Circular No. 10/2024

On consideration of difficulties faced by the taxpayers and other stakeholders in electronic filing of various reports of audit under the provisions of the Income-tax Act,1961 (Act), the Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119 of the Act, extends the specified date of furnishing of report of audit under any provision of the Act for the Previous Year 2023-24, which was 30th September, 2024 in the case of assessees referred in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act, to 07th October, 2024. 

Rates for tax deduction at source^*

[For Assessment year 2022-23]

__________________________

* The rate of TDS shall be increased by applicable surcharge and Health & Education cess.

[As amended by Finance Act, 2021]

FORM NO. 15CA - Information to be furnished for payments to a nonresident not being a company, or to a foreign company

(See rule 37BB) 

In case of an Individual (resident or non-resident) or HUF or Association of Person or Body of Individual or any other artificial juridical person

Add:

a. Surcharge : Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-

Note: The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax under sections 111A, 112A and 115AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.

However, marginal relief is available from surcharge in following manner-

  i.  in case where net income exceeds Rs. 50 lakh but doesn't exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

 ii.  in case where net income exceeds Rs. 1 crore but doesn't exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

iii.  in case where net income exceeds Rs. 2 crore but doesn't exceed Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore.

iv.  in case where net income exceeds Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore.

b. Health and Education Cess : Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.

Note: A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500, whichever is less.

1. Special tax Rate for Individual and HUFs

The Finance Act, 2020, has provided an option to Individuals and HUF for payment of taxes at the following reduced rates from Assessment Year 2021-22 and onwards:

Add:

a. Surcharge : Surcharge is levied on the amount of income-tax at following rates if total income of an assessee exceeds specified limits:-

Note: The enhanced surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax under sections 111A, 112A and 115AD. Hence, the maximum rate of surcharge on tax payable on such incomes shall be 15%.

However, marginal relief is available from surcharge in following manner-

  i.  in case where net income exceeds Rs. 50 lakh but doesn't exceed Rs. 1 Crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs.

 ii.  in case where net income exceeds Rs. 1 crore but doesn't exceed Rs. 2 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

 iii.  in case where net income exceeds Rs. 2 crore but doesn't exceed Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore.

iv.  in case where net income exceeds Rs. 5 crore, marginal relief shall be available from surcharge in such a manner that the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore.

b. Health and Education Cess : Health and Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.

Note 1: A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500, whichever is less.

Note 2: The option to pay tax at lower rates shall be available only if the total income of assessee is computed without claiming specified exemptions or deductions:

1. Partnership Firm

For the Assessment Year 2022-23, a partnership firm (including LLP) is taxable at 30%.

Add:

(a) Surcharge : The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).

(b) Health and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge

1. Local Authority

For the Assessment Year 2021-22 & 2022-23, a local authority is taxable at 30%.

Add:

(a)  Surcharge : The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).

(b)  Health and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

1. Domestic Company

Income-tax rates applicable in case of domestic companies for assessment year 2021-22 and 2022-23 are as follows:

Add:

(a) Surcharge : The amount of income-tax shall be increased by a surcharge at the rate of 7% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 12% of such tax, where total income exceeds ten crore rupees. The surcharge shall be subject to marginal relief, which shall be as under:

 (i)  Where income exceeds Rs. 1 crore but not exceeding Rs. 10 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

 (ii)  Where income exceeds Rs. 10 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore

(b) Health and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

1. Special Tax rates applicable to a domestic company

The special Income-tax rates applicable in case of domestic companies for assessment year 2021-22 and 2022-23 are as follows:

Surcharge : The rate of surcharge in case of a company opting for taxability under Section 115BAA or Section 115BAB shall be flat 10% irrespective of amount of total income.

Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

MAT : The domestic company who has opted for special taxation regime under Section 115BAA & 115BAB is exempted from provision of MAT. However, no exemption is available in case where section 115BA has been opted.

In that case, the provisions of Minimum Alternate Tax (MAT) applies, tax payable cannot be less than 15% (+HEC) of "Book profit" computed as per section 115JB. However, MAT is levied at the rate of 9% (plus surcharge and cess as applicable) in case of a company, being a unit of an International Financial Services Centre and deriving its income solely in convertible foreign exchange. For provisions relating to MAT refer tutorial on "MAT/AMT" in tutorial section.

1. Foreign Company

Assessment Year 2021-22 and Assessment Year 2022-23

Add:

(a)  Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 2% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 5% of such tax, where total income exceeds ten crore rupees. However, the surcharge shall be subject to marginal relief, which shall be as under:

 (i)  Where income exceeds one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

 (ii)  Where income exceeds ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.

(b)  Health and Education Cess : The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

8. Co-operative Society

Assessment Year 2021-22 and Assessment Year 2022-23

Add:

(a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).

(b) Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

9. Special tax rates applicable to a Co-operative societies

Assessment Year 2022-23

Note:

The Finance Act, 2020 has inserted a new Section 115BAD in Income-tax Act to provide an option to the co-operative societies to get taxed at the rate of 22% plus 10% surcharge and 4% cess. The resident co-operative societies have an option to opt for taxation under newly Section 115BAD of the Act w.e.f. Assessment Year 2021-22. The option once exercised under this section cannot be subsequently withdrawn for the same or any other previous year.

If the new regime of Section 115BAD is opted by a co-operative society, its income shall be computed without providing for specified exemption, deduction or incentive available under the Act. The societies opting for this section have been kept out of the purview of Alternate Minimum Tax (AMT). Further, the provision relating to computation, carry forward and set-off of AMT credit shall not apply to these assessees

The option to pay tax at lower rates shall be available only if the total income of co-operative society is computed without claiming specified exemptions or deductions

A. Deductible items

Section 30 - Rent, rates, taxes, repairs (excluding capital expenditure) and insurance for premises - All Assessees

Section 31 - Repairs (excluding capital expenditure) and insurance of machinery, plant and furniture - All Assessees

Section 32(1)(i) - For taxpayer engaged in business of generation or generation and distribution of power.

Depreciation¹ in respect of following assets shall be allowed at prescribed percentage on actual cost of an asset (i.e., Straight Line Method):

 i.  Tangible Assets (buildings, machinery, plant or furniture);

 ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature).

However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.

Note:

Taxpayers engaged in business of generation or generation and distribution of power have the option to claim depreciation on written down value basis also

Section 32(1)(ii) - For all assessees engaged in business or profession

Depreciation¹ in respect of following assets shall be allowed at prescribed percentage on written down value of each block of asset (as per WDV method):

 i.  Tangible Assets (buildings, machinery, plant or furniture);

ii. Intangible Assets (know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature).

