Introduction of Taxation

Dr. Anurag Agnihotri

M.Com, LLB, M.Phil, NET, ACS, CWA,MIMA, Ph.D

MEANING
DIRECT TAX Charged directly on an individual, firm, company etc. Tax on earning INDIRECT TAX Charged indirectly on everybody, whether rich or poor Tax on purchases

PERSON Section 2(31)

Includes
An Individual A H.U.F. A Company A Firm An A.O.P/ B.O.I A Local Authority Every other artificial juridical person

INCOME Section 2(24)

Includes
Profit Dividends Perquisites Allowance such as D.A Profit on sale of Import License Export Cash Assistance Refund of Excise or Customs duty Remuneration received by partner of a firm

Contd.
Capital Gain Profit of any business of insurance Winning from lotteries, crossword puzzles, horse race, card games etc.

Important Points
Periodical Return Illegal Income

Cash or Kind
Real Income (Remittance) Mutual Activity- from outside source

ASSESSMENT YEAR
The period of Twelve months Commencing on the first day of April every year Ending on March Year in which income is taxed

PREVIOUS YEAR
A Financial year Immediately preceding the assessment year Newly started business
Period beginning with date of setting up the business till March

ASSESSEE
A person
by whom any tax, interest, penalty is due Whose assessment of income, loss or refund is pending A deemed assessee a representative assessee An assessee in default

ASSESSMENT
A PROCESS
Determining, Computing

Amount of Income
Fixing the tax dues

 Exempted income Section 10(1) Meaning -

Agricultural Income Section 2(1A)

Any rent or revenue derived from land which is situated in India and is used for agricultural purposes. Any income derived from such land by agricultural operations including processing of the agricultural produce, raised or received as rent in kind Income attributable to a farm house subject to the conditions that the building is situated on or in the immediate vicinity of the land and is used as a dwelling house, store house and the land is assessed to land revenue or local rate

Rent or revenue derived from land Section 2(1A)(a)

According to section three conditions needs to be satisfied
Rent or revenue should be derived from land (may be cash or kind) The land is situated in India The land is used for agricultural purposes.

Land used for agricultural purposes

Most important condition whether exemption sought under section (a), (b) or (c) of 2(1A) Agriculture & agricultural purposes not defined in act. Based on laid down principles, the scope of the terms
Basic operations such as sowing of seeds, planting etc. which involve expenditure of human skill and labour upon the land , necessary to constitute agriculture.

Contd.
Subsequent operations such as weeding, digging the soil around the growth, removal of undesirable undergrowths etc. are performed after the produce sprouts from the land. Operations which basically are carried out to foster & preserve the growth. And to make them marketable. The performance of these operations in conjunction with or in continuation of the basic operations is must to constitute part of agricultural activity.

Contd.
Agriculture does not merely imply raising of foods and grains. It includes all the products from the performance of the basic and subsequent operations on land. Example: fruits, vegetables, tea , coffee, sugar-cane, tobacco, spices, cotton , jute, timber, tendu leaves etc. All products of the land which has got some utility either for the consumption or for trade & commerce

Contd.

Mere connection with land not sufficient to refer the income as agricultural. Example: poultry farming , breeding and rearing of livestock. With effect from A.Y. 2009-10, nursery operations income from saplings or seedlings grown in a nursery shall be deemed to be agricultural income.

Income attributable to a farm house Section 2(1A)(c)

To qualify for the above, certain conditions needs to be satisfied The building should be occupied by the cultivator (as a landlord or as a tenant) or receiver of rent-in-kind as a landlord. The cultivator or receiver of the rent-in-kind should by reason of his connection with the agricultural land requires the building as a dwelling house or as a store house. It should be on or in the immediate vicinity of land situated in India and used for agricultural purposes.

Contd.
The land is assessed to land revenue or local rate or alternatively the land is situated outside urban areas
(Urban area = an area which is comprised within the jurisdiction of any municipality / cantonment board having population of not less than 10000 persons or within 8 kilometers from the limits of the municipality or contentment board.)

The land or building should be used for agricultural purposes. For example giving the building on rent is not agricultural purpose and such case income will not be exempt.

Capital and revenue expenditure

Not defined under the act, but one has to follow the natural meaning & decided cases. Acquisition of fixed asset against routine expenditure
Capital expenditure means expenses incurred while purchasing a fixed assets, as against revenue expenditure is recurring or incurred during the normal course of business

Contd.
Benefit over several years against one year
Capital expenditure benefits us for several years (life of the asset) as against revenue expenditure is consumed within a year.

