CA Intermediate Taxation Revision Overview

Hi everyone, hope you all must be doing great. So from today we are starting with the revision lecture series for CA intermediate examinations which are going to happen in May 24 and November 24. So this series is applicable for the students who are appearing in May 24 or November 24 examinations. So in this series I'll be discussing with you all the chapters of the taxation paper. First, we will start with income tax and then we'll go to GST, right? Here, I'll be discussing each and every chapter with you. In fact, every topic which is as per our syllabus, as per our CA study material, I'll be discussing everything with you, right? So, let's start with the very first chapter of income tax that is basic concepts of income tax You can, I'll be using my book, my handwritten book, and you can also download this book. It is available. It's a very beautifully crafted book and it covers all your topics, which is as per your syllabus, right? As per the new course, which is applicable and it covers all the amendments also, which is applicable for our 2024 exams, right? So you can visit our website. This is rajatmogha.com and there is a download section over there. right so uh there you will find a book uh go to ca intermediate part and there is a link of the book you can easily download this it is downloadable in pdf format okay so let's start uh with basic concepts of income text and this chapter is introductory so i'll be uh starting with very elementary topics very basic topics what is takes uh and there are two different types of taxes direct tax indirect taxes what are the tax rates applicable who is an assay see what is the assessment here so i'll be discussing those points over here in this first chapter okay so we all understand what is sticks why government of any country needs takes because of economic development we understand that uh if any economy needs to get developed so their education sector must be strong their health sector, their infrastructure, they should have a good infrastructure in the country and defense system must be strong. So for making these things strong, for developing a nation, we require funds. Government of any country requires funds and so is India. We require funds. So there are different sources of revenue for the government and taxation is one of the major sources of revenue. So we can say that tax is a revenue to the government. it's a revenue for the government and they levy taxes on various goods various services that we known as gst and also on uh people's income if they are earning then they have to pay taxes so taxes are fees charged by the government on products income or activity that we understand and we also know that there are two different types of taxes direct x and indirect see this is introductory lecture so that is the reason i am starting with very basic topics so direct x and indirect x What is direct text and indirect text? You easily understand this. Direct text is that here you just have to remember two things. One is called burden of text and other is called collection of text. And if it is on the same person, then we call it as a direct text. So we understand if the burden of text, burden of text is that who will bear this text, who will bond this text, from whose pocket it will actually go. So that is called burden of tax and the burden of tax and collection of tax. Collection of tax means government will collect from whom. So if these both the things are from the same person, we call it as a direct tax and income tax is a classic example. See, for example, if I am earning income, then I have to pay taxes. Burden of taxes on my pocket. I have to pay tax from my pocket. And will the government... or income tax department officers will go to my neighbor's place or to any of my relatives place to collect the tax the answer is no they will come to me i have to pay tax because i if i will not be paying tax they will be sending me notices they will be applying penalties and other provisions also to collect tax from me so pocket from whose pocket it is going from my pocket and they will call also collect it from me right so this is both the things are on the same person that is for direct things But if these things are from different person, burden of taxes on some other person and collection of taxes is going to happen from some other person then we call it as an indirect taxes. A classic example is GST. Customs duty is also one of the examples which you will learn in your CA finals and there was a text there in fact there it was not was it was is because excise duty is not completely abolished still there are some goods rarely there are some goods left on which excise duties also have legal so excise duty is another example of indirect taxes so in indirect taxes Let's say if you go to market, if you purchase any product or if you purchase any services, then you have to pay that amount. For example, you go to a restaurant or you go to a Pizza Hut or Domino's, you purchase a pizza for you and the pizza cost is 400 plus 50 rupees as taxes. So you have to pay 450 rupees. So who is bearing the burden from whose pocket it is going from the consumer pocket? They have to pay 400 for the pizza also and 50 rupees for the taxes also. Correct. So 450 is going from the... consumer pocket but will government will collect this 50 rupees from that consumer with that consumer has to go somewhere and deposit this text no he will simply pay to that restaurant owner or that restaurant manager he will pay and government will collect from someone else right uh in gst we know that it is a supplier generally in case of forward charge and reverse charge that we will discuss in gst so burden of takes and collection of taxes on different person it is indirect taxes This is, and I tell you that this is just for your knowledge purpose, not very important for examination purpose, these things. But this is, this can come in your MCQ. You should remember this article 245. What does this article say? It says that no tax can be collected unless and until there is a law. There should be a law. Without law, if you are collecting taxes, that is illegal. So in income tax, we have Income Tax Act 1961. In GST, we have GST Act, CGST, SGST and all. we have 2017. so there must be a law if there is no law you cannot collect term and cannot collect text this is written in article 245 this is important second important thing is you should know about those three lists list one list two list three remember list one is called union list list one let me explain