However, if asset is acquired and put to use for less than 180 days during the previous year, the deduction shall be restricted to 50% of depreciation computed above.

Section 32(1)(iia) - Additional depreciation shall be allowed at 20% of actual cost of new plant and machinery [other than ships, aircraft, office appliances, second hand plant or machinery, etc.] (Subject to certain conditions).

However, if an asset is acquired and put to use for less than 180 days during the previous year, 50% of additional depreciation shall be allowed in year of acquisition and balance 50% would be allowed in the next year.

Deduction under this section is available to all taxpayers setting-up an undertaking or enterprise for production or manufacture of any article or thing in any notified backward area in the state of Andhra Pradesh, Bihar, Telangana or West Bengal.

Note:

1.  Manufacturing unit should be set-up on or after April 1, 2015.

2.  New plant and machinery should be acquired and installed on or after April 1, 2015 but before April 1, 2020.

Section 32AC - Investment allowance shall be allowed at 15% of actual cost of new asset acquired and installed by a company engaged in business or manufacturing or production of any article or thing (Subject to certain conditions)

This is available to company engaged in business of manufacturing or production of any article or thing.

Note:

Deduction shall be available if actual cost of new plant and machinery acquired and installed by the company during the previous year exceeds Rs. 25/100 Crores, as the case may be

Section 32AD - Investment allowance shall be allowed at 15% of actual cost of investment made in new plant and machinery (other than ships, aircraft, vehicle, office appliances, second hand plant or machinery, etc.) if manufacturing unit is set-up in notified backward area in the State of Andhra Pradesh, Bihar, Telangana or West Bengal (subject to certain conditions). This deduction is available to all taxpayers who acquire new plant and machinery for purpose of setting-up manufacturing unit in notified backward areas in the State of Andhra Pradesh, Bihar, Telangana or West Bengal

Note:

1.  New asset should be acquired and installed on or after April 1, 2015 but before April 1, 2020.

2.  Manufacturing unit should be set-up on or after April 1, 2015.

3.  Deduction shall be allowed under section 32AD in addition to deduction under section 32AC if assessee fulfils the specified conditions.

Section 33A - Development allowance - 50 per cent of actual cost of planting (subject to certain conditions and limits) (planting should have been completed before 1-4-1990) for assessee engaged in business of growing and manufacturing tea in India

Section 33AB - Tea/Coffee/Rubber Development Account - Amount deposited in account with National Bank (Special Account) or in Deposit Account of Tea Board, Coffee Board or Rubber Board in accordance with approved scheme or 40% of profits of business, whichever is less (subject to certain conditions). This deduction is available only to assessees engaged in business of growing and manufacturing tea/Coffee/Rubber in India.

Section 33ABA - Amount deposited in Special Account with SBI/Site Restoration Account or 20 per cent of profits, whichever is less (subject to certain conditions). This is available only to assessee carrying on business of prospecting for, or extraction or production of, petroleum or natural gas or both in India.

Section 35(1)(i) - Revenue expenditure on scientific research pertaining to business of assessee is allowed as deduction (Subject to certain conditions).

Note:

Expenditure on scientific research incurred within 3 years before commencement of business (in the nature of purchase of materials and salary of employees other than perquisite) is allowed as deduction in the year of commencement of business to the extent certified by prescribed authority.

Section 35(1)(ii) - 175% of contribution made to approved research association, university, college or other institution to be used for scientific research shall be allowed as deduction (Subject to certain conditions)

150% of sum paid to such association, university, college or other institution is allowed as deduction (applicable from AY 2018-19)

Section 35(1)(iia) - 125% of contribution made to an approved company registered in India to be used for the purpose of scientific research is allowed as deduction (Subject to certain conditions)

Entire sum paid to the company is allowed as deduction (applicable from AY 2018-19).

Section 35(1)(iii) - 125% of contribution made to approved research association, university, college or other institution with objects of undertaking statistical research or research in social sciences shall be allowed as deduction (Subject to certain conditions)

Entire sum paid to such association, university, college or other institution is allowed as deduction (applicable from AY 2018-19)

Section 35(1)(iv) read with 35(2) - Capital expenditure incurred during the year on scientific research relating to the business carried on by the assessee is allowed as deduction (Subject to certain conditions)

Capital expenditure incurred within 3 years before commencement of business is allowed as deduction in the year of commencement of business.

Note:

i. Capital expenditure excludes land and any interest in land;

ii. No depreciation shall be allowed on such assets.

Section 35(2AA) - 200% of payment made to a National Laboratory or University or an Indian Institute of Technology or a specified person is allowed as deduction (Subject to certain conditions).

150% of payment is allowed as deduction (applicable from AY 2018-19)

The payment should be made with the specified direction that the sum shall be used in a scientific research undertaken under an approved programme.

Section - 35(2AB) - 200% of any expenditure incurred by a company on scientific research (including capital expenditure other than on land and building) on in-house scientific research and development facilities as approved by the prescribed authorities shall be allowed as deduction (Subject to certain conditions).

150% of expenditure so incurred shall be allowed as deduction (applicable from AY 2018-19)

Note:

Company should enter into an agreement with the prescribed authority for co-operation in such research and development and fulfils such conditions with regard to maintenance of accounts and audit thereof and furnishing of reports in such manner as may be prescribed;

This deduction is available to company engaged in business of bio-technology or in any business of manufacturing or production of eligible articles or things.

Section 35(A) - Expenditure incurred before 1-4-1998 on acquisition of patent rights or copyrights [equal to appropriate fraction of expenditure on acquisition to be deducted in fourteen equal annual instalments beginning with previous year in which such expenditure has been incurred] (subject to certain conditions)

Section - 35(AB) - Lump sum payment made in any previous year relevant to assessment year commencing on or before 1-4-1998, for acquisition of technical know-how [consideration for acquisition to be deducted in six equal annual instalments (3 equal annual instalments where know-how is developed in certain laboratories, universities and institutions)] (subject to certain conditions)

Section - 35(ABA) For All Assessee engaged in telecommunication services - Capital expenditure incurred and actually paid for acquiring any right to use spectrum for telecommunication services shall be allowed as deduction over the useful life of the spectrum in equal instalments.

Section 35ABB - Expenditure incurred for obtaining licence to operate telecommunication services either before commencement of such business or thereafter at any time during any previous year.

