CONTENTS
Chapter 1
Preliminary
[1] Section 1 : Short title, extent and commencement……………………………..1
Chapter 2 — Definitions
[1] Section 2(1A) : Agricultural Income…………………………………………………..4
[2] Section 2(12A) : “books or books of account” include ……………………..18
[3] Section 2(14) : “Capital asset” means ………………………………………………19
[4] Section 2(15) : Charitable purpose …………………………………………………..21
[5] Section 2(19AA) : “demerger” …………………………………………………………30
[6] Section 2(22)(c) : “Distribution to shareholders on liquidation”………31
[7] Section 2(22)(e) : Deemed dividend…………………………………………………33
[8] Section 2(23) : Firm………………………………………………………………………….35
[9] Section 2(24) : Income ……………………………………………………………………..36
[10] Section 2(29c) : Maximum Marginal Rate ………………………………………39
[11] Section 2(31) : Person …………………………………………………………………….40
[12] Section 2(35) : “principal officer” …………………………………………………..41
[13] Section 2(41) : “relative” ………………………………………………………………..41
[14] Section 2(43) : “Tax” ………………………………………………………………………42
[15] Section 2(47) : Transfer…………………………………………………………………..44
Chapter 3 — Basis of Charge
[1] Section 4 : Charge of Income-tax……………………………………………………..50
[2] Section 5 : Scope of total income ……………………………………………………..53
[3] Section 6 : Residence in India…………………………………………………………..55
[4] Section 9 : Income deemed to accrue or arise in India……………………..62
Chapter 4 — Incomes which do not Form Part of Total Income………………..68
[1] Section 10(1) : Agricultural Income………………………………………………….68
[2] Section 10(2A) : Share of profit from a partnership firm …………………75
[3] Section 10(3) : Any receipts which are of a casual and
non-recurring nature, to the extent such receipts do not
exceed five thousand rupees in the aggregate ……………………………….76
[4] Section 10(4) : Interest income of non-resident………………………………..77
[5] Section 10(5) : Leave Travel Allowance or Leave Travel
Concession or Leave Travel assistance received by an individual
from his employer…………………………………………………………………………..78
[6] Section 10(10) : Any death-cum-retirement gratuity
reveived – Subject to certain limits…………………………………………………..79
[7] Section 10(10A) : Commuted value of pension subject to conditions ……80
[8] Section 10(AA) : Leave encashment on retirement…………………………..82
[9] Section 10(10B) : Retrenchment Compensation received by
workers …………………………………………………………………………………………..86
[10] Section 10(10C) : Amount received under a Voluntary
Retirement Scheme (VRS) subject to limits…………………………………….87
[11] Section 10(10D) : Any sum received under life insurance
policy (not being a key-man insurance policy)………………………………91
[12] Section 10(13A) : House Rent Allowance (HRA)…………………………….91
[13] Section 10(14) : Special allowances or benefits granted to
employees to meet certain expenses………………………………………………93
[14] Section 10(16) : Scholarships granted to meet the cost of
education ………………………………………………………………………………………94
[15] Section 10(20) : Income of a Local authority…………………………………..95
[16] Section 10(23AA): Exemption from income-tax in the case of
regimental funds, non-public funds, etc., set up by armed forces ………99
[17] Section 10(23B): Income of funds or institutions established
for charitable purposes and existing solely for the development
of khadi or village industries or both…………………………………………..100
[18] Section 10(23C): Income of certain funds, institutions,
educational institutions, and hospitals (subject to specific
conditions)…………………………………………………………………………………..101
[19] Section 10(26): Income of scheduled tribe members residing
in certain areas …………………………………………………………………………….111
[20] Section 10(26A) : Any income accruing or arising to any person
from any source in the district of Ladakh or outside India…………..114
[21] Section 10(26AAA): Income of a “Sikkimese” individual
exempt from tax subject to certain conditions ……………………………..115
[22] Section 10(26AAB) : Income of an Agricultural Produce
Marketing Committee or Board …………………………………………………..116
[23] Section 10(26B) : Income of a corporation set-up for promoting
the interests of Scheduled Castes, Scheduled Tribes or
Backward Classes ………………………………………………………………………..116
[24] Section 10(26BBB) : Any income of a Corporation established
for Ex-Servicemen ……………………………………………………………………….117
[25] Section 10(37) : Capital gain on compensation received on
compulsory acquisition of urban agricultural land situated within
specified urban limit ……………………………………………………………………120
[26] Section 10(38) : Long-term capital gain………………………………………..124
[27] Section 10AA : Special provisions in respect of newly
established Units in Special Economic Zones ………………………………128
[28] Section 10B: Special provisions in respect of newly
established hundred percent export-oriented undertakings. ……….129
Chapter 5 — Charitable Trusts or Institutions
[1] Section 11: Income from Property held for charitable or
religious purposes …………………………………………………………………………133
[2] Section 11(2) : Accumulation of income in excess of 15% of
the income earned ……………………………………………………………………….138
[3] Section 11(4) : Income from a Business Carried on by the Trust…….140
[4] Section 11(4A) : Profits and Gains from Incidental Business ………….143
