , 2,50,001 to 5,00,000, , 5%, , 5,00,001 to 7,50,000, , 10%, , 7,50,001 to 10,00,000, , 15%, , 10,00,001 to 12,50,000, , 20%, , 12,50,001 to 15,00,000, , 25%, , Above 15,00,000, , 30%, , Assessee exercising option u/s 115BAC is not liable to AMT u/s 115JC, ▪, , ▪, , Deductions Exemptions not Available, 10(5) – Leave Travel, Concession, , 10(13A) – House Rent Allowance, , 10(32) – Clubbing of Minor Income, , 10AA – Tax Holidays in SEZ, , 16 – Deductions under Salary, , 24(b) – Interest on Loan of SOP, , 32(1)(ii) – Additional Depre., , 35 – Contribution for Scientific, Research, , 35AD – Investment Linked, Deductions, , 57 – Deduction in Respect of, Family Pension, , 80C to 80U – Deductions under Chapter VI-A, (Other than 80CCD(2) Employers Contribution and 80JJAA), , Losses not allowed to be Set Off, ✓, ✓, , ▪, , Carried forward losses attributable to any deductions above, Loss under the head IFHP with any other head of Income, , Time Limit for Exercise of Option, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 1.1

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DT - Simplified, ✓, ✓, , Individual / HUF having NO Business Income – Along with ITR, Option to choose in one year and change, in another year, Individual / HUF having Business Income – Along with ITR, NO option to change in subsequent AY, Option can be withdrawn only once. Where it was exercised by Assessee having business income for PY, other than the year in which it was exercised., Once withdrawn Assessee shall never be eligible to exercise the option again except assessee ceases to, have business income, , Where the person born on 1st April would be considered to have attained the particular age on 31st March i.e. day, preceding the anniversary of his birthday [circular 28/2016], e.g. if person born on 1st April 1962, he will be considered to have attained the age of 60 years (i.e. become senior, citizen in FY 2021-22) on 31st March 2022, ❖ Co-Operative Society, −, , −, , Income Tax, , Surcharge, , ≤ 10,000, , 10%, , 10,001 to 20,000, , 20%, , > 20,000, , 30%, , Total Income > 1 Crore, , 12% of Income Tax, , Concessional Tax Rates [Section 115BAD] [Similar to 115BAA in case of Companies], 25.168 % [22% Tax + 10% Surcharge + 4% HEC], ❖ Firm / LLP / Local Authority, −, , Income Tax, , Flat Rate, , 30%, , −, , Surcharge, , Total Income > 1 Crore, , 12% of Income Tax, , ❖ Specific Rates as per IT Act 1961, , (Refer respective Chapter for details), , − Unexplained Income u/s 68/69/A/B/C/D, , Any Assessee : 60% Income Tax + 25% surcharge on Income, Tax, , − Long Term Capital Gain, , 20% (Section 112), , − Long Term Capital Gain on transfer of, ▪ Equity Share in a company, (STT paid on acquisition & transfer, both), ▪ Unit of Equity Oriented Fund, (STT paid on transfer only), ▪ Unit of Business Trust, (STT paid on transfer only), , 10% (Section 112A), Above tax is applicable only when LTCG > ₹ 1,00,000, LTCG upto ₹ 1,00,000 is exempt (It will be included in Total, Income but ONLY TAX WILL NOT BE levied), , − STCG on Share/Securities subject to STT, , 15% (Section 111A), , − Casual Income i.e. Lottery income etc., , 30% (Section 115BB), , − Health & Education Cess, , @ 4% on Income Tax + Surcharge as the case may be, , − Rounding of Total Income (288A), , Rounded off to the nearest multiple of Ten Rupees, , − Rounding of Tax (288B), , Rounded off to the nearest multiple of Ten Rupees, , Marginal Relief:, − In case any assessee having total income exceeding 50 Lakh/1 Crore/10 Crores as the case may be,, − Total amount of Income Tax Including Surcharge should not exceed, − Income Tax Including Surcharge, if any, payable on total income upto 50 Lakh/1 Crore/10 Crores, by more than the amount of Income that exceeds 50 Lakh/1 Crore/10 Crores, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 1.2

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DT - Simplified, , Example of marginal relief, Sr., , Particulars, , A, , Total Income, , 50.00, , 51.00, , 52.00, , 100.00, , 101.00, , 1,000.00, , 1,010.00, , B, , Income Tax, , 13.13, , 13.43, , 13.73, , 30.00, , 30.30, , 300.00, , 303.00, , C, , Surcharge, , NA, , 1.34, , 1.37, , NA, , 2.12, , 21.00, , 36.36, , D, , Income Tax + Surcharge (B+C), , 13.13, , 14.77, , 15.10, , 30.00, , 32.42, , 321.00, , 339.36, , E, , Additional Tax over Tax on, Income of 50/100/1000 Lakh, , -, , 1.64, , 1.97, , -, , 2.42, , -, , 18.36, , F, , Additional Income over, 50/100/1000 Lakh, , -, , 1.00, , 2.00, , -, , 1.00, , -, , 10.00, , G, , Marginal Relief where, Additional Tax > Additional, Income (E-F), , NA, , 0.64, , NA, , NA, , 1.42, , NA, , 8.36, , Tax Payable = Income Tax +, Surcharge – Marginal Relief, (B + C – G), , 13.13, , 14.13, , 15.10, , 30.00, , 31.00, , 321.00, , 331.00, , H, , (₹ in Lakh), , Individual/HUF/AOP/BOI/AJP, , Companies, , I, , Add : HEC @ 4% (H  4%), , 0.53, , 0.57, , 0.60, , 1.20, , 1.24, , 12.84, , 13.24, , J, , Total Tax Payable (H + I), , 13.66, , 14.70, , 15.70, , 31.20, , 32.24, , 333.84, , 344.24, , ❖ Tax Rates in case of Companies, −, , −, , Income Tax, ▪, , Domestic Companies, , If Turnover ≤ 400 Crore in PY 2019-20, , 25%, , ▪, , Domestic Companies, , Any Other Case, , 30%, , ▪, , Foreign Companies, , All the Cases, , 40%, , Total Income > 1 Cr. but ≤ 10 Cr., , 7% of Income Tax, , Total Income > 10, , 12% of Income Tax, , Total Income > 1 Cr. but ≤ 10 Cr., , 2% of Income Tax, , Total Income > 10, , 5% of Income Tax, , Surcharge, ▪, ▪, , Domestic Companies, Foreign Companies, , Special Rates for Tax for, certain Co., Particulars, Applicability, , Taxation Laws (Amendment) Act 2019, , Rate of Tax, , Section 115BAB (New Co.), Domestic MANUFACTURING Co. or, Electricity Generating Co., Setup & Regd. on or AFTER 01-102019, &, Commence Manufacturing on or, BEFORE 31-03-2023, 15%, , Surcharge, , 10%, , 10%, , 17.16%, , 25.168%, , Effective Rate (including, Surcharge & Cess), , CA Dhaval Patanvadia, , www.theinvictus.in, , Section 115BAA (New & Old Co), , Any Domestic Co., Applicable to Existing or New both, Need not to be a manufacturing Co., , 22%, , +91-87800 58699, , 1.3

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DT - Simplified, MAT Provisions, , Not Applicable, , Not Applicable, , New Co. so there would be no b/f MAT, Credit, , B/f MAT credit cannot be set-off, against income u/s 115BAA, , Rate of Tax on Income Covered, under Chapter XII (Specific, Rates), e.g. Capital Gain u/s 112A,, 111A, 112 etc., , Tax Rate as per Chapter XII will be, apply + Surcharge @10% + HEC @ 4%, , Tax Rate as per Chapter XII will be, apply + Surcharge @10% + HEC @ 4%, , Rate of of and STCG derived on, Capital Asset on which no, Depreciation allowed under, Act, , Tax Rate will be 25.168% [22% Tax +, 10% Surcharge + 4% HEC], No restriction on allowance of any, expenditure or deductions., , Tax Rate will be 25.168% [22% Tax +, 10% Surcharge + 4% HEC], No restriction on allowance of any, expenditure or deductions., , Rate of Tax on Other Income in, respect of which no specific, rate is provided, e.g. IFHP, IFOS, , Tax Rate will be 25.168% [22% Tax +, 10% Surcharge + 4% HEC], No Deductions in respect of any, expenditure will be allowed., , Tax Rate will be 25.168% [22% Tax +, 10% Surcharge + 4% HEC], No restriction on allowance of any, expenditure or deductions., , Adjustments for transactions, with persons having close, connection, , Tax Rate will be 34.32% [30% Tax +, 10% Surcharge + 4% HEC], , No such requirement to make any, adjustment, , MAT Credit, , If the Assessing Officer opines that the, course of business between the, company and any other person having, close connection therewith is so, arranged that the business transacted, between them produces more than the, ordinary profits to the company, he is, empowered to take into account the, amount of profits as may be, reasonably deemed to have been, derived therefrom, while computing, profits and gains of such company., In case the arrangement referred to, above involves a specified domestic, transaction referred to in section, 92BA, then, the amount of profits from, such transaction would be determined, by considering the arm’s length price, (ALP)., Note – The scope of “specified, domestic transaction” referred to in, section 92BA has been expanded to, include within its ambit, any business, transacted between such persons with, close connection, where one such, person is a company claiming benefit, under section 115BAB, Exercise of option by the, company within the prescribed, time, , CA Dhaval Patanvadia, , On or before due date of furnishing, FIRST of the returns of Income, , On or before due date of furnishing of, the return of Income for any AY., , If company fails to opt in within time, limit, It cannot be exercised in, subsequent AYs, , Once, Opted,, subsequent AYs., , www.theinvictus.in, , Applicable, , +91-87800 58699, , 1.4, , for

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DT - Simplified, , However Company can opt for Section, 115BAA, Once, Opted,, subsequent AYs., , Applicable, , It can exercise this option from ANY, Year, , for, , It’s a NEW co. so need to exercise, option in FIRST Year., In Case of Amalgamation, The option, exercised u/s 115BAB shall remain, valid in case of Amalgamated Co. if all, the conditions are satisfied by Co., Common Conditions, , Deductions under following sections shall not be allowable, 10AA, , Exemption to SEZ Unit, , 32(1)(iia), , Additional Depreciation 20% or 35%, , 32AD, , Deduction @ 15% from Actual cost of Asset, , 33AB, , Deduction – Tea Coffee Rubber, , 33ABA, , 35AD, , Deduction – Extraction of Petroleum or Natural Gas, Weighted Deductions for Contribution to Scientific Research, Institutes, Specified Businesses, , 35CCC, , Notified Agricultural Extension Business, , 35, , 35CCD, Notified Skill Development Project, 80IA to 80, Deductions under Chapter VI-A under Heading – C, RRB, Adjustment of Carried forward Losses, In case of company option for Section 115BAA income shall be calculated, without set-off of any loss carried forward from any earlier assessment year, if, such loss is attributable to any of the deductions listed above, Adjustment of Balance ADDITIONAL DEPRECIATION, In case of asset acquired and put to use for the period less than 180 days in PY, 2018-19 and effect of Balance ADDITIONAL DEPRECIATION to be allowed in, PY 2019-20 will be made in WDV as on 01-04-2019 if option for 115BAA, exercised for PY 2019-20 relevant to AY 2020-21, ❖ Surcharge in case of Individual / HUF / AOP / BOI / AJP, Nature of Income, , 50 L to 1 Cr., , 1 Cr. to 2 Cr., , 2 Cr. to 5 Cr., , 5 Cr. to 10 Cr., , STCG (111A), , 10%, , 15%, , 15%, , 15%, , LTCG (112A), , 10%, , 15%, , 15%, , 15%, , Any Other Income, , 10%, , 15%, , 25%, , 37%, , The Finance (No. 2) Act, 2019 has been amended to withdraw the enhanced surcharge, i.e., 25% or 37%, as the case, may be, from income chargeable to tax under section 111A, 112A and 115AD., Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%., However, where other income of a person does not exceed ₹ 2 crores but after including the incomes as referred to, in section 111A, 112A and 115AD, the total income exceeds Rs. 2 crores then irrespective of the amount of other, income, surcharge shall be levied at the rate of 15% on the amount of tax payable on both normal income as well as, income referred to in section 111A, 112A and 115AD, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 1.5

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DT - Simplified, Example, Amount (₹ in Lakhs), Sr., , LTCG (112A) &, STCG (111A), , Other Income, , Total Income, , Surcharge on, LTCG & STCG, , Surcharge on, Other Income, , 1, , 10, , 45, , 55, , 10%, , 10%, , 2, , 30, , 90, , 120, , 15%, , 15%, , 3, , 40, , 210, , 250, , 15%, , 25%, , 4, , 30, , 190, , 220, , 15%, , 15%, , 5, , 200, , 310, , 510, , 15%, , 37%, , 6, , 350, , 160, , 510, , 15%, , 15%, , Average Rate & Maximum Marginal Rate of Tax, , −, −, , Average Rate = Total Tax Calculated / Total Income, Maximum Marginal Rate = Highest Rate in Slab plus Highest Surcharge plus Cess, , Application of Income v/s Diversion of Income, −, , Application of Income means,, ▪ Income arise or accrues and reaches to the assessee, ▪ Income is applied to discharge an obligation, whether self-imposed or gratuitous, ▪ Income shall be charged in the hands of assessee, , −, , Diversion of Income means,, ▪ Income does not reach to the assessee, it is diverted at source, ▪ There is an overriding title or charge for such diversion, ▪ Charge/Obligation is on Source from which income is diverted and not on assessee, ▪ It shall not be charged in the hands of assessee, , Other Points, , −, −, −, , Only revenue receipts shall be taxable as Income, Capital Receipt shall be excluded, , −, , Gifts constitutes capital receipt, Certain gift transactions brought within purview of Income Tax., , If capital receipt falls within purview of ‘Capital Gain’, Capital Income shall be taxable, Even a single transaction may constitute as business or adventure in nature of trade, Repetition of such, transaction is not necessary to constitute business income, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 1.6

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DT - Simplified, , CHAPTER – 2, INCOME FROM HOUSE PROPERTY, SECTION 22 – BASIS OF CHARGE, −, , Annual value of property comprising of building or land appurtenant thereto shall be chargeable under the head, house property, , −, , Where the property is occupied for the purpose of Business or Profession, profit of which chargeable under PGBP, shall not be chargeable under IFHP, , −, , Building includes residential as well as commercial premises such as factory, office etc., , −, , Land appurtenant means connected with building such as garden, parking etc., , −, , Income from vacant land & assets other than building are chargeable under PGBP/IFOS, , −, , Assessee must be the owner of the property during the previous year. However, registration of sale deed is not, warranted., BUILDINGS OR LANDS APPURTENANT THERETO, ,  RESIDENTIAL, ,  VACANT LAND, ,  COMMERCIAL, , USE OF HOUSE PROPERTY, , SELF RESIDENCE, , FOR OWN BUSINESS, , LETTING OUT, , NOT MAIN BUSINESS, , ASSET USED FOR, BUSINESS, PROVISION OF PGBP, SHALL APPLY, , PROVISION OF, IFHP SHALL APPLY, , CA Dhaval Patanvadia, , MAIN BUSINESS, , www.theinvictus.in, , +91-87800 58699, , 2.1

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DT - Simplified, SECTION 23 – DETERMINATION OF ANNUAL VALUE, Net Annual Value (NAV), , Let out Property (LOP), ▪ GAV = Higher of ER or AR, ▪ ER = Higher of MV or FR, but, restricted to SR, ▪ NAV = GAV less Muni. Tax, actually paid, ▪ Due to vacancy for part of the, year, AR < ER than GAV = AR, , Deemed Let out Property (DLOP), ▪ Assessee holds more than two, properties, He can choose any, Two as SOP, other shall be, deemed as let out, ▪ Option can be changed year, after year as beneficial to, assessee, ▪ NAV = Same as LOP, , Self-Occupied Property (SOP), ▪ Only Individual/HUF can avail, exemption of SOP (Max 2, Houses), ▪ Unoccupied means assessee, resides at other property not, belonging to him by reason of, his employment or business, ▪ NAV = NIL, ▪ Municipal Tax paid shall not, be allowed as deduction, , GAV = Gross Annual Value, MV = Municipal Value, FR = Fair Rent, SR = Std. Rent, AR = Actual Rent recd./receivable (excluding unrealized Rent), , ❖ Single unit of property is LOP for part of the year and SOP for part of the year, −, , GAV = Higher of ER for whole year or AR (for Let out Period) i.e. it shall be treated as fully LOP, , −, , NAV = GAV less Municipal Tax whole year if actually paid, , ❖ Any portion of property is LOP and a portion is SOP, −, , GAV = Apportioned GAV of LOP shall be taxable, , −, , NAV = Apportioned GAV less Apportioned Municipal Tax if actually paid, , ❖ Municipal Taxes, −, , Municipal taxes borne by assessee shall qualify for deduction, , −, , Tax is allowed on payment basis irrespective of accounting method, , −, , Arrears of preceding years / Advance Tax paid are also allowed if paid in previous year, , −, , Tax related to property situated outside India is also allowed, , ❖ Unrealised Rent, −, , AR shall not include rent which is not capable of being realised, , −, , Conditions as per Rule – 4 must be satisfied, ▪ Tenancy is bona fide, ▪ Defaulting tenant has vacated or steps taken compel him to vacate, ▪ Defaulting tenant should not be occupation of other property of assessee, ▪ Assessee has taken legal steps or satisfies AO that legal step would be useless even if taken, , ❖ Property held as stock in trade [w.e.f. 01-04-2018], −, , Property consisting of any building or land appurtenant thereto is held as stock-in-trade,, , −, , Such property should not be let out during the whole or any part of the previous year., , −, , Annual Value of such property shall be taken as Nil for the period upto Two Years, , −, , From the end of FY in which certificate of completion of construction is obtained, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 2.2

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DT - Simplified, ❖ Treatment of Composite Rent, −, , Composite rent includes rent of building and charges for different services (lifts, security etc.), the, composite rent has to be split up in the following manner,, , −, , Let out of Building & Other Assets are inseparable means other party does not accept letting out building, without other assets or Services, ▪ Entire Income shall Taxable under PGBP / IFOS as the case may be, ▪ Even if sum receivable for two lettings fixed separately, , −, , Let out of Building & Other Assets are separable means other party accepts letting out building without, other assets or Services, ▪ Income from Letting out of Building – Taxable under IFHP, ▪ Income from Letting out of other assets – Taxable under PGBP/IFOS as the case may be, , SECTION 24 – DEDUCTIONS FROM NAV, Deductions allowed from NAV, , SOPs, , LOP/DLOP, , Std. Deduction, , Interest on borrowed capital, , 30% of NAV, , Fully Allowed, , Interest on borrowed capital, , Loan for Acquisition /, Construction, , Loan taken on or, after 01-04-1999, Acquire/Construction is completed within 5 years from, the end of FY in which amount borrowed, and, Certificate from Lender specifying interest payable, , Loan for Repair / Renewal, / Reconstruction, , Loan taken before, 01-04-1999, , No, , Yes, Maximum 2,00,000, , Maximum 30,000, , −, , Interest on Pre-Construction period (Date of Borrowing to 31st March Immediately Preceding to Date of, Completion) shall be allowed in 5 equal instalments commencing from the year of acquisition or completion of, construction, , −, , Interest relating to year of completion of construction can be fully claimed irrespective of date of completion, , −, , If House taken on instalments, such outstanding instalments are also treated as capital borrowed, , −, , Interest on fresh loan taken to repay the original also qualify for deduction, , −, , Interest allowed on accrual basis hence accrued but not paid during the year also allowed, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 2.3

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DT - Simplified, SECTION 25 – INADMISSIBLE DEDUCTIONS, −, , Interest paid outside India without deducting tax (TDS) and, , −, , There is no person in India can be treated as agent u/s 163, , SECTION 25A – ARREARS/UNREALISED RENT RECEIVED SUBSEQUENTLY, −, , Taxable in the FY of receipt under IFHP, whether assessee is owner or not in such FY and, , −, , 30% deduction is allowed from such rent, , SECTION 26 – CO-OWNED PROPERTIES, −, , If Shares of each owner is definite and ascertainable, such property cannot be taxed as an AOP, , −, , Income shall be calculated as per above provisions and apportioned between them, , −, , In case of SOP, each Co-owner is entitled to a deduction of 30,000/2,00,000 as the case may be, , SECTION 27 – DEEMED OWNERSHIP, −, , Transferred to spouse otherwise than adequate consideration, Exception, Property transferred under agreement to leave apart, , −, , Transferred to minor child otherwise than adequate consideration, Exception, Property transferred minor married daughter, , −, , Holder of an impartible estate which is not legally divisible, , −, , Member of Co-operative Society/Company/AOP to whom property is allotted or leased under House, Building Scheme of Society/Company/AOP, , −, , Person who is in possession of a property where, Possession is transferred to buyer and buyer has paid or, promised to pay sale consideration under agreement to sell/power of attorney although property is not, registered in buyer’s name., , −, , A person acquires right in property under lease for not less than 12 years., Exception, Person acquiring right by way of lease from month to month for period not exceeding one year, , INCOME FROM HOUSE PROPERTY IS EXEMPT, , Sr., , Section, , Particulars, , 1, , 10(1), , Farm House forming part of agricultural income, , 2, , 10(19A), , 3, , 10(20), , House property of Local Authority, , 4, , 10(21), , An approved Scientific Research Association, , 5, , 10(23C), , Property income of Universities, Educational Institute etc., , 6, , 10(24), , Property income of Registered Trade Union, , 7, , 11, , 8, , 13A, , Annual value of any one palace of Ex-Ruler, , Property held for Charitable/Religious purpose, Property income of a Political Party, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 2.4

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DT - Simplified, COMPUTATION OF IFHP UNDER VARIOUS CASES, Particulars, , Let Out Property, (LOP), , Deemed Let Out, Property (DLOP), , Self-Occupied Property, (SOP), , Higher of ER or AR, , ER, , NIL, , A, , Gross Annual, Value (GAV), , B, , Municipal Taxes, , Allowed as deduction if, actually paid, , Allowed as deduction if, actually paid, , Not Allowed hence NIL, , C, , Net Annual Value, (NAV), , A–B, , A–B, , NIL, , D, , Deductions u/s 24, , (i), , Std. Deduction, , 30% of NAV, , 30% of NAV, , NIL, , (ii), , Interest on, Borrowed Capital, , Fully Allowed, , Fully Allowed, , Allowed, Subject to some, restrictions, , E, , Income from, House Property, , C – D(i) - D(ii), , C – D(i) - D(ii), , C – D(i) - D(ii), , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 2.5

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DT - Simplified, , CHAPTER – 3, PROFITS & GAINS OF BUSINESS OR PROFESSION, SECTION 28 - PROFITS AND GAINS OF BUSINESS OR PROFESSION – CHARGING SECTION., Following income shall be chargeable to income-tax, in nature of business, under the head PGBP, −, −, −, , PGBP, Perquisite/Gift/Benefit, Compensation – Managing, Company, Holding Agency or, Vesting Management in Govt., Co., Service for members by Trade,, Professional or Similar AOP, , −, , −, −, , −, , Sum Received under Keymen, Insurance Policy, Incentives to Exporter – Sale of, Import License, Cash, Assistance, Duty Drawback &, Transfer of DEPB Entitlement, Sum Received by Partner of, Firm Sub. to Sec 40(b), , −, −, , Sum received from Capital, Asset referred u/s 35AD, Sum received under NonCompete Fees – Not to Carry, activity or Not to Share Know, How Exception – Transfer of, Right, which is Chargeable, under CG, , −, , Compensation or other payment due to or received by any person at or in connection with the termination or the, modification of the terms and conditions, of any contract relating to his business; whether capital or revenue in, nature [w.e.f. 01-04-2019], , −, , The FMV of inventory as on the date on which it is converted into, or treated as, a capital asset determined in the, prescribed manner [w.e.f. 1-4-2019], , −, , Any stock in trade transferred by Firm or AOP/BOI to Partner or Member in connection with dissolution or, reconstitution of Firm or AOP/BOI, [SECTION 9B w.e.f. 01-04-2021], ▪ FMV on date of transfer will be considered as Sale Price and, ▪ Any Profit arising from such deemed transfer shall be chargeable to income under PGBP in hands of Firm or, AOP/BOI, [for deemed transfer of Capital Asset, Provision of Capital Gain shall Apply], , SECTION 29 - INCOME FROM PROFITS AND GAINS OF BUSINESS OR PROFESSION, HOW COMPUTED., −, −, −, , The income referred to in section 28 shall be computed in accordance with sections 30 to 43D., Profit should be computed according to method of accounting [Section 145] regularly followed by the assessee., Profit & Gains must comply with ICDS notified, wherever applicable., , SECTION 30 – ALLOWABLE RENT, RATES, TAXES, REPAIRS AND INSURANCE EXPENSES FOR BUILDINGS., − Rent & Revenue Repairs are allowed to assessee, − If expenditure is in nature of capital, being tenant / lessee / licensee etc., To Owner - It will be added to cost of asset, To Tenant – It will be treated as Building, − As an owner of building notional rent is not, allowed, however rent paid to partner by Firm, − Rent paid would be allowable even though it is, shall be allowed, exempt in the hands of the owner, − Other expenses such as, land revenue, local rates,, − If building is given as sub-let = Rent paid Less, Rent recovered shall be allowed (Net Rent), municipal taxes and insurance etc., SECTION 31 – ALLOWABLE REPAIRS AND INSURANCE EXPENSES OF MACHINERY, PLANT AND, FURNITURE., −, −, , Current repairs and insurance of machinery, plant and furniture, if it is revenue in nature, Assets must have been used wholly and exclusively for purposes of the assessee’s own business, , −, , Even if used for a part of the previous year, entitled to the deduction of the full amount, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.1