Section 35AC - Expenditure by way of payment of any sum to a public sector company/local authority/approved association or institution for carrying out any eligible scheme or project (subject to certain conditions)

Deduction under this section is available only A.Y. 2017-2018

Section 35AD - Capital expenditure incurred, wholly and exclusively, for the purpose of any specified business [setting up and operating a cold chain facility; setting up and operating a warehousing facility for storage of agricultural produce; laying and operating a cross-country natural gas or crude or petroleum oil pipeline network for distribution, including storage facilities being an integral part of such network; building and operating, anywhere in India, a hotel of two-star or above category as classified by the Central Government; building and operating, anywhere in India, a hospital with at least one hundred beds for patients; developing and building a notified housing project under a scheme for slum redevelopment or rehabilitation framed by the Government, as the case may be, in accordance with prescribed guidelines; developing and building a notified housing project under a scheme for affordable housing framed by the Government, as the case may be, in accordance with prescribed guidelines; production of fertilizer in India; setting up and operating an inland container depot or a container freight station which is approved/notified under the Customs Act, 1962; bee-keeping and production of honey and beeswax; and setting up and operating a warehousing facility for storage of sugar. Lying and operating a slurry pipeline for the transportation of iron ore; setting-up and operating a notified semi-conductor wafer fabrication manufacturing unit; developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility⁴, carried on by the assessee during the previous year in which such expenditure is incurred (subject to certain conditions)

Note: No deduction of any capital expenditure above Rs 10,000 shall be allowed where such expenditure is incurred otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed.

Such deduction is available to Indian company in case of following business, namely;-

 i)   Business of laying and operating a cross-country natural gas or crude or petroleum oil pipeline network.

 ii)  Developing or maintaining and operating or developing, maintaining and operating a new infrastructure facility.

Section 35CCA - Payment to associations/institutions for carrying out rural development programmes (subject to certain conditions)

Section 35CCB - Expenditure incurred before 1-4-2002 by way of payment to approved associations/institutions for carrying out approved programmes of conservation of natural resources or afforestation (subject to certain conditions)

Section 35CCC - One and a half times of expenditure on notified agricultural extension project (subject to certain conditions). From the Assessment Year 2021-22, the deduction shall be restricted to 100% of the expenditure incurred.

Section 35CCD - Only for companies - One and a half times of expenditure on notified skill development project (subject to certain conditions)

Note: From the Assessment Year 2021-22, the deduction shall be restricted to 100% of the expenditure incurred.

Section 35D - Amortisation of certain preliminary expenses by Indian companies and resident non-corporate assessees [deductible in 5 equal annual instalments] (subject to certain conditions)

Section 35DD - Amortisation of expenditure by Indian company incurred after 31-3-1999 in case of amalgamation or demerger in the hands of an Indian company (one-fifth of such expenditure for 5 successive previous years) (subject to certain conditions).

Section 35DDA - Amortisation of expenditure incurred under voluntary retirement scheme in 5 equal annual instalments starting with the year when the expenditure is incurred

Section 35E - Expenditure on prospecting, etc., for certain minerals incurred by Indian companies and resident non-corporate assessees engaged in prospecting, etc., for minerals [deductible in ten equal annual instalments] (subject to certain conditions)

Section 36(1)(i) - Insurance premium covering risk of damage or destruction of stocks/stores

Section 36(1)(ia) - Insurance premium covering life of cattle owned by a member of co-operative society engaged in supplying milk to federal milk co-operative society

Section 36(1)(ib) - Medical insurance premium paid by any mode other than cash, to insure employee's health under (a) scheme framed by GIC of India and approved by Central Government; or (b) scheme framed by any other insurer and approved by IRDA

Section 36(1)(ii) - Bonus or commission paid to employees

Section 36(1)(iii) - Interest on borrowed capital

Section 36(1)(iiia) - Pro rata amount of discount on a zero coupon bond based on life of such bond and calculated in prescribed manner

Section 36(1)(iv) - Contributions to recognised provident fund and approved superannuation fund [subject to certain limits and conditions]

Section 36(1)(iva) - Any sum paid by assessee-employer by way of contribution towards a pension scheme, as referred to in section 80CCD, on account of an employee to the extent it does not exceed 10 per cent of the employee's salary in the previous year.

Section 36(1)(v) - Contributions to approved gratuity fund [subject to certain limits and conditions]

Section 36(1)(va) - Contributions to any provident fund or superannuation fund or any fund set up under Employees' State Insurance Act, 1948 or any other fund for welfare of such employees, received from employees if the same are credited to the employee's account in relevant fund or funds before due date

Section 36(1)(vi) - Allowance in respect of animals which have died or become permanently useless [subject to certain conditions]

Section 36(1)(vii) - Bad debts which have been written off as irrecoverable [subject to limitation in the case of banks and financial institutions]

Section 36(1)(viia) - Provision for bad and doubtful debts

Section 36(1)(viii) - Amounts transferred to special reserve [subject to certain conditions and maxi-mum of 20 per cent of profits derived from eligible business]

Section 36(1)(ix) - Expenditure for promoting family planning amongst employees (deductible in 5 equal annual instalments in case of capital expenditure)

Section 36(1)(xi) - Expenditure incurred wholly and exclusively by the assessee on or after the 1st April, 1999 but before the 1st April, 2000 in respect of a non-Y2K compliant system, owned by the assessee and used for the purposes of his business or profession, so as to make such system Y2K compliant computer system

Section 36(1)(xii) - Any expenditure (not being in the nature of capital expenditure) incurred by a notified corporation or body corporate, by whatever name called, constituted or established by a Central, State or Provincial Act, for the objects and purposes authorised by the Act under which such corporation or body corporate was constituted or established

Section 36(1)(xiii) - Any banking cash transaction tax paid during the previous year on taxable banking transaction entered into by the assessee

Section 36(1)(xiv) - Contribution to notified credit guarantee trust fund for small industries

Section 36(1)(xv) - Securities Transaction Tax paid if corresponding income is included as income under the head 'Profits and gains of business or profession'

Section 36(1)(xvi) - Amount equal to commodities transaction tax paid by an assessee in respect of taxable commodities transactions entered into in the course of his business during the previous year, if the income arising from such transactions is included in the income computed under the head "Profits and gains of business or profession"

Section 36(1)(xvii) - Amount of expenditure incurred by a co-operative society for purchase of sugarcane shall be allowed as deduction to the extent of lower of following0:

a) Actual purchase price of sugarcane; or

b) Price of sugarcane fixed or approved by the Government

Section 36(1)(xviii) - Marked to market loss or other expected loss as computed in accordance with the ICDS notified under section 145(2)

Section 37(1) - Any other expenditure [not being personal or capital expenditure and expenditure mentioned in sections 30 to 36] laid out wholly and exclusively for purposes of business or profession

B. Non-deductible items

Section 37(2B) - Advertisement in souvenir, brochure, tract, pamphlet, etc., of political party

Section 40(a)(i) - Interest, royalty, fees for technical services or other chargeable sum payable outside India, or in India to a non-resident or foreign company, on which tax has not been deducted or after deduction, has not been paid on or before the due date of filing of return under section 139(1). Where in respect of any such sum, tax has been deducted in any subsequent year or, has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid6

However, where deductor has failed to deduct the tax and he is not deemed to be an assessee in default under first proviso to section 201(1), then it shall be deemed that the deductor has deducted and paid the tax on the date on which the payee has furnished his return of Income.

