IT Act With Master Guide to Income Tax Act

Income Tax Act with Master Guide to Income Tax Act SECTION

Income Tax Act

PAGE

CONTENTS 1

DIVISION ONE Income-tax Act, 1961

PAGE ◆

Arrangement of Sections

◆

Text of the Income-tax Act, 1961 as amended by the Finance Act, 2012

◆ ◆

I-3 1.1

Appendix : Text of remaining provisions of Allied Acts referred to in Income-tax Act

1.1057

Subject Index

1.1123

2

DIVISION TWO Finance Act, 2012 ◆

Arrangement of Sections

2.3

◆

Text of the Finance Act, 2012

2.7

3

DIVISION THREE National Tax Tribunal Act, 2005 ◆

Arrangement of Sections

3.3

◆

Text of the National Tax Tribunal Act, 2005 as amended up to date

3.5

4

DIVISION FOUR Securities Transaction Tax ◆ ◆

Arrangement of Sections Text of the Securities Transaction Tax as amended by the Finance Act, 2012 v

4.3 4.5

CONTENTS

Master Guide to Income Tax Act

PAGE

CONTENTS PAGE

DIVISION ONE Commentary on Finance Act, 2012 u

Amendments made by Finance Act, 2012 at a glance

1.3

1 GENERAL ANTI AVOIDANCE RULE (‘GAAR’)

1.1

Introduction

1.83

1.2

1.1.1 Nature of provisions Objective

1.84 1.85

1.3

Arrangement

1.87

1.3.1 Definition 1.3.2 Analysis Arrangement ‘entered’ into by assessee ‘may’ be declared to be an impermissible avoidance arrangement (IAA)

1.87 1.87

1.5

1.4.1 Onus 1.4.2 May Impermissible Avoidance Arrangement (IAA)

1.90 1.90 1.91

1.6

1.5.1 Conditions 1.5.2 Illustrations 1.5.3 Factual exercise Explanation to section 95

1.91 1.92 1.92 1.92

1.7

1.6.1 May 1.6.2 Onus Options available to Assessing Officer for invoking GAAR

1.93 1.93 1.93

1.4

I-7

1.90

CONTENTS

I-8 PAGE

1.8

Tax benefit

1.94

1.9

1.8.1 Definition 1.8.2 Analysis Main purpose

1.94 1.94 1.95

1.10

1.9.1 Main 1.9.2 Purpose Statutory presumption

1.95 1.97 1.101

1.11

1.10.1 Shall presume Alternate Conditions

1.102 1.104

1.11.1 Onus Creation of rights or obligations which are not ordinarily created [section 96(1)(a)]

1.104

1.13

1.12.1 Ordinarily 1.12.2 Arm’s length Misuse or abuse of the provisions of the Act [section 96(1)(b)]

1.104 1.104 1.106 1.106 1.106

1.14

1.13.1 Abuse 1.13.2 Objective behind introduction of a provision 1.13.3 Benefit of a provision in the Act does not per se result in abuse/misuse Lack of commercial substance [Section 96(1)(c)]

1.12

1.15

1.14.1 Arrangement lacking or deemed to lack commercial substance 1.14.2 Meaning of commercial substance 1.14.3 Illustration 1.14.4 Deemed lack of commercial substance 1.14.5 Irrelevant factors 1.14.6 Direct Taxes Code 1.14.7 Round trip financing 1.14.8 Accommodating Party Carried out by means or manner not ordinarily employed for bona fide purposes 1.15.1 Ordinarily 1.15.2 Bona fide purpose

1.104

1.106 1.107 1.107 1.107 1.107 1.107 1.108 1.108 1.109 1.110 1.111 1.111 1.111

I-9

CONTENTS

PAGE

1.16

Arrangement to be ‘declared’ to be an IAA

1.112

1.17

Consequences of applicability of Chapter X-A [section 98]

1.113

1.18

1.17.1 Statutory provisions 1.17.2 Analysis Application of GAAR (section 100)

1.113 1.114 1.115

Chapter to be applied in accordance with prescribed guidelines etc.