you we have list one we have list two we have list three List 1 is your union list, list 2 is your state list and list 3 is concurrent list. Only once it has been asked for examination, although not very important, but still they can ask you. So, you should know about these three lists. These lists are mentioned in Schedule 7 of Constitution of India. So, list 1, it contains all the... activities which are governed by central government so here union government that is central government there are different points written over there and one of the point is 82 here income tax is written that on income government can collect tax so what we call these points we call these points as entry so this is entry number 82 this you should remember this can come in your examination in mcq so entry 82 says that central government has power to collect taxes on the person's income if they are earning income central government has the power state government cannot collect tax on income tax right so please tell me income tax is a central law or it is a state law it is a central law right it is not a state law it is central law all over india it is applied uniformly right and entry number 82 says that you can collect taxes on income except agriculture income on agriculture income we cannot collect tax Because that power is given to state government. There is in list 2, there is entry number 46. There it is written that on agriculture income, state government can collect tax. Although they do not collect it, but still that power is with the state government. It is not with the central government. So, we do not collect tax on agriculture income. We say that agriculture income is exempt. But yes, you will also learn in your partial integration, we do not tax on agriculture income. But we take that. agriculture income into account while calculating tax that we will learn in our agriculture portion when i'll explain partial integration with you that is important for examination okay coming back so you should remember entry 82 that is in your uh union list second is what are the components of income tax law see income tax law whenever you have to understand income tax law you cannot uh understand income tax act in isolation Income Tax Act is just one component. Income Tax Act 1961 is just one component of income tax law. And there are also various other things which you should know if you would like to have a knowledge on entire income tax law. So second thing is Annual Finance Act. Annual Finance Act, every year there is a budget. and in that budget session our finance minister presents a finance bill which later on becomes a will become finance act so for our examination we have finance act 2023 which is applicable to us finance act 2023 so all the amendments which have had happened in finance 2023 we have to do that also so we don't only look at income tax act provisions we also look at finance and provisions so we have to understand these things also there are again income tax rules and some of the chapters, I tell you how these percusives are calculated. These all are mentioned in rules that how you have to because in there are different sections where it is written, where you have you must have seen that it is written as may be prescribed. So, that things are prescribed in rules. So, wherever act says in any section that as may be prescribed, so as prescribed by rules, so you have to understand rules also, then notifications central government from time to time they make some changes in income tax so they what they do is they issue notifications so we should know all the notifications circulars and also there are some decisions of court also that we have to understand and finally we do various decisions of court but in inter we don't do so many decisions but yes one of the decision i think you should remember that we will do in capital gain chapter manjula jay shah right that i'll discuss in capital gain chapter so these all are things are which are components of income tax law you should know this okay then various there are various stamps who is an assessee assessee is a person who has to pay tax the person who is earning income and he has to pay tax not only tax if that person has to pay other amount also to the income tax let's say that person has paid the tax but he has not paid the interest let's say interest is also levied on him or any other penalties levied on him if income tax department has to collect taxes or any other amount like interest penalty etc then that person from that person from whom we have to collect this that person becomes an assessee so in simple word the person who is earning income is an assessee right and also if income tax officers assess any person if they do some assessment on that we will discuss in our chapter that is return of income that how many types of assessments are there so if Income tax officers are doing assessment on any person. So that person also becomes an assessee. So assessee is a person from whom any tax or any other sum of money is payable under this act. Who has to pay income tax or interest or penalty and all. Right? Person. Because here it is mentioned assessee means a person. So who is a person? Only individual can be person or there are some artificial persons also. There are some artificial person also. So income tax has also given us a definition of person. So in person. that person could be our natural person like individual and they could be like huf aop boi association of person body of individual they can be artificial juridical person like temple mosque gurudwara like east church etc right they can be partnership firm also partnership is also assessed as a person right as a firm or a company also could be a person so they are individual hvf company partnership aop local authority artist juridical person so you should know that these are all person if they are earning income they have to pay taxes what is assessment year and what is previous year this is the easy so what is assessment year it is a period of 12 months first you understand it is a period of 12 months and in assessment year we assess the income of the income which we have earned in the last year in last year we say is previous year So in previous year whatever income we have earned we will assess it in the assessment year. So assessment year is always a period of 12 months and it follows the previous year. After previous year there would be an assessment year. So for our examination which previous year is applicable? Previous year 23-24 is applicable. So whatever income which we have earned in previous year 23-24 that is from 1st April 23 to 31st March. 