Commerce Optional (UPSC-IAS),
Target for 17/07
👆Above are subtopic for Commerce Optional Paper 1 of Taxation
✅Income Tax: Definitions; Basis of Charge
✅
Note- Students are advised to read only that subtopics for UPSC commerce Optional Preparation.
Join 🔜 @commerceoptional
😊 This will be very useful for students of Commerce Optional.
For Guidance Purpose Contact
CA Dhananjay Ojha (Chartered Accountant)
Contact @cadhananjay
Target for 17/07
👆Above are subtopic for Commerce Optional Paper 1 of Taxation
✅Income Tax: Definitions; Basis of Charge
✅
Note- Students are advised to read only that subtopics for UPSC commerce Optional Preparation.
Join 🔜 @commerceoptional
😊 This will be very useful for students of Commerce Optional.
For Guidance Purpose Contact
CA Dhananjay Ojha (Chartered Accountant)
Contact @cadhananjay
Section 6 [Residence in India]
(I) Individuals [Resident and ordinarily resident/ Resident but not ordinarily resident/ non-resident]
The residential status of an individual is determined on the basis of the period of his stay in India.
Basic conditions:
(i) He must be present in India for a period of 182 days or more during the previous year
(ii) He must be present in India for a period of 60 days or more during the previous year and 365 days or more during the 4 years immediately preceding the previous year.
Cases where condition (ii) is not applicable:
(a) Where an Indian citizen who leaves India during the previous year for the purpose of employment outside India or as a member of the crew of an Indian ship;
(b) Where an Indian citizen or a person of Indian origin who, being outside India, comes on a visit to India during the previous year.
(I) Individuals [Resident and ordinarily resident/ Resident but not ordinarily resident/ non-resident]
The residential status of an individual is determined on the basis of the period of his stay in India.
Basic conditions:
(i) He must be present in India for a period of 182 days or more during the previous year
(ii) He must be present in India for a period of 60 days or more during the previous year and 365 days or more during the 4 years immediately preceding the previous year.
Cases where condition (ii) is not applicable:
(a) Where an Indian citizen who leaves India during the previous year for the purpose of employment outside India or as a member of the crew of an Indian ship;
(b) Where an Indian citizen or a person of Indian origin who, being outside India, comes on a visit to India during the previous year.
Additional conditions:
(1) He is a resident in at least 2 out of 10 previous years preceding the relevant previous year;
(2) His stay in India in the last 7 years preceding the relevant previous year is 730 days or more.
(1) He is a resident in at least 2 out of 10 previous years preceding the relevant previous year;
(2) His stay in India in the last 7 years preceding the relevant previous year is 730 days or more.
HUF [Resident and ordinarily resident/ Resident but not ordinarily resident/ non-resident]
A HUF would be resident in India if the control and management of its affairs is situated wholly or partly in India.
If the control and management of the affairs is situated wholly outside India, it would become a non-resident.
If the HUF is resident, then the satisfaction or otherwise of additional conditions by Karta would determine whether the HUF is resident and ordinarily resident or resident but not ordinarily resident
If Karta satisfies both the additional conditions [(1) and (2)] in (I) above, then the HUF would be ROR. Otherwise, the HUF would be RNOR.
A HUF would be resident in India if the control and management of its affairs is situated wholly or partly in India.
If the control and management of the affairs is situated wholly outside India, it would become a non-resident.
If the HUF is resident, then the satisfaction or otherwise of additional conditions by Karta would determine whether the HUF is resident and ordinarily resident or resident but not ordinarily resident
If Karta satisfies both the additional conditions [(1) and (2)] in (I) above, then the HUF would be ROR. Otherwise, the HUF would be RNOR.
Section 5 [Scope of Total Income]
Resident And Ordinarily Resident
Income received/ deemed to be received/ accrued or arisen/ deemed to accrue or arise in or outside India
In short, the global income is taxable.
Resident But Not Ordinarily Resident
Income which is received/ deemed to be received/ accrued or arisen/ deemed to accrue or arise in India;
AND
Income which accrues or arises outside India being derived from a business controlled in or profession set up in India.
Non-Resident
Income received/ deemed to be received/ accrued or arisen/deemed to accrue or arise in India.
Resident And Ordinarily Resident
Income received/ deemed to be received/ accrued or arisen/ deemed to accrue or arise in or outside India
In short, the global income is taxable.
