| Real
Estate consultants Legal Information |
 |
| DEDUCTIONS UNDER THE HEAD INCOME
FROM HOUSE PROPERTY |
| |
| SECTION |
DEDUCTION |
| 23 (1) |
Taxes levied by local authority and borne by the owner to
the extent they are First Provision paid. |
| 23 (2) |
No Annual Value if the house is self-occupied.
But in case of more than one such houses, option is available
only for one house Notional income in respect of self- occupied
house property will be taken as Nil. Deduction under Sec 24(1)
below is not available in respect of self occupied property
except Interest paid not exceeding Rs. 15000/- on funds borrowed
for purchase, construction, repair of said property. |
| 23 (3) |
Proportionate non-occupation allowance for residential house,
subject to certain conditions. |
| 24 (1)(i) |
Repairs and collection of Rent - 1/5th of annual value |
| 24 (1)(ii) |
Insurance premium paid on property. |
| 24 (1)(iv) |
Amount of annual charge (not being a capital charge or a charge
created by the assessee ). |
| 24 (1)(v) |
Ground rent. |
| 24 (1)(vi) |
Interest on borrowed capital for loan taken for the purpose
of property. For Self Occupied Property limited to maximum of
Rs. 10,000/- |
| 24 (1)(vii) |
Land revenue paid. |
| 24 (1)(ix) |
Vacancy allowance subject to certain conditions. |
| 24 (1)(x) |
Unrealised rent ( subject to maximum of property income ).
|
|
| |
|
| THE WEALTH TAX
ACT, 1957 |
| |
| 1 . APPLICABILITY : |
| |
This Act came into force
w.e.f. 1.4.1957. The tax is calculated every year on a particular
date in respect of net assets held by the assessee. Wealth
tax is levied on an individual, Company and Hindu Undivided
Family. A group of persons under certain circumstances can
also be treated as individual. No wealth tax is payable by
a partnership firm or an association of persons. The tax is
levied on the net wealth after deducting from assets, the
exemptions, deductions and liabilities, etc. |
| 2. CHARGE OF WEALTH TAX : |
| |
| (i) Individual |
| |
| Who is not a
citizen of India. |
Not liable to
tax in respect of assets located outside India. |
| Who is citizen of India
but, non-resident or not ordinarily resident. |
not liable to tax in respect
of assets located outside India. |
| Who is citizen and resident
of India |
liable to tax for all assets
whether in India or abroad. |
|
| (ii) H.U.F |
| |
| which is non-resident or not ordinary
resident |
not liable to tax in respect of assets
located outside India. |
| which is resident of India |
liable to tax for all assets whether in India
or abroad. |
|
| |
Residence of Karta of H.U.F. shall be the
basis for deciding the residence of H.U.F. |
| (iii) Companies |
| |
| All Companies |
Specified assets wherever located
belonging to the company. |
|
| (iv) Charitable Trust |
| |
As per section 5(1)(i)
of Wealth Tax Act, any property held under religious
or charitable trust for public purposes in India is
exempt from Wealth Tax. W.e.f. Assessment Year 1985-86
if the trust or institution looses exemption for any
reason the entire corpus shall be charged to wealth
tax at maximum marginal rates. |
|
| 3. ASSETS LIABLE TO TAX |
| |
| The assets liable to wealth tax includes
|
| |
(a) |
Any
guest house, residential house (only one house or part
thereof to individual or HUF is exempt), and/or farm
house situated within 25Km of local limits on municipality-board,
etc. but excluding residential house alloted by a company
to its employee / director having a gross salary less
than Rs. 2,00,000 p.a and residential house forming
a part of stock-in-trade w.e.f. asst. year 1997-98,
commercial buildings not used for assessees own business
or as stock-in-trade shall also attract wealth tax. |
| |
(b) |