1.115

Procedure regarding application of GAAR by Income tax department (section 144BA)

1.116

1.19 1.20

1.21 1.22

1.20.1 Steps 1.20.2 Consequences of directions 1.20.3 Other matters 1.20.4 Analysis 1.20.5 AO’s reference 1.20.6 Assessment proceedings 1.20.7 Opinion by Commissioner 1.20.8 Approving Panel 1.20.9 Prior approval of the Commissioner 1.20.10 Nature of proceedings before the AO in relation to determination of consequences 1.20.11 Tremendous sanctity of the review by the Commissioner/Approving Panel Appeal against assessment order Advance ruling in respect of an impermissible avoidance arrangement

1.22.1 Background 1.22.2 Amendments 1.22.3 Analysis 1.22A GAAR vis-à-vis binding force of AAR’s rulings 1.23

Other aspects of GAAR and applicability of GAAR to other provisions 1.23.1 Complex and interlinked provisions 1.23.2 Benefit 1.23.3 Relevance of Finance Minister’s speech and Explanatory Memorandum

1.116 1.117 1.117 1.118 1.119 1.120 1.120 1.121 1.122 1.124 1.125 1.125 1.125 1.125 1.126 1.126 1.127 1.127 1.127 1.128 1.128

CONTENTS

I-10 PAGE

1.23.4 No threshold limit 1.23.5 Legal or genuine arrangements are also covered 1.23.6 Non-related parties 1.23.7 Whether applicable to past transactions? 1.23.8 Non obstante provisions 1.23.9 Year of application of Chapter XA 1.23.10 GAAR and DTAA 1.23.11 Applicability to Court sanctioned schemes 1.23.12 Specific Anti Avoidance Regulations (SAAR) v. General Anti Avoidance Regulations (GAAR) 1.23.13 Assessment of representative assessee 1.23.14 TDS 1.23.15 Penalties 1.23.16 Recommendations by the Standing Committee of the Parliament 1.23.17 Onus 1.23.18 Implications under other laws Annex 1.1 Reliance on Memorandum explaining the provisions of the Finance Bill

1.129 1.129 1.129 1.129 1.130 1.131 1.132 1.135 1.137 1.137 1.138 1.140 1.141 1.142 1.142 1.143

2 TAXATION OF NON-RESIDENTS

2.1

Amendment to definition of property

1.146

2.2

2.1-1 Amendment 2.1-2 Analysis Amendment to definition of transfer

1.146 1.146 1.148

2.3

2.2-1 Amendment 2.2-2 Analysis Amendment to section 9(1)(i)

1.148 1.149 1.150

2.4

2.3-1 Brief description of amendments in section 9(1)(i) Statutory explanation regarding the amendment in section 9(1)(i)

1.150 1.150

2.4.1 2.4.2 2.4-3

1.151 1.151 1.153

Notes on Clauses to Finance Bill, 2012 Explanatory Memorandum to Finance Bill, 2012 Finance Minister’s Speech

I-11

CONTENTS

PAGE

2.5

Analysis of amendment in section 9(1)(i)

1.153

2.6

2.5-1 Explanation 4 2.5-2 Explanation 5 Consequences of the amendments in section 9(1)(i)

1.153 1.153 1.154

2.6.1 2.6.2 2.6.3 2.6.4 2.6-5 2.6-6

No threshold for smaller transactions No exception to listed companies No limit to tiers Illustration Interest in any entity is covered by the amendment No proportionate abatement qua value derived from non India assets 2.6.7 Determination of value 2.6-8 Taxation of transfer of shares in all holding companies situated in the UK/USA 2.6-9 No step up of cost 2.6.10 ‘Through’ qualifies all the limbs of section 9(1)(i) 2.6-11 Substantial Retrospectivity