Resident But Not Ordinarily Resident
Income which is received/ deemed to be received/ accrued or arisen/ deemed to accrue or arise in India;
AND
Income which accrues or arises outside India being derived from a business controlled in or profession set up in India.
Non-Resident
Income received/ deemed to be received/ accrued or arisen/deemed to accrue or arise in India.
👆🏻Above topics are related with Taxation subtopics of UPSC Commerce Optional
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👆 Test series Schedule of UPSC Commerce Optional for UPSC mains 2019 by Civil Service Gurukul.
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Commerce Optional (UPSC-IAS),
Target for 18/07
👆Above are subtopic for Commerce Optionval Paper 1 of Taxation
✅Income which do not form part of total income.
✅
Note- Students are advised to read only that subtopics for UPSC commerce Optional Preparation.
Join 🔜 @commerceoptional
😊 This will be very useful for students of Commerce Optional.
For Guidance Purpose Contact
CA Dhananjay Ojha (Chartered Accountant)
Contact @cadhananjay
Target for 18/07
👆Above are subtopic for Commerce Optionval Paper 1 of Taxation
✅Income which do not form part of total income.
✅
Note- Students are advised to read only that subtopics for UPSC commerce Optional Preparation.
Join 🔜 @commerceoptional
😊 This will be very useful for students of Commerce Optional.
For Guidance Purpose Contact
CA Dhananjay Ojha (Chartered Accountant)
Contact @cadhananjay
10(1) Agricultural income is exempt under section 10(1).
However, agricultural income has to be aggregated with non- agricultural income for determining the rate at which non-agricultural income would be subject to tax, in case of individuals, HUF, AOP & BOIs etc., where the –
• agricultural income exceeds ` 5,000 p.a. and
• non-agricultural income exceeds basic exemption limit.
The following are the steps to be followed in computation of tax - Step 1: Tax on non-agricultural income plus agricultural income Step 2: Tax on agricultural income plus basic exemption limit Step 3: Tax payable by the assessee = Step 1 – Step 2
Step 4: Add Surcharge/Deduct Rebate u/s 87A, if applicable.
Step 5: Add Health and Education Cess@4%.
However, agricultural income has to be aggregated with non- agricultural income for determining the rate at which non-agricultural income would be subject to tax, in case of individuals, HUF, AOP & BOIs etc., where the –
• agricultural income exceeds ` 5,000 p.a. and
• non-agricultural income exceeds basic exemption limit.
The following are the steps to be followed in computation of tax - Step 1: Tax on non-agricultural income plus agricultural income Step 2: Tax on agricultural income plus basic exemption limit Step 3: Tax payable by the assessee = Step 1 – Step 2
Step 4: Add Surcharge/Deduct Rebate u/s 87A, if applicable.
Step 5: Add Health and Education Cess@4%.
10(2) Since the HUF is taxed in respect of its income, the share income is exempt from tax in the hands of the member.
10(2A) The partner’s share in the total income of the firm or LLP is exempt
from tax.
10(4) Income by way of interest on moneys standing to his credit in a Non-resident (External) Account (NRE A/c), is exempt in the hands of an individual, being a person resident outside India as per the FEMA, 1999 or in the hands of an individual who has been permitted by the RBI to maintain such account.
10(2A) The partner’s share in the total income of the firm or LLP is exempt
from tax.
10(4) Income by way of interest on moneys standing to his credit in a Non-resident (External) Account (NRE A/c), is exempt in the hands of an individual, being a person resident outside India as per the FEMA, 1999 or in the hands of an individual who has been permitted by the RBI to maintain such account.
10(6D) Income arising to non-corporate non-resident and foreign companies, by way of royalty from or fees from technical services rendered in or outside India to, the National Technical Research Organisation (NTRO) is exempt.
10(10BB) Payment to Bhopal Gas Victims is exempt.
10(10BC) Compensation received or receivable from the Central Government, State Government or local authority by an individual or his legal heir on account of any disaster is exempt except to the extent of loss or damage allowed as deduction under the Act.
10(11A) Any payment from Sukanya Samriddhi Account
10(16) The value of scholarship granted to meet the cost of education would be exempt from tax in the hands of the recipient irrespective of the amount or source of scholarship.
10(17) Daily allowance received by any Member of Parliament or of State Legislatures or any Committee thereof are exempt.
