Income tax topics

Capital gain is the profit from sale of a capital asset — taxed as STCG or LTCG depending on holding period and asset class.

Income from house property covers actual rent, deemed rent on second homes and standard deductions under Section 24.

Business income is the profit from any trade, commerce or manufacture, computed under Sections 28–44DB with allowances for depreciation and actual expenses.

Salary income under Sections 15–17 covers basic pay, allowances, perquisites, profits in lieu of salary and pension.

The residual head under Sections 56–59 covering interest, dividend, gifts, family pension, lottery and any income not falling under the other four heads.

Dividend received from domestic and foreign companies, taxable at slab rates in shareholder's hands from FY 2020-21 onwards.

Foreign income refers to any income earned outside India by an Indian resident, taxable in India under Section 5 read with DTAA.

Income from land in India used for agriculture, exempt under Section 10(1) but included for rate-determination if exceeds ₹5,000.

Section 80C allows a deduction of up to ₹1.5 lakh per year for specified investments and payments — only under old tax regime.

Section 80D allows deduction for health insurance premium — up to ₹25k for self + family, additional ₹25k (₹50k if senior) for parents.

Section 80CCD covers deductions for contributions to National Pension System (NPS) — 80CCD(1) employee, 80CCD(1B) additional ₹50k, 80CCD(2) employer.

Section 80G allows deduction for donations to notified charitable institutions — 50% or 100% depending on institution, subject to 10% of adjusted gross total income for certain categories.

HRA exemption under Section 10(13A) is the minimum of three amounts — actual HRA, rent paid minus 10% salary, or 40%/50% of salary for non-metro/metro.

LTA exemption under Section 10(5) covers travel expenses for employee and family within India, restricted to twice in a block of four calendar years.

TDS is tax deducted at source by the payer under Chapter XVII-B, deposited with government and credited to the deductee's PAN in Form 26AS.

Advance tax is tax paid in the same FY when income is earned, in four instalments as per Section 208, if total tax liability exceeds ₹10,000.

Self Assessment Tax under Section 140A is the balance tax paid by the taxpayer before filing ITR, after adjusting TDS, advance tax and MAT credit.

AIS is a comprehensive statement of taxpayer's financial transactions reported by banks, brokers, mutual funds, employers and other reporting entities — accessible on the Income Tax portal.

Form 26AS is the consolidated annual tax credit statement showing all TDS, TCS, advance tax, self-assessment tax and refunds credited against a PAN.

AIS (Annual Information Statement) is the comprehensive digital view of all reported financial transactions of a PAN in a financial year.

Tax audit under Section 44AB is a mandatory audit of business/profession accounts by a CA when turnover crosses specified thresholds or presumptive scheme is opted out below thresholds.

Linking PAN with Aadhaar under Section 139AA is mandatory; unlinked PANs became inoperative from 1 July 2023 and cannot be used for tax purposes.

A belated return is any ITR filed after the due date under Section 139(1) but before 31 December of the assessment year, under Section 139(4).

Revised return under Section 139(5) allows correction of any error or omission in an original or belated ITR — filed before 31 December of the AY or completion of assessment, whichever is earlier.

ITR-U (updated return) under Section 139(8A) allows filing/updating a return within 24 months from end of AY, on payment of additional tax (25% or 50%).

Income tax refund is issued when tax paid (TDS + advance + SAT) exceeds actual tax liability, credited directly to pre-validated bank account.