Improvement as against maintenance

Capital expenditure leads to increasing the efficiency or earning capacity of the fixed asset. Whereas revenue expenditure helps in running the business smoothly.

Contd.
Lump sum payment as against periodic payments
To decide whether Capital expenditure or revenue expenditure, whether payment was made in lump sum or periodic cannot be deciding factor.

Company
Section 2(17) defines Company to mean
An Indian company or A body Corporate incorporated under the laws of a foreign country Any institution, association or a body, whether incorporated or not and whether Indian or non Indian, which is declared by general or special order of the CBDT to be a Company

Indian Company
Indian Company Section 2(26)
A company formed and registered under the Indian Companies act of 1956 A company formed and registered under any law in force in the state of Jammu and Kashmir Any institution , association or body which is declared by the board to be a Company under section 2(17)

Dividend Section 2(22)

Under Section 2(22) following payments or distribution by a company to its shareholders are deemed as dividend to the extent of accumulated profits of the company
Any distribution entailing the release of companys assets. Any distribution of debentures, debenture stock, deposit certificates and bonus to preference share holders Distribution on liquidation of company

Contd.
Distribution on reduction of Capital Any payment by way of loan or advance by a closely held company to a shareholder, holding substantial interest; provided the loan should not have been made in the ordinary course of business and money lending should not be substantial part of the companys business

Total Income & its computation

It is Gross total Income ***** Less: Permissible deduction u/s.80 ***** ( section 80 C to 80 U) Net taxable income *****

Tax is calculated on the Net taxable income as per the applicable rates. The net taxable income is rounded off as per the provisions of section 288A and the tax payable is rounded off to as per provisions of section 288B

RESIDENTIAL STATUS
PERSON ALL ASSESSEE RESIDENT NON RESIDENT

ONLY INDIVIDUAL & H.U.F

RESIDENT BUT NOT NOT ORDINARY RESIDENT
RESIDENT & ORDINARY RESIDENT

BASIC CONDITIONS
STAY IN INDIA IN PREVIOUS YEAR 182 DAYS OR MORE OR 60 DAYS IN PREVIOUS YEAR & PRECEDING PREVIOUS 4 YEARS 365 DAYS

 An Individual

EXCEPTIONS

Indian citizen, leaves India in previous year, as a crew member of an Indian Ship OR For employment

An Individual
Who is person of an Indian Origin or Who is an Indian Citizen Stayed outside India Comes on a visit to India

CONDITIONS FOR R & OR

Preceding previous 10 years, Resident atleast for two years

AND
Stay in India in preceding previous seven years 730 days.

HUF & RESIDENTIAL STATUS

Resident Control & Management of affairs is exercised Either completely or partially from India R & OR Status of Karta of HUF? R & OR OR NR or R but NOR

Control & Management

Refers to Head and Brain which direct the affairs of the business i.e. the policies, finance, disposal of profits, vital things concerning the management of the business

COMPANY/AOP/BOI/FIRM AND RESIDENTIAL STATUS

AOP/BOI/FIRM/Local authority/Artificial person R & OR Control & Management of affairs is exercised Either completely or partially from India COMPANY Indian always R & OR Any other company R & OR Control & Management of affairs is exercised Completely in India

Relationship between residential status & incidence of tax

Incidence of tax on a tax payer depends
on his residential status and also on the place & time of accrual or receipt of income.

Indian Income & Foreign Income

Indian Income
If income is received in India & also accrues in India (deemed to received & accrues in India) If Income is received in India but accrues outside India If Income is received outside India but accrues in India

Foreign Income
Income is not received in India ( not deemed to receive in India) Income does not accrue or arise in India.

INCOME DEEMED TO RECEIVE AND ACCRUE IN INDIA Examples of Income deemed to receive
Contribution by the employer to the EPF account in excess of 12% of employees salary Annual interest credited to the employees PF account in excess of 9.5%

Examples of Income deemed to Accrue

All income accruing or arising whether directly or indirectly through / from
Any business connection in India or Property in India or Asset or source of income in India or Transfer of Capital asset in India

Contd.
Salary payable for services rendered in India Salary received by Indian national from Government in respect of services rendered outside India is deemed to accrue or arise in India Any dividend paid by an Indian Company outside India Etc.