[5] Section 11(7) : Assessee can either Obtain Registration under
Section 12AB or Obtain Approval under Section 10(23C), but he
cannot Adopt both…………………………………………………………………………146
[6] Section 12(1) : Voluntary Contributions (Donation) not Forming
Part of Corpus of the Trust or Institution Treated as Income…………146
[7] Section 12A(1) : Conditions for Applicability of Sections 11 and 12……147
[8] Section 12AA : Trust Registration………………………………………………….149
[9] Section 12AA(3) & 12AA(4): Cancellation of Registration of
the Trust or Institution [As applicable up to 31.03.2021]………………..156
[10] Section 12AB : Procedure of for fresh Registration of a Trust/
Institution (Applicable from 01.04.2021)………………………………………..158
[11] Section 13 : Section 11 not to apply in certain cases ……………………..159
[12] Section 13A : Special provision relating to incomes of political
parties …………………………………………………………………………………………161
Chapter 6 — Heads of Income
[1] Income held as Income from Salary ……………………………………………..163
[2] Income held as income from house property………………………………..164
[3] Income held as Business Income ………………………………………………….187
[4] Income held as income from capital Gains……………………………………197
[5] Income held as income from other sources …………………………………..198
Chapter 7 — Expenditure Incurred in Relation to Income not
Includible in Total Income ………………………………………………………………………203
[1] Section 14A : Expenditure incurred in relation to income not
includible in total income………………………………………………………………203
Chapter 8 — Income from Salary
[1] Section 15 : Salary …………………………………………………………………………216
[2] Sector 16 : Deductions from Salary………………………………………………..218
[3] Section 17 : Salary, “perquisite” and “profit in liew of salary” ……..219
Chapter 9 — Income from House Property………………………………………………225
[1] Section 22 : Chargeability of income under the head ‘House Property’ ……………225
[2] Section 23 : Annual value how determined……………………………………229
[3] Section 24 : Deductions from Income from house property …………..236
[4] Section 26 : Property owned by co-owners…………………………………….241
[5] Section 27 : “Owner of house property”, “annual charge”, etc. ……..242
Chapter 10 — Profits and Gains of Business or Profession ……………………..244
[1] Section 28 : Profits and gains of business or profession………………..244
[2] Section 30 : Rent, Rates, Taxes, Repairs and Insurance for
Buildings ………………………………………………………………………………………247
[3] Section 31 : Repair and insurance of machinery, plant
and furniture ………………………………………………………………………………..248
[4] Section 32 : Depreciation ……………………………………………………………….251
[5] Section 32A : Investment allowance ………………………………………………261
[6] Section 32AB : Investment deposit account……………………………………261
[7] Section 35 : Expenditure on Scientific Research……………………………..262
[8] Section 35AB : Expenditure on know-how…………………………………….264
[9] Section 35ABB: Expenditure for obtaining licence to operate
telecommunication services…………………………………………………………..265
[10] Section 35AC : Expenditure on eligible projects schemes …………….267
[11] Section 35D : Amortisation of certain preliminary expenses ……….268
[12] Section 35E : Deduction for expenditure on prospecting, etc.,
for certain minerals. …………………………………………………………………….269
[13] Section 36(1)(ii): Any sum paid to an employee as bonus or
commission………………………………………………………………………………….270
[14] Section 36(1)(iii) : Interest paid on borrowed capital ……………………270
[15] Section 36(1)(va) : Employees’ contributions (PF/ESI)………………….276
[16] Section 36(1)(vii) : Deduction for Bad debts and provision
for bad and doubtful debt……………………………………………………………280
[17] Section 36(1)(viia) : Deductions for provision for bad and
doubtful debts created by certain banks, Financial Institutions
and Non-Banking Financial Company…………………………………………288
[18] Section 36(1)(viii) : Special reserve created and maintained
by financial corporation (Transfer to Special Reserve)…………………290
[19] Section 37 : General conditions for allowable deductions……………291
Chapter 11 — Depreciation
[1] Section 32 : Depreciation ……………………………………………………………….320
[2] [Section 32(1)(iia) : Additional Depreciation in case of any
eligible New Machinery or Plant (Other than Ship and Aircraft)…..334
Chapter 12 —Amounts not Deductible ……………………………………………………336
[1] Section 40(a)(ia) : Disallowance for non-deduction or
non-payment of TDS……………………………………………………………………..336
[2] Section 40(a)(ii) : Business disallowance – Any rate or tax levied…..339
Chapter 13 — Expenses or Payments not Deductible in Certain
Circumstances ……………………………………………………………………341
[1] Section 40A(2) : Business disallowance – Excessive or
unreasonable payments…………………………………………………………………341
[2] Section 40A(3) : Cash payments exceeding prescribed limits…………347
Chapter 14 — Profits Chargeable to Tax …………………………………………………..357
[1] Section 41(1) : Recovery against any loss, expenditure or
trading liability earlier allowed as deduction ……………………………….357
[2] Section 41(2) : Balancing charge (Impairment loss on disposal
of assets)………………………………………………………………………………………..362
[3] Section 41(4) : Profits chargeable to tax – Recovery of bad debt……..363
Chapter 15 — Special Provision for Deductions, Plant, Speculative
Transaction, etc.