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DT - Simplified, SECTION 32 - DEPRECIATION., Conditions, , ➢, , Usage of asset, , Ownership, , The asset must have been actually put to use., If Put to use for period < 180 days, half of the, depreciation shall be allowed, , It is allowable to the owner of the asset –, e.g. Lessor or Licenser not user but allowed as owner, , Use includes passive use or kept ready to use, e.g. Fire Extinguisher, Machinery Spares linked to Fixed, Assets, , Capital Exps by way of renovation or extension of, or, improvement –, By Assessee being holder of lease or other right, Depreciation shall be allowed on such expenses., , If asset is not used exclusively for business,, proportionate depreciation shall be allowed (Section 38)., , No depreciation shall be allowed on asset which is not, own but only used or hired, , −, −, , Mandatory Deduction : Deduction on account of depreciation shall be made compulsorily, whether or not the, assessee has claimed the deduction in computing his total income., Expression “Used for the purpose of business” with respect to discarded machinery would mean the use in the, business, not only in relevant previous year but also in the earlier previous years. Discarded machinery may not be, actually used relevant previous year but depreciation can be claimed as long as it was used for the purpose of, business in the earlier year provided block continues to exist. [CIT v/s Yamaha Motor India Pvt. Ltd. (SC)], , Computation of Depreciation Allowance:, , ❖ Assessee in the business of Generation or Generation and Distribution of Power [Rule 5(1A)], −, , SLM Method - Percentage on the ACTUAL COST, – As per Appendix-IA, , −, , Option to Choose SLM or WDV, ▪ Before due date of Filing of Return, ▪ Cannot Change for subsequent A.Y., , −, , Aggregate depreciation shall not exceed the, actual cost of the asset, , −, , Terminal depreciation, if Deficiency (i.e. SP < WDV) on Asset, sold/discarded/ demolished/ destroyed in the, previous year & actually written off in books, ▪ Depreciation = Moneys payable less WDV, (Moneys Payable = Selling Price or scrap, value), , −, , Block of Asset = Group of Asset having Same, Rate, Same Class, , −, , No Additional Depreciation if –, ▪ Used/Second Hand Asset,, ▪ Non Production use i.e. Office use,, ▪ Road Transport Vehicles,, ▪ Actual Cost already allowed earlier under, PGBP, , ❖ Other Assessee, −, , Percentage on the WRITTEN DOWN VALUE of, Block of Asset, , ❖ Additional Depreciation @20% [Section 32(1)(iia)], −, , Acquired & Installed (other than ships and, aircraft) after the 31st day of March, 2005,, , −, , Manufacture or production of any article or, thing or in the business of generation,, transmission or distribution of power,, , −, , Additional 20% of the actual cost, , −, , Period of less than 180 days –, 50 per cent & Balance in next year, , ❖ Depreciation in the event of Succession/Amalgamation/Demerger, −, , Succession of firm/sole proprietary concern by a company or business reorganization, amalgamation or, demerger of companies or succession of business otherwise than on death, , −, , Fulfils the conditions mentioned in section 47, , −, , Total depreciation shall not exceed the amount of depreciation as if event does not take place, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.2

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DT - Simplified, −, , Depreciation shall be apportioned between the two entities in the ratio of the number of days, , RATES OF DEPRECIATION, PART A TANGIBLE ASSETS, I Buildings - include roads, bridges, culverts, wells and tube wells, 1, , Residential Purposes, , 5%, , 2, , General, , 10%, , 3, , Temporary Structures, , 40%, , II Furniture and Fittings, 1, , Furniture and Fittings including Electrical Fittings, , 10%, , III Plant & Machinery, 1, , Motors buses running them on hire [Other than Below], , 30%, , 2, , Motors buses running than on hire acquired AND Put to use between 23-08-19 to 31-0320, , 45%, , 3, , Motor cars other than running on hire [Other than Below], , 15%, , 4, , Motors buses OTHER than on hire acquired AND Put to use between 23-08-19 to 31-0320, , 30%, , 5, , Aeroplanes, Aero engines, , 40%, , 6, , Computers including computer software, , 40%, , 7, , Annual publications owned by assessee carrying on a profession, , 40%, , 8, , Books owned by assessee carrying on business in running lending libraries, , 40%, , 9, , Books, other than annual publications, owned by assessee carrying on a profession, , 40%, , 10 Lifesaving medical equipment, , 40%, , 11 Plant & machinery (General rate), , 15%, , 12 Energy Saving Devices (as specified), , 40%, , 13 Windmills on or after 01-04-2014, , 40%, , 14 Windmills before 01-04-2014, , 15%, , PART B INTANGIBLE ASSETS, 1., , Know-how, patents, copyrights, trademarks, licences, franchises or any other business or, commercial rights of similar nature, (Excluding Goodwill of Business or Profession i.e. No Depreciation on Goodwill – w.e.f., 01-04-2021], , 25%, , ❖ Carry forward and set off of depreciation [Section 32(2)], −, , Unabsorbed depreciation shall be carried forward indefinitely till it is fully set off., , −, , Order of set-off: Current Year Depreciation → B/F Business Loss → Unabsorbed Depreciation, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.3

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DT - Simplified, SECTION 43(1) - ACTUAL COST, −, , Actual Cost of Asset = Purchase Cost plus Incidental Expense less Subsidies/Credit of taxes availed, , − If Cash paid in excess of ₹ 10,000 in a day: Such payment shall be excluded from cost of asset, Explanation to Section 43(1) provides for actual cost in following cases, Situations, , Actual Cost, , 1, , Previously used for scientific research, , Actual Cost less Deduction allowed u/s 35(1)(iv), , 2, , Gift or Inheritance, , WDV to previous owner, , 3, , Second hand asset, [in the hands of buyer], , If Intention to claim higher Depn;, Fair Value Determined by AO with approval JCIT, , 4, , Re-acquisition of asset, , Lower of WDV at time of sale or re-acquisition cost, , 5, , Purchased and leased back, , WDV to Lessee, , 6, , Building previously used by assessee brought to, Business, , Actual Cost less Notional Depn at rate in force since, acquisition, as if it was used for business, , 7, , Transferred by 100% Holding to Sub or Sub to, Holding, , WDV to transferor, , 8, , Amalgamating company to the amalgamated, company in Amalgamation, , WDV to Amalgamating, , 9, , Demerged company to the resulting company, , WDV to Demerged Co., , 10, , Asset acquired out of borrowed capital, , Actual Cost plus Interest up to first put to use, , 11, , Taxes, Excise Duty / Custom Duty paid, , Actual Cost less Duty Paid if CENVAT is availed, , 12, , Subsidy or grant or loan waiver, , Reduced from Actual Cost, , 13, , Acquired outside India and brought to India, , Actual Cost less Notional Depn at current rate, , 14, , Scheme for Corporatization Stock Exch., , Actual Cost as if no Corporatisation taken place, , 15, , Deduction is allowable under section 35AD, , NIL, , 16, , Inventory converted into Capital Asset, , FMV as on the date of conversion, , SECTION 33AB - TEA/COFFEE/RUBBER, DEVELOPMENT ACCOUNT, , SECTION 33ABA - SITE RESTORATION FUND, , Assessee in, business of, , Growing and manufacturing tea or coffee or, rubber in India, , Prospecting for or extraction or production of, petroleum/natural in India, , Deposit any, amount, , Any amount with NABARD,, up to Due date of Filing of ITR, , Special account with SBI before end of PY –, Interest Credited is deemed deposit, , Deduction, , Lower of Actual Amount or 40% of PGBP, , Lower of Actual Amount or 20% of PGBP, , Utilisation, , Utilize only for Specified Purpose prescribed, by Tea/Coffee/Rubber Board, , Utilize only for Specified Purpose prescribed, by Deposit Scheme, , SECTION, , Common Points for Section 33AB/33ABA, 1. No deduction to partner of assessee-firm or, member of AOP/BOI, 2. Utilisation from scheme for other expenses not, allowed as a deduction, 3. Non-utilisation of withdrawn amount in the year, of withdrawal - deemed to be profits u/s 41, 4. Withdrawal of deduction – if Any machinery or, plant installed for office use, , CA Dhaval Patanvadia, , 5., , 6., , Sale or transfer of an asset before 8 years deemed to be profits Exception trans. to Govt, /Succession of firm by Co, Deduction allowed before the setting off of b/f, loss, , 7. Treated as Taxable profit if Used for residential, , www.theinvictus.in, , accommodation including a guest house/office, appliance except Computer, , +91-87800 58699, , 3.4

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DT - Simplified, SECTION 35 - EXPENDITURE ON SCIENTIFIC RESEARCH, , IN HOUSE RESEARCH – Expenditure Related to Business of Assessee, , INDIAN COMPANY engaged in Business of, Bio-technology or manufacturing of article, or thing – Approved [Section 35(2AB)], , Any Assessee [Section 35(1)], , Before Commencement, (Max 3 Years), , Revenue Exps, ONLY SALARY, (Excluding Perks) +, MATERIAL, , All Exps (Other than cost, of Land & Building), , After, Commencement, , Capital Exps, Other than, Land, , All, Revenue, Exps, , 100%, Deduction, , 100%, Deduction, , Capital, Exps, Other than, Land, , 100%, Deduction, , CONTRIBUTION TO OTHERS – Research may not be related to Business, , Approved - Research, Association/Institute/College/University, , IIT/National, Laboratory, , Approved Indian Co., Engaged in R&D, , For Scientific Research –, Sec 35(1)(ii), , For Social & Statistical –, Sec 35(1)(iii), , For Scientific, Research – Sec, 35(2AA), , For Scientific, Research – Sec, 35(1) (iia), , 100% Deduction, , 100% Deduction, , 100% Deduction, , 100% Deduction, , Key Points:, 1. Expenditure on land will be disallowed for deduction, cost of land will be bifurcated on FMV, 2. Unabsorbed Loss due to deduction will be carried forward – No Time bar, 3. No depreciation allowed on Capital Asset, 4. Taxability in case of asset ceased to be used for scientific research –, Sold after using –, a. Sale price plus scrap value if any = Taxable as PGBP, Sold without using –, a. Lower of Sale price or Deduction allowed = Taxable as PGBP, b. Sale price less Cost of Asset = Taxable as CG, 5. Contribution made to approved researcher and approval subsequently withdrawn – Deduction allowed to, contributor shall not be denied., , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.5

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DT - Simplified, SECTION 35ABA - EXPS FOR OBTAINING RIGHT TO USE SPECTRUM FOR TELECOM SERVICES, SECTION 35ABB - EXPS FOR OBTAINING RIGHT TO USE LICENSE FOR TELECOM SERVICES, Deduction amortised over the period of Spectrum, , Spectrum fee is actually paid, BEFORE the commencement of Business, , Spectrum Fee is actually paid, AFTER the commencement of Business, , Period = PY of Commencement → PY of Expiry of, License (part of PY counted as full PY), , Period = PY of Actual Payment → PY of Expiry of, License (part of PY counted as full PY), , Sale/Transfer of Spectrum, , SP < Unamortised Amount, (whole of Spectrum), , SP > Unamortised Amount, (whole or part of Spectrum), , Deduction = Unamortised, Amount less SP, , 1., 2., 3., , SP < Unamortised Amount, (part of Spectrum), , PGBP = Lower of, SP less Unamortised Amount, or, Exps Allowed till Date, CG = Sale Price less Cost of acquisition, , Deduction =, Unamortised Amount less SP, Un Expired Period, , No Depreciation allowed for such expenditure, Deferred payment treated as if opted for full upfront payment for Date of Actual Payment, In Case of Amalgamation/Demerger – Deduction allowed to Amalgamated/Resulting Co., , SECTION 35AD - “INVESTMENT-LINKED TAX INCENTIVES” FOR SPECIFIED BUSINESSES, Commencement of following specified business on or after 1st April 1, , Cold chain facilities, , 2009, , 2, , Warehousing –, Agricultural, , 2009, , 3, , Cross-country Pipeline 2009, , 4, , Hotel of two-star or, above, , 2010, , 5, , Hospital min. 100 beds, 2010, for patients, , 6, , Housing slum, redevelopment or, rehabilitation, , 2010, , 7, , Affordable housing, Scheme, , 2011, , 8, , Fertilizer, , 2011, , 9, , ICD/CFS approved by, Custom, , 2012, , 10, , Bee-keeping / Honey/, Beeswax;, , 2012, , 11, , Warehousing - sugar, , 2012, , 12, , Slurry pipeline - iron, ore, , 2014, , 13, , Semiconductor wafer, fabrication, , 2014, , 14, , Developing / maintaining and operating /developing,, maintaining & operating a NEW infrastructure facility, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 2017, , 3.6

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DT - Simplified, −, , Deduction for Capital Expenditure: 100%, excluding,, ▪ Payment for Land/Goodwill/Fin. Instrument and, ▪ Cash Payment > ₹ 10,000 in a day for expenditure [Exceptions under rule 6DD are not applicable], , −, , Expenditure prior to commencement allowed in PY – if it is capitalised in books, , General Conditions:, −, , It should not be set up by splitting up or the reconstruction of a business already in existence, , −, , Plant and Machinery should be newly acquired, ▪ Exception – Max. 20% old or Imported old P&M (Not used in India & Depn not allowed earlier in India), , −, , Deduction u/s 80-IA to 80RRB and Sec 10AA are not allowed, if deduction claimed in 35AD, , −, , No Depreciation on Capital Expenditure, , −, , Loss can be set off against specified business only and carried forward indefinitely, , −, , On Sale/Transfer of Asset – Entire sale price taxable under PGBP, No CG arise, , −, , If asset used for other purpose than specified business during 8 years in will result in–, ▪ Deemed Income = Deduction claimed less Depreciation u/s 32, as if no deduction allowed, , −, , In case of Hotel business – Operation of the hotel can be transfer to other person, , SECTION 35CCC - AGRICULTURAL EXTENSION PROJECT, −, , Sum equal to 150% of expenditure incurred by an assessee on agricultural extension project notified by CBDT, in accordance with the prescribed guidelines, , SECTION 35CCD - SKILL DEVELOPMENT PROJECT – TO COMPANIES ONLY, −, , Standard deduction of 150% of the expenditure (other than land or building) incurred on Public Private, Partnership (PPP) project for skill development in the ITIs in manufacturing sector as notified by CBDT, , SECTION 35D - AMORTISATION OF PRELIMINARY EXPENSES, −, , Assessee: being Indian Companies and Other Resident Non Corporates, , −, , Preliminary Exps = Exps before Commencement or Setting up New Unit in case of Existing Business, , − Amortisation = Over the period of Five Years in Five equal instalments, Eligible Expenses:, −, , Preparation of Feasibility Report / Project, Report, , −, , Legal Charges, , −, , ROC Fees/Drafting & Printing of MOA/AOA, , −, , Marketing Survey, , −, , Exps on issue of shares/debentures, , −, , Engineering Services, , −, , Other Exps as notified., , Overall Limit: Actual preliminary expenses for the purpose of amortisation shall be restricted to below limits, In case of companies, − 5% of Cost of Project or, − 5% of Capital Employed, Whichever is Higher, , In case of Other Assessee, −, , 5% of Cost of Project, , Capital Employed = Issued Shares plus Debentures plus Long Term Borrowings, Cost of Project = Actual cost of Fixed Assets being land, buildings, leaseholds, plant, machinery,, furniture, fittings, railway sidings (including expenditure on the development of land, buildings) which, are shown in the books of the assessee, As on the LAST DAY of the PY in which business/New unit is commenced., ▪, ▪, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.7

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DT - Simplified, SECTION 35DD - AMORTISATION OF EXPENSE FOR AMALGAMATION/DEMERGER, −, , Indian Company who has incurred such expenditure, , −, , Deduction allowed in 5 equal Instalments, , SECTION 35DDA - VOLUNTARY RETIREMENT SCHEME, −, , All Assessee - Payment to any employee in connection with his voluntary retirement, , −, , Deduction allowed in 5 equal Instalments, , −, , Amalgamation/Demerger/Succession – Deduction to Successor Company, , SECTION 35E - EXPENSES FOR PROSPECTING AND DEVELOPMENT OF CERTAIN MINERALS, −, , Expenditure incurred by: Indian company /other resident non-corporate, , −, , Expenditure Allowed: In equal instalments over the period of 10 Years, , −, , Allowable Exps:, ▪ Incurred during the year of commercial production and, ▪ Any time during four years immediately preceding that year, ▪ wholly and exclusively on prospecting for or extraction of certain minerals, , −, , Exps Not Allowable:, ▪ Expenditure incurred on the acquisition of the site of the source/Deposits of Mineral, ▪ Buildings, Plant, Machinery, Intangibles etc. on which Depreciation is allowed, , SECTION 36 – OTHER ALLOWABLE DEDUCTIONS, −, , Insurance Premium – for Stock/Stores, , −, , Health Insurance Premium of employees – only if payment made by mode other than Cash, , −, , Bonus and Commission to the employees – if it is not paid in lieu of Profit or Dividends, , −, , Interest on borrowed capital – if amount borrowed for the purposes of business, , −, , Amortisation of Discount on ZCB = (Redemption Amount less Issue Price)/No. of Years to Maturity, , −, , Contributions to PF/Gratuity/Super Annuation funds – Only made to Approved Funds, , −, , Employer’s contri. to pension fund u/s 80CCD – Max. 10% of Salary [Basic + DA if terms provide], , −, , Employees’ portion towards welfare fund – if Deposited by assessee being employer before due date specified, in respective act – e.g. Employees’ PF – Due Date is 15 days from close of month, , −, , Bad Debts and Provision for Bad and Doubtful Debts, ❖ Provision for Bad Debts, ▪ General Assessee:, ✓ Provision for bad debt is not allowed, ▪ Banks – Maximum provision allowed:, ✓ Specified Indian Banks: ≤ 8.5% of Total Income (Before deduction under VI-A), ✓ Rural Branch of Above Banks: ≤ 10% of Aggregate avge. advance made, ✓ Foreign Banks/PFI/NBFC/State Fin. Corp: ≤ 5% of Total Income (Before dedn under VI-A), ❖ Bad Debts, ▪ For General Assessee = Fully Allowed, ▪ For Banks = Amount not recovered less Provision for bad debts allowed earlier, ✓ Debt should have been included in income earlier years, ✓ Debts should have been written off in books of accounts, ✓ No need to prove that debt becomes bad, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.8

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DT - Simplified, −, , Expenses on family planning – Only Companies, ▪ Revenue Expenditure – Fully Allowed in year of occurrence, ▪ Capital Expenditure - Allowed in Five Equal Instalments, ▪ Can be set off and Carried forward same way as depreciation, , −, , Deduction of securities transaction tax (STT) paid, , −, , Deduction for commodities transaction tax (CTT) paid, , −, , Market to Market (MTM) losses specifically permitted under any other ICDS would be allowable as deduction, u/s 36. [w.r.e.f. 01-04-2017], , −, , Co-operative society for purchase of sugarcane at price fixed by the Government, , −, , Special reserve created by financial Corporation providing long term finance, Lower of Actual Amount or 20% of Profit or 200% of (Share Capital plus Gen. Res), , SECTION 37 - RESIDUARY EXPENSES, −, , Revenue Expenses which is in nature of business and not covered u/s 30 to 36 only is allowed, , −, , It should not be personal or capital in nature or for purpose which is an offence or Prohibited by law, , −, , CSR Expenditure – It is not in nature of business hence disallowed, , −, , Advertisements in souvenirs of political parties – Not Allowed, , −, , Some Examples:, ▪ Keyman Insurance Policy – Allowed, ▪ Cost of production of Abandoned Feature Films – Allowed (it is not covered under Rule – 9A), ▪ Exps for development of highways in BOT agreements – Amortised over the period of right to collect tall, ▪ Dividend & CDT, Provision for Loss of Subsidiary, Deferred Tax – Not Allowed, ▪ Income Tax is personal – Not Allowed but fees for Tax Audit or Consultation for Income Tax Allowed, ▪ Interest on Indirect Tax – Allowed, ▪ Penalty Levied for breach of contract is allowed however penalty levied for breach of law is not allowed, , SECTION – 38 BUILDING, ETC., PARTLY USED FOR BUSINESS, ETC., OR NOT EXCLUSIVELY SO USED, −, , Where any building, machinery, plant or furniture is not exclusively used for the purposes of the business or, profession, , −, , Deductions u/s 30 (Rent etc. for building), 31 (Repairs etc. for P&M) and 32 (Depreciation) shall be, , −, , Restricted to a fair proportionate part thereof which the as A.O. may determine, , SECTION 40 - INADMISSIBLE DEDUCTIONS, SECTION 40(A) – NON-DEDUCTION / NON-PAYMENT OF TDS, −, , Amount paid/credited on which TDS not deducted or deducted but not deposited on or before the due date of, filing of ITR, ▪ To Non Resident or Foreign Company – 100% of Amount Paid/credited Disallowed in P.Y., ▪ To Resident – 30% of Amount Paid/credited Disallowed in P.Y., , −, , Amount paid to non-resident for specified services on which equalisation levy is not deducted, ▪ 100% of amount on which equalisation levy was deductible., , −, , If TDS/Equalisation levy deducted in subsequent year or Deducted in P.Y. but deposited after due date of ITR, ▪ Amount disallowed above i.e. 100%/30% shall be allowed in the year of payment of TDS, Exception,, −, , In case of resident payee amount paid/credited without deduction shall be allowed if, ▪ Payee has included in his income, ▪ Paid the tax due on such income, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.9

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DT - Simplified, ▪, −, , Furnished ITR, , ▪, , Payer shall furnish Certificate from CA, , Date of payment of TDS shall be date on which Payee furnishes ITR. Exps shall be allowed accordingly, , Tax on Perquisites paid by Employer, −, , Tax on perquisites (other than monetary payments) Paid by Employer on behalf of Employee, ▪ Employer – Such payment of Tax will be disallowed as Income Tax is personal Expenses, ▪ Employee – Such payment of Tax by employer shall be exempt and not charged to tax [10(10CC)], , SECTION 40(B) – PAYMENT OF REMUNERATION, INTEREST BY FIRM TO PARTNER, −, , Salary, Bonus, Commission paid to Non-Working Partner - Disallowed, , −, , Remuneration or Interest Not authorised by Partnership Deed or Authorised with Retrospective effect by revised, deed not allowed for any prior period., , −, , Interest on capital = Max. 12% p.a., , −, , Remuneration = Book Profit up to 3 Lakh = Higher of 1,50,000 or 90% of Book Profit, On Balance Book Profit = 60 % of Balance Book Profit, , −, , Interest paid to Partner on representative capacity shall also be considered for this clause, , SECTION 40(BA) – SALARY, INTEREST PAID BY AOP/BOI TO MEMBER, − Any payment of interest, salary, commission, bonus or remuneration – Disallowed, Explanations:, 1. Net Interest Disallowed = Interest Paid to Member less Interest received from Member, 2. If Member in Individual Capacity, then Interest in Representative Capacity is Allowed, 3. If Member in Representative Capacity, then Interest in Individual Capacity is Allowed, SECTION 40A - EXPENSES OR PAYMENTS NOT DEDUCTIBLE IN CERTAIN CIRCUMSTANCES, SECTION 40A (2) - PAYMENT TO RELATIVES, −, , Unreasonable or excessive payment to specified person for expenses incurred, , −, , Disallowed by A.O. after considering – FMV or Legitimate business needs or Benefit to Assessee, , Specified Persons means,, Individuals, , Relatives - Spouse/Brother/Sister/Lineal Ascendant/ Lineal descendant, , HUF/AOP/BOI, , Members and their Relatives, , Firm/LLP, , Partners and their Relatives, , Company, , Directors and their Relatives / Subsidiaries / Holdings/ Co-Subsidiaries, , Having Substantial, Interest [≥ 20%, shareholding or profit, sharing] in business of, Assessee, , By Any person, , CA Dhaval Patanvadia, , By Company/Firm-LLP/HUF/AOP-BOI or, By Directors/Partners/Members or, Relative of them, , www.theinvictus.in, , +91-87800 58699, , 3.10