1.154 1.154 1.154 1.154 1.156

2.7.1 2.7-2 2.7-3 2.7-4 2.7-5 2.7-6

1.160 1.161 1.161 1.163 1.164

2.7

General principles regarding retrospective amendment Retrospective legislation and Income-tax Restrictions on retrospective amendments Retrospective amendment when permissible Onus to prove that amendment not permissible Factors considered relevant in assessing unreasonableness of amendment 2.7.7 View 1 : Retrospective amendment to section 9(1)(i) is permissible 2.7.8 View 2 : Retrospective amendment to section 9(1) and allied provisions is not permissible (see paras 2.7.8 to 2.7.12) 2.7-9 Amendment to ‘through’ 2.7-10 Explanation 5 regarding ‘deemed’ location in India 2.7-11 Fresh imposition of levy 2.7-12 Validation clause

1.156 1.156 1.157 1.158 1.158 1.158 1.160

1.164 1.165

1.167 1.168 1.171 1.176 1.177

CONTENTS

I-12 PAGE

2.8

Amendments to section 9(1)(vi)

1.178

2.9

2.8.1 Amendments 2.8-2 Object 2.8-3 Analysis Amendment to section 90

1.178 1.178 1.179 1.181

2.10

2.9-1 Amendment 2.9-2 Analysis Amendments to section 90A

1.181 1.182 1.190

2.11

Section 115A

1.191

2.12

Amendment in relation to taxation of non-resident entertainers (Section 115BBA)

1.191

2.12-1 Analysis Validation of Demand

1.191 1.192

2.13

Annex 2.1

Meaning of the word “Management”

1.194

3 EXEMPTIONS

3.1

3.1A 3.2

3.3

Exemption of maturity proceeds of Life Insurance Policy [Section 10(10D)]

1.197

3.1-1 Amendment 3.1-2 Effects of the amendment 3.1-3 Analysis Exemption to Prasar Bharati

1.197 1.198 1.198 1.199

Application of first proviso to section 2(15) (‘First proviso’) and effects on exemption to charitable trusts

1.199

3.2-1 First proviso 3.2-2 Amendment 3.2-3 Analysis Amendment in the definition of Venture Capital Undertaking [Section 10(23FB)]

1.199 1.200 1.200

3.3-1 3.3-2

1.203 1.203

Background and Amendment Analysis

1.203

I-13

CONTENTS

PAGE

3.4

Exemption to income of a foreign company on account of sale of crude oil [section 10(48)]

1.204

3.4-1 3.4-2

1.204 1.205

Amendment Analysis

4 BUSINESS INCOME

4.1

Additional depreciation - Extension to the business of generation or generation and distribution of power

1.206

4.2

4.1-1 Background 4.1-2 Amendment 4.1-3 Analysis Weighted Deduction for Scientific Research and Development

1.206 1.206 1.207 1.207

4.3

Deduction in respect of capital expenditure on specified business

1.207

4.4

4.3-1 Amendment 4.3.2 Analysis Expenditure on agricultural extension project [Section 35CCC]

1.207 1.208 1.213

4.5

4.4-1 Agricultural extension project meaning of 4.4-2 Expenditure 4.4-3 An assessee 4.4-4 Other issues Expenditure on skill development project [Section 35CCD]

1.214 1.214 1.215 1.215 1.215

4.6

4.5-1 Skill Development project 4.5-2 Expenditure 4.5-3 Other issues Disallowance under section 40(a)(ia)

1.216 1.216 1.216 1.216

4.6-1 Present provision 4.6-2 Amendment 4.6-3 Analysis Amendment to section 40A(2) in respect of disallowance of unreasonable or excessive expenditure

1.216 1.217 1.217

4.7-1 4.7-2 4.7-3

1.220 1.220 1.221

4.7

Background Amendment relating to specified domestic transactions Amendment relating to list of ‘specified persons’