[1] Section 42 : Special provision for deductions in the case of
business for prospecting, etc., for mineral oil ………………………………..365
[2] Section 43(5) : Speculative transaction …………………………………………..366
Chapter 16 — Certain Deductions to be only on Actual Payment
[1] Section 43B : Certain deductions to be only on actual payment …….369
Chapter 17 — Presumptive Taxation Schemes
[1] Section 44AD : Special provision for computing profits and
gains of business on presumptive basis …………………………………………373
[2] Section 44AE : Special Provision for Computing Profits and
Gains of Business of Plying, Hiring or Leasing Goods Carriages…..382
[3] Section 44AF : Special Provisions for Computing Profits and
Gains of Retail Business ………………………………………………………………..386
[4] Section 44B : Special Provision for Computing Profits and Gains
of Shipping Business in the Case of Non-Residents……………………….387
[5] Section 44BB : Business of Providing Services and Facilities in
Connection with Exploration, etc., of Mineral Oils………………………..389
[6] Section 44C : Deduction of Head Office Expenditure in the
Case of Non-Residents…………………………………………………………………..395
[7] Section 44D : Special Provisions for Computing Income by
Way of Royalties, etc., in the Case of Foreign Companies ……………..397
Chapter 18 — Capital Gains
[1] Section 45 : Capital Gains arising out of ‘transfer’ of a capital
asset ……………………………………………………………………………………………..400
[2] Section 45(1A) : Capital gains when insurance is received ……………402
[3] Section 45(2) : Capital gains on conversion of capital assets
into stock-in-trade ……………………………………………………………………….402
[4] Section 45(3) : Capital gain on transfer of capital asset by a
partner, member to a firm or association of persons or body of
individuals, as capital contribution ……………………………………………….403
[5] Section 45(4) : Capital gain on transfer of capital assets by a
firm/AOP/BOI to partner/member on its reconstitution ………………..404
[6] Section 45(5) : Capital gain on transfer by way of compulsory
acquisition of an asset by Government………………………………………….406
[7] Section 45(5A) : Special provisions for computation of capital
gains in case of Joint Development Agreement……………………………..410
[8] Section 46 : Capital gains on distribution of assets by companies
in liquidation…………………………………………………………………………………414
[9] Section 47 : Transactions not treated as Transfer……………………………415
[10] Section 48 : Mode of computation of capital gains………………………416
[11] Explanation (v) to Section 48 : Cost Inflation Index …………………….420
[12] Section 49 : Cost with reference to certain modes of acquisition …421
[13] Section 50 : Special provision for computation of capital gains
in case of depreciable assets…………………………………………………………422
[14] Section 50C : Determining the full value of consideration in
cases of transfer of immovable property – Deemed capital gain ….423
[15] Section 51 : Advance money received ………………………………………….429
[16] Section 54 : Exemption available for investment of long-term
capital gains arising on transfer of a residential house…………………430
[17] Section 54B : Exemption from capital gain arises from the
transfer of urban agricultural land used for agricultural purpose…….435
[18] Section 54EE : Exemption of investment of long-term capital
gains by an investor in units of a specified fund notified
by Central Government……………………………………………………………….437
[19] Section 54F : Exemption from Capital gain arises from the
transfer of a long-term capital asset other than a house property ..438
[20] Section 55(2) : Cost of acquisition for the purpose of sections
48 and 49 ……………………………………………………………………………………..447
[21] Section 55(3) : Cost of acquisition to the previous owner where
the cost for which the previous owner acquired the property
cannot be ascertained…………………………………………………………………..449
Chapter 19 — Income from Other Sources
[1] Section 56 : Income from other sources………………………………………….453
[2] Section 56(2)(viii) : Income by way of Interest on Compensation
or on Enhanced Compensation Referred to in Section 145A(b) …….457
[3] Section 56(2)(x) : Money/Property Received without Consideration
or Inadequate Consideration on or after 01.04.2017 ………………………462
[4] Section 57 : Deductions …………………………………………………………………463
Chapter 20 — Income of Other Persons, Included in Assessee’s Total
Income
[1] Section 61: Income Arising from Revocable Transfer of Assets ……..472
[2] Section 63 : “Transfer” and “Revocable Transfer” Defined …………..480
[3] Section 64(1)(ii) : Income by Way of Salary, Commission, Fees
or Remuneration Paid to Spouse from A Concern in Which an
Individual has Substantial Interest………………………………………………..482
[4] Section 64(1)(iii) : Income of Individual to Include Income
of Spouse, Minor Child, etc……………………………………………………………484
[5] Section 64(1)(iv) : Income Arising to the Spouse from an Asset
Transferred without Adequate Consideration……………………………….489
[6] Section 64(1)(v) : Income of Individual to Include Income
of Spouse ………………………………………………………………………………………497
[7] Section 64(1)(vi) : Income Arising to Son’s Wife (i.e., Daughter-in
-Law) from the Assets Transferred Without Adequate
Consideration by the Transferor, i.e., Father-in-Law/
Mother-in-Law………………………………………………………………………………503
[8] Section 64(1)(vii) : Clubbing of Income from Assets Transferred
to A Person for the Benefit of Spouse …………………………………………….506
[9] Section 64(1A) : Minor Child’s Income Clubbed with the Income
of Parent ……………………………………………………………………………………….508
[10] Section 64(2) : Conversion of Self-acquired Property into the
Property of a Hindu Undivided Family………………………………………516
Chapter 21 — Unexplained Cash Credits, Investments, Money, etc.