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DT - Simplified, SECTION 40A (3) - CASH PAYMENTS IN EXCESS OF ₹10,000, −, , In respect of any expenditure incurred, payment or aggregate of payments made to a person in a day otherwise, than by account payee Cheque/DD/ECS/Other Prescribed Modes to a person in a day shall be disallowed, , −, , Other Prescribed modes : Credit Card / Debit Card / IMPS / RTGS / NEFT / UPI / BHIM / Aadhar Pay, , −, , In case of Transport Operator – Limit = 35000, , −, , If expenses allowed on due basis in previous year, such payment shall be deemed to be income in subsequent, year, , −, , Loan Transactions – Allowed as no expenses incurred, , −, , Payment by Commission Agent for Goods sold on Commission or Consignment basis - Allowed, , Exceptions [Rule 6DD] - No disallowance if payment made to, −, , Banks/LIC /Govt., , −, , Payment to employee or legal heirs - gratuity,, compensation etc. Max, ₹ 50,000, , Cultivator/Grower/Producer of, Agricultural/Forest, Product/Fish/Apiculture/Horticulture, , −, , Book adjustments, , −, , −, , Payment made on a day on which the Banks, Closed due to holiday or strike, , Authorised dealer/money changer against, purchase of foreign currency, , −, , −, , Village having no bank facility, , SECTION 40A (7) - DISALLOWANCE OF PROVISION FOR GRATUITY, −, , Deduction in respect of gratuity be allowable to the employer on payment basis, , −, , In the year in which the gratuity is actually paid, , −, , In the year in which contributions to an approved gratuity fund are actually made, , or, , SECTION – 41 DEEMED INCOME, −, , Remission or cessation of trading liability by writing of in books = Amount allowed earlier as deduction, , −, , Balancing Charge in case of Power Undertakings = Sale Price of Asset less WDV, , −, , Bad Debt Recovery = Amount Recovered less Bad debts not allowed earlier as deductions, , −, , Amount withdrawn from Special reserve created and not used for specified purpose, , −, , Income can be set off against an unabsorbed loss, even if business ceased to exist, , SECTION 43A - CHANGES IN THE RATE OF EXCHANGE OF CURRENCY, −, , Currency fluctuations shall be adjusted to amount of capital expenditure or the cost of acquisition of the capital, asset, , −, , If Forward contract is entered with Authorised Dealer, Exchange Rate of Contract is considered, , −, , If expenses incurred is in revenue nature, Exchange loss allowed u/s 37, , SECTION 43AA - TAX ON FOREIGN EXCHANGE FLUCTUATION, Section 43AA provides that, subject to the provisions of section 43A, [Newly Inserted Section by FA 2018], − Any gain or loss arising on account of any change in foreign exchange rates shall be, − Treated as income or loss, as the case may be,, − Which shall be computed in accordance with the notified ICDS, − i.e., ICDS VI: The effects of changes in foreign exchange rates., Gain or loss arising on account of the effects of change in foreign exchange rates shall be in respect of all foreign, currency transactions, including those relating to, − Monetary items and non-monetary items;, − Translation of financial statements of foreign operations, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.11

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DT - Simplified, −, −, , Forward exchange contracts;, Foreign currency translation reserves, , SECTION 43B - CERTAIN DEDUCTIONS TO BE MADE ONLY ON ACTUAL PAYMENT, Deductions shall be allowed only if payment made on or before the due date of filing of return, −, , Any sum payable by way of tax, duty, cess or fee, by whatever name called, , −, , Any sum payable by the assessee as an employer by way of contribution to any PF, Gratuity etc., ▪ Employer's Contribution to PF – Due date of Filing of ITR, ▪ Employees' Contribution to PF – Due date mentioned in PF Act [Governed by section 36], , −, , Bonus or Commission, Earned leave payable to employees., , −, , Interest on loan from Scheduled Bank or Co-Op Bank other than Agricultural or Rural Bank, if Interest converted into loan due to rescheduling does not mean actually paid hence not allowed, , − To the Indian Railways for use of Railway assets, If the payment is not made before due date of filing of return, deductions shall be allowed in the PY in which actual, payment is made., SECTION 43C - SPECIAL PROVISION FOR COMPUTATION OF COST OF ACQUISITION OF CERTAIN ASSETS, Stock in Trade transferred under the following cases in the event of amalgamation, −, , Stock in Trade → Taken over at revalued Price by amalgamated Co. or, , −, , Capital Asset → Taken over as Stock in Trade at revalued price by amalgamated Co. or, , −, , Capital Asset converted Into Stock in Trade by Amalgamating Co → Transferred to amalgamated co., , Cost of Acquisition = Cost of Acquisition to Amalgamating Co. plus Any Exps in this relation, However where Capital Asset → taken over as Capital Asset & Converted into SIT and revalued thereafter Section 45(2), apply in such cases, SECTION 43CA - STAMP DUTY VALUE OF LAND AND BUILDING TO BE TAKEN AS CONSIDERATION., −, , Where transferor held Land & Building as Stock in Trade and Value < Stamp Duty Value, , −, , Stamp Duty Valued shall be deemed to be the full value of the consideration for computing PGBP, , −, , Date of Valuation = Date of Agreement, in case of part/full payment made by mode other than CASH, Date of Registration – In any other case, Reference to Valuation Officer by A.O., −, , If Assessee claims that Stamp Duty Value > FMV of asset, AO may refer case to VO, , −, , In such case, where Value determined by VO > Stamp Duty Value, Stamp Duty Value shall be Consideration for, Asset, Allowability of Variance between Sale Consideration or SDV [w.e.f. 01-04-2019], − No adjustments shall be made in a case where the variation between SDV and the sale consideration is, −, , Not more than ten percent of the sale consideration, , −, , if SDV ≤ 110% of Sale Consideration, , −, , In such cases Sale Consideration will be taken as value, not SDV, , Special Relief in case of transfer of asset being RESIDENTIAL UNIT [to boost real estate sector], −, , Variation upto 120% (instead of 110%) will be allowed, , −, , Transfer takes place during 12th Nov. 2021 to 30th June 2022, , −, , It is first time allotment of any person (i.e. First transaction with buyer), , −, , Sale Consideration does not exceed 2 Crore, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.12

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DT - Simplified, SECTION 43CB - INCOME FROM CONSTRUCTION & SERVICE CONTRACTS, The profits and gains arising from [Newly Inserted Section by FA 2018], − Construction contract or, −, , Service contract, , −, , Shall be computed on the basis of percentage of completion method (POCM) in accordance with the notified ICDS, i.e., ICDS III: Construction Contracts., ❖ Exception in case of certain Service Contract, Method, , Condition, , Project Completion, Method, , If duration of Contract ≤ 90 Days, , Straight Line Method, , If Contract involves indeterminate number of acts over a specific, period of time, , −, , For the purpose of percentage of completion method, project completion method or straight line method, , −, , The contract revenue shall include retention money;, , −, , The contract cost shall not be reduced by any incidental income in the nature of interest, dividends or capital, gains., , SECTION 44AA - COMPULSORY MAINTENANCE BOOKS OF ACCOUNTS, ❖ Notified Profession [Section 44AA (1) read with Rule 6F], 1. Legal, 4. Architectural, 2. Medical, 5. Accountancy, 3. Engineering, 6. Technical Consultancy, −, , 7., 8., , Interior Decoration, Other Profession Notified, (Film Artist, CS & IT, Professional), , If Gross Receipts > ₹ 1,50,000 in all 3 Years immediately preceding PY, , ❖ Assessee other than above mentioned [Section 44AA (2)], Individual / HUF, Other than Individual / HUF, Income > ₹ 2,50,000 or Turnover > ₹25,00,000, Income > ₹ 1,20,000 or Turnover > ₹10,00,000, −, , In any one of 3 Years immediately preceding PY, , −, , In case of Newly set up business or Profession above limits likely to exceed in PY, , ❖ Prescribed Books of Accounts, Place and Period, −, , Cash Book, , −, , Journal, , −, , Ledger, , −, , Original Bills or Voucher in case of bills are not, issued <₹50, , −, , Medical Professionals – Case Register and, Medical Inventory, , − Carbon Copies of receipt > ₹ 25, Books of Accounts to be kept at Principal Place of Business or Profession, Kept and retained for the period of 6 Years, SECTION 44AB - AUDIT OF ACCOUNTS, , Following person required to get books of account audited by Chartered Accountant, 1. BUSINESS – Turnover/Gross Receipts/Sales > 100 Lakh, 2. PROFESSION – Gross Receipts > 50 Lakh, 3. Does not Opt for Presumptive Income i.e. Profit lower then limit in 44ADA, 44AE, 44BB, 44BB, 4. Assessee covered u/s 44AD (4) and Income exceeds basic exemption limit, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.13

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DT - Simplified, ❖ Audit Not Required if, −, , Turnover [Business] ≤ ₹ 200 Lakh and opt for Presumptive Income u/s 44AD, , −, , Turnover [Business] ≤ ₹ 100 Lakh and also do not opt for Presumptive Income u/s 44AD - if maintain Books of, Account u/s 44AA, , −, , Turnover [Business] ≤ ₹ 10 Crore and, ▪ Cash Receipts < 5% of Total Receipts &, ▪ Cash Payments < 5% of Total Payments, , ❖ Audit Report, −, , To be submitted One month prior to [30th Sept / 31st Oct] Due Date of Filing of Return [31st Oct / 30th Nov] as, the case may be in following Forms, , −, , Required Audit under other statute (e.g. Companies Act 2013) – Form 3CA/3CD, , −, , Any other case – Form 3CB /3CD, , ❖ Penalty u/s 271B, −, , if failure of get books of account audited or furnish report with ITR, , −, , 0.5% of Turnover or ₹ 1,50,000 whichever is lower, , SECTION 44AD – PROFIT & GAIN OF BUSINESS ON PRESUMPTIVE BASIS, −, , Eligibility - Assessee (except Co. & LLP) having Turnover form BUSINESS ≤ ₹ 200 Lakh, , −, , Tax Audit limit of ₹ 100 Lakh not applicable to person opt for presumptive income, , −, , Presumptive Profit Minimum (Higher profit can be declared), ▪ 6% of Turnover - in case of Receipt by Account Payee Cheque/DD/ECS before due date ITR, ▪ 8% of Turnover – in any other case, ▪ In case of Firm, No further deduction for Partner Interest and remuneration allowed, , −, , Deductions u/s 30 to 38 deemed to be allowed, No Further deductions allowed, , −, , Relief from maintenance of Books of Accounts u/s 44AA and Audit u/s 44AB, , −, , Required to Pay Advance tax by 15th March instead of instalments, , −, , Person having income from Commission or Agency Business not eligible, , Non Eligibility for 5 Assessment Years [ Section 44AD (4)], −, , Assessee Opted for presumptive income scheme in for any PY u/s 44AD (1), , −, , Then need to opt for presumptive income for 5 consecutive AY, , −, , If he violates this section i.e. does not declare income as per scheme (6% or 8%) for subsequent AY, , −, , He shall not eligible for 5 AY subsequent to AY in which he breaches this section, , −, , Assessee now required to maintain books of account u/s 44AA and get audited u/s 44AB for 5 subsequent AY, , SECTION 44ADA – PROFIT & GAIN OF PROFESSION ON PRESUMPTIVE BASIS, 1., 2., 3., 4., 5., 6., , Resident Assessee (Individual, HUF and Partnership Firm other than LLP) engaged in any PROFESSION have, option to declare on presumptive basis., gross receipts ≤ 50 lakh rupees in a previous year, Presumptive Profit ≥ 50% of the total gross receipts, Relief from maintenance of Books of Accounts u/s 44AA and Audit u/s 44AB, Required to pay Advance tax by 15th March instead of instalments, Lower Profit can be claimed subject to Compliance of Section 44AA and 44AB, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.14

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DT - Simplified, SECTION 44AE - PROFITS & GAINS OF BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAGES, 1., 2., , 3., 4., , OWNING ≤ 10 goods vehicles at any time during the previous year, Presumptive Income:, ▪ ₹ 1,000 PER TON of gross vehicle weight or unladen weight for every month or part of the month – In case, of Heavy Goods Vehicles (Gross Vehicle Weights > 12,000 Kgs), ▪ ₹ 7,500 for every MONTH or part of the month – In case of other vehicles, Relief from maintenance of Books of Accounts u/s 44AA and Audit u/s 44AB, Lower Profit can be claimed subject to Compliance of Section 44AA and 44AB, , INCOME IS PARTLY AGRICULTURAL AND PARTLY BUSINESS IN NATURE [RULE 7 & 8], , Rule, , COMPOSITE Income, , Business Income, (Taxable), , Agricultural Income, (Exempt), , 7A, , Manufacturer of Rubber, , 35%, , 65%, , 7B, , Manufacturer of Coffee, - Grown & Cured, - Grown, Cured, Roasted, Grounded, , 25%, 40%, , 75%, 60%, , Manufacturer of Tea, , 40%, , 60%, , 8, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 3.15

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DT - Simplified, , CHAPTER – 4, CAPITAL GAINS, SECTION 45 - SCOPE AND YEAR OF CHARGEABILITY, SECTION 45(1) - GENERAL PROVISION, −, , Any profits or gains arising from the Transfer of a Capital Asset chargeable to Income-tax under this head in the, previous year in which the transfer took place., , ❖ Capital Asset [Section 2(14)], −, , Capital Asset Includes property of any kind connected with business or not or, , −, , Securities held by FII or, , −, , ULIP issued ON OR AFTER 01st FEB 2021 to which exemption u/s 10(10D) DOES NOT apply on account of, premium payable exceeding 2,50,000 / Aggregate 2,50,000 in case of multiple ULIP for ANY PYs, , But does not include,, ▪ Stock-in trade or Gold Deposit Bond or Special Bearer Bond-1991 or, ▪ Personal effects – Movable assets for personal use but excludes,, ✓ Jewellery, ✓ Paintings, ✓ Any work of art., ✓ Drawings, ✓ Sculptures, ✓ Archaeological collection, ▪ Rural Agricultural Land in India – within Jurisdiction of Municipal/Cantonment having population as below,, CG from Rural Agricultural Land is exempt u/s 10(1), Population, , ≤ 2 Kms, , ≤ 10,000, , ≤ 6 Kms, , ≤ 8 Kms, , > 8 Kms, , Rural Agricultural Land (RAL), , ≤ 100,000, ≤ 10,00,000, > 10,00,000, , Urban Agricultural Land (UAL), , ❖ Transfer [Section 2(47)], Transfer includes deemed transfer also., ▪ Sale, exchange or relinquishment, ▪ Extinguishment of any rights therein, ▪ Compulsory acquisition, , ▪, ▪, ▪, , Conversion into Stock-in-trade, Maturity/Redemption of ZCB, Possession on part performance of Cont., , ❖ Short Term & Long Term Capital Assets [Section 2(42A)], STCA – Holding Period, , Assets, , ≤ 12 month, , Listed Securities / Equity Oriented Units / ZCB, , ≤ 24 month, , Unlisted Shares/Land or Building or Both, , ≤ 36 month, , Unlisted securities other than shares / Debt oriented Unit / Other Assets, , Period of Holding – [Explanation 1 to section 2(42A) read with Rule 8AA], −, , Asset acquired by way of Gift – Holding period and CII shall be considered from the year in which asset first, acquired by previous owner [CIT v. Manjula J. Shah (2013) – Bombay High Court]., , −, , Right/Bonus Shares – From Allotment Date, , −, , Conversion Pref. Shares/Bonds/Debentures into Equity – Include previous period of security, , CA Dhaval Patanvadia, , −, , www.theinvictus.in, , Right Sold – Period from right offered, , +91-87800 58699, , 4.1

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DT - Simplified, −, , Securities of company in liquidation – Period upto date of liquidation shall be considered, , −, , Inventory converted into Capital Asset – Period from date of conversion, , −, , Units allotted under segregated portfolio referred to in Section 49(2AG) – Period from Main Portfolio, , SECTION 45(1A) - RECEIPTS FROM INSURANCE PARTIES, −, , Profit and Gain arising from receipt of money/other assets from an insurer for damage/destruction, , −, , Deemed to be the income as CG (money or FMV of asset) in the previous year of receipt, ,  Capital Gain = Claim Received or FMV of Asset received – Cost of Asset or WDV in case of depreciable asset,  Taxability : Year in which such money or other asset is received, , SECTION 45(1B) – UNIT LINKED INSURANCE POLICY RECEIPTS [w.e.f. 01-04-2021], −, , Profit and Gain arising from receipt of money under ULIP, , −, , ULIP issued ON OR AFTER 01st FEB 2021 to which exemption u/s 10(10D) DOES NOT apply on account of, premium payable exceeding 2,50,000 / Aggregate 2,50,000 in case of multiple ULIP for ANY PYs, , −, , Taxable in the year in which such amount was received., , SECTION 45(2) - CONVERSION OR TREATMENT OF A CAPITAL ASSET AS STOCK-IN-TRADE, Conversion of Capital Asset → Stock in trade, , CG = FMV on Date of Conversion less, Cost/Indexed Cost of Acquisition/Improvement, , PGBP = Sale Price less FMV on date of Conversion, , Proportionately taxable in the year in which stock is, sold, Note: Indexation benefit would be considered in relation to year of Conversion, SECTION 45(3) - INTRODUCTION OF CAPITAL ASSET AS CAPITAL CONTRIBUTION BY PARTNER/MEMBER, −, , Capital asset as contribution or otherwise, by existing or incoming partner/member, in firm/AOP/BOI, , −, , Chargeable to tax in hands of partner/member in the year of such transfer, , −, , Sale Consideration = Amount recorded in the books of Firm/AOP/BOI, , Capital Gain = Amount recorded in books of Firm being FVOC – Cost of Asset, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.2

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DT - Simplified, SECTION 45(4) - DISTRIBUTION OF CAPITAL ASSETS OR MONEY ON A DISSOLUTION/RECONSTITUTION, OF FIRM/AOP/BOI OR OTHERWISE [Substituted Old Section 45(4)], −, , Where Partner/Member (Specified Person) of any Firm/AOP/BOI (Specified Entity) receives any Asset or Money or, Both on dissolution or reconstitution, , −, , Such transfer shall be taxable in the hands of firm/AOP/BOI in the year in which transfer took place, ,  Profit or Gain, ▪, ▪, ▪, ▪, −, , A, , = B + C – D (if A is NEGATIVE, Value shall be deemed to be ZERO), , A = Income Taxable in the hands of Specified Entity, B = Value of MONEY Received by Specified Person, C = FMV of ASSET Received by Specified Person on date of Receipt, D = Balance in Capital Account as on the date of RECONSTITUTION/DISSOLUTION, , Balance in Capital Account shall EXCLUDE increase on account of, ▪ Revaluation of any Asset, ▪ Value of SELF GENERATED Goodwill or Any other Asset, , SECTION 45(5) - COMPENSATION ON COMPULSORY ACQUISITION BY CENTRAL GOVT., −, , Capital Gain = Compensation less Cost, Chargeable in the year of receipt., , −, , Enhanced Compensation : Cost is NIL, Chargeable in the year of receipt, , −, , Reduction of compensation by Court/Tribunal etc. : Gain/Loss re-computed by rectification u/s 154, , −, , Compensation received under Interim Order : Chargeable to tax in year of final order, , SECTION 45(5A) - TAXABILITY OF CAPITAL GAINS IN CASE OF SPECIFIED AGREEMENT [W.E.F. 01-04-18], −, , 'Transfer' includes - where any ‘rights’ are handed over in as part performance of contract, , −, , Possession of property is handed over to the developer for development (e.g. Land/Building), , −, , Consideration for such transfer of rights will be received only after couple of years., , −, , Transaction attracts taxability in year of transfer of such right as per definition, , −, , Hence, Relief given by Postponement of taxability of capital gains to –, ▪ Individual or HUF only, ▪ Chargeable to income-tax as year in which the certificate of completion (whole or part) is received, ▪ Value of Consideration = Stamp Duty Value of his share plus Consideration received in cash, if any, ▪ When assessee transfer his share before completion certificate received – No relief available, , SECTION 46 - CAPITAL GAINS ON DISTRIBUTION OF ASSETS BY COMPANIES IN LIQUIDATION, Asset Distributed in liquidation, , In the hands of Share Holder, , In hands of Company, Not regarded as Transfer, Hence No CG, , Distribution attributable to, Accumulated Profit, Deemed Dividend = % of, Holding  Accumulated Profit, [Taxable under IFOS], , Full Value of Consideration =, FMV of Asset distributed less, Deemed Dividend, Subject to Capital Gain, , Note: if liquidator directly sells assets and distribute fund : Company shall be liable to CG, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.3

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DT - Simplified, , SECTION 46A - CAPITAL GAINS ON BUYBACK, ETC. OF SHARES, Taxability, , Domestic Companies, (Listed (w.e.f. 05-07-2019) or Unlisted), [Section 115QA], , Other than Domestic Companies, [Section 46A], , Company, , Taxable Income = Consideration Paid to, Shareholder less Amount Received at the time of, issue of Shares, Taxable @ 23.296%, [20 % Tax + 12% Surcharge + 4% HEC], [No indexation to be done], , No Taxability in the hands of Company, , Share, Holder, , Exempt u/s 10(34A), , Capital Gain = Amount Received less Cost of, Acquisition of such shares, , SECTION 47 & 49 - SPECIFIED CASES OF EXEMPT TRANSFER AND COST OF ACQUISITION TO TRANSFEREE, Nothing contained in section 45 shall apply to the following transfers, 1, , Specific transaction of asset distribution or transfer of asset [Sec. 47], a) Distribution of capital assets on the total or partial partition of a HUF [47(i)], b) Transfer of a capital asset under a gift or will or an irrevocable trust excluding ESOP [47(iii)], c) Transfer of capital asset by 100% Holding to Subsidiary or Vice-versa, Transferee Company must, be an INDIAN Co. in both the cases [47(iv) & (v)], − Exception, Capital Asset Transferred as Stock in Trade exemption shall not apply, − Exemption Withdrawn if, [Sec. 47A(1)], ▪ Any time before the expiry of 8 years from the date of transfer, ▪ Transferee converts such capital asset into stock in trade or, ▪ Parent company ceases to Hold 100% shares in subsidiary company, ▪ Capital Gain not charged on such transfer shall be deemed to be the capital gain of the, PY in which such transfer took place., Cost of Acquisition [Sec. 49], Transactions covered by Section 49(1), Where the capital asset became the property of the assessee—, − On any distribution of assets on the total or partial partition of a HUF;, − Under a gift or will;, − By succession, inheritance or devolution, or, − On any distribution of assets on the liquidation of a company, or, − Under a transfer to a revocable or an irrevocable trust, or, − Under any such transfer as is referred to in clause (iv) or clause (v), − Such assessee being a Hindu undivided family, by the mode referred to in sub-section (2) of, section 64 at any time after the 31st day of December, 1969,, Deemed Cost of Acquisition, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.4

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DT - Simplified, −, −, , Deemed cost of Acquisition = Cost of acquisition by Previous Owner + Cost of Improvement by, Previous Owner or Assessee, However, in case of Point C above - if exemption is withdrawn by virtue of Section 47A,, Cost of Acquisition = Cost at which asset acquired from transferor, , Previous Owner of Property, In this sub-section the expression "previous owner of the property" in relation to any capital asset, owned by an assessee means the last previous owner of the capital asset who acquired it by a mode, of acquisition OTHER THAN transactions referred above, 2, , Transfer of Asset in relation to Amalgamation/Demerger – Exempt transfer [Sec. 47], a) Transfer of Capital Asset held by, ▪ Amalgamating Company → Amalgamated INDIAN Company [47(vi)], ▪ Demerged Company → Resulting INDIAN Company [(vib)], b) Transfer of Shares held in INDIAN Company by, ▪ Amalgamating FOREIGN Company → Amalgamated FOREIGN Company [47(via)],  At least 25% of shareholders (Numbers) of Amalgamating FC continue to remain, shareholder of Amalgamated FC, ▪, , Demerged FOREIGN Company → Resulting FOREIGN Company [(vic)],  Shareholders holding not less than 3/4 in Value of Shares of Demerged FC continue to, remain shareholder of Resulting FC, , −, , Such transaction Should not attract CG in the country in which the amalgamating/, Demerged company is incorporated, , c) Transfer of Capital Asset held in banking company into banking institution in the scheme of, amalgamation [47(viaa)], d) Transfer of Capital Asset held in predecessor co-op bank to the successor co-op bank in business, reorganization [47(vica)], Cost of Acquisition [Sec. 49], − Deemed cost of Acquisition = Cost of acquisition by Previous Owner + Cost of Improvement by, Previous Owner or Assessee, 3, , Transfer of shares of a FOREIGN Company – Exempt transfer [Sec. 47], a) By Amalgamating FOREIGN Company into Amalgamated FOREIGN Company [47(viab)],  At least 25% of shareholders (Numbers) of Amalgamating FC continue to remain, shareholder of Amalgamated FC, b) By Demerged FOREIGN Company into Resulting FOREIGN Company [47(vicc)],  Shareholders holding not less than 3/4 in Value of Shares of Demerged FC continue to, remain shareholder of Resulting FC, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.5

