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Basic Concepts

Clarification regarding attaining prescribed age of 60 years/80 years on 31st March itself, in case of senior/very senior citizens whose date of birth falls on 1st April [Circular No. 28/2016, dated 27-07-2016]

An individual who is resident in India and of the age of 60 years or more (senior citizen) and 80 years or more (very senior citizen) is eligible for a higher basic exemption limit of Rs.3,00,000 and Rs.5,00,000, respectively. The CBDT has, vide this Circular, clarified that a person born on 1st April would be considered to have attained a particular age on 31st March, the day preceding the anniversary of his birthday.

Example: A resident individual whose 60th birthday falls on 1st April, 2017, would be treated as having attained the age of 60 years in the P.Y.2016-17, and would be eligible for higher basic exemption limit of Rs. 3 lakh in computing his tax liability for A.Y.2017-18. Likewise, a resident individual whose 80th birthday falls on 1st April, 2017, would be treated as having attained the age of 80 years in the P.Y.2016-17, and would be eligible for higher basic exemption limit of Rs. 5 lakh in computing his tax liability for A.Y.2017-18.

Rates of Taxes:
In the case of a domestic company:

(i) Where the total turnover or gross receipt in the previous year 2014-15 does not exceed Rs. 5 crore - 29% of the total income
(ii) In case of other domestic companies - 30% of the total income

Surcharge:
The rates of surcharge applicable for P.Y.2016-17 are as follows:


Type of Person

Where Total Income exceeds Rs. 1 crore

Rate of Surcharge

(i) Individual / HUF / AOP / BOI / Artificial juridical person

Where the total income exceeds Rs. 1 crore

15% of Income Tax

(ii) Co-operative societies/Local Authorities/Firms/LLPs

Where the total income exceeds Rs. 1 crore

12% of Income Tax

(iii) Domestic company

Whose total income >Rs. 1 crore but is ≤ Rs. 10 crore

7% of income-tax

(iii) Domestic company

whose total income is >Rs.10 crore

12% of Income Tax


Rebate of up to Rs.5,000 for resident individuals having total income of up to Rs.5 lakh [Section 87A]
Increased from Rs. 2000 to Rs. 5000 from AY 2017-18

Previous year for undisclosed sources of income [Section 115BBE]

There are many occasions when the Assessing Officer detects cash credits, unexplained investments, unexplained expenditure, unexplained money, etc, the source for which is not satisfactorily explained by the assessee to the Assessing Officer.

- These would attract 30% Tax Rate.

- No basic exemption or allowance or expenditure shall be allowed to the assessee under any provision of the Income-tax Act, 1961 in computing such deemed income.

- Set-off of losses not permissible against unexplained income, investments, money etc. chargeable under sections 68/69/69A/69B/69C/69D

Residential & Scope of Total Income

No income deemed to accrue or arise in India to a foreign mining company (FMC) through or from the activities which are confined to display of uncut and unasserted diamonds in a Special Notified Zone Effective from: A.Y. 2016-1.7

In order to facilitate the FMCs to undertake activity of display of uncut diamond (without any sorting or sale) in the SNZ, clause (e) has been inserted in Explanation 1 to section 9(1)(i) to provide that in the case of a foreign company engaged in the business of mining of diamonds, no income shall be deemed to accrue or arise in India to it through or from the activities which are confined to display of uncut and unasserted diamonds in any special zone notified by the Central Government in the Official Gazette in this behalf.

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Category Exams, Other Articles by - CA Arpita Tulsyan 



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