28 30 Rent, Rates, tax, Repair 31 Repair and insurance of 32(1)(ii) 32(1) (iia) 32(2) Unabsorbed

Taxable income under head of PGBP & insurance of building P&M & furniture. Depreciation Additional Depreciation Depreciation (set off & C/f)
 Profits & Gains of any business or Profession Allowed Disallowed Allowed Disallowed 1. Asset should be used for -New P&M (ship & Aircraft- X) - set off against income MPAT= manufacture of
 Profit on sale of import entitlement licence Rent, rates Capital Rent (u/s 37 Capital B or P (Active/passive) -Acquired & Installed under any head production of article or thing
 Cash compensatory support/ DBK * DEPB/DFRC & Taxes, repair not to tenant), repair not 2. Owner - MPAT, Transmission or - C/F even if buss is closed ULF=Unamortised licence fee
 Key-man Insurance policy, * Non compete fees Insurance, allowed to Insurance, allowed to (Wholly/partially) distribution of power @ 20% -C/F for Indefinite period, T/f= transfer/Transferred
 Gift, benefits, perquisite from B or P Revenue both. But Revenue both. But 3. Assets used in PY -notified area @ 35% after even if ROI not filed Acq=Acquisition
 Interest, salary, bonus, commission by partner of firm repairs. Capitalized repairs. Capitalized 4. Depreciation on WDV of 01.05.15, for MPAT only -Assessee should be same C/f=Carry forward
 If Inventory is converted into Capital Asset- FMV on Rent Rent exp not block of the asset - if Put to use for < 180 days [exceptions)- GIO=Government of India
the date of conversion shall be taxable under PGBP (Both= expense allowed 5. Mandatory to claim dep (yr of acq)- Dep 50%,balance 72A,72AA,72AB Ded= Deduction
 Any compensation received in connection with the Owner & not to owner 6. 50% dep if put to use 50% in next PY -priority of set off Buss=business
termination or modification of the terms and Tenant) allowed to <180 day(yr of acq) - add depreciation only for 1 CY Dep.(depreciation) SP/SC/SV=Sale consideration
32(1)(i)- Dep for power
conditions, of any contract relating to BUSINESS shall owner generating undertaking. 7. Asset should be PUT to WDV method (not to SLM) 2 Brought forward Buss loss LIP= Lock in period
be taxable under PGBP USE but not ready to use - Exceptions- Note 1 3 Brought forward Dep Dep= Depreciation
Optional to follow SLM
4. CE on Scientific research

33 AB Tea/Coffee/Rubber Rule for computing income 33 ABA Site restoration fund- 35

32AD Investment in New Plant
Development account Petroleum, Natural gas in India Expenditure on Scientific research
& machinery by assesses in
backward areas of AP, Bihar, All Assessee Income from Buz Agri -Any Assessee Section Purpose Ded
Telangana or WB Amount Deposited or Rubber 35 65 -Deposit- before the end of py 35(1)(i) Revenue Expenditure 100% Incurred Exp For after or before( 3 years) start of buss
40% of PGBP WEL -Deduction- 20% of profit
All Assessee [buss of MPAT] Coffee Sum paid to Research 150% Object of receiver is Scientific research (or) to university,
-Deposit before DD of ROI Or WEL
from PY 01-04-2015 to 2020 25 75 35(1)(ii) association college or others to be used for research
-Withdrawal of amount other -Deposit
Ded= 15% of actual cost of *Grown Paid to University, 100% For research in Social Science or Statistical research
than specified purpose- - Agreement with Govt
such new P&M; LIP= 5 Years 40 60 35(1)(iii) college or other institute {35(1)(i)/(ii)- must be approved by CG; not buss related}
taxable as PGBP in the year - withdrawal- on closure & for
No 50% restriction as 32(1)(1) *+Roasted Capital Expenditure 100% Incurred On scientific research related to business carried on
of withdrawal; LIP= 8 Years specific purpose only
Ded in the year asset 35(1)(iv) (Except land) by Assesse, post exp of 3 years
- utilise in the year of - T/f of asset before 8 years-
installed, PUT to use Tea 40 60 exemption withdrawn approved specified 150% Paid to national laboratory, university, IIT, or specified
withdrawal
condition NA(Not applicable) 35(2AA) person for scientific res person to be used specifically for Scientific research
Deduction from composite
Ded not available to Assessee To Companies for 150% on an approved in house research & development facility
income (Agri +Buss income)
following SLM Method 35(2AB) scientific research (except L&B), Building = 100% under 35(1)(iv)