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DT - Simplified, −, −, , Such transaction Should not attract CG in the country in which the amalgamating/ Demerged, company is incorporated, Share of a foreign company referred to in Explanation 5 to section 9(1)(i), which derives,, directly or indirectly, its value substantially from the share or shares of an INDIAN company, , Cost of Acquisition [Sec. 49], − Deemed cost of Acquisition = Cost of acquisition by Previous Owner + Cost of Improvement by, Previous Owner or Assessee, 4, , Transfer or issue of share to shareholder in relation to Amalgamation/Demerger – Exempt [Sec. 47], a) Transfer or issue of shares by the resulting company to the shareholder of demerged company, in a scheme of demerger [47(vid)], b) Transfer of shares held in the amalgamating company by a shareholder, in a scheme of, amalgamation. [47(vii)],  The amalgamated company is an Indian Company,  The transfer is made in consideration of the allotment to him of any SHARES in the, amalgamated company,  Where the shareholder itself is the amalgamated company, this conditions does not apply, (if Co. itself is a shareholder so cannot issue shares to itself), c) Shares held by shareholder in Predecessor co-op bank on allotment of shares in Successor coop bank in business reorganization [47(viicb)], Cost of Acquisition [Sec. 49], − In case of demerger cost of acquisition in Resulting Company = A  B / C, A = Cost of shares of Demerged Co., B = Net worth transferred to Resulting, C = Total Net worth of Demerged Co., −, , In case of demerger cost of share held in Demerged Company, Cost of Shares of Demerged Co. reduced by Cost allotted to share of resulting as above, , − Cost of acquisition in Amalgamated/Successor Company will be Cost of Share acquired in, Amalgamating/Predecessor Co., 5, , Related to Succession, Conversion for Firm, Company and Demutualisation & Corporatisation, (Scheme) of Recognised Stock Exchange (RSE) – Exempt [Sec. 47], a) Transfer of a capital asset or intangible asset (in the case of a firm) [47(xiii)], − By a firm to a company where such firm is succeeded by that company or, − To a company in the course of demutualisation or corporatisation of a Recognised Stock, Exchange (RSE) in India as a result of which an AOP or BOI is succeeded by that company., Conditions –,  All assets and liabilities of the firm or AOP or BOI relating to the business immediately, before the succession become the assets and liabilities of the company;, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.6

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DT - Simplified,  All the partners of the firm immediately before the succession become the shareholders of, the company and the proportion in which their capital accounts stood in the books of the, firm on the date of succession remains the same;,  The partners of the firm do not receive any consideration or benefit in any form, directly or, indirectly, other than by way of allotment of shares in the company.,  The partners of the firm together hold not less than 50% of the total voting power in the, company, and their shareholding continues in such manner for a period of 5 years from the, date of succession.,  The demutualisation or corporatisation of a RSE in India is carried out in accordance with a, scheme for demutualisation or corporatisation approved by SEBI, Exemption Withdrawn if any of the condition not complied with and deemed income shall be, chargeable to tax in hands of Successor, [Sec. 47A (3)], b) Any transfer of a membership right by a member of RSE in India [47(xiiia)], − For acquisition of shares and, − Trading or clearing rights, − Acquired by such member in that RSE in accordance with a scheme for demutualization or, corporatisation approved by SEBI., c) Transfer of capital asset or intangible asset by private company and share held by shareholder, to LLP in a conversion of private company by a LLP [47(xiiib)], − Any transfer of a capital asset or intangible asset by a private company or unlisted public, company to a LLP or, − Any transfer of a share or shares held in a company by a shareholder on conversion of a, company into a LLP., Conditions –,  All assets and liabilities of the company immediately before the conversion become the, assets and liabilities of the LLP;,  All the shareholders of the company immediately before the conversion become partners, of the LLP in the same proportion as their shareholding in the company on the date of, conversion;,  No consideration other than share in profit and capital contribution in the LLP arises to the, shareholders;,  The erstwhile shareholders of the company continue to be entitled to receive at least 50%, of the profits of the LLP for a period of 5 years from the date of conversion;,  The total sales, turnover or gross receipts in business of the company should not exceed ₹, 60 lakh in any of the three preceding PYs;,  The total value of assets as appearing in the books of account of the company in any of the, three previous years preceding the previous year in which the conversion takes place,, should not exceed ₹ 5 crore; and,  No amount is paid, either directly or indirectly, to any partner out of the accumulated profit, of the company for a period of 3 years from the date of conversion, Exemption Withdrawn if any of the condition not complied with and deemed income shall be, chargeable to tax in hands of Successor, [Sec. 47A (4)], , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.7

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DT - Simplified, d) Transfer of capital asset or intangible asset by sole proprietary concern to a company in a, succession of sole proprietary concern by a company [47(xiv)], Conditions –,  All assets and liabilities of the sole proprietary concern relating to the business immediately, before the succession become the assets and liabilities of the company;,  The sole proprietor holds not less than 50% of the total voting power in the company, and, his shareholding continues in such manner for a period of 5 years from the date of, succession;,  The sole proprietor does not receive any consideration or benefit in any form, directly or, indirectly, other than by way of allotment of shares in the company;, Exemption Withdrawn if any of the condition not complied with and deemed income shall be, chargeable to tax in hands of Successor, [Sec. 47A (3)], Cost of Asset [Sec. 49], − Deemed Cost of Asset = Cost of acquisition by Previous Owner plus Cost of Improvement by, Previous Owner or Assessee, − Cost of acquisition of rights in LLP of a partner received on conversion of private or unlisted, public company into LLP shall be Cost of Share held in predecessor Company, Cost of Asset [Sec. 55], − Cost of Shares allotted in Scheme of RSE to a member = Cost of acquiring original membership, of exchange before scheme, − Cost of acquiring Trading or Clearing Right = NIL, 6, , Conversion of Bonds/Preference into Shares – Exempt Transfer [Sec. 47], a) Any transfer by way of conversion of bonds or debentures, debenture-stock or deposit, certificates in any form, of a company into shares or debentures of that company [47(x)], b) Any transfer by way of conversion of Foreign Currency Exchangeable Bonds referred to in, clause (a) of section 115AC(1) into shares or debentures of a company [47(xa)], c) Any transfer by way of conversion of preference shares of a company into equity shares of, that company [47(xb)], Cost of Asset [Sec. 49], − Cost of Bonds/Preference shares etc. in relation to which asset acquired., , 7, , Transfer of Capital Asset / Units from Original Fund to Resulting Fund – Exempt Transfer [Sec. 47], a) Transfer of Capital Asset in relocation from Original fund to Resulting Fund (in the case of a Fund), [47(viiac)], − Original Fund Established OUTSIDE India, − Resultant Fund Incorporated IN INDIA in form of Trust / Company / LLP, b) Transfer of Unit/Share/Interest of Original fund in consideration of Unit/Share/Interest in, Resulting Fund (in the case of a Unit holder) [47(viiad)], , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.8

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DT - Simplified, Cost of Asset [Sec. 49], Deemed cost of Acquisition = Cost of acquisition by Previous Owner + Cost of Improvement by Previous, Owner or Assessee, Certain Transfer of Capital Asset to CG Notified Companies or Institution, a) Transfer of Capital Asset by India Infrastructure Finance Company Limited to an institution, established for financing the infrastructure and development, set up under an Act of Parliament, [47(viiae)], b) Any transfer of capital asset, under a plan approved by the CG, by a public sector company to, another public sector company notified by the Central Government for the purpose of this clause, or to the CG or to a SG [47(viiaf)], Cost of Asset [Sec. 49], Deemed cost of Acquisition = Cost of acquisition by Previous Owner + Cost of Improvement by Previous, Owner or Assessee, 9, , Some Other Exempt Transfer [Sec. 47], a) Following capital assets transferred by a non-resident on a recognised stock exchange located, in any International Financial Services Centre (IFSC) shall not be regarded as transfer, where the, consideration for such transaction is paid or payable in foreign currency: [47(viiab)], − Bond or GDR referred to in section 115AC (1); or, − Rupee denominated bond of an Indian company; or, − Derivative, − Such other securities notified by central government in this behalf, b) Any transfer of bonds or Global Depository Receipts referred to in section 115AC(1), by a nonresident to another non-resident outside India [47(viia)]., c) Any transfer, made outside India, of a capital asset being rupee denominated bond of an Indian, company issued outside India, by a non-resident to another non-resident [47(viiaa)], d) Any transfer of a capital asset, [47(viib)], − being a Government Security carrying a periodic payment of interest,, − made outside India through an intermediary dealing in settlement of securities,, − by a non-resident to another non-resident, e) Redemption by an individual of Sovereign Gold Bond issued by RBI under the Sovereign Gold, Bond Scheme, 2015 [47(viic)], f) Any transfer of any of the following capital asset to the Government or to the University or the, National Museum, National Art Gallery, National Archives or any other public museum or, institution notified by the Central Government to be of national importance or to be of renown, throughout any State [47(ix)]:, − Work of art, − Archaeological, scientific or art collection, − Book, − Manuscript, − Drawing, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.9

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DT - Simplified, −, −, −, , Painting, Photograph or, Print., , g) Transfer of land by a sick industrial company [47(xii)], h) Transfer in a scheme for lending of any securities – Security Lending Scheme [47(xv)], i), , Any transfer of a capital asset in a transaction of reverse mortgage under a scheme made and, notified by the Central Government [47(xvi)], , j), , Any transfer of a capital asset, being share of a special purpose vehicle to a business trust in, exchange of units allotted by that trust to the transferor [47(xvii)], , k) Transfer of unit(s) by a unit holder under consolidating Scheme/Plan of Mutual Fund [47(xviii) &, 47(xix)], 8, , Other cases of Cost of Acquisition [Sec. 49], a) Where the capital gain arises from the transfer of specified security or sweat equity shares, referred to in section 17(2)(vi), the cost of acquisition of such security or shares shall be the FMV, which has been taken into account for perquisite valuation [49(2AA)]., b) Where the capital gain arises from the transfer of a capital asset which was used by the assessee, as inventory earlier before its conversion into capital asset, the cost of acquisition of such capital, asset shall be the FMV of the inventory as on the date of such conversion determined in the, prescribed manner. [49(9)], c) The cost of acquisition of the capital asset, being share or shares of a company acquired by a, non-resident assessee, consequent to redemption of GDRs [referred to in section 115AC(1)(b)], held by him would be the price of such share or shares prevailing on any recognized stock, exchange on the date on which a request for such redemption was made [49(2ABB)], d) Where the capital asset, being unit of a business trust, became the property of the assessee in, consideration of transfer of shares of a special purpose vehicle as referred to in section 47(xvii),, the cost of acquisition of the unit would be the cost of acquisition of the shares to him [49(2AC)], e) The cost of acquisition of the units acquired by the assessee in consolidated scheme/plan of, mutual fund in consideration of transfer referred in section 47(xviii) & 47(xix) shall be deemed, to be the cost of acquisition to him of the units in the consolidating scheme/plan of mutual fund, [49(2AD) & 49(2AF)], f) Where the capital gain arises from the transfer of such property which has been subject to tax, under section 56(2)(x), the cost of acquisition of the property shall be deemed to be the value, taken into account for the purposes of section 56(2)(x) [49(4)], g) Where capital gain arises from the transfer of asset declared under the Income Declaration, Scheme, 2016 and the tax, surcharge and penalty have been paid in accordance with the, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.10

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DT - Simplified, provisions of the Scheme on the FMV of the asset as on the date of commencement of the, Scheme, the cost of acquisition of the asset shall be deemed to be the FMV of the asset which, has been taken into account for the purposes of the said scheme [49(5)], h) Deemed cost of acquisition being stamp duty value as on the last day of the second financial, year after the end of the financial year in which the possession of the said plot or land was, handed over to the assessee under Land Pooling Ownership Scheme (LOPC) in the state of, Andhra Pradesh [49(6)], i), , Cost of acquisition of capital asset, being share in the project referred u/s 45(5A) would be, amount which is deemed value of consideration under 45(5A) [49(7)], , j), , The cost of acquisition of a unit or units in the segregated portfolio shall be the amount which, bears, to the cost of acquisition of a unit or units held by the assessee in the total portfolio, the, same proportion as the net asset value of the asset transferred to the segregated portfolio, bears to the net asset value of the total portfolio immediately before the segregation of, portfolios. [49(2AG)], , k) The cost of the acquisition of the original units held by the unit holder in the main portfolio shall, be deemed to have been reduced by the amount as so arrived at under sub-section (2AG)., [49(2AH)], SECTION 55 – COST OF ACQUISITION / IMPROVEMENT – CERTAIN CASES, ❖ Goodwill / Business Rights etc. [Sub. old clause (a)], −, , In case of acquired from previous owner : Amount paid for acquisition, ▪ If depreciation is claimed for any PYs preceding the PY relevant to AY commencing on or after 01-04-21,, such depreciation shall be reduced from such cost, , −, , In case of acquired from previous owner u/s 47 : Cost at which previous owner has acquired, ▪ If depreciation is claimed for any PYs preceding the PY relevant to AY commencing on or after 01-04-21,, such depreciation shall be reduced from such cost, , −, , Cost of Improvement = NIL in any case, , ❖ Financial Assets, −, , Cost of Acquisition of Original / Right Shares = Amount Paid, , −, , Cost of right entitlement which is renounced = NIL, , −, , Cost of Bonus Shares = NIL, ▪ In case of bonus allotted before 01-04-2001 Assessee can Opt of for FMV as on 01-04-2001, , −, , Shares purchased by buying Right Entitlement = Amount paid for Shares less Amount paid for Right, , ❖ Any other capital assets, −, , Asset acquired before 1-4-2001 = Cost of Acquisition or FMV on 01-04-2001, as assessee may Opt, , −, , Cost of Improvement = All expenses in capital nature incurred Only after 01-04-2001, , −, , Cost of Asset as per Section 49 = Cost to Previous Owner, However Option for FMV is available as above if, acquired before 01-04-2001., Provided that in case of a capital asset referred above, being LAND or BUILDING or BOTH,, − the FMV of such asset on the 01-04-2001 for the purposes, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.11

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DT - Simplified, − shall not exceed the stamp duty value, wherever available, of such asset as on the 01-04-2001., ❖ Long-term capital assets referred to in section 112A, −, , The cost of acquisition in relation to the long-term capital assets being,, ▪ Equity shares in a company on which STT is paid both at the time of purchase and transfer or, ▪ Unit of equity oriented fund or unit of business trust on which STT is paid at the time of transfer., , −, , Acquired before 1st February, 2018 shall be the higher of, (i) Cost of acquisition of such asset; and, (ii) Lower of, a) The FMV of such asset; and, b) The FVOC received or accruing as a result of the transfer of the capital asset., Sr. No, A, , Circumstances, , Fair Market Value, , In a case where the capital asset is listed on, any recognized stock exchange as on, 31.01.2018, , If there is trading in such asset on such, exchange on 31.01.2018, The highest price of the capital asset quoted, on such exchange on the said date, If there is no trading in such asset on such, exchange on 31.01.2018, The highest price of such asset on such, exchange on a date immediately preceding, 31.01.2018 when such asset was traded on, such exchange., , B, , In a case where the capital asset is a unit, which is not listed on any recognized stock, exchange as on 31.01.2018, , The NAV of such unit as on the said date, , C, , In a case where the capital asset is an equity, share in a company which is, − Not listed on a recognized stock exchange, as on 31.01.2018 but listed on such, exchange on the date of transfer, − Listed on a recognized stock exchange on, the date of transfer and which became the, property of the assessee in consideration, of share which is not listed on such, exchange as on 31.01.2018 by way of, transaction not regarded as transfer under, section 47, , An amount which bears to the cost of, acquisition the same proportion as CII for the, financial year 2017-18 bears to the CII for the, first year in which the asset was held by the, assessee or on 01.04.2001, whichever is later., , CA Dhaval Patanvadia, , www.theinvictus.in, , Simply,, FMV =, , Cost of Acquisition × CII [ 2017-18], CII [Yr. of Acquisition] or For 2001-02, Whichever is later, , +91-87800 58699, , 4.12

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DT - Simplified, SECTION 48 - MODE OF COMPUTATION OF CAPITAL GAINS, Particulars, , Amount, , Full Value of Consideration / Sale Consideration, , XXXX, , Less: Expense Related to Transfer [STT paid not allowed], , XXXX, , Net Sale Consideration, , XXXX, , Less: Cost/Indexed Cost of Acquisition/Improvement, , XXXX, , Capital Gain / Loss, , XXXX, , Less: Exemption available, , XXXX, , Capital Gain / Loss chargeable to Tax, −, , XXXX, , Indexation benefit only applicable for LTCA, , −, , No Indexation benefit in following Cases, ▪ Bonds / Debentures acquired in Foreign Currency except, Capital Indexed Bonds and SGB 2015, ▪ Depreciable Asset, ▪ Short Term Capital Asset, ▪ Sale of undertaking under Slump Sale u/s 50B, ▪ Non-resident Assessee and Foreign Co., , Value attributable remaining assets in case of Section 45(4), Sr., No., 1, , Money or Assets received by Partner in EXCESS of, CAPITAL BALANCE and, Such EXCESS relates to, , Amount Attributable to remaining assets of, Specified Entity (Firm / AOP / BOI), , REVALUATION of Assets or, RECOGNITION of Asset or Self-Generated Assets, 𝑃𝑟𝑜𝑓𝑖𝑡 𝐶ℎ𝑎𝑟𝑔𝑒𝑑 𝑢/𝑠 45(4) ×, , 𝐼𝑛𝑐𝑟𝑒𝑎𝑠𝑒 𝑑𝑢𝑒 𝑡𝑜, 𝑅𝑒𝑣𝑎𝑙𝑢𝑎𝑡𝑖𝑜𝑛 𝐴𝑚𝑜𝑢𝑛𝑡, 𝑜𝑟, 𝑅𝑒𝑐𝑜𝑔𝑛𝑖𝑠𝑒𝑑 𝐴𝑚𝑜𝑢𝑛𝑡, 𝑜𝑓 𝑁𝑒𝑤 𝐴𝑠𝑠𝑒𝑡, 𝐴𝑔𝑔𝑟𝑒𝑔𝑎𝑡𝑒 𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓, 𝑅𝑒𝑣𝑎𝑙𝑢𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 𝐴𝐿𝐿 𝑎𝑠𝑠𝑒𝑡𝑠, 𝒐𝒓, 𝑅𝑒𝑐𝑜𝑔𝑛𝑖𝑠𝑒𝑑 𝐴𝑚𝑜𝑢𝑛𝑡 𝑜𝑓, 𝑎𝑙𝑙 𝑁𝑒𝑤 𝐴𝑠𝑒𝑒𝑡𝑠, , 2, , Revaluation ONLY Relates to Capital Assets received, by Specified Person, , Profit Charged u/s 45(4) shall not be attributed to, remaining assets, , 3, , Excess does not relates to revalution of Assets, , Profit Charged u/s 45(4) shall not be attributed to, remaining assets, , For Detailed explanation – Please refer Study Material, ❖ Special provision for non-residents who invest foreign Exchange to acquire Capital Asset, −, , CG arising from the transfer of shares or debentures of an Indian company computed by conversion of Foreign, Currency as under [Rule 115A], Particulars, , Amount, , Sale Consideration [ @Avge. Ex. Rate on Transfer], , XXXX [FC], , Less: Expenses on Transfer [@Avge. Ex. Rate on Transfer], , XXXX [FC], , Net Sale Consideration, Less: Cost of Acquisition [@Avge. Ex. Rate on Purchase], , XXXX [FC], XXXX [FC], , Capital Gain / Loss [ in Foreign Currency ], Capital Gain in INR [ FC x TT Buying Rate on date of Transfer], , XXXX [FC], XXXX [INR], , Avge Exchange Rate = Avge Rate of Telegraphic Transfer Buying and Selling Rate, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.13

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DT - Simplified, ❖ Capital Gain due to rupee appreciation in case of Rupee Denominated Bonds (RDBs) is exempt, −, , Indian companies are allowed to Issue RDB outside India to raise the funds., , −, , In case any non-resident holds such RDB and bears risk of foreign exchange fluctuation., Particulars, , Amount, , Redeemed at par, Redemption Price, , [FV in INR / Ex. Rate], , 1000/62, , $ 16.12, , Less : Cost of Acquision, , [FV in INR / Ex. Rate], , 1000/66, , $ 15.15, , Gain/loss due to Rupee Appreciation, [Such gain is not taxable, excluded from CG], , [in FC], , $ 0.97, , Now let’s assume that RDB redeemed at premium, Redemption Price, , [FV in INR / Ex. Rate], , 1050/62, , $ 16.93, , Less : Cost of Acquision, , [FV in INR / Ex. Rate], , 1000/66, , $ 15.15, , Gain/loss on Redemption, , [in FC], , $ 1.78, , Less : Gain due to rupee appreciation exempt [as above], , $ 0.97, , Net gain chargeable to tax, , 50/62, , $ 0.81, , ❖ Cost Inflation Index Table, Cost Inflation Indices (CII), FY, , CII, , FY, , CII, , FY, , CII, , FY, , CII, , 2001-02, , 100, , 2006-07, , 122, , 2011-12, , 184, , 2016-17, , 264, , 2002-03, , 105, , 2007-08, , 129, , 2012-13, , 200, , 2017-18, , 272, , 2003-04, , 109, , 2008-09, , 137, , 2013-14, , 220, , 2018-19, , 280, , 2004-05, , 113, , 2009-10, , 148, , 2014-15, , 240, , 2019-20, , 289, , 2005-06, , 117, , 2010-11, , 167, , 2015-16, , 254, , 2020-21, , 301, , Asset acquired before 01/04/2001, COA = Higher of Actual Cost or FMV as on 01/04/2001 [At option of Assessee], Improvement before 01/04/2001 shall be ignored., SECTION 50 – GAIN/LOSS ON TRANSFER OF DEPRECIABLE ASSETS, , −, , Always STCG/STCL on Depreciable asset, Irrespective of Period of Holding u/s 2(42A), , ❖ Where all assets of blocks are not transferred, −, , Let take example Asset A, B & C are falling in same block say Plant & Machinery, Block – Plant & Machinery, , Amount, , WDV at beginning of the year (Asset A & B), , 1,00,000, , Add: Actual Cost of asset acquired during the year (Asset C), , 4,00,000, , Less: Net Sale Consideration of Asset Transferred (Asset B), , 7,50,000, STCG, , 2,50,000, , −, , Net sale consideration of one asset (Asset B) exceeds opening Balance of WDV and Cost of asset acquired, during the year (Asset C), , −, , Hence there is no value remain in block. The excess amount (INR 2,50,000) will be STCG, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.14

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DT - Simplified, ❖ Where all assets of block are transferred, −, , Now, Let’s assume all asset (A, B, & C) in above example sold for INR 4,50,000., , −, , There is balance amount in block of INR 50,000 (5,00,000 – 4,50,000) will be STCL as there is no asset remain, in the block so Block cease to exist., So Simply,, Value Remain, in Block, , Asset remain, in Block, , Sale Consideration > Op WDV +, Asset Acquired, , No, , Yes, , STCG, No Depreciation on, remaining Asset, , Sale Consideration < Op WDV +, Asset Acquired, , Yes, , No, , STCL, No depreciation on, remaining Value, , Any of above situation, , Yes, , Yes, , No STCG/STCL, Depreciation, allowed on Closing Balance, , Situation, , STCG/STCL, , Determination of WDV where Goodwill of Business or Profession forms part of block of asset for AY 2020-21, and depreciation has been claimed on such goodwill, WDV of Block of Intangible assets (Amount of Goodwill shall be deducted from Block), Amount of Block of Assets consist of Goodwill LESS Amount of Goodwill reduced by depreciation claimed, STCG (Excess as below will be STCG), Reduction Amount u/s 43(6), (Goodwill Amount – Depreciation Claimed), , >, , WDV of Block at beginning of PY 2020-21 (Without Reduction), Add : Intangibles acquired OTHER THAN Goodwill, , ❖ In case of Asset belongs to Power Sector Undertakings in which SLM applicable, −, , When Sale Consideration > Actual cost of Asset, , −, , Actual Cost less WDV = Terminal Depreciation, , −, , Sale Consideration less Actual Cost = STCG, , SECTION 50B – GAIN/LOSS ON TRANSFER OF UNDERTAKING AS SLUMP SALE, −, , Capital Gain/Loss = Sale Consideration (FMV on Date transfer shall be deemed to be FVOC), less Net Worth (Deemed Cost of Acquisition), , −, , Net Worth = Assets less Liabilities (Belongs to Undertaking transferred), , −, −, , A report of a Chartered Accountant before the specified date referred to in section 44AB, If Undertaking held for > 36 Months = LTCG, However Indexation benefit not available, , −, , Value of Assets Transferred under Slump Sale (Ignore Revaluation effect), ✓ Depreciable Asset = WDV as per Section 43(6)(C), ▪ WDV of Asset = Cost of Asset less Depreciation, ▪ However, such WDV is restricted to total WDV of Block of which asset belongs, ✓ Other Assets = Book Value of Other Assets, , Example: WDV of Block ‘Buildings’ = 55,00,000 as on 01-04-2021 includes ‘Building A’, ‘Building A’ (Cost = 62,00,000, Acquired 01-04-2020) is transferred under slump sale of undertaking, WDV of ‘Building A’ Transferred = 62,00,000 (Cost) less 6,20,000 (Depreciation @10% for 2020-21), = 55,80,000, Total WDV of Block ‘Buildings’ = 55,00,000 < WDV of ‘Building A’ alone i.e. 55,80,000, Hence WDV of Asset Transferred restricted to WDV of Block ‘Buildings’ = 55,00,000, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.15

