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Taxation

October 22, 2015 By Prince Kunal

What is Professional Tax ? Who needs to get Professional Tax registration ? Who is best professional tax consultant in Patna BIhar ?

PROFESSIONAL TAX REGISTRATION IN PATNA BIHAR INDIA SAMASTIPUR MUZAFFARPUR BUXAR ARA JHARKHAND JAMSHEDPUR

 

Professional Tax Registration and Compliance

Professional Tax is a tax levied by the State government. Professional tax is levied on income however earned in any trade and is usually paid by the employer. The provision detailing the stipulations attached to Provisional Tax, caps the total professional tax payable in respect of any one person to the State or to any local authority in the State by way of taxes on professions, trades, callings and employments shall not exceed two hundred and fifty rupees two thousand and five hundred rupees per annum.

Introduction to Professional Tax

Professional tax is just like Income Tax except for the fact that Income Tax is collected by the Central Government and Professional Tax is collected by the State Government. When this tax was first introduced in India, the maximum limit on the tax to be collected was Rs. 250.

Some of the State Governments have represented that the earlier celling of two hundred and fifty rupees which was fixed in 1949, needs to be revised upwards taking into consideration the price rise and other factors. It is also pointed out that the profession tax has, at present, become almost regressive because of the ceiling since even people with high salaries have to pay this tax at only the maximum amount of two hundred and fifty rupees per annum. The upward revision of profession tax has helped the State Governments in raising additional resources.

Professional Tax Rate

The maximum amount payable per annum towards professional tax is INR 2,500. The professional tax is usually a slab-amount based on the gross income of the professional. It is deducted from his income every month. The state governments of the following states have levied professional tax – Karnataka, West Bengal, Andhra Pradesh, Maharashtra, Tamil Nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Orissa, Tripura and Madhya Pradesh. In case of Salaried and Wage earners, the Professional Tax is liable to be deducted by the Employer from the Salary/Wages and the Employer is liable to deposit the same with the state government. In case of other class of Individuals, this tax is liable to be paid by the person himself.

Employer’s Responsibility for Professional Tax

The owner of a business is responsible to deduct professional tax from the salaries of his employees and pay the amount so collected to the appropriate government department. He/she has to furnish a return to the tax department in the prescribed form within the specified time. The return should include the proof of tax payment. In case the payment proof is not enclosed, the return shall be deemed incomplete and invalid

Professional Tax Registration

Professional tax registration application must be to the State’s tax department within 30 days of employing staff in a business. If there is more than one place of work, application must be made separately to each authority as regards the place of work coming under the jurisdiction of that authority

Delay in obtaining Professional Tax Registration Certificate incurs a penalty of Rs. 5/- per day. In case of non/late payment of profession tax, penalty will be 10% of the amount of tax. In case of late filing of returns, a penalty of Rs. 300 per return will be imposed.

 

For more details about Procedures, fees, checklists involved in getting PROFESSIONAL TAX REGISTRATION IN PATNA BIHAR INDIA SAMASTIPUR MUZAFFARPUR BUXAR ARA JHARKHAND JAMSHEDPUR, please visit http://www.meerad.in/professionaltaxregistration.html

Or,

Call us at +91-8540099000 or give a missed call on +91-7050515253, we will help you in getting professional tax registration in BIhar & Jharkhand.

 

Topic of this page:

PROFESSIONAL TAX REGISTRATION IN PATNA BIHAR INDIA SAMASTIPUR MUZAFFARPUR BUXAR ARA JHARKHAND JAMSHEDPUR

 

This article is written by: ACS Prince Kunal
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Filed Under: Taxation

September 12, 2015 By Prince Kunal

Documents-Information Required for Income Tax Return-ITR-India-Patna-Bihar-Jharkhand

Documents-Information Required for Income Tax Return-ITR-India-Patna-Bihar-Jharkhand

Documents-Information Required for Income Tax Return-ITR-India-Patna-Bihar-Jharkhand

Income Tax Return Information Sheet

(You are advised to fill up details as much as you can)

 

  1. General Information(Mandatory Information)
Sr. No. Details Please Fill Up Remarks
1. Name of Tax Payer
2. Pan No. :
3. Date of Birth:
4. Father’s Name:
5. Income Tax Login Pass word
6. Number of Bank Accounts running: Please give bank of all bank accounts and ensure that all details are visible.
7. Full Address with Pincode:

2. Income Details

Sr. No. Source of Income Amount (Rs.)
1. Income from Salary
2. Income from House Property
3. Income from Capital Gain
4. Income From Business or Profession
5. Income from Other Sources

3. Employer Details

Sr. No. Name of Employer Tan No. of Employer Address of Employer with Pincode
1.
2.
3.

 

4. Expenditure Details

 

Sr. No. Nature of Expenses Amount (Rs.) Remarks
1. LIC premium spent during the relevant year
2. Tuition fee spent on children
3. Hostel fee spent on the children
4. Fixed deposit kept with any bank
5. Interest paid on housing loan
6. Education loan interest payments
7. Principal repayment on your home loan
8. Contribution to Provident Fund
9. Investment made under PPF, NSC, ULIPS, ELSS, RGESS
10. Money spent on medical treatment of parents
11. Money invested in any other tax saving funds, scheme of government or private banks or institutions

 

5. Please furnish these documents

 

 

Sr. No. Details of Documents Remarks
1. Form 16 issued by the employer  
2. Bank Statements of All bank accounts  
3. Interest income statement for fixed deposits  
4. TDS certificate issued by banks and others  
5. Copy of Balance sheet In case of taxpayer other than individual
6. Copy of Profit & Loss Account In case of taxpayer other than individual

