Chapter 1

Residential Status and Scope of Total Income

Residential Status

Resident Non-resident
Individual Otherwise non-resident
≥ 182 days
OR
≥ 60 days + ≥ 365 days in last 4 years

Others
If POEM is situated in India

Scope of Total Income

Resident Non-resident
Income accrue/arise in India Income accrue/arise in India

Income received in India Income received in India

Income accrue/arise outside India

Tax rates
1. Senior citizen = Individual + Resident + age ≥ 60 years
Upto first Rs. 3,00,000 = Nil
Next Rs. 2,00,000 i.e. upto Rs. 5,00,000 = 5%
Next Rs. 5,00,000 i.e. upto Rs. 10,00,000 = 20%
Balance = 30%

2. Very senior citizen = Individual + Resident + age ≥ 80 years

Upto first Rs. 5,00,000 = Nil
Next Rs. 5,00,000 i.e. upto Rs. 10,00,000 = 20%
Balance = 30%

3. Other individuals
Upto first Rs. 2,50,000 = Nil
Next Rs. 2,50,000 i.e. upto Rs. 5,00,000 = 5%
Next Rs. 5,00,000 i.e. upto Rs. 10,00,000 = 20%
Balance = 30%

Note:
1. If total income > Rs. 50,00,000, then surcharge on above tax @ 10%
2. If total income > Rs. 1,00,00,000, then surcharge on above tax @ 15%
3. On above tax + surcharge (if any), Education and Health Cess @ 4% (for Assessment Year
2018-19, cess is levied @ 3%)
 Overall flow of Income-tax Act, 1961
Computation of Total Income of Mr. X for AY 2019-20
Particulars Amt. Amt. Amt.
1. INCOME UNDER HEAD SALARIES
Basic Salary ---
Allowances ---
Less: Exempt --- ---
Perquisites ---
Retirement Benefits ---
Less: Exempt --- ---
Gross Salary ---
Less: Deductions u/s 16
(i) Standard Deduction Rs. 40,000 ---
(ii) Professional Tax
(iii) Entertainment Tax --- --- ----

2. INCOME FROM HOUSE PROPERTY

Gross Annual Value ---
Less: Municipal Taxes ---
Annual Value/Net Annual Value ---
Less: Deductions u/s 24
(i) Standard Deduction ---
(ii) Interest on borrowed capital --- ---
---
Add: Recovery u/s 25A --- ----

3. INCOME UNDER HEAD PGBP

Net Profit as per P&L A/c ---
Add: Expenditure debited to P&L A/c but not allowed under Income-tax Act ---
Less: Expenditure allowed under Income-tax Act but not debited to P&L A/c ---
Add: Income not recorded in P&L A/c ---
Less: Income credited to P&L A/c but not chargeable under this head --- --- ----

4. INCOME UNDER HEAD CAPITAL GAINS

Short-term capital gain
- Non-depreciable asset
Sale consideration ---
Less: Cost of acquisition ---
Cost of improvement ---
Expenses on transfer --- ---

- Depreciable asset
Sale consideration ---
Less: Opening WDV ---
Cost of additions ---
Expenses on transfer --- ---

Long-term Capital Gain

Sale consideration ---
Less: Indexed cost of acquisition ---
Indexed cost of improvement ---
Expenses on transfer --- ---
---
Less: Exemptions u/s 54 to 54H --- ----
Particulars Amt. Amt. Amt.
5. INCOME FROM OTHER SOURCES
Winning from lotteries, etc. ---
Other income ---
Less: Expenses --- --- ----

Add: Clubbed income under relevant heads ---

Less: Set off and carry forward & set off from relevant heads --- ----

GROSS TOTAL INCOME ----

Less: Deductions under chapter VI-A
80C ---
80CCD ---
80U, etc. --- ----

TOTAL INCOME ----

Total Income (R/o) [to the nearest multiple of ten] ----