Motors car or other than those
used for hiring business or as stock-in-trade. |
| |
(c) |
Jewellery,
bullion, furniture, utensils or any other article made
wholly or partly of gold, silver, platinum or other
precious metal other than used as stock-in-trade. |
| |
(d) |
Yachts,
boats and aircrafts, other than those used for commercial
purposes. |
| |
(e) |
Urban
Land within jurisdiction of municipality/board where
population is over 10,000 or such other conditions but
not including urban land held as stock-in-trade for
3 years or more from the date of purchase. |
| |
(f) |
Cash
in hand, in excess of Rs.50,000 in case of individual
and HUF and in case of other persons, any amount not
recorded in account books. This is an inclusive definition
and all other items are tax free. |
|
| 4. WEALTH TAX RATES |
| |
From Assessment Year 1993-94 to 1998-99
@ 1% of net taxable wealth for all tax payer. |
| 5. OTHER |
| |
Assets belonging to minor child attract
the provisions of clubbing up as specified in section 4 of
the Wealth Tax Act. |
| 6. PENALTIES UNDER THIS ACT ARE : |
| |
| S.No. |
Under Section
|
Cause of Penalty |
Quantum of Penalty |
| (i) |
15B(3) |
For failure to pay self-assessment
tax & interest |
Penalty not exceeding amount of
tax in arrear. |
| (ii) |
18(1)(ii) |
For failure to comply, without
reasonable cause, with a notice under section 16(2)
or 16(4). |
Minimum Rs.1,000 and Maximum Rs.25,000
for each such failure. |
| (iii) |
18(1)(iii) |
For concealing the particulars
of any assets or for furnishing inaccurate particulars. |
Minimum 100% & Maximum 500%
of the tax sought to be evaded. |
| (iv) |
18A(1) |
For failure to answer question,
sign statement or attend to give evidence in responce
to summons under section 37(1). |
Minimum Rs.500 and Maximum Rs.10,000
for every day of default. |
| (v) |
18A(2) |
For failure to furnish statement/information
required without reasonable cause. |
Minimum Rs.100 and maximum Rs.200
for every day of default. |
| (vi) |
32 |
For default in payment of Wealth-Tax. |
Maximum upto 100% of the amount. |
| (vii) |
17B |
For delay in furnishing of return. |
Simple interest @2% of tax payable
for every month of delay or part thereof. |
|
| |
|
|
| CAPITAL GAINS
|
| |
Capital gains means profits or
gains arising from the sale or transfer, conversion of asset into
stock, extinguishment of right is a capital asset in the previous
year. Certain assets are not treated as capital assets being given
in section 2(14) : - |
| |
| (a) |
any stock-in-trade, consumable
stores or raw material held for the purpose of business or
profession. |
| (b) |
personal effects of the assessee, that
is to say, movable property including wearing apparel and
furniture held for his personal use or for the use of any
member of his family dependent upon him (from the assessment
year 1973-74, jewellery is treated as a capital asset even
though it is meant for personal use of the assessee). |
| (c) |
agriculture land in India provided it is
not situated :-
- in any area within the jurisdiction of a municipality
or a cantonment board having a population of 10,000 of
more; or
- in any notified area;
|
| (d) |
6-1/2 percent Gold Bonds, 1977 or 7 percent
Gold Bonds, 1980 or National Defence Gold Bonds, 1980 the
central Government; and |
| (e) |
Special Bearer Bonds, 1991. |
|
| |
Capital assets are
further classified for taxation purposes into two catagories :
- Short term Capital Assets :
- Long term Capital Assets :
|
| |
Short term Capital Asset means
the asset held for a period of less than 36 months. If the period
of holding of the capital asset is more than 36 months (in case
of shares - 12 months ) it will be called long term capital asset.