Documents-Information Required for Income Tax Return-ITR-India-Patna-Bihar-Jharkhand 

Topic Discussed in the article: Documents-Information Required for Income Tax Return-ITR-India-Patna-Bihar-Jharkhand

This article is written by: ACS Prince Kunal
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Filed Under: Taxation

August 27, 2015 By Prince Kunal

SET OFF AND CARRY FORWARD OF LOSS UNDER THE INCOME-TAX ACT | Meaning of intra-head adjustment | Meaning of inter-head adjustment

SET OFF AND CARRY FORWARD OF LOSS UNDER THE INCOME-TAX ACT | Meaning of intra-head adjustment | Meaning of inter-head adjustment

Loss from exempted source of income cannot be adjusted against taxable income  If income from a particular source is exempt from tax, then loss from such source cannot be set off against any other income which is chargeable to tax. E.g., Agricultural income is exempt from tax, hence, if the taxpayer incurs loss from agricultural activity, then such loss cannot be adjusted against any other taxable income.

 

Meaning of intra-head adjustment 

 

If in any year the taxpayer has incurred loss from any source under a particular head of income, then he is allowed to adjust such loss against income from any other source falling under the same head. The process of adjustment of loss from a source under a particular head of income against income from other source under the same head of income is called intra-head adjustment, e.g. Adjustment of loss from business A against profit from business

B. Restrictions to be kept in mind while making intra-head  adjustment of loss  Following restrictions should be kept in mind before making intra-head  adjustment of loss:

1) Loss from speculative business cannot be set off against any income other than income from speculative business. However, non-speculative business loss can be set off against income from speculative business.

2) Long-term capital loss cannot be set off against any income other than income from long-term capital gain. However, short-term capital loss can be set off against long-term or short-term capital gain.

3) No loss can be set off against income from winnings from lotteries, crossword puzzles, race including horse race, card game, and any other game of any sort or from gambling or betting of any form or nature.

4) Loss from the business of owning and maintaining race horses cannot be set off against any income other than income from the business of owning and maintaining race horses.

5) Loss from business specified under section 35AD cannot be set off against any other income except income from specified business (section 35AD is applicable in respect of certain specified businesses like setting up a cold chain facility, setting up and operating warehousing facility for storage of agricultural produce, developing and building a housing projects, etc.).

Meaning of inter-head adjustment

After making intra-head adjustment (if any) the next step is to make inter-head adjustment. If in any year, the taxpayer has incurred loss under one head of income and is having income under other head of income, then he can adjust the loss from one head [As amended by Finance Act, 2015] against income from other head, E.g., Loss under the head of house property to be adjusted against salary income. Restrictions to be kept in mind while making inter-head adjustment of loss  Following restrictions should be kept in mind before making inter-head adjustment:

1) Before making inter-head adjustment, the taxpayer has to first make intra-head adjustment.

2) Loss from speculative business cannot be set off against any other income. However, non-speculative business loss can be set off against income from speculative business.

3) Loss under head “Capital gains” cannot be set off against income under other heads of income.

4) No loss can be set off against income from winnings from lotteries, crossword puzzles, race including horse race, card game, and any other game of any sort or from gambling or betting of any form or nature.

5) Loss from the business of owning and maintaining race horses cannot be set off against any other income.

6) Loss from business specified under section 35AD cannot be set off against any other income (section 35AD is applicable in respect of certain specified businesses like setting up a cold chain facility, setting up and operating warehousing facility for storage of agricultural produce, developing and building housing projects, etc.)

7) Loss from business and profession cannot be set off against income chargeable to tax under the head “Salaries”.  Carry forward of unadjusted loss for adjustment in next year  Many times it may happen that after making intra-head and inter-head adjustments, still the loss remains unadjusted. Such unadjusted loss can be carried forward to next year for adjustment against subsequent year(s)’ income. Separate provisions have been framed under the Income-tax Law for carry forward of loss under different heads of income. Provisions under the Income-tax law in relation to carry forward and set off of business loss other than loss from speculative business  If loss of any business/profession (other than speculative business) cannot be fully adjusted in the year in which it is incurred, then the unadjusted loss can be carried forward for making adjustment in the next year. In the subsequent year(s) such loss can be adjusted only against income charged to tax under the head “Profits and gains of business or profession”  Loss under the head “Profits and gains of business or profession” can be carried forward only if the return of income/loss of the year in which loss is incurred is furnished on or before the due date of furnishing the return, as prescribed under section 139(1).  Such loss can be carried forward for eight years immediately succeeding the year in which the loss is incurred.

[As amended by Finance Act, 2015]
Above provisions are not applicable in case of unabsorbed depreciation (provisions relating to unabsorbed depreciation are discussed later)  Loss from business specified under section 35AD cannot be set off against any other income except income from specified business (section 35AD is applicable in respect of certain specified businesses like setting up a cold chain facility, setting up and operating warehousing facility for storage of agricultural produce, developing and building a housing projects, etc.). Such loss can be carried forward for adjustment against income from specified business for any number of years. Loss from the business of owning and maintaining race horses cannot be set off against any income other than income from the business of owning and maintaining race horses. Such loss can be carried forward only for a period of 4 years. If loss of any speculative business cannot be fully adjusted in the year in which it is incurred, then the unadjusted loss can be carried forward for making adjustment in the next year. In the subsequent year(s) such loss can be adjusted only against income from speculative business (may be same or any other speculative business). Loss from speculative business can be carried forward only if the return of income/loss of the year in which loss is incurred is furnished on or before the due date of furnishing the return, as prescribed under section 139(1).  Such loss can be carried forward for four years immediately succeeding the year in which the loss is incurred.  Above provisions are not applicable in case of unabsorbed depreciation of speculative business (provisions relating to unabsorbed depreciation are discussed later).  Provisions under the Income-tax Law in relation to carry forward and set off of house property loss  If loss under the head “Income from house property” cannot be fully adjusted in the year in which such loss is incurred, then unadjusted loss can be carried forward to next year. In the subsequent years(s) such loss can be adjusted only against income chargeable to tax under the head “Income from house property”.  Such loss can be carried forward for eight years immediately succeeding the year in which the loss is incurred.  Loss under the head “Income from house property” can be carried forward even if the return of income/loss of the year in which loss is incurred is not furnished on or before the due date of furnishing the return, as prescribed under section 139(1).  Provisions under the Income-tax law in relation to carry forward and set off of capital loss  If loss under the head “Capital gains” incurred during a year cannot be adjusted in the same year, then unadjusted capital loss can be carried forward to next year.