1.220

CONTENTS

I-14 PAGE

4.8

Threshold limit for Tax Audit [Section 44AB]

1.222

4.8A

4.8-1 Amendment 4.8-2 Analysis Specified Date for Furnishing Tax Audit Report

1.222 1.222 1.223

4.9

Tax on presumptive basis in case of certain eligible business

1.224

4.9-1

Person carrying on profession referred to in section 44AA 4.9-2 Person earning brokerage/commission income 4.9-3 Agency Business 4.9-4 Increase in threshold limit to Rs. 1 crore Annex 4.1 Relevant extracts from National Manufacturing Policy

1.224 1.225 1.230 1.231 1.232

5 CAPITAL GAINS

5.1

5.2

Demerger

1.236

5.1-1 Amendment 5.1-2 Analysis Exemption from capital gains to a shareholder in case of amalgamation [Section 47]

1.236 1.237 1.238

5.3

Cost of capital asset in case of succession to business by companies [Section 49]

1.238

5.4

Fair Market Value to be deemed as full value of consideration in certain cases [Section 50D]

1.240

5.5 5.6

5.4-1 Objects of the provision 5.4-2 Rulings neutralised 5.4-3 Other issues Exemption of Capital Gain on transfer of land used for agriculture purpose [Section 54B]

1.240 1.241 1.241 1.243

Exemption to capital gains on transfer of residential property not to be charged in certain cases [Section 54GB]

1.243

5.6-1 5.6-2 5.6-3 5.6-4

1.244 1.245 1.245 1.252

Salient Features of the provision Analysis of the provision Residential property Owned by

I-15

CONTENTS

PAGE

5.6-5 5.6-6

1.253

5.7

Eligible assessee Utilisation of the net consideration for subscribing to shares 5.6-7 Eligible company 5.6-8 Utilisation by the company 5.6-9 Quantum of capital gains exempt 5.6-10 Cost of new asset 5.6-11 Withdrawal of exemption in case of certain transfers within 5 years [Sub-section (4)] Reference to Valuation Officer

5.8

5.7-1 Amendment Tax on short-term capital gains [Section 111A]

1.283 1.284

5.9

Tax on long-term capital gains [Section 112]

1.284

5.9-1 Amendment 5.9-2 Analysis Special provisions relating to conversion of Indian branch of a foreign bank into a subsidiary company

1.284 1.284

5.10-1 Initial failure to comply with the conditions 5.10-2 Subsequent failure

1.287 1.287

5.10

1.253 1.258 1.264 1.274 1.274 1.277 1.283

1.286

6 INCOME FROM OTHER SOURCES

6.1

6.2

Exemption of any sum or property received by HUF from its members

1.289

6.1-1 Amendment Share premium in excess of the fair market value deemed as income

1.290

6.2-1 6.2-2 6.2-3 6.2-4 6.2-5 6.2-6 6.2-7

1.291 1.292 1.292 1.294 1.311 1.312 1.312

Salient features of the provision Objective of the amendment Certain aspects relevant for interpreting clause Analysis of the clause Allowance of expenditure Applicability of section 55A Effects

1.290

CONTENTS

I-16 PAGE

7 DEDUCTION UNDER CHAPTER VI-A

7.1

Amendment to the definition of market value in section 80A(6)

1.314

7.2

7.1.1 Amendment 7.1.1A Analysis of amendment Deduction in respect of Life Insurance Premium

1.314 1.314 1.315

7.3

7.2-1 Effects of the amendments Deduction in respect of health insurance premium

1.316 1.316

7.4

7.3-1 Amendment 7.3-2 Analysis Deduction in respect of medical treatment, etc. [Section 80DDB]

1.317 1.317 1.318

Deductions in respect of certain donations under sections 80G and 80GGA - Mode of Payment

1.318

7.6

Extension of sunset clause for tax holiday under section 80-IA

1.319

7.7

Amendment to the definition of market value in section 80-IA(8)/(10)

