Professional Documents
Culture Documents
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Previous Year:
Income earned in the twelve months contained in the
period from 1st April to 31st March (commonly called
Financial Year) is taken into account for purposes of
calculating Income Tax. Under the income tax Act this
period is called a Previous year.
Assessment Year:
It is the twelve-month period 1st April to 31st March
immediately following the previous year. In the
Assessment year a person files his return for the income
earned in the previous year.
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Resident:
If an individual stays in India for 182 days or more in a
year, he is treated as resident in that year regardless of
his citizenship. If the stay is less than 182 days he is a
non-resident.
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Taxable Income:
Under the Act, all incomes earned by persons are
classified into 5 different heads, such as:
Income from Salary
Income from House property
Income from Business or Profession
Income from Capital gains
Income from other sources
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Exempt Income (Section 10):
Section 10 grants certain exemptions on incomes earned by the
assessees. Some of which arAgricultural income
1) Leave Travel Concession received from employer.
2) Gratuity (As per conditions mentioned in the Act)
3) Commuted pension (As per conditions)
4) Leave Encashment (As per conditions)
5) Compensation received for voluntary retirement- upto maximum
of Rs.5 lacs.
6) House Rent Allowance (As per conditions)
7) Payments received from recognized provident fund.
8) Prescribed allowances.
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Meaning of salary:
Salary under the Act is defined U/s 17(1), which includes
the following:-
Wages
Annuity or Pension
Gratuity
Fees, commission, perquisites, profit in lieu of salary
Any advance of salary
Leave Travel Concession
Transferred balance in a recognized Provident Fund,
to the extent it is taxable.
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Allowances:
i. Entertainment Allowance - Exempt only for
Govt. employees.
ii. Conveyance Allowance - Exempt to the
extent of expenditure incurred.
iii. Children Education allowance - Exempt upto
Rs.100 p.m. per child to a maximum of 2
children.
iv. Transport Allowance- Exempt upto Rs.800
p.m.
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(For individuals)
NET INCOME RANGE RATES
Upto Rs.1,60,000 Nil*
Next Rs.1,60,000-Rs.3,00,000 10%
Next Rs.3,00,000-Rs.5,00,000 20%
Next Above Rs.5,00,000 30%
Return Of Income:
Last dates for filing of return:
STATUS LAST DATE
Companies 30th September
Other Entities that require audit 30th September
of their accounts
Other cases 31st July
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Calculation of tax:
Basic salary xxx
Commission xxx
Allowances (minus exemptions) xxx
@ oss sala xxx
Other income xxx
@ oss Total income xxx
Less: Deduction u/s 80C xxx
Net Income xxx
Income tax on net income xxx
Add: Surcharge xxx
Add: Education Cess xxx
Add: Secondary and higher edu. Cess xxx
Tax paable xxx