Rebate tax, treatment, carry forward and set off of both these assets
are different. |
| |
Capital Gains tax shall be levied
considering the market price in case of :
- transfer of capital assets to a firm or A.O.P. or B.O.I where
the transferor is a partner or member by way of capital contribution,
- distribution of capital assets on dissolution of firm or A.O.P.
or B.O.I or otherwise by a firm/A.O.P. or B.O.I to its partners/members,
- on compulsory acquisition under any law - sections 45, 47
(ii) and 49 (iii) .
|
| |
METHOD OF COMPUTATION
OF CAPITAL GAINS |
| |
From the full value of consideration received on transfer
of capital assets, the figures shall be reduced as per section 48
:
| (i) |
Cost of its acquisition; (duly indexed except
in case of bonds/debentures ) |
| (ii) |
Cost of expenditure on any improvements in the assets |
| (iii) |
Expenditure in connection with transfer e.g. legal expenses,
brokerage, stamp duty, etc. |
|
| |
|
| |
Any Capital assets being acquired before 1.4.1981 shall
be evaluated at the market price as on 1-4-1981 and that value shall
be reduced from the sale consideration in lieu of actual cost.
|
| |
|
| EXEMPTIONS IN CASES OF
RE-INVESTMENT |
| |
| Section 54 |
If any residential house
is sold or transferred and the individual or HUF purchases
a new residential house one year before or two years after
thereof or constructs a residential house within three years,
capital gains so much so invested in the new house shall be
exempted from tax and the rest of the portion, if any shall
be put to tax. The new house should not be sold for three
years. It has been provided that the money can be deposited
in public sector bank, till it is reinvested. |
| Section 54B |
If the agricultural land used by the
assessee or his parents for at least 2 years before sale,
is sold and the capital gain so arising is reinvested within
2 years in purchase of another agricultural land for his or
his parents use, the capital gains so invested shall be exempted
from tax to the extent of reinvestment. Otherwise it can be
invested in specified bank under new deposit scheme. |
| Section 54D |
If the land, building being used for
atleast 2 years for an industrial undertaking, and is acquired
compulsorily and the assessee within three years thereof purchases
or constructs a new land building for shifting, re-establishing,
etc. his industrial undertaking, the reinvestment of such
gains will make the capital gain exempt from tax to the extent
of reinvestment. Otherwise it can be deposited in specified
bank under new deposit scheme. |
| Section 54EA |
In case the net consideration on sale
of a long term capital asset is reinvested within 6 months
of the date of sale in specified bonds, debentures or units
of any mutual funds, the capital gain shall be exempt to the
extent of reinvestment in such securities. W.E.F 1.10.1996.
The new asset should not be sold for 3 years from the date
of its purchase. |
| Section 54EB |
In case the Capital gain on sale of a
long term capital asset is reinvested within 6 months of the
date of sale in specified asset notified by CBDT, the capital
gain shall be exempt to the extent of reinvestment in such
asset, W.e.f, 1.10.1996. The new asset should not be sold
for 7 years nor loan should be taken against it. |
| Section 54F |
If any long term capital assets is sold
by an individual being other then residential house and within
a period of two years before of after the sale, a new residential
house or within a period of 3 years after the sale, a residential
house is constructed, the capital gains on sale shall be exempt
from tax to the extent of such reinvestment, the new house
must not be sold/transferred for 3 years after the purchase
or construction . This exemption will be available to HUF
also. |
| Section 54G |
Long/Short term capital gains, in case
of shifting of industrial undertaking from urban area to a
non-urban area in relation to machinery, plant, building and
land, will be exempt in case the capital gains arising on
shifting are utilized within one year before or three years
after the date of transfer for purchase of new machinery,
plant, land or building, etc. section 54G. (section 280ZA
omitted). |
| Section 54H |
In case of compulsory acquisition, if
the compensation is not received at the time of transfer,
the period of acquiring new asset shall be calculated w.e.f
the date of actual receipt of compensation. |
|
| |
Where the amount of long term capital
gains or the net consideration as the case may be, in case of property
used for residence, land used for agricultural purposes, compulsory
acquisition of lands or buildings are not reinvested as per the
present law, but are deposited before the due date of furnishing
of return of income, in an account with a bank or institution under
the scheme framed by Central Govt.. in this regard, shall be treated
being reinvested in the new asset for exemption, sections 54, 54B,
54D and 54F. |
| |
After these exemptions, if any, the long term capital
gains will be further reduced as under. |
| |
|
| DEDUCTIONS FROM LONG-TERM
CAPITAL GAINS |
| |
The method of calculation of long term capital gains
has been worked out as under. |
| |
| (a) |
Cost of acquisition X Cost Inflation Index of