1.319

7.8

7.7-1 Amendment to section 80-IA(8) 7.7-2 Amendment to section 80-IA(10) Deduction of interest on savings account deposit

1.319 1.319 1.321

7.9

7.8-1 Analysis Deduction for investment under equity saving scheme

1.321 1.322

7.9-1 7.9-2

1.322 1.323

7.5

Salient features of the provision Analysis

8 TRANSFER PRICING

8.1

8.2

Extension of transfer pricing provisions to specified domestic transactions (SDT)

1.324

8.1.1 Amendment 8.1-2 Analysis Amendment to section 92C(2) regarding deviation from arithmetic mean (AM)

1.324 1.325

8.2-1 8.2-2

1.332 1.332

Background Amendments relating to second proviso

1.332

I-17

CONTENTS

PAGE

8.2-3 Amendments relating to first proviso 8.2-4 Analysis Amendment relating to transactions not reported in the Audit Report under section 92E

1.332 1.333

8.4

Amendment in definition of international transaction

1.336

8.5

8.4.1 Amendment 8.4-2 Analysis Advance Pricing Agreement [section 92CC]

1.336 1.338 1.339

8.5-1 Amendment 8.5-2 Analysis Effect of APA in term of return of income/assessment (section 92CD)

1.339 1.340

8.6-1

1.346

8.3

8.6

Analysis

1.336

1.345

9 MINIMUM ALTERNATE TAX (‘MAT’) AND ALTERNATE MINIMUM TAX (‘AMT’)

9.1

9.2

Minimum Alternate Tax (MAT)

1.347

9.1.1 9.1-2

Preparation of accounts Adjustment of amount standing to the credit of revaluation reserve 9.1-3 Option for preparation of accounts 9.1-4 Exemption to life insurance business Alternate Minimum Tax (‘AMT’)

1.347

9.2-1 9.2-2 9.2-3

1.350 1.351 1.351

The Provision Amendment Analysis

1.348 1.349 1.350 1.350

10 RETURN, ASSESSMENT AND APPEALS

10.1

Furnishing return of income by certain resident

1.353

10.2

10.1-1 Amendment Assessment

1.353 1.357

10.2-1 Amendment

1.357

CONTENTS

I-18 PAGE

10.2-2 Analysis 10.2-3 Third Proviso 10.3/4 Dispute Resolution Panel

1.358 1.358 1.358

10.3/4-1 Background 10.3/4-2 Amendments 10.3/4-3 Analysis Amendment relating to reassessment of income [section 147]

1.358 1.358 1.359 1.359

10.5-1 Background 10.5-2 Amendments 10.5-3 Analysis Amendment relating to provisions relating to time limit for notice under section 148

1.359 1.360 1.360

10.7

10.6-1 Background 10.6-2 Amendments 10.6-3 Analysis Time limit for completion of assessment or reassessment

1.363 1.363 1.363 1.364

10.8

10.7.1 Amendments Notice for assessment in search or requisition or other cases

1.364 1.366

10.9

10.8-1 Amendment Amendments to section 153B

1.366 1.366

10.5

10.6

1.363

10.10 Rectification of mistakes

1.368

10.10-1 Amendment 10.11 Section 156 - Notice of Demand

1.368 1.369

10.12 Appeal to Commissioner (Appeals)

1.369

10.12-1 Rights of appeal to deductor 10.12-2 Appeal against assessment order under section 143(3) Exceptions 10.12-3 Appeal against assessment etc. under section 147 Exceptions 10.12-4 Assessment or reassessment pursuant to search 10.12-5 Appeal against assessment or reassessment or recomputation of total income pursuant to Advance Pricing Agreement (‘APA’) 10.12-6 Appeal against rectification orders - Exceptions 10.12-7 Appeal against penalty order under section 271AAB