[As amended by Finance Act, 2015]
In the subsequent year(s), such loss can be adjusted only against income chargeable to tax under the head “Capital gains”, however, long-term capital loss can be adjusted only against long-term capital gains. Short-term capital loss can be adjusted against long-term capital gains as well as short-term capital gains.  Such loss can be carried forward for eight years immediately succeeding the year in which the loss is incurred.  Such loss can be can carried forward only if the return of income/loss of the year in which loss is incurred is furnished on or before the due date of furnishing the return, as prescribed under section 139(1).  Meaning of unabsorbed depreciation, unabsorbed capital expenditure on scientific research and unabsorbed capital expenditure on promoting family planning amongst the employees  Apart from several other deductions, while computing income chargeable to tax under the head “Profits and gains of business or profession” a person is allowed to claim deduction on account for depreciation, capital expenditure incurred by him on scientific research and capital expenditure incurred by a company for promoting family planning amongst its employees. If the income of the year in which these expenses are incurred falls short of these expenses, then the unabsorbed expenses can be carried forward to next year in the form of unabsorbed depreciation or unabsorbed capital expenditure on scientific research or unabsorbed capital expenditure on promoting family planning amongst the employees. Illustration for better understanding  Business income (computed as per the provisions of Income-tax Law) of Mr. Kiran before allowing deduction on account of depreciation amounted to Rs. 84,000. Depreciation as per the provisions of section 32 amounted to Rs. 1,00,000. What will be the amount of unabsorbed depreciation in this case?  **  It can be observed that business income before claiming deduction under section 32 on account of depreciation is Rs. 84,000 and depreciation allowable as per section 32 is Rs. 1,00,000, hence, after claiming deduction on account of depreciation of Rs. 1,00,000, there will be a loss of Rs. 16,000. This loss is on account of depreciation and, hence, loss of Rs 16,000 will be termed as unabsorbed depreciation. Provisions under the Income-tax Law relating to set off of unabsorbed depreciation, unabsorbed capital expenditure on scientific research and unabsorbed capital expenditure on promoting family planning amongst the employees  Depreciation is first deducted from the income chargeable to tax under the head “Profits and gains of business or profession”. If such depreciation could not be fully adjusted against such income chargeable to tax in that previous year, the unabsorbed portion shall [As amended by Finance Act, 2015] be added to the amount of depreciation for the following year and shall be deemed to be the part of depreciation for that year(similar treatment would be given to other allowances as mentioned above).

However, in the case of set off, following order of priority is to be followed:

1) First adjustments are to be made for current scientific research expenditure, family planning expenditure and current depreciation.

2) Second adjustment is to be made for brought forward business loss.

3) Third adjustments are to be made for unabsorbed depreciation, unabsorbed capital expenditure on scientific research or on family planning.

Carry forward of loss in case of change in the constitution of business  Generally, the person incurring the loss is only entitled to carry forward the loss to be adjusted in subsequent year(s). However, in certain cases of reconstitution of the business like amalgamation, demerger, conversion of proprietary firm into company or conversion of partnership firm into company, etc., the reconstituted entity is entitled to carry forward the unadjusted loss of predecessor entity (provided that conditions specified in this regard are satisfied). Provisions relating to carry forward of loss in case of retirement of a partner from a partnership firm  Section 78 contains provisions relating to carry forward and set off of loss in case of change in constitution of a partnership firm due to death or retirement of a partner (i.e. when a partner goes out of firm by retirement or death). In such a case, the share of loss attributable to the outgoing partner cannot be carried forward by the firm. Restriction of section 78 is applicable only in case of loss and is not applicable in case of adjustment of unabsorbed depreciation, unabsorbed capital expenditure on scientific research or family planning expenditure.

Special provisions relating to carry forward and set off of loss in case of a company in which public are not substantially interested

As per section 79 of the Income-tax Act, where a change in shareholding has taken place in a previous year in the case of a company, not being a company in which the public are substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year unless- On the last day of the previous year the shares of the company carrying not less than fifty-one per cent of the voting power were beneficially held by person who beneficially held shares of the company carrying not less than fifty-one per cent of the voting power on the last day of the year or years in which the loss was incurred. Restriction of section 79 is applicable only in case of loss and is not applicable in case of adjustment of unabsorbed depreciation, unabsorbed capital expenditure on scientific research or family planning expenditure. Further, the provisions of section 79 are not applicable in case of change in share holding on account of death of shareholder or on account of transfer of shares by way of gift to [As amended by Finance Act, 2015] any relative of the shareholder or change in shareholding in case of an Indian company which is a subsidiary of foreign company, when such foreign company is amalgamated/demerged with another foreign company and 51% or more shareholders of the amalgamating/demerged foreign company continues to be the shareholders of the amalgamated/resulting foreign company.