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DT - Simplified, SECTION 50C - STAMP DUTY VALUE WOULD BE THE FULL VALUE OF CONSIDERATION, −, , Where consideration received on transfer of capital asset and such Consideration < Stamp Duty Value, , −, , Stamp Duty Value shall be deemed to be the sale consideration for computing PGBP, , −, , Date of Valuation = Date of Agreement : in case of at least part of payment made other than CASH, or = Date of Registration : In any other case, , Reference to Valuation Officer by A.O., −, , if Assessee claims that Stamp Duty Value > FMV of Asset., , −, , Where Valuation done by Valuation Officer > Stamp Duty Value, in such cases Stamp Duty Value shall be full, value of Consideration for Asset, , Allowability of Variance between Sale Consideration or SDV, − No adjustments shall be made in a case where the variation between SDV and the sale consideration is, −, , Not more than five percent of the sale consideration, , −, , if SDV ≤ 110% of Sale Consideration, , −, , In such cases Sale Consideration = FVOC, not SDV, , SECTION 50CA – SALE CONSIDERATION FOR TRANSFER OF SHARES OTHER THAN QUOTED SHARES, −, , Sale Consideration received < FMV, In such case FMV shall be the deemed Value of Consideration, , −, , Quoted share = the share quoted on any RSE with regularity from time to time, where the quotation of such, share is based on current transaction made in the ordinary course of business., , −, , Calculation of FMV as per Rule 11U and Rule 11UA, , SECTION 50D – SALE CONSIDERATION FOR TRANSFER OF ANY CAPITAL ASSET, −, , Where the consideration received on transfer of a capital asset is not ascertainable/determined,, , −, , FMV shall be the full Value of Consideration, , SECTION 51 – ADVANCE MONEY RECEIVED – FORFEITED ON FAILURE OF NEGOTIATION, −, , Before 01-04-2014 : Deducted from Cost of Acquisition before indexation,, Taxable in the year of Transfer of Asset, , −, , On or After 01-04-2014 : Taxable u/s 56(2)(ix) as IFOS, Taxable in the year of forfeiture, , EXEMPTIONS IN CAPITAL GAIN [SECTION 10], 1., , Capital gain on transfer of a unit of Unit Scheme, 1964 [Section 10(33)], , 2., , Capital gains on compulsory acquisition of Urban Agricultural Land [Section 10(37)], − Available to Individual or HUF,, − Provided Such Land used during preceding 2 years for agricultural purpose by Individual or his Parents or, by HUF, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.16

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DT - Simplified, EXEMPTIONS IN CAPITAL GAIN ON INVESTMENT BASIS, , PROVISIONS, , SECTION 54 –, CG ON SALE OF, RESIDENTIAL HOUSE, , Assessee, , SECTION 54B –, GAIN ON TRANSFER OF, URBAN AGRICULTURAL, LAND [UAL], , SECTION 54F –, CAPITAL GAIN ON SALE OF, ANY LTCA, , Individual & HUF, , Conditions, , ▪ Transfer of residential, house,, ▪ Income of which is charged, under IFHP, ▪ It must be LTCA, ▪ Used for Residential, Purpose, , ▪ UAL [LTCA or STCA], ▪ Any LTCA other than, ▪ Land must be used for agri., Residential House, purpose by Individual or his, ▪ Assessee should not own, parents/HUF – Preceding 2, more than one residential, yrs. immediately preceding, house on date of transfer, the date of transfer, , New Asset, , If CG ≤ 2 Cr, ▪ Two Resi. House (Option, can be exercised once only., Not available again for same, or subsequent AY even if CG, ≤ 2 Cr) in India, If CG > 2 Cr., One Resi. House in India, , Any Agricultural Land, [UAL or RAL], , Residential House situated in, India, , Amount of, Exemption, , Lower of, CG or Cost of New Asset, , Lower of, CG or Cost of New Land, , Proportionate, CG x Amount Invested, Net Sale Consideration, , Time Period to, acquire New, Asset, , Restriction on, transfer of New, Asset /, Acquisition, , ▪ Purchased within 1 yr., before or 2 yrs. after the, date of Transfer., or, ▪ Constructed within 3 yrs., From the date of transfer, , New asset acquired shall not, be transferred within 3 yrs., from the date of purchase /, Construction, , CA Dhaval Patanvadia, , ▪ Purchased within 1 yr., before or 2 yrs. after the, date of Transfer., or, ▪ Constructed within 3 yrs., From the date of transfer, , ▪ Purchased within 2 yrs., from date of transfer, , New UAL shall not be, transferred within 3 yrs. from, the date of purchase of New, UAL, N.A. if New land is RAL, as it is, already exempted from CG, , www.theinvictus.in, , Should not Transfer within, 3 yrs. from the date of, purchase / Construction, or, Should not,, Purchase within 2 yrs. /, Construct within 3 yrs. from, the date of transfer, Any residential house other, than above new asset, , +91-87800 58699, , 4.17

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DT - Simplified, , Consequences, on Violation of, any condition, , Cost of Acquisition of asset, transferred shall be reduced, by CG exempted earlier for, the purpose of computation of, CG of new asset, , Cost of Acquisition of land, transferred shall be reduced, by CG exempted earlier for, the purpose of computation of, CG of new land, , Exemption not available and, CG exempted earlier, Chargeable to tax, , PROVISIONS, , SECTION 54D –, CG ON COMPULSORY, ACQUISITION OF LAND &, BUILDING OF INDUSTRIAL, UNDERTAKING, , SECTION 54EC –, INVESTMENT IN CERTAIN, BONDS, , SECTION 54EE –, INVESTMENT IN CERTAIN, NOTIFIED UNITS OF, BONDS, , Assessee, , Any Assessee, ▪ Transfer of any LTCA being, Land or Building or Both, ▪ Money recd. on liquidation, of company is taxable, however there is not, transfer of capital asset, hence no exemption u/s, 54EC available, [CIT vs. Ruby Trading (Raj, HC)], ▪ Depreciable asset held for >, 36 months – Also eligible, [CIT vs. Dempo Co. (SC)], , ▪ Transfer of any LTCA, , Unit issued before 01-042019 of such fund as notified, by Govt., , Conditions, , ▪ Must be Land & Building, ▪ Used by the assessee for, business of industrial, undertaking – 2 yrs., preceding date of transfer, ▪ Even if he is not owner, during 2 yrs. (e.g. Rented, Premise which purchased, later on), , New Asset, , Purchase/Construct any other, land or Building for, Shifting/Re-establish existing, or Setting up new industrial, undertaking, , Bonds of NHAI or, RECL or, Power Finance Corp. (PFC) or, Railway Finance Corp (RFC), Redeemable after 5 yrs.,, issued on or after 01-04-2018, , Lower of, CG or Cost of New Asset, , Lower of, CG or Cost of Investment, [Max. 50 Lakh], , Amount of, Exemption, , Time Period to, acquire New, Asset, , ▪ Purchase/Construct:, within 3 yrs. From date of, transfer, , CA Dhaval Patanvadia, , Lower of, CG or Cost of Investment, ▪ [Max. 50 Lakh], , ▪ Purchase:, Within 6 months from date, of transfer, Capital Asset converted into, stock in trade, 6 months shall, be reckoned from the date of, sale of stock in trade, , www.theinvictus.in, , ▪ Purchase: Within 6 months, from date of transfer, , +91-87800 58699, , 4.18

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DT - Simplified, , New undertaking shall not be, transferred within 3 yrs. from, the date of purchase /, Construction, , Should not, Transfer/Convert/avail, loan/advance on security, within 5 yrs. from the date of, purchase of bonds, , Should not, Transfer/Convert/avail, loan/advance on security, within 3 yrs. from the date of, purchase of bonds, , Consequences, on Violation of, any condition, , Cost of Acquisition of asset, transferred shall be reduced, by CG exempted earlier for, the purpose of computation of, CG of new asset, , CG exempted earlier shall be, taxed in the year of violation, , CG exempted earlier shall be, taxed in the year of violation, , PROVISIONS, , SECTION 54G CG ON SHIFTING OF, INDUSTRIAL, UNDERTAKING FROM, URBAN AREAS, , Restriction on, transfer of New, Asset /, Acquisition, , Assessee, , Any Assessee transfers Industrial Undertaking, ▪ Shifting of industrial, undertaking from, Urban area to any area, other than urban area, , Conditions, , SECTION 54GA CG ON SHIFTING OF, INDUSTRIAL, UNDERTAKING FROM, URBAN AREAS TO SEZ, , ▪ Transfer of machinery,, plant, building or land, or any right in building, or land used for the, business of an, industrial undertaking, situated in an urban, area, , ▪ Shifting of an industrial, undertaking from an, urban area to any SEZ,, whether developed in, an urban area or not, ▪ Transfer of machinery,, plant, building or land, or any right in building, or land used for the, business of an, industrial undertaking, situated in an urban, area, , SECTION 54GB CG ON RESI. HOUSE & USED TO, SUBSCRIBE EQUITY IN START-UP, , Individual or HUF, , ▪ Sale of a residential property (house, or plot of land) owned by an, individual or a HUF, ▪ Invest in an Eligible company being, an Eligible Start Up, , New Asset, , ▪ Purchase of new plant and machinery for the, purposes of business of the industrial undertaking, in the area to which the said undertaking is shifted, ▪ Acquisition of building or land or construction of, building for the purposes of his business in the said, area, ▪ Expenses on shifting of the industrial undertaking, from the urban area to the other area, ▪ Other Expenses as notified by Government, , Individual or HUF shall Subscribe >, 50% of Equity share or Voting Rights in, eligible company, and, Such amount is utilized by eligible Co., for purchase of NEW Plant &, Machinery/Computers / Software, , Amount of, Exemption, , Lower of, CG or Cost of New Asset/Expenses, , Proportionate, CG x Amount Invested, Net Sale Consideration, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.19

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DT - Simplified, , Time Period to, acquire New, Asset, , Restriction on, transfer of New, Asset /, Acquisition, , Consequences, on Violation of, any condition, , ▪ Purchase/Construct:, Before 1 yr. or within 3 yrs. From date of transfer, , New assets should not be transferred within, 3 yrs. from the date of purchase / Construction, , Cost of Acquisition of asset transferred shall be, reduced by CG exempted earlier for the purpose of, computation of CG of new asset, , ▪ Company should be incorporated on, or before due date of ITR by, Individual or HUF, ▪ Amount shall be utilized by Co., within 1 yr. from date of Subscription, , Should not Transfer within 5 yrs., ▪ Equity shares subscribed or, ▪ Plant & Machinery Acquired, If the amount deposited by the, company in specified banks/, institutions, is not utilized wholly or, partly for the purchase of new plant, and machinery within the period, specified, then,, The amount of capital gains not, charged to tax u/s 45 on account of, such deposit by the company shall be, charged to tax u/s 45 as income of the, assessee, For the PY in which the period of 1 year, from the date of subscription in the, equity shares by the assessee expires, , ➢ Eligible Co. - Incorporated in the year in which CG arise or Incorporated on or before the due date of filing of ITR in, following year, ➢ Eligible Start-up, −, , Incorporated during 01-04-2016 to 31-03-2022 & Holds Certificate of eligible business, , −, , Turnover ≤ 25 Crore in from PY 2016-17 to PY 2020-21, , −, , Eligible Business of Innovation/Development/Deployment/Commercialization of New Process/, Product/Service driven by Technology/Intellectual Property, , ➢ New plant and machinery does not include, −, , Any machinery or plant which, before its installation by the assessee, was used either within or outside India, by any other person;, , −, , Any machinery or plant installed in any office premises or any residential accommodation, including, accommodation in the nature of a guest house;, , −, , Any office appliances including computer and computer software;, , −, , Any vehicle; or, , −, , Any machinery or plant, the whole of the actual cost of which is allowed as a deduction, whether by way of, depreciation or otherwise, in computing the income chargeable under the head “Profits and gains of business, or profession” of any previous year., , −, , In case of an eligible start-up, being a technology driven start-up so certified by the notified Inter-Ministerial, Board of Certification (IMBC), the company can also utilize the amount invested in shares to purchase, computers or computer software. This is because computers or computer software form the core asset base of, such technology driven start-ups., , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.20

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DT - Simplified, CAPITAL GAINS ACCOUNT SCHEME (CGAS), −, , Under sections 54, 54B, 54D, 54F, 54G and 54GA, CG is exempt only on investment of such gains or net, consideration (54F),, , −, , In case of 54GB amount deposited in Specified A/c and not in CGAS, , −, , If Such Investment is not made before due date of filing of ITR,, , −, , Such Amount should be deposited in CGAS on or before the due date of filing of ITR, , −, , If amount deposited is not utilised before time specified, Unutilised amount will be charged to Tax, , In event of death of an individual before the specified period, the unutilized amount is not chargeable to tax in the, hands of the legal heirs. It is not income but is a part of the estate devolving upon them., [CBDT Circular No.743 dated 06-05-1996], SECTION 54H - EXTENSION OF TIME FOR ACQUIRING NEW ASSET OR DEPOSITING, −, , In case of Compulsory acquisition, Period specified for Investment or Deposit shall be considered from the date, of receipt of Compensation., , SECTION 55A - REFERENCE TO VALUATION OFFICER, AO may refer to Valuation Officer in following Cases, −, , Value claimed by Assessee in accordance with estimate by Regd. Valuer varies with FMV to determine Sale, consideration or Cost of asset, , −, , If there is difference between FMV of the asset and Value claimed by assessee., , −, , Such difference exceeds by more than 15% of value claimed or by more than 25,000, , −, , If AO is of the opinion that it is necessary to refer case to VO, considering nature of asset and relevant, circumstances, , TAX RATES ON CAPITAL GAINS, Capital Gains, , Transaction on which STT Paid on Transfer of, − Equity Shares, - Units of Equity Oriented Fund, − Units of Business Trust, , LTCG, Taxable @10%, [Section 112A], , STCG, Taxable @15%, [Section 111A], , Other Transactions, , LTCG, Taxable @ 20%, [Section 112], , STCG, Taxable at, Normal Rate, , − Transactions undertaken in foreign currency on a RSE located in an IFSC would be taxable @10% u/s 112A, even though STT is not leviable in respect of such transaction., −, , Gain upto ₹ 1,00,000 is Not Taxable (It will be included in Total Income), in case of LTCG taxable u/s 112A, , −, , No benefit of rebate u/s 87A shall be available in case of LTCG taxable u/s 112A, , −, , In case of LTCG on Unlisted Securities (Other than Units) & ZCB, Option to Pay Tax, ▪ 10% (without Indexation) or 20% (with Indexation) Whichever is lower, , −, , No deduction under Chapter VI-A allowed against STCG u/s 111A, LTCG u/s 112A and LTCG u/s 112, , −, , Basic Exemption Limit shall be first exhausted by any Other Income and LTCG u/s 112, STCG u/s 111A, LTCG u/s, and 112A (exceeding ₹ 1,00,000) can be reduced by unexhausted limit only., , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.21

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DT - Simplified, SALE OF SHARES WHETHER BUSINESS INCOME OR CAPITAL GAIN? [CIRCULAR NO. 06/2016 DT. 29-022016], −, , Shares can be held either as capital assets or stock-in-trade/trading assets or both., , −, , Where the assessee itself, irrespective of the period of holding, opts, , −, , To treat them as stock-in-trade / Capital Asset, , −, , Income arising from transfer of such shares/securities would be treated accordingly, , −, , Stand once taken shall be final for subsequent year also., , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 4.22

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DT - Simplified, , CHAPTER – 5, INCOME FROM OTHER SOURCES, SECTION 56 – INCOME CHARGEABLE UNDER THIS HEAD, This head is the residuary head. When any income, profit or gain is chargeable to tax but does not fall precisely under, any of the other specific heads, it would be charged under this head., Following is the illustrative list of Income Chargeable under this head., DIVIDEND INCLUDING DEEMED DIVIDEND [56(2)(I)], − Following payment shall be deemed dividend only to the extent of accumulated profit ( Whether capitalised or, not), e) Loan by closely held company to Shareholder, a) Distribution of Assets like shares etc., holding ≥ 10% equity or to Concern in which such, b) Debentures, Deposit Certificate or Bonus to, shareholder having substantial interest except loan, Preference Share Holders., given in ordinary course & lending is substantial, c) Asset distributed on liquidation, part of business, d) Reduction of capital, − Exception to deemed dividend i.e. following shall not be considered as deemed dividend, ▪ Bonus shares given to equity share holder is not dividend, ▪ Distribution after the date of liquidation is not dividend, ▪ Buyback of shares or issue of shares on demerger is not dividend, ▪ Dividend setoff against loan which has been deemed dividend u/s 2(22) (e) not taxable again., − Taxability of Dividend, Any income by way of dividend received from a company, whether domestic or foreign, is taxable in the hands of, Share Holder at Normal Rate of Tax [w.e.f. 01-04-2020], However, dividend DISTRIBUTED by domestic companies BEFORE 01-04-2020 but received after 01-04-2020 on, which DDT u/s 115-O has been paid by company would be exempt in the hands of shareholder, Except Dividend Chargeable u/s 115BBDA., SECTION 115BBDA – TAX ON CERTAIN DIVIDEND RECEIVED FROM DOMESTIC COMPANY, −, −, , Any income by way of aggregate dividend in excess of ₹10 lakh shall be chargeable to tax, In the hands of specified assessee who is resident in India, at the rate of 10% [Further increased by Surcharge,, if applicable and HEC @4%], ▪ Specified Assessee: Any Person except, Domestic Company, Institution, AOP/BOI, Trust referred to in, section 10(23C) and 12A or 12AA, ▪ Company distributing dividend need to pay DDT on full amount of dividend distributed., , SECTION 115BBD – DIVIDEND RECEIVED BY INDIAN COMPANIES FROM FOREIGN COMPANIES, −, −, −, −, , Any dividend by Indian company from foreign company, In which Indian company holds ≥ 26% of nominal value of equity, Taxable at concessional rate of 15%., No expenditure in respect of such dividend shall be allowed, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 5.1

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DT - Simplified, TAXATION OF GIFTS (APPLICABLE TO ALL ASSESSEE) [56(2)(X)], Gifts etc., , Inadequate Consideration, , Without Consideration, , Immovable Property, , Cash, , Movable Property, , Movable Property, , Value of, Money/Stamp Duty/FMV > 50,000, Then whole money/SDV/FMV taxable, , Value of Difference >, 50,000, (Difference = FMV, less Consideration, paid), , Immovable Property, Value of Difference >, Higher of, 50,000 or, 10% of Consideration, (Difference = SDV less, Consideration paid), , Entire Difference is, Taxable, Note, − Tax implications for transfer of immovable property for inadequate consideration in the hands of seller shall be, dealt as per Section 43CA (in case of Stock in trade) and 50C (in case of Capital Asset), ➢ Non-applicability of section 56(2)(x), Any sum of money or value of property received in the following circumstances would be outside the ambit of section, 56(2)(x) i.e. Exempt, i., From any relative or, ii., On the occasion of the marriage of the individual; or, iii., Under a will or by way of inheritance; or, iv., In contemplation of death of the payer or donor, as the case may be; or, v., From any local authority as defined in the Explanation to section 10(20); or, vi., From any fund or foundation or university or any trust or institution referred in section 10(23C); or, vii. From any trust or institution registered under section 12AA; or, viii. By any fund or trust or institution or any university or other educational institution or any hospital or other, medical institution referred to in Section 10(23C) (iv)/(v)/(vi)/(via) or, ix., By way of exempt transfer under clause referred in Section 47 or, x., From an individual by a trust created or established solely for the benefit of relative of Individual, ➢ Relative means,, 1, , Spouse, , of Individual /of any person referred in 2 or 3 below, , 2, , Brother or Sister, , of Individual / of Spouse / of Parents, , 3, , Lineal ascendant or descendant, , of Individual / of Spouse, , 4, , HUF, , Any member of HUF, , ➢ Property means, Capital Asset being, (a) immovable property being, (c) Jewellery,, land or building or both,, (d) Archaeological collections,, (b) Shares and securities,, (e) Drawings,, , CA Dhaval Patanvadia, , www.theinvictus.in, , (f) Paintings,, (g) Sculptures,, (h) any work of Art or Bullion., , +91-87800 58699, , 5.2

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DT - Simplified, −, , −, , Date for determining Stamp duty value., ▪ Date of agreement if part/full payment made in mode other than cash or, ▪ Date of registration will be considered in any other case, Only transfer of capital asset, without consideration or for inadequate consideration would attract the provisions, of section 56(2)(x)., , Special Relief in case of transfer of asset being RESIDENTIAL UNIT [to boost real estate sector], −, , Variation upto 120% (instead of 110%) will be allowed, , −, , Transfer takes place during 12th Nov. 2021 to 30th June 2022, , −, , It is first time allotment of any person (i.e. First transaction with buyer), , −, , Sale Consideration does not exceed 2 Crore, , SHARES ISSUED AT PREMIUM BY CLOSELY HELD COMPANY TO A RESIDENT PERSON [56(2) (VIIB)], − Issue price (Face Value + Premium) > FMV of Shares, − Taxable Amount under IFOS = Issue Price less FMV of Shares, Taxable in the hands of Company., − If shares issued at Discount or Face Value, this section not attracted though issue price > FMV, Example:, Issue Price = 120, Issue Price 120 > FMV 110, , Face Value = 100, FMV = 110, Taxable Amount = 120 - 110 = 10, , Exception: This section not attracted in following transactions, − Shares issued by Venture Capital Undertaking (VCU) from VC Fund or by Venture Capital Company or, − Shares issued by a company notified by Central Government, , OTHER INCOMES, 1., , Casual Income in the nature of winning from lotteries, crossword puzzles, races including horse races, card games, and other games of any sort, gambling, betting etc. [56(2)(ib)], ▪ Chargeable @ flat rate of 30% [Section 115BB], ▪ No expenditure allowed from such income, ▪ No benefit of Basic Exemption Limit or No deduction under Chapter VI-A allowed, , 2., , Advance received and forfeited due to failure of negotiations [56(2)(ix)], ▪ Advance received upto 31-03-2014 = Reduced from cost of acquisition of capital asset under CG, ▪ Advance received after 31-03-2014 = Taxable under IFOS, , 3., 4., 5., , Salary received by an MPs/MLAs – it is not chargeable to income-tax under the head ‘Salary’, Interest on bank deposit/Loan given/Income tax refund., Interest on Post Office Saving Account (exempt u/s 10(15) up to 3500/7000 to Individual/Joint Account), Apart from the above exemption deduction u/s 80TTA is also available, Interest on compensation/enhanced compensation – Taxable in the year of receipt [56(2)(viii)], 50% flat deduction allowed u/s 57 from the interest received on compensation, Compensation or Payment due to or received by any person [56(2)(xi), ▪ In connection with or termination of his employment or, ▪ Modification of the terms & conditions relating there to, ▪ Shall be chargeable under this head, , 6., 7., , 8., , Following income chargeable under IFOS only if not chargeable under PGBP/IFHP, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 5.3

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DT - Simplified, ▪, ▪, ▪, ▪, , Sum received under a Keyman insurance policy., Income from letting out on hire, machinery, Plant or furniture., Income from letting out of Building is inseparable from machinery let out above., Interest on Securities., , SECTION 57 – DEDUCTIONS ALLOWABLE, −, −, , −, , −, −, , Reasonable commission or remuneration paid for the purpose of realising such dividend or interest other than, dividend referred in section 115-O, Deductions in respect of letting on hire of machinery, plant and furniture, with or without building,, ▪ Current repairs on machinery, plant or Furniture, ▪ Insurance paid for such asset, ▪ Normal Depreciation, Family pension, a deduction of 33.33% of such income or 15,000, whichever is less, Exemption, ▪ Family pension received by widow/children of member of armed forces of Union and death of such, member occurred in course of operational duties [10(19)], ▪ Family pension received by member of family who had been awarded notified gallantry awards like, “Param Vir Chakra” or “Vir Chakra”, Other revenue expenditure incurred exclusively to earn the income, 50% of interest on compensation/enhanced compensation received u/s 56(2)(viii), , SECTION 58 – DEDUCTIONS NOT ALLOWABLE, −, −, −, −, , Personal Expenses, Interest/Salary paid outside India without TDS – Full amount disallowed, Payment to resident without TDS or TDS deposited after due date of ITR – 30% of exps. disallowed, Excessive payment to Relative/Associate Concerns or Cash Payment exceeding 10,000 as covered in Section, 40A is also applicable to IFOS, , SECTION – 59 DEEMED INCOME, −, , Expenditure claimed or loss deducted earlier and subsequently any amount received or benefit derived =, Amount allowed earlier as deduction shall be deemed income, , SECTION 94 - BOND WASHING OR DIVIDEND STRIPPING TRANSACTIONS, −, , To avoid tax on income from Securities owner of a security/unit transfers the Security/Unit just before the due, date of income and buys back the same immediately after Income on such security is paid, , −, , Taxability in the hands of Transferor being owner of securities, ▪ Such income will be taxable as deemed income in the hand of Transferor and not the transferee, , −, , Taxability in the hands of Transferee, ▪ Loss if any, on transfer to Securities/Unit ignored to the extent of income received as above if all the three, conditions below is satisfied, ✓ Person acquires Securities/Unit within period of 3 Months prior to record date and, ✓ Income received on such Securities/Unit is exempted and, ✓ Sells or Transfers Securities within 3 Months/ Units within 9 Months after such date, However, Section 94 shall not be attracted in following cases, ▪ Securities/Unit acquired before 3 months prior to record date or, ▪ Income earned on such Securities/Unit is not exempt or, ▪ Securities/Unit transferred or sold after 3 Months/9 Months as the case may be, , −, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 5.4