[1] Sections 68 : Unexplained Cash Credits ……………………………………….523
[2] Section 69 : Unexplained Investments…………………………………………..563
[3] Section 69A : Unexplained money, etc………………………………………….570
[4] Section 69B : Amount of investments, etc., not fully disclosed
in books of account………………………………………………………………………582
[5] Section 69C : Unexplained Expenditure ……………………………………….585
[6] Section 69D : Amount Borrowed or Repaid on Hundi ………………….594
Chapter 22 — Set off, or Carry Forward and Set off
[1] Section 70 : Set-off of Loss from One Source Against Income
from Another Source Under the Same Head of Income ………………..596
[2] Section 71 : Set-off of Loss from One Head Against Income
from Another ………………………………………………………………………………..597
[3] Section 72 : Carry Forward and Set-off of Business Losses …………..599
[4] Section 72A : Provisions Relating to Carry Forward and Sett-off
of Accumulated Loss and Unabsorbed Depreciation
Allowance in Amalgamation or Demerger, etc………………………………601
[5] Section 73 : Losses in Speculation Business …………………………………607
[6] Section 74 : Loss under the Head “Capital Gains” ……………………..608
[7] Section 74A : Losses from Certain Specified Sources Falling
Under the Head “Income from other Sources” …………………………..608
[8] Section 77 : Losses of Unregistered Firms or their Partners …………609
[9] Section 79 : Carry Forward and Set-off of Losses in Case of
Certain Companies ………………………………………………………………………610
[10] Section 80 : Submission of Return for Losses ………………………………611
Chapter 23 — Deduction not to be Allowed unless Return Furnished
[1] Section 80AB : Deductions to be made with reference to the
income included in the gross total income…………………………………….613
[2] Section 80AC : Deduction not to be allowed unless return
furnished ………………………………………………………………………………………614
[3] Sections 80B : Definitions ………………………………………………………………615
Chapter 24 — Deduction in Respect of Certain Payments……………………….618
[1] Section 80C : Deduction in respect of life insurance premia,
deferred annuity, contributions to provident fund, subscription
to certain equity shares or debentures, etc. ……………………………………618
[2] Section 80G : Donations to certain funds, charitable
institutions, etc………………………………………………………………………………618
[3] Section 80GGA : Deduction in respect of certain donations for
scientific research or rural development………………………………………..620
[4] Section 80GGC : Contributions given by any person to
political parties ……………………………………………………………………………..620
Chapter 25 — Deductions in Respect of Certain Incomes
[1] Section 80HH : Profits and gains from hotels or industrial
undertakings, etc., in backward areas ……………………………………………622
[2] Section 80HHA : Deduction in respect of profits and gains from
newly established small-scale industrial undertakings in certain
areas ……………………………………………………………………………………………..624
[3] Section 80HHB : Deduction in respect of profits and gains from
projects outside India…………………………………………………………………….626
[4] Section 80HHC : Deduction in respect of profits retained for
export business ……………………………………………………………………………..626
[5] Section 80HHD : Deduction in respect of earnings in convertible
foreign exchange……………………………………………………………………………634
[6] Section 80-I : Deduction in respect of profits and gains from
industrial undertakings after a certain date, etc. …………………………..635
[7] Section 80-IA : Deductions in respect of profits and gains from
industrial undertakings or enterprises engaged in infrastructure
development, etc……………………………………………………………………………636
[8] Section 80-IAB : Deductions in respect of profits and gains by an
undertaking or enterprise engaged in development of Special
Economic Zone ……………………………………………………………………………..647
[9] Section 80-IB : Deductions in respect of profits and gains from
certain industrial undertakings other than infrastructure
development undertakings……………………………………………………………648
[10] Section 80IBA : Deductions in respect of profits and gains
from housing projects ………………………………………………………………….652
[11] Section – 80IC : Special provisions in respect of certain
undertakings or enterprises in certain special category States……..653
[12] Section – 80-ID : Deduction in respect of profits and gains from
business of hotels and convention centres in specified area……………..654
[13] Section 80-IE : Special provisions in respect of certain
undertakings in North-Eastern States ………………………………………….655
[14] Section 80-JJA : Deduction in respect of profits and gains from
business of collecting and processing of bio-degradable waste ……656
[15] Section 80M : Deduction in respect of certain inter-corporate
dividends …………………………………………………………………………………….656
[16] Section 80-O : Deduction in respect of royalties, etc., from
certain foreign enterprises……………………………………………………………657
[17] Section 80-P : Deduction in respect of income of co-operative
societies ……………………………………………………………………………………….660
[18] Section 80-R : Deduction in respect of remuneration from certain
foreign sources in the case of professors, teachers, etc. ………………..693
[19] Section 80-RR : Deduction in respect of professional income
from foreign sources in certain cases……………………………………………694
Chapter 26 — Deductions in Respect of Other Incomes/Other Deductions
[1] Section 80TTA : Deduction in respect of interest on deposits
in savings account ………………………………………………………………………..698
[2] Section 80U : Deduction in case of a person with disability …………..698
Chapter 27 — Rebates and reliefs …………………………………………………………….701
[1] Section 87 : Rebate to be allowed in computing income-tax…………..701
[2] Section 89 : Relief when salary, etc., is paid in arrears or in
advance …………………………………………………………………………………………702
Chapter 28 — Double Taxation Relief
[1] Section 90 : Agreement with Foreign Countries or Specified
Territories ……………………………………………………………………………………..703
[2] Section 91 : Countries with which no Agreement Exists ………………..709
Chapter 29 — Special Provisions Relating to Avoidance of Tax
[1] Sections 92 : Computation of income from international
transaction having regard to arm’s length price…………………………….712
[2] Section 92A : Meaning of associated enterprise……………………………..714
[3] Section 92B : Meaning of International transaction………………………..716
[4] Section 92BA : Meaning of Specified Domestic Transactions …………720
[5] Section 92C : Computation of arm’s length price ………………………….721
[6] Section 92CA : Reference to Transfer Pricing Officer……………………..723
[7] Section 94A : Special measures in respect of transactions with
persons located in notified jurisdictional area ……………………………..723
Chapter 30 — General Anti-Avoidance Rule (GAAR)
[1] Section 95 : Applicability of General Anti-Avoidance Rule ……………725
Chapter 31 — Determination of Tax in Certain Special Cases…………………729
[1] Section 111A : Tax on short-term capital gains in certain cases……..729