[As amended by Finance Act, 2015]
MCQ ON SET OFF AND CARRY FORWARD OF LOSS UNDER THE INCOME-TAX LAW 

Q1.If income from a particular source is exempt from tax, then loss from such source cannot be set off against any other income which is chargeable to tax.

(a) True      (b) False

Correct answer : (a) Justification of correct answer : If income from a particular source is exempt from tax, then loss from such source cannot be set off against any other income which is chargeable to tax.  Thus, the statement given in the question is true and hence, option (a) is the correct option.

Q2.The process of adjustment of loss from a source under a particular head of income against income from other source under the same head of income is called __________.

(a) Inter-head adjustment    (b) Intra-head  adjustment (c) Carry forward of loss    (d) Clubbing of income

Correct answer : (b) Justification of correct answer: The process of adjustment of loss from a source under a particular head of income against income from other source under the same head of income is called intra-head adjustment. Thus, option (b) is the correct option.

Q3.While making intra-head adjustment of loss, short-term capital loss cannot be set off against long-term capital gain.

(a)True     (b) False

Correct answer : (b) Justification of correct answer : While making intra-head  adjustment of loss, short-term capital loss can be set off against short-term capital gain as well as against long-term capital gain. Thus, the statement given in the question is false and hence, option (b) is the correct option.

Q4.While making intra-head  adjustment,loss from the business of owning and maintaining race horses can be set off against ____________ only.

(a) Income from winnings from lotteries (b) Income from crossword puzzles (c) Income from business of owning and maintaining race horses (d) Income from card game

Correct answer : (c) [As amended by Finance Act, 2015] Justification of correct answer : Loss from the business of owning and maintaining race horses cannot be set off against any income other than income from the business of owning and maintaining race horses. Thus, option (c) is the correct option.

Q5.While making inter-head adjustment of loss, loss from business and profession cannot be set off against income chargeable to tax under the head “Salaries”.

(a) True     (b) False

Correct answer : (a) Justification of correct answer : While making inter-head adjustment of loss, loss from business and profession (including unabsorbed depreciation) cannot be set off against income chargeable to tax under the head “Salaries”. Thus, the statement given in the question is true and hence, option (a) is the correct option.

Q6.Loss under the head “Profits and gains of business or profession” can be carried forward even if the return of income/loss of the year in which loss is incurred is not furnished on or before the due date of furnishing the return, as prescribed under section 139(1).

(a) True     (b)False

Correct answer : (b) Justification of correct answer : Loss under the head “Profits and gains of business or profession” can be carried forward only if the return of income/loss of the year in which loss is incurred is furnished on or before the due date of furnishing the return, as prescribed under section 139(1). Thus, the statement given in the question is false and hence, option (b) is the correct option.

Q7.If loss under the head “Income from house property” cannot be fully adjusted in the year in which such loss is incurred, then unadjusted loss can be carried forward for ___________ years immediately succeeding the year in which the loss is incurred.

(a) 2       (b) 5 (c) 8       (d) 10

Correct answer : (c) Justification of correct answer : If loss under the head “Income from house property” cannot be fully adjusted in the year in which such loss is incurred, then unadjusted loss can be carried forward for 8 years immediately succeeding the year in which the loss is incurred. Thus, option (c) is the correct option.

[As amended by Finance Act, 2015]
Comment on incorrect answer :Option (c) is the correct option since it gives the correct number of years, all the other options, viz., option (a), (b) and (d) giving incorrect number of years are not correct.

Q8.Restriction of section 78 is applicable only in case of loss and is not applicable in case of adjustment of unabsorbed depreciation, unabsorbed capital expenditure on scientific research or family planning expenditure.

(a) True     (b) False

Correct answer : (a) Justification of correct answer : Section 78 contains provisions relating to carry forward and set off of loss in case of change in constitution of a partnership firm due to death or retirement of a partner (i.e. when a partner goes out of firm by retirement or death). In such a case, the share of loss attributable to the outgoing partner cannot be carried forward by the firm. Restriction of section 78 is applicable only in case of loss and is not applicable in case of adjustment of unabsorbed depreciation, unabsorbed capital expenditure on scientific research or family planning expenditure.  Thus, the statement given in the question is true and hence, option (a) is the correct option.

Q9.In case of a closely held company, if the person beneficially holding ________ of the voting power as on the last day (i.e. 31st March) of the year in which the loss was incurred and on the last day (i.e. 31st March) of the year in which the company wants to set off the brought forward loss are different, then the company cannot set off such brought forward loss.

(a) 20%     (b) 25% (c) 50%     (d) 51%

Correct answer : (d) Justification of correct answer : In case of a company in which public are not substantially interested (i.e., closely held company), if the person beneficially holding 51% of the voting power as on the last day (i.e. 31st March) of the year in which the loss was incurred and on the last day (i.e. 31st March) of the year in which the company wants to set off the brought forward loss are different, then the company cannot set off such brought forward loss. Thus, option (d) is the correct option.

 

 

 

Topic of the article: SET OFF AND CARRY FORWARD OF LOSS UNDER THE INCOME-TAX ACT | Meaning of intra-head adjustment | Meaning of inter-head adjustmen.

 

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8. www.corporatelegalguru.in

Filed Under: Taxation

August 23, 2015 By Prince Kunal

Section 90-Income Tax Act-DTAA- Double Tax Avoidance Agreements

Section 90-Income Tax Act-DTAA- Double Tax Avoidance Agreements

 

 

Section – 90, Income-tax Act, 1961-2014

CHAPTER IX

DOUBLE TAXATION RELIEF

58[Agreement with foreign countries or specified territories.

