Please refer for a crisp reading on types of income and return filing under the Income Tax Act 1961

1. INCOME TAX
AND RETURN
FILING
AN OVERVIEW
BY SATYARTH PRAKASH DWIVEDI
©WORKSHOP ON INCOME TAX AND RETURN FILING

2. BY SATYARTH PRAKASH DWIVEDI
WHAT IS INCOME TAX?
As the name itself suggests, Income Tax is a tax on income charged by the Central
Government under the Income Tax Act, 1961.
Mr. X works as a consultant with ABC Pvt. Ltd.
ABC Pvt. Ltd.
Now the Central Government in order to develop the economy and the infrastructure
of the country charges an amount out of the income earned by individuals like Mr. X
and businesses like ABC Pvt. Ltd. in the form of Income Tax. The taxes charged on
income of an assessee i.e Mr. X or ABC Pvt. Ltd. are known as Direct Taxes.
©WORKSHOP ON INCOME TAX AND RETURN FILING

3. BY SATYARTH PRAKASH DWIVEDI
HEADS OF INCOME?
Incomes are taxed under the following heads
salary
House
property
Profits and
Gains of
Business and
Profession
Capital
Gains
Other
source
s
©WORKSHOP ON INCOME TAX AND RETURN FILING

4. BY SATYARTH PRAKASH DWIVEDI
Income From Salary
Income is chargeable under the head salaries if the following conditions exist:
Employer-employee relationship
Full Time or Part time payment
Foregoing of salary
Surrender of salary-Exempt when surrendered to Central Government
Salary paid tax free
Place of accrual of salary- Earned in India then taxable in India
©WORKSHOP ON INCOME TAX AND RETURN FILING

5. Salary Includes the following:
Wages
Any annuity or pension
Any gratuity
Any fees, commission, perquisite or profits in lieu of salary or in addition to any salary or
wages
Any advance of salary
Any payment received in respect of any period of leave not availed by him i.e. leave
salary or leave encashment.
Provident Fund
Contribution by an employer to New Pension Scheme under section 80CCD
BY SATYARTH PRAKASH DWIVEDI
Income From Salary
©WORKSHOP ON INCOME TAX AND RETURN FILING

6. BY SATYARTH PRAKASH DWIVEDI
Income From House Property
Income is chargeable under the head house property if the following conditions are fulfilled:
Property should consist of any building or land appurtenant thereto.
Assessee must be the owner of the property.
Property shall not be used for the purpose of business or profession carried on by him.
Property held as stock in trade.
©WORKSHOP ON INCOME TAX AND RETURN FILING

7. BY SATYARTH PRAKASH DWIVEDI
Income From House Property
Rs.
Computation of GAV
Step 1
Compute Expected Rent which is higher of Market Value and
Fair Rent
Step 2 Compute actual rent received/receivable less unrealised rent
Step 3 Compare actual rent received/receivable with Expected Rent
Step4 Higher of the two will be the Gross Annual Value(GAV) A
Less: Municipal Taxes paid by the owner during the previous year B
Net Annual Value C
Less: Deductions u/s 24
(a) 30% of NAV D
(b) Interest on borrowed capital
(actual without any ceiling limit) E
Income From House Property F
Computation of Income From House Property
©WORKSHOP ON INCOME TAX AND RETURN FILING

8. BY SATYARTH PRAKASH DWIVEDI
PROFITS AND GAINS OF BUSINESS AND PROFESSION
MEANING OF THE TERM ‘BUSINESS’
The term business has been defined in section 2(13) to include any trade, commerce or
manufacture or any adventure or concern in the nature of trade, commerce or
manufacture.
MEANING OF THE TERM ‘PROFESSION’
The term profession has not been defined in the act. It means an occupation requiring
some degree of learning. The term profession includes vocation as well 2(36).
PRESUMPTIVE TAXATION
Section 44AD of the Income Tax Act, 1961 provides for presumptive taxation where
Taxable income of a “business” is calculated at the rate of 8% of Gross Turnover in
case of cash receipts and 6% in case of receipts other than cash or through electronic
means and on such Taxable Income tax is calculated thereon. It is applicable only where
Gross Turnover is less than Rs.2 Crore.
Similarly a section 44ADA was introduced for income from “profession” which is
calculated at 50% of the Gross Receipt and on such taxable income tax is calculated
thereon. It is applicable where gross receipts are less than Rs.50 lakhs.
©WORKSHOP ON INCOME TAX AND RETURN FILING

