Direct Tax Chart Book - CA Pranav Chandak PDF

DT CHART BOOK – CA PRANAV CHANDAK Income Upto 3 Lacs 3L – 6L 6L – 9L 9L – 12L 12L – 15L > 15 Lacs Income Upto 2.5 Lacs 2.5L – 5L 5L – 10L > 10L Rates Nil 5%...

DT CHART BOOK – CA PRANAV CHANDAK Income Upto 3 Lacs 3L – 6L 6L – 9L 9L – 12L 12L – 15L > 15 Lacs Income Upto 2.5 Lacs 2.5L – 5L 5L – 10L > 10L Rates Nil 5% 10% 15% 20% 30% Rates Nil [BEL] 5% 20% 30% Note: Certain exemptions/deductions are not available under new (default) scehem. Note: Exemptions/deductions are available. This scheme is optional. Note: Limit on Income for Section 87A Rebate → Rs. 7 Lacs. (Max. Rebate = Rs. 25,000) Note: Limit on Income for Section 87A Rebate → Rs. 5 Lacs. ◆ No Special BEL for Resident Senior Citizen & Resident Super Senior Citizen. ◆ For Resident Senior Citizen (Age: 60 years - 80 years) → BEL = 3 Lacs. NO alternate ◆ No AMT is payable under New Tax Regime. DETAILS IN TOTAL COMPUTATION CHAPTER ◆ For Resident Super Senior Citizen (Age: 80 years or more) → BEL = 5 Lacs. minimum tax Note: Special Incomes will always be taxable at the special rates. Slab rate is not applicable on special incomes under both the schemes. 112--20%,112A--10% ON above 1L, 111A-15%,115BB-30%,115BBJ-30% Jaise appn depn not taxable under new regime 115BBE-60% Firms/LLP/LA → Whole Income is taxable @ Flat 30% without any BEL. Co-operative Income Upto 10,000 ₹ 10,001 – ₹ 20,000 > 20,000 1. Calculate Tax (including surcharge) on Total Income of the assessee. Societies 2. Tax payable on Rs. 50 L/1 Cr/2 Cr/5 Cr. as the case may be. [Depends on levy of SC] Tax Rate 10% 20% 30% 3. Calculate “Extra Tax Payable” because of Income above 50 Lacs/1 Cr/2 Cr/5 Cr Company Domestic Company TO in PY 2021-22 ≤ 400 Cr 25% 4. Marginal Relief = Extra Tax Payable – Income above Rs. 50 Lacs/ 1 Cr/2 Cr/5 Cr. In other case 30% PC Note: If Extra Tax > Extra Income, Marginal Relief = Extra Tax - Extra Income. Foreign Company 40% PC Note: RATE OF SURCHARGE – OLD SCHEME [SC is levied as % of Income Tax] Individual/HUF/AOP/BOI/AJP (If No Share Market Income) If there is “Share Market Income” [Dividend, STCG u/s 111A, LTCG u/s 112A & 112] Income ≤ 50 L 50L – 1Cr 1 Cr – 2 Cr 2 Cr – 5 Cr > 5 Cr  Surcharge Rate of 25% & 37% → NA on ‘Share Market Income. Surcharge Nil 10% 15% 25% 37% (a) TI ≤ Rs. 50 Lacs No Surcharge RATE OF SURCHARGE – NEW SCHEME [SC is levied as % of Income Tax] (b) TI > Rs. 50 Lacs but ≤ Rs. 1 Cr Rate of Surcharge = 10% of Income Tax Individual/HUF/AOP/BOI/AJP (If No Share Market Income) (c) TI > Rs. 1 Cr. but ≤ Rs. 2 Cr Rate of Surcharge = 15% of Income Tax Income ≤ 50 L 50L – 1Cr 1 Cr – 2 Cr > 2 Cr No 37% SC u/s (d) TI > 2 Cr [Locha hai] Surcharge Nil 10% 15% 25% 115BAC Share Market Income Rate of Surcharge = 15% of Income Tax on share market income Surcharge for other Assessee ↓ TI > 1 Cr but ≤ 10 Cr TI > 10 Cr Other Incomes - 1. Firms/LLP/LA 12% 12% TI - ≤ Rs. 2 Cr. Rate of Surcharge = 15% of Income Tax ON other income 2. Domestic Company & Co-op Society 7% 12% TI - > 2 Cr. but ≤ Rs. 5 Cr. Rate of Surcharge = 25% of Income Tax 3. Foreign Companies 2% 5% TI - > 5 Cr IN NEW Scheme this remains as 25% Rate of Surcharge = 37% of Income Tax TO CALCULATE HEC IS ALWAYS THE LAST STEP Health & Education Cess = 4% of Tax + SC - Rebate u/s 87A. [Always Levied @ Last] Note: No SC @ 37% is levied in default (new) tax regime. So if income > 2 Cr, SC will be levied @ 25% in default (new) scheme. matlab,111A -short term capital gain nahi hai P gain 112A- long term capital a g nahi e |hai1 Q.15 OF full PC BOOK SOLVE ONCE after 112 -normal wala long term capital gain nahi aur dividend income nahi hai syllabus is complete DT CHART BOOK – CA PRANAV CHANDAK Assessee Resident Individual whose Total Income ≤ Rs. 5 Lacs Assessee Resident Individual whose Total Income ≤ Rs. 7 Lacs Rebate Lower of (i) Income Tax payable OR (ii) Rs. 12,500 Rebate Lower of (i) Income Tax payable OR (ii) Rs. 25,000  Rebate u/s 87A shall be before adding 4% of HEC. If TI > Rs. 7 Lacs (thoda sa), then rebate shall be [Same as Marginal Relief]  Rebate u/s 87A is not available in respect of tax payable @ 10% on LTCG u/s 112A (1) Compute Tax on TI (2) Compute Extra Income (i.e Income over Rs. 7 Lacs)  FMM: Rebate u/s 87A is available from Casual Incomes. PC Note: If Tax on TI > Extra Income, Rebate = Tax on TI – Extra Income. REST JUST READ ONCE 1 Income Tax Act, 1961 1. Individual: A Natural Human Being (Male/Female/Minor/Unsound Mind). ▪ Proviso: It gives exceptions to the provision contained in respective section. 2. HUF: Status in HUF is received by birth & not by operation of law. ▪ Explanation: It gives clarification to the provision contained in that section. ▪ Right to Partition - Only Co-parceners. 