5990. (1) The Central Government may enter into an agreement with the Government of any country outside India or specified territory outside India,—

(a) for the granting of relief in respect of—

(i) income on which have been paid both income-tax under this Act and income-tax in that country or specified territory, as the case may be, or

(ii) income-tax chargeable under this Act and under the corresponding law in force in that country or specified territory, as the case may be, to promote mutual economic relations, trade and investment, or

(b) for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country or specified territory, as the case may be, or

(c) for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country or specified territory, as the case may be, or investigation of cases of such evasion or avoidance, or

(d) for recovery of income-tax under this Act and under the corresponding law in force in that country or specified territory, as the case may be,

and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement.

(2) Where the Central Government has entered into an agreement with the Government of any country outside India or specified territory outside India, as the case may be, under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee.

(2A) 60[***]

The following sub-section (2A) shall be inserted after sub-section (2) of section 90 by the Finance Act, 2013, w.e.f. 1-4-2016 :

(2A) Notwithstanding anything contained in sub-section (2), the provisions of Chapter X-A of the Act shall apply to the assessee even if such provisions are not beneficial to him.

(3) Any term used but not defined in this Act or in the agreement referred to in sub-section (1) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Act or the agreement, have the same meaning as assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf.

61[(4) An assessee, not being a resident, to whom an agreement referred to in sub-section (1) applies, shall not be entitled to claim any relief under such agreement unless 62[a certificate62a of his being a resident] in any country outside India or specified territory outside India, as the case may be, is obtained by him from the Government of that country or specified territory.]

63[(5) The assessee referred to in sub-section (4) shall also provide such other documents and information, as may be prescribed63a.]

Explanation 1.—For the removal of doubts, it is hereby declared that the charge of tax in respect of a foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company.

Explanation 2.—For the purposes of this section, “specified territory” means any area outside India which may be notified64 as such by the Central Government.]

65[Explanation 3.—For the removal of doubts, it is hereby declared that where any term is used in any agreement entered into under sub-section (1) and not defined under the said agreement or the Act, but is assigned a meaning to it in the notification issued under sub-section (3) and the notification issued thereunder being in force, then, the meaning assigned to such term shall be deemed to have effect from the date on which the said agreement came into force.]

 Topic:
Section 90-Income Tax Act-DTAA- Double Tax Avoidance Agreements-India

 Source:

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Filed Under: Taxation

August 23, 2015 By Prince Kunal

Section 80C deductions-Income tax act-Guide to section 80 deductions-India

Section 80C deductions-Income tax act-Guide to section 80 deductions-India

Deductions on Section 80C, 80CCC & 80CCD

Section 80C

The deduction under section 80C is allowed from your Gross Total Income. These are available to an Individual or a HUF. The deduction is allowed for various investments, expenses and payments.

Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2014-15 (assessment year 2015-16). The limit for financial year 2015-16 is also Rs 1,50,000.

Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer

This section provides deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer for receiving pension from a fund referred to in Section 10(23AAB).

In case the annuity is surrendered before the date of its maturity, the surrender value is taxable in the year of receipt.

Section 80CCD: Deduction in respect of Contribution to Pension Account

Employee’s contribution – Section 80CCD(1)
Allowed to an Individual who makes deposits to his/her NPS account. Maximum deduction allowed is 10% of salary (in case of taxpayer being an employee) or 10% of gross total income (in case of tax payer being self employed) or Rs 1,00,000 whichever is less.

The limit of Rs 1,00,000 has been increased to Rs 1,50,000 for financial year 2015-16 (assessments year 2016-17).

Employer’s contribution – Section 80CCD(2)
Maximum deduction available in respect of employer’s contribution is allowed up to 10% of the salary of the employee.

For FY 2014-15 (assessment year 2015-16)

Total Deduction under Section 80C, 80CCC and 80CCD(1) cannot exceed Rs 1,50,000.

For FY 2015-16 (assessment year 2016-17)

A new section 80CCD(1B) has been introduced to provide for additional deduction for amount contributed to NPS of up to Rs 50,000.

Therefore for financial year 2015-16, Total Deduction under Section 80C, 80CCC, 80CCD(1) and 80 CCD(1B) cannot exceed Rs 2,00,000.

From assessment year 2012-13, employer’s contribution under section 80CCD(2) towards NPS is outside the monetary ceiling mentioned above.

Deductions on Savings Bank Account

Section 80 TTA: Deduction from gross total income with respect to any Income by way of Interest on Savings account

Deduction from gross total income of an individual or HUF, up to a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account with a bank, co-operative society or post office. Section 80TTA deduction is not available on interest income from fixed deposits.

Deductions on House Rent

Section 80GG: Deduction with respect to House Rent Paid

  • This deduction is available for rent paid when HRA is not received. Assessee or his spouse or minor child should not own residential accommodation at the place of employment.
  • Assessee should not be in receipt of house rent allowance.
  • He should not have self occupied residential premises in any other place.

Deduction available is the least of

  1. Rent paid minus 10% of total income
  2. Rs. 2000/- per month
  3. 25% of total income

Deductions on Loan for Higher Studies

Section 80E: Deduction with respect to Interest on Loan for Higher Studies

Deduction in respect of interest on loan taken for pursuing higher education. This loan is taken for higher education for the assessee, spouse or children or for a student for whom the assessee is a legal guardian.