[2] Section 112 : Tax on long-term capital gains…………………………………..730
[3] Section 112A : Tax on long-term capital gains in certain cases……….732
[4] Section 115BAA : Tax on income of certain domestic companies …..732
[5] Section 115BBE : Unexplained cash attracts Section 69A and
Section 115BBE de hors Assessee’s income disclosure &
categorization………………………………………………………………………………..733
Chapter 32 — Special Provisions Relating to Certain Incomes
of Non-Residents
[1] Section 115E : Tax on Investment Income and Long-Term
Capital Gains…………………………………………………………………………………736
[2] Section 115H : Benefit under Chapter to be available in certain
cases even after the assessee becomes resident………………………………738
Chapter 33 — Special Provisions Relating to Certain Companies ………….741
[1] Section 115J : Special provisions relating to certain companies ……..741
[2] Section 115JA : Deemed income relating to certain companies………744
[3] Section 115JAA : Tax credit in respect of tax paid on deemed
income relating to certain companies…………………………………………….744
[4] Section 115JB : Special provision for payment of tax by certain
companies……………………………………………………………………………………..745
Chapter 34 — Special Provisions Relating to Certain Persons
Other than a Company
[1] Section 115JC : Special provisions for payment of tax by certain
persons other than a company ………………………………………………………747
Chapter 35 — Income-tax Authorities
[1] Section 116 : Income-tax authorities ………………………………………………750
[2] Section 119 : Instructions to subordinate authorities ……………………..750
Chapter 36 — Jurisdiction
[1] Section 120 : Jurisdiction of Income-tax authorities ………………………755
[2] Section 124 : Jurisdiction of Assessing Officers………………………………756
[3] Section 127 : Centralization of Search Cases – Transfer of cases
from one Assessing Officer to another Assessing Officer……………….757
[4] Section 129 : Change of incumbent of an office………………………………769
Chapter 37 — Power Regarding Discovery, Production of Evidence, etc
[1] Section 131 : Examination of Assessees & Witnesses for Personal
Attendance…………………………………………………………………………………….771
[2] Section 131(1A) : Empowers the officers of the Investigation
Wing viz., Assistant Director, Deputy Director or the Principal
Director of Income-tax (Investigation)…………………………………………..771
Chapter 38 — Search and Seizure
[1] Section 132(1) : When can Search be Authorised ……………………………776
[2] [Section 132(3) : Prohibitory Order ……………………………………………….786
[3] Section 132(4) : Recording of Statement ………………………………………..788
[4] Section 132(4A) : Presumptions as to Assets, Books of
Account, etc. …………………………………………………………………………………790
[5] Section 132(5) : Estimating the undisclosed income in a
summary manner …………………………………………………………………………792
[6] Section 132(8) : Time limit for retention books of account or
other documents seized or deemed to be seized …………………………..792
[7] Section 132(9A) : Where the authorised officer is not the
Assessing Officer of the person searched ……………………………………..793
[8] Section 132A : Powers to requisition books of account, etc…………….793
[9] Section 132B : Application of seized or requisitioned assets …………796
Chapter 39 — Power to Calling for Information & Power of Survey
[1] Section 133(6) : Calling for information …………………………………………802
[2] Sections 133A : Power of Survey……………………………………………………803
Chapter 40 — Disclosure of Information Respecting Assessees
[1] Sections 138 : Disclosure of information respecting assessees ……….806
Chapter 41 — Procedure for Assessment
[1] Section 139(1) : Return of Income…………………………………………………..808
[2] Section 139(3) : Return of loss ……………………………………………………….813
[3] Section 139(5) : Filing of Revised Return of Income ……………………..813
[4] Section 139A : Permanent Account Number…………………………………815
[5] Section 139AA : Quoting of Aadhaar Number………………………………817
[6] Section 140 : Return by whom to be verified………………………………….818
[7] Section 140A : Self-Assessment ……………………………………………………..820
[8] Section 141 : Provisional Assessment …………………………………………….821
[9] Section 142 : Power of Assessing Officer to make enquiry
before assessment………………………………………………………………………..823
[10] Section 142(2A) : Giving direction to get Books of Account
Audited ……………………………………………………………………………………….823
[11] Section 142A : Estimate of value of assets by Valuation Officer……824
[12] Section 143 : Processing of an income-tax return – Scope of
adjustments under section 143(1)…………………………………………………826
[13] Section 143(2) : Scrutiny Assessment notice ……………………………….835
[14] Section 143(3) : Scrutiny Assessment……………………………………………840
[15] Section 144 : Best judgment assessment……………………………………….845
[16] Section 144B : Faceless Assessment………………………………………………851
[17] Section 144C : Reference to Dispute Resolution Panel………………….855
Chapter 42 — Method of Accounting
[1] Section 145 : Method of Accounting ………………………………………………860
[2] Section 145A : Method of accounting in certain cases ……………………875
Chapter 43 — Income Escaping Assessment
[1] Section 147 : Income Escaping Assessment ……………………………………880
[2] Section 148 : Issue of notice under section 148 where income
has escaped assessment…………………………………………………………………886
[3] Section 148A : Procedure before issuance of notice under
section 148 …………………………………………………………………………………….907
[4] Section 149 : Time Limit for Notices under Sections 148 and 148A…….923
[5] Section 150 : Provision for Cases where Assessment is in
Pursuance of an Order on Appeal, etc. ………………………………………….926
[6] Section 151 : Sanction for Issue of Notice under Section 148 ………….930
[7] Section 151A : Faceless assessment of income escaping
assessment…………………………………………………………………………………..935
Chapter 44 — Time Limit for Completion of Assessment, Reassessment
and Recomputation
[1] Section 153 : Time limit for completion of assessment,
reassessment………………………………………………………………………………….939
Chapter 45 — Procedure of Assessment in cases where a search was
initiated under Section 132/132A after 31.05.2003 but before 31.03.2021
[1] Sections 153A : Procedure of assessment in cases where
a search was initiated under section 132/132A after 31.05.2003
but before 31.03.2021 …………………………………………………………………….946
[2] Section 153B : Time limit for completion of assessment under
Section 153A as applicable where a search was initiated under
section 132/132A after 31.05.2003 but before 31.03.2021…………………949
[3] Section 153C : Assessment of a person other than the person
searched [Third Party Assessment] as applicable where a search
was initiated under section 132/132A after 31.05.2003 but before
31.03.2021………………………………………………………………………………………949
[4] Section 153D : Prior Approval of JCIT – Applicable where a
search was initiated under section 132/132A after 31.05.2003
but before 31.03.2021……………………………………………………………………..953
Chapter 46 — Rectification of Mistake etc.