SCOPE OF INCOME
Particulars R & OR R but NOR NRI

Income received in India Accrues in India

TAXABLE TAXABLE

TAXABLE

TAXABLE TAXABLE

TAXABLE

Deemed to TAXABLE TAXABLE receive or accrue in India

TAXABLE

Contd.
Business income controlled wholly or partly from India Business / Profession controlled from outside of India Taxable Taxable Not Taxable

Taxable

Not Taxable

Not Taxable

HEADS OF INCOME
Income from Salary Income from House Property Profits & gains from Business & Profession Capital Gain Income from other sources

EXAMPLE FOR POST-CONSTRUCTION INTEREST

FLOP/PLOP/VLOP/ DLOP Loan taken for construction/ purchase of the property No Limit SOP/ UOP Loan taken for construction/purcha se of the property Rs.1,50,000 (Loan taken after 1-4.99) Rs.30000 (For prior period) Limit incl. repair loan repayment

CAPITAL GAINS
Basic Conditions
There must be a Capital Asset.
There must be Transfer of the asset. Transfer During the previous year.

Due to transfer Gain/ Profit arises.

CAPITAL ASSET
Meaning Section 2 (14)
Property of any kind
Tangible or Intangible

Whether connected to business or not Held by Assessee

Subject to certain exceptions

Exceptions
Stock in trade, consumables or raw material held for business. Agricultural Land in rural area Special bearer bonds 1991

6.5 % Gold Bonds 1977, 7% Gold Bonds 1980, National Defence gold bonds

Contd.
Personal effects of the assessee i.e.
Movable property including furniture, wearing apparel , held for personal use of assessee or his dependents Excluding Gold, Silver, Semi Precious Stone, Real Stone, Metal Jewellery, Ornaments

TRANSFER 2(47)
Sale or Exchange or Relinquishment Extinguishment (like due to fire, theft etc.) Compulsory Acquisition Conversion into stock Transfer of capital asset by a person to a firm in which he is a partner Distribution of capital assets on dissolution of firm

Income from Salary

Basic Conditions
Master And servant or employer and employee relationship Contract of employment is important

BASIS OF CHARGE
Either accrual or receipt (which ever is earlier) Salary due from an existing and/or former employer Salary paid or allowed by the employer though not due Arrears of salary paid or allowed

SALARY COMPONENTS
Basic salary Advance salary Arrears of salary Bonus Allowances Leave encashment on retirement

COMPONENTS
Retrenchment compensation Pension Gratuity Voluntary retirement payments Perquisites Provident fund payments

CONCEPT
Gross salary Deductions such as G.P.F., P.T. Net salary

COMPUTATION
Gross salary Less:- exemption us. 10 Less:-deduction us. 16 Net salary Deduction under chapter VI-A Net taxable salary

EXEMPTION UNDER SECTION 10 FOR SALARY

LEAVE ENCASHMENT 10(10AA) GRATUITY 10(10) PENSION 10(10A) HOUSE RENT PAID 10(13A) TRANSPORT ALLOWANCE 10(14) RULE 2BB LEAVE TRAVEL CONCESSION 10(5)

Leave Encashment Sec.10(10AA)

Meaning Leave Salary
Salary standing / accumulated to the credit of an employee at the time of retirement is Leave Salary Encashment of the same at the time of retirement is referred to as leave encashment Tax treatment for the same next slide

Leave encashment tax treatment

Nature of Leave encashment Leave encashment during continuity of employment Leave encashment at the time of retirement or leaving of job Status of the employee Government/ Nongovernment Government Tax treatment Taxable

Fully Exempt

Leave encashment at the time of retirement or leaving of job

Nongovernment

Fully or partly exempt

Non government Employee exemption - detail

In case of non-government employee (including an employee of local authority or public sector undertaking exemption is least of the followings. 1 Period of earned leave to the credit of the employee * average monthly salary 2 10 * average monthly salary 3 Rs.300000 (specified amount by government) 4 Leave encashment actually received

Gratuity Section 10 (10)

It is a retirement benefit. Payable at the time of cessation of employment & on the duration of service. Government employees i.e. Central Government employees, State government employees, employees of local authority but not of statutory corporations Tax treatment - next slide

Tax treatment
Status of the employee Government employee Non Government employee covered by Payment of Gratuity Act , 1972 Non Government employee not covered by Payment of Gratuity Act , 1972 Whether Gratuity is taxable Fully exempt U/s. 10(10)(i) Fully or partly exempt from tax U/s. 10(10)(ii)

Fully or partly exempt from tax U/s. 10(10)(iii)

Employees covered by Payment of Gratuity Act, 1972

Any gratuity received is exempt to the least of the following: 1. 15 days salary (7 days in case of seasonal establishment) based on salary last drawn for each year of service.(15 days salary * length of service) (6 months & above = full year) (Salary= last drawn salary =Basic + D.A.) (days in month=26) Rs.350000 Gratuity actually received

2.
3.

