CHAPTER VI – Aggregation of income and set off or carry forward of loss
Section – 66 : Total income
Section – 67 : Method of computing a partner’s share in the income of the firm
Section-67A: Method of computing a member’s share in income of association of persons or body of individuals.
Section – 68 : Cash credits
Section – 69 : Unexplained investments
Section – 69A : Unexplained money, etc
Section – 69B: Amount of investments, etc., not fully disclosed in books of account
Section – 69C: Unexplained expenditure, etc
Section – 69D: Amount borrowed or repaid on hundi
Section – 70: Set off of loss from one source against income from another source under the same head of income
Section – 71 : Set off of loss from one head against income from another
Section – 71A: Transitional provisions for set off of loss under the head “Income from house property”
Section – 71B: Carry forward and set off of loss from house property
Section – 72: Carry forward and set off of business losses
Section – 72A: Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger, etc.
Section – 72AA: Provisions relating to carry forward and set-off of accumulated loss and unabsorbed depreciation allowance in scheme of amalgamation of banking company in certain cases
Section – 72AB: Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in business reorganisation of co-operative banks
Section – 73: Losses in speculation business
Section – 73A: Carry forward and set off of losses by specified business
Section – 74: Losses under the head “Capital gains”
Section – 74A: Losses from certain specified sources falling under the head “Income from other sources”
Section – 75: Losses of firms
Section – 78: Carry forward and set off of losses in case of change in constitution of firm or on succession
Section – 79: Carry forward and set off of losses in the case of certain companies
Section – 80: Submission of return for losses
| S 70. Whether set off allowed within same head? | S 71. Whether set off allowed with different head? | S 71B to 74A Rules to carry forward & set off past year losses. | |
| House Property Loss | Yes | Yes | Section 71B. |
| • | Brought forward HP loss can be set off only with HP. | ||
| • | It can be carried forward for 8 AY’s. | ||
| • | Section 80 is not applicable. It means even if return of loss is not filed or filed late loss can be carried forward & set off. | ||
| Business loss | Yes | Yes except salary. | Section 72 |
| • | Set off with both business income & speculation income. | ||
| • | Carry forward for 8AY. | ||
| • | Section 80 applicable. It means if return of loss is not filed or filed late business loss cannot be carried forward. | ||
| • | Assessee who has incurred the loss can only set off that loss [6 exception] | ||
| • | Even if business is discontinued business loss can be set off. | ||
| Specula- tion loss (Same day sale & pur- chase i.e. without taking delivery) S 43(5) | Yes | No | Section 73 |
| • | Past year speculation loss can be set off only with specula- tion income. | ||
| • | Carry forward for 4AY. | ||
| • | Section 80 applicable. It means if return of loss is not filed or filed late speculation loss cannot be carried forward. | ||
| • | Assessee who has incurred the loss can only set off that loss [exception not applicable] | ||
| • | Even if business is discontinued business loss can be set off. | ||
| Loss under the head capital gain | Yes LT can be set off only with LT. ST can be set off with both LT & ST. | No | Section 74 |
| • | LT can be set off only with LT. ST can be set off with both LT & ST. | ||
| • | Carry forward for 8AY. | ||
| • | Section 80 applicable. It means if return of loss is not filed or filed late capital gain (loss) cannot be carried forward. | ||
| Loss from activity of owning & maintain- ing race horses | Yes | No | Section 74A |
| • | Past year horse loss can be set off only with horse income. | ||
| • | Carry forward for 4 AY. | ||
| • | Section 80 applicable. It means if return of loss is not filed or filed late business loss cannot be carried forward. | ||
| • | Assessee who has incurred the loss can only set off that loss [exception not applicable] | ||
| • | If business is discontinued then loss cannot be set off. | ||
| Loss from lotteries etc | No | No | No |
| Note: No other loss can be set off against this income. Deduction u/s 57 not available. Deduction u/s 80C to 80U not available. Basic exemption not available. Flat rate 30%. | |||
| Other losses | Yes | Yes | No |
| In case of choice this loss should be set off first since it cannot be carried forward. |
| S 32(1) | S 32(2) |
| Current year depreciation | Unabsorbed depreciation |
| Rules to set off unabsorbed depreciation | |
| 1. | The unabsorbed depreciation can be set off with any head’s of income except casual income and salary income. But it shall be first set off with Business Income then with any other income. Do note that current year depreciation can be set off only with business income if cannot be set off then it shall be carried forward which becomes unabsorbed depreciation. |
| 2. | The unabsorbed depreciation can be carried forward for unlimited period. |
| 3. | Section 80 is not applicable. It means even if return of loss is not filed or filed late loss can be carried forward & set off. |