Section 40(a)(ia) - Any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work)7, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in sub-section (1) of section 139.

However, where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.

However, where deductor has failed to deduct the tax and he is not deemed to be an assessee in default under first proviso to section 201(1), then it shall be deemed that the deductor has deducted and paid the tax on the date on which the payee has furnished his return of Income.

Section 40(a)(ib) - Any sum paid or payable to a non-resident which is subject to a deduction of Equalisation levy would attract disallowance if such sum was paid without deduction of such levy or if it was deducted but not deposited with the Central Government till the due date of filing of return.

However, where in respect of any such sum, Equalisation levy is deducted or deposited in subsequent year, as the case may be, the expenditure so disallowed shall be allowed as deduction in that year.

Note: This provision has been inserted by the Finance Act, 2016, w.e.f. 1-6-2016

Section 40(a)(ii) - Rate or tax levied on the profits or gains of any business or profession

Section 40(a)(iia) - Wealth-tax paid

Section 40(a)(iib) - Amount paid by way of royalty, licence fee, service fee, privilege fee, service charge or any other fee or charge, by whatever name called, which is levied exclusively on, or any amount which is appropriated, whether directly or indirectly, from a State Government undertaking by the State Government

Section 40(a)(iii) - Salaries payable outside India, or in India to a non-resident, on which tax has not been paid/deducted at source

Section 40(a)(iv) - Payments to provident fund/other funds for employees' benefit for which no effective arrangements are made to secure that tax is deducted at source on payments made from such funds which are chargeable to tax as 'salaries'

Section 40(a)(v) - Tax actually paid by an employer referred to in section 10(10CC)

Section 40(b) - Interest, salary, bonus, commission or remuneration paid to partners (subject to certain conditions and limits)

Section 40(ba) - Interest, salary, bonus, commission or remuneration paid to members (subject to certain conditions and limits)

Section 40A(2) - Expenditure involving payment to relative/director/partner/substantially interested person, etc., which, in the opinion of the Assessing Officer, is excessive or unreasonable

Section 40A(3) - 100% of payments exceeding Rs. 10,000 (Rs. 35,000 in case of payment made for plying, hiring or leasing goods carriages) made to a person in a day otherwise than by account payee cheque/bank draft or use of electronic clearing system through a bank account or through such other electric mode as may be prescribed. (subject to certain conditions)

Section 40A(7) - Any provision for payment of gratuity to employees, other than a provision made for purposes of contribution to approved gratuity fund or for payment of gratuity that has become payable during the year (subject to specified conditions)

Section 40A(9) - Any sum paid for setting up or formation of, or as contribution to, any fund, trust, company, AOP, BOI, Society or other institution, other than recognised provident fund/approved superannuation fund/pension scheme referred to in section 80CCD/approved gratuity fund

Section 40(A)(13) - No deduction shall be allowed in respect of marked to market loss or other unexpected loss except as allowable under section 36(1)(xviii)

C. Other deductible items

Section 42(1) - In case of mineral oil concerns allowances specified in agreement entered into by Central Government with any person (subject to certain conditions and terms of agreement)

Section 42(2) - In case of mineral oil concerns expenditure incurred remaining unallowed as reduced by proceeds of transfer

Section 43B - Any sum which is actually paid, relating to (i) tax/duty/cess/fee levied under any law, (ii) contribution to provident fund/superannuation fund/gratuity fund/any fund for employees' welfare, (iii) bonus/commission to employees, (iv) interest on loan/borrowing from any public financial institution, State Financial Corporation or State Industrial Investment Corporation (v)interest payments to scheduled banks/Co-operative banks (other than a primary agricultural and development bank)/primary co-operative agricultural and rural development bank on loans or advances, (vi) interest on loan or borrowings from a deposit taking non-banking financial company or systemically important non-deposit taking non-banking financial company and (vii) sum payable by employers by way of leave encashment to employees. (viii) sum payable to the Indian Railways for the use of railway assets. Deduction will not be allowed in year in which liability to pay is incurred unless actual payment is made in that year or before the due date of furnishing of return of income for that year

Section 44A - Expenditure in excess of subscription, etc., received from members (subject to certain conditions and limits)

Section 44C - Head office expenditure (subject to certain conditions and limits)

Section 80CCC¹³

Contributions to certain pension funds of LIC or any other insurer (up to Rs. 1,50,000) (subject to certain conditions)¹⁴

Section 80CCD

Contribution to pension scheme notified by Central Government up to 10% of salary (subject to certain conditions and limits)¹⁵

Contribution made by employer shall also be allowed as deduction under 80CCD(2) while computing total income of the employee. However, amount of deduction could not exceed 14% of salary where contribution is made by central government and 10% of salary, where contribution is made by any other employee.

Section 80CCF

Amount up to Rs. 20,000, paid or deposited, during the previous years relevant to assessment year 2011-12 or 2012-13, as subscription to notified long-term infrastructure bonds

Section 80D¹⁷

Amount paid (in any mode other than cash) by an individual or HUF to LIC or other insurer to effect or keep in force an insurance on the health of specified person. An individual can also make payment to the Central Government health scheme and/or on account of preventive health check-up (subject to limit)

  ■  specified person means:

  -   In case of Individual - self, spouse, dependent children or parents

  -   In case of HUF - Any member thereof

  ■  Deduction for preventive health check-up shall not exceed in aggregate Rs. 5,000.

  ■  Payment on account of preventive health check-up may be made in cash.