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DT - Simplified, , CHAPTER – 6, Clubbing of Income, SECTION 60 – TRANSFER OF INCOME WITHOUT TRANSFER OF ASSET, −, , Income shall be clubbed in the hands of Transferor, , SECTION 61 – INCOME ARISING FROM REVOCABLE TRANSFER OF ASSET MADE BY ANY PERSON, −, , Income shall be clubbed in the hands of Transferor, , SECTION 62 – INCOME ARISING FROM REVOCABLE TRANSFER OF ASSET WILL NOT BE CLUBBED, −, , Transfer is not revocable during the lifetime and, , −, , Transferor derives no direct or indirect benefit of such income,, , −, , Exception - when power to revoke is arise, Income shall be clubbed in the hands of transferor even if actually, not revoked., , SECTION 63 – TRANSFER DEEMED TO BE REVOCABLE, −, , If it contains provision of re-transfer of Income/Asset, , −, , Contains right to re-assume power over whole/part of the Income/Asset., , SECTION 64 – CLUBBING OF INCOME OF SPOUSE, MINOR CHILD ETC., , INCOME OF SPOUSE, Income of the Spouse to be clubbed in the hands of Individual, , Salary etc. received from, concern in which Individual/, Relative has substantial, Interest, Exception, Spouse possess, Professional/Technical, Knowledge and Income earned, by applying such knowledge, [Section 64(1)(ii)], Clubbed in the hands of Individual whose, income excluding such salary is greater, Once clubbed in hand of either person, cannot be changed in subsequent A.Y., unless AO is satisfied otherwise, , Asset Transferred to Spouse, without adequate, Consideration, However, if asset is House, Property Section 27 ‘Deemed, Owner’ shall apply, Exception, Transfer is in, connection with agreement to, leave apart, [Section 64(1)(iv)], , Asset Transferred to, Person/AOP/Trust without, adequate Consideration for, benefit of Spouse, [Section 64(1)(vii)], , Income received from Such Asset, Clubbed in the hands of Transferor, , Relative = Husband, Wife, Brother, Sister, Lineal Ascendant or Descendant of Individual, − Where the assets transferred to Spouse are invested by the Spouse in the business,, − Proportionate income arising from such investment will be clubbed with total income of the transferor., − If investment is in the nature of capital contribution, Proportionate Interest on capital will be clubbed, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 6.1

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DT - Simplified, − Proportion = Value of the aforesaid investment / Total Investment as on First day of previous year., − Total Investment = Capital of Spouse on First Day of PY plus Value of aforesaid Investment, INCOME OF SON’S WIFE, , Income of the Son’s Wife to be clubbed in the hands of Father-in-law or Mother-in-law, , Asset Transferred to Person/AOP/Trust without, adequate Consideration for benefit of Son’s Wife, [Section 64(1)(viii)], , Asset Transferred to Son’s Wife, without adequate Consideration, [Section 64(1)(vi)], , Income received from Such Asset, Clubbed in the hands of Transferor, − Where the assets transferred to Son’s Wife are invested by the Son’s Wife in the business,, − Proportionate income shall be clubbed as discussed above., INCOME OF MINOR CHILD, Income of the Minor Child/Minor Married Daughter [Section 64(1A)], , All income shall be clubbed in the hands of parent,, − Whose total income is Greater or, − Who maintains the child, if marriage of parents, not subsist, − Once clubbed in hand of either parent cannot be, changed in subsequent A.Y. unless AO is satisfied, , Exceptions, Income earned by, − Manual Work or Applying Skill or Talent, − Minor suffered with disability specified u/s 80U, Exemption, in respect of each child [Section 10(32)], Income of each child or ₹ 1500 whichever is lower, , CROSS TRANSFER, Cross Transfer to be Clubbed in the hands of Transferor, Mr. A, , Mr. B, Brother of Mr. A, , Minor Son of, Mr. A, , Mrs. B, , − Interest @ 9% earned by Minor Son ₹ 36,000 and Mrs. B ₹ 45,000 by Investing such amount, − Amount to the extent of ₹ 4,00,000 shall be considered as Cross Transfer in this case, − Hence, Interest of ₹ 36,000 shall be clubbed in the hands of Mr. A and Mr. B (not ₹ 45,000), , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 6.2

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DT - Simplified, TRANSFER OF PROPERTY TO HUF, , Conversion of Self Acquired Property into the Property of HUF [Section 64(2)], , Member Converts Property into, the Property of HUF without, adequate Consideration, Income from such Property Shall, Clubbed with Individual and not, taxable in the hands of HUF, , Treatment of such converted property in case of Partition, , Received by Spouse, , Received by any other Member, , Income from such Property Shall, Clubbed with Individual [64(1)], , Income from such Property Shall, not be Clubbed with Individual, , SECTION – 65 LIABILITY OF TRANSFEREE IN RESPECT OF INCOME CLUBBED IN THE HANDS OF, TRANSFEROR, − When any income of transferee is clubbed in the hands of transferor by virtue of Section 60 to 64 and Section 27, − Transferee shall be liable to pay that portion of tax which is attributable to clubbed income, if notice to pay such, tax is served by AO to Transferee., , OTHER PROVISIONS., − Income includes loss also, hence loss shall also be clubbed. [Explanation 2 to Section 64]., − Section 61 applies to any person while Section 64 applicable to Individual only., − If loan given is bona fide, whether interest free or not, such bona fide loan shall not be considered as transfer of, asset hence clubbing provision on such income not applicable., − Clubbing shall be done under the same head in which it is earned., − Clubbing provision shall continue to apply even if transferee has converted the asset in other form., − Income earned by transferee by applying the income which is clubbed shall not be clubbed., , − Individual must have substantial interest in Individual Capacity and not in representative capacity., , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 6.3

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DT - Simplified, , CHAPTER – 7, AGGREGATION OF INCOME, SETOFF AND CARRY FORWARD OF LOSSES, AGGREGATION OF INCOME, SECTION 66 – TOTAL INCOME, −, , In computing the total income of an assessee, there shall be included all income on which no income-tax is, payable under Chapter VII, , SECTION 67A – METHOD OF COMPUTING MEMBER’S SHARE IN AOP/BOI, −, , Discussed in “Assessment of Various Entities”, , SECTION 68 – CASH CREDIT, −, , Any sum credited in the books of account shall be charged to Income Tax,, ▪ If satisfactory explanation about nature and source is not offered to AO, , −, , Share Application money, Premium, Capital credited in the books of Closely held Companies, ▪ Explanation offered by such company is deemed to be unsatisfactory, ▪ Unless Resident person, in whose name such amount is credited, explains satisfactorily to AO, ▪ Exception, if such person is Venture Capital Fund (VCF)/ VC Company, no explanation required., , SECTION 69 – UNEXPLAINED INVESTMENT, MONEY, EXPENDITURE ETC., −, , Following amount shall be deemed income of such FY, if satisfactory explanation not offered to AO, ▪ Value of Investment which is not recorded in the Books of Account [69], ▪ Money, Bullion, Jewellery etc. not recorded in the Books of Account [69A], ▪ Investment, Bullion, Jewellery etc. not fully disclosed, undisclosed part is deemed income [69B], ▪ Unexplained expenditure shall be deemed income and shall not be allowed as deduction [69C], , −, , Amount borrowed/repaid otherwise than account payee cheque. repayment includes interest paid If amount, borrowed is included than repayment of such borrowing shall not be assessed again [69D], , SECTION 115 BBE - RATE OF TAX ON UNEXPLAINED MONEY, INVESTMENTS ETC., , The unexplained money, investment, expenditure, etc. deemed as income under section 68/69/A/B/C/D, would be taxed at the rate of, − Tax @ 60% + Surcharge @ 25% + HEC @ 4% = Effective Tax Rate 78%, No BEL or allowance or expenditure shall be allowed to the assessee under any provision of the Income-tax, Act, 1961 in computing such deemed income., Further, no set off of any loss shall be allowable against income brought to tax under sections, 68/69/A/B/C/D., SECTION 271AAC – PENALTY IN CASE OF UNEXPLAINED MONEY, INVESTMENT ETC., −, , Penalty@10% of tax payable u/s 115BBE, , −, , No penalty is income is included in ITR and Tax u/s 115BBE has been paid before the end of Relevant PY, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 7.1

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DT - Simplified, SET OFF AND CARRY FORWARD OF LOSSES [SECTION 70 TO SECTION 80], Sr., No., , Loss under the Head, , 1, , House Property, , 2, , PGBP, , 3, , Carried Forward Loss, , Current Year Loss can be setoff against, , Set off Against, , No. of Years, , IFHP – Full Loss, Other Head – Upto ₹ 2 Lakh, , IFHP, , 8 Years, , − Normal Business, , Any Head except Salary, , Any PGBP, , 8 Years, , − Speculation Business, , Only Speculative Income, , Speculative Income, , 4 Years, , − Business Specified, u/s 35AD, , Specified Business u/s 35AD, , Specified Business u/s 35AD, , Indefinite, , − Owning & Maintaining, Race Horses, , Income from O & M of Race, Horses, , Income from O & M of Race, Horses, , 4 Years, , − STCL, , Only LTCG or STCG, , LTCG or STCG, , 8 Years, , − LTCL, , Only LTCG, , Only LTCG, , 8 Years, , IFOS, , Any Income, , No Carry Forward, , Capital Gains, , 4, , REHABILITATION OF BUSINESS [PROVISO TO SECTION 72(1)], −, , Normally loss of discontinued business cannot be set off against any other business income., , −, , However, Business is discontinued due to flood, earthquake, riots etc., , −, , Such business is revived, re-established or reconstructed by assessee within 3 years, , −, , Such loss can be set-off against any other business income, , −, , Such unabsorbed loss can be carried forward upto 7 years., , ORDER OF SET OFF OF LOSSES, −, , Current year depreciation/expense on scientific research/expense on family planning, , −, , Brought Forward loss from Business/Profession [Section 72(1)], , −, , Unabsorbed Depreciation [Section 32(2)], , −, , Unabsorbed Capital Expenditure on Scientific Research [Section 35(4)], , −, , Unabsorbed Expenditure on Family Planning [Section 36(1)(ix)], , SECTION – 72A ALLOWABILITY IN CASE OF AMALGAMATION, DEMERGER ETC., Sr., 1, , Unabsorbed loss of, , Carried forward by, , Amalgamating Co., , Amalgamated Co., , Amalgamating one or more, Public Sector Co., , Amalgamated one or, more Public Sector Co., , Amalgamating Earstwhile, Public Sector Co. (Now, ceased to be PSC by way of, strategic disinvestment, (eg. Air India), , Amalgamated Co, [Loss will be restricted to, date on which public co., ceased to be pub. co.], , 2, , Private or Unlisted Co., , Successor LLP, , 3, , Firm / Sole Proprietary, , Successor Co., , CA Dhaval Patanvadia, , Quantum of Loss, , Full Unabsorbed loss, (Excluding Speculative Loss), , www.theinvictus.in, , Period, , Fresh 8 Years, , +91-87800 58699, , 7.2

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DT - Simplified, 4, , Banking Co., , Banking Institution, , 5, , Demerged Co., , Resulting Co., , 6, , Demerged Co-Operative, Bank, , Resulting Co-Operative, Bank, , 7, , Amalgamating CoOperative Bank, , Amalgamated CoOperative Bank, , Full – If Directly Related to, resulting company, Proportionate – Other Case, (Excluding Speculative Loss), , Balance Period, , Full Unabsorbed loss, (Excluding Speculative Loss), , Balance Period, , SECTION – 78 LOSS OR DEPRECIATION IN CASE OF CHANGE IN CONSTITUTION OF FIRM OR SUCCESSION, −, , Change in constitution of Firm, ▪ Loss proportionate to share of retired/deceased partner cannot be carried forward, ▪ However, no restriction on carry forward of unabsorbed depreciation, , −, , Succession otherwise than by inheritance –, ▪ Cannot be carried forward by Successor, , −, , Succession by inheritance –, ▪ Allowed to carry forward by legal heirs, ▪ Even if legal heirs constitute themselves as Partnership Firm, Firm can carry forward, [Madhukant M. Mehta – Supreme Court], , SECTION 79 - CARRY FORWARD AND SET-OFF OF LOSSES IN CASE OF CLOSELY HELD COMPANIES, −, , Closely held companies not being eligible start up referred to in Section 80-IAC, ▪ Loss of any year prior to previous year cannot be set off against income of previous year or carried forward,, if change in shareholding takes place in closely held companies unless,, ▪ 51% or more of Voting power beneficially held by persons are same, ✓ On the last day of previous year and, ✓ On the last day of year or years in which loss is incurred, , −, , Closely held companies being eligible start up referred to in Section 80-IAC, ▪ Loss of any year prior to previous year allowed set off against income of previous year or carried forward,, only if, ▪ 51% or more of Voting power beneficially held by persons are same, ✓ On the last day of previous year and, ✓ On the last day of year or years in which loss is incurred, or, ▪ All the shareholders held shares carrying voting power are same, ✓ On the last day of previous year and, ✓ On the last day of year or years in which loss is incurred, ✓ Such loss incurred during the period of 7 years from beginning from the Incorporation, , −, , Non-applicability of restriction if change in shareholding takes place, ▪ Due to death of shareholder or transfer by shareholder to relative by way of gift, ▪ In an Indian Company, being subsidiary of foreign co, as a result of amalgamation or demerger of the foreign, company and at least 51% of shareholders continue in new company, ▪ where a change in shareholding takes place in a previous year as a result to a resolution plan approved, under the IBC 2016, after affording a reasonable opportunity of being heard to the jurisdictional Principal, Commissioner or Commissioner, ▪ Change in subsidiary takes palace to a company and its subsidiary and subsidiary of such subsidiary where, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 7.3

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DT - Simplified, ✓, ✓, , The Tribunal, on application by CG, suspended board u/s 242 of Companies Act 2013 and, Such change taken place pursuant to resolution a resolution plan approved by tribunal u/s 242 of, Companies Act 2013, , SECTION – 80 SUBMISSION OF RETURN FOR LOSSES, −, −, , −, , Non-filing of a return of loss within the time allowed under section 139(1), Disentitles the assessee from carrying forward following loss, ▪ Business Loss [Section 72(1)], ▪ Speculative Business Loss [Section 73(2)], ▪ Specified Business u/s 35AD [Section 73A], ▪ Capital Gain [Section 74(1)], ▪ Owning & Maintaining Race Horses [Section 74A (3)], Exception, Loss from House Property [Section 71B] and Unabsorbed depreciation [Section 32(2)] allowed to, carried forward even if, return is not filed., , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 7.4

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DT - Simplified, , CHAPTER – 8, EXEMPT INCOME, SECTION 10(1) – AGRICULTURAL INCOME, −, , Central Government has no power to levy tax on agricultural income, , −, , Agricultural income must be in direct connection with land., , Rent or Revenue derived from land situated in India used for agricultural purpose, −, , Amount received in money or in kind for right to use land shall be treated as rent, , −, , Ownership of land is not necessary, rent received by sub-tenant is also an agricultural income, , −, , Following conditions need to be satisfied to be treated as agricultural income, ▪ Income should be derived from land, ▪ Land should be used for agricultural purpose, ▪ Land must be situated in India, , Income through Agriculture, −, , Cultivation of a field involving human skill and labour on the land can be treated as agriculture, , −, , Basic Operations, which are absolutely necessary for the purpose of effectively raising produce from the land, such as tilling of land, sowing of the seeds, watering etc., , −, , Subsequent Operations, which are performed after produce sprouts from the land such as weeding, digging,, harvesting, threshing etc. but it must be in conjunction with and as continuation of the basic operations to, qualify as agriculture, , −, , Income derived from saplings or seedlings grown in a nursery would be deemed to be agricultural income,, whether or not the basic operations were carried out on land., , −, , Dairy farming, breeding of livestock, poultry farming, fisheries etc. are not agricultural activity, , Income from process employed to produce marketable and sale of such produce, −, , It must be a process ordinarily employed by the cultivator or receiver of rent in kind, such as thrashing,, winnowing, cleaning, drying etc., , −, , The produce must retain its original character in spite of the processing unless there is no market for selling, it in that condition., , −, , Any income from the sale of any produce by the cultivator or receiver of rent-in kind is agricultural income, provided it is from the land situated in India and used for agricultural purposes, , Partly agriculture and partly business income, −, , If marketing process is performed on a produce which can be sold in its raw form, i.e. process other than, ordinarily employed by cultivator or receiver of rent in kind, , −, , Income derived therefrom is partly agricultural income and partly business income, , Rule 7 - Income from Growing or Manufacturing any product by agriculturist, −, , If Agricultural produce capable of being sold in raw form is used to manufacture any product, ▪ Business Income = Sales less Market Value of such produce used less Manufacturing Exps., ▪ Agricultural Income = Market Value of such produce less Cultivation Exps., , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 8.1

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DT - Simplified, Rule 7A, 7B & 8 - Income is Partly Agricultural and Partly Business in Nature, Rule, , Composite Income, , Business, [Taxable], , Agricultural, [Exempt], , 7A, , Manufacturer of Rubber, , 35%, , 65%, , 7B, , Manufacturer of Coffee, - Grown & Cured, - Grown, Cured, Roasted, Grounded, , 25%, 40%, , 75%, 60%, , Manufacturer of Tea, , 40%, , 60%, , 8, , Income from Farm Building, −, , Income from building situated on land on which agricultural activity, as discussed above, is carried on shall, be agricultural income, , AGRICULTURAL INCOME INCLUDED IN TOTAL INCOME FOR RATE PURPOSE, −, , Applicable only to Individuals, HUF, AOP/BOI and AJP, ▪ If Net agricultural income > 5,000 and, ▪ Non-agricultural income > BEL, , Example, Particulars (Individual having age 35 years), , Amount (Rs.), , Amount (Rs.), , Step – 1 Calculate Tax on combined income, A, , Non-agricultural Income, , 5,10,000, , 5,10,000, , B, , Agricultural Income, , 1,00,000, , NIL, , C, , Total (A+B), , 6,10,000, , 5,10,000, , D, , Tax on (C), , 34,500, , 14,500, , 3,50,000, , 2,50,000, , 5,000, , NIL, , 29,500, , 14,500, , Step – 2 Calculate Tax on BEL + Agricultural Income, E, , BEL + Agricultural Income, , F, , Tax on (E), , Step – 3 Compute Net Tax payable [Step-1 less Step-2], G, , Net Tax (D-E), , Step – 4 Apply Surcharge, Rebate, Cess as applicable, H, , Surcharge, , NA, , NA, , I, , Rebate u/s 87A, , NA, , NA, , K, , Net Tax Payable (G+H-I), , 29,500, , 14,500, , L, , Cess @ 4%, , 1,180, , 580, , M, , Total Tax Payable, , 30,680, , 15,080, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 8.2

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DT - Simplified, SECTION 10AA – TAX HOLIDAYS FOR NEWLY ESTABLISHED UNITS IN SEZ, ❖ Eligible Assessee, −, , Any assessee being an entrepreneur as per SEZ Act 2005 and who has been granted letter of approval by, Development Commissioner of SEZ, , −, , Profit & Gains derived from an undertaking engaged in the export of goods or services., , −, , Begun to manufacture goods or providing services on or after PY 2005-06, , −, , It should not be formed by splitting up existing business or reconstruction or formed by transfer of plant &, machinery previously used exceeding 20% of total Plant & Machineries used in business., , ❖ Period of deduction, −, , First 5 AY : 100% of Profit derived from export i.e. 1 to 5 years, , −, , Next 5 AY : 50% of Profit derived from export i.e. 6 to 10 years, , −, , Further 5 AY : Amount transferred to SEZ Re-Investment Reserve Account not exceeding 50% of the profit, and should be utilised for following purpose within 3 years from creation of reserve, ▪ Acquiring Plant & Machinery and put to use before expiry of 3 years from creation of reserve, ▪ It should not be utilised for distribution of dividends/profits or remittance outside India as profit or, creation of any asset outside India., ▪ Non-utilisation/Mis-utilisation shall be deemed profit & charged to tax accordingly, , ❖ Apportionment of profit & gain from exports, −, , Profit from Export = Total Profit of Unit in SEZ  Export Turnover of SEZ / Total Turnover of SEZ, , ❖ Other Points, −, , Return along with report from CA must be filed to claim deduction, , −, , In case of amalgamation/demerger, amalgamated/resulting company can enjoy benefit for balance period of, tax holiday, , −, , During the period of deduction, Depreciation is deemed to be allowed and WDV shall be reduced., , −, , No further deduction u/s 80-IA or 80-IB or 35AD shall be allowed, , −, , Unabsorbed depreciation or Business loss or Capital loss shall be allowed to be carried forward and set off for, subsequent years., , Section 14A – Expenditure incurred for exempt income shall be disallowed, −, , Expenditure incurred in relation to earnings of exempt income shall be disallowed, , −, , Whether such income earned during the financial year or not, , −, , This section is not applicable to deductions under Chapter VI-A, , −, , AO is empowered to determine expenditure in relation to exempt income if,, ▪ He is not satisfied with correctness of claim of expenditure or, ▪ Assessee claims that no such expenditure incurred, , RULE 8D – DETERMINATION OF EXPENDITURE IN RELATION TO EXEMPT INCOME BY AO, −, , Expenditure in relation to exempt shall be the aggregate of the following, ▪ Amount directly relating to income not forming part of total income i.e. exempt income, ▪ 1% of Annual Average of Monthly Average of opening & closing balance of Investment, ▪ However, such aggregate should not exceed total expenses claimed by assessee, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 8.3

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DT - Simplified, Sub, Section, 2, 2A, 10BC, 11A, , Other Exemptions under Section 10, Amounts received by a member from the income of the HUF, Share income of a partner from Partnership Firm, Compensation received from CG/SG/Local Authority on account of disaster, Payment from Sukanya Samriddhi Account, , 16, , Educational scholarships, , 17, , Payments to MPs & MLAs – Daily allowance & Constituency Allowance, , 17A, 18, 19A, , Awards for literary, scientific and artistic works and other awards by the Government, Pension received by recipient/Family of gallantry awards, Annual value of any one palace of former rulers shall be excluded, , 20, , Income of local authorities, , 21, , Income of research associations approved under section 35(1)(ii), , 22B, , Income of news agency – Press Trust of India Ltd. is Notified by CG, , 23A, , Income of professional associations except IFHP, Income from specific service rendered,, Interest/Dividend on Investments, , 23AA, , 23BBA, , Income of institutions established by armed forces, Income of Funds established for welfare of employees of which such employees are, members, Income of Fund set up by Life Insurance Corporation or other insurer under pension, Scheme, Income of institution established for development of Khadi and Village industries, Income of authorities set up under State or Provincial Act for promotion of Khadi and, Village Industries, Income of authorities set up to administer religious or charitable trusts, , 23BBE, , Income of the IRDA, , 23BBG, , Income of Central Electricity Regulatory Commission (CERC), , 23BBH, , Income of Prasar Bharati (Broadcasting Corporation of India), , 23AAA, 23AAB, 23B, 23BB, , 23C, , Income of certain funds or institutions [Refer Chapter 13], , 23D, , Income of Mutual Fund set up by Public Sector Bank/PFI/SEBI/RBI [Section 10(23D)], , 23EA, , Income of Investor Protection Funds set up by recognised stock exchanges in India, , 23EC, , Specified income of Investor Protection Fund set up by commodity exchanges, , 23ED, , 24, , Income of Investor Protection Fund set up by depositories, Specified income of Core Settlement Guarantee Fund (SGF) set up by a recognized, Clearing Corporation, Income of trade unions, , 25, , Income of provident funds, superannuation funds, gratuity funds, , 23EE, , 25A, 26, 26AAA, 26AAB, 26B, 26BB, , Income of Employees’ State Insurance (ESI) Fund, Income of member of a scheduled tribe, Specified income of a Sikkimese Individual from Source in the state of Sikkim, Sikkimese woman who, on or after 01-04-2008 marries a non-Sikkimese individual exemption not, available, Income of an Agricultural Produce Market Committee (APMC) or Board, Income of a corporation etc. for the promotion of interests of members of scheduled, casts or tribes or backward classes or any two or all of them, Income of corporations established to protect interests of minority community, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 8.4

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DT - Simplified, 26BBB, 27, 29A, , Income of corporation established for welfare and economic upliftment of Ex-Servicemen, Income of a co-operative society for promoting interest of members of scheduled, castes or tribes or both, Incomes of certain bodies like Coffee Board, etc., , 42, , Tea board subsidy, Other subsidies for business of growing and manufacturing rubber, coffee, cardamom or other, specified commodity in India, Income from units from the Administrator of specified undertaking/specified company /, mutual fund specified in clause, Specified income arising from any international sporting event in India, Certain grants etc. received by a subsidiary from its Indian holding company engaged, in the business of generation or transmission or distribution of power, Specified income of certain bodies or authorities, , 44, , Income received by any person on behalf of NPS Trust, , 46, , Specified income of notified entities not engaged in commercial activity, , 47, , Income of notified infrastructure debt funds, , 30, 31, 35, 39, 40, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 8.5

