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Income Tax sections at a glance

CA CS CIMA Prakash Somani 
Updated on 07 October 2020

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Section Head Limit Remarks
Salary:      
10(10) Gratuity 1. 3,50,000
2. Actual
3. Yr*15/30*Ang salary of 10 Months(Basic+DA+Comm)
Basic + DA (forming part of retirement benefits) + Comm based on % of turn over
10(10A) Pension If gratuity is also available:
Accumulated Pension*1/3
Otherwise:
Accumulated pension*1/2
 
10(10AA) Leave Encashment 1. Actual
2. 3,00,000
3. 10 months avg salary(last drawn)
4. leave encashment max 30 days for every completed yr of service
Basic + DA (forming part of retirement benefits) + Comm based on % of turn over
10(10B) Retrenchment Compensation 1. Actual
2. 5,00,000
3. Amount calculated in accordance with Industrial Dispute Act
 
10(10C) voluntary Retirement 1. Actual
2. 5,00,000
3. Last drawn salary*3*Months of completed yr of service
4. Last drawn salary* Balance no of months in yr of service left
 
10(13A) House Rent Allowance 1. Actual
2. Rent paid - 10% of salary
3. 40% or 50% of salary
Basic + DA (forming part of retirement benefits) + Comm based on % of turn over
10(19) Family Pension 15000 or 1/3rd of Family Pension  
11(1A) Capital Gains    
11(2) Accumulations of Income    
12 Income from Voluntary Contributions    
13A Tax Exemption to Political Parties    
16(ii) Entertainment Allowance 1. 5,000
2. Actual
3. 20% of Basic
Basic
House Property:    
  Annual Value (a). Sum reasonably expected from letting
(b). Actual rent recd or receivable
(c). If owing to such vacancy actual rent recd or receivable < (a), Actual rent
GAV
Less: Municiple Taxes
Unrealisable rent
NAV
Less: 30% of NAV
  Int(Max 150,000) paid/payable
25AA Arrears of rent received Deduction 30% allowed  
Deductions from GTI:    
80C LIC, PF Etc 1,00,000* Maximum of 1,00,000
80CCC Pension Funds 1,00,000*  
80CCD Pension scheme of CG 1,00,000*  
80D Medical Insurance Premia 20000 for SS/ 15000 for other Spouse, Parents and children
80DD Handicapped Dependant 75000 for severe/50000 for normal Spouse, Parents and children, Bro & Sis (Dependent)
80DDB Medical treatment 60000 for SS/40000 for other or
Actual (Whichever is less)
 
80E Higher education Entire amount for 7 yr from Initial Ass Yr.  
80G Donation to funds etc No ceiling of 10% of Adj GTI
50% for Gandhi, nehru/100% other
Ceiling of 10% of Adj GTI
100% for family planning, sport etc
50% for mandir, charitable etc
 
80GG Rent paid 1. 2000 PM
2. 25% of TI (After all deductions)
3. Exp.-10% of TI (After all deductions)
 
80GGA donation to scientific research 100%  
80GGB Political parties by company 100%  
80GGC Political Parties by Individual 100%  
80JJA Bio Degradable waste 100% for 5 consecutive assessment  
80JJAA Employement of new workmen 30% of additional wages paid to new regular workmen for 3 Ass yr.  
80LA offshore bankng units 100% for 5 yr/50% for next 5 yr  
80P Co Operative societies 1. For Banking, Cottage, Fishing, Milk Etc=100%
2. Other-
  a. Consumer Co-Op Socity=100%
  b. Other=50%
3. Other=100%
 
80QQB Royalty from Books 1. Lumpsum- 100%
2. Not Lumpsum- Actual or 3,00,000 (lower)
Royalty>15% shall be ignored, if not paid Lumpsum
80RRB Royalty from Patents Actual or 3,00,000 (lower) Not available to NR
80U Person with Disability 75000 for severe/50000 for normal  
80-IA a. Infrastructure 100% for 10 yr out of 20 yr's  
  b. Telecommunication 100% for 5 yr and 30% for next 5 yr  
  c. SEZ/IT park developmt 100% for 10 yr out of 15 yrs  
  d. Power business 100% for 10 yr out of 15 yrs  
80-IAB SEZ developmt 100% for 10 yr out of 15 yrs  
Taxation of Firms:    
Surcharge 10% applicable even if firms Net Income is below Rs. 1 Cr  
Maximum Interest on Capital Account 12%  
Remuneration to working partner only and only with authorisation in partnership deed
Maximum limit: Business Firm First 75,000 50,000 or 90% of Book Profit( Higher)
    Next 75,000 60%
    balance profit*(before adjusting remuneration to partners) 40%
  Professional Firm First 1,00,000 50,000 or 90% of Book Profit( Higher)
    Next 1,00,000 60%
    balance profit 40%
Remuneration and Interest is allowed from presumptive income U/s 44AD,44AE & 44AF.
If there is a change in constitution of firm than share of retired partner shall not be carry forward
Presumptive Taxation:    
44AD Civil Construction 8% of Gross receipt  
44AE Goods carriage 3500/3150 PM for Heavy/Light Vehicle  
44AF Retail Business 5% of Turnover  
Capital Gain: Repurchase  
54 House to house 1 Yr prior or 2 yr after pur/3yr construct  
54B land to land (Agri) 2 Yr from date of transfer  
54D L&B to L&B 3yr from date of transfer (Compulsary Acquisition)
54EC Any capital assets to Shares etc. 6 Month from date of transfer  
54F Other to House 1 Yr prior or 2 yr after pur/3yr construct Not own >1 house other than new asset
54G L&B/P&M to L&B/P&M 1 yr prior or 3 yr after fron dt of trnsfer (Urben to Non Urben)
54GA L&B/P&M to L&B/P&M 1 yr prior or 3 yr after fron dt of trnsfer (Urben to SEZ)
139(3) Return of loss Before 31st Oct of relevant AY  
139(4) Belated return Before 1 Yr from end of Relevent AY or Before completn of Assessment
139(5) Revised Return Return filed originaly U/s 139(1)/142(1)
Before 1 Yr from end of AY or compln of Assessment.
 
139(9) Defective/Incomplete return    
139A PAN    
139B Tax return prepares    
234A Default in furnishing ROI 1% P.M. or part of Month  
234B Default in payt of Adv. Tax 1% P.M. or part of Month
If Adv tax paid is <90% of Tax due.
From April 1 to date of determination of Income
234C Deferment of Adv tax 1% P.M. or part of Month  
234D Int on Excess Refund 0.50% PM or part of month  



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