BASIC CONCEPTS MEANING OF ASSESSMENT YEAR SECTION 2(9) MEANING OF PREVIOUS YEAR SECTION 3 MEANING OF PERSON SECTION 2(31) MEANING OF ASSESSEE SECTION 2(7) MEANING OF INCOME SECTION 2(24)

BASIC CONCEPTS SALIENT FEATURES OF INCOME : REGULAR AND DEFINITE SOURCE RECEIPT V/S ACCRUAL INCOME INCLUDES LOSS SAME INCOME CANNOT BE TAXED TWICE INCOME SHOULD BE REAL AND NOT FICTIONAL ILLEGAL INCOME PRIZE ON WINNING A MOTOR RALLY LOTTERY INCOME – SECTION 2(24)(9)

GROSS TOTAL INCOME MEANING OF GROSS TOTAL INCOME : DEFINED UNDER SECTION 80B(5). AS PER SECTION 14, THE INCOME IS COMPUTED UNDER THE FIVE HEADS OF INCOME : THE AGGREGATE OF INCOME UNDER THESE HEADS OF INCOME IS TERMED AS GROSS TOTAL INCOME. GROSS TOTAL INCOME MEANS TOTAL INCOME COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT BEFORE MAKING DEDUCTIONS UNDER SECTION 80C-80U.

GROSS TOTAL INCOME As per Sec 14 Income of a person is computed under the following five heads : Salary XXXX Income from House Property XXXX Profits and Gains of Business XXXX or profession Capital Gains XXXX Income from Other sources XXXX -------- XXXX Less Set Off and carry forward of losses XXXX --------- xxxxx GROSS TOTAL INCOME Less Deductions u/s 80 C – 80 U XXXX TOTAL TAXABLE INCOME XXXX

Computation of Tax Liability Tax on Net Income XXX Add Surcharge XXX ----- Tax and Surcharge XXX Add Education Cess (@3% of Tax and Surcharge) XXX Less Prepaid Taxes XXX (TDS and Advance Tax) XXX ------ Final Tax Liability XXX

AGRICULTURAL INCOME AGRICULTURAL INCOME IS DEFINED U/S 2(1A) ANY INCOME DERIVED FROM LAND WHICH IS SITUATED IN INDIA AND IS USED FOR AGRICULTURAL PURPOSES. ANY RENT OR REVENUE DERIVED FROM LAND WHICH IS SITUATED IN INDIA AND IS USED FOR AGRICULTURAL PURPOSES. ANY INCOME ATTRIBUTABLE TO A FARM HOUSE W.E.F 01APRIL2009 ANY INCOME DERIVED FROM SAPLINGS OR SEEDLINGS GROWN IN A NURSERY SHALL BE DEEMED TO BE AGRICULTURAL INCOME – EXPLANATION 3 TO SECTION 2(1A). BASIC OPERATIONS PRIOR TO GERMINATION ARE ESSENTIAL. BASIC OPERATIONS INVOLVE EXPENDITURE OF HUMAN SKILL, LABOUR, TILLING OF LAND, SOWING OF THE SEEDS, PLANTING ETC. SUBSEQUENT OPERATIONS SUCH AS WEEDING,DIGGING OF THE SOIL, REMOVAL OF UNDESIRABLE GROWTH ETC.

INSTANCES OF AGRICULTURAL INCOME PROFIT ON SALE OF STANDING CROP AFTER HARVEST BY THE CULTIVATING OWNER. RENT FOR AGRICULTURAL LAND RECEIVED FROM SUBTENANTS. INCOME FROM GROWING FLOWERS AND CREEPERS. NON AGRICULTURA INCOME INSTANCES INCOME FROM SALE OF FOREST TREES, FRUITS AND FLOWERS GROWN SPONTANEOUSLY. INCOME FROM SALE OF WILD GRASS. INCOME OF SALT PRODUCED BY FLOODING THE LAND WITH SEA WATER. PROFIT ACCRUING FROM PRUCHASED OF STANDING CROP AND RESALE. INCOME FROM FISHERIES. ROYALTY INCOME OF MINES. INCOME FROM BUTTER AND CHEESE MAKING INCOME FROM POULTRY FARMING RECEIPT FROM TV SERIAL SHOOTING IN FARM HOUSE

SALARY SALIENT FEATURES OF SALARY RELATIONSHIP BETWEEN EMPLOYER AND EMPLOYEE SALARY AND WAGES NOT DIFFERENT SALARY MUST BE REAL AND NOT FICTIONAL FOREGOING OF SALARY SURRENDER OF SALARY TO CENTRAL GOVT. U/S 2 OF VOLUNTARY SURRENDER OF SALARY (EXEMPTION FROM TAXATION) ACT 1961.