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DT - Simplified, , CHAPTER – 9, DEDUCTIONS FROM GROSS TOTAL INCOME, HEADING A – GENERAL PROVISIONS, SECTIONS 80A, −, , Deductions u/s 80C to 80U shall be allowed as deduction from gross total income (GTI), , −, , Aggregate of deductions shall not exceed GTI and not allowed to carry forward as loss, , −, , If deductions allowed to AOP, Members shall not be allowed deductions for the same, , −, , Deductions allowed under provision of chapter VIA, no deductions allowed under other provisions, , −, , No deductions allowed unless it is claimed in return of income, It is necessary to file return, , SECTION 80AB – CALCULATIONS OF DEDUCTION ALLOWED IN RESPECT OF CERTAIN INCOME –, ‘HEADING C’, −, , First, Net Income computed shall be regarded as income and included in GTI, , −, , Thereafter deductions will be allowed in respect of such income, , SECTION 80AC – RETURN MUST BE FILED ON OR BEFORE DUE DATE TO CLAIM CERTAIN DEDUCTIONS, −, , To claim deductions under sections 80IA, 80IAB and 80IB to 80IE under ‘Heading C’, (Before 01-04-2018), , −, , To claim any deductions under ‘Heading C’, (On or after 01-04-2018), , −, , It is mandatory to file ITR on or before due date specified u/s 139(1), , HEADING B – PAYMENT BASED DEDUCTIONS, SECTION, , NATURE OF PAYMENT, , 80C, Life Insurance Premium, (Allowed to − Premium paid for, Individual, ▪ Individual - Self, Spouse, Child (Major/Minor), Parents are not covered,, and HUF), ▪ HUF- Any Member, −, , Maximum Sum allowed in respect of policy issued, ▪ Before 01-04-12,, 20% of sum assured,, ▪ On or After 01-04-12,, 10% of Sum assured, ▪ Person with disability u/s 80U or Disease u/s 80DDB – 15% from 1-4-2013, , −, , Exemption u/s 10(10D), ▪ Any sum received under LIP including Bonus shall be exempt, However exemption would not, be available if premium payable for any years during the term of policy exceeds 20% or 10%, of sum assured as the case may be, ▪ Any sum received on death of insured person shall be exempt, , Repayment of Housing Loan including stamp duty, registration fees and other expenses, − Conditions / Eligible payments, ▪ Purchase or construction of House property, Chargeable under IFHP, ▪ Instalment of part amount paid to Development Authority / Co-operative Society in which, house is allotted, ▪ Repayment of Borrowings from Bank/Govt/LIC/NHB/Financing Company, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 9.1

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DT - Simplified, ▪, , −, , Lock in - HP cannot be transferred for 5 years, else deductions claimed in earlier years shall, be taxable in respective years in which deductions claimed, , Not eligible payments, ▪ Admission fees or cost of share or initial deposit to become a member of Co-op. society, ▪ Cost of addition/alteration/renovation after the completion of construction or Property, occupied by assessee, , Deductions from salary for Govt employee for deferred annuity – Max 20% of Salary, Contribution of PPF/SPF/RPF, Contribution of Approved Super Annuation Fund, Sukanya Samriddhi Scheme in name of himself/Girl Child, Tuition fees (School, College, Education Institution in India) for full time education of Two Children, Subscription NSC VII Issue, Notified bonds by NABARD, Contribution of Unit Linked Insurance Plan 1971/ ULIP of LIC / Approved annuity plans, Tax Saver Units or Notified Pension fund of MF/UTI, National Housing Bank (Tax Saving) Term Deposit 2008, Five years term deposit with scheduled banks/Post Office, Deposit in senior citizen savings scheme, 80CCC, Contribution made to Pension plans of LIC/other insurer, (Individual) − Interest or Bonus accrued and credited to such account cannot be considered as contribution and, shall not be allowed as deduction., 80CCD, 80CCD (1) – Atal Pension Yojna (Scheme notified by CG), (Individual) − Maximum Deductions, ▪ Person in employment – 10% of Salary, ▪ Self Employed – 20% of GTI, Additional deductions in respect of NPS [ Over and above limit of 1,50,000 u/s 80CCE], − Maximum Deductions, ▪ 80CCD(1B) - Employee’s Contribution – ₹ 50,000, ▪ 80CCD(2) - Employer’s Contribution – Such contribution shall be included in salary as income, and thereafter allowed as deduction to the extent of, ✓ By CG to NPS account of their employees - 14% of salary, ✓ By Other Employer to NPS account of their employees - 10% of salary, SALARY = Basic + DA (forming part of Retirement Benefit), 80CCE, , 80D, (Individual, and HUF), , Aggregate deductions u/s 80C, 80CCC, 80CCD(1) – Ceiling limit of 1,50,000, , Mediclaim Premium or Contribution of Central Govt. Health Scheme (CGHS), − Premium Allowable (Individual and HUF), ▪ ₹ 25,000 – for Self, Spouse, Child (Dependent) or member of HUF plus, ▪ ₹ 25,000 – for Parents, ▪ ₹ 50,000 – if above persons are RESIDENT Senior Citizen, ▪ Payment must be made by any mode other than cash, −, , Payment in respect of Preventive Health Check-up (Individual), ▪ ₹ 5,000 – within overall limit of 25,000 or 50,000 as above, ▪ ₹ 50,000 – RESIDENT Senior Citizen if no payment for premium is made, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 9.2

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DT - Simplified, ▪, −, , 80DD, (Resident, Individual, and HUF), , Payment can be made any mode including cash, , Lump Sum payment of Medical Insurance Premium [Section 80D(4A)], ▪ Where Mediclaim premium paid in lump sum for more than one year, ▪ Deduction allowable would be appropriate fraction of such lump sum payment, ▪ Appropriate Fraction, = 1 ÷ Total No. of relevant PYs, ▪ Relevant PYs, = PY of payment to PY of validity of insurance, , Payment in respect of Medical Treatment/training/rehabilitation of dependent with disability, ▪ ₹ 75,000 – Person with disability, ▪ ₹ 1,25,000 – Person with severe disability, Dependent means person who wholly/mainly dependent and not claiming deductions u/s 80U, ▪ Spouse, Children, Parents, Brother, Sister of Individual, ▪ Any Member of HUF, , 80DDB, (RESIDENT, Individual, and HUF), , Payment in respect of Medical Treatment for Specified Disease for self / dependent, ▪ ₹ 1,00,000 – RESIDENT Senior Citizen, ▪ ₹ 40,000 – Any other cases, , 80E, (Individual), , Interest on loan taken for Higher Education (After Class XII) of Self/Spouse/Children, ▪ Starting year of interest payment plus Seven succeeding years or, ▪ Interest is paid in full, Whichever is earlier, Eligible borrowings : Loan taken from Financial Institution or Approved Charitable Institution, , 80EE, (Individual), , Interest on loan for acquisition of Self-Occupied Property from Financial Institution., ▪ Maximum Deduction ₹ 50,000 (Over and above ₹ 2,00,000 allowed under IFHP), ▪ Assessee should not own any residential house on the date of sanction of loan, ▪ Value of house acquired ≤ ₹ 50 Lakh, ▪ Loan must be sanctioned during PY 2016-17, ▪ Loan amount ≤ 35 Lakh, , 80EEA, (Individual), , Interest on loan for acquisition of RESIDENTIAL HOUSE Property from Financial Institution or, Housing Finance Company), ▪ Maximum Deduction ₹ 1,50,000 (Over and above ₹ 2,00,000 allowed under IFHP), ▪ Assessee should not own any residential house on the date of sanction of loan, ▪ SDV of house acquired ≤ ₹ 45 Lakh, ▪ Loan must be sanctioned during 01-04-2019 to 31-03-2022, , 80EEB, (Individual), , Interest on loan for acquisition of ELECTRICAL VEHICLE from Financial Institution (Bank or Specified, NBFCs), ▪ Maximum Deduction ₹ 1,50,000 till repayment of loan, ▪ Loan must be sanctioned between period during 01-04-2019 to 31-03-2023, , 80G, (All), , Donation to eligible funds or institutions (100% or 50%), − Subject of 10% of adjusted GTI in respect of donation made to certain funds or institutions, − Adjusted GTI = GTI as reduced by, ▪ Deductions from 80C to 80U (except 80G), ▪ Any income on which tax is not payable, ▪ LTCG taxable u/s 112, u/s 112A and STCG taxable u/s 111A, − No deductions allowed in respect of sum exceeding ₹ 2,000 paid in cash, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 9.3

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DT - Simplified, −, , Limit of 10% of Adjusted GTI first Adjusted towards deductions qualifying for 100% deductions, and balance amount utilized for deductions qualifying for 50% deductions, , 80GG, (Individual, not, receiving, HRA), , Deductions in respect of Rent paid for furnished/unfurnished accommodation, − Maximum Limit, lower of, ▪ Actual Rent Paid less 10% of Total income after allowing deductions (except 80GG), ▪ 25% of total income after allowing deductions (except 80GG), ▪ ₹ 5,000 p.m., , 80GGA, (Any, assessee), , Donation for Scientific Research & Rural Development, By assessee not having income from PGBP, − No deductions allowed in respect of sum paid in Cash, Exceeding ₹ 10,000 [upto 31-05-2020], Exceeding ₹ 2,000 [on or after 01-06-2020], , 80GGB, (Ind. Co.), , Contributions given by companies to Political Parties or Electoral Trust or, Expenditure incurred on advertisement in publication of political party, − No deductions allowed in respect of sum paid in cash, − Expenditure incurred shall be disallowed u/s 37 and allowed as deductions u/s 80GGB, , 80GGC, (Any), , Contributions given person to Political Parties or Electoral Trust or, Expenditure incurred on advertisement in publication of political party, − No deductions allowed in respect of any amount paid in cash, − Local Authorities or AJP wholly or partly funded with Govt. are not eligible, , HEADING C – DEDUCTIONS IN RESPECT OF CERTAIN INCOME, 80IAC, (Company, and LLP), , Profit & Gain derived by an Eligible Start-up from Specified Business, ▪ Incorporated during the period from 01-04-2016 to 31-03-2022, ▪ Quantum of Deductions: 100% of Profit & Gains, ▪ Total turnover ≤ ₹ 100 Crores in the PY relevant to AY for which deductions is claimed, ▪ Period of Deductions: 3 consecutive AYs out of 10 AYs beginning from the incorporation, Eligible Business, ▪ A business carried out by an eligible start-up engaged in, ▪ Innovation, development or improvement of products or processes or services or, ▪ a scalable business model with a high potential of employment generation or wealth creation, , 80IBA, (All), , Developing & Building Housing Projects., ▪ Project is approved during the period from 01-07-2016 to 31-03-2022, ▪ Project should be completed within 5 years from date of approval, ▪ Quantum of Deductions: 100% of Profit & Gains, ▪ the business of developing and BUILDING RENTAL HOUSING PROJECT (as notified) : also, eligible for 100% Deduction, , 80IC, (All), , New undertakings or substantial expansion of existing undertakings in the states of Himachal Pradesh, and Uttaranchal, ▪ Manufacturing started during the period from 07-01-2003 to 31-03-2012, ▪ Quantum of Deductions: 100% for first 5 Years and 25% (30% in case of company) for next, five years, ▪ Period of Deductions: 10 AYs beginning from starting of manufacturing., , 80IE, (All), , Undertakings begun or begins in the North Eastern states, ▪ Commenced during the period from 01-04-2007 to 31-03-2017, ▪ Quantum of Deductions: 100%, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 9.4

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DT - Simplified, ▪, , Period of Deductions: 10 AYs beginning from initial year., , 80JJA, (All), , Profit from business of collecting and processing or treating of bio-degradable waste, ▪ Quantum of Deductions: 100%, ▪ Period of Deductions: 5 AYs, , 80JJAA, (Assessee, to whom, section, 44AB, applies), , Deductions in respect of employment of New Employees, ▪ Quantum of Deductions: 30% of the additional employee cost, ▪ Period of Deductions: 3 AYs including the year in which employment provided, −, , Additional Employee = Total Employees employed during the PY excluding, ▪ Casual Employees or Employees who do not participate in RPF or, ▪ Employees whose emoluments > 25,000 pm. or, ▪ An employee employed for less than 240 days (Apparel or Footwear or Leather Products, Business 150 days) during PY, ▪ If an employee is employed during the previous year for less than 240 days or 150 days, as the, case may be, but is employed for a period of 240 days or 150 days, as the case may be, in the, immediately succeeding year, he shall be deemed to have been employed in the succeeding, year., ▪ Accordingly, the employer would be entitled to deduction of 30% of additional employee cost, of such employees in the succeeding year, , 80LA, , Deductions in respect of income of off-shore Banking units in SEZ or Unit of an IFSC, ▪ Deductions : 100% for first 5 years and 50% for next 5 years, , 80M, , Deductions in respect of Inter-Corporate Dividends, ▪ Eligible Co. : Domestic Co. which receives dividend from other domestic co. or foreign co., ▪ Deduction Allowed:, ✓ Dividend Received from other Domestic Co. & Foreign Co. or, ✓ Dividend Distributed by Co. before Date of one month prior to the Due date of Filing of, ITR, Whichever is Lower, , 80PA, [Newly, Inserted, Section by, FA 2018], , Deduction in respect of certain income of Farm Producer Companies (FPC), ▪ FPC having turnover < 100 Cr. in any PY from Eligible Business, ▪ Deduction Allowed 100% of profit & gains attributable to eligible business, ▪ From AY 2019-20 to AY 2024-25, Eligible Business, − the marketing of agricultural produce grown by its members, or, − the purchase of agricultural implements, seeds, livestock or other articles intended for, agriculture for the purpose of supplying them to its members, or, − the processing of the agricultural produce of its members, , 80QQB, (Resi., Individual), , Royalty from the books of literacy, artistic or scientific nature, ▪ Deductions : Eligible royalty (Max 3,00,000), Eligible royalty:, ▪ Where lump sum royalty received – Amount of royalty received, ▪ Other case – 15% of value of books sold, , 80RRB, (Resi., Individual), , Royalty from Patents, ▪ Deductions : Actual Royalty (Max 3,00,000), If royalty is earned outside India, then deduction allowed only if such royalty brought to India in, convertible foreign exchange within 6 months from the end of PY or such period allowed by RBI, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 9.5

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DT - Simplified, OTHER DEDUCTIONS, 80TTA, (Individual, & HUF), , Interest earned in saving account with Banks/Co-Op Societies/Post Office, ▪ Deductions : Actual Interest (Max 10,000), ▪ Eligible assessee shall be Individual & HUF excluding Senior Citizen, , 80TTB, [Newly, Inserted, Section by, FA 2018], , Deduction in respect of interest on deposits (Saving + FD] in case of RESIDENT senior citizens, ▪ Having income by way of interest on deposits with Bank/Co-Op Societies/Post Office, ▪ Deduction allowed = Max 50,000 of aggregate interest, , 80U, (Resident, Individual), , Deductions in respect of person with disability, ▪ Deductions : 75,000 or 1,25,000 in case of severe disability, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 9.6

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DT - Simplified, , CHAPTER – 10, DEDUCTION COLLECTION AND LEAVY OF TAX, SECTION 190 – DEDUCTION AT SOURCE AND ADVANCE PAYMENT, −, −, , Income shall be assessed in AY however, tax on such income shall be recovered in PY through TDS or TCS or, Advance Tax, Any balance tax payable shall be paid by Self-Assessment tax u/s 140A in AY, , SECTION 191 – DIRECT PAYMENT, −, , Tax shall be directly paid by assessee if,, ▪ Income in respect of which tax not required to be deducted at source, ▪ Tax liable to be deducted but not deducted at source, , −, , If person responsible to deduct tax including principal officer of the company,, ▪ Fails to deduct the tax or after deducting fails to pay the same, ▪ And assessee also fails to pay tax directly, ▪ Such person shall be deemed to be an assessee in default u/s 201(1), , −, , Income includes Specified Securities or Sweat Equity Shares by Employer being an Eligible Start Up u/s 80 IAC,, Tax shall be paid by assessee directly within 14 days from the earliest of following dates [191(2)], ▪ After the expiry of 48 months from the end of relevant AY or, ▪ From date of sale of such specified securities or sweat equity shares or, ▪ From date of assessee ceasing to be employee of the employer who allotted or transferred such shares, , SECTION 192 – TDS ON SALARY, Deductor, , Person responsible to making payment of Income chargeable under the head “Salary”, , Deductee, , Resident/Non Resident Employee, , Rate, , At Average Tax Rate = Total Tax Computed / Total Income, , Time, , At the time of Payment, , Notes, , ▪ Total Income = Taxable Salary Income plus Other income/Loss from HP only less, Deductions of chapter VI-A as reported by employee, ▪ Employer is responsible for genuineness of any claim of exemption or deduction hence, employer shall obtain necessary proof for such purpose, ▪ Income chargeable under a head other than “Salary” does not attract TDS u/s 192, [ITC Hotel v/s CIT (2016) (SC)], , SECTION 192A – TDS ON PREMATURE WITHDRAWAL FROM EMPLOYEES PROVIDENT FUND, Deductor, , Trustees of EPF Scheme, , Deductee, , Resident/Non Resident, , Rate, , 10% of Amount paid or MMR if PAN is not furnished, , Time, , At the time of Payment, , Non Applicability, , ▪ Payment < 50,000 or, ▪ Employee completes Continuous service of 5 Years, ▪ Employee could not complete continuous service of 5 years due to ill health, contraction or, discontinuance of business, cessation of employment etc., , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.1

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DT - Simplified, SECTION 193 – INTEREST ON SECURITIES, Deductor, , Any Person, , Deductee, , Resident Person, , Rate, , 10%, , Time, , Payment or Credit whichever is earlier, , Non Applicability, , ▪, ▪, ▪, ▪, , Interest on Govt. Securities, Interest paid to LIC/GIC/Other Insurer, Interest on Listed securities in Demat form, Non Demat Form, If Interest paid to Individual/HUF < 5,000, , SECTION 194 – DIVIDEND, Deductor, , Domestic Company making payment of Dividend including Preference Dividend, , Deductee, , Resident Shareholders, , Rate, , 10%, , Time, , Before making payment of dividend, Before making payment or distribution of Deemed Dividend u/s 2(22)(a) to (e), , Threshold Limit, , ▪ No TDS if Dividend paid to Share holder being an Individual, ▪ Dividend including Deemed Dividend u/s 2(22) (a) to (d) > 10 Lakh i.e. Not exempt u/s, 115-O by virtue of Section 115BBDA, ▪ Deemed Dividend u/s 2(22) (e) > 2,500, , Non Applicability, , No TDS if Dividend paid to Share holder being an Individual, ▪ Dividend paid by any mode other than CASH, ▪ Amount of Dividend distributed or likely to be distributed < 5,000, Dividend paid to LIC, GIC or Other Insurer provided shares owend by them and having full, beneficial interest, Dividend paid to a Business Trust or any other person notified, , SECTION 194A – INTEREST OTHER THAN INTEREST ON SECURITIES, Deductor, , Any Person except, Individual/HUF whose turnover does not exceed limit prescribed (1 Cr / 50 Lakh) for Audit, u/s 44AB during preceding FY, , Deductee, , Resident Person, , Rate, , 10%, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , ▪ 40,000 in case of Interest on deposit with Bank/Post Office etc., ▪ 50,000 in case of Interest on deposit with Bank/Post Office etc. – if Payee is RESIDENT, Senior Citizen, ▪ 5,000 in any other case, , Non Applicability, , ▪, ▪, ▪, ▪, , Notes, , ▪ Threshold limit shall be reckoned with reference to total interest of all branch if Bank has, adopted CBS System, ▪ Bank, using CBS, calculates interest on daily/monthly basis. In such case TDS shall be, deducted when Interest actually credited to Customer’s Account, , Interest paid by Firm/Co-op Society to Partner/Member, Interest paid by Central Government to Resident, Interest paid by Credit Society/ Land Development Bank etc., Interest paid to Banks/Govt. Financial Corporations/LIC/Insurance Co. etc., , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.2

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DT - Simplified, SECTION 194B AND 194BB – WINNINGS FROM LOTTERIES, CROSSWORD PUZZLES AND HORSE RACES, Deductor, , Any Person in case of Winnings from Lotteries, Crossword Puzzles [194B], Book maker or Person holding license for horse racing [194BB], , Deductee, , Resident/Non Resident, , Rate, , 30%, , Time, , At the time of Payment, , Threshold Limit, , ▪ 10,000, , Notes, , ▪ If winnings in nature of kind or partly cash and partly in kind but cash is not sufficient to, deduct tax. In such cases payer shall ensure that payee has paid tax or recover the tax from, payee before releasing the winnings, [CIT v/s Hindustan Lever Ltd. (Karnataka High Court)], , SECTION 194C – PAYMENT TO CONTRACTOR AND SUB-CONTRACTOR, Deductor, , Any Person except, Individual/HUF whose turnover not exceed limit prescribed (1 Cr / 50 Lakh) for Audit u/s, 44AB during preceding FY, , Deductee, , Resident Contractor or Sub-Contractor, , Rate, , ▪ 1% in case of Deductee is Individual/HUF, ▪ 2% in any other Deductee, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , ▪ 30,000 for Single Payment, ▪ 1,00,000 in aggregate during FY, , Non Applicability, , ▪ Payment made by Individual/HUF exclusively for personal purpose, ▪ Contract of ‘Sale’, ▪ Deductee is in business of Plying, Hiring or Leasing of goods carriages if,, Owns ≤ 10 carriages and Furnish such declaration along with PAN, , Notes, , ▪ Work includes Manufacture/Supply of product as per specification using Material, purchased from customer., − Tax deductible on Invoice Value excluding cost of such material if shown separately in, invoice, − In above case, if material purchase from person other than customer, it will be treated, as contract of sale hence no TDS, ▪ If Transport charges of supply of Gas is paid to Third Party, Tax is deductible, ▪ Payment by Broadcasters or TV Channels to Production Houses, − For production of content/programme as per specification – Tax deductible, − For purchase of content/programme already produced – No Contract, No TDS, , SECTION 194D - INSURANCE COMMISSION, Deductor, , Any Person, , Deductee, , Resident Person, , Rate, , 5%, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , ▪ 15,000, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.3

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DT - Simplified, SECTION 194DA - PAYMENT IN RESPECT OF LIFE INSURANCE POLICY, Deductor, , Any Person, , Deductee, , Resident Life insurance policy holder which does not fulfil condition u/s 10(10D), , Rate, , 5%, , Time, , At the time of Payment, , Threshold Limit, , ▪ 1,00,000, , SECTION 194E - PAYMENTS TO NON-RESIDENT SPORTSMEN OR SPORTS ASSOCIATION, Deductor, , Any Person, , Deductee, , ▪ Non Resident Sportsman/Entertainer who is not Citizen of India for receipt of income in, India, ▪ Non Resident Sport Association or Institution, , Rate, , 20% plus Cess@4%, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , ▪ No Limit, , SECTION 194EE - PAYMENTS IN RESPECT OF DEPOSIT UNDER NATIONAL SAVING SCHEME, Deductor, , Any Person, , Deductee, , Any person except payment made to legal heirs of assessee, , Rate, , 10%, , Time, , At the time of Payment, , Threshold Limit, , ▪ 2,500, , SECTION 194G – COMMISSION ETC. ON SALE OF LOTTERY TICKETS, Deductor, , Any Person, , Deductee, , Any person, , Rate, , 5%, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , ▪ 15,000, , SECTION 194H – COMMISSION OR BROKERAGE, Deductor, , Any Person except, Individual/HUF whose turnover does not exceed limit prescribed (1 Cr / 50 Lakh) for Audit, u/s 44AB during preceding FY, , Deductee, , Any person, , Rate, , 5%, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , ▪ 15,000, , Non Applicability, , ▪ TDS applicability on below transactions [Circular No. 05/2016, Dt 29-2-2016], − Payment by client to advertising agency - Section 194C applicable, − Payment by Advertising agency to Newspaper company/Television – No TDS, ▪ Payment by Airlines Company to Agent, − TDS is applicable only on minimum fixed commercial price, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.4

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DT - Simplified, −, , No TDS on difference between minimum and maximum price or actual price at which, agent has sold to customer, [CIT v/s Qatar Airways (Bombay HC)], , SECTION 194I – RENT, Deductor, , Any Person except, Individual/HUF whose turnover not exceed limit prescribed (1 Cr / 50 Lakh) for Audit u/s, 44AB during preceding FY, , Deductee, , Resident, , Rate, , ▪ 2% in respect of rent for plant, machinery or equipment;, ▪ 10% Any other Rental payment, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , ▪ 2,40,000 (Aggregate amount of Plant, Machinery & Other Rental Payment), , Non Applicability, , ▪ Rent payment to REIT in respect of any asset directly owned by it, , Notes, , ▪, ▪, ▪, ▪, , Tax deductible even if asset not owned by Deductee, Tax deductible on rent amount only excluding GST, Payment made to cold storage owners for cooling charges – Section 194C applies, Lump sum lease premium or one-time upfront lease charges – it is Not in nature of rent, hence no TDS applicable [Circular 3/2016], ▪ Charges fixed by Airport Authority of India (AAI) for Landing & parking facilities are not, just use of land but for number of services provided by airport hence it cannot be treated as, rent u/s 194I, [Japan Airlines v/s CIT (SC)], , SECTION 194IA - PAYMENT ON TRANSFER OF CERTAIN IMMOVABLE PROPERTY OTHER THAN, AGRICULTURAL LAND, Deductor, , Any Person, , Deductee, , Resident, , Rate, , 1%, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , ▪ 50,00,000, , Non Applicability, , ▪ Specified Transactions u/s 45(5A) where 194IC attracted, ▪ Compulsory acquisition of immovable property covered u/s 194LA, , SECTION 194IB - PAYMENT OF RENT BY CERTAIN INDIVIDUALS OR HUF, Deductor, , ▪ Any Individual/HUF receives any income from any source/head, ▪ Excludes those whose turnover exceeds limit prescribed (1 Cr / 50 Lakh) for Audit u/s, 44AB during preceding FY, , Deductee, , Resident, , Rate, , 5%, , Time, , Payment or Credit of the rent of, Last month of Previous year or, Last month of Tenancy, if property is vacated, whichever is earlier, , Threshold Limit, , ▪ Amount of Rent exceeds 50,000 per month or part of month, , Notes, , ▪ If PAN is not furnished Tax shall be deducted @20% or Higher rate, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.5

