Relevant to Financial Year 2020-21
Assessment Year 2021-22
Containing FAQs & practical problems and its solutions in easy to follow language with guidelines on art of handling the tax matters and ideas for tax-planning under various heads of income together with Tax rates, Depreciation rates, Cost Inflation Index, Rate of Gold and Silver. Also incorporating Salient features on prohibition of Benami Transactions Act, 1988 after Amendment in 2016; new definition of business connection and significant economic present u/s 9, amended provisions of sec. 10 and 11 to make provisions of sec. 40A(3) and 40A(3A) mutatis mutandis for computing income of certain institutions,trusts and societies, reintroduction of standard reduction from salary u/s 16(ia), newly inserted provision of sec. 40A(13) imposing Restrictions on allowing marked o market loss or other expected loss except as allowable u/s 36(1)(xviii), expenditure u/s 35AD, changes in sec. 43(1), 43(5), taxation in case of foreign exchange fluctuatio u/s 43AA, presumptive income of transport operator u/s 44AE, concession for taxing capital gains u/s 43CA/50Cin case of transfer of immovable property, amendment in capital gains provisions u/s 47,48,49, 54EC, 55, amendments in sec. 56,79 and deductions under chapter VIA, new sec. 112A for tax on LTCG in certain cases, special rate of tax of 30% in place of 15% on distributed profits of domestic companies u/s 115-O, MAT, AMT, new provisions of E assessment inserted u/s 143(3A), provisions of sec. 145A for valuation of Inventory Income computation and disclosure standards, TDS and TCS; Penalties, and other amendments made by the Finance Act, 2018. Also referring to decisions of various Courts and ITAT and recent Circulars & Notifications issued by CBDT.
(Section 1 to 140A)
HIGHLIGHTS-1 : The Finance Act, 2020
HIGHLIGHTS-1A: The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020
HIGHLIGHTS-2 : Relaxations due to Covid 19 relating to Income Tax
PART I: TAX FAQs & SOLUTIONS
1. How to start a new 1. T. File?
2. What are the important definitions under the IT Act? (section 2)
3. What is 'previous year' and the basis of charge'? (sections 3 to 5)
4. What is the effect of residential status and business connection on tax incidence?(sections 6 to 9)
5. Which receipts/incomes are not taxable u/s 10?
6. How income tax is computed in case of agricultural income?[section 10(1)]
7. What benefit is available u/s 10A to newly established undertakings in FTZ, EHTP, STPs etc.?
8. What benefits are available uls 10AA to units established in SEZ?
9. What benefit is available uls 10B to newly established 100%Export Oriented Undertakings (EOUS)?
10. What benefit is available u/s 10BA to an undertaking engaged in export of handmade articles or things etc.
11. What tax benefits are available to educational institutions?[sections 10(23C)(iiiab), 10(23C)(iiiad), sec.11 to13]
12. What tax benefits are available to hospitals and medical institutions? [sections 10(23C)(iiiac), 10(23C)(iiiae),
11 to 13]
13 What are the income tax provisions relating to charitable trusts etc. (section 11 to 13)
14. What are the provisions for exemption of income of political parties and Electoral Trust ? (section 13A & 130)
15. What are the provisions of section 14A and ita implications? (section 14A1)
16. How to minimize tax on income from Salary? (sections 15 to 171)
17. What are the new rules for Valuation of Perquisites [section 171)
18 How to avail tax benefits while computing income from house property? (sections 22 to 27)
19 What are the tax benefits of Corporatisation or Reorganisation of business? (sections 47, 72A, 72AA etc.)
20. Which income is chargeable to tax under the Head "Profits & Gains of business or profession" [sections 28
21. What are the provisions relating to depreciation ?[section 32]
22. Which expenses are allowable while computing Profit & Gains of business / profession? [sections 30 to 44A,
except section 32]
23. Which expenses or payments of statutory liabilities are allowable on the basis of actual payment?[section
24. Whether date of presentation of cheque will be considered as date of payment? [sections 43B, 140A , 210
25. What is the Presumptive Income Scheme for small businessmen, certain professionals, transport operators, shipping business or business of exploration of mineral oil etc.? [section44AD,44ADA,44AE,448,44BB,44BBB)
26. Compulsory maintenance of books of account - for whom and for how many years? (section 44AA)
27. Compulsory tax audit of accounts - in which cases? (section 44AB)
28. How to minimise tax on capital gains ?[sections 45 to 55A)
29. What are the IT, implications in case an Immovable Property is to be transferred? [section 50C)
30. What incomes are to be considered under the head income from other sources? [sections 56 to 59)
31. What are the deeming provisions of sec. 56(2) and treatment of certain property received as gift or at
inadequate consideration? [sections 56(2)
32.What are the provisions for clubbing of income? [sections 60 to 65)