SALARY TAX FREE SALARY. SALARY IS TAXABLE ON RECEIPT OR ACCRUAL BASIS WHICHEVER IS EARLIER. SALARY IS TAXABLE AT A PLACE WHERE SERVICES ARE RENDERED I.E. IF THE NON RESIDENT RENDERS SERVICES IN INDIA AS AN EMPLOYEE HE SHALL BE LIABLE TO TAX IN INDIA FOR THIS SALARY U/S 9(II). SALARY RECEIVED BY A GOVT EMPLOYEE WHO IS AN INDIAN CITIZEN FOR RENDERING SERVICES OUTSIDE INDIA SHALL BE TAXABLE IN INDIA ONLY U/S 9(III). PROFIT IN LIEU OF SALARY SECTION 17(III)

SALARY CONTD SALARY INCLUDES SECTION 17(I) WHAT A GREAT FUN AND LOVE AROUND AHA

COMPUTATION OF SALARY BASIC SALARY XXX ADD : SPECIAL PAY XXX ADD : BONUS XXX ADD : FEES/COMMISSION XXX ADD : ADVANCE SALARY XXX ADD : TAXABLE ALLOWANCES XXX ADD : TAXABLE PERQUISITES XXX ADD : RETIREMENT BENEFITS GRATUITY XXX PENSION XXX LESS : DEDUCTIONS ENTERTAINMENT ALLOWANCE PROFESSIONAL TAX

ALLOWANCES HRA SECTION 10(13A) ALLOWANCES EXEMPT TO THE EXTENT AMOUNT USED FOR OFFICIAL PURPOSES ALLOWANCES EXEMPT TO THE EXTENT LIMITS SPECIFIED IN THE ACT FULLY TAXABLE ALLOWANCE

PERQUISITES RAM COULD SAVE LAXMAN FINALLY SITA CLAPPED

SPECIFIED EMPLOYEE – PERQUISITE SECTION 17(2)(III) GO ENJOY TODAY IS SUNDAY MEDICAL ALLOWANCES MOTOR CAR PERQUISITES

NOTES WRITE A SHORT NOTE ON RETRENCHMENT COMPENSATION SECTION 10(10B) PROFIT IN LIEU OF SALARY SALARY RECEIVED UNDER VRS ENTERTAINMENT ALLOWANCE LEAVE TRAVEL CONCESSION WHAT ARE NON TAXABLE PERQUISITES ? CONTRIBUTION TO A RECOGNISED PROVIDENT FUND INTEREST FREE LOAN LESS THAN RS 20000. LOAN FOR MEDICAL TREATMENT PROVIDING USE OF COMPUTER,LAPTOP LEAVE TRAVEL CONCESSION TWICE IN A BLOCK OF 4 YEARS MEDICAL FACILITY IN THE HOSPITAL MAINTAINED BY EMPLOYER OR GOVT. FREE FOOD AND BEVERAGES GIFT IN KIND UPTO RS 5000.00 EMPLOYERS CONTRIBUTION TOWARDS SUPERANNUATION EXCEEDING RS 1 LAKH TELEPHONE, MOBILE NOT CHARGEABLE TO TAX.

GRATUITY RECEIVED BY GOVT EMPLOYEE GRATUITY RECD BY EMPLOYEE COVERED UNDER PAYMENT OF GRATUITY ACT 1972 OTHER CASES OF GRATUITY

UNCOMMUTED PENSION IS FULLY TAXABLE IN EVERY CASE. COMMUTED PENSION IN CASE OF GOVT EMPLOYEE IS FULLY EXEMPT COMMUTED PENSION BY OTHER EMPLOYEES

MEANING OF SALARY FOR DIFFERENT PURPOSES HRA - BASIC + DA(FP) + COMMISSION ENTERTAINMENT ALLOWANCE – BASIC RECOGNISED PF - BASIC + DA(FP) + COMMISSION GRATUITY – BASIC + DA(FP) + COMMISSION PENSION – BASIC + DA(FP) + COMMISSION PERQUISITES BASIC + DA(FP) + COMMISSION +BONUS + TAXABLE ALLOWANCES – (WILL NOT INCLUDE DA NOT FORMING PART OF RETIREMENT + PERQUISITES + PF CONTRIBUTION + INTEREST EXCEEDING 9.5%). IF FURNITURE OR ANY OTHER ASSET IS PROVIDED THEN 10% OF THE ACTUAL COST SHALL BE CONSIDERED.