2 Annual Finance Act ▪ Members: All males lineally descended from common ancestor including their wives & unmarried daughters. [Note: Single male member can have HUF]. 3 Income Tax Rules ▪ All Co-parceners are Members but all members need not be co-parceners. 4 Notifications: Binding on everyone. [Assessee + Income Tax department] ▪ Coparceners → HUF may contain many members, but only members within 4 5 Circulars: Binding on department but not on assessee (but can take benefits). degrees including KARTA are called co-parceners (including daughters). 6 Case Laws (Judicial Decisions) PC Note: wife/daughter-in-law cannot be co-parceners; but they can be members. Assessee: It includes – 3. Company: Tax Payable Every Person by whom any tax or any other sum of money is payable ▪ Any Indian Company defined in section 2(26); under this Act (with/without any proceeding). ▪ Any Body Corporate incorporated under the foreign laws [Foreign company]; Proceeding Any Person against whom any proceeding has started (whether or not ▪ Association, Institution or Body declared by CBDT to be a company. [AIB] started any tax, interest or penalty is payable by him). 4. Firm (Reg/unregistered) (including LLP): Same Tax Treatment (Except 44AD) Deemed A person assessable for income of some other persons. 5. AOP/BOI Assessee in Person who does not (i) deduct tax or (ii) after deducting tax, fails to 6. Local Authority default pay tax deducted to government or (iii) pay advance tax. 7. Every Other AJP (not in above categories) Average Tax on Total Income ▪ Highest Slab Rate of Tax (including SC) applicable to Individual. Rate of Tax = Total Income ▪ For PY 23-24, MMR is 42.744% (Always for any slab of income). PERSON HAVING SUBSTANTIAL INTEREST IN THE COMPANY → Any beneficial owner of shares carrying at least 20% of voting power or share in the profit. Application of Income Diversion of Income ▪ If assessee applies (uses) his income to discharge his obligation, after the income ▪ If there is overriding charge on source of such income which diverts the income reaches assessee, it is application of income before it reaches assessee, it is diversion of Income. ▪ Such Income is taxable to assessee. ▪ Such Income cannot be treated as income & thus Not Taxable. Page |2 DT CHART BOOK – CA PRANAV CHANDAK CONCEPT OF PREVIOUS YEAR & ASSESSMENT YEAR First PY for Newly Set-up Business/Profession during FY [Section 3] Previous Year FY in which the income is earned. → From date of setting up of business & ending on last day of that FY (31st March of PY). Assessment Year FY in which income is assessed to tax. → PC Note: 1st PY of newly set-up business/profession will be ≤ 12 Months. It cannot exceed 12 Months. 1. Shipping business of Non-Residents [Sec 172] Illegal/tainted income → Illegal Income is also taxed. 2. Person Leaving India [Sec 174] Disputed Income → Taxable to recipient till the dispute is settled. 3. AOP/BOI/AJP formed for a particular event/purpose [Sec 174A] Contingent Income → not an income & thus not taxed. 4. Persons likely to transfer property to avoid tax [Sec 175] 5. Discontinued Business [Sec 176] Pin Money → Income ; Any property acquired using such money → CA. PC Note: Sec. 176 is a Discretionary power. AO may choose to assess income in AY. Income must come from Outside: A person cannot earn income from himself. 1. Cash Credits [Section 68] (i) Salary; (ii) HP; (iii) CG Method of Accounting is irrelevant. 2. Unexplained Investments [Section 69] (i) PGBP; (ii) IFOS Method of Accounting is relevant. 3. Unexplained Money/Bullion/Jewellery [Section 69A] Space for PC Class Note: 4. Amount of Investments not fully disclosed in books [Section 69B] 5. Unexplained Expenditure [Section 69C] 6. Amount borrowed or repaid on Hundi [Section 69D] PC Note: But if any amount borrowed on hundi has been taxed as income of the person, Capital Receipts Not Taxable unless expressly provided. he will not be taxed again on repayment of such amount. Revenue Receipts Always Taxable unless expressly exempt. Rate of Tax u/s 68 & 69 [Sec 115BBE] = 60% + SC @ 25% + HEC @ 4% = 78%. PC Note: Neither BEL nor set off of any loss shall be allowable against such income. Space for PC Class Note: 1. Liquidated damages → Capital receipt. Amount received towards compensation for sterilization of profit earning source is not in ordinary course of business. 2. Compensation received from the employer or from any person for premature termination of the service contract is a capital receipt but is taxable as profit in lieu of salary u/s 17(3) or IFOS u/s 56(2)(xi), respectively. 3. Compensation received or receivable in connection with termination/modification of T&C of any contract relating to its business shall be taxable as business income. Page |3