2024 whatever income which we have earned we have to assess that income in the assessment year so uh previous year means the year in which we earn income and the assessment year is the next year where we have to pay the taxes or we have to assess our income so assessment year one thing you should remember assessment it is also always a period of 12 months is previous year is also a period of 12 months this is important the answer is generally yes i'm saying generally why i'm saying generally Because previous year is generally of 12 months. Previous year starting from 23 and 24. But sometimes it could be less than 12 months also. How? Let's say there is a person who has just started his business. He has just started his business or he has just started his profession. Before that, he was not having any income. Before that, he was not having any income. He has just started a new business or new profession. So is it necessary that he will start the business from 1st April? The answer is no. He could start the business from 1st May, 1st June and not even 1st. In the middle of the month also, he can start their business or profession. So in that case, the previous year is not of 12 months. It can be reduced also. So if... there is any new business or profession which is set up during the year okay and also if there is any source of income which comes for the very first time let's say there is a person for example there is a person Mr. Amit and he was doing CA he was doing CA and in May let's say 2020 24 he gives examinations and he becomes CA so when he will become CA once result will be declared so result will be declared in May, June, July somewhere in July let's say the result will be declared so when once the result was declared in July 24 he started his job let's say he started his job or he started his practice or profession or business anything so let's say he started his job so before that he was not doing anything let's say he was just uh studying he was not earning but from july onwards or from august onwards he got a job now he started earning so his previous year would start from this particular date from where he has started his earning right this is a new source of income which has come into picture so in from april 24 he was not earning anything may 24 he was not earning june he was not earning and let's say he started earning from july onwards so his previous year will start from july right so you It is a very rare situation. Generally, it is a period of 12 months. But yes, examiner can ask you whether the previous year can be less than 12 months. Also, the answer is yes. In these cases, it can be less than 12 months also. Right. Okay. Income earned during the previous year is assessed and takes in the assessment. In previous year, whatever income will be earned, it will be taxed and assessed in the assessment year. One very important question. can there be certain cases where the income of the previous year will be assessed in the same previous year can there be any cases the answer is yes examiners favorite question they can ask this question generally we know general law is that in previous year whatever income we will be earning that will be assessed in assessment year but are there any cases where the previous year income is assessed in the same previous year the answer is very much yes there are certain cases In what cases, in what circumstances can it be? Let's say if there is any assessee, which income tax officers believe that he will not be available in assessment year, he will not be available, he will be either gone from, he will be leaving India forever or he will not come back. So in that case, we will assess the income of the previous year in the same previous year itself. Or there is any non-resident if he will not come back. So this is something which is important. So you can mark this important. This is page number 1.4. So please mark this important. So you don't have to remember the section number, but you should know these cases where the income of the previous year is assessed in the same year. So if there is a shipping business of a non-resident, so if there is any US company, they are into shipping business. So once they came India. Once in a blue moon, they came to India and they are now leaving. And we don't know whether they will come back or not. In that case, before leaving that Indian port, we will ask them to pay their taxes also. So, non-resident shipping business. So, it is resident shipping business or non-resident? It is non-resident shipping business. Second is person leaving India with no intention of returning. If he is going out and he has no intention of coming back, then we will collect the tax from in the same previous year. AOP, BOI formed for a particular event or purpose. If there is any association of person or body of individual that is formed only for a particular purpose. Let's say if there is any event happening or any function happening and there is two or three person they join together as an AOP or BOI and they will be managing that particular function for that they will be paid and that function will last for three or four days. So after that for only for four days they got together and they are doing that particular venture and after that they will be all divided right so in that case because in us if we wait till assessment here there will be no aop or by in the assessment here so in that case we will be texting them in the same previous year right person likely to transfer property to avoid taxes if there is any person who is has so much of black money and if income tax officer get to know about it and if they also get to know that he is just now disposing all his property so that he will not be able to will not be able to recover that tax also so in that case we will go and tax in the same previous year or any business which is discontinued so these are the cases where we will tax the income in the same previous year. Okay. Oh, this is easy. What are heads of income? We all know there are five heads of income. First, we'll start with salary, then house property, PGVP, capital gain and IFOS. Okay. Now it is important and there is an amendment also in the income tax rates. So you should know about income tax rates also. For individual HUF, there is an amendment also and in the new scheme which we call now a default scheme there is an amendment also now the income tax has been rate has been changed from the last year in 2024 now we have different income tax rate so for individual huf