| 4. | Even if business is discontinued business loss can be set off. |
| 5. | Assessee who has incurred the loss can only set off that loss [6 exception] |
| Rules to set off the losses Priority to set off the losses | |||
| 1. | First S 71, then S 72 and then adjust past year losses. | 1. | Current year depreciation u/s 32(1). |
| 2. | Income exempted u/s 10 cannot be set off with tax- able income. | 2. | Brought forward business loss u/s 72. |
| 3. | It is mandatory to set off the loss. | 3. | Unabsorbed depreciation u/s 32(2) |
| Exceptions to the rule that assessee who has incurred the loss can only set off that loss. This exception is applicable only to S 72 & S 32(2). | |
| 1. | 72A. Accumulated business loss of amalgamating company can be carried forward and set off by amalgamated company. |
| 2. | 72A. Accumulated business loss of demerged company can be carried forward and set off by resulting company. |
| 3. | 72A. Conversion of sole proprietorship concern into a company. |
| 4. | 72A. Conversion of firm into a company. |
| 5. | 72A. Conversion of Pvt. limited Company to LLP or Unlisted Company to LLP. (Limited Liability Partnership). |
| 6. | 78(2). Losses of business acquired on inheritance. Father dies and son inherits the business then son can set off the business loss. |
| S 71B | S 72 | S 73 | S 74 | S 74A | S 32(2) | ||
| HP loss | Business loss | Speculation loss | Capital gain loss | Horse race loss | Unabsorbed dep | ||
| 1. | Set off under which head | Same Head | Same Head | Same Head | Same Head | Same Head | Any Head |
| 2. | Carry forward for how many years | 8 AY | 8 AY | 4 AY | 8 AY | 4 AY | unlimited period |
| 3. | Section 80 | NA | A | A | A | A | NA |
| 4. | Should business be continued to set off the loss | NA | No | No | NA | Yes | No |
| 5. | The assessee who has incurred the loss can only set of that loss (True or False) | NA | True | True | NA | True | True |
| 6. | Any exceptions | NA | Yes | No | NA | No | Yes |
CHAPTER XIII – Income-tax Authorities
Section – 116 : Income-tax authorities
Section – 117 : Appointment of income-tax authorities
Section – 118 : Control of income-tax authorities
Section – 119 : Instructions to subordinate authorities
Section – 120 : Jurisdiction of income-tax authorities
Section – 124: Jurisdiction of Assessing Officers
Section – 127: Power to transfer cases
Section – 129: Change of incumbent of an office
Section – 131: Power regarding discovery, production of evidence, etc.
Section – 132: Search and seizure ( Rule 112)
Time retention by authorized officer of books of account seized under subsection (1) of section 132(1(A) is permitted for a period upto 30 days from date of order u/s 153A
Section – 132A: Powers to requisition books of account, assets etc. of an assessee form any officer or authority under any other law
Section – 132B: Application of seized or requisitioned assets
Section – 133: Power to call for information
Section – 133A: Power of survey
Section – 133(A): For Impounding the book u/s 33A(3) of income tax act, it is necessary to keep ‘Reasons recorded’
Section – 133A (5) Marriage ceremony or other ostentatious social function
Section – 133B: Power to collect certain information
Section – 133C: Power to call for information by prescribed income-tax authority (Rule 12D)
Section – 134: Power to inspect registers of companies
Section – 135: Power of27[28[Principal Director General or] Director General or 28[Principal Director or] Director],29[30[Principal Chief Commissioner or] Chief Commissioner or 30[Principal Commissioner or] Commissioner] and 31[Joint Commissioner]
Section – 136: Proceedings before income-tax authorities to be judicial proceedings
Section – 138: Disclosure of information respecting assesses
CHAPTER XVII – Collection and recovery of tax
Reade with Schedule Second and Third
2nd Schedule: Procedure for Recovery of tax
3rdSchedule: Procedure for distraint by Assessing Officer or Tax Recovery Officer
Forms for e-TDS returns
Form 24Q – For salary deductions
Form 26Q – In other cases
Form for e-TCS returns
Form 27EQ
Section – 190: Deduction at source and advance payment
Section – 191: Direct payment
Section – 192: Salary
@Normal Slab Rate+ SC : 15% on income exceeding Rs. 1cr. EC : 2%, SHEC : 1% )
Section – 192A: Payment of accumulated balance due to an employee
@10%
(However, amount upto Rs. 50,000/- is not liable for TDS]
Section – 193: Interest on securities
@10%
(However, amount upto Rs.10,000/- is not liable for TDS]
Interest on Debentures: @10%
(However, amount upto Rs. 5,000/-p.a is not liable for TDS]
Section – 194: Dividends
@10%
Dividend including deemed Dividend u/s 2(22)(e)
(However, Dividend upto Rs. 2500 is not liable for TDS if paid by an account payee cheque)
Section – 194A: Interest other than “Interest on securities”
@10%
(However, interest upto Rs. 50,000/-(Senior Citizen) Rs.10,000/- others paid by Bank or Co-operative Society carrying on the business of banking or Post Office or upto Rs. 5,000/- by any other entity, is not liable for TDS)
Section – 194B : Winnings from lottery or crossword puzzle.
@30%
(However, amount upto Rs. 10,000/- is not liable for TDS]
Section – 194BB: Winnings from horse race.