Employees not covered by Payment of Gratuity Act, 1972

In case of other employee gratuity received is exempt to the least of the following: 1. 2. Rs.350000 Half months Salary for each completed year of service ( only complete year, part of the year to be ignored; salary based on average salary for last 10 months immediately preceding; Salary=Basic + D.A.) Gratuity actually received

3.

Pension
Pension received from UNO by an employee or his family members is not chargeable to tax. Family pension received by the family members of armed forces is exempt under section 10(19). Family pension received by others (not covered in 2 above) after the death of the employee is taxable in their hands under section 56 income from other sources.

Contd.
Un-commuted Pension It is periodical payment of pension- i.e. monthly pension Commuted Pension It is the lump sum payment in lieu of periodical payment.

Pension

Status of the employee

Is it chargeable to tax?

Un-commuted

Commuted Commuted

Government / non government Government

Non government

It is chargeable to tax

It is fully exempt from tax under 10(10A)(i) It is fully or partly exempt from tax under 10(10A)(ii)

Commuted pension & non government employee

Non government employee Non government employee Gratuity is received 1/3rd of the pension received is exempt of the pension received is exempt.

Gratuity is not received

HRA Section 10(13A) & Rule 2A

Least of the following is exempt Salary = Basic + D.A.( if terms of employment so provide) 1 An amount equal to 50% of Salary (For Metro cities) and 40% of Salary ( For nonMetro cities) 2 The HRA received by the employee in respect of the period during which rental accommodation is occupied by the employee during the previous year The excess of rent paid over 10% of Salary

Transport Allowance 10(14) Rule 2BB

Allowance is granted to an employee to meet his expenditure for the purposes of commuting between the place of his residence and the place of his duty It is exempt up to Rs.800 per month In case of blind or orthopaedically handicapped it is Rs.1600 per month.

Leave Travel Concession 10(5)

Leave Travel assistance extended by an employer for going anywhere in India along with his family is exempt on the basis of the provisions given in table. Family includes spouse, children, parents , brothers and sisters (who are dependent on the employee) Only two journeys in a Block of Four years is exempt. Amount of exemption is limited to the actual expenditure

Contd.
Where journey is performed by Amount of economy class air fare of the air national carrier by the shortest route or the amount spent whichever is less Where journey is performed by Amount of air conditioned first class rail rail fare by the shortest route or amount spent whichever is less Where the places of origin & destination of journey are connected by rail and the journey is performed by any other mode of transport Amount of air conditioned first class rail fare by the shortest route or amount spent whichever is less

Where the places are not First class or deluxe class fare by the connected by rail & recognized shortest route or amount spent which public transport system exist ever is less

Perquisites - Taxable
Any residential accommodation given to the employee without charging any rent or at a concessional rate Free supply of gas , electricity or water for household consumption Wages paid by the employer for the domestic servants employed by the employee Value of free boarding & lodging expenses. Free educational facilities to the children

Contd.
Subscription & Bills paid to the club houses by the employer Vacation at the holiday homes or holiday trips at the cost of the employer Income tax due on salary but paid by employer Use of motor car with or without a driver at the cost of the employer for personal use.

DEDUCTIONS FROM SALARY

ENTERTAINMENT ALLOWANCE [16(2)]
If granted by the employer it is included in the Salary income From A.Y. 2002-03 the allowance deduction is allowed only to Government employees. The least of the following is exempt
Actual amount received Rs.5000 per year 1/5th of the basic salary

DEDUCTIONS FROM SALARY

PROFESSIONAL TAX [16(3)]
Tax deducted from the Salary under Maharashtra State Tax on professions, trade, callings and Employment Act 1975.

 Basic conditions

Income from Business & Profession

Any activity carried out with the intention of profit Not necessary to carry on business continuously Activity may be in the nature of business i.e Trade or Commerce or profession or Vocation An adventure in the nature of Trade , commerce or manufacture

Basis of Charge (Section 28)

Deals with the classes of Income to be included in the profits and gains of business. For e.g.
Profits and gains of any business or profession Any compensation or other payment received or due for loss of agency Any profit on sale of a licence granted under Imports (Control) Order, 1955 etc. Any interest, salary, bonus, commission or remuneration due to or received by a partner of a firm

Contd.
Any sum received under Key-man Insurance Policy including the sum allocated by way of bonus on such policy. The value of any benefit or perquisite whether convertible into money or not, arising from business or the exercise of profession like present received by a doctor.

