TAX NOTES- IPCC (CA) COMPUTATION OF TOTAL INCOME AND TAX LIABILITY Revisionary Notes by Chartered Hacks FEBRUARY, 2018 WWW.CHARTEREDHACKS.WORDPESS.COM
Salary House/ Property Business/ Profession Capital Gain Other Sources u/s 15-17 u/s 22-27 u/s 28-44DB u/s 45-55A u/s 56-59 Gross Total Deductions u/s 80C-80U Total Taxable u/s 288 A Rounding Off 1. Round off in multiples of 10. 2. Ignore paisa. 3. If last digit 5, next higher multiple of 10. 4. Otherwise, lower multiple of 10. 5. Eg- 42236.28 will become 42240 6. Eg- 42234.28 will become 42230 Tax Payable/Refund u/s 288 B Education Cess Primary Education Cess @ 2%. Charged on income tax calculated at slab rate. Secondary & Higher Education Cess @ 1%.
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 101.8 lakh- 3296475 Tax+Sur on 100.0lakh- 3093750 1.8 lakh 202725 Marginal Relief= 202725-180000 =22725 Deducted before charging Education Cess
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 Taxable @ 30% Deductions u/s 80C- 80U are not allowed Asset sold after 3yrs Capital Gain Asset sold within 3yrs Deductions (80C- 80U) not allowed, taxable @ 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, taxable @ 15% u/s 111A
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 taxable @ 30% Surcharge @ 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 Normal @ 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 Normal @ 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.
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 AIT @ 25% + Sur @ 12% + EC @ 3% AIT @ 30% + sur @ 12% + EC @ 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 2. 4. Apply Surcharge, Rebate, EC, if and as applicable.
Foreign Company Dividend Domestic Company Taxable For Company For Shareholder Calculation- Dividend: 100L AIT= (100L X 17.304%) 82.696% AIT @ 15% + Sur @ 12% + EC @ 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 Taxable @ 10% No deduction allowed Exempt for Domestic Company, Fund, Institution, Trust, University Covered u/s 115BBDA