Income Tax Current working issues DEFECTIVE RETURN U/S 139(9) Charging of maximum marginal rate

DEFECTIVE RETURN U/S 139(9) Due to Schedule I (Details of Accumulation ) Due to Schedule J ( investment of all funds of trusts or institution last day of previous Year) Balance of Corpus fund as on 31st march Balance of Non - Corpus fund as on 31st march Due to Schedule K ( name of Author/ Founder/ Trustees)

PERSON . As per income Tax 2(31) As per PAN Form 49A Individual HUF Company Firm AOP Local Authority AJP Trust BOI LLP Government

ITR-7 For persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F) (Please see rule 12 of the Income-tax Rules,1962) Section 139 ( 4A ) :- Every NPO whose total income exceeds the maximum amount not chargeable to tax , without giving to the any exemption ( u/s 11 & 12 ) Section 139 ( 4B ):- for political parties. Section 139 (4C) :- following NPOs enjoying exemption u/s 10 , have to necessarily file tax return Section 139 ( 4D ):- Research Institution section 139(4E):- Business Trust section 139(4F): Investments funds

SECTION-WISE AUDIT UNDER NPO 10(23)(iv):- Notified by the government for states Developments. 10(23)(v):- religious Trusts 10(23)(vi):- Education institutes turnover exceeds 1 cr. 10(23)(via):- Hospitals turnover exceeds 1 cr. 10A:- free Trade zone. 10AA:- Special Economic zone. 12A(1)(b):- trust /institution turnover exceed 2.5 lac weather registered under section 12AA . 44 AB:- tax Audit Report. 44 AD:- presumptive basis of Taxation 50B:- Special provision for computation of capital gain in case of slump sale. 80 IA/IB/IC/ID/JJAA/LA 92E: - Transfer pricing 115JB:- MAT/AMT 115VW:- Tonnage Scheme Others:

ITR-5 For persons other than,- (i) Individual, (ii) HUF, (iii) Company and (iv) person filing Form ITR-7] (Please see rule 12 of the Income-tax Rules,1962)

STATUS If a charitable Trust Registered u/s 12 AA the status will be AOP trust. If the Society Registered 1860 registered u/s 12 AA the status will be AOP/BOI. If the Section 8 Company Registered u/s 12 AA the status will be Domestic/ Foreign Company. When the income of a charitable trust become taxable , it is taxed at the rate applicable to an AOP

MAXIMUM MARGINAL RATE Any direct or indirect benefits transfer to the related person refer section 13(3). Any part of the income applied to related person refer section 13(3). Income received from the investment which are not as per section 11(5). Anonymous donation as per section 115 BBC. Circular no 387 dated 06.07.1984

UNREGISTERED NPO Un-Registered NPO:- Which is not registered u/s 10/12AA/ any other provision under Income tax Act ITR- 5 to be filled Benefit of Slab rate available Share to be determinate unless MMR will be charged ( Section 164 )

Rate Structure Paragraph A of Part I of the First Schedule specifies the rates of income-tax in the case of every individual, Hindu undivided family, association of persons, body of individuals or artificial juridical person (other than a co-operative society, firm, local authority and company) as under:- THE FIRST SCHEDULE (See section 2) PART I INCOME-TAX Paragraph A (I) In the case of every individual other than the individual referred to in items (II) and (III) of this Paragraph or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part applies,— Rates of income-tax (1) where the total income does not exceed Rs. 2,50,000 Nil (2) where the total income exceeds Rs. 2,50,000 but does not 10 per cent exceed Rs. 5,00,000 (3) where the total income exceeds Rs. 5,00,000 but does not Rs. 25,000 plus 20 per cent exceed Rs. 10,00,000 (4) where the total income exceeds Rs. 10,00,000 Rs. 1,25,000 plus 30 per cent.

Comparison chart of Rates Status Rate Schedule Rates Individual The First Schedule, Part I , Paragraph A 0-2.5 lac 0% 2.5- 5 Lac 10% 5- 10 lac 20% Above 10 Lac 30% Hindu Undivided family ( HUF) Same as above Association of Persons ( AOP) Body of individuals (BOI) Artificial Judicial Person ( AJP )

What is AOP AOP includes Taxability in section Co-operative Society The First Schedule, Part I , Paragraph B Society registered U/s 1860 The First Schedule, Part I , Paragraph A and Section 164(ii) and 164 (iii) and also circular no 387 Dated 06.07.1984 Private Trust Specific Discretionary The First Schedule, Part I , Paragraph A and Section 161/167 Section164. Charitable Trust(Registered u/s 12A) Section 11 and 12 and 164(ii) and (iii) , circular no 387 Dated 06.07.1984 Oral Trust u/s 164 Joint Venture 167 B Any other AOP/BOI The First Schedule, Part I , Paragraph A

AOP Taxation few Points Where the Individual share of the member of AOP are unknown and indeterminate the Rate to be charged at MMR (u/s 167B(1)). When share is known and Determined then Income of one of the member is exceed maximum basic exemption limit then MMR u/s 167B(2) Income of all of the member is Below Basic Exemption limit then normal slab rate will apply. Any member is Chargeable to Maximum Marginal Rate then MMR will apply.

Issue of Depreciation No depreciation is allowed when the any assets at the time of purchase claim as a application of income. Asset Is purchased by corpus fund Asset is purchased by accumulation of fund Asset is purchased by secured loan Payment of secured loan treated as application of fund. Asset by way of donation