10(17A) Awards for literary, scientific and artistic works and other awards by the Government are exempt.
10(18) Pension received by individual who has been in service of Central or State Government and has awarded “ParamVir Chakra” or “MahaVir Chakra” or “Vir Chakra” such other gallantry award as the Central Government notifies is exempt from tax.
10(26) Income from any source in the specified areas or States in which member of a Scheduled Tribe is residing or income by way of dividend or interest on securities is exempt in the hands of member of the Scheduled Tribe.
10(26AAA) Income from any source in the state of Sikkim, dividend income and interest on securities is exempt in the hands of a Sikkimese individual. This exemption is not available to a Sikkimese woman who, on or after 1st April, 2008, marries a non-Sikkimese individual.
10(10BB) Payment to Bhopal Gas Victims is exempt.
10(10BC) Compensation received or receivable from the Central Government, State Government or local authority by an individual or his legal heir on account of any disaster is exempt except to the extent of loss or damage allowed as deduction under the Act.
10(11A) Any payment from Sukanya Samriddhi Account
10(16) The value of scholarship granted to meet the cost of education would be exempt from tax in the hands of the recipient irrespective of the amount or source of scholarship.
10(17) Daily allowance received by any Member of Parliament or of State Legislatures or any Committee thereof are exempt.
10(17A) Awards for literary, scientific and artistic works and other awards by the Government are exempt.
10(18) Pension received by individual who has been in service of Central or State Government and has awarded “ParamVir Chakra” or “MahaVir Chakra” or “Vir Chakra” such other gallantry award as the Central Government notifies is exempt from tax.
10(26) Income from any source in the specified areas or States in which member of a Scheduled Tribe is residing or income by way of dividend or interest on securities is exempt in the hands of member of the Scheduled Tribe.
10(26AAA) Income from any source in the state of Sikkim, dividend income and interest on securities is exempt in the hands of a Sikkimese individual. This exemption is not available to a Sikkimese woman who, on or after 1st April, 2008, marries a non-Sikkimese individual.
10(30) The amount of any subsidy received by any assessee engaged in the business of growing and manufacturing tea in India through or from the Tea Board will be wholly exempt from tax.
10(31) The amount of any subsidy received by an assessee engaged in the business of growing and manufacturing rubber, coffee, cardamom or other specified commodity in India from or through the Rubber Board, Coffee Board, Spices Board or any other will be exempt.
10(35) Any income received in respect of units from the Administrator of the specified undertaking/ specified company/ Mutual Fund shall be exempt. However, income arising from transfer of such units would not be exempt.
10AA Tax holiday for unit established in Special Economic Zones (SEZs), which has begun or begins to manufacture or produce articles or things or provide any service on or after 1.4.2005 in any SEZ for 15 consecutive assessment years in respect of its profits derived from exports of such articles or things or export of services (including computer software).
Amount of exemption =
Profits of Unit in SEZ x Export turnover of Unit SEZ
Total turnover of Unit SEZ
100% of such profits would be exempt in the first five years, 50% in the next five years and in the last five years, 50% subject to transfer to SEZ Re-investment Reserve Account.
10(31) The amount of any subsidy received by an assessee engaged in the business of growing and manufacturing rubber, coffee, cardamom or other specified commodity in India from or through the Rubber Board, Coffee Board, Spices Board or any other will be exempt.
10(35) Any income received in respect of units from the Administrator of the specified undertaking/ specified company/ Mutual Fund shall be exempt. However, income arising from transfer of such units would not be exempt.
10AA Tax holiday for unit established in Special Economic Zones (SEZs), which has begun or begins to manufacture or produce articles or things or provide any service on or after 1.4.2005 in any SEZ for 15 consecutive assessment years in respect of its profits derived from exports of such articles or things or export of services (including computer software).
Amount of exemption =
Profits of Unit in SEZ x Export turnover of Unit SEZ
Total turnover of Unit SEZ
100% of such profits would be exempt in the first five years, 50% in the next five years and in the last five years, 50% subject to transfer to SEZ Re-investment Reserve Account.
👆Above are realted with Commerce Optionval Paper 1 of Taxation
✅Income which do not form part of total income.
✅
Join Soon @commerceoptional
✅Income which do not form part of total income.
✅
Join Soon @commerceoptional