33. Under what circumstances AO. may consider Loan or Cash Credit as income u/s 68?
34. Under what circumstances the A.O. may make addition in respect of unexplained investments u/s 69?
35. Under what circumstances the A.O. may make addition in respect of unexplained money etc. u/s 69A?
36. Under what circumstances the A.O. may make addition in respect of Investments etc. not fully disclosed in books of account u/s 69B?
37. Under what circumstances the A.O. may make addition in respect of unexplained expenditure etc. uls 69C?
38. Under what circumstances the A.O. may make addition in respect of amount borrowed or repaid on Hundi
39. What is the system for set off & carry forward of losses? [sections 70 to 79]
40. What deductions are available under chapter VI-A?[sections 80A to 80U)
41. What deduction is available u/s 80C?
42 Who are eligible to get deduction u/s 80-IA?
43. What deduction is available to SEZ Developers uls 80-IAB and Start up Undertakings u/s 80-IAC?
44. Who are eligible to get deduction uls 80-1B and uls 80-IBA?
45. What Deduction is available to undertakings in Special Category States? [section 80-IC ]
46. What Deduction is available for business of Hotels and Convention Centers in specified area u/s 80-ID?
47. What Deduction is available u/s 80-IE for certain undertakings in North Eastern States & Sikkim?
48. How to take benefit of tax rebates u/s 87A? [section 87A]
49. How to claim Relief u/s 89 when salary etc. is received in arrear or in advance?
50. How to get relief in case of double taxation? [sections 90 & 91]
51. What are the provisions with regard to transfer pricing? [sections 92 to 92F)
52. What will be tax treatment in case of Dividend Stripping and limit on Interest payment to non-residents/
associated enterprise? [section 94 and 94B]
53. What are the provisions of General Anti-Avoidance Rules(GAAR)[sections 08 to 102)
54. Alternate Tax Regime (u/s 116BAC, 116BAA, 115BAB, 115BA) and Special Tax Rates on what incomes?
(sections 115A, 116AB,118AC, 116ACA, 116AD, 1160, 1160A, 1115BBA,115BBC,116B0D,116DBDA,116BBE,
55. What are the provisions of Minimum Alternate Tax (MAT) u/s 115JB? [sections 116JAA, 116JB)
56. What are the provisions of Alternate Minimum Tax (AMT) u/s115JC for assesseos other than companies?
[sections 115JC to 116JF1
57. Dividend and Income Distribution Tax and Income from Securitisation Trust [sections 115-0, 115QA,
115R,and uls 115TCA)
58. What are the taxation provisions of Business Trusts? [section 115UA)
59. What is the Presumptive tax scheme for Shipping Industry (sections 115V to 115VZC]
60. Who are the IT authorities and what are their powers and functions ?[sections 116 to 124)
61. Do you wish to get your IT file transferred to other place? [section 127]
62. How to claim opportunity of fresh hearing in case of change of incumbent of an I. T. Office? [section 129]
63. Under what circumstances Notice or Summon can be issued for appearance u/s 131? [section 131]
64. How to face an Income Tax Search? [sections 132, 132A,132B)
65. What are the powers of the A. O. to call for information uls 133?
66. How to handle an I.T. Survey, Enquiries relating to expenses on Marriage or other functions and when
information is sought for verification? [sections 133A,133B & 133C]
67. What are the provisions for disclosure of information respecting assesses u/s 134, 135, 136 and 138?
68. What are the provisions relating to Return of Income and Self assessment tax etc.? [section 139, 139B,
139C,139D, 140, 140A)
69. What are the features of Permanent Account Number (PAN) and Quoting of Aadhaar Number? [section 139A and 139AAJ
(Section 142A to 298 plus WT, STT)
