Direct and Indirect Taxation - I Notes | B.Com. (Accountancy) Semester 5 | Mumbai University | munotes

Contents

Module I Basic Concepts and Salaries

1. Why There Is a New Income-tax Act, and What Changed 1
2. How the Act Is Arranged, and How to Find a Provision in It 4
3. The Tax Year, Which Replaced the Previous Year and the Assessment Year 6
4. Assessee, Person, Income and Total Income 8
5. The Charge of Income-tax 11
6. Scope of Total Income: What Residence Decides 14
7. Residence of an Individual: the Day Counts 17
8. Residence of a HUF, a Firm and a Company 21
9. Residential Status and Incidence, Worked End to End 24
10. Income Deemed to Be Received, and Dividend Deemed to Be Income 27
11. Income Deemed to Accrue or Arise in India 30
12. The Five Heads of Income 33
13. A Married Couple under the Portuguese Civil Code 36
14. A Capital Asset Received from a Specified Entity 38
15. Incomes Not Included in Total Income: Schedules I to VIII 40
16. Expenditure Relating to Income That Is Exempt 44
17. Salaries: What Is Charged, and When 47
18. Income from Salary: What Goes into the Computation 50
19. Perquisites, and How Each Is Valued 53
20. Profits in Lieu of Salary 58
21. Deductions from Salaries 61
22. A Complete Salary Computation, Worked 65
23. Practice Questions: Basic Concepts and Salaries 68

Module II Income from House Property and Capital Gains

1. Income from House Property: What Is Charged 71
2. Determination of Annual Value 74
3. Arrears of Rent and Unrealised Rent Received Later 78
4. Deductions from Income from House Property 80
5. Property Owned by Co-owners, and the Head's Own Definitions 83
6. A Complete House Property Computation, Worked 86
7. Capital Gains: the Charge, and the Year of Taxability 88
8. What Is a Capital Asset, and What Is a Transfer 91
9. Transactions Not Regarded as Transfer 95
10. Withdrawal of Exemption in Certain Cases 98
11. Mode of Computation of Capital Gains 101
12. Cost Where the Asset Was Not Bought 104
13. Capital Gains on Depreciable Assets 107
14. When the Act Substitutes the Consideration 110
15. Slump Sale, and Market Linked Debentures 113
16. Advance Money Received and Forfeited 115
17. Profit on Sale of Property Used for Residence 117
18. Agricultural Land, and Compulsory Acquisition 120
19. Exemption by Investing the Gain 123
20. Shifting of an Industrial Undertaking 126
21. Extension of Time, and the Capital Gains Account Scheme 128
22. Adjusted, Cost of Improvement and Cost of Acquisition 130
23. Reference to a Valuation Officer 133
24. Distribution on Liquidation, and Buy-back of Shares 135
25. A Complete Capital Gains Computation, Worked 138
26. Practice Questions: House Property and Capital Gains 140

Module III Profits and Gains of Business or Profession and Income from Other Sources

1. Profits and Gains of Business or Profession: What Is Charged 143
2. The Manner of Computing Business Profits 145
3. Rent, Rates, Taxes, Repairs and Insurance 148
4. Deductions Related to Employee Welfare 150
5. Deduction on Certain Premium 152
6. Bad Debts, and the Provision for Bad and Doubtful Debts 154
7. Other Deductions 156
8. Depreciation, and the Block of Assets 158
9. Actual Cost, and Written Down Value 161
10. Special Provision for the Cost of Certain Assets 164
11. The General Conditions for an Allowable Deduction 166
12. Amounts Not Deductible in Certain Circumstances 168
13. Expenses or Payments Not Deductible 170
14. Deductions Allowed Only on Actual Payment 172
15. Certain Sums Deemed to Be Profits 174
16. The Head's Own Definitions 177
17. A Complete Business Computation, Worked 179
18. Income from Other Sources: the Residual Head 181
19. Gifts, and Receipts Without Consideration 184
20. Deductions, and Amounts Not Deductible, under Other Sources 188
21. Profits Chargeable to Tax under Other Sources 192
22. Practice Questions: Business Profits and Other Sources 194

Module IV Deductions, Rebates, Reliefs and Total Income Computation

1. Deductions to Be Made in Computing Total Income 197
2. Life Insurance Premia, Deferred Annuity and Provident Fund 199
3. Contributions to a Pension Scheme, and to the Agnipath Scheme 201
4. Health Insurance Premia 204
5. A Dependant with Disability, and Medical Treatment 207
6. Interest on a Loan for Higher Education 209
7. Interest on a Loan for a Residential House 211
8. Interest on a Loan to Buy an Electric Vehicle 214
9. Donations to Funds and Charitable Institutions 216
10. Deduction in Respect of Rents Paid 219
11. Interest on Deposits, and an Assessee with a Disability 221
12. Rebate: the Two Kinds, and Which One Applies 223
13. Relief Where Salary Is Paid in Arrears or in Advance 226
14. Relief for a Retirement Benefit Account Held Abroad 229
15. The New Tax Regime for Individuals and Hindu Undivided Families 231
16. Total Income and Tax Liability, Worked End to End 234
17. Practice Questions: Deductions, Rebates and Total Income 237