Deduction for First Time Home Owners

Section 80EE: Deductions on Home Loan Interest for First Time Home Owners

This section provided deduction on the Home Loan Interest paid and is valid for financial years 2013-14 & 2014-15 (Assessment year 2014-15 and 2015-16) only. The deduction under this section is available only to Individuals for first house purchased where the value of the house is Rs 40lakhs or less and loan taken for the house is Rs 25lakhs or less. And the Loan has been sanctioned between 01.04.2013 to 31.03.2014. The total deduction allowed under this section is Rs 1,00,000.

Deductions on Rajiv Gandhi Equity Saving Scheme (RGESS)

Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)

The Rajiv Gandhi Equity Saving Scheme (RGESS) was launched after the 2012 Budget. Investors whose gross total income is less than Rs. 12 lakhs can invest in this scheme. Upon fulfillment of conditions laid down in the section, the deduction is lower of – 50% of amount invested in equity shares or Rs 25,000.

Deductions on Medical Insurance

Section 80D: Deduction in respect of Medical Insurance

For financial year 2014-15 – Deduction is available up to Rs. 15,000/- to an assessee for insurance of self, spouse and dependent children. If individual or spouse is more than 60 years old the deduction available is Rs 20,000. An additional deduction for insurance of parents (father or mother or both) is available to the extent of Rs. 15,000/- if less than 60 years old and Rs 20,000 if parents are more than 60 years old. Therefore, the maximum deduction available under this section is to the extent of Rs. 40,000/-. (From AY 2013-14, within the existing limit a deduction of up to Rs. 5,000 for preventive health check-up is available).

For financial year 2015-16 – Deduction is raised from Rs 15,000 to Rs 25,000. The deduction for senior citizens is raised from Rs 20,000 to Rs 30,000. For uninsured super senior citizens (more than 80 years old) medical expenditure incurred up to Rs 30,000 shall be allowed as a deduction under section 80D. However, total deduction for health insurance premium and medical expenses for parents shall be limited to Rs 30,000.

Deductions on Medical Expenditure for a Handicapped Relative

Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative

Deduction is available on:

  1. expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative
  2. Payment or deposit to specified scheme for maintenance of dependent handicapped relative.

Where disability is 40% or more but less than 80% – fixed deduction of Rs 50,000. Where there is severe disability (disability is 80% or more) – fixed deduction of Rs 1,00,000.A certificate of disability is required from prescribed medical authority.

Note: A person with ‘severe disability’ means a person with 80% or more of one or more disabilities as outlined in section 56(4) of the ‘Persons with disabilities (Equal opportunities, protection of rights and full participation)’ Act.

For financial year 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

Deductions on Medical Expenditure on Self or Dependent Relative

Section 80DDB: Deduction in respect of Medical Expenditure on Self or Dependent Relative

A deduction to the extent of Rs. 40,000/- or the amount actually paid, whichever is less is available for expenditure actually incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from any Registered Doctor.

In case of senior citizen the deduction can be claimed up to Rs 60,000 or amount actually paid, whichever is less.

For financial year 2015-16 – for very senior citizens Rs 80,000 is the maximum deduction that can be claimed.

Deductions on Person suffering from Physical Disability

Section 80U: Deduction with respect to Person suffering from Physical Disability

Deduction of Rs. 50,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation. Further, if the individual is a person with severe disability, deduction of Rs. 100,000/- shall be available u/s 80U. Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D.

For financial year 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

Deduction for donations towards Social Causes

Section 80G: Deduction for donations towards Social Causes

The various donations specified in Sec. 80G are eligible for deduction up to either 100% or 50% with or without restriction as provided in Sec. 80G. 80G deduction not applicable in case donation is done in form of cash for amount over Rs 10,000.

Donations with 100% deduction without any qualifying limit:

  • National Defence Fund set up by the Central Government
  • Prime Minister’s National Relief Fund
  • National Foundation for Communal Harmony
  • An approved university/educational institution of National eminence
  • Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
  • Fund set up by a State Government for the medical relief to the poor
  • National Illness Assistance Fund
  • National Blood Transfusion Council or to any State Blood Transfusion Council
  • National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
  • National Sports Fund
  • National Cultural Fund
  • Fund for Technology Development and Application
  • National Children’s Fund
  • Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
  • the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
  • The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6,1993
  • Chief Minister’s Earthquake Relief Fund, Maharashtra
  • Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
  • Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
  • Prime Minister’s Armenia Earthquake Relief Fund
  • Africa (Public Contributions — India) Fund
  • Swachh Bharat Kosh (applicable from financial year 2014-15)
  • Clean Ganga Fund (applicable from financial year 2014-15)
  • National Fund for Control of Drug Abuse (applicable from financial year 2015-16)

Donations with 50% deduction without any qualifying limit.

  • Jawaharlal Nehru Memorial Fund
  • Prime Minister’s Drought Relief Fund
  • Indira Gandhi Memorial Trust
  • The Rajiv Gandhi Foundation

Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income

  • Government or any approved local authority, institution or association to be utilised for the purpose of promoting family planning
  • Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.

Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income

  • Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
  • Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning
  • Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
  • Any corporation referred in Section 10(26BB) for promoting interest of minority community
  • For repairs or renovation of any notified temple, mosque, gurudwara, church or other place.

Deductions on Contribution by Companies to Political Parties

Section 80GGB: Deduction in respect of contributions given by companies to Political Parties

Deduction is allowed to an Indian company for amount contributed by it to any political party or an electoral trust. Deduction is allowed for contribution done by any way other than cash.

Political party means any political party registered under section 29A of the Representation of the People Act. Contribution is defined as per section 293A of the Companies Act, 1956.

Deductions on Contribution by Individuals to Political Parties

Section 80GGC: Deduction in respect of contributions given by any person to Political Parties

Deduction is allowed to an assessee for any amount contributed to any political party or an electoral trust. Deduction is allowed for contribution done by any way other than cash.

