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Income Tax Rule

  • Income-tax, in India, is a tax payable, annually, at the rate enacted by the Indian Union Budget (Finance Act) for every Assessment Year, on the Total Income earned in the Previous Year by every Person.
  • The chargeability is based on the nature of income, i.e., whether it is revenue or capital. The principle of taxation of income is: -
    • All revenue incomes are chargeable to tax unless it is specifically exempt (declared as not taxable)
    • All capital profits are not chargeable to tax unless specifically made chargeable.
  • The computation of the total income of any person depends on the Residential Status of such person.
  • The Residential Status of a person is of two categories, viz.,
    1. Resident
    2. Non Resident


    However, in case of Individuals and Hindu Undivided Families (HUFs) the category Resident is divided into two, viz., 

    1. Resident and Ordinarily Resident (also termed simply as 'Resident')
    2. Resident but not Ordinarily Resident.


  • All Indian residents are taxable for all their income, including income outside India.
  • Non resident Indians are taxable only for income,


    • Received in India or
    • Income accrued in India.


  • Not Ordinarily residents of India are taxable in relation to income,


    • Received in India or
    • Income accrued in India or
    • Income from business or profession controlled from India.


  • Gross Total income is sum of Income under the following heads : -


    • Salaries
    • Income from House Property
    • Business Income
    • Capital Gains
    • Other Sources


  • Total Income = Gross Total Income - Deduction Under Chapter VI-A
  • In computing the total income, the following related provisions should also be taken into consideration: - 

    Chapter III of the Indian Income-tax Act
    Incomes, which do not form part of Total Income.


    Chapter V of the Indian Income-tax Act
    Income of other persons, included in the assessee's total income.



    Chapter VI of the Indian Income-tax Act
    Aggregation of Income and Set-off and Carry Forward of Losses.



    Chapter VII of the Indian Income-tax Act
    Incomes forming part of Total Income on which no income-tax is payable.


  • Besides, certain other special provisions relating to non-residents, companies, firms, liability in special cases, etc. needs to be taken into account in determining the total income.
  • Generally, the income of the previous year is chargeable to income-tax in the assessment year. However, in the following cases, the income of the previous year is charged in the previous year itself: - 
    • Shipping Business of Non-Residents
    • Assessment of Persons leaving India
    • Assessment of Persons likely to transfer property to avoid tax
    • Assessment of AOP, BOI or Artificial Juridical Persons formed for a particular venture
    • Discontinued Business or Profession
  • Income-tax is payable at the rates prescribed by the Union Budget for every assessment year. Rebates and Reliefs are available under sections 88E, 89, 90 & 91 in certain cases.
  • The Income-tax shall be paid by the assessee by Advance Tax/Self-Assessment tax, as the case may be. For delay/non-payment of Income-tax (either Advance or Self Assessment) interest/penalty is levied. The Income-tax chargeable as above, shall be deducted at source (TDS), collected at source (TCS) or paid in advance (Advance Tax - if Tax Payable exceeds Rs.5,000/-). 
  • In the case of certain entities like, Lorry Owners, Contractors, Retail Traders and certain Non-residents, tax is payable on presumptive income (notional income). Similarly, a Company is liable to pay Minimum Alternate Tax on notional income (book-profit).
  • All persons having losses or taxable income are required to file Return of Income. However, certain persons who do not have taxable income are also required to file return for better tax administration.
  • For better tax monitoring, certain category of assesses are now required to obtain Permanent Account Number (PAN). Obtaining PAN has been made mandatory for certain type of Transactions, like Property/Vehicle Sale/Purchase, FDs in Banks/Post Offices, Share transactions, etc.
  • Books of Account are required to be maintained by certain class of persons and Audit to be carried out in certain other cases.
  • Further, there are several other special provisions, penalty/prosecution provisions, powers of the income-tax authorities, restrictions on certain transactions, etc.

Regular investing in MF schemes reached a new milestone, with SIP accounts crossing 4 crore and SIP AUM reaching an all-time high of Rs 483,964 crore
Fri, 09 Jul 2021 12:12:17 +0530

Investors have put in bids for 74.15 crore equity shares against offer size of 56.85 lakh equity shares, the subscription data available on exchanges showed.
Fri, 30 Jul 2021 11:36:54 +0530

Exxaro Tiles IPO: The company will utilise the net proceeds from fresh issue for repaying debt (Rs 50 crore), and working capital requirements (Rs 45 crore).
Fri, 30 Jul 2021 08:32:08 +0530

Devyani International IPO: Investors seem to be more excited about the issue, especially after the great success of IPOs of Zomato and Barbeque Nation Hospitality.
Fri, 30 Jul 2021 08:18:34 +0530

The net proceeds from its fresh issue will be utilised for repaying of debt (Rs 50 crore), and working capital requirements (Rs 45 crore).
Thu, 29 Jul 2021 18:15:56 +0530

Tatva Chintan traded with volumes of 78.60 lakh equity shares on the NSE and 8.99 lakh shares on the BSE
Thu, 29 Jul 2021 17:43:36 +0530

Tatva Chintan Pharma Chem IPo shares gained more than 100 percent in one of the strongest listings in 2021. GR Infraprojects rallied 108.7 percent and Indigo Paints climbed 109.31 percent on listing day
Thu, 29 Jul 2021 12:54:45 +0530

Rolex Rings IPO has, so far, received bids for 2.87 crore equity shares against an initial public offering size of 56.85 lakh equity shares
Thu, 29 Jul 2021 11:53:10 +0530

Glenmark Life is planning to raise Rs 1,513.6 crore through its IPO, which comprises a fresh issue for Rs 1,060 crore and an offer for sale of 63 lakh equity shares by Glenmark Pharma
Thu, 29 Jul 2021 11:29:06 +0530

Tatva Chintan IPO was subscribed 180.35 times. The specialty chemical company will utilise net proceeds from its fresh issue to expand its manufacturing facility in Dahej and upgrade the RD facility in Vadodara
Thu, 29 Jul 2021 10:00:23 +0530

Windlas Biotech IPO: Promoter Vimla Windlass will sell 11.36 lakh equity shares, and investor Tano India Private Equity Fund II will offload its entire stake of 40,06,067 equity shares (or 22 percent of pre-offer paid up equity) via offer for sale.
Thu, 29 Jul 2021 08:10:42 +0530

The company will separately announce price band and lot size for its IPO in coming few days. The issue will close on August 6.
Wed, 28 Jul 2021 18:55:01 +0530

The price band for the offer could be disclosed separately by the company in coming days. The issue will close on August 6.
Wed, 28 Jul 2021 13:12:35 +0530

Arihant Capital has come out with its report on Rolex Rings. The research firm has recommended to #39;#39;Subscribe#39;#39; the ipo in its research report as on July 27, 2021.
Wed, 28 Jul 2021 12:29:56 +0530

KR Choksey has come out with its report on Rolex Rings. The research firm has recommended to #39;#39;Subscribe#39;#39; the ipo in its research report as on July 28, 2021.
Wed, 28 Jul 2021 12:23:59 +0530

Considering the business growth outlook and almost stable operating margins, Choice Broking assigned a #39;subscribe#39; rating to the issue.
Wed, 28 Jul 2021 11:42:58 +0530