35ABB Amortisation of 35ABA Exp. for obtaining right 35AD 35CCC Expenditure on 35CCD Expenditure of Skill development
telecom license fee to use telecom services Deduction of expenditure on specified business Agricultural extension project project
 CE of licence fee(paid) is allowed as deduction from the year of - Capital expenditure (other -Cold chain facility - warehousing of sugar -Any Assesse -Eligible Assessee- Company
payment to end of licence. for before commencement exp, ded than Land/ Goodwill/ -Warehousing (agri) -pipeline- iron ore -Any Expenditure -Any exp except L & B)
= year of start to end of PY( licence last date) in no of years financial Instrument) -affordable housing project -Semiconductor- m/f unit -Ded= 150% of expenditure -Eligible co means any co engaged in
T/f of licence SP< ULF=Loss SP> ULF=Gain - - 35AD loss set off with 35AD -production of fertilisers - Developing/& maintaining -Condition MPAT except alcohol, tobacco.
Whole licence is Deduction in the Taxable as PGBP in - post/ after commencement, -hospital (100 beds) /& operating a new *for training, education of -Training Institute- for new employee < 6
transferred year of Transfer the year of sale capital or revenue exp = -X country pipeline oil gas infrastructure facility farmers months exp only
(ULF –SP) Least of the following 100% deduction ;LIP= 8 years -Hotel 2** (w.e.f 1/04/17) *Prior approval of GOI, -Ded= 150% of exp
Part of licence is Deduction allowed a) SP – ULF - If sold or destroyed, entire SP -slum redevelopment housing No other ded for same exp. ministry of agriculture
transferred in balance life b) Deduction allowed or Insurance Compensation -Inland container depot CE In cash > 10,000 in a day *Exp should be >25L (Except
(ULF- SP)/ bal life till date taxable as PGBP; NO CG -Bee –honey & Bee wax to one person is disallowed Land & Building)

35D Preliminary expenses 35DD Amortization of Exp in 35DDA Amortisaiton of 35E Expenditure on 36
case of amalga. or demerger expenditure on VRS. prospecting, etc for minerals Other deduction as specified
* Resident person Indian Co  Any Assesse Indian Co Insurance premium of stocks Contribution towards pension Special reserve created by specific
*Indian Co. QE= 5% of COP Ded= 1/5th of such Ded= 1/5th of the amount so Any Exp of 5 YR (Yr of start + Ins premium on life of cattle scheme u/s 80CCD entity carrying on eligible business
5% of COP or expenditure for each of 5 paid deductable in 5 4 years prior to start) Insurance on Health of emp Employer contribution to an Revenue Exp on promoting family
5% of CE WEH successive PY`s succeeding PY`s Ded= equally in 10 years Bonus or commission to emp approved Gratuity fund planning amongst the employee of
Above amount (or) From the PY in which From the PY in which amount 1/10th of QE WEL Interest on borrowed capital Allowance in respect of dead or company only (CE=Equal amount
Actual amount WEL= QE amalgamation or demerger paid Income of PY Discount on ZC Bond permanently useless animals in 5 years)
 Ded= 1/5th of QE in each of takes place Employer contribution to RPF/ Bad debts STT, CTT paid
5 successive PY`s Approved superannuation fund Provisions for Bad & Doubtful Expenditure incurred for purchase
CE= capital Exp COP=Cost of project debts of sugarcane