Political party means any political party registered under section 29A of the Representation of the People Act.

Deductions on Income by way of Royalty of a Patent

Section 80RRB: Deduction with respect to any Income by way of Royalty of a Patent

Deduction in respect of any income by way of royalty is respect of a patent registered on or after 01.04.2003 under the Patents Act 1970 shall be available up to Rs. 3 lacs or the income received, whichever is less. The assessee must be an individual resident of India who is a patentee. The assessee must furnish a certificate in the prescribed form duly signed by the prescribed authority.

Deductions on Investment in Long Term Infrastructure Bonds [REMOVED]

Section 80CCF: Investment in Long Term Infrastructure Bonds

This section is no longer valid from AY 2012-13.

Topic of Page: Section 80C deductions-Income tax act-Guide to section 80 deductions-India

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Filed Under: Taxation

August 23, 2015 By Prince Kunal

Section 80C deduction-Income tax act-Guide to section 80 deductions-India

Section 80C deductions-Income tax act-Guide to section 80 deductions-India

Deductions on Section 80C, 80CCC & 80CCD

Section 80C

The deduction under section 80C is allowed from your Gross Total Income. These are available to an Individual or a HUF. The deduction is allowed for various investments, expenses and payments.

Total Deduction under section 80C, 80CCC and 80CCD(1) together cannot exceed Rs 1,50,000 for the financial year 2014-15 (assessment year 2015-16). The limit for financial year 2015-16 is also Rs 1,50,000.

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Section 80CCC: Deduction in respect of Premium Paid for Annuity Plan of LIC or Other Insurer

This section provides deduction to an Individual for any amount paid or deposited in any annuity plan of LIC or any other insurer for receiving pension from a fund referred to in Section 10(23AAB).

In case the annuity is surrendered before the date of its maturity, the surrender value is taxable in the year of receipt.

Section 80CCD: Deduction in respect of Contribution to Pension Account

Read More

For FY 2014-15 (assessment year 2015-16)

Total Deduction under Section 80C, 80CCC and 80CCD(1) cannot exceed Rs 1,50,000.

For FY 2015-16 (assessment year 2016-17)

A new section 80CCD(1B) has been introduced to provide for additional deduction for amount contributed to NPS of up to Rs 50,000.

Therefore for financial year 2015-16, Total Deduction under Section 80C, 80CCC, 80CCD(1) and 80 CCD(1B) cannot exceed Rs 2,00,000.

From assessment year 2012-13, employer’s contribution under section 80CCD(2) towards NPS is outside the monetary ceiling mentioned above.

Deductions on Savings Bank Account

Section 80 TTA: Deduction from gross total income with respect to any Income by way of Interest on Savings account

Deduction from gross total income of an individual or HUF, up to a maximum of Rs. 10,000/-, in respect of interest on deposits in savings account with a bank, co-operative society or post office. Section 80TTA deduction is not available on interest income from fixed deposits.

Deductions on House Rent

Section 80GG: Deduction with respect to House Rent Paid

  • This deduction is available for rent paid when HRA is not received. Assessee or his spouse or minor child should not own residential accommodation at the place of employment.
  • Assessee should not be in receipt of house rent allowance.
  • He should not have self occupied residential premises in any other place.

Deduction available is the least of

  1. Rent paid minus 10% of total income
  2. Rs. 2000/- per month
  3. 25% of total income

Deductions on Loan for Higher Studies

Section 80E: Deduction with respect to Interest on Loan for Higher Studies

Deduction in respect of interest on loan taken for pursuing higher education. This loan is taken for higher education for the assessee, spouse or children or for a student for whom the assessee is a legal guardian.

Deduction for First Time Home Owners

Section 80EE: Deductions on Home Loan Interest for First Time Home Owners

This section provided deduction on the Home Loan Interest paid and is valid for financial years 2013-14 & 2014-15 (Assessment year 2014-15 and 2015-16) only. The deduction under this section is available only to Individuals for first house purchased where the value of the house is Rs 40lakhs or less and loan taken for the house is Rs 25lakhs or less. And the Loan has been sanctioned between 01.04.2013 to 31.03.2014. The total deduction allowed under this section is Rs 1,00,000.

Deductions on Rajiv Gandhi Equity Saving Scheme (RGESS)

Section 80CCG: Rajiv Gandhi Equity Saving Scheme (RGESS)

The Rajiv Gandhi Equity Saving Scheme (RGESS) was launched after the 2012 Budget. Investors whose gross total income is less than Rs. 12 lakhs can invest in this scheme. Upon fulfillment of conditions laid down in the section, the deduction is lower of – 50% of amount invested in equity shares or Rs 25,000.

Deductions on Medical Insurance

Section 80D: Deduction in respect of Medical Insurance

For financial year 2014-15 – Deduction is available up to Rs. 15,000/- to an assessee for insurance of self, spouse and dependent children. If individual or spouse is more than 60 years old the deduction available is Rs 20,000. An additional deduction for insurance of parents (father or mother or both) is available to the extent of Rs. 15,000/- if less than 60 years old and Rs 20,000 if parents are more than 60 years old. Therefore, the maximum deduction available under this section is to the extent of Rs. 40,000/-. (From AY 2013-14, within the existing limit a deduction of up to Rs. 5,000 for preventive health check-up is available).

For financial year 2015-16 – Deduction is raised from Rs 15,000 to Rs 25,000. The deduction for senior citizens is raised from Rs 20,000 to Rs 30,000. For uninsured super senior citizens (more than 80 years old) medical expenditure incurred up to Rs 30,000 shall be allowed as a deduction under section 80D. However, total deduction for health insurance premium and medical expenses for parents shall be limited to Rs 30,000.