aop by artificial juridical person we understand that these people these kinds of assessees pay their taxes at the rate on a slab rate basis and for companies and firms they pay tax on flat rate system so in india we have both types of rates slab rates and flat rates but first we'll talk about this and specifically in intermediate examinations you understand that individual is most important you should know about individual they will not ask you uh questions about partnership firm or companies and all rarely they will ask you the rates and everything but entire your all the questions will cover generally of individual or actually mainly individual okay so these people individual i repeat individual huf aop by artificial juridical person they pay taxes on the basis of this labor rates so and they have two option either they can pay their taxes by using the new scheme that is called new regime and now it is called as a default tax regime and the section number is 115 bac this is one of the important section and if you can remember the section number then it will be good 115 bac it is for the new tax regime which we call it as a default tax regime so these people have an option They can pay their taxes as per the default tax regime also or as per the old scheme, which we call it as an optional scheme. We don't call it an old scheme. We call it now. It is an optional scheme, but it is same thing. It is old scheme only. Right. So there are two kinds of. So if any individual would like to pay their taxes, they have an option. Either they can go with the default tax regime or they can go with the old scheme. That is, we call it as an optional scheme. So. what is the tax rate in the new tax regime this is important and there is an amendment also and certainly question will come even mc queen can come then they will ask you that this is the income of an ssc and he is following individual scheme what would be the text on that so if the individual hvf aop by or ajp that is our juridical person if they are following default scheme they have to pay rates they have to pay taxes as follows okay So if they have total income up to 3 lakh, so till 3 lakh they don't have to pay any taxes. If they have total income up to 3 lakh, the tax is nil. And on next 3 lakh, that is from 3 lakh 1 rupees till 6 lakh rupees, that is for next 3 lakh, they have to pay 5%. Next 3 lakh from 6 to 9, 10%. 9 to 12, 15%. 12 to 15, 20. And after 15 lakh, 30%. Right? So it is a concessional scheme of taxes. The answer is yes, because the old scheme in the optical scheme after 10 lakh, we pay 30%. But here after 15 lakh, we are paying 30%. Right? So this is a concessional scheme. And how you will learn that it is very easy to learn. So see, in total income, there is a difference of three, three lakh and after 15 lakh, it is going to 30%. So first three, next three, next three, next three, next three. And once you reach 15 lakh. it would be your 30%. So there is a difference of 3, 3 lakh and there is a difference of 5, 5%. So that is easy to remember. First it was 0, then 5, 10, 15, 20 going on multiple of 5. Once you reach 15 lakh limit, that is 20%, after that it is not 25, it is now 30. So you should remember the last one. Now from 20 onwards, it is not going to 25, it is going on 30. So these are concessional rate this is default x regime rate earlier it was 2.5 lakh and so now it is 3 lakh okay so this is an amendment and you understand that if any person, individual, HVF, AOP, BOI is following these particular rates, then there are certain deductions, there are certain exemptions which will not be available because we are not giving two benefits to them. One benefit we have given is concessional rate. So, we will take one benefit from them. The other benefit is which we are taking away from them is the sacrifice they have to make is they do not have to, they cannot claim certain exemptions and deductions which we will be doing in our... subsequent chapters in salary what deductions they cannot they will not be getting in house property what uh for self-occupied property they don't get that two lakh deductions in pgbp they don't get section 35 ad and all additional depreciation they will not get that we will learn in all those chapters what are the exemptions or deductions which is not available to them okay second most important thing you should remember is in default x regime uh there would be no benefit for the age also for senior citizen or for super senior citizen there will be no benefit. All of them will be paying the taxes if the person is individual HFAOP, BOI. If the person is individual, their age is more than 60 years or more than 80 years also, they will be paying tax. There is a similar rate of tax for everyone. In optional scheme, in the old scheme, we have benefit for senior citizen and super senior citizen, but here we don't have any such benefit. So everyone would be treated equally. So this is important thing which you should remember. Got it? Okay. So in optional scheme, what was the tax rate? It was earlier. There is no amendment there. So it was the same as earlier. So up to 2.5 lakh, if the person is falling, he is saying, no, no, I want to take those. I don't want to sacrifice those examinations, those reduction. I'll be taking that. That would be beneficial for me. So if the person is opting for optional scheme, that is old scheme. So that rate of tax would be up to 2.5 lakh nil. Next 2.5 lakh, that is from 2.5 lakh to 5 lakh, it would be 5%. 5%. from 5 lakh to 10 lakh actually it is 5 lakh 1 rupees right it is 2 lakh 50 thousand 1 rupees so but we understand that first 2.5 black nail next 2.5 like 5 next 5 lakh is 20 and after 10 lakh we have to pay 30 see here after 5 lakh you are paying 20 and there you are paying 20 after 12 lakh so this is concessional and this is not concessional but yes you get certain benefits here you get certain deductions also here so there is a new chapter which is introduced in your syllabus that is income text we will do it in the last that is income text computation and optimization very important chapter and examination examiner will short will be asking questions on that particular point also specifically the first question which comes of total income they can ask you which particular scheme would be beneficial for him So that is income tax computation and optimization. What is optimization means? That out of these two options, what will be the most beneficial for him? Should we advise him to go for default tax regime or we should advise him to go opt for optional tax regime? So that