Business income computation (Section 29)

1. Determine the profit or loss from business & profession 2. Do adjustments related to expenses allowable or not allowable (as per section 30 to 43D) 3. Do the adjustments related to income to be considered separately etc.

Deductions expressly allowable (Section 30 to 43D)

Rent , rates, taxes, repairs & insurance of Building (Section 30)
Building or Premises should be used for the business purposes Only revenue expenditure related to the premises allowed ( even in case of rented premises)

Contd.
Repairs and Insurance of Machinery , Plant & Furniture (Section 31)
Said Machinery , Plant must be used for the business Only revenue expenditure i.e current repairs or Insurance premium paid against risk of damage No capital expenditure allowed.

Contd.
Depreciation (Section 32)
To claim the depreciation the following conditions should be fulfilled
Assessee must be the owner of the asset The asset must be used for the purpose of the business or profession Such use must be in the relevant previous year

Depreciation is allowed with respect to Building, Plant & Machinery, Furniture & Fixture & Office Equipment Also on intangible assets acquired on or after 1/4/1998 and used for business.

Contd.
Unabsorbed Depreciation {Section 32(2)}
Profit earned by business or profession is not sufficient to absorb the amount of depreciation allowance then such amount of depreciation is called unabsorbed depreciation. Can be set off against any other income of the assessee chargeable to tax for the same assessment year. Can be carried forward and set off against future taxable income of the assessee. No time limit for carry forward Even if the business discontinue the unabsorbed depreciation belonging to it can

Contd.
Expenditure on Scientific Research (Section 35)
Revenue Expenditure incurred on scientific research related to the business of assessee Any Capital expenditure incurred except on Land incurred on scientific research related to the business of the assessee A weighted deduction of One & one forth times of the sum paid to any university or college or association or institution approved by Central government or to a company registered in India for scientific research purposes.

Contd.
Amortization of Preliminary Expenses (Section 35D)
An Indian Company & any resident assessee are allowed to write off the preliminary expenses incurred by them in setting up of a new industrial unit or extension of an existing industrial unit. For e.g. Expenses incurred for preparation of feasibility report, Project report, Conducting Market survey, legal charges for drafting agreements or MOA & AOA etc. Qualifying amount is allowed over a period of five years from commencement of business

Contd.
Insurance (Section 36(1)(i))
Deduction allowed provided paid by cheque or electronic mode or credit card etc. Insurance premium paid to cover the risk of damage or destruction of stocks, stores or cattle and on the health of the employee under an approved scheme

Contd.
Bonus or Commission Paid to Employee (Section 36(1)(ii))
Any amount of bonus or commission paid to employee for services rendered is allowed

Contd.
Interest on Borrowed Capital (Section36(1)(iii))
Interest on Borrowed capital for the business purposes qualifies for deduction Interest paid by Firm to its Partners will be deductible within the limits of section 40(b)

Contd.
Contribution to Recognized Provident Fund or approved Super annuation fund( Section 36 (1)(iv))
Contribution within the limits as specified by the act is permitted as deduction.

Contribution to an approved Gratuity fund is also allowed as deduction under section 36(1)(v)

Contd.
Bad Debts are allowed as deduction as per Section 36(1)(vii) and 36(2) Expenditure on Family Planning is also allowed as deduction under Section 36(1)(ix). In case of capital expenditure 1/5th of such expenditure over five years is allowed. Any amount of Banking Transaction tax paid on taxable banking transactions is allowed.

Section 37 General Expenditure Any expenditure other than mentioned in Section 30 36 = General expenditure Allowed as deduction so long as Revenue in nature Incurred for the business of the assessee Should not be personal in nature Should not be prohibited by law

E.g. Purchase of raw Material, Wages, Salaries etc.