@30%
(However amount upto Rs. 5,000/- is not liable for TDS)
Section – 194C: Payments to contractors.
a. Payment/credit to an individual or a Hindu Undivided Family @1%
b. Payment/credit to any person other than an individual or a Hindu Undivided Family @2%
However, amount in Rs.30,000 (single) Rs.1,00,000 (aggregate) is not liable for TDS
Section – 194D: Insurance commission
- Payment/credit to a person other than a company
@10% (upto 31.05.2016)
@5% (w.e.f 01.06.2016)
b. Payment/credit to a company @10%
(However, amount upto Rs.15,000/- is not liable for TDS)
Section – 194DA: Payment in respect of life insurance policy
(a) Including sum allocated by way of bonus on such policy:
@2% (upto 31.05.2016)
(b) Excluding amount not includible under clause (10D) of section 10 :
@1%(w.e.f01.06.2016)
(However, amount upto Rs.1 lac is not liable for TDS)
Section – 194E: Payments to non-resident sportsmen or sports associations
@20%
Section – 194EE: Payments in respect of deposits under National Savings Scheme, etc.
@20% (upto 31.05.2016)
@10%(w.e.f. 01.06.2016)
(However, amount upto Rs. 2,500/- and the amount paid to the heirs of the assessee is not liable for TDS)
Section – 194F: Payments on account of repurchase of units by Mutual Fund or Unit Trust of India @20%
Section – 194G: Commission, etc., on the sale of lottery tickets
@10% (upto 31.05.2016)
@5% (w.e.f. 01.06.2016
(However, amount upto Rs. 1,000/- {upto 31.05.2016}/Rs. 15,000/- {w.e.f. 01.06.2016} is not liable for TDS)
Section – 194H: Commission or brokerage
@10% (upto 31.05.2016)
@5% (w.e.f. 01.06.2016)
(However, amount upto Rs. 5,000/- {upto 31.05.2016}/Rs. 15,000/- {w.e.f. 01.06.2016} is not liable for TDS)
Section – 194-I: Rent
a. Rent of plant and machinery @2%
(However, amount upto Rs. 1,80,000/- is not liable for TDS)
b. Rent of land or building or land appurtenant to a building or furniture or fittings @10%
(However, amount upto Rs. 1,80,000/- is not liable for TDS)
Section – 194IA: Payment on transfer of certain immovable property other than agricultural land.
@1%
(No deduction where consideration for transfer is less than Rs. 50 lakh
Section – 194IB: Payment or credit of rent by an individual or HUF if not subject to tax audit w.e. 1-6-2017
@5%
(However, amount upto Rs. 50,000/-p.m. is not liable for TDS)
Section – 194IC: Payment under joint development agreement (who transfers land/building)
@10%
Section – 194J : Fees for professional or technical services
- Professional fees, technical fees, royalty or remuneration to a director.
-if payment is engaged only in the business operations of call centre w.e.f 1-6-2017
@2%
- Professional Fee, Technical fees, Royalty or Remuneration.
Other than call centre operator only business payment.
@10%
(However, amount upto Rs. 30,000/- is not liable for TDS)
Section – 194K: Income in respect of units
Section – 194L: Payment of compensation on acquisition of capital asset
Section – 194LA: Payment of compensation on acquisition of certain immovable
Property
@10%
However, amount upto Rs. 2 lakh (upto 31.05.2016) / Rs. 2.50 lakh (w.e.f. 01.06.2016) is not liable for TDS)
Section – 194LB: Income by way of interest from infrastructure debt fund
@5%
Section – 194LBA: Certain income from units of a business trust
@10%
Section – 194LBB: Income in respect of units of investment fund
@10%
Section – 194LBC: Income in respect of investment in securitization trust
- Payment/credit to a person other than a company @25%
- Payment/credit to a company @30%
Section – 194LC: Income by way of interest from Indian company
Section – 194LD: Income by way of interest on certain bonds and Government
securities
Section – 195: Other sums
Section – 195A: Income payable “net of tax”
Section – 196: Interest or dividend or other sums payable to Government, Reserve
Bank or certain corporations
Section – 196A: Income in respect of units of non-residents
Section – 196B: Income from units
Section – 196C: Income from foreign currency bonds or shares63 of Indian company.
Section – 196D: Income of Foreign Institutional Investors from securities
Section – 197: Certificate for deduction at lower rate
Section – 197A: No deduction to be made in certain cases
Section – 198: Tax deducted is income received
Section – 199: Credit for tax deducted
Section – 200: Duty of person deducting tax
Section – 200A: Processing of statements of tax deducted at source
Section – 201: Consequences of failure to deduct or pay.