the year in which assests is transferred / Cost
Inflation Index of the year of acquisition or of 1.4.81. |
| (b) |
Cost of improvement X Cost Inflation Index of the year in
which asset is transferred / Cost
Inflation Index of the year of improvement to asset. |
|
| |
The Cost of inflation index has been notified as under
: -
|
| |
| Fin. Year |
Cost Inflation Index |
Fin. Year |
Cost Inflation Index |
| 1981-82 |
100 |
1989-90 |
172 |
| 1982-83 |
109 |
1990-91 |
182 |
| 1983-84 |
116 |
1991-92
|
199 |
| 1984-85 |
125 |
1992-93 |
223 |
| 1985-86 |
133 |
1993-94 |
244 |
| 1986-87 |
140
|
1994-95 |
259 |
| 1987-88 |
150 |
1995-96 |
281 |
| 1988-89 |
161 |
1996-97 |
305 |
|
| |
TAX ON LONG TERM CAPITAL
GAINS |
| |
Long term capital gains shall be
taxed at flat rate of 20%. |
| |
Where the taxable income as reduced
by long term capital gain is below basic exemption limit ( for individual
& HUF Rs. 40,000), the long term capital gain will be reduced
to the extent the difference between other income and basic exemption
limit. |
| |
Sections 115AB and 115AD provide
lower rate for foreign institutional investors for income from units/securities |
| THE GIFT - TAX ACT, 1958
|
| |
| 1. |
Meaning
of Gift Under section 2(xii) of the Gift Tax Act, 1958,
Gift means the transfer by one person to another of any
existing movable or immovable property made voluntarily
and without consideration in money or moneys worth and includes
the transfer or conversion of any property referred to section
4, deemed to be gift under that section. |
| 2. |
Levy of Gift
Tax Under section 3 of the Gift Tax Act, gift shall
be charged for every assessment year commencing on and from
the Ist day April, 1958, in respect of gifts made by a person
during the previous year at the rate or rates specified
in the Schedule to the Act. |
| 3. |
Basic Exemption
from Gift Tax The amount of taxable gift will be
determined by reducing an amount of Rs. 30,000 from the
total gift computed after allowing exemption in respect
of the various types of gifts enumerated in clauses (i)
to (xv) of section 5(1). |
| 4. |
Determination of the value of the
Gifted Property As per section 6 of the Gift-Tax
Act, 1958, the value of the gifted property shall be determined
in the following manner.
(a) |
the value of the
gifted property other than cash shall be estimated
to be the price which in opinion of the Gift-tax Officer,
it would fetch if sold in the open market on the date
on which the gift was made. |
| (b) |
where a person makes a gift which
is not revocable for a specified period, the value
of the property gifted shall be the capitalised value
of the income from the property gifted during the
period for which the gift is not revocable; |
| (c) |
where the value of any property
can not be estimated because it is not saleable in
the open market, the value shall be determined in
the prescribed manner. The manner in which such property
shall be valued, are prescribed by rule 10 of the
Gift-tax Rules, 1958. |
|
| 5 |
Rebate on Advance
Payment Under section 18 of the Gift-tax Act, if
a person making a taxable gift pays into the treasury within
fifteen days of his making the gift any part of the amount
of tax due on the gift calculated at the rates, specified
in the Schedule, or in a case where the provision of section
6A are applicable to a gift in that section, he shall at
the time of final assessment be given credit :
| (i) |
for the amount so paid, and |
| (ii) |
for a sum equal to one-ninth of the amount so paid,
so however, that such sum shall in no case exceed
one-tenth of the tax due on the gift. |
There is a self assessment tax provision
in Gift Tax Act. So, if the tax is not paid within 15 days
of making of gift, it is payable before the return is filed
( section 14B). |
| 6. |
Credit for stamp
Duty Paid on Instrument of Gift Under section 18A
of the Gift-tax Act, where any stamp duty has been paid
under any law relating to stamp only in force in any state
on an instrument of gift or property, the assessee shall
be entitled to a deduction from the gift - payable by him
of an amount equal to the stamp duty so paid or one-half
of the sum by which the gift-tax payable, before making
deduction under this section, whichever is less. |
| 7. |
Rates of Gift
- Tax With effect from 1.4.1987 ( Asst. year 1987-88)
and onwards, Flat rate of 30%. |
| 8. |
Exemption from payment of Gift-tax,
in respect of certain gifts
Under section 5(1) of the Gift Tax Act, gift-tax shall not
be charged under this Act in respect of gifts made by any
person :
| Section |
Applicable
to |
| 5(1) (i) |
of immovable property situated
outside the territories to which this Act extends;
|
| (ii) |
of movable property situated outside
the said territories unless the person :
- being an individual, is a citizen of India and
is ordinarily resident in the said territories,
or
- not being an individual, is resident in the
said territories, during the previous year in
which the gift is made;
|
| (iia) |
being an individual who is not
resident in India to any person resident in India,
of foreign currency or other foreign exchange remitted
from a country outside India during the period from
26.10.1965 to 28.2.1966, or such later date as may
be extended by the Central Government.