is another important question. And one more thing, if the person is following optional scheme and if they are resident individual and whose age is more than. 60 years or more then they will be getting benefit of 50 000 that up to 2 point generally up to 2.5 lakh they don't have to pay tax but if the person is a senior citizen then up to 3 lakh they don't have to pay tax so there is a benefit of 50 000 up to 3 lakh there is no tax from 3 to 5 this is something which is the same as earlier 3 to 5 lakh 5 percent 5 to 10 lakh 20 and about 10 lakh it is 30 percent but The important thing is that the senior citizen must be a resident. And I tell you a very important thumb rule. In income tax, there are so many benefits which are available to senior citizens. But in every case, wherever these benefits are available, it is important that that senior citizen must be a resident. In income tax act, we are not going to give any special benefits. to non-resident senior citizen. So if a senior citizen is a non-resident, we will be giving them normal provisions. We will not be giving them any special benefits which are available to senior citizen. So that senior citizen must be a resident. This is important. This is important. Resident can be ordinary, not ordinary. That is okay. But that person should be a resident individual. So if a person is a resident individual and his age is 60 years or more, one important thing, we say see for our examination the previous year which is applicable is previous year 23 24. So, it starts from 1st April 2023 and will go till 31st March 2024. So, in this previous year, these dates, both these dates are included. So, if a person becomes of age 60 in any of this, on any date in this year, from 1st April 2023 till 31st March 2024, if he becomes 60 years of age, We will call him as a senior citizen. Let's say he becomes 60 years. His birthday is on 31st March 2024. So we will call him as a senior citizen. Right. We don't have to see the date of assessment year. We have to see of only of previous year. One important point. Also, we will give add one more day extra. That is 1st April 2024. 1st April. Only one day extra. Not 2nd April. 1st April. Not 2nd April. Just 1st April. we will give one day extra also so if a person is becoming a senior citizen on not in the previous year but on 1st april 2024 we will again consider him as a him or her as a senior citizen right so this we discussed generally we discussed this in our regular lecture why one more day is given but this is revision i think you will get to know this right so please remember if a person is becoming a senior citizen on first day of the assessment year also that is first april 2024 for examination then also we will be considering that person as a senior citizen correct so this is important okay and if a person is a super senior citizen that is 80 years or more same thing in at any time during the previous year that person becomes 80 years or even on first april 2024 if a person becomes 80 years or more then up to five lakh nil five to ten twenty percent and about ten lakh would be 30 Got it? Age must be attained during the previous year or on 1st April of assessment year. Not 2nd April, 3rd April. No, it is only on the, we are giving only one day benefit, right? On 1st April of the assessment year. But these benefits will be given only and only in the case of optional tax regime. It will not be given in default tax regime. Correct? Okay. One more important question which examiner can ask, whether an individual, such individual that you have AOP, BOI. Can they in one year they can choose optional in second year they can choose default tax regime. Is it OK with them? The answer is yes. Also, and the answer is no. Also, right. Why? It depends upon their PGVB income. It depends on PGVB income. If they would like to switch between if they would like to keep on switching between optional and your default tax regime. So it depends upon the PGVB income. If the assessee does not have PGVB income. then you are free. You are free. In one year, if you find default tax regime is beneficial, you can go for default tax regime. In second year, if you find optional scheme is beneficial for you, then you can opt for optional tax regime. So if you don't have PGVP, we have no problem. You can switch between the two schemes. But if you have PGVP income, if the assessee has a PGVP income, then they cannot switch. Once they have opted, if a person has a PGVP income and once they have adopted, default tax regime, they cannot go back. They cannot go back. This is important. Got it? They cannot go back. But the exception here is if in any subsequent year, that person does not have PGVP income. If that PGVP ceases, he shuts down his business or he shuts down his profession. If that PGVP income ceases, in that case, he can come back. But unless and until till the time he is having PGP pay income he cannot go back. So once he has adopted default tax regime you cannot go back. So this was important it was on the previous page. So assessee time limit for exercising the option to shift out of the default tax regime if the assessee does not have PGP pay income so they can change every year whenever they will be filing their return they can change it they can opt just which scheme they are opting this year. But if the assessee has PGVP income, once they have exercised the option of default tax regime, once default tax regime was applicable, they have exercised that option, they cannot go back till they have PGVP. Once that PGVP ceases, then they can go back. So this is important. Companies and firms, we understand there is flat rate. For firm it is 30%, companies it is 30% also, 25% also and foreign companies it is 40% also. That I'll discuss with you. Okay. First, let us discuss a very important point 87a rebate and in default text regime in new scheme there is an amendment also that will be making this section very important and I am quite sure that one question will be coming from this 87A rebate. I'll tell you which question. First of all, this rebate is eligible. The person who is eligible is only an only resident individual, not even insured. So this rebate, you should remember this rebate is only for individual, not for any other SSC and that individual must be a resident. It is available in both Optional tax regime also, old one also and new one also. So, in optional tax scheme, there is no amendment. But in new tax regime, that is default tax regime, there is an amendment. So, what was in optional tax regime? In optional tax regime, it was if a resident