201(3) – Time limit prescribed beyond which no order can be passed deeming a person to be an assessee in default 7 Years)
Section – 202: Deduction only one mode of recovery
Section – 203: Certificate for tax deducted (Form 16, 16A etc)
Section – 203A: Tax deduction and collection account number [Penalty u/s 272BB(1)]
Section – 203AA: Furnishing of statement of tax deducted
Section – 204: Meaning of “person responsible for paying”
Section – 205: Bar against direct demand on assessee
Section – 206: Persons deducting tax to furnish prescribed returns
Section – 206A: Furnishing of quarterly* return in respect of payment of interest to
residents without deduction of tax
Section – 206AA: Requirement to furnish Permanent Account Number
Section – 206B: Person paying dividend to certain residents without deduction of tax
to furnish prescribed return
Section – 206C: Profits and gains from the business of trading in alcoholic liquor,
forest produce, scrap, tendu leaves, etc
TCS – At the time of receipt of amount from the said in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier,
- Liquor of alcoholic nature, made for consumption by humans
1.00%
- Timber wood when collected from a forest that has been leased 2.50%
- Tendu Leaves 5.00%
- Timber wood when not collected from a forest that has been leased, but any other mode 2.50%
- A forest produce other than tendu leaves and timber – 2.00%
- Scrap 1.00%
- Toll Plaza, Parking lot, Quarrying and Mining 2.00%
- Minerals that include lignite or coal or iron ore 1.00%
- Bullion that exceeds over Rs. 2 lakhs/ Jewelry that exceeds over Rs. 5 lakhs. 1.00%
This certificate needs to be submitted in the Form 27D, within a week’s time from the last date of the month in which that tax had been collected, by people or entities who are collecting the tax at source
Section – 206CA: Tax collection account number
Section – 206CB: Processing of statements of tax collected at source
Section – 206CC: Requirement to furnish Permanent Account number by collectee
Section – 207: Liability for payment of advance tax (on current income)
Section – 208: Conditions of liability to pay advance tax
Section – 209: Computation of advance tax
Section – 209A: Computation and payment of advance tax by assessee
Section – 210: Payment of advance tax by the assessee of his own accord or in
pursuance of order of Assessing Officer
[The intimation which an assessee has to send to the Assessing Officer u/s 210(5) shall be in Form No. 28A],
(r.w.s. 156 and rule 38, notice of demand shall be in Form No. 28)
Section – 211: Instalments of advance tax and due dates
Section – 212: Estimate by assessee
Section – 213: Commission receipts
Section – 214: Interest payable by Government
Section – 215: Interest payable by assessee
Section – 216: Interest payable by assessee in case of under-estimate, etc
Section – 217: Interest payable by assessee when no estimate made
Section – 218: When assessee deemed to be in default
Section – 219: Credit for advance tax
Section – 220: When tax payable and when assessee deemed in default
Section – 221: Penalty payable when tax in default
Section – 222: Certificate to Tax Recovery Officer (Form No. 57)
(Where no certificate has been drawn up under section 222, the A.O. may recover the tax by ‘any one or more mode as per section 226’
Section – 223: Tax Recovery Officer by whom recovery is to be effected
Note – Form of statement u/s 222 or section 223 of the IT Act,1961 is related to Rule 117B of Income Tax Rule, 1962
Section – 224: Validity of certificate and cancellation or amendment thereof
Section – 225: Stay of proceedings in pursuance of certificate and amendment or
cancellation thereof
Section – 226: Other modes of recovery
Section – 227: Recovery through State Government
Section – 228: Recovery of Indian tax in Pakistan and Pakistan tax in India
Section – 228A: Recovery of tax in pursuance of agreements with foreign countries
Section – 229: Recovery of penalties, fine, interest and other sums
Section – 230: Tax clearance certificate
Section – 230A: Restrictions on registration of transfers of immovable property in
certain cases
Section – 231: Period for commencing recovery proceedings
Section – 232: Recovery by suit or under other law not affected
Section – 233: Recovery of tax payable under provisional assessment
Section – 234: Tax paid by deduction or advance payment
Section – 234A: Interest for defaults in furnishing return of income
Section – 234B: Interest for defaults in payment of advance tax
Section – 234C: Interest for deferment of advance tax
Section – 234D: Interest on excess refund
Section – 234E: Fee for default in furnishing statements
Section – 234F: Fee for default in furnishing return of income
Non-deduction of TDS
If the depositor do not have a taxable income, they have to file a declaration in Form 15G/15H to the Bank in duplicate.
Form 15G: The depositors below the age of 60 Years
Form 15H: The depositors above the age of 60 Years.
For filing of Form 15G/15H, the depositor should have PAN. Companies and Firms are not eligible to file Form 15G/15H.
With effect from 1.6.2016, rental receipts u/s 194I are also covered. From 1.4.2017, insurance commission u/s 194D is also covered.
Note – No surcharge and Health & education cess is applicable on the payment to Residents/HUFs/Firm/Domestic Company.
CHAPTER XXI – Penalties imposable
Section – 270: Failure to furnish information regarding securities, etc
Section – 270A: Penalty for under-reporting and misreporting of income
Section – 270AA: Immunity from imposition of penalty, etc
Section – 271: Failure to furnish returns, comply with notices, concealment of income, etc
Section – 271A: Failure to keep, maintain or retain books of account, documents, etc
Section – 271AA: Penalty for failure to keep and maintain information and document, etc., in respect of certain transactions
Section – 271AAA: Penalty where search has been initiated
Section – 271AAB: Penalty where search has been initiated
Section – 271B: Failure to get accounts audited
Section – 271BA: Penalty for failure to furnish report under section 92E
Section – 271BB: Failure to subscribe to the eligible issue of capital
Section – 271C: Penalty for failure to deduct tax at source
Section – 271CA: Penalty for failure to collect tax at source
Section – 271D: Penalty for failure to comply with the provisions of section 269SS
Section – 271DA: Penalty for failure to comply with provisions of section 269ST
Section – 271E: Penalty for failure to comply with the provisions of section 269T
Section – 271F: Penalty for failure to furnish return of income
Section – 271FA: Penalty for failure to furnish
Section – 271FAA: Penalty for furnishing inaccurate statement of financial transaction or reportable account
Section – 271FAB: Penalty for failure to furnish statement or information or document by an eligible investment fund
Section – 271FB: Penalty for failure to furnish return of fringe benefits.