According to a recent clarification,
gifts made by Non-resident donors to residents in
India by foreign exchange/currency remittances by
bank draft or cheque by post to the donees address
in India will not attract gift tax if the despatch
by post is made at the request of the donee and the
gift will be accordingly considered as made outside
India (vide C.B.D.T. Circular F.No.331/2/G.T. dated
2.5.81).
|
| (iib) |
being a non-resident out of credit
balance in non-resident external account in a bank
in India. |
| (iic) |
being a non-resident citizen
of India or of Indian origin to any relative in India
of convertible foreign exchange remitted from abroad |
| (iid) |
being a non-resident citizen
of Indian origin to any relative in India of foreign
exchange assets as defined in Income-tax Act. |
| (iie) |
gift by non-resident Indian individual
once only made out of money in Non-resident (Non-repatriable)
Rupee Deposit Scheme, 1992 w.e.f asst. year 1993-94. |
| (iii) |
of property in the form of saving
certificate issued, by the Central Govt. which that
Goverment by notification in the Official Gazette
exempts from gift-tax; |
| (iiib) |
of property in the form of Special
Bearer Bonds, 1991; |
| (iiic) |
of property in the form of such
Capital Investment Bonds as the Central Govt. may
specify in this behalf subject to a maximum of Rs.
ten lakhs in value in the aggregate in one or more
precious years. This exemption shall be available
to a person who has initially subscribed to the said
Bonds. ( Effective from the Asst. year 1983-84 and
onwards ); |
| (iiid) |
Relief Bonds belonging to an
individual/HUF being initial subscriber subject to
maximum Rs. 5 lakh; |
| (iiie) |
Bonds as specified under section
10(15) of Income-tax Act held by an individual who
is an NRI. |
| (iv) |
to the Goverment or any local
authority referred to in section 10(20A) of the Income-tax
Act, 1961. |
| (v) |
to any institution or fund established
or deemed to be established for a charitable purpose
to which the provisions of section 80G of the Income-tax
Act, 1961 apply. |
| (va) |
- to such temple,mosque,gurdwara,church or other
place as has been notified by the Central Goverment
for the purpose of section 80G(2)(b) of the Income-tax
Act, 1961; or
- by way of settlement on trust of property the
income from which according to the deed of settlement
is to be used exclusively in connection with the
temple, mosque, gurdwara, church or other place
specified therein and notified as aforesaid.
