6. INCOME U/s 2 (24): Meaning and Characteristics A PERIODICAL MONETARY RETURN COMING IN WITH OR SOME SORT OF FROM A DEFINITE SOURCE REGULARITY REGULARITY
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8. Tax The outflow from income paid to the Government.
9. Who is liable to pay TAX? PERSON – U/s 2 ( 31 ) INDIVIDUAL H U F COMPANY FIRM BOI / AOP LOCAL AUTHORITY ANY OTHER ARTIFICIAL JURIDICAL PERSON
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14. ASSESSMENT YEAR u/s 2(9) Year in which final tax is payable relating to the previous year. Always for 12 months. Example: PY 2008-09 AY 2009-10 PY 2009-10 AY 2010-11 (this is relevant or exam)
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18. Kinds of Residential status: All Assesses Resident Non-resident Individual & HUF R & OR R but not OR
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21. E.g. Mr. George Bush comes for the first time to India on 26.1.201009 and leaves India on 15.3.2010. Determine his residential status for AY 2010-11 Solution: Mr. George Bush Foreign Citizen PY 2009-10 AY 2010-11 Days in India in P.Y. 2009-10 Jan : 6 days Feb: 28 days Mar: 15 days Total: 49 days He does not satisfy any of the conditions. Therefore he is Non resident .
22. Conditions for determining residential status BASIC ADDITIONAL Stay in India for At least 182 days in Current PY 05-06 ( A ) OR Stay in India for at least 60 days in current PY. & Stay in India for at least 365 days in 4 PY preceding current PY. ( B ) AND Stay in India for 730 days in 7 PY preceding the current PY 05-06 Resident in India for 9 out of 10 PY preceding current PY & ( C ) ( D ) If {a or b}+ {c & d} satisfied: ROR If only a or b satisfied: RNOR If a or b NOT satisfied: Non-resident
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30. E.g.: T- Taxable NT - Not Taxable Items of Income Nature ROR RNOR N R Salary received in India Received in India T T T Salary earned in India but received in Sri Lanka Accruing in India T T T Foreign Income: Income from business in Nepal controlled form Delhi Foreign Income controlled from India T T NT Income from business in Sri Lanka received there. Foreign Income NOT controlled from India T NT NT
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34. Computation of Total Income PY 09-10 AY 10-11 Particulars Rs. Rs. Income from Salaries XX Income from House property XX Income from P & G of Business or profession XX Income from capital gains (short term) XX Income from Other sources XX X Add: Clubbed incomes X GROSS total Income XX Less: deductions u/s 80 - X Net taxable income YY Add: Long term capital gains GG Net taxable income MM
35. Computation of Final tax payable : Net taxable income YY Rates of tax (10 % 20% 30%) or as relevant ---------- Net tax payable 1 Add: Surcharge (tax on tax) 2 Tax payable [ 1 + 2 ] 3 Add: {education cess 3%} [1 x 3 %] 4 FINAL tax payable 5 Less: Tax already paid (T.D.S. / Advance tax) [5-6] 6 Assessed tax payable/refund 7