Section 80DD

Deduction of Rs. 75,000 (Rs. 1,25,000 in case of severe disability) to a resident individual/HUF where (a) any expenditure has been incurred for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995] (w.e.f. assessment year 2005-06 including autism, cerebral palsy and multiple disability as referred to in National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999), or (b) any amount is paid or deposited under an approved scheme framed in this behalf by the LIC or any other insurer or the Administrator or the specified company for the maintenance of a dependent, being a person with disability (subject to certain conditions)

Section 80DDB

Expenses actually paid for medical treatment of specified diseases and ailments subject to certain conditions¹⁸

Section 80E

Amount paid out of income chargeable to tax by way of payment of interest on loan taken from financial institution/approved charitable institution for pursuing higher education¹⁹ (subject to certain conditions) (maximum period : 8 years)

Section 80EE

Interest payable on loan taken by an individual from any financial institution for the purpose of acquisition of a residential house property subject to certain condition. (Maximum deduction 50,000)

Section 80EEA

Interest payable on loan taken by an individual, who is not eligible to claim deduction under 80EE, from any financial institution for the purpose of acquisition of a residential house property subject to certain condition. (Maximum deduction 1,50,000)

Section 80EEB

Interest payable on loan taken by an individual from any financial institution for the purpose of purchase of an electric vehicle subject to certain condition. (Maximum deduction 1,50,000)

Section 80G

Donations to certain approved funds, trusts, charitable institutions/donations for renovation or repairs of notified temples, etc. [amount of deduction is 50 per cent of net qualifying amount]. 100 per cent of qualifying donations to National Defence Fund, Prime Minister's National Relief Fund, Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND) Prime Minister's Armenia Earthquake Relief Fund, Africa (Public Contributions - India) Fund, National Children's Fund (from 1-4-2014), Government or approved association for promoting family planning, universities and approved educational institutions of national eminence, National Foundation for Communal Harmony, Chief Minister's Earthquake Relief Fund (Maharashtra), Zila Saksharta Samitis, National or State Blood Transfusion Council, Fund set up by State Government to provide medical relief to the poor, Army Central Welfare Fund, Indian Naval Benevolent Fund and Air Force Central Welfare Fund, Andhra Pradesh Chief Minister's Cyclone Relief Fund, National Illness Assistance Fund, Chief Minister's Relief Fund or the Lt. Governor's Relief Fund in respect of any State or Union Territory, National Sports Fund, National Cultural Fund, Fund for Technology Development and Application, Indian Olympic Association, etc.²⁰, fund set up by State Government of Gujarat exclusively for providing relief to victims of earthquake in Gujarat, National Trust for Welfare of Persons with Autism, Cerebral palsy, Mental retardation and Multiple Disabilities, and sums paid between 26-1-2001 and 30-9-2001 to any eligible trust, institution or fund for providing relief to Gujarat earthquake victims²¹, the Swachh Bharat Kosh and the Clean Ganga Fund (from assessment year 2015-16) and National Fund for Control of Drug Abuse (from assessment year 2016-17) [subject to certain conditions and limits]²²

Section 80GG

Rent paid in excess of 10% of total income for furnished/unfurnished resi-dential accommodation (subject to maximum of Rs. 5,000 p.m. or 25% of total income, whichever is less) (subject to certain conditions)

Section 80GGA23

Certain donations for scientific, social or statistical research or rural development programme or for carrying out an eligible project or scheme or National Urban Poverty Eradication Fund (subject to certain conditions)

Section 80GGB

Sum contributed to any political party/electoral trust²⁴

Section 80GGC

Sum contributed to any political party/electoral trust²⁴

Section 80-IA

Profits and gains from industrial undertakings engaged in infrastructure facility, telecommunication services, industrial park, development of Special Economic Zone, power undertakings, etc. (subject to certain conditions and limits)25

No deduction under this section shall be available to an enterprise which starts the development or operation and maintenance of the infrastructure facility on or after the 1st day of April, 2017.   

Section 80-IAB

Profits and gains derived by undertaking/enterprise from business of developing a Special Economic Zone notified on or after 1-4-2005 (subject to certain conditions and limits)  

No deduction under this section shall be available to an assessee, being a developer, where the development of Special Economic Zone begins on or after the 1st day of April, 2017.      

Section 80-IAC

Profit and gains derived by an eligible start-up from specified business on or after 1-4-2017 (subject to certain conditions)

Section 80-IB

Profits and gains from industrial undertakings, cold storage plant, hotel, scientific research & development, mineral oil concern, housing projects, cold chain facility, multiplex theatres, convention centres, ships, etc. (subject to certain conditions and limits)

No deduction shall be available to an enterprise which commence the business activity on or after 1-4-2017.

Section 80-IBA

Profits and gains derived by assessee from the business of developing and building affordable housing projects. (subject to certain conditions)

Section 80-IC   

Profits and gains derived by an undertaking or an enterprise in special category States (Himachal Pradesh, Uttaranchal, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura) (subject to certain limits, time limits and conditions),

(a) which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the specified period.

(b) which has begun or begins to manufacture or produce any article or thing specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule and undertakes substantial expansion during the specified period

Section 80-ID

Profits and gains from business of hotels and convention centres in specified areas (subject to certain conditions).

Section 80-IE

Deduction in respect of certain undertakings in North Eastern States.      

Section 80JJA

Entire income from business of collecting and processing or treating of bio-degradable waste for generating power, or producing bio-fertilizers, bio-pesticides or other biological agents or for producing bio-gas, making pellets or briquettes for fuel or organic manure (for 5 consecutive assessment years)

Section 80JJAA

Deduction of 30% of additional employee cost in respect of employment of new employees.

Additional employee cost means total emoluments paid or payable to additional employees employed during the previous year.  

Deduction shall be allowed for first three Assessment Years including the Assessment Year relevant to previous year in which such employment is provided.      

(Subject to certain other condition)        

Section 80LA

Certain incomes of Scheduled banks/banks incorporated outside India having Offshore Banking Units in a Special Economic Zone/Units of International Financial Services Centre (subject to certain conditions and limits)  

Section 80M

Inter-corporate dividend shall be allowed to be reduced from total income of company receiving the dividend if same is further distributed to shareholders one month prior to the due date of filing of return.