|
| (vii) |
to any relative dependent upon
him for support and maintenence, on the occasion of
the marriage of the relative subject to maximum of
Rs.30,000 in value in respect of the marriage of each
such relative (upto Asst. year 1993-94 Rs.10,000). |
| (x) |
under a will; |
| (xi) |
in contemplation of death; |
| (xii) |
for the education of his children,
to the extent of which the gifts are proved to the
satisfaction of the Gift-tax Officer as being reasonable
having regard to the circumstances of the case : |
| (xiii) |
being an employer, to any employee
by way of bonus, gratuity or pension or to the dependents
of a deceased employee, to the extent to which the
payment of such bonus, gratuity or pension is proved
to the satisfaction of the Gift-tax Officer as being
reasonable having regard to circumstances of the case
and is made solely in recognition of the services
rendered by the employee; |
| (xv) |
to any person in-charge of any
such Bhoodan or Sampattidan movement as the Central
Goverment may, by notification specify. |
| |
|
|
| PENALTIES
UNDER THE GIFT - TAX ACT |
| |
| 1 |
Meaning of Gift Under
section 2(xii) of the Gift Tax Act, 1958, Gift means
the transfer by one person to another of any existing
movable or immovable property made voluntarily and
without consideration in money or moneys worth and
includes the transfer or conversion of any property
referred to section 4, deemed to be gift under that
section. |
| 2 |
Levy of Gift Tax Under section
3 of the Gift Tax Act, gift shall be charged for every
assessment year commencing on and from the Ist day
April, 1958, in respect of gifts made by a person
during the previous year at the rate or rates specified
in the Schedule to the Act. |
| 3 |
Basic Exemption from Gift Tax
The amount of taxable gift will be determined by reducing
an amount of Rs. 30,000 from the total gift computed
after allowing exemption in respect of the various
types of gifts enumerated in clauses (i) to (xv) of
section 5(1). |
| 4 |
Determination of the value of the
Gifted Property As per section 6 of the Gift-Tax Act,
1958, the value of the gifted property shall be determined
in the following manner.
| 1) |
the value of the gifted property
other than cash shall be estimated to be the
price which in opinion of the Gift-tax Officer,
it would fetch if sold in the open market on
the date on which the gift was made. |
| 2) |
where a person makes a gift which is not revocable
for a specified period, the value of the property
gifted shall be the capitalised value of the
income from the property gifted during the period
for which the gift is not revocable; |
| 3) |
where the value of any property can not be
estimated because it is not saleable in the
open market, the value shall be determined in
the prescribed manner. The manner in which such
property shall be valued, are prescribed by
rule 10 of the Gift-tax Rules, 1958. |
|
| |
Rebate on Advance Payment Under
section 18 of the Gift-tax Act, if a person making
a taxable gift pays into the treasury within fifteen
days of his making the gift any part of the amount
of tax due on the gift calculated at the rates, specified
in the Schedule, or in a case where the provision
of section 6A are applicable to a gift in that section,
he shall at the time of final assessment be given
credit :
| (i) |
for the amount so paid, and |
| (ii) |
for a sum equal to one-ninth of the amount
so paid, so however, that such sum shall in
no case exceed one-tenth of the tax due on the
gift. |
There is a self assessment tax provision
in Gift Tax Act. So, if the tax is not paid within
15 days of making of gift, it is payable before the
return is filed ( section 14B).
|
| |
Credit for stamp Duty Paid on
Instrument of Gift Under section 18A of the Gift-tax
Act, where any stamp duty has been paid under any
law relating to stamp only in force in any state on
an instrument of gift or property, the assessee shall
be entitled to a deduction from the gift - payable
by him of an amount equal to the stamp duty so paid
or one-half of the sum by which the gift-tax payable,
before making deduction under this section, whichever
is less. |
| |
Rates of Gift - Tax With effect
from 1.4.1987 ( Asst. year 1987-88) and onwards, Flat
rate of 30%. |
| |
Exemption from payment of Gift-tax,
in respect of certain gifts
Under section 5(1) of the Gift Tax Act, gift-tax shall
not be charged under this Act in respect of gifts
made by any person :
| Section |
Applicable
to |
| 5(1) (i) |
of immovable property situated outside the
territories to which this Act extends; |
| (ii) |
of movable property situated outside the
said territories unless the person :
- being an individual, is a citizen of
India and is ordinarily resident in the
said territories, or
- not being an individual, is resident
in the said territories, during the previous
year in which the gift is made;
|
| (iia) |
being an individual who
is not resident in India to any person resident
in India, of foreign currency or other foreign
exchange remitted from a country outside India
during the period from 26.10.1965 to 28.2.1966,
or such later date as may be extended by the
Central Government.
