Income Tax Computation

Chapter 1: Income Tax Basics

Introduction

• Income Tax
• Why are taxes levied?
• Power to levy taxes
• Income-tax Act, 1961
• Important Definitions
• Charge of Income-tax
• Financial Year (FY) and Previous Year (PY)
• Residential Status
• What is Income Tax?
• The Income-tax Act, 1961
• Tax Law Terminology
• Section 4: Charge of Income-tax
• Residential Status: Does it Matter Where They Live?

Heads of Income

• Heads of Income
• Income from Salary
• Income from House Property (HP)
• Capital Gains (CG)
• Income from Other Sources
• Computation Process

Income Tax Rates for Individuals

• Income Tax Rates
• Tax Slab Rates for Individuals
• Taxation under Old Regime
• Cess
• Tax under New Regime (Section 115BAC)
• Comparison between Old and New Tax Regime
• What Are Income Tax Rates?
• Tax Slab System Individual / Hindu Undivided Family (HUF) / Association of Persons (AOP) / Body of Individuals (BOI) / Artificial Juridical Person
• What is Old Regime vs New Regime?
• Income Tax Slabs under Old Regime (FY 2024–25)
• Default Tax Regime for Individual / HUF / AOP / BOI / AJP [Sec. 115BAC] – FY 2024–25

Rebate under Sec 87A

• Income Tax Rebate under Section 87A
• Rebate against various tax liabilities

Income Tax Rates for Others

• Income Tax Rates for Non-Individuals
• NRI or HUF or AOP or BOI or AJP
• Cess & Surcharge for NRI, HUF, AOP, BOI or AJP
• Partnership Firm or LLP
• Domestic Companies
• Income Tax Rate for Foreign Companies
• Income Tax Rates for Others
• Company

Tax Calculation

• Steps to Compute Income Tax
• Clubbing of income of spouse, minor child etc.

Case Study

• Case Study

Assignment

• Assignment

Chapter 2: Salary & Allowances

Introduction

• Salary
• Condition for Taxation of Income under the head Salary
• Provisions of Income Tax for Salary
• Basis of charge (Section 15)
• Deductions
• Salary, perquisite and profits in lieu of salary (Section 17)

Taxability of Salary

• Taxability of Salary
• Basic Salary
• Allowances
• Allowances which are fully taxable under both regime
• Partly Taxable / Partly Exempt Allowances
• Fully Exempt Allowances
• Documents required for claiming allowance
• Perquisites
• Computation of Salary, at a glance

HRA Exemption

• House Rent Allowance (HRA) [Section 10(13A)]
• Calculation of HRA Exemption
• Conditions to be satisfied for Claiming HRA
• Points to be remembered

Section 80GG

• Section 80GG

Retirements Benefits

• Retirement benefits
• GRATUITY
• PENSION
• PROVIDENT FUND
• Gratuity – One-time Lump Sum for Past Service
• Pension – Regular Monthly Income Post Retirement
• Provident Fund (PF) – Long-Term Retirement Savings

Case Study 1

• Case Study 1

Case Study 2

• Case Study 2

Assignment 1

• Assignment 1

Assignment 2

• Assignment 2

Chapter 3: Income from House Property

Introduction

• Income from House Property
• Basis of Charge (Section 22)
• Condition for Chargeability
• Points to remember

Annual Value

• Determination of Annual Value (Section 23)
• Actual rent where the property is vacant

Deductions

• Deductions under House Property
• Municipal Taxes Paid
• Standard Deduction
• Pre-Construction Interest
• Property owned by co-owners

Case Study 1

• Case Study 1

Case Study 2

• Case Study 2

Assignment 1

• Assignment 1

Assignment 2

• Assignment 2

Chapter 4: Capital Gain and Other Sources

Introduction

• Capital Gain
• Definition of Transfer
• What is a Capital Asset? [Section 2(14)]
• Meaning of “Transfer” in Capital Gains
• Classification of Capital Assets Based on Period of Holding

Computation of Capital Gain

• Computation of Capital Gains
• Method of Computation under Head Capital Gains
• Computation of Short-term Capital Gains
• Computation of Long-term Capital Gains
• Calculation of Short-Term Capital Gains (STCG)
• Calculation of Long-Term Capital Gains (LTCG)

CG Tax Rate

• Tax Rates – Long-Term Capital Gains and Short-Term Capital Gains
• Tax on Equity and Debt Mutual Funds
• Exemption from Capital Gain (Section 54)
• Exemption from Capital Gain (Section 54EC)
• Capital Gains Taxation in India (FY 2024-25 / AY 2025-26)
• Capital Gains Tax on Mutual Funds

Case Study 1

• Case Study 1
• Case Study 1

Income from Other Sources

• Income from Other Sources
• Specific Incomes Included Under “Income from Other Sources”

Case Study 2

• Case Study 2

Assignment

• Assignment

Chapter 5: Deductions & IT Computation

Introduction

• Tax Planning
• How to save taxes in India with the help of Tax Planning?
• List of deduction under Chapter VIA
• Deductions are not allowed from the following incomes
• Tax Avoidance
• Tax Evasion

Section 80C

• Deduction in Respect of Investments in Specified Assets (Sec 80C)
• Admissible Deductions under 80C

Section 80D

• Deduction in respect of Medical Insurance Premium (Sec 80D)

Section 80DD & 80U

• Deduction in respect of Rehabilitation of Handicapped Dependent Relative (Sec 80DD)
• 80U Eligibility – Who can claim this deduction?

Section 80G & 80GGC

• Contributions made to certain Relief Funds and Charitable Institutions (80G)

Section 80TTA & 80TTB

• Deductions in respect of Interest Income (Sec 80TTA)
• Section 80TTB Deductions in respect of Interest Income for Senior Citizens

Other Deductions

• Other Deductions
• Deduction in Respect of Contribution to Pension Scheme of CG (Sec 80CCD)
• Loan for Higher Studies (Sec 80E)
• Deduction for Rent Paid (80GG)

Tax Payment

• Self Assessment Tax
• Self Assessment Tax Payment Process
• 1. Without logging into the e-Filing Portal
• 2. Log into the e-Filing Portal (Pay Tax Online)

Case Study 1

• Case Study 1

Case Study 2

• Case Study 2

Assignment 1

• Assignment 1

Assignment 2

• Assignment 2

Chapter 6: Advance Tax Computation of an Individual

Introduction

• Advance Tax
• Due date for Advance Tax

Computation & Interest

• Steps to Compute Advance Tax of Individual
• Interest for non-payment or short-payment of advance tax (Section 234B)
• Interest payable for deferment of Advance Tax installments (Section 234C)

Payment

• Advance Tax Payment Process
• Steps in Payment of Advance Tax
• Step 1: Login and Select e-Pay Tax
• Step 2: Select Assessment Year & Minor Head
• Step 3: Add Tax Details and Make Payment

Case Study

• Case Study

Assignment

• Assignment