1.370 1.370 1.370 1.371

1.371 1.371 1.371

I-19

CONTENTS

PAGE

10.13 Appeal to the Appellate Tribunal 10.13-1 Appeal against certain orders passed under section 153A/153C 10.13-2 Appeal against order passed under section 144BA(12) 10.13-3 Appeal by AO against own order, pursuant to objection to DRP 10.13-4 Cross objections 10.14 Disposal of appeal by ITAT within specified period

1.372 1.372 1.372 1.372 1.373 1.373

11 DEDUCTION AND COLLECTION OF TAX AT SOURCE

11.1

TDS from interest on securities

1.374

11.2

11.1-1 Amendment TDS from payments to non-resident sportsmen etc.

1.374 1.375

11.3

TDS from fees for professional or technical services

1.375 1.375

11.4

11.3-1 Analysis TDS from payment of compensation on acquisition of certain immovable property

11.5

TDS from interest payable by specified Indian company

1.376

11.6

11.5-1 Insertion of section 194LC 11.5-2 Analysis Amendments to section 195

1.376 1.377 1.377

11.7

11.6-2 Analysis Amendment in section 197A

1.378 1.385 1.385

11.8

11.7-1 No deduction of tax to be made 11.7-2 No TDS in case of certain payments to notified institutions etc. Person deemed to be assessee in default 11.8-1 11.8-2 11.8-3 11.8-4 11.8-5

1.386 1.386 1.387 1.388

Amendment Conditions Analysis Amendment in section 206C Consequences where person responsible treated as assessee in default

1.376

1.385 1.386

1.388

CONTENTS

I-20 PAGE

11.9

11.8-6 Interest under section 201(1A) 11.8-7 Limitation period under section 201(3) Interest under section 220(2)

1.389 1.389 1.390

11.10 Person responsible for paying

1.390

11.11 Collection of tax from buyers of coal or lignite or iron ore or bullion or jewellery

1.391

11.11-1 Amendment 11.11-2 Inclusion of specified minerals 11.11-3 Goods utilised for power generation - Not subject to tax collection 11.11-4 Bullion or Jewellery 11.11-5 Interest under section 206C(7) 11.12 Fees for default in furnishing statements in respect of tax deductible or collectible 11.12-1 Amendment 11.12-2 Analysis

1.391 1.391 1.392 1.392 1.392 1.393 1.393 1.394

12 TAX & INTEREST PAYMENTS

12.1

Credit for payment of Alternate Minimum Tax (AMT)

1.396

12.1-1 Amendment 12.1-2 Effect of the amendment Advance tax - Exemption to resident senior citizen having non-business income

1.396 1.396

12.3

12.2-1 Amendment 12.2-2 Analysis Computation of advance tax

1.397 1.397 1.398

12.4

12.3-1 Background 12.3.2 Analysis Interest under section 234A and AMT Credit

1.398 1.398 1.399

12.5

12.4-1 Background 12.4-2 Amendment Interest under section 234B and AMT Credit

1.399 1.400 1.400

12.5-1 Background 12.5-2 Amendment

1.400 1.401

12.2

1.397

I-21

CONTENTS

PAGE

12.6

Interest under section 234C

1.401

12.7

12.6-1 Background 12.6-2 Amendment Interest on excess refund

1.401 1.401 1.402

12.7-1 Amendment

1.402

13 PENALTIES

13.1

Penalty for concealment of income in respect of ‘Specified Domestic Transaction’ (SDT)

1.403

13.1-1 Background 13.1-2 Amendment Penalty for failure to keep and maintain documentation in respect of SDT [Section 271AA]

1.403 1.403

Penalty in search cases

1.404

13.3-1 Penalty under section 271AAB 13.3-2 Analysis Penalty for failure to furnish information or document under section 92D

1.404 1.406

13.5

Penalty for failure to furnish statements etc.