70. What are the new movie stimulation of cont by Departmental Valver? [section 142A]
71. Special Tax Act of accounts - in which cases? [section 142(2A)]
72. In what cases intimation u/s 143(1) is issued? [section 143(1)]
73. W the Central Processing of return scheme [section 143(1A)/143(1B)]
74. How to wale a security assessment? [section 143(2) and 143(3)]
75. In what circumstances Best Judgement Assessment can be made u/s 144?
76. What are salient feature of Dispute Resolution Panel? (section 144C)
77. What method of accounting is required to be followed u/s 145,145A and 145B
78. Re-opening of assessments u/s 147 and issue of new 148- under what circumstance [section 147 to 152)
79. What is the Time Limit w 183 for completion of various assessments and re assessment? [section 152]
80. What is the procedure for assessment in search eases u/s 153A to 153C?
81. In what circumstances Rectification we 184 can be made?
82. In what circumstances Amendment can be made u/s 155?
83. What are the provisions regarding Notice of Demand u/s 156?
84. What are the Llabilities of Representative Assessment, Private Trust or Executors of a deceased sections 159
85. What is the procedure regarding assessment after Partition of HUF [section 171]
86. What are the Liabilities of Directors of private company in Liquidation section 179)
87. What is the procedure for assessment of Partnership Firms? (sections 184 to 189A)
88. What is the assessment procedure for Limited Liability Partnership?
89. What are the provisions in respect of T.D.S [sections 192 to 206]
90. What are the provisions in respect of Tax Collection at Source (T.C.S.)? [sections 206C, 206CA, 206CB
91. What are the provisions for deduction of tax at source (TCS) in case of payment to non-residents?
92. What precautions NRIs should take for tax planning and investment?
93. What are the provisions for payment of advance tax? [sections 207 to 219]
94. What should be done for Stay of Disputed Tax Demand? [sections 220 & 221]
95. When Interest or Fee is payable by the assessee and whether it can be waived or reduced? [sections 201(1A), 234A, 234B,234C, 234D, 234E and 234F etc.]
96. How to get Refund and Interest thereon? [sections 237 to 245]
97. Do you wish to go to Settlement Commission? [sections 245A to 245L]
98. What is the procedure for filing Appeals and Application before AAR? [sections 246A to 262]
99. Revision of Orders prejudicial to Revenue uls 263 - under what circumstances? [section263]
100. Revision of orders by CIT in favour of assessee u/s 264 - under what circumstances? [section 264]
101. What precautions are required in Accepting and Refunding of Loans and Deposits or Acceptance of Cash
uls 269ST? [sections 269SS, 269ST and 269T]
102. What Penalties are impossible and how the same can be avoided? [sections 270A to 275]
103. How to take benefit of section 273A and section 273AA for waiver of penalties? [section 273A and 273AA]
104. What are Income tax offences and how the same can be compounded? [sections 275A to 280]
105. Which transfers may be void u/s 281? [section281]
106. In what circumstances A.O. may provisionally attach property of an assessee uls 281B? [section 281B]
107. What are the provisions regarding Service of Notice and facility for electronic communication? [section 282]
108. What are the new provisions regarding Statement of Financial Transactions or Reportable Account
and Statement by non-resident and International group? [sections 285, 285A, 285BA and 286]
109. Who are entitled to represent before the I.T. Authorities? [section 288]
110. What are the salient features of Wealth tax Act?
111 What are the new provisions of Securities Transaction Tax (STT)?
112. Income Declaration Scheme, 2016 (IDS)
113. Direct Tax Dispute Resolution Scheme, 2016
114. What are the features of Prohibition of Benami Property Transactions Act as amended in 2016?
115. What are the features of Direct Tax Vivad Se Vishwas Scheme, 2020?
Part II : Tax Rates, Appeal Fees, Court Fees, Stamp Duty, Depreciation Rates, Gold and Silver Rates and
Other Important Information
Annex - A to K
Part III : Important CBDT Circulars, Notifications, Press Releases and Instructions etc.
Annex - L to S
Prof. Narayan Jain, is a Master of Law and practising Advocate. He is a visiting faculty at NUJS, IIMC, ICAI, ICSI, ICWAI, ICFAI. He is the Secretary General of AIFTP and has served as President of Direct Taxes Professionals' Association. He is the co-author of the books "How to Handle Income Tax Problems", "Income Tax on Receipt of Certain Properties as Gift or at Inadequate Consideration" and "Ready Referencer of Business Expenditure". His articles on taxation are published in various dailies and magazines. The Tax-payers' education programmes have been his mission. He served as the Member of West Bengal Minorities Commission, Government of West Bengal.
Shri Dilip Loyalka F.C.A. is a young, talented and promising Chartered Accountant. He is one of the few persons in the country who has qualified as a Chartered Accountant even without eye-sight. He is also a Law graduate. He is also co-author of How to Handle Income Tax Problems. He has been awarded by H.E. the President of India as "Outstanding Handicapped Tax Professional".