Recoveries from Employees
towards welfare fund are
Deemed buss income.
Deduction allowed only if the
same is paid before filing ROI
u/s 139(1)- AIMIL Delhi HC
Marked to market loss or
other expected loss as per
ICDS [refer 40A(3)]
40(b) Deduction in respect of
payment to partner
Remuneration paid to Partner  Interest paid to partners
 Non working partner - X
 Not authorised by deed - X
 Not as per deed - X
 For prior period - X
Maximum remuneration
(As per Book profit U/s 28)
a) First 3L or Loss- Rs. 1.5 L
or 90 % of BP WEH
b) On bal BP = 60 %
 Remuneration paid to HUF
as a partner – X
43A
Foreign exchange fluctuation
 Asset acquired O/s India
 Loan taken in foreign currency
 Payment made actually in PY
 Amount paid – amount
recorded in books= difference  Int. payable to PFI or Banks
to add/ sub to WDV of block  Leave salary(Leave encash.)
Foreign exchange gain or loss  Payment to Indian Railways
Except above w.r.t Debtor or
creditor to be taken as if
 Gain = PGBP income or
 Loss= deduction u/s 37(1)
44A Special provision for
deduction in case of Trade
Professional or similar
association
Deficiency allowed U/s 44A
 Deficiency = Rs. 25,000/- or
 50% of other income= 37,500
(75,000 * 50%)
WEL is allowed u/s 44A
37(1)
General deduction
 exp not allowed u/s 30 to 36
Not a Capital expenditure
Not a prior period, personal
Only for business purpose
Not contrary to prov of law
CSR exp is not allowed
 Not authorised by deed - X
 Prior period interest - X
 Max interest- 12%
 Allowed to HUF as partner
40(ba)
Disallowance applicable to
AOP/BOI
Fully disallowed
-Interest- Net disallowed
-Int paid to non member
capacity allowed
-Salary disallowed
43B Disallowance of unpaid
liability
 Employers Contribution to RPF  Amalgamation
or other Emp.(e) welfare fund  Partition of HUF
 Tax. Duty, cess etc.
 Bonus or commission to Emp.  Irrevocable trust
for use of railway Assets
Allowed if paid on or before
filing of ROI. Otherwise
allowed in the year paid
44AA Compulsory
maintenances of accounts
professional or similar
association
37(2B) 40(a)(i) Amount paid to Non-
Contribution to political party resident without deducting tax resident without deducting tax
For expense not allowed as Interest, royalty, fee for
deduction u/s 37 technical services paid to
For donation, Deduction NR/FC o/s India or NR/FC in
allowed u/s 80GB, 80GGC India without deducting/
40(a)(1b)- Non compliance payment of TDS
with Equalisation levy- 100% of Exp disallowed
Disallowed if not deducted or Allowed in PY TDS deducted
paid @ 6% before DD of RO or Paid
Ceiling limit = 1L (aggregate)
40 A(2) 40A(3) Exp not deductible
payment made to relatives under certain if exp > 10,000
 Disallowed to the extent Payment of aggregate of
such expense is considered by payment made to a person in
the Assessing officer to be a day, other than the account
excessive or unreasonable. payee cheque exceeding Rs.
No disallowance if such T/s is 10,000/- per day per person
at ALP Is Disallowed (whole amount)
NA to domestic Transfer  In case of Transporter the
pricing limit is Rs. 35,000/-
Applies to Expenditure only Exception to this section are
NA to Trade discounts given in Rule 6D
For Section 40A(3A) Same
NA= Not Applicable limit as above
43C Special provision for 43CA Full Value of
computation of COA of certain Consideration for Transfer of
Assets (on T/F in case of) L & B Held as Stock in trade
 Sale consideration =
Sale consideration
 Assets by Gift or will Or WEH
Stamp duty value
COA= COA to previous owner SDV= on the date of
+ cost of improvement + agreement (if any amount
expenditure on transfer paid on or before date of
agreement) or else date of
transfer.
(refer CG Chapter)
44AB 44AD Presumptive income
Audit of books of accounts other than transport business
Compulsory audit for  Indvidual(R),HUF,Firm(no LLP)
 Business- TO > 1 Cr  TO shall not exceed 2 Crore
 Profession- TO > 50L  Estimated income= 8% of
 44AE , BB, BBB ,ADA, AD gross receipts or higher claim
showing lower income than  Declared income as per 44AD
prescribed under relevant in PY then bound to declare
section income u/s 44AD for next 5
years. No other exp deduction
 For non cash receipt = 6%
 Can set off business loss
40(a)(ia) Amount paid to Below expenses are not 40(a)(iib) Amount paid by of
deductable royalty, licence fee
Amount paid to Resident on 40(a)(ii) Payment of IT appropriated from State Govt
which TDS Not deducted/paid 40(a)(iia) Payment of wealth tax Any exclusive payments in form of
30% of exp disallowed 40(a)(iii) Payment made to non- royalty, licence fee, service fee,
Allowed in PY TDS deducted or resident as salary without privilege fee, other charges paid to
Paid deducing TDS- 100% state govt by SG undertaking the
Palam Gas Services 2017(SC) 40(a)(v) Payment of taxes in same shall be disallowed.
U/s 40(a)(1a)(/1), word respect of non-monetary If levied by CG then No
“payable” means amount yet to perquisites disallowance.
be paid or actually paid
40A (7) 41 Taxable in PY
Provision for Gratuity Profit chargeable to tax