Section – 271G: Penalty for failure to furnish information or document under section 92D
Section – 271GA: Penalty for failure to furnish information or document under section 285A
Section – 271GB: Penalty for failure to furnish report or for furnishing inaccurate report under section 286
Section – 271H: Penalty for failure to furnish statements, etc
Section – 271-I: Penalty for failure to furnish information or furnishing inaccurate information under section 195
Section – 272: Failure to give notice of discontinuance
Section – 272A: Penalty for failure to answer questions, sign statements, furnish information, returns or statements, allow inspections, etc
Section – 272AA: Penalty for failure to comply with the provisions of section 133B
Section – 272B: Penalty for failure to comply with the provisions of section 139A
Section – 272BB: Penalty for failure to comply with the provisions of section 203A
Section – 272BBB: Penalty for failure to comply with the provisions of section 206CA
Section – 273: False estimate of, or failure to pay, advance tax
Section – 273A: Power to reduce or waive penalty, etc., in certain cases
- Reduce or waive penalty, the order by the Commissioner can be passed without any limit on time.
(CIT/Pr.CIT with prior approval)
Section – 273AA: Power of 8[Principal Commissioner or] Commissioner to grant immunity from penalty.
Section – 273B: Penalty not to be imposed in certain cases
Section – 274: Procedure
if any penalty of the aforesaid nature is to be imposed, the assessee must be provided with a reasonable opportunity of being heard. If no such opportunity is provided to the assessee, the penalty order will be invalid.
No order imposing a penalty, can be made without prior approval of Joint commissioner
(a) where penalty exceeds Rs. 10,000 levied by I.T.O.
(b) where penalty exceeds Rs. 20,000 levied by Assistant Commissioner or Deputy Commissioner. [Section 274 (2)].
| Section | Nature of default | Penalty leviable | Person who can impose penalty |
| (1) | (2) | (3) | (4) |
| 140A(3) | Failure to pay wholly or partly— | Such amount as Assessing Officer may impose but not exceeding tax in arrears | |
| (a) self-assessment tax/fringe benefit tax, or | |||
| (b) interest, and fee, or | |||
| (c) both | |||
| under section 140A(1) | |||
| 158BFA(2) | Determination of undisclosed income of block period | Minimum : 100 per cent of tax leviable in respect of undisclosed income | |
| Maximum : 300 per cent of tax leviable in respect of undisclosed income. | |||
| 221(1) | Default in making payment of tax | Such amount as Assessing Officer may impose but not exceeding amount of tax in arrears | Assessing Officer |
| 234E | Failure to file statement within time prescribed in section 200(3) or in proviso to section 206C(3) | Rs. 200 for every day during which failure continues but not exceeding tax deductible/collectible | |
| 234F | Default in furnishing return of income within time as prescribed under section 139(1) | a) Rs. 5000 if return is furnished on or before 31 December of assessment year. b) Rs. 10,000 in any other case Note: if total income of the person does not exceeds Rs. 5 lakh then fee payable shall be Rs. 1000 | |
| 270A(1) | Under-reporting and misreporting of income | A sum equal to 50% of the amount of tax payable on under-reported income. However, if under-reported income is in consequence of any misreporting thereof by any person, the penalty shall be equal to 200% of the amount of tax payable on under-reported income | AO/CIT(A)/CIT |
| 271(1)(b) | Failure to comply with a notice under section 115WD(2)/115WE(2)/142(1) or section 143(2) or failure to comply with a direction under section 142(2A) | Fixed at Rs. 10,000 for each failure Note:– However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017. | Assessing Officer |
| 271(1)(c) | Concealment of particulars of income or fringe benefits or furnishing of inaccurate particulars of income or fringe benefits | Minimum: 100 per cent Maximum: 300 per cent of tax sought to be evaded in addition to tax payable Note: ‘Amount of tax sought to be evaded’ shall be aggregate of tax sought to be evaded under the general provisions and the tax sought to be evaded under the provisions of MAT or AMT. However, if an amount of concealed income is considered both under the general provisions and provisions of MAT or AMT, such amount shall not be considered in computing tax sought to be evaded under provisions of MAT or AMT. Further, where provisions of MAT or AMT are not applicable, the computation of tax sought to be evaded under the provisions of MAT or AMT shall be ignored. Note: – However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017. | AO/CIT(A)/CIT |
| 271(4) | Distribution of profits by registered firm otherwise than in accordance with partnership deed and as a result of which partner has returned income below the real income | Not exceeding 150 per cent of difference between tax on partner’s income assessed and tax on income returned, in addition to tax payable Note: – However, the above penalty shall not be levied to and in relation to any assessment for the A.Y commencing on or after the 1st day of April, 2017. | |
| 271A | Failure to keep, maintain, or retain books of account, documents, etc., as required under section 44AA | Rs. 25,000 | AO/CIT(A) |
| 271AA(1) | (1) Failure to keep and maintain information and documents required by section 92D(1) or 92D(2) | 2% of value of each international transaction/or specified domestic transaction entered into | AO/CIT(A) |
| (2) Failure to report such transaction | |||
| (3) Maintaining or furnishing incorrect information or document | |||