Deductions on Medical Expenditure for a Handicapped Relative

Section 80DD: Deduction in respect of Rehabilitation of Handicapped Dependent Relative

Deduction is available on:

  1. expenditure incurred on medical treatment, (including nursing), training and rehabilitation of handicapped dependent relative
  2. Payment or deposit to specified scheme for maintenance of dependent handicapped relative.

Where disability is 40% or more but less than 80% – fixed deduction of Rs 50,000. Where there is severe disability (disability is 80% or more) – fixed deduction of Rs 1,00,000.A certificate of disability is required from prescribed medical authority.

Note: A person with ‘severe disability’ means a person with 80% or more of one or more disabilities as outlined in section 56(4) of the ‘Persons with disabilities (Equal opportunities, protection of rights and full participation)’ Act.

For financial year 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

Deductions on Medical Expenditure on Self or Dependent Relative

Section 80DDB: Deduction in respect of Medical Expenditure on Self or Dependent Relative

A deduction to the extent of Rs. 40,000/- or the amount actually paid, whichever is less is available for expenditure actually incurred by resident assessee on himself or dependent relative for medical treatment of specified disease or ailment. The diseases have been specified in Rule 11DD. A certificate in form 10 I is to be furnished by the assessee from any Registered Doctor.

In case of senior citizen the deduction can be claimed up to Rs 60,000 or amount actually paid, whichever is less.

For financial year 2015-16 – for very senior citizens Rs 80,000 is the maximum deduction that can be claimed.

Deductions on Person suffering from Physical Disability

Section 80U: Deduction with respect to Person suffering from Physical Disability

Deduction of Rs. 50,000/- to an individual who suffers from a physical disability (including blindness) or mental retardation. Further, if the individual is a person with severe disability, deduction of Rs. 100,000/- shall be available u/s 80U. Certificate should be obtained from a Govt. Doctor. The relevant rule is Rule 11D.

For financial year 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs 1,00,000 has been raised to Rs 1,25,000.

Deduction for donations towards Social Causes

Section 80G: Deduction for donations towards Social Causes

The various donations specified in Sec. 80G are eligible for deduction up to either 100% or 50% with or without restriction as provided in Sec. 80G. 80G deduction not applicable in case donation is done in form of cash for amount over Rs 10,000.

Donations with 100% deduction without any qualifying limit:

  • National Defence Fund set up by the Central Government
  • Prime Minister’s National Relief Fund
  • National Foundation for Communal Harmony
  • An approved university/educational institution of National eminence
  • Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
  • Fund set up by a State Government for the medical relief to the poor
  • National Illness Assistance Fund
  • National Blood Transfusion Council or to any State Blood Transfusion Council
  • National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
  • National Sports Fund
  • National Cultural Fund
  • Fund for Technology Development and Application
  • National Children’s Fund
  • Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
  • the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
  • The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6,1993
  • Chief Minister’s Earthquake Relief Fund, Maharashtra
  • Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
  • Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
  • Prime Minister’s Armenia Earthquake Relief Fund
  • Africa (Public Contributions — India) Fund
  • Swachh Bharat Kosh (applicable from financial year 2014-15)
  • Clean Ganga Fund (applicable from financial year 2014-15)
  • National Fund for Control of Drug Abuse (applicable from financial year 2015-16)

Donations with 50% deduction without any qualifying limit.

  • Jawaharlal Nehru Memorial Fund
  • Prime Minister’s Drought Relief Fund
  • Indira Gandhi Memorial Trust
  • The Rajiv Gandhi Foundation

Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income

  • Government or any approved local authority, institution or association to be utilised for the purpose of promoting family planning
  • Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.

Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income

  • Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
  • Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning
  • Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
  • Any corporation referred in Section 10(26BB) for promoting interest of minority community
  • For repairs or renovation of any notified temple, mosque, gurudwara, church or other place.

Deductions on Contribution by Companies to Political Parties

Section 80GGB: Deduction in respect of contributions given by companies to Political Parties

Deduction is allowed to an Indian company for amount contributed by it to any political party or an electoral trust. Deduction is allowed for contribution done by any way other than cash.

Political party means any political party registered under section 29A of the Representation of the People Act. Contribution is defined as per section 293A of the Companies Act, 1956.

Deductions on Contribution by Individuals to Political Parties

Section 80GGC: Deduction in respect of contributions given by any person to Political Parties

Deduction is allowed to an assessee for any amount contributed to any political party or an electoral trust. Deduction is allowed for contribution done by any way other than cash.

Political party means any political party registered under section 29A of the Representation of the People Act.

Deductions on Income by way of Royalty of a Patent

Section 80RRB: Deduction with respect to any Income by way of Royalty of a Patent

Deduction in respect of any income by way of royalty is respect of a patent registered on or after 01.04.2003 under the Patents Act 1970 shall be available up to Rs. 3 lacs or the income received, whichever is less. The assessee must be an individual resident of India who is a patentee. The assessee must furnish a certificate in the prescribed form duly signed by the prescribed authority.

Deductions on Investment in Long Term Infrastructure Bonds [REMOVED]

Section 80CCF: Investment in Long Term Infrastructure Bonds

This section is no longer valid from AY 2012-13.

Topic of Page: Section 80C deductions-Income tax act-Guide to section 80 deductions-India

Information Courtesy:

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  2. meeradgroup.in
  3. indiancompanyregistration.in
  4. indiannidhicompanyregistration.in
  5. indiannbfcproducercompanyregistration.in
  6. indianpartnershipllpregistration.in
  7. websitemaniac.in
  8. corporatelegalguru.in

Filed Under: Taxation

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