1.411

13.6

13.5-1 TDS statements 13.5-2 TCS statements 13.5-3 Failure to furnish TDS/TCS statements 13.5-4 Furnishing incorrect information Penalty under section 272A(2)(k)

1.412 1.414 1.414 1.415 1.415

13.7

Reasonable cause

1.415

13.2 13.3

13.4

1.404

1.411

14 PROSECUTION

14.1

Prosecution provisions

1.417

14.2

Amendments

1.417

14.2-1 Details 14.2-2 Objectives of the amendments

1.417 1.417

CONTENTS

I-22 PAGE

14.2-3 Increasing threshold and reduction in period 14.2-4 Special Court 14.2-5 Compounding

1.418 1.419 1.421

15 MISCELLANEOUS

15.1

Definition of ‘Commissioner’

1.422

15.2

Cash credits under section 68 of the Act

1.422

15.3

15.2-1 15.2-2 15.2-3 15.2-4 Taxation

1.422 1.423 1.425 1.426 1.430

15.4

15.3.1 Amendment 15.3-2 Objective of the amendment 15.3-3 Illustration 15.3-4 Other issues Tax on dividends received from foreign companies

1.430 1.430 1.431 1.431 1.432

15.5

Dividend distribution tax

1.432

15.6

15.5-1 Amendment 15.5-2 Analysis Taxation of investors in VCC/VCF [Section 115U]

1.432 1.433 1.433

15.7

15.6-1 Background 15.6-2 Amendments 15.6-3 Analysis Amendment to taxation of tonnage income

1.433 1.434 1.435 1.436

15.8

Settlement of cases

1.436

15.9

Application for Advance Ruling [Section 245Q]

1.437

Background Amendment Salient features of the first proviso Analysis of income referred to in section 68, etc.

15.10 Authorisation and assessment in case of search or requisition

1.437

15.10-1 Background 15.10-2 Amendment 15.11 Consequential amendment in section 296

1.437 1.438 1.438

15.12 Amendment in Schedule IV

1.438

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CONTENTS

PAGE

15.13 Definition of asset under section 2(ea) of the Wealth-tax Act

1.439

15.14 Reassessment of wealth escaping assessment [Section 17]

1.439

15.15 Exemption to RBI from Wealth-tax

1.440

15.16 Retrospective amendments and its practical effects

1.440

15.16-1 Mode and manner in which effect can be given 15.16-2 Retrospective amendments, whether retrospective or prospective 15.17 Amendment to securities transaction tax

1.440 1.442 1.443

DIVISION TWO Practice Manual 1 CHARTS & TABLES UNDER INCOME-TAX ACT u

List of tax-free incomes

2.3

u

Deductions/Allowances

2.19

u

Periods of limitation

2.41

u

Penalties

2.68

u

Offences and prosecutions

2.72

2 IMPORTANT PROCEDURES UNDER INCOME-TAX ACT u

Deduction of tax at source

2.75

- Salary [Section 192]

2.75

- Interest on securities [Section 193]

2.79

- Dividends [Section 194]

2.84

- Interest other than interest on securities [Section 194A]

2.88

- Winnings from lottery or crossword puzzle [Section 194B]

2.93

- Winnings from horse races [Section 194BB]

2.96

- Payments to contractors [Section 194C]

2.98

CONTENTS

I-24 PAGE

- Insurance commission [Section 194D]

2.102

- Payments to non-resident sportsmen/sports associations [Section 194E]

2.105

- Payments in respect of deposits under NSS, etc. [Section 194EE]

2.108

- Payments on account of repurchase of units by UTI/Mutual Fund [Section 194F]

2.112

- Commission on sale of lottery tickets [Section 194G]

2.114

- Commission or brokerage [Section 194H]

2.117

- Rent payments [Section 194-I]

2.120

- Fees for professional or technical services, etc. [Section 194J]

2.123

- Payment of compensation on acquisition of certain immovable property [Section 194LA]

2.126

- Income by way of Interest from Infrastructure Debt Fund [Section 194LB]