| 271AA(2) | Failure to furnish information and document as required under Section 92D(4) | Rs. 5,00,000/- | AO/CIT(A) |
| 271AAA | Where search has been initiated before 1-7-2012 and undisclosed income found | 10% of undisclosed income | |
| 271AAB(1) | Where search has been initiated on or after 1-7-2012 but before 15-12-2016 and undisclosed income found | (a) 10% of undisclosed income of the specified previous year if assessee admits the undisclosed income; substantiates the manner in which it was derived; and on or before the specified date pays the tax, together with interest thereon and furnishes the return of income for the specified previous year declaring such undisclosed income | AO |
| (b) 20% of undisclosed income of the specified previous year if assessee does not admit the undisclosed income, and on or before the specified date declare such income in the return of income furnished for the specified previous year and pays the tax, together with interest thereon; | |||
| (c) 60% of undisclosed income of the specified previous year if it is not covered by (a) or (b) above | |||
| 271AAB(1A) | Where search has been initiated on or after 15-12-2016 and undisclosed income found | (a) 30% of undisclosed income of the specified previous year if assessee admits the undisclosed income; substantiates the manner in which it was derived; and on or before the specified date pays the tax, together with interest thereon and furnishes the return of income for the specified previous year declaring such undisclosed income (b) 60% of undisclosed income of the specified previous year in any other case. | Assessing Officer |
| 271AAC | Income determined by Assessing Officer includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D for any previous year. [if such income is not included by assessee in his return or tax in accordance with section 115BBE has not been paid] | 10% of tax payable under section 115BBE. | Assessing Officer |
| 271B | Failure to get accounts audited or furnish a report of audit as required undersection 44AB | One-half per cent of total sales, turnover or gross receipts, etc., or Rs. 1,50,000, which-ever is less | Assessing Officer |
| 271BA | Failure to furnish a report from an accountant as required by section 92E | Rs. 1,00,000 | Assessing Officer |
| 271BB | Failure to subscribe any amount to units issued under scheme referred to in section 88A(1) | 20 per cent of such amount | |
| 271C | Failure to deduct tax at source, wholly or partly, under sections 192 to 196D(Chapter XVII-B) or failure to pay wholly or partly tax u/s 115-O(2) or second proviso to section 194B | Amount equal to tax not deducted or paid | Joint/Add. CIT |
| 271CA | Failure to collect tax at source as required under Chapter XVII-BB | Amount equal to tax not collected | Joint/Add. CIT |
| 271D | Taking or accepting any loan or deposit or specified sum in contravention of the provisions of Section 269SS. “Specified sum” means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place. | Amount equal to loan or deposit or specified sum so taken or accepted | Joint/Add. CIT |
| 271DA | Receipt of an amount of Rs. 2 lakh or more in contravention of provisions of Section 269ST. | Amount equal to such receipt | |
| 271E | Repayment of any loan or deposit or specified advance otherwise than in accordance with provision of Section 269T. “Specified advance” means any sum of money in the nature of advance, by whatever name called, in relation to transfer of an immovable property, whether or not transfer takes place. | Amount equal to loan or deposit or specified advance so repaid | Joint/Add. CIT |
| 271F | Failure to furnish return as required by section 139(1) or by its provisos before the end of the relevant assessment year | Rs. 5,000 Note: Applicable upto the Assessment year 2017-18 | AO |
| 271FA1 | Failure to furnish an annual information return as required under section 285BA(1)2 | Rs. 500 per day of default | Prescribed Income Tax Authority |
| Failure to furnish annual information return within the period specified in notice u/s 285BA(5) | Rs. 1,000 per day of default | ||
| 271FAB | Section 9A provides that fund management activity carried out by an eligible offshore investment fund through an eligible fund manager acting on behalf of such fund shall not constitute business connection in India (subject to certain conditions). The provision requires that eligible investment fund shall furnish within 90 days from the end of the financial year a statement, in respect of its activities in a financial year, in the prescribed form containing information relating to fulfilment of specified conditions and such other information or documents as may be prescribed. Penalty to be levied if investment fund failed to comply with the requirement. | Rs. 5,00,000 | To be prescribed |
| 271FB | Failure by an employer to furnish the return of fringe benefits as required undersection 115WD(1) | Rs. 100 for every day of default | Prescribed Income Tax Authority |
| 271G3 | Failure to furnish any information or document as required by section 92D(3) | 2% of the value of the international transaction/specified domestic transaction for each failure | AO/CIT(A) |
| 271GA | Section 285A provides for reporting by an Indian concern if following two conditions are satisfied: a) Shares or interest in a foreign company or entity derive substantial value, directly or indirectly, from assets located in India; and b) Such foreign company or entity holds such assets in India through or in such Indian concern. In this case, the Indian entity shall furnish the prescribed information for the purpose of determination of any income accruing or arising in India under Section 9(1)(i). In case of any failure, the Indian concern shall be liable to pay penalty. | Penalty shall be: a) a sum equal to 2% of value of transaction in respect of which such failure has taken place, if such transaction had effect of, directly or indirectly, transferring right of management or control in relation to the Indian concern; b) a sum of Rs. 5,000 in any other case. | To be prescribed |