individual whose total income is up to 5 lakh, then they are eligible for rebate. And how much rebate they will be getting? Whatever the tax is there on their income or rupees 12,500, whichever is lower. So, you understand? whatever the text is let's say a person is having income of 4 lakh so you have to calculate a text on 4 lakh or 12 500 whichever is lower that is the rebate available to them in new text regime resident individual if that person is earning a total income not gti i'm talking about total income after deductions and all right so if total income in now in new text game we generally don't get deduction of chapter 6a except those few section that 80 ccd And 80 CCH, there is a section that I'll be discussing with you in the chapter of deductions. So, and again, one more section 80 JJJ, that I'll be discussing with you. Okay. So, eligible assessing. So, resident individual where total income is up to 7 lakh. Now, it is 7 lakh. There is an amendment over here. So, if the total income is up to 7 lakh, then this person can go for rebate. And how much rebate he will be getting? the tax on that income let's say if a person is earning 6 lakh or 6.5 lakh or even 7 lakh you calculate text on that income or 25 000 whichever is lower so you should remember this amount 25 000 whichever is lower how this 25 000 is calculated if you will calculate text on 7 lakh by following these rates you will get 25 000. see if a person is earning 7 lakh so on first 3 lakh nil on next three lakh five percent right three lakh 5% is 15,000 and on remaining 1 lakh, 3 plus 3 plus 1, 7, it is coming. So, on remaining 1 lakh, 10%, that is 10,000 rupees. So, this is 25,000. So, this is how I am getting 25,000. So, if a person has a total income of up to 7 lakh, then they can go for rebate, tax on income or 25,000, whichever is lower. Right. Now, the important point is, if any person. who has income of 7,1,000, will he be eligible for rebate? Will he be eligible for rebate? The answer is no, sir, because we know that up to 7,000,000, then you are eligible for rebate. But if the income is 7,1,000,000 to 7,2,000, will he be eligible for rebate? The answer is still yes. The answer is still yes. There is some rebate available to him and how that rebate will be calculated. For that, you should know the concept of marginal relief. because it is very similar to the concept of marginal relief. So, I will be discussing the concept of surcharge with you and I will be discussing the concept then with surcharge we will be doing marginal relief. After that, I will be telling you how this rebate is calculated. So, surcharge, although in our study material surcharge is discussed in this particular chapter only, but I have been discussing surcharge in a separate chapter. And if you look at this book, There is a chapter, second last chapter, I believe it is of surcharge. There I'll be discussing surcharge with you, marginal relief also with you and this concept also of rebate because which is very much related to it is like same like marginal relief, the same method which you apply for marginal relief, the same method you apply for rebate also. So, but here in optional scheme, if a person is having income of 5 lakh, 10 rupees also, there would be no that concept. There will not be using that concept. Here it is just 5 lakh if that person is having income of 5 lakh then there is rebate if it is more than 5 lakh there is no rebate at all but here we have that concept in optional tax regime so that I will be discussing with the chapter of surcharge. Okay there are few points in chapter number one like agriculture income agriculture income I will not discuss in this class I will discuss agriculture income with our PGPP right so New tax regime also, I will be discussing in detail about new tax regime, what are the deductions which are not available. Because in every chapter, with every chapter, I will be telling you that this will apply only in official tax scheme. It will not apply in new tax regime. So, in new tax regime, what are the deductions which are not available, I will be discussing in further chapters. In each and every chapter, I will be discussing with you, right. Search charge, we have a different chapter. Agriculture income, although institute has discussed that agriculture income in the first chapter itself but i'll be discussing that chapter that particular topic with you in pgvp okay okay one more important point one more important point is there that rebate of 87a is not available from 112a income what is this 112a we understand we have a chapter of capital gain in capital gain capital gains are of two types short-term capital gain and long-term capital gain right if a person short-term capital gain generally we understand uh generally it is if person is transferring their asset before three years in some cases it is two years and in some cases it is one year also that we will discuss be discussing in uh the chapter of capital gain but here just i would like to give an overview if a person is selling equity shares if a person is selling equity shares or equity oriented units if the person is selling equity shares and equity oriented units on a stock exchange on a stock exchange it has written it is mentioned in the question that it is stock exchange or stt is mentioned securities transaction takes is mentioned then we understand that if this transaction is happening in a stock exchange so if a person is selling equity shares or equity oriented units on a stock exchange or stt is paid anything which is mentioned in the question then we call such short term we call such short term is as 111a that is called 111a other short term is not 111 other short term is not let's say if a person is selling gold after six months seven months that is also short term but that is not triple one way 111a is only and only if we sell equity shares for equity oriented units or units of business stress business stress is not in intermediate course so i'm not discussing that so okay equity shares equity oriented units then it is triple money right So you understand 111A is short term only and only in case of equity shares or equity oriented units. Okay. And the rate of taxes, 15%. Here the rate of taxes, 15%. Everybody has to pay tax at a rate of 15%. Whether that person is individual also, HUF, AOP, BUI, artificial digital person, even partnership firm or companies also. Everyone has to pay tax at a rate of 15%. Here we have special rate of taxes, 15%. Long term capital gain. If. that equity shares or equity oriented units, if they are long term, we