[1] Section 154 : Rectification of mistake……………………………………………..954
[2] Section 156 : Notice of Demand……………………………………………………..971
[3] Section 157 : Intimation of Loss …………………………………………………….973
Chapter 47 — Special Procedure for Assessment of Search Cases
[1] Section 158BA : Assessment of total income as a result of search…..975
[2] Section 158BB : Computation of total income of block period ……….976
[3] Section 158BC : Procedure for Block Assessment…………………………..977
[4] Section 158BD : Undisclosed income of any other person ……………..977
[5] Section 158BE : Time-limit for completion of block assessment……..978
[6] Section 158BFA : Levy of interest and penalty in certain cases ………984
[7] Section 158BG : Authority competent to make assessment of
block period…………………………………………………………………………………..984
[8] Section 158BH : Application of other provisions of this Act…………..985
[9] Section 158BI : Chapter not to apply in certain circumstances……….986
Chapter 48 — Liability in Special Cases
[1] Section 159 : Legal Representative …………………………………………………987
[2] Section 160 : Representative Assessee ……………………………………………990
[3] Section 163 : Who may be regarded as agent in relation to a
Non Resident…………………………………………………………………………………994
[4] Section 164 : Charge of tax where share of beneficiaries unknown…….995
[5] Section 165 : Case where part of trust income is chargeable…………1006
[6] Section 166 : Direct assessment or recovery not barred………………..1008
[7] Section 167B : Charge of tax where shares of members in
association of persons or body of individuals unknown, etc ……….1012
[8] Section 170 : Succession to business otherwise than on death………1013
[9] Section 171 : Assessment after partition of a Hindu undivided
family ………………………………………………………………………………………….1014
[10] Section 172 : Shipping business of non-residents – Levy and
Recovery of tax…………………………………………………………………………..1016
[11] Section 174 : Assessment of persons leaving India……………………..1018
[12] Section 176 : Discontinued business ………………………………………….1019
[13] Section 177 : Association dissolved or business discontinued…….1022
[14] Section 178 : Company in Liquidation ……………………………………….1028
[15] Section 179 : Liability of directors of private company……………….1030
[16] Section 180 : Royalties or copyright fees for literary or artistic
work ………………………………………………………………………………………….1031
Chapter 49 — Special Provisions Applicable to Firms
[1] Section 184 : Assessment as a firm………………………………………………1033
[2] Section 185 : Assessment when section 184 not complied with……1036
[3] Section 186 : Cancellation of registration…………………………………….1038
[4] Section 187 : Change in constitution of a firm………………………………1039
[5] Section 188A : Joint and several liability of partners for tax
payable by firm……………………………………………………………………………1040
[6] Section 189 : Dissolution of firm or discontinuance of business …..1041
Chapter 50 — Collection and Recovery of Tax
[1] Section 191 : Safeguard for Revenue – If no provision for TDS or
where tax not deducted – Tax is to be payable by Assessee Direct ……1045
[2] Section 192 : TDS from Salary………………………………………………………1045
[3] Section 194A : TDS from Interest other than Interest on
Securities …………………………………………………………………………………….1047
[4] Section 194C : TDS from Payments to Contractors &
Sub-Contractors ………………………………………………………………………….1049
[5] Section 194E : TDS from Payments to Non-Resident Sportsmen
or Sports Associations …………………………………………………………………1052
[6] Section 194H : TDS from Commission or Brokerage …………………..1054
[7] Section 194-1 : TDS from Rent ……………………………………………………..1061
[8] Section 194J : TDS from Fees or Professional or Technical
Services ……………………………………………………………………………………….1062
[9] Section 194LB : TDS from income by Way of Interest from
Infrastructure Debt Fund …………………………………………………………….1063
[10] Section 194N : TDS from Cash Withdrawal Exceeding Rs. 1
Crore from Banks or Co-operative Bank or Post Office ……………..1063
[11] Section 195 : TDS from Payments (Other Than Salary) to
Non-Residents and Foreign Company ………………………………………1067
[12] Section 196 : No Tax deduction at source on Interest or
Dividend or Other Income Payable to Government, Reserve
Bank or Certain Corporations ……………………………………………………1069
[13] Section 197 : Certificate for Deduction at Lower Rate ………………1071
[14] Section 199 : Credit for Tax Deducted ……………………………………….1072
[15] Section 201: Consequences of failure to Deduct or Pay………………1076
[16] Section 206C : Tax Collected at Source ………………………………………1077
Chapter 51 — Liability for Payment of Advance Tax
[1] Section 207 : Liability for payment of advance tax……………………….1078
[2] Section 214 : Interest payable by Government……………………………..1079
[3] Section 215 : Interest payable by assessee…………………………………….1080
[4] Section 217(1A) : Interest payable by assessee when no
estimate made …………………………………………………………………………..1080
Chapter 52 — Collection and Recovery
[1] Section 220 : When tax payable and when assessee deemed
in default……………………………………………………………………………………..1082
[2] Section 220(2) : Interest for non-payment of tax as per demand
notice (i.e., Interest on delayed payment of tax)…………………………..1083
[3] Section 220(2A) : Reduce or Waiver of interest paid or payable
