1 TAX NOTES- IPCC (CA) COMPUTATION OF TOTAL INCOME AND TAX LIABILITY Revisionary Notes by Chartered Hacks FEBRUARY,
2 Salary House/ Property Business/ Profession Capital Gain Other Sources u/s u/s u/s 28-44DB u/s 45-55A u/s Gross Total Deductions u/s 80C-80U Total Taxable u/s 288 A Rounding Off 1. Round off in multiples of Ignore paisa. 3. If last digit 5, next higher multiple of Otherwise, lower multiple of Eg will become Eg will become Tax Payable/Refund u/s 288 B Education Cess Primary Education 2%. Charged on income tax calculated at slab rate. Secondary & Higher Education 1%.
3 Slab for calculation of Tax AGE < 60yrs + Non-Resident of all age. 60yrs AGE < 80yrs (Senior Citizen) 80yrs Age (Very Senior Citizen) ON NEXT NI NIL 5% NEXT 5,00,000 5,00,000 5,00,000 20% BALANCE 30% Charged on Individual Surcharge Education Cess- charged on Tax + Surcharge Total > 50 lakhs- 10% Total > 100 lakhs- 15% Charged when- Increase in tax from 50/100Lakhs > Increase in Marginal Relief Amount of Relief- Increase in Tax-Increase in Tax+Sur on lakh Tax+Sur on 100.0lakh lakh Marginal Relief= =22725 Deducted before charging Education Cess
4 Allowed even from Tax on LTCG, STCG-111A, Casual Rebate u/s 87A Allowed before charging Education Cess Allowed only to Resident Individual Max. Rebate- Rs 2,500/- When Total 3,50,000 Separated from Total for calculation Casual Taxable u/h Other Sources Rebate & Surcharge are applicable Expenses not allowed to be deducted 30% Deductions u/s 80C- 80U are not allowed Asset sold after 3yrs Capital Gain Asset sold within 3yrs Deductions (80C- 80U) not allowed, 20% STT Not Paid Shares sold after 1yr STT Paid LTCG Rebate & Surcharge applicable normally STCG Taken as normal income & taxable at slab rate STT Not Paid Shares sold within 1yr STT Paid Exempt u/s 10(38) Deductions (80C-80U) not allowed, 15% u/s 111A
5 Normal taxable at Slab Rate of /- Rebate is not allowed HUF/ Artificial Juridical Person All other provisions similar to Individual (including LTCG, STCG-111A, Casual ) Normal 30% 12%, if Total > 1 crore Partnership/ LLP All other provisions similar to HUF (including LTCG, STCG- 111A, Casual, Rebate) LTCG, STCG, Casual at normal rates 30% Domestic Company Surcharge- Total > 100L- 7% Total > 1000L - 12% Rebate not allowed EC & Marginal Relief is allowed Deductions u/s 80C-80U are allowed 40% Surcharge- Total >100L - 2% Total >1000L- 5% Foreign Company Marginal Relief allowed Other provisions similar to Domestic Company Generally, is exempt from Tax Local Authority from business is taxable like Partnership.
6 Receiver Dividend/Interest from MF/UTI notified u/s 10(23D) For MF/UTI Entity Exempt u/s 10(35) If paid to Individual/HUF If paid to any other person Calculated as in Sec 115 O/P/Q 25% + 12% + 3% 30% + 12% + 3% From India Agricultural (u/s 10) From Outside India Exempt Taxable u/h Other Sources Attracts applicability of Partial Integration** Separate LTCG/STCG-111A/ Casual for partial Integration. For Partnership, Firm, Company No Partial Integration If Non-Agricultural is upto Exemption Limit For LTCG/ STCG- 111A/ Casual If Agricultural is upto Rs 5,000/- **Calculation of Partial Integration- 1. Compute Tax on Agricultural + Non-Agricultural. 2. Compute Tax on Agricultural + Exemption Limit. 3. Step 1 Step Apply Surcharge, Rebate, EC, if and as applicable.
7 Foreign Company Dividend Domestic Company Taxable For Company For Shareholder Calculation- Dividend: 100L AIT= (100L X %) % 15% + 12% + 3% (u/s 115 O/P/Q) Exempt u/s 10(34) Normal < Exemption Limit Normal is excluding LTCG, STCG-111A, Casual Applicable to Resident Individual/HUF Not allowed from Casual Deficiency allowed in sequence- 1. LTCG 2. STCG-111A Dividend > 10 lakhs 10% No deduction allowed Exempt for Domestic Company, Fund, Institution, Trust, University Covered u/s 115BBDA