Section 80P

Specified incomes [subject to varying limits specified in sub-section (2)]   - available to Co-operative societies

Section 80QQB

Royalty income of author of certain specified category of books (up to Rs. 3,00,000) (subject to certain conditions) – available to Resident Individual - Author

Section 80RRB

Royalty on patents up to Rs. 3,00,000 in the case of a resident individual who is a patentee and is in receipt of income by way of royalty in respect of a patent registered on or after 1-4-2003 (subject to certain conditions). – available to Resident individuals

Section 80TTA

Interest on deposits in savings bank accounts (up to Rs. 10,000 per year) (except Senior Citizen)

Section 80TTB

Interest on deposit in saving account or fixed deposit (upto Rs. 50,000 per year) Senior citizen

Section 80U

Deduction of Rs. 75,000 to a resident individual who, at any time during the previous year, is certified by the medical authority to be a person with disability [as defined under Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995] [w.e.f. assessment year 2005-06 including autism, cerebral palsy, and multiple disabilities as defined under National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities Act, 1999] [in the case of a person with severe disability, allowable deduction is Rs. 1,25,000] (subject to certain conditions).

 Rebate under Section 87A

Tax rebate in case of individual resident in India, whose total income does not exceed Rs. 5,00,000 quantum of rebate shall be an amount equal to hundred per cent of such income-tax or an amount of Rs. 12,500, whichever is less.

NOTES

 13.  Where deduction is claimed under this section, deduction in relation to same amount cannot be claimed under section 80C.

 14.  section 80CCE provides that the aggregate amount of deductions under section 80C, section 80CCC and section 80CCD(1) shall not, in any case, exceed Rs. 1,50,000

With effect from assessment year 2015-16, amended sub-section (1) has clarified that a non-government employee can claim deduction under section 80CCD even if his date of joining is prior to January 1, 2004.

 15.  With effect from the assessment year 2012-13 section 80CCE is amended so as to provide that contribution made by the Central Government or any other employer to a pension scheme under sub-section (2) of section 80CCD shall not be included in the limit of deduction of Rs. 1,50,000 provided under section 80CCE.

With effect from assessment year 2016-17, sub-section (1A) of section 80CCD which laid down maximum deduction limit of Rs. 1,00,000 (under sub-section (1)) has been deleted.

Further, a new sub-section (1B) is inserted to provide for additional deduction to the extent of Rs. 50,000. The additional deduction is not subject to ceiling limit of Rs. 1,50,000 as provided under section 80CCE.

However, it is to be noted that addition deduction of Rs. 50,000 shall not be allowed in respect of contribution which is considered for deduction under section 80CCD(1), i.e., within limit of 10% of salary/gross total income

Any payment from NPS to an employee because of closure or his opting out of the pension scheme is chargeable to tax. However, with effect from the assessment year 2017-18, the whole amount received by the nominee from NPS on death of the assessee shall be exempt from tax.

 16.  Rajiv Gandhi Equity Savings Scheme, 2012/2013.

With effect from assessment year 2014-15 (a) investment in listed units of an equity oriented fund is also permitted; (b) deduction shall be allowed for three consecutive assessment years, beginning with the assessment year relevant to previous year in which the listed equity shares or listed units of equity oriented fund were first acquired and (c) gross total income of the assessee for relevant assessment year shall not exceed twelve lakh rupees.

 17.  Section 80D is amended by the Finance Act, 2018. From assessment year 2019-20 onwards the deduction under Section 80D will be available as per the limit specified below:

*‘Senior citizen’ means an individual resident in India who is of the age of sixty years or more at any time during the relevant previous year.

 18.  Maximum deduction is Rs. 40,000 (Rs. 1,00,000 where expenditure is incurred for a senior citizen [w.e.f assessment year 2019-20])

 With effect from assessment year 2016-17, the taxpayer shall be required to obtain a prescription from a specialist doctor (not necessarily from a doctor working in a Government hospital) for availing this deduction.

 19.  Scope of 'higher education' is enlarged with effect from assessment year 2010-11 to cover any course of study pursued after passing the Senior Secondary Examination or its equivalent from any school, Board or university recognised by the Central Government or State Government or local authority or by any other authority authorized by the Central Government or State Government or local authority to do so.

With effect from 1-4-2010 the scope of expression 'relative' has also been enlarged to cover the student for whom the taxpayer is the legal guardian.

 20.  Donation of any sums paid by the assessee, being a company, in the previous year as donations to the Indian Olympic Association or to any other association or institution established in India, as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf for—

 (i)  the development of infrastructure for sports and games; or

(ii)  the sponsorship of sports and games,

in India;

is eligible for the purpose of deduction under section 80G [this is in consequence of omission of section 10(23)].

 21.  Donation made to an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both is also eligible for the purpose of deduction under section 80G from the assessment year 2003-04 [this is in consequence of omission of section 10(20A)].

 22.  With effect from 1-4-2013 no deduction shall be allowed in respect of donation of any sum exceeding two thousand rupees unless such sum is paid by any mode other than cash.

 23.  With effect from 1-4-2013 no deduction shall be allowed under this section in respect of any sum exceeding ten thousand rupees unless such sum is paid by any mode other than cash.

 24.  With effect from 1-4-2014 deduction will not be allowed if sum is contributed in cash.

 25.  Time limits stated under section 80-IA(4)(iv) have been extended from 31-3-2014 to 31-3-2017.

 26.  100% deduction shall be allowed from the AY beginning on or after the 1st day of April, 2021.

 27.  With effect from Assessment Year 2018-19:

  i.  'Eligible business' means 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.

 ii.  "Eligible start-up" means a company or a limited liability partnership engaged in eligible business which fulfils the following conditions, namely:

  a.  it is incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 2021

  b.  the total turnover of its business does not exceed 100 crore rupees in the previous years in which deduction is claimed; and

  c.  it holds a certificate of eligible business from the Inter-Ministerial Board of Certification as notified in the Official Gazette by the Central Government

 ■  Life insurance premium for policy :

 -    in case of individual, on life of assessee, assessee's spouse and any child of assessee

 -    in case of HUF, on life of any member of the HUF

 ■  Sum paid under a contract for a deferred annuity :

 -    in case of individual, on life of the individual, individual's spouse and any child of the individual (however, contract should not contain an option to receive cash payment in lieu of annuity)

 -     in case of HUF, on life of any member of the HUF

 ■  Sum deducted from salary payable to Government servant for securing deferred annuity or making provision for his wife/children [qualifying amount limited to 20% of salary]

 ■  Contributions by an individual made under Employees' Provident Fund Scheme

 ■  Contribution to Public Provident Fund Account in the name of:

 -    in case of individual, such individual or his spouse or any child of such individual

 -    in case of HUF, any member of HUF

 ■  Contribution by an employee to a recognised provident fund

 ■  Contribution by an employee to an approved superannuation fund

 ■  Subscription to any notified security or notified deposit scheme of the Central Government. For this purpose, Sukanya Samriddhi Account Scheme has been notified vide Notification No. 9/2015, dated 21.01.2015. Any sum deposited during the year in Sukanya Samriddhi Account by an individual would be eligible for deduction.