| 271GB(1) | Failure to furnish report under section 286(2) | Rs. 5,000 per day upto 30 days and Rs. 15,000 per day beyond 30 days | |
| 271GB(2) | Failure to produce the information and documents within the period allowed under section 271GB(6) | Rs. 5,000 for every day during which the failure continues. | |
| 271GB(3) | Failure to furnish report or failure to produce information/documents under section 286 even after serving order under section 271GB(1) or 271GB(2) | Rs. 50,000 for every day for which such failure continues beginning from the date of serving such order. | |
| 271GB(4) | Failure to inform about inaccuracy in report furnish under section 286(2) | Rs. 5,00,000 | |
| Or furnishing of inaccurate information or document in response to notice issued under section 286(6). | |||
| 271H4 | Failure to deliver/cause to be delivered a statement within the time prescribed insection 200(3) or the proviso to section 206C(3), or furnishes incorrect information in the statement | W.e.f. 1-10-2014 Assessing Officer may direct payment of penalty. Penalty shall not be less than Rs. 10,000 but may extend to Rs. 1,00,000 | AO |
| 271-I | As per section 195(6) of the Act, any person responsible for paying to a non-resident or to a foreign company, any sum (whether or not chargeable to tax), shall furnish the information relating to such payment in Form 15CA and 15CB. Penalty shall be levied in case of any failure. | Rs. 1,00,000 | AO |
| 271J | Furnishing of incorrect information in any report or certificate by an accountant or a merchant banker or a registered valuer | Rs. 10,000 for each incorrect report or certificate | |
| 272A(1) | Refusal or failure to : | Rs. 10,000 for each failure/default | |
| (a) answer questions | |||
| (b) sign statement | |||
| (c) attend to give evidence or produce books of account, etc., in compliance with summons under section 131(1) | |||
| (d) comply with notices u/s 142(1)/143(2) or failure to comply with direction issued u/s 142(2A). | |||
| 272A(2) | Failure to : | ||
| (a) furnish requisite information in respect of securities as required undersection 94(6) ; | Rs. 10,000 for each failure/default. (In respect of penalty for failure, in relation to a declaration mentioned in section 197A, a certificate as required by section 203 and returns u/ss 206 and 206C and statements under Section 200(2A)or section 200(3) or proviso to section 206C(3) or section 206C(3A), penalty shall not exceed amount of tax deductible or collectible) | ||
| (b) give notice of discontinuance of business or profession as required undersection 176(3) ; | |||
| (c) furnish in due time returns, statements or certificates, deliver de-claration, allow inspection, etc., under sections 133, 134, 139(4A), 139(4C), 192(2C), 197A, 203, 206, 206C, 206C(1A) and 285B; | |||
| (d) deduct and pay tax under section 226(2) | |||
| (e) file a copy of the prescribed statement within the time specified in section 200(3) or the proviso to section 206C(3) (up to 1-7-2012) | |||
| (f) file the prescribed statement within the time specified in section 206A(1) (g) Failure to deliver or cause to be delivered a statement under Section 200(2A) or Section 206C(3A) within prescribed time. With effect from June 1, 2015, it is mandatory for an office of the Government, paying TDS or TCS, as the case may be, without production of a challan, to deliver a statement in the prescribed form and manner to the prescribed authority. | |||
| 272AA(1) | Failure to comply with section 133B | Not exceeding Rs. 1,000 | |
| 272B | Failure to comply with provisions of section 139A/139A(5)(c)/(5A)/(5C) | Rs. 10,000 | |
| 272BB(1) | Failure to comply with section 203A | Rs. 10,000 for each failure/default | |
| 272BB(1A) | Quoting false tax deduction account number/tax collection account number/tax deduction and collection account number in challans/certificates/statements/documents referred to in section 203A(2) | Rs. © |
Section – 275: Bar of limitation for imposing penalties (6 Months)
[AY 2019-20]
Note : No penalty is imposable for any failure under sections 271(1)(b), 271A, 271AA, 271B, 271BA, 271BB, 271C, 271CA, 271D, 271E, 271F, 271FA, 271FAB, 271FB, 271G, 271GA, 271GB, 271H, 271-I, 272A(1)(c) or (d), 272A(2), 272AA(1), 272B, 272BB(1), 272BB(1A), 272BBB(1), 273(1)(b), 273(2)(b) and 273(2)(c) if the person or assessee proves that there was reasonable cause for such failure (section 273B).
Section 273AA provides that a person may make application to the Principal Commissioner/Commissioner for granting immunity from penalty, if (a) he has made an application for settlement under section 245C and the proceedings for settlement have abated; and (b) penalty proceeding have been initiated under this Act. The application shall not be made after the imposition of penalty after abatement.
1. With effect from assessment year 2015-16 “annual information return” has been changed to “statement of financial transaction or reportable account” and word “return” has been changed to “statement”.
2. With effect from assessment year 2015-16 a new section 271FAA has been inserted to provide for a penalty of Rs. 50,000 for furnishing inaccurate statement of financial transaction or reportable account in certain cases.