According to a recent clarification,
gifts made by Non-resident donors to residents
in India by foreign exchange/currency remittances
by bank draft or cheque by post to the donees
address in India will not attract gift tax
if the despatch by post is made at the request
of the donee and the gift will be accordingly
considered as made outside India (vide C.B.D.T.
Circular F.No.331/2/G.T. dated 2.5.81).
|
| (iib) |
being a non-resident
out of credit balance in non-resident external
account in a bank in India. |
| (iic) |
being a non-resident
citizen of India or of Indian origin to any
relative in India of convertible foreign exchange
remitted from abroad |
| (iid) |
being a non-resident
citizen of Indian origin to any relative in
India of foreign exchange assets as defined
in Income-tax Act. |
| (iie) |
gift by non-resident
Indian individual once only made out of money
in Non-resident (Non-repatriable) Rupee Deposit
Scheme, 1992 w.e.f asst. year 1993-94. |
| (iii) |
of property in the form
of saving certificate issued, by the Central
Govt. which that Goverment by notification
in the Official Gazette exempts from gift-tax;
|
| (iiib) |
of property in the form
of Special Bearer Bonds, 1991; |
| (iiic) |
of property in the form
of such Capital Investment Bonds as the Central
Govt. may specify in this behalf subject to
a maximum of Rs. ten lakhs in value in the
aggregate in one or more precious years. This
exemption shall be available to a person who
has initially subscribed to the said Bonds.
( Effective from the Asst. year 1983-84 and
onwards ); |
| (iiid) |
Relief Bonds belonging
to an individual/HUF being initial subscriber
subject to maximum Rs. 5 lakh; |
| (iiie) |
Bonds as specified under
section 10(15) of Income-tax Act held by an
individual who is an NRI. |
| (iv) |
to the Goverment or any
local authority referred to in section 10(20A)
of the Income-tax Act, 1961. |
| (v) |
to any institution or
fund established or deemed to be established
for a charitable purpose to which the provisions
of section 80G of the Income-tax Act, 1961
apply. |
| (va) |
- to such temple,mosque,gurdwara,church
or other place as has been notified by
the Central Goverment for the purpose
of section 80G(2)(b) of the Income-tax
Act, 1961; or
- by way of settlement on trust of property
the income from which according to the
deed of settlement is to be used exclusively
in connection with the temple, mosque,
gurdwara, church or other place specified
therein and notified as aforesaid.
|
| (vii) |
to any relative dependent
upon him for support and maintenence, on the
occasion of the marriage of the relative subject
to maximum of Rs.30,000 in value in respect
of the marriage of each such relative (upto
Asst. year 1993-94 Rs.10,000). |
| (x) |
under a will; |
| (xi) |
in contemplation of death; |
| (xii) |
for the education of
his children, to the extent of which the gifts
are proved to the satisfaction of the Gift-tax
Officer as being reasonable having regard
to the circumstances of the case : |
| (xiii) |
being an employer, to
any employee by way of bonus, gratuity or
pension or to the dependents of a deceased
employee, to the extent to which the payment
of such bonus, gratuity or pension is proved
to the satisfaction of the Gift-tax Officer
as being reasonable having regard to circumstances
of the case and is made solely in recognition
of the services rendered by the employee;
|
| (xv) |
to any person in-charge
of any such Bhoodan or Sampattidan movement
as the Central Goverment may, by notification
specify. |
|
|
|
| PENALTIES UNDER THE GIFT
- TAX ACT |
| |
| Under Section |
Cause of Penalty
|
Quantum of Penalty |
| 14B(3) |
For failure to pay tax interest under,
self assessment. |
Not exceeding 100% of tax in arrears. |
| 17(1)(ii) |
For failure to comply with a notice under
section 15(2) or 15(4) without reasonable cause. |
Minimum Rs. 1,000 and Maximum Rs.25,000. |
| 17(1)(iii) |
For concealing the particulars of any
gift or for deliberately furnishing inaccurate particulars |
Minimum 20% and Maximum 150% of the tax
sought to evaded. |
| 17A(1) |
For failure to answer or sign statement,
furnish information, allow inspection, etc. |
Minimum Rs.500 and Maximum Rs.10,000. |
| 17A(2) |
For failure to furnish statement / information
required under section 37. |
Minimum Rs.100 and Maximum Rs. 200 for
every day of default. |
| 33 |
For default in payment of tax. |
Not exceeding 100% of tax in arrear.