by an assessee under section 220(2A)…………………………………………..1084
[4] Section 220(4) : Assessee shall be deemed to be in default……………1088
[5] Section 220(6) : Treat the assessee as not being in default in
respect of the amount in dispute in the appeal…………………………….1089
[6] Section 221 : Penalty for Default in Making Payment of Tax………..1090
[7] Section 222 : Certificate to Tax Recovery Officer ………………………….1093
[8] Section 226(1) : Other Modes of Recovery ………………………………….1094
[9] Section 226(3) : Garnishee Proceedings – Recovery from Third
Parties………………………………………………………………………………………….1094
Chapter 53 — Interest Chargeable in Certain Cases
[1] Section 234A : Interest for defaults in furnishing return of
income ………………………………………………………………………………………..1096
[2] Section 234B : Interest for defaults in payment of advance tax …….1097
[3] Section 234C : Interest for deferment of advance tax……………………1098
[4] Section 234D : Interest on Excess Refund Granted to the
Assessee ……………………………………………………………………………………1099
[5] Section 234E : Fee for default in furnishing statements………………..1101
Chapter 54 — Refunds
[1] Section 237 : Refunds …………………………………………………………………..1105
[2] Section 239 : Form of Claim for Refund and Limitation……………….1106
[3] Section 240 : Refund on Appeal, etc……………………………………………..1107
[4] Section 241A : Withholding of Refund in Certain Cases ……………..1109
[5] Section 243 : Interest on Delayed Refunds……………………………………1110
[6] Section 244 : Interest on Refund where no Claim is Needed………..1111
[7] Section 244A : Interest on Refunds ………………………………………………1118
[8] Section 245 : Set off of Refunds against Tax remaining Payable …..1119
Chapter 55 — Settlement of Cases
[1] Section 245C : Application for settlement of cases ………………………1120
[2] Section 245D : Procedure on application under section 245C
(Full and true disclosure)…………………………………………………………….1126
Chapter 56 — Dispute Resolution Committee
[1] Sections 245MA : Dispute Resolution Committee ……………………..1129
Chapter 57 — Advance Rulings
[1] Section 245N : Definitions ……………………………………………………………1131
[2] Section 245Q : Application for advance ruling……………………………..1131
[3] Section 245R : Procedure on receipt of application ………………………1132
Chapter 58 — Appeals
[1] Section 246 : Appealable order…………………………………………………….1134
[2] Section 249(3) : Condonation of Delay …………………………………………1135
[3] Section 249(4) : Payment of Admitted Tax Due before Filing an
Appeal before the Joint Commissioner (Appeals) or the
Commissioner (Appeals)……………………………………………………………..1138
[4] Section 251 : Powers of Commissioner (Appeals) ………………………..1139
[5] Section 253(4) : Memorandum of Cross-Objections ……………………..1145
[6] Section 253(5) : Condonation of Delay in Filing of Appeal or
Memorandum of Cross-Objections before the Tribunal……………….1146
[7] Section 253(6) : Form of Appeal & Requisite Fee………………………….1148
[8] Section 254(1) : Orders of Appellate Tribunal………………………………1149
[9] Section 254(2) : Appellate Tribunal – Power for Rectification of
Mistake Apparent on Record ………………………………………………………1153
[10] Section 254(2B) : Awarding Cost of any Appeal by the
Appellate Tribunal …………………………………………………………………….1156
[11] Section 255(4) : Third Member Bench of the Appellate Tribunal…….1159
[12] Section 255(6) : Powers of the Appellate Tribunal………………………1161
[13] Section 258 : Power of High Court or Supreme Court to
require Statement to be Amended ……………………………………………..1161
[14] Section 259 : Case before High Court to be Heard by not less
than two Judges …………………………………………………………………………1162
[15] Section 260A : Appeal to High Court …………………………………………1164
[16] Section 260A(2) : Who can File Appeal to the High Court………….1171
[17] Section 260A(2A) : Condonation of delay…………………………………..1172
[18] Section 260A(7) : Applicability of Code of Civil Procedure,
1908……………………………………………………………………………………………1176
[19] Section 260B : Case before High Court to be Heard by not
less than two Judges…………………………………………………………………..1177
[20] Section 261 : Appeal to Supreme Court………………………………………1178
Chapter 59 — Revision of Orders Prejudicial to Revenue
[1] Section 263 : Revision of orders prejudicial to revenue ………………..1183
Chapter 60 — Revision of Other Orders
[1] Section 264 : Revision of other orders ………………………………………….1255
Chapter 61 — General
[1] Section 268A : Filing of appeal or application for reference by
Income-tax authority……………………………………………………………………1262
Chapter 62 — Requirement as to Mode of Acceptance, Payment or
Repayment in Certain Cases to Counteract Evasion of Tax
[1] Section 269SS : Mode of taking or accepting certain loans,
deposits and specified sum………………………………………………………….1263
[2] Section 269ST : Mode of undertaking transactions. ……………………..1263
[3] Section 269T : Mode of repayment of certain Loans or deposits…..1265
Chapter 63 — Penalties Imposable
[1] Section 270A : Penalty for Under-Reporting and Misreporting
of Income …………………………………………………………………………………….1267
[2] Section 271(1)(c) : Failure to furnish returns, comply with
notices, concealment of income, etc……………………………………………..1268
[3] Section 271A : Penalty for Failure to Keep, Maintain, or Retain
Books of Account, Documents, etc., as Required Under
Section 44AA……………………………………………………………………………….1287