Is disallowed 41(1) Taxability of Recovery of Exp Amount recovered
Except & Remission & cessation of
Provision for contribution to trading liabilities
recognised fund (or) 41(2) Balance Charge Asset is sold/ TF, SC> WDV
Actual payment (SLM method asset)
Ex. Annual premium paid to LIC 41(3) Surplus=(SC+ Deduction- Sale took place
for Gratuity- Allowed cost ) or Deduction WEL
40 A (9) 41(4A) Special Reserve When It is recovered
Contribution by employer 41 (4) Recovery of Bad Debts When it is recovered
to unrecognised/ NON Statutory 41(5) Adjustment for Loss of PY in Can be adjusted against the above
Fund is Disallowed which business is discontinued income [41(1) to 41 (iv)] in any
to RPF, SF, AGF or approved subsequent year
pension fund – u/s 36(iv)
43D 43(1) 43(6)
Special Provision in case of Actual cost of assets WDV= Cost – Depreciation
income of PFI,public co etc
Income by way of interest  Scientific research asset *By gift, will, Sec 50 Sec 50A
in relation to bad & inheritance * Second hand asset
For Block of SLM
doubtful debts  Reacquisition of asset
assets method
taxable in PY in which  Sale & Lease back, 35 AD asset
Interest received or When Block T/f of asset
 Building used for non business purpose
Credited WEE ceases
, T/f by HC to sub co *Amalgamation,
Exp for acquisition of asset demerger *Int. on borrowing, subsidy COA Op WDV WDV+ BC
full or part, paid in cash  Adjustment of CENVAT credit + CY pur WDV- TD
exceeding 10K in a day to  Asset by NR brought in India
CG Always STCG/LTCG
a person to be ignored for  If Inventory is converted into CA- FMV STCG
COA u/s 43(1) on the date of conversion = COA of CA
44ADA Presumptive income of 44AE Presumptive income of transport
profession business
 All Resident Assessee  Any Assessee *Own vehicles <= 10 BC= Balance charge
 Gross receipts < 50Lacs goods carriage during PY (anytime) TD= terminal Depreciation
 50% of gross receipts are  For Heavy Vehicles (i.e. Gross vehicle COA= Cost of acquisition
deemed as income U/H PGBP weight/unladen weight > 12,000 Kgs) TO= Turnover; INT= Interest
 No deduction of exp allowed income =Rs.1,000 / ton of gross vehicle O/s = Outside
 Not required to maintain weight/unladen weight PM (part NR= Non Residence
books of accounts month =full) per truck or actual WEH FC= Foreign Company
 Not required to get audited  Other than Heavy Vehicle Co= Company
Income= Rs. 7,500 PM/part Agri= Agriculture
or actual income WEH ROI= Return of Income
 43CB- Income from Construction & Service contract [ FA 2018] Valuation of Inventory- 145A 145B 40A(13) MTM losses or expected loss [FA 2018]
 The profits & gains [P&G) from a  For the purpose of POCM, For the purpose of determining PGBP,  Interest received on compensation/enhanced  No deduction of allowance shall be allowed in MTM losses not
construction contract(cc) or a PCM, SLM methods valuation shall be as under. compensation deemed to be the income of PY in respect of any marked to market loss or other allowed are
contract for providing services 1. Contract revenue shall  Inventory= @Actual cost or NRV WEL which it is received expected loss, except as allowable U/s 36 - Write down of
shall be determined on the basis include- Retention money  Purchase & Sale of goods & services &  The claim for escalation of price in a contract or  Expected losses allowable & marked to investment.
of POCM as pre ICDS 2.Contract cost shall not be Inventory shall include taxes, cess and export incentives shall be deemed to be the market losses allowable as per ICDS -Impairment loss on FA
 P&G from contract for service is reduced by incidental income expenses incurred to bring goods/ services income of PY in which it is reasonable certainly of - Inventory= @Actual cost or NRV WEL - Loss on Derivative
determined as given below like interest, dividend or CG to the location on the date of valuation its realisation is achieved. - Unlisted, listed but unquoted inventory of instrument, where
1)Duration<= 90 days-P&G on the  Unlisted, listed but unquoted inventory of  Governments grants excluding, grants related to security = @ Actual cost as given in ICDS contract is not settled
 POCM=percentage completion
basis of PCM security = @ Actual cost as given in ICDS specific fixed asset or grants or subsidy for the - Listed Security = @ Actual cost or NRV WEL - Financial assets/
method
2)involves indeterminate no of  Listed Security = @ Actual cost or NRV WEL purpose of corpus of a trust shall be deemed to be As given in ICDS. Comparison of Actual cost & liabilities where Fair
 PCM=project completion
acts over specified period- P&G As given in ICDS. Comparison of Actual cost the income of the previous year in which it is NRV shall be done Category wise value measurement
method
on the basis of Straight line & NRV shall be done Category wise received, if not charged to income-tax in any - Foreign exchange fluctuation losses losses policy is
method (SLM method) earlier previous year - Losses on construction contracts adopted.