are selling it after one year, then we call them 112A. We call them 112A. Other long term, we call it 112. So, these are three sections which I would like to discuss. These are three sections which I would like to refer for you. So, 111A is short term capital gain on equity shares or equity units. If they are short term, 111A, 15%. And if they are long term, then 112A. and here the rate is 10 percent here the rate is 10 percent also we understand that in 112a there is i'll be discussing that in capital gain that in 112a if you are having income of let's say five lakh six lakh or seven lakh then we give an exemption of one lakh one lakh is exemption is a flat exemption so we don't charge on entire five lakh if you have one one two or five lakh then only four lakh we have to pay tax of ten percent if you have income of six lakh just subtract minus one and it will be five lakh if you have income of seven lakh after 1 subtract minus 1 and then it would be 6 lakhs. So, 1 lakh is exemption which is available over there in 112A, but the rate is 10%. And on other long term, let us say if equity shares or equity oriented units, it is 112A. And other long term, if the person is selling land and that is long term or if that person is selling gold or any other capital asset which they are selling, which is not equity shares or equity oriented units on a stock exchange, other than that, it is 112 and the rate is 20%. and these are special rates these are special rates it is applicable for everyone individual huf aop by even partnership firm companies and all everyone has to pay these special rates right we understand partnership rate is 30 but 30 is normal income but we have special income also right so i was telling you that this rebate this rebate of 87a is not available from 112a what was 112a long term equity shares or equity-oriented units on stock exchange or STD. So in that case, if a person is having, let's say there is a person who is having an income of 6,000,000, and he is in new tax regime and this 6 lakh is coming entirely from 112a so he will not be getting repaid so this is one thing which you should remember that 112 is not available sorry 87a rebate is not available from 112a right 112a i have written discussed later because this is a part of capital gain okay surcharge is an additional tax which you have to pay let's say for individual if he's earning income of more than 50 lakh then there is surcharge which is which would be applicable if more than 1 crore, then 2 crore, 5 crore, that I'll be discussing with you, I've already mentioned that I'll be discussing with you in a separate chapter, surcharge and margin relief. Okay, health and education CES, so there is a CES of 4% on income tax plus surcharge, if applicable, you have to add both the things and then you will apply your CES. So if the person is having, if there is an individual who is not having any income more than 50 lakhs, so there will be no surcharge. So whatever tax we will calculate, we will add 4% on it. Right. And if a person is having income, which is more than 50 lakh, then we will be calculating tax, then surcharge, and we will be adding both of them. Then after adding them, then we will be applying 4% on it. Correct. Okay. And this, you know that you have to round off your income also and round off your taxes also. So, rounding of income is section 288a rounding of taxes 288b even if you don't remember the sections it's okay perfectly fine but you should know that you have to round off your income some person some students make this mistake that they keep on rounding of each and every head if they are earning income from salary they will round it off if they are earning income from house property they will round it off no you don't have to round off each and every of your head's income you have to round off your total income gti no gti only a total income you have to round it. So please remember that you have to round off your total income and how you will round off you in the multiples of 10 and simple mathematics concept will be followed over here. If the last digit is up to 1, 2, 3 or 4, up to 4, then you have to come back in the previous multiple of 10. And if it is last digit is 5 or more than 5, then you have to further round it off. and the succeeding 10. So let's say if your total income is 2,40,343, then what you have to make? You have to go back. So this is 240, 340, 4, 0, right? And if this is not 343, but it is 345 for 346, then you have to take it 2,40,350. Okay? Same concept of mathematics. So you have to round off your total income, not every head, not GTI, total income you have to round off and you have to round off your taxes also. Before says and after says, after says, whatever is your tax payable, whatever is your tax payable or tax refundable, you have to round off that, right? Same concept will be followed. If the last digit is up to 4, then previous multiple of 10, if it is 5 or more than 5, then next multiple of 10. Okay? Texas on other SSC. So partnership from we understand that the tax rate is 30% LLP LLP is also a partnership from once it was asked in an MDP that how LLP is assessed LLP is nothing but a kind of partnership firm. So the tax rate is 30%. But on those special income, like which we have discussed triple one a 112 a and 112 we have tax rate of 15% 10% or 20% as applicable, right? So on normal income, they have to pay tax of 30%. But on other income, they have If they have a special income, they will be paying tax at the special rates. Companies. First of all, companies, they have a flat rate. Flat rate of 30%. Flat rate of 30%. But if it is not a very big company, it's not a very big company whose turnover is up to 400 crore in the previous year, 21-22. Then that domestic company has to pay tax of 25%. So. For domestic company, it is 30%. But for, if it is not a very big company, the turnover is not more than 400 crore in the previous year, 21-22. Why we take 21-22? I am not discussing here. We discuss in regular lectures. But here, just remember that in the previous year, 21-22, if it is 400 crores, up to 400 crores or less than 400 crores, then the flat rate would be 25%, otherwise 30%. There are other rates also, 22%, 15% also. There is section like 115. BAA, BABA, etc. But that is not in intermediate. So, I am not discussing those sections. Just remember that for companies, domestic companies, it is 30%. But if it is not a very big company, then it is 25%. For foreign company, you should know 40%. For foreign company, it is 40%. Just you remember this rates. They can come in MCQ. But