[4] Section 271AAA : Penalty for Undisclosed Income in Search
Cases……………………………………………………………………………………………1288
[5] Section 271AAB : Penalty where search has been initiated on
or after 01.07.2012………………………………………………………………………..1289
[6] Section 271AAC : Penalty in Case of Income from Undisclosed
Sources ……………………………………………………………………………………….1291
[7] Section 271B : Failure to get Accounts Audited or Furnish a
Report of Audit as Required Under Section 44AB ……………………….1291
[8] Section 271C : Penalty for Failure to Deduct Tax at Source…………..1305
[9] Section 271D : Penalty for failure to comply with the provisions
of section 269SS……………………………………………………………………………1306
[10] Section 271E : Penalty for Failure to Comply with the
Provisions of Section 269T………………………………………………………….1310
[11] Section 271F : Penalty for Failure to Furnish Return of Income …1311
[12] Section 271FA : Penalty for Failure to Furnish Statement of
Financial Transaction or Reportable Account as Required
Under Section 285BA(1) – [Previously Called as ‘Annual
Information Return (AIR)’] ……………………………………………………….1312
[13] Section 272B : Penalty for Failure to Comply with the
Provisions of Section 139A…………………………………………………………1316
[14] Section 273 : False Estimate of, or Failure to Pay, Advance Tax …1317
[15] Section 273A : Power to Reduce or Waive Penalty, etc., in
Certain Cases……………………………………………………………………………..1317
[16] Section 274 : Procedure for Levy of Penalty ……………………………….1319
[17] Section 275 : Bar of Limitation for Imposition of Penalty……………1319
Chapter 64 — Offences and Prosecutions
[1] Section 275A : Contravention of Order made to in Second Proviso
to Section 132(1) Or 132(3) in Case of Search And Seizure …………..1322
[2] Section 276B : Failure to pay tax to the credit of Central
government under Chapter XII-D or XVII-B ……………………………….1323
[3] Section 276C : Wilful attempt to evade tax, penalty or interest,
etc. ………………………………………………………………………………………………1326
[4] Section 276CC : Failure to furnish returns of income …………………..1332
[5] Section 277 : False statement in verification, etc. ………………………….1340
[6] Section 278B : Offences by Companies…………………………………………1343
[7] Section 278C : Offences by Hindu Undivided Families ……………….1345
[8] Section 278E : Presumption as to culpable mental state ……………….1346
[9] Section 279(1) : Prosecution at Instance of Chief
Commissioner/Commissioner …………………………………………………….1348
[10] Section 279(2) : Compounding of Offences…………………………………1349
[11] Section 280 : Disclosure of particulars by public servants ………….1354
Chapter 65 — Miscellaneous
[1] Section 281 : Certain Transfers to be Void ………………………………….1356
[2] Section 281B : Provisional attachment to protect revenue in
certain cases ………………………………………………………………………………1359
[3] Section 282 : Service of notice generally……………………………………….1360
[4] Section 288 : Appearance by authorized representative……………….1367
[5] Section 292BB : Notice deemed to be valid in certain
circumstances …………………………………………………………………………….1367
[6] Section 292C : Presumption as to assets books of account, etc. …….1369
[7] Section 293 : Bar of suits in civil courts ……………………………………….1370
[8] Section 297 : Repeals and savings ………………………………………………..1371
Chapter 66 — General Topics
[1] Affidavit – Evidentiary value……………………………………………………….1373
[2] Legal Heir ………………………………………………………………………………….1378
[3] Principle of mutuality………………………………………………………………….1378
[4] Concept of Principles of Natural Justice ………………………………………1380
[5] Surrounding circumstances and Test of applying human
probabilities…………………………………………………………………………………1383
[6] Concept of Perversity…………………………………………………………………..1389
[7] Principles of Cross-Examination in Income Tax Proceedings……….1392
[8] Reasonable cause…………………………………………………………………………1393
[9] The Term ‘Sufficient Cause’ – Certain Ratios Laid down
by the Court…………………………………………………………………………………1395
[10] Colourable devices cannot be part of tax planning…………………….1398
Chapter 67 — The Prohibition of Benami Property Transactions Act, 1988
[1] Section 2(8) : Benami Property …………………………………………………….1399
[2] Section 2(9) : Benami Transaction ………………………………………………..1400
[3] Section 2(12) : Beneficial Owner…………………………………………………..1405
[4] Section 2(16) : Fair Market Value………………………………………………….1406
[5] Section 24 : Notice and Attachment of Property Involved in
Benami Transaction……………………………………………………………………1407
Chapter 68 — Black Money Act, 2015
[1] Section 2 : Definitions…………………………………………………………………..1420
[2] Section 40 : Interest Payable by Assessee ……………………………………..1420
[3] Sections 43 : Penalty for Failure to Furnish in Return of Income,
an Information or Furnish Inaccurate Particulars About an
Asset (including financial interest in any entity) Located
Outside India ………………………………………………………………………………1422
[4] Sections 46 : Procedure ………………………………………………………………..1424
[5] Sections 48 : Chapter not in Derogation of any other Law or
any other Provision of this Act…………………………………………………..1424
[6] Section 50 : Punishment for Failure to Furnish in Return of
Income, any Information about an Asset (including financial
interest in any entity) Located outside India………………………………..1426
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