Expenses expressly disallowed

Donations , Charity , Presents Income Tax , advance Tax, Wealth Tax, Estate Duty Legal expenses incurred to defend criminal liability Fines , penalty resulting from contravention of law Drawings by the proprietor Expenses of capital nature Any kind of provision or reserves not allowed

Contd.
Any expenditure incurred by an assessee on the advertisement in any souvenir, brochure, tract, pamphlet etc published by apolitical party will not be allowed as deduction -Section 37(2B) Payments made to the relatives of the assessee who is an individual or Director , Partner or a person having substantial interest in the business, which is unreasonable or in excess in the opinion of the I.T.O , will be disallowed.- Section

Contd.
Payment made in excess of Rs.20000 otherwise than by a crossed cheque or Draft Section 40A(3) & 40A (4)
Payment made to a person in a day in excess of Rs.20000 otherwise than by a crossed cheque or draft than such expenditure is fully disallowed.

Any provision made for the future liability towards Gratuity is disallowed , however any gratuity that becomes payable during the previous year is allowed

Deductions allowed only on payment Section 43B

Any sum payable by way of Tax, Cess, Duty or fee under any law for the time being in force. Any sum payable by way of contribution to any provident fund or superannuation fund for the welfare of the employee. Any sum payable as bonus or commission to employee for services rendered. Any sum payable as interest on loans & advances taken from a schedule Bank, Public financial institution, State financial corporation

Contd.
Any sum payable by an employer in lieu of leave at the credit of his employee.

INCOME FROM OTHER SOURCES (SECTION 56 TO 59)

Basis of charges
Income of any kind which is not to be excluded from total income & not chargeable under any of the specified heads = income from other sources Section 56(1)

Section 56 (2)
Income chargeable to tax example:
Dividend (except exempt u/s.10(34) & 10(35) Winnings from lotteries, crossword puzzles, races including horse races, card games & other games of any sort Income by way of interest on securities Any sum of money exceeding Rs.50000 received without consideration i.e. Gift by an individual or HUF from any person on or after 1.4.2006 but before 1.10.2009 the whole of the amount = income from other sources

Contd.
A sum of money/ property is received by an individual or HUF without consideration on after 1.10.2009 (i.e. Gift) then
Any sum of money in cash/ cheque/ draft from one or more persons exceeding Rs.50000 then the entire total value will be chargeable to tax Immovable Property without consideration and the stamp duty value of which exceed Rs.50000, then Stamp duty value will be chargeable to tax. Movable property received without consideration Fair Market value of which is exceeding Rs.50000 whole FMV of the

Contd.
Interest on Bank deposit, NSC, Loans, deposits with companies Income from Royalty Directors fees Income from sub letting of property Examination remuneration received by a teacher or lecturer from an university Rent of Plot of Land Income from undisclosed sources.

CHAPTER VI-A
SECTION 80 C , 80CCC & 80CCD (Limit of Rs.1,00,000)
Life insurance Premium Payment , Pension Funds Contribution to statutory PF, PPF, Recognized PF Post office Term Deposit 10 to 15 years account NSS, NSC- VIII Issue , ULIP of UTI or LIC Annuity Plan Jeevan Dhara & Jeevan Akshay Equity linked saving scheme of any mutual

 Medical Insurance Premium paid by cheque or any mode other than Cash is allowed as deduction The premium is for the policy covering spouse, dependent childern . Even the premium of the policy of parents is also covered. In case of HUF policy taken for the members of the HUF is allowed
Maximum allowed is Rs.15000 for Assessee other than Senior citizen For senior citizen it is Rs.20000

80-D Mediclaim

 Deduction available to Resident Individual & HUF Deduction for expenditure incurred for medical treatment of a dependent person of disability A fixed amount of Rs.50000 / Rs.100000 ( Severe disability = 80% & above) is allowed A copy of certificate issued by medical authority along with return of income a

80 DD Deduction in respect of maintenance including medical treatment

80 E -Deduction for interest on loan taken for higher education

Deduction available to an individual Loan is taken for the purpose of his education or his relatives Amount of deduction = interest paid out of income chargeable to tax Period of deduction = from the start of the previous year + 7 assessment year or till interest is paid in full whichever is earlier.

80 G Donations
Donations made to notified bodies or institute or funds qualifies for deductions.

Four categories A, B, C, D For A categories 100 % of amount as deduction without any limit For B categories 50 % of amount as deduction without any limit For C categories 100 % of amount as deduction subject to qualifying limit For D categories 50 % of amount as deduction subject to qualifying limit

80 U Disable Assessee
Deduction for individual resident in India Individual suffering from disability action, cerebral palsy, multiple disability blindness etc Deduction = Rs. 50000 / Rs. 100000 (for severe disability = 80% and above disability) to the assessee

Computation of Total Income

Income

1st source - salary

2nd source - HP 3rd source - B&P

4th source - CG 5th source - OS

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