generally in intermediate questions doesn't come on companies. It comes generally on individual, right? Corporate societies up to 10,000, 10%, 10,000 to 20,000 is 20 and more than 20,000 is there. Again, not very important. Okay. Special rate I have discussed also with you for long-term capital gain is 20%. Everyone has to pay 20%, right? STCG on equity shares or equity unit units, STCG that is called 1118 is 15%. and if it is not LTCG, it is LTCG on equity units then it is 10%. But 1-1-2-A, we don't give rebate out of this. Second thing, there is an exemption of 1 lakh also. Whatever income you will be earning in 1-1-2-A, after 1 lakh there would be tax which is applicable of 10%. In casual income, in your lottery income, game show, quiz etc., you know that the rate of tax is 30% and on unexplained income like unexplained cash credit, unexplained money, unexplained investment, unexplained... expenditure these sections i'll be discussing with you in bgbp here the tax rate is 60 percent right here the tax rate is 60 percent so these are special rates everyone if person is having income of these kinds of uh special income then they have to pay special tax rate let it be because we understand for companies we have 25 30 but if they have income in ltcg of 112 112 is other ltcg 112a is equity shares equity units they have to pay tax of this LTCG 20%, STCG 111 is 15% is for everyone. So about tax rate are for all SSE, whether they are individual, HOF, firm, companies, everyone. They have to pay tax if they are having income of this special type of income. They have to pay tax on special type of rate. Second question it can come, whether it is applicable on new scheme or old scheme? On both the schemes. It is same. It is both the scheme. It is same. whether a person is opting for a new scheme that is default or their person is opting for an optional scheme these special rates on special income are same in both the cases correct so special rate will apply respect of the tax regime and what about those slab rates this is taxable on that slab rates which we have discussed for individual that is on other income that is on remaining income they have to pay tax but if they have special income they have to pay tax like this right and there is a special provision also for resident individual and hvf that if it is only for resident individual on hf i tell you with an example now let's say look here see if there is a person is an assessee mr k and he is following in previous year this is previous year 23 and 24 and he is following default tax regime default exchange we understand that there is a basic exemption limit basic exemption limit of how much three lakh till three lakh that that person is not required to pay taxes let's say in this year he has income from salary one lakh this is computed income 1 lakh and he has income from capital gains let's say 4 lakh and out of this rupees 380 000 is 1 1 2. this is 1 1 2 that is ltcg it is normal ltcg we understand that this is chargeable at 20 okay now let me add one more thing over here uh this is three lakh fifty thousand it is one one two and he has twenty thousand rupees as triple one this is triple one is stcg we understand that here the rate is fifteen percent one one two the rate is this is normal long term and the rate is here is we understand 20 we don't have 112a over here 1 1 2 a that is the rate is 10 which is after here and yes ios which is lottery income this is lottery income and let's say he has income of 10 lakhs so total income he has is 15 lakh is he eligible for rebate the answer is no in default exchange we understand after 7 lakh you are eligible for rebate and if it is marginally over 7 lakh that we will be discussing in that chapter of surcharge and marginal relief i'll be discussing that rebate but here he's not person is not eligible for rebate okay so the question is this is let's say his total income this is his total income So how we will calculate the tax over here? How will we be going to calculate the tax? So first of all, we will see whether he has any special income. So a special income is taxable on special rates. So how we proceed with this type of question? First of all, we have to calculate, we have to see, determine whether there is any special income. So first, it should be in this order. It should be in this order. First, you will write LTCG that is of 112. If you don't remember this 112 section, it's okay, but you should know rate of 10%. LTCG which is flexible at 20%. Second is 111A short term which is applicable at a rate of 15% and 112A that is long term on equity shares. This is long term on equity shares or equity oriented units 10%. It should be in the same order. First you should write LTCG 20% then 111A 15% and 112A 10%. So should we write LTCG and this LTCG together? The answer is no. Please you should write this. We have to follow this order. Why we follow this order? Again, I'm not discussing over here. We discuss this in regular lecture, not here. Okay. I think you should know this, that why we take this order. And after that, we say whatever is our casual income. Casual income is taxable at 30%. And if we have any undisclosed income, you will rarely find it. If you want, you can also skip this. If the, uh, in the question it is not mentioned but still i am writing it over here so if there is any undisclosed income which is taxable at 60 tax rate so first of all these all are one two three four five these are five special income first out of this 15 lakh you should make this five special income and this is remaining income the last one is called remaining income which we also call it as a we also call this as a normal income okay So out of this 15 lakh, please ask yourself that whether there is any LTCG, which is normal LTCG 20%. The answer is yes, sir. Out of this 15 lakh, we have 3,50,000 as LTCG. So please write over here 3,50,000. Triple 1A, is there any triple 1A? The answer is yes, sir. 20,000 was triple 1A also. Was there any 112A? The answer is no, there was no 112A, right? there is casual income. Yes, sir. 10 lakh is the casual income lottery income. There is no undisclosed income. Now what you have to do is you just have to take the balancing figure over here. You just have to take the balancing figure over here. Please don't compute from here that what are my normal income? No, please don't go that way. You just simply calculate what is the balancing figure. So out of 15 lakh, subtract these all these things. So subtract out of this 15 subtract 3.5 20 10 lakh. So this is 1 lakh 30,000. 1,30,000 is your remaining