9. BY SATYARTH PRAKASH DWIVEDI
INCOME FROM CAPITAL GAINS
Any profits or gains arising from transfer of a Capital Asset effected in the previous year
will be chargeable to income tax under the head Capital Gains
Exclusions from the definition of capital asset:
Stock in trade
Personal effects- Movable property i.e wearing apparel or furniture
Rural Agricultural Land in India
Specified Gold Bonds
Special Bearer Bonds 1991
Gold Deposit Bonds
©WORKSHOP ON INCOME TAX AND RETURN FILING

10. BY SATYARTH PRAKASH DWIVEDI
INCOME FROM OTHER SOURCES
It is a residual head i.e any income which cannot be taxed under the earlier 4 heads of
income are taxed under this head.
For example dividend income, interest on securities, gifts, cash credits, winnings from
horse races or lotteries etc.
©WORKSHOP ON INCOME TAX AND RETURN FILING

11. BY SATYARTH PRAKASH DWIVEDI
FILING OF RETURN OF INCOME
Every company, partnership firm or Limited Liability Partnership is
mandatorily required to file return of income.
For any assessee other than above if Gross Total Income is more
than the basic exemption limit then return filing is compulsory.
SLAB RATES
Individuals and HUF (Resident or
Non-Resident)
Upto Rs.250,000
NIL
>250,000 upto 5,00,000 10%
>5,00,000 upto 10,00,000 20%
Above 10,00,000 30%
Resident Senior Citizen (Age 60
years or more in p.y)
Upto Rs.300,000
NIL
>300,000 upto 5,00,000 10%
>5,00,000 upto 10,00,000 20%
Above 10,00,000 30%
SURCHARGE @15% OF TAX IF NTI >1CRORE
©WORKSHOP ON INCOME TAX AND RETURN FILING

12. BY SATYARTH PRAKASH DWIVEDI
SLAB RATES
COMPANIES TAX RATES SURCHARGE ON TAX
NTI>1CRORE BUT
<10CRORE
NTI>10CRORE
DOMESTIC COMPANIES-IF T/O
OR GROSS RECEIPT OF P.Y
2014-15 <RS.5 CRORE
29% @7% @12%
DOMESTIC COMPANIES-
OTHERS
30% @7% @12%
FOREIGN COMPANIES 40% @2% @5%
For partnership firms/LLP/Local Authorities Tax Rate will be 30% and surcharge
will be @12% of Tax if NTI>Rs.1Crore
©WORKSHOP ON INCOME TAX AND RETURN FILING

13. BY SATYARTH PRAKASH DWIVEDI
FORMS FOR FILING RETURN OF INCOME
DESCRIPTION ITR
For individuals having income from salaries, one house property, other
sources (interest etc.) and having total income upto Rs.50lacs
1
For individuals and HUFs not carrying out business or profession under any
proprietorship
2
For individuals and HUF having income from a proprietary business or
profession
3
For presumptive income from business profession 4
For persons other than (i) individual (ii) HUF (iii) Company and (iv) Person
filing form ITR-7
5
For companies other than companies claiming exemption under section 11 6
For persons including companies required to furnish return under sections
139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F)
7
©WORKSHOP ON INCOME TAX AND RETURN FILING

14. BY SATYARTH PRAKASH DWIVEDI
FORMS FOR FILING RETURN OF INCOME
A detailed discussion on return filing and other income
tax provisions is made in the classrooms.
©WORKSHOP ON INCOME TAX AND RETURN FILING

15. –Satyarth Prakash Dwivedi
9582016799
9140615260
satty90@gmail.com
Thank You Every One For Being Patient, patience
is a virtue.
BY SATYARTH PRAKASH DWIVEDI
©WORKSHOP ON INCOME TAX AND RETURN FILING