2.129

- Interest from specified Indian Company [Section 194LC] (From 1-7-2012)

2.129

- Payments to non-residents [Section 195]

2.130

- Income from units in case of offshore fund [Section 196B]

2.134

- Income from foreign currency bonds or global depository receipts of Indian companies [Section 196C]

2.136

- Income of foreign institutional investors from securities [Section 196D]

2.139

- Processing of TDS statements [Section 200A]

2.141

- Effect of non-furnishing of PAN [Section 206AA]

2.142

u

Tax Deduction and Collection Account Number [Section 203A]

2.142

u

Collection of tax at source [Section 206C]

2.143

u

Advance tax [Section 211]

2.146

u

e-Payment of tax

2.149

u

Self-assessment tax [Section 140A]

2.149

u

Return of income [Section 139]

2.150

u

Summary assessment [Section 143(1)]

2.152

I-25

CONTENTS

PAGE u

Scrutiny assessment [Section 143(2)/(3)]

2.153

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Refunds [Section 237]

2.154

u

Interest chargeable [Sections 201(1A), 220(2), 234A to 234D & 244A]

2.155

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Permanent Account Number [Section 139A]

2.160

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Quoting of Permanent Account Number in documents pertaining to certain prescribed transactions [Section 139A]

2.167

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Rectification of mistakes [Section 154]

2.172

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Revision of orders by Commissioner [Sections 263 & 264]

2.173

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Waiver of penalty by Commissioner [Section 273A]

2.174

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Waiver of penalty under section 273AA

2.175

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Appeals to Commissioner (Appeals) [Sections 246A to 249]

2.175

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Appeals to Tribunal [Sections 252 to 255]

2.176

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Appeal to High Court [Section 260A]

2.178

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Advance rulings [Sections 245N to 245V]

2.179

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Survey [Section 133A]

2.180

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Search and seizure [Section 132]

2.181

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Annual information returns [Section 285BA]

2.184

3 TAX RATES u

Tax liability - How to find out

2.190

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Income-tax

2.191

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Compulsory deposit

2.198

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Wealth-tax

2.198

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Gift-tax

2.198

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Estate duty

2.198

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Rates for tax deduction at source

2.198

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Rates for tax collection at source

2.202

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Dividend tax under section 115-O

2.203

CONTENTS

I-26 PAGE

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Tax on income distributed by UTI/Mutual Fund under section 115R

2.203

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Other taxes

2.204

4 TAX RATES FOR THE LAST TEN ASSESSMENT YEARS

Income-tax rates for individuals, HUFs, associations of persons and body of individuals

2.206

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Income-tax rates for firms (PFAs)

2.208

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Income-tax rates for companies

2.208

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Dividend tax rates under section 115-O

2.209

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Income-tax rates for co-operative societies

2.209

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Rates of wealth-tax

2.209

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Rates of gift-tax

2.209

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5 GOLD AND SILVER RATES FOR THE CURRENT YEAR, LAST TEN ASSESSMENT YEARS AND ON APRIL 1, 1981 u

Gold and Silver rates for the current year, last ten assessment years and on April 1, 1981

2.210

DIVISION THREE Circulars, Clarifications & Notifications [1961 - March 2012] u

u

u

Section key to Circulars, Clarifications & Notifications issued by CBDT [1961 - March 2012]

3.i

Alphabetical key to Circulars, Clarifications & Notifications issued by CBDT [1961 - March 2012]

3.v

Circulars, Clarifications & Notifications [1961 - March 2012]

3.3

I-27

CONTENTS

DIVISION FOUR

PAGE

Case Laws [1922 - March 2012] u

u u

Section key to Landmark Rulings of Supreme Court/High Courts [1922 - March 2012]

4.i

Alphabetical key to Landmark Rulings of Supreme Court/ High Courts [1922 - March 2012]

4.v

Case Laws [1922 - March 2012]

4.3