3. With effect from 1-10-2014 TPO can also levy penalty.
4. Section 271H as amended with effect from 1-10-2014 provides that penalty shall be levied by Assessing Officer.
[As amended by Finance Act, 2018]
CHAPTER IV – Computation of total income
Section – 14 : Heads of income
Section – 14A : Expenditure incurred in relation to income not includible in total income
Section – 15 : Salaries
Section – 16 : Deductions from salaries
| 16(ia) | Standard Deduction [Rs. 40,000 or the amount of salary, whichever is lower] | Individual – Salaried Employee |
| 16(ii) | Entertainment allowance [actual or at the rate of 1/5th of salary, whichever is less] [limited to Rs. 5,000] | Government employees |
| 16(iii) | Employment tax | Salaried assessees |
Section – 17 : “Salary”, “perquisite” and “profits in lieu of salary” defined
Section – 22 : Income from house property
Section – 23 : Annual value how determined
Section 23(1) : Treatment of unrealized rent and arrears of rent(explanation)
Section – 24 : Deductions from income from house property
| 24(a) | Standard deduction [30% of the annual value (gross annual value less municipal taxes)] | All assessees |
| 24(b) | Interest on borrowed capital (Rs. 30,000/Rs. 2,00,000, subject to specified conditions) | All assessees |
Section – 25 : Amounts not deductible from income from house property
Section – 25A : Special provision for arrears of rent and unrealised rent received subsequently
| 25A(2) | Standard deduction of 30 per cent of arrears of rent or unrealised rent received | All assessees |
Section – 26 : Property owned by co-owners
Section – 27 : “Owner of house property”, “annual charge”, deemed owner etc., defined
Section – 28 : Profits and gains of business or profession
Section – 29 : Income from profits and gains of business or profession, how computed
Section – 30 : Rent, rates, taxes, repairs and insurance for buildings
Section – 31 : Repairs and insurance of machinery, plant and furniture
Section – 32 : Depreciation
Section – 35 : Expenditure on scientific research
Section – 35A : Expenditure on acquisition of patent rights or copyrights
Section – 35AB : Expenditure on know-how
Section – 35AD : Deduction in respect of expenditure on specified business
Section – 43B : Certain deductions to be only on actual payment
Nature of expenses covered under Section 43B –
a) Any tax, duty, cess or fee under any law;
b) Contribution made by employer to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees;
c) Bonus or commission to employees;
d) Interest on any loan or borrowing from any public financial institution or a State financial corporation or a State Industrial Investment corporation;
e) Interest on any loan or advances from a Scheduled bank;
f) Sum payable by the assessee as an employer by way of leave encashment.
Section – 44AA : Maintenance of accounts by certain persons carrying on profession or business
Section – 44AB : Audit of accounts of certain persons carrying on business or profession
The Tax Audit limit for :
Business: Rs. 1 Crore. It means an assessee need to be audited under Sec 44AB if his annual gross turnover/receipts in business exceeds Rs. 1 Crore. This provision is applicable from F.Y. 2016-17 (A.Y. 2017-18)
Profession: Rs. 50 Lakh. It means an assessee need to be audited under Sec 44AB if his annual gross receipts in profession exceeds Rs. 50 Lakh. This provision is applicable from F.Y. 2016-17 (A.Y. 2017-18)
Section – 44AD : Special provision for computing profits and gains of business on presumptive basis
This Sec. provides special provision for computing profits and gains of business on presumptive basis. You need not to maintain proper accounting. Your net income is estimated to be @8% of your gross receipt/turnover. From F.Y. 2016-17, net income is calculated as @6% of gross receipts are received through digital mode of payments and @8% of gross receipts are received in cash.
Businesses, whose annual gross turnover/receipt does not exceed Rs. 2 Crore are eligible for this scheme.
Section – 45 : Capital gains
Section – 55A : Reference to Valuation Officer
With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the Assessing Officer may refer the valuation of capital asset to a Valuation Officer—
(a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the Assessing Officer is of opinion that the value so claimed is at variance with its fair market value;
(b) in any other case, if the Assessing Officer is of opinion—
(i) that the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than Rs. 25,000/- or 15 % of the value of the asset as so claimed whichever is less; or
(ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do,
Section – 56: Income from other sources
Section – 56(2): For the purposes of this clause, “relative” means—
(i) spouse of the individual;
(ii) brother or sister of the individual;
(iii) brother or sister of the spouse of the individual;
(iv) brother or sister of either of the parents of the individual;
(v) any lineal ascendant or descendant of the individual;
(vi) any lineal ascendant or descendant of the spouse of the individual;
(vii) spouse of the person referred to in clauses (ii) to (vi);
Section – 57 : Deductions
Section – 58 : Amounts not deductible
CHAPTER V – Income of other persons included in assessee’s total income
Section – 60 : Transfer of income where there is no transfer of assets
Section – 61 : Revocable transfer of assets
Section – 62 : Transfer irrevocable for a specified period
Section – 63 : “Transfer” and “revocable transfer” defined
Section – 64 : Income of individual to include income of spouse, minor child, etc.Section 64(1A) : In case of the income of an individual includes the income of his minor child in terms of this section, such individual shall be entitled to an exemption of upto Rs.1,500/- in respect of each minor child.