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DT - Simplified, ▪ However such deductions shall not exceed rent amount of last month, , SECTION 194IC - PAYMENT UNDER SPECIFIED AGREEMENT, Deductor, , Any Person paying consideration as per Specified Agreement u/s 45(5A), , Deductee, , Resident, , Rate, , 10%, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , ▪ Any share, being land or building or both, ▪ Part of such consideration may be in cash, , Notes, , ▪ Specified Transactions u/s 45(5A) refers to, − Owner of land or building allows another person to develop real estate project on such, land or building, , SECTION 194J – FEES FOR PROFESSIONAL OR TECHNICAL SERVICE, Deductor, , Any Person except, Individual/HUF whose turnover does not exceed limit prescribed (1 Cr / 50 Lakh) for Audit, u/s 44AB during preceding FY, [Individual HUF do not require to deduct tax on Royalty and Non-Compete Fees], , Deductee, , Resident, , Rate, , ▪ 10%, ▪ 2% if Deductee in the business of operation of call centre, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , ▪ 30,000, ▪ Limit is applicable separately for Professional Service, Technical Service, Royalty & NonCompete Fees., ▪ However no threshold limit for payment to director, , Non Applicability, , ▪ Right to use of Computer Software amounts to Royalty however TDS not apply if,, − Software acquired on subsequent transfer without modification and, − Tax already deducted on previous transfer u/s 194J or 195, − Transferee obtains such declaration and PAN from transferee, ▪ Payment by Airlines Company to Agent, − TDS is applicable only on minimum fixed commercial price, − No TDS on difference between minimum and maximum price or actual price at which, agent has sold to customer, [CIT v/s Qatar Airways (Bombay HC)], , Notes, , TDS applicable under this section on, , Meaning, , ▪ Professional Fees, ▪ Technical Fees, ▪ Royalty, , ▪ Non-Compete Fees, ▪ Payment of Director other than Salary, , Professional Service, , Technical Service, , ▪ Profession as per Section 44AA, ▪ Persons in relation to Sport Activity, , ▪ Managerial/Technical/Consultancy, ▪ Technical or Other Personnel, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.6

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DT - Simplified, SECTION 194K – INCOME IN RESPECT OF SPECIFIED UNITS, Deductor, , Person responsible for Paying any Income in respect of, ▪ Units of a Mutual Fund Specified u/s 10(23D), ▪ Units from Administrator of Specified Undertaking, ▪ Units from a Specified Company, , Deductee, , Resident, , Rate, , ▪ 10%, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , ▪ 5,000, , Non-Applicability, , ▪ Income distributed is in nature of Capital Gains, , SECTION 194LA - COMPENSATION ON COMPULSORY ACQUISITION OF CERTAIN IMMOVABLE PROPERTY, Deductor, , Any Person, , Deductee, , Resident, , Rate, , 10% on Compensation or Enhanced Compensation, , Time, , At the time of Payment, , Threshold Limit, , ▪ 2,50,000, , Non Applicability, , ▪ Compulsory acquisition of any agricultural land, , SECTION 194LB – INTEREST ON NOTIFIED INFRASTRUCTURE DEBT FUND, Deductor, , Notified Infrastructure debt fund, , Deductee, , Non-corporate non-resident or a Foreign Company, , Rate, , 5%, , Time, , At the time of Payment, , Threshold Limit, , Any Amount, , SECTION 194LC – INTEREST ON FOREIGN CURRENCY BORROWING FROM SOURCES OUTSIDE INDIA, Deductor, , Indian Company or Business Trust, , Deductee, , Non-corporate non-resident or a Foreign Company, , Rate, , ▪ 5% + Surcharge + HEC, ▪ 4% + Surcharge + HEC if Money borrowed by way of issue of Long Term Bond or RDB, between 01-04-2020 to 30-06-2023 which is listed on RSE in ISFC, , Time, , At the time of Payment, , Threshold Limit, , Any Amount, , SECTION 194LD – INTEREST ON GOVERNMENT SECURITIES OR RUPEE-DENOMINATED BONDS OF AN, INDIAN COMPANY PAYABLE TO A FOREIGN INSTITUTIONAL INVESTOR (FII) OR A QUALIFIED FOREIGN, INVESTOR (QFI), Deductor, , Government or Indian Company, , Deductee, , Foreign Institutional Investor (FII) or Qualified Foreign Investor (QFI), , Rate, , 5% + Surcharge + HEC, , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , Any Amount, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.7

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DT - Simplified, , SECTION 194M – PAYMENT IN RESPECT OF ANY WORK, Deductor, , −, −, , −, , Any Individual/HUF (other than those who are required to deduct income-tax as per the, provisions of section 194C, section 194H or section 194J), Responsible for paying any sum carrying out any work (including supply of labour for, carrying out any work) in pursuance of a contract, by way of commission (not being, insurance commission referred to in section 194D) or brokerage or by way of fees for, professional services during the financial year, Excludes those whose turnover EXCEEDS limit prescribed (1 Cr / 50 Lakh) for Audit u/s, 44AB during preceding FY, , Deductee, , Resident, , Rate, , 5%, , Time, , At the time of Payment or Credit whichever is earlier, , Threshold Limit, , ₹ 50,00,000, , Notes, , Non requirement of TAN & Payment of Tax and Filing of Statement, − Person responsible to deduct tax u/s 194IA is not required to Obtain TAN u/s 203A, , SECTION 194N – PAYMENT OF CERTAIN AMOUNT IN CASH, Deductor, , Every person, being,—, − A banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies, (including any bank or banking institution referred to in section 51 of that Act);, − A co-operative society engaged in carrying on the business of banking; or, − A post office,, − who is responsible for paying any sum, or, as the case may be, aggregate of sums, in cash,, ▪ in excess of one crore rupees during the previous year, to any person (herein, referred to as the recipient), ▪ from one or more accounts maintained by the recipient with it shall, at the time of, payment of such sum, deducts an amount equal to two per cent of sum exceeding, one crore rupees, , Deductee, , Any Person being recipient, , Rate, , 2% of such sum exceeding ₹ 1 Crore, Person who has not filed return of income of Last 3 years (w.e.f. 01-07-2020), 2% of such sum > ₹ 20 Lakhs but ≤ ₹ 1 Crore, 5% of such sum exceeding ₹ 1 Crore, , Time, , At the time of Payment of such sum, , Threshold Limit, , ₹ 1,00,00,000, , Non, Applicability, , This section is not applicable in case of payment made to, − The Government;, − Any banking company or co-operative society engaged in carrying on the business of, banking or a post office;, − Any business correspondent of a banking company or co-operative society engaged in, carrying on the business of banking, in accordance with the guidelines issued in this, regard by the Reserve Bank of India under the Reserve Bank of India Act, 1934 (2 of, 1934);, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.8

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DT - Simplified, −, , −, −, , Any white label ATM operator of a banking company or co-operative society engaged in, carrying on the business of banking, in accordance with the authorisation issued by the, Reserve Bank of India under the Payment and Settlement Systems Act, 2007 (51 of, 2007);, Commission agent or trader, operating under Agriculture Produce Market Committee, (APMC), Such other person or class of persons, which the Central Government may, by notification, in the Official Gazette, specify in consultation with the Reserve Bank of India.], , SECTION 194O – CERTAIN PAYMENT BY E-COMMERCE OPERATOR TO E-COMMERCE PARTICIPANT, [w.e.f. 01-10-2020], Deductor, , E-Commerce Operator, , Deductee, , E-Commerce Participant, , Rate, , 1%, [COVID RELIEF – 0.75% Deduction - from 14-05-2020 to 31-03-2021], , Time, , Payment or Credit whichever is earlier, , Threshold Limit, , Any Amount, , Non Applicability, , E-Commerce Participant being Individual or HUF (who has furnished PAN/Aadhar), Where, gross amount of such sale or service < 5 Lakh, , SECTION 194P – DEDUCTION OF TAX IN CASE OF SPECIFIED SENIOR CITIZEN, [w.e.f. 01-04-2021], Deductor, , Specified Banks [Scheduled Banks], , Deductee, , Specified Senior Citizen, ▪ AGE : 75 Years or more at ANY TIME during PY, ▪ INCOME : Pension Income & Interest Income from Accounts maintained with Bank (NO, OTHER INCOME APART FROM THIS), ▪ DECLARATION : Furnish declaration in FORM 12BBA, Exempted from Filing of ITR for PY in which Tax deducted under this Section, , Rate, , Rates in Force (Slab Rates), On TOTAL INCOME after considering, ▪ Deduction of Chapter VI-A (Proofs to be verified by Banks), ▪ Rebate allowable u/s 87A, , SECTION 194Q – DEDUCTION OF TAX AT SOURCE ON PAYMENT OF CERTAIN SUM FOR PURCHASE OF, GOODS, [w.e.f. 01-07-2021], Deductor, , Buyer, whose total sales, gross receipts or turnover FROM THE BUSINESS carried on by him, exceed TEN CRORE RUPEES during the IMMEDIATELY PRECEDING THE FINANCIAL YEAR in, which the purchase of goods is carried out, This provision DOES NOT apply to Buyer being NON-RESIDENT and NOT CONNECTED with PE, in INDIA, , Deductee, , RESIDENT Seller, No Deduction if ENTIRE Income of Seller is Exempt (e.g. Section 10 or any under any other act), , Rate, , 0.1% of Sum Exceeding ₹ 50 Lakhs, , Threshold Limit, , Value or Aggregate value exceeding ₹ 50 Lakhs (GST Amount shall be Excluded), , Time, , Payment or Credit whichever is earlier, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.9

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DT - Simplified, , Other Points, , ▪, , Threshold Limit shall be triggered from 1st APRIL, if Payment of Credit amount is already, 50 Lakhs or more upto 30th June, Provision of this section shall apply from ALL, transactions on or after 1st July, , ▪, ▪, , Advance Paid before 1st July & Sum Credited thereafter – NO DEDUCTION, Sum Credited before 1st July & Payment made thereafter – NO DEDUCTION, Simply, If any of the two events had happened earlier, No Deduction required., , ▪, , Transactions on which Provisions of Section 194-O (E-Commerce Operator) applies, NO, DEDUCTION requires under this section again., If Seller has collected tax u/s 206C(1H) before buyer could deduct tax, NO DEDUCTION, requires under this section again, If Tax is required to be DEDUCTED under ANY OTHER Provision OR Tax required to be, COLLECTED under ANY OTHER Provision of Act, NO DEDUCTION requires under this, section again, In case of PURCHASE RETURN - if Tax already deducted, It shall be adjusted against Next, Transactions., , ▪, ▪, , ▪, Non-Applicability, , ▪, , ▪, , Transactions in securities and commodities which are traded through recognized stock, exchanges or cleared and settled by the recognized clearing corporation, including, recognized stock exchanges or recognized clearing corporation located in International, Financial Service Centre (IFSC), Transactions in electricity, renewable energy certificates and energy saving certificates, traded through registered power exchanges., , SECTION 195A – INCOME PAYABLE NET OF TAX, − When any payment is to be made ‘Net of Tax’, − Amount of payment shall be grossed up and Tax shall be deducted on Grossed up amount, − Exception, Income Tax payable by employer on Non-Monetary perquisite shall not be grossed up, E.g., ‘Net of Tax’ Payment amount = 90,000, Rate of TDS = 10%, Grossed up Amount, = 90,000/100-10, = 1,00,000, TDS on Grossed up Amount = 1,00,000  10%, = 10,000, SECTION 196 – NO TDS ON PAYMENT OF INTEREST OR DIVIDEND TO GOVT/RBI/CERTAIN, CORPORATIONS, −, , No TDS on Interest or Dividend in respect of shares or securities held by, ▪ Government, ▪ Corporations established under Central Act, ▪ Reserve Bank of India, ▪ Mutual Fund Specified u/s 10(23D), , SECTION 197 – CERTIFICATE FOR DEDUCTION AT LOWER OR NIL RATE, −, −, −, , Recipient of Income can make application containing PAN to AO to grant such certificate, If AO satisfies that income justifies such lower deduction, he will issue such certificate, Person making payment shall deduct tax at rate specified in certificate while making payment, , SECTION 197A – NON DEDUCTION IN CERTAIN CASES, −, , No deduction if declaration is furnished by person receiving income, ▪ Declaration in Form 15G by Resident Individual/HUF whose total income ≤BEL, ▪ Declaration in Form 15H by Resident Individual having age ≥ 60 years even if total income >BEL, ▪ Declaration shall be submitted in duplicate to Person making payment, ▪ Person making payment shall submit one copy to CCIT/CIT before 7th of following month, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.10

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DT - Simplified, , −, −, −, , Interest paid by Offshore/IFSC Banking Unit to Non-resident/Non Ordinarily Resident, Payment to any person for or on behalf of New Pension System Trust (NPS), Specified payments to Bank listed in Second Schedule excluding foreign bank or any payment system Company, authorised by RBI. Following are the specified Payments, ▪ Bank Guarantee Commission, , ▪ Cash Management Charges, , ▪ Underwriting Charges, , ▪ Depository Charges on DEMAT, , ▪ Clearing Charges, , ▪ Credit/Debit Card, Commission, , SECTION 198 – TAX DEDUCTED SHALL BE DEEMED TO BE INCOME RECEIVED, −, −, , All sums deducted under forgoing provision shall be deemed to be the income received, Except, Tax paid by employer on non-monetary perquisite shall not be treated as income, , SECTION 199 – CREDIT FOR TDS, −, −, , All sums deducted and paid to government shall be treated as Income Tax paid by Deductee, If such income is assessable in the hands of other person, Credit shall be given to other person and not the, Deductee, , SECTION 200 – DUTY OF PERSON DEDUCTING TAX, Quarterly Statement, [ 24Q / 26Q / 27Q ], , Payment of TDS through Challan, , Issue of TDS Certificates, , Income Paid/, Credited in, , Due Date, , Quarter Ending, , Due Date, , Section 192, , Other Case, , March, , 30th April, , 31st Mar, , 31st May, , Form 16, , Form 16A, , Any other, Quarter, , 31st of Next Month, 15th Jun of, immediately, following FY, , Within 15 days, from due date of, filing of, Quarterly, Statement, , Any other Month, , 7th, , of Next, Month, , if Govt. Office, Pays tax by direct credit without challan, Submit Monthly statement in 24G on, 30th April for March/, within 15 days other month, , On same day, −, −, , AO with prior approval of JCIT may permit to deposit TDS u/s 192, 194A/D/H quarterly, TDS u/s 194 IA and 194IB and 194M shall be deposited through Challan-cum-Statement within 30 days from, end of month of deduction and furnish Certificate in 16B/16C within 15 days from due date of filing of Challancum-Statement, , SECTION 201 – CONSEQUENCES OF FAILURE TO DEDUCT OR PAY, Assessee shall be deemed to be in default &, Simple Interest shall be levied per month or part of the month, , −, , Default, , Rate of Interest, , Starting from, , Ending with, , Late deduction, , 1%, , Date on which deductible, , Date of actual deduction, , Late deposit, , 1.5%, , Date of deduction, , Date of actual payment, , Exception, Assessee shall not be deemed to be in default if,, ▪ Payee has furnished return of income u/s 139, ▪ Payee has taken such income for computing his income and paid the tax due thereon, ▪ Payer shall furnish certificate to this effect from CA, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.11

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DT - Simplified, SECTION 205 – BAR AGAINST DIRECT DEMAND FROM ASSESSEE, −, −, , Deductee shall not be called upon to pay such tax himself, To the extent tax has been deducted from that income, , SECTION 206AA – NON FURNISHING OF PAN BY PAYEE, −, , −, , Non furnishing or furnishing wrong PAN, Tax shall be deducted at Higher of, ▪ Rate prescribed in Income Tax Act, ▪ 20% (If TDS Required u/s 194-O or 194-Q, instead of 20%, deduction shall be made at 5%), ▪ Rate mentioned in Finance Act, Non Applicability, if Deductee is Non-Resident and furnish the prescribed details such as Name, Contact, Number, e-mail id etc., , SECTION 206AB – SPECIAL PROVISION FOR DEDUCTION OF TAX AT SOURCE FOR NON-FILERS OF, INCOME-TAX RETURN [w.e.f. 01-07-2021], −, , Non furnishing or furnishing wrong PAN, by SPECIFIED PERSON (i.e. Non Filers) Tax shall be deducted at, Higher of, ▪ TWICE of rate prescribed in the Provisions of Act, ▪ TWICE of the Rate mentioned in Annual Finance Act, ▪ 5%, , −, , If Section 206AA is also applicable, HIGHER Rates in this section and 206AA shall be applicable, , −, , This Section is not applicable for TDS u/s 192, 192A, 194B, 194BB or 194LBC (Non-Resident Chapter) or 194N, , Meaning of Specified Person (Non-Filers), −, , A Person who has not filed Return of Income, ▪ for both of the two AYs relevant to the two PYs immediately prior to the PY in which tax is required to be, deducted, for which the time limit of filing return of income under section 139(1) has expired, and, ▪ the aggregate of TDS and TCS in his case is ₹ 50,000 or more in EACH of these two previous years, Specified person DOES NOT include Non-Resident who does not have PE in India, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.12

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DT - Simplified, TAX COLLECTION AT SOURCE, SECTION 206C – TAX COLLECTION AT SOURCE (TCS), 206C, (1), , TCS by seller of certain goods, Collection of Tax on Debit or Receipt whichever is earlier, Excludes, Buyer being Public Sector Company, Government or Govt agencies, any buyer who buys the goods, for personal consumption, Exception, No TCS if Goods purchased for Manufacture of article/thing or Generation of power. Buyer shall, furnish declaration in Form 27C to seller, such goods to be used for specified purpose, ▪, , Liquor for human consumption, , 1%, , ▪, , Timber under forest lease, , 2.5%, , ▪, , Tendu Leaves, , 5%, , ▪, , Timber other than above, , 2.5%, , ▪, , Scrap, , 1%, , ▪, , Any other forest produce, , 2.5%, , ▪, , Minerals being Coal/Lignite/Iron Ore, , 1%, , 206C, (1C), , Sale on lease/license in respect of Parking Lot/Toll Plaza/Mine or Quarry, Collection of Tax on Debit or Receipt whichever is earlier, Excludes, Buyer as mentioned above, , 2%, , 206C, (1F), , Retail Sale of any Motor Vehicle Value > 10 Lakh, Collection of Tax on Receipt, Excludes, Buyer being Government, Govt. Agencies and Public Sector Co. engaged in business of, carrying passengers, , 1%, , Excludes Seller being Individual/HUF whose turnover < limit prescribed u/s 44AB in all above cases, 206C, (1G), , Overseas Remittance or an overseas tour package [w.e.f. 01-10-2020], Person Responsible for Collection, Authorised person who receives amount under LRS of RBI, A Seller of overseas tour programme package, Time of Collection, Collection of Tax on debit or receipt whichever is earlier, Rate of Collection, Amount Remitted for purpose other than purchase of overseas tour programme AND Amount < 7, lakh in a FY, , NIL, , Amount Remitted for purpose other than purchase of overseas tour programme AND Amount > 7, lakh in a FY, , 5%, , Amount Remitted is Education Loan AND Amount > 7 lakh in a FY, , 0.5%, , Non Applicability (No TCS by Authorised Dealer, 1) TCS already collected by Seller, 2) Buyer is liable to Deduct Tax (TDS), 3) CG / SG / Local Authority / Embassy etc., 206C, (1H), , Sale of Goods Value > 50 Lakh [w.e.f. 01-10-2020], Person Responsible for Collection, A Seller whose total sales > 10 Crore during immediately preceding FY and, who receives amount for Sale of Goods aggregating > 50 Lakh in FY, [Other than Exported Goods or Goods already covered in above provisions], Time of Collection, At the time of Receipt, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.13

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DT - Simplified, Rate of Collection, 0.1% of Sale Consideration exceeding Rs. 50 Lakh, [COVID Relief – 0.075% from 14-05-2020 to 31-03-2021], Non Applicability, If buyer is liable to Deduct Tax (TDS) u/s 194-O and 194-Q, Non furnishing of PAN or Aadhar, ▪ Twice the rate specified or, ▪ 1%, Whichever is higher, RESPONSIBILITY OF TAX COLLECTOR, Quarterly Statement, [ 27EQ ], , Payment of TCS through Challan, , Issue of TCS, Certificates, , Income received/, Debited in, , Due Date, , Quarter Ending, , Due Date, , All Month, , 7th of Following, Month, , Any Quarter, , 15th of Following Month, , All Cases, Form 27D, Within 15 days from, due date of filing of, Quarterly Statement, , if Govt. Office, Pays tax by direct credit without challan, Submit Monthly statement in 24G on 30th April, for March/within 15 days other month, , On same day, , SECTION 201 – CONSEQUENCES OF FAILURE TO COLLECT OR PAY, Assessee shall be deemed to be in default &, Simple Interest shall be levied per month or part of the month, Default, , Rate of Interest, , Starting from, , Ending with, , Late Collection/Deposit, , 1%, , Date on which Collectable, , Date of actual Deposit, , −, , Exception, Assessee shall not be deemed to be in default if,, ▪ Buyer has furnished return of income u/s 139, ▪ Buyer has paid the tax due thereon, ▪ Interest shall be payable by Seller from Date on which collectible to date on which buyer has furnished the, return, , SECTION 206CC – NON-FURNISHING OF PAN BY PAYEE, −, , Non furnishing or furnishing wrong PAN by collectee, Tax shall be collected at Higher of, ▪ Twice Rate prescribed in Income Tax Act or, ▪ 5%, , SECTION 206CCA – SPECIAL PROVISION FOR COLLECTION OF TAX AT SOURCE FOR NON-FILERS OF, INCOME-TAX RETURN [w.e.f. 01-07-2021], −, , Non furnishing or furnishing wrong PAN, by SPECIFIED PERSON (i.e. Non Filers) Tax shall be collected at, Higher of, ▪ TWICE of rate prescribed in the Provisions of Act, ▪ 5%, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.14

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DT - Simplified, −, , If Section 206CC is also applicable, HIGHER Rates in this section and 206CCA shall be applicable, , Meaning of Specified Person (Non-Filers), −, , A Person who has not filed Return of Income, ▪ for both of the two AYs relevant to the two PYs immediately prior to the PY in which tax is required to be, deducted, for which the time limit of filing return of income under section 139(1) has expired, and, ▪ the aggregate of TDS and TCS in his case is ₹ 50,000 or more in EACH of these two previous years, Specified person DOES NOT include Non-Resident who does not have PE in India, , CA Dhaval Patanvadia, , www.theinvictus.in, , +91-87800 58699, , 10.15

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DT Simplified CA, , Final, , Direct, , Tax, , Laws, , We issue, this book, freeInvictus, of Cost ???, International, Taxation, The, , &, , – CA, , NO, Here is theDTPrice, we get, which cannot be, Simplified, Simplified CA Final Direct Tax, measured in, terms of Money…, Laws & International, Taxation, DT, Simplified, CA Final Direct Tax Laws & International Taxation, DT Simplified CA, Final, Direct, Tax, Laws, &, International Taxation DT Simplified CA Final Direct, Tax Laws & International Taxation DT Simplified CA, Final Direct Tax Laws & International Taxation DT, Simplified CA Final Direct Tax Laws & International, , The Invictus – CA Simplified, , DT, Simplified CA Final Direct Tax Laws & International, Taxation DT Simplified CA Final Direct Tax Laws &, International Taxation DT Simplified CA Final Direct, Tax Laws & International Taxation DT Simplified CA, Final Direct Tax Laws & International Taxation, , Simplified, , CA Final Direct, International Taxation DT Simplified, , Tax, , DT, , Laws &, CA Final, , Direct Tax Laws & International, Taxation DT Simplified CA Final Direct Tax, Laws & International Taxation DT Simplified CA, Final Direct Tax Laws & International Taxation, DT Simplified CA Final Direct Tax Laws &, International Taxation DT Simplified, CA Final Direct Tax Laws & International Taxation, DT Simplified CA Final, , CA Simplified, , The Invictus –, , Direct Tax Laws & Interna

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Student Speaks…, “Great Faculties having great attitude about teaching. Genuinely cared about making the, subject interesting and comprehensible to everyone”, CMA Vishal Shah, “Very practical approach towards teaching. Classes are always filled with positive energy, and enthusiasm. Style of teaching is very dynamic and on point. I have always enjoyed, studying in lecture”, Jeneel – CA Inter, “Best faculties... Conceptually clear. Always remains open and receptive to the comments, and suggestions.... His efforts to make ‘DT-Simplified’ are very appreciable”, Chirasha – CA Final, “Where, all faculties are engaged in mugging concepts-formulas to the students,, Dhaval sir provides the best conceptual clarity where no mugging is required. Very, positive and helping sir!”, Alay – CA Inter, , “We sincerely acknowledge your love and support…, Please send your valuable feedbacks & suggestions... It encourages & helps, us to make it more simple…”, Committed to simplify your dreams…., Thanks a lot…, , Team THE INVICTUS