|
|
| NRI / Foreign Nationals
|
| |
RESIDENTIAL STATUS |
| |
Assessee under Income Tax Act are :
- Resident in India
- Non-Resident in India
|
| |
However, individuals and Hindu Undivided families
who are residents are further classified as
- Resident and ordinary Resident
- Resident but not ordinary resident
|
| |
In each year the residential status of an assessee is
to be worked out. |
| |
Now there is two basic tests to determine the residential
status.
- BASIC TEST
- ADDITIONAL TEST
|
| |
Basic Test : |
| |
An individual is said to be resident
in India in any previous year, if he/she satisfies atleast any one
of the following basic condition.
- He/She is in India for a period of 182 days or more in any
previous year.
- He/she is in India for a period of 60 days or more during
the previous year and 365 days or more during the four years
preceeding the previous year in question.
|
| |
NOTE :-
-
An Indian citizen who leaves India during
the previous year for the purpose of employment outside India
or an Indian citizen who leaves India during the previous year
as a member of the crew of an Indian Ship, the period shown
in 2nd condition would be 182 days instead of 60 days.
-
The above substitution of 182 days, instead
of 60 days is also applicable to person who comes on a visit
to India.
|
| |
A person is deemed to be of Indian origin if he/she
or either of his/her parents or any of his/her grand parents was born
in undividend India. |
| |
ADDITIONAL TEST :- |
| |
It is carried to know whether the
resident Individual is ordinarily Resident or not in India. An individual
who is resident said to be " Resident and Ordinarily Resident
" in India if he/she satisfies the following two additional
condition :-
-
He/she has been resident in India at least
9 out of 10 previous years preceding the relevent previous year
in question, AND.
-
He/she has been in India for a period of
750 days or more during 7 years preceding the relevant previous
year.
|
| |
| RESIDENT BUT NOT
ORDINARILY RESIDENT |
| |
An individual who satisfies one or more Basic
Test above but does not satisfy the two additional conditions. |
| NON - RESIDENT - |
| |
An individual is a non-resident in India
during the previous year if he/she does not satisfy any of
the Basic Test above. |
RULE OF RESIDENCE
| Resident & Ordinarily Resident |
Resident but not Ordinarily Resident
|
Non - Resident
|
| Must satisfy at least one of the
Basic Test and both conditions of Additional Test. |
Must satisfy at least one of the
Basic Test and one or more Conditions of Additional
Test |
Must not satisfy any of
Basic Test conditions.
|
|
Residential Status
of Hindu individual family firm or Association of person :- |
| They are said to be Resident in India if control
and management of its affairs are wholly or partly situated
in India.
|
| Residential Status
of a Company :- |
| A Company registered in India under companies
Act is always Resident in India. |
| Incidence of Tax
:- |
| It depends on his residential satus and also on
place and time of accrued or reciept of income in India. |
| Incidence of Tax
in case of Resident & Ordinarily resident Individual
|
He/she is accessable to tax in India for :
-
Income recieved or deemed to be recieved
in India in the previous year by him / her behalf.
-
Income which accrues or arises or is
deemed to accrue or arise to him / her in India during
the previous year.
-
Income which accrues or arises to him
/ her outside India
|
|
| |
INCIDENCE OF TAX FOR
RESIDENT BUT NOT ORDINARILY RESIDENT ASSESSEE. |
| |
If income is received or deemed
to be received in India or accrued or deemed to be accrued in India
or business is controlled in India, then it is taxable in India. |
| |
INCIDENCE OF TAX FOR NON-RESIDENT. |
| |
They are taxable only on income
recieved or deemed to be recieved in India by himself and accrue
or arise in India.
|
| |
|
|