Dr.S.S.Jadhav Head, Dept of Commerce mrs.k.s.k. college beed

Income Tax Act-1961 Definitions:- Section 2 of the Act lays down definitions of the various terms used in the Act. There are 48 definitions given under this section but we have to study only 6 including that given under section 3 and these are discussed as under:- Contd……

Income u/s-2(24) This term is vary important from Income tax. Point of view because tax is charged on income earned by the person during a particular period- the term includes:- Profit Dividend Contribution received by trust Perquisites Allowance Capital gains Lotteries Commuted value. Contd……

Person u/s 2(31) Being under this section varies assessee are discussed this definitions is also vary important as provided u/s2, subsection 31 ‘person means and include’ An individuals A Hindu Undivided Family (H.U.F.) A company A Firm An Association of Person A Local Authority Contd……

Assessee u/s 2(7) From the point of view of fixing liabilities of certain person known as assessee this definition is vary important. As defined under subsection 7 of this section of the assessee means and include: A person who is liable to pay any tax or any other sum under this act or; A person against whom proceeding under this Act has been commenced to assess his income or loss is determine refund payable to him. A person against whom proceeding under this act has been commenced to assess the income or loss of any other person is respect of which is assessable A person who is deemed to be an assessee under this act. A person who is deemed to be an assessee in default under this act Contd……

Assessment Year u/s 2(9) Under subsection 9 of section 2 the assessment year is defined as the period of 12 month commencing on the 1st Day of April every year to be an assessment year. It must have following ingratiation: A period of 12 months. Commenced of 1st Day of April every year. Taxable income and tax liabilities refund etc. relation to the proceeding year is calculated in this year. Contd……

Previous Year u/s 3 As a defined in section 3 of the income tax act, previous year means the financial immediately preceding the a assessment year. In case of newly setup business or profession or as the case may be the date on which the source of income newly in to existence to the date of the financial year Contd……

Agricultural Income u/s 2 (1A) The subsection 1 (A) of section 2 define and include agriculture income as: Any rent or revenue derived from land which is situated India and used for Agriculture purpose. Any income derived from such land by Agriculture process performed by a cultivator or receiver of rent-in-kind to make product fit to be taken to the market or marketing or sale of agriculture goods. Cultivator or receiver of rent-in-kind. Contd……

Head of Income(Section 14) For calculating total income and ascertaining total tax liabilities, income from various sources is required to be computed under the following head: Salaries. Income from House Property. Profit and Gains of Business or Profession. Capital Gains. Income from Other Sources. Contd……

Proforma of Income From House Property Computation of Income From House Property Mr.Lokhandwala’s Statement of Taxable Income from House Property For Assessment Year 2010-11 Particular Layout Property Rs. Self O ccupied Property As if Let Out Rs. Self Occupied Rs. GROSS ANNUAL VALUE A- Expected Rent of the Value a) Municipal Valuation b) Fair Rent Which ever is more but the arrived figure should not be more than standard Rent, if more then standard Rent is taken as expected rent and if is less than the standard rent then self be taken as expected rent Expected Rent (i) b) Rent Actual Received or Receivable Gross Annual Value x xx Nil Contd……

Expected Rent or Rent received whichever is more Expected Rent or Rent received whichever is more. But it if rent Received is less than the expected rent due to vacancy then though less, actual Rent Received is taken as Gross Annual Value of course if after deduction of un-realised rent the actual rent received comes to more than the expected rent, this rent received be taken as Gross Annual Value, loss due to vacancy be deducted from Annual rent or from reasonable expected rent if it is more than the Annual Rent “when annual rent is more than expected rent , it is Gross Annual Value when annual Rent is less than the Expected Rent then the vacancy Allowance be deducted from the expected Rent and this will be Gross annual value.” Less Municipal Tax (Including service Tax)paid NET ANNUAL VALUE Deduction u/s-24 Standard Deduction u/s 24 (a) @ 30% of Net Annual value Interest on Borrowed Capital u/s 24 (b) let out No limit On self occupied- Actual or Rs.150000 which ever is less TAXABLE INCOME FROM HOUSE PROPERTY (-) x __ x Nil (-) xx xx Contd……

ILLUSTRATIONS Sanket owned two Houses, for the financial year 2005-06, details relating to the properties are given below Particular Layout Property Rs. Self O ccupied Property As if Let Out Rs. Self Occupied Rs. GROSS ANNUAL VALUE A- Expected Rent of the Value a) Municipal Valuation b) Fair Rent Which ever is more but the arrived figure should not be more than standard Rent, if more then standard Rent is taken as expected rent and if is less than the standard rent then self be taken as expected rent Expected Rent (i) b) Rent Actual Received or Receivable Gross Annual Value x xx Nil Contd……