Rate of Depreciation Note-1 36(1)(viia) Provision for Bad & doubtful debts of Banks/NBFC 36(viii)- Transfer to Special reserve
 Buildings -Books for running library = 40% No deduction to be allowed (for Indian bank Public Financial, Foreign NBFC  Eligible Assessee- Financial Corporation’s (ICICI, IDBI,
-Residential = 5% -Aeroplanes= 40% additional deprecation in respect of: State financial Bank PFC, REC etc), Banking Co including co-operative banks.
-General = 10% -Air/water Pollution control - Second- Hand P or M (Indian/imported) corporation etc.  Quantum of deduction-lower of
-Temporary Structure = 40% equipments= 40% - P or M – installed at Office/residence/ -Amount transferred in PY in special reserve A/c, or
 Furniture & Fixtures = 10% -Computers(but not s/w)= 40% guest house Amount of deduction allowable in respect of provision for bad and -20% of the profits derived from the business activities
 Plant & Machinery -Ships= 20% - Office appliances or road transport doubtful debts. (specified)
-P&M- General = 15% -Oil Wells= 15% vehicles 8.5% of Total Income 5% of Total 5% of 5% of -200% of the
-Renewal energy (Wind mill)=40%  Intangible Assets - P or M on which deduction U/s 35(1)(iv) + Income Total Total Paid share capital(last day of PY) XXX
-Motor Cars (non business)= 15% Know-how, patents, copy-rights, is allowed (whole cost) 10% of aggregate Income Income Add :General reserve (last day of PY) XXX
-Motor car, buses, lorries etc. used trade marks, licence, franchises or average advances Less: Balance of Special reserve A/c (XXX)
in hiring business = 30% any other business or commercial made by rural (1st day of PY) XXX
-Books for profession = 40% rights of similar nature = 25% branches (Amount withdrawn from reserve is taxable as PGBP)

Deduction in respect of Expenditure on production of Feature films in case of Notes

film Producer/ Distributor
Situations
Film Producer/ Distributer
sells all rights of exhibition of
the film in PY
Film Producer/ Distributer
- Himself Exhibits film or
-sells rights in some areas or
- Himself exhibits the film or
sells the rights in some/all the
areas
Films released Films released after
before 1st Jan, 19 1st Jan, 19
Deduction = entire Deduction = entire
Cost of production Cost of production
Deduction = entire
Cost of production
Deduction = entire Or
Cost of production Amount realised by
exhibiting the film &
sale of rights of
exhibition
WEL

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