 ■  Amount can be deposited by an individual or in the name of girl child of an individual or in the name of the girl child for whom such an individual is the legal guardian.

 ■  Subscription to notified savings certificates [National Savings Certificates (VIII Issue)]

 ■  Contribution for participation in unit-linked Insurance Plan of UTI :

 -    in case of an individual, in the name of the individual, his spouse or any child of such individual

 -    in case of a HUF, in the name of any member thereof

 ■  Contribution to notified unit-linked insurance plan of LIC Mutual Fund [Dhanaraksha 1989]

 -    in the case of an individual, in the name of the individual, his spouse or any child of such individual

 -    in the case of a HUF, in the name of any member thereof

 ■  Subscription to notified deposit scheme or notified pension fund set up by National Housing Bank [Home Loan Account Scheme/National Housing Banks (Tax Saving) Term Deposit Scheme, 2008]

 ■  Tuition fees (excluding development fees, donations, etc.) paid by an individual to any university, college, school or other educational institution situated in India, for full time education of any 2 of his/her children

 ■  Certain payments for purchase/construction of residential house property

 ■  Subscription to notified schemes of (a) public sector companies engaged in providing long-term finance for purchase/construction of houses in India for residential purposes/(b) authority constituted under any law for satisfying need for housing accommodation or for planning, development or improvement of cities, towns and villages, or for both

 ■  Sum paid towards notified annuity plan of LIC (New Jeevan Dhara/New Jeevan Dhara-I/New Jeevan Akshay/New Jeevan Akshay-I/New Jeevan Akshay-II/Jeewan Akshay-III plan of LIC) or other insurer

 ■  Subscription to any units of any notified [u/s 10(23D)] Mutual Fund or the UTI (Equity Linked Saving Scheme, 2005)

 ■  Contribution by an individual to any pension fund set up by any mutual fund which is referred to in section 10(23D) or by the UTI (UTI Retirement Benefit Pension Fund)

 ■  Subscription to equity shares or debentures forming part of any approved eligible issue of capital made by a public company or public financial institutions

 ■  Subscription to any units of any approved mutual fund referred to in section 10(23D), provided amount of subscription to such units is subscribed only in 'eligible issue of capital' referred to above.

 ■  Term deposits for a fixed period of not less than 5 years with a scheduled bank, and which is in accordance with a scheme¹¹ framed and notified.

 ■  Subscription to notified bonds issued by the NABARD.

 ■  Deposit in an account under the Senior Citizen Savings Scheme Rules, 2004 (subject to certain conditions)

 ■  5-year term deposit in an account under the Post Office Time Deposit Rules, 1981 (subject to certain conditions)

 ■  Contribution to specified account of the pension scheme referred to in 80CCD, in case of central Government employee.

Notes:

 1.  Deduction is limited to whole of the amount paid or deposited subject to a maximum of Rs. 1,50,000¹². This maximum limit of Rs. 1,50,000¹² is the aggregate of the deduction that may be claimed under sections 80C, 80CCC and 80CCD.

2. The sums paid or deposited need not be out of income chargeable to tax of the previous year. Amount may be paid or deposited any time during the previous year, but the deduction shall be available on so much of the aggregate of sums as do not exceed the total income chargeable to tax during the previous year.

 3.  Life Insurance premium is part of gross qualifying amount for the purpose of deduction under section 80C. Payment of premium which is in excess of 10 per cent (if policy is issued on or after 1-4-2013, 15% in case of insurance on life of person with disability referred to in section 80U or suffering from disease or ailment specified in section 80DDB/rule 11DD) of actual capital sum assured shall not be included in gross qualifying amount. The value of any premiums agreed to be returned or of any benefit by way of bonus or otherwise, over and above the sum actually assured, which is to be or may be received under the policy by any person, shall not be taken into account for the purpose of calculating the actual capital sum assured.

The limit of 10 per cent will be applicable only in the case of policies issued on or after 1-4-2012. In respect of policies issued prior to 1-4-2012, the old limit of 20 per cent of actual sum assured will be applicable.

With effect from 1-4-2013, 'actual capital sum assured' in relation to a life insurance policy shall mean the minimum amount assured under the policy on happening of the insured event at any time during the term of the policy, not taking into account—

 (i)  the value of any premium agreed to be returned; or

(ii) any benefit by way of bonus or otherwise over and above the sum actually assured, which is to be or may be received under the policy by any person.

 4.  Where, in any previous year, an assessee—

 (i)  terminates his contract of insurance, by notice to that effect or where the contract ceases to be in force by reason of failure to pay any premium, by not reviving contract of insurance,—

(a) in case of any single premium policy, within two years after the date of commencement of insurance; or

(b) in any other case, before premiums have been paid for two years; or

(ii) terminates his participation in any unit-linked insurance plan (ULIP), by notice to that effect or where he ceases to participate by reason of failure to pay any contribution, by not reviving his participation, before contributions in respect of such participation have been paid for five years; or

(iii) transfers the house property before the expiry of five years from the end of the financial year in which possession of such property is obtained by him, or receives back, whether by way of refund or otherwise, any sum specified in that clause,

then,—

(a) no deduction shall be allowed to the assessee with reference to any of such sums, paid in such previous year; and

(b) the aggregate amount of the deductions of income so allowed in respect of the previous year or years preceding such previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.

If any equity shares or debentures, with reference to the cost of which a deduction is allowed, are sold or otherwise transferred by the assessee to any person at any time within a period of three years from the date of their acquisition, the aggregate amount of the deductions of income so allowed in respect of such equity shares or debentures in the previous year or years preceding the previous year in which such sale or transfer has taken place shall be deemed to be the income of the assessee of such previous year and shall be liable to tax in the assessment year relevant to such previous year.

A person shall be treated as having acquired any shares or debentures on the date on which his name is entered in relation to those shares or debentures in the register of members or of debenture-holders, as the case may be, of the public company.

 5.  If any amount, including interest accrued thereon, is withdrawn by the assessee from his deposit account made under (a) Senior Citizen Saving Scheme or (b) Post Office Time Deposit Rules, before the expiry of the period of five years from the date of its deposit, the amount so withdrawn shall be deemed to be the income of the assessee of the previous year in which the amount is withdrawn and shall be liable to tax in the assessment year relevant to such previous year.

The amount liable to tax shall not include the following amounts, namely:—

 (i)  any amount of interest, relating to deposits referred to above, which has been included in the total income of the assessee of the previous year or years preceding such previous year; and

(ii)  any amount received by the nominee or legal heir of the assessee, on the death of such assessee, other than interest, if any, accrued thereon, which was not included in the total income of the assessee for the previous year or years preceding such previous year.

• Expenditure incurred wholly and exclusively in connection with transfer of capital asset - Section 48(i) - available to All assessees
• Cost of acquisition of capital asset and of any improvement thereto (indexed cost of acquisition and indexed cost of improvement, in case of long-term capital assets) - Section 48(ii) - available to All assessees
• Long-term capital gains on sale of residential house and land appurtenant thereto invested in purchase/construction of another residential house8 (subject to certain conditions and limits) - Section 54 - available to Individual/HUF
• Capital gains on transfer of land used for agricultural purposes, by an individual or his parents or a HUF, invested in other land for agricultural purposes (subject to certain conditions and limits) - Section 54B - available to Individual/HUF
• Capital gains on compulsory acquisition of land or building forming part of an industrial undertaking invested in purchase/construction of other land/building for shifting/re-establishing said undertaking or setting up new industrial undertaking (subject to certain conditions and limits) - Section 54D - available to Any assessee
• Long-term capital gain invested in long-term specified assets being units of such fund as may be notified by Central Government to finance start-ups - Section 54EE - available to All assesses
• Net consideration on transfer of long-term capital asset other than residential house invested in residential house10 (subject to certain conditions and limits) - Section 54F - available to Individual/HUF
• Capital gain on transfer of machinery, plant, land or building used for the purposes of the business of an industrial undertaking situate in an urban area (transfer being effected for shifting the undertaking to a non-urban area) invested in new machinery, plant, building or land, in the said non-urban area, expenses on shifting, etc. (subject to certain conditions and limits) - Section 54G - available to Any assessee
• Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone (subject to certain conditions and limits) - Section 54GA - available to All assessees
• Exemption in respect of capital gain arising from the transfer of a long-term capital asset, being a residential property (a house or a plot of land), owned by the eligible assessee, and such assessee before the due date of furnishing of return of income under sub-section (1) of section 139 utilises the net consideration for subscription in the equity shares of an eligible company and such company has, within one year from the date of subscription in equity shares by the assessee, utilised this amount for purchase of specified new asset (subject to certain conditions and limits). - Section 54GB - available to Individual/HUF

Deductible items

• Any reasonable sum paid by way of commission or remuneration for purpose of realising dividend - Section 57(i)
• Any reasonable sum paid by way of commission or remuneration for the purpose of realising interest on securities - Section 57(i)
• Contributions to any provident fund or superannuation fund or any fund set up under Employees' State Insurance Act, 1948 or any other fund for welfare of employees, if the same are credited to employees' accounts in relevant funds before due date - Section 57(ia)
• Repairs, insurance, and depreciation of building, plant and machinery and furniture - Section 57(ii)
• In case of family pension, 331/3 per cent of such pension or Rs. 15,000, whichever is less - Section 57(iia)
• Any other expenditure (not being capital expenditure) expended wholly and exclusively for earning such income - Section 57(iii)
• In case of interest received on compensation or on enhanced compensation referred to in section 145A(2), a deduction of 50 per cent of such income (subject to certain conditions) - Section 57(iv)

Non-Deductible items

• Personal expenses - Section 58(1)(a)(i)
• Interest chargeable to tax which is payable outside India on which tax has not been paid or deducted at source - Section 58(1)(a)(ii)
• 'Salaries' payable outside India on which no tax is paid or deducted at source - Section 58(1)(a)(iii)
• Disallowance due to TDS default (Covered by section 40(a)(ia) and 40(a)(iia)) - Section 58(1A)
• Expenditure of the nature specified in section 40A - Section 58(2)
• Expenditure in connection with winnings from lotteries, crossword puzzles, races, games, gambling or betting - Section 58(4)

Against 'salaries'

• Standard Deduction [Rs. 50,000 or the amount of salary, whichever is lower] - Section 16(ia)
• Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000] - Section 16(ii)
• Employment tax - Section 16(iii)

Against 'income from house properties'

• Taxes levied by local authority and borne by owner if paid in relevant previous year - Section 23(1) first proviso
• Standard deduction [30% of the annual value (gross annual value less municipal taxes)] - Section 24(a)
• Interest on borrowed capital (Rs. 30,000/Rs. 2,00,000, subject to specified conditions) - Section 24(b)
• Standard deduction of 30 per cent of arrears of rent or unrealised rent received - Section 25A(2)

With effect from June 01 2016, every person, being a seller, who receives any amount in cash as consideration for sale of goods or services shall, at the time of receipt of such amount in cash, collect from the buyer (except from such class of buyer who fulfills such conditions, as may be prescribed), a sum equal to 1% of sale consideration as TCS (Tax Collection at Source) if such consideration exceed Rs 5,00,000 in case of jewellery and Rs 2,00,000 in case of bullion and other goods or services.

Provided that TCS collection will not be applicable on such transactions which are covered under TDS and

such sellers who receives any amount as consideration of sale of a motor vehicle of value exceeding Rs 10,00,000, shall at the time of receipt of such amount, collect from the buyer, a sum equal to 1% of the sale consideration as TCS.

Here, "Seller" means Central Government, State Government, Local Authority, any Corporation or Authority established by or under a Central, State or Provincial Act, any Company, Firm, Co-Operative Society and an Individual or HUF who is carrying on a business/profession where accounts are required to be audited u/s 44AB, in the immediately preceding financial year.

Some other relevant information are as below:

• The seller will be liable to collect TCS even if a part of the sale consideration of invoice (where invoice amount exceeds 2,00,000/5,00,000/10,00,000) is received in cash.
• The seller shall submit Quarterely Statement in Form 27EQ by 15th July, 15th October, 15th January and 15th May for the quarter ending 30th June, 30th September, 31st December and 31st March respectively.
• TCS collected shall be deposited with 7th day from the close of the month in which it was collected.
• TCS Certificate in Form 27D shall be furnished within 15 days from the due date of filing statement in Form 27EQ.

Gazetted Officer Certificate Format for PAN Card Application

PAN Card Application Form - Foreign Citizens

Pan Card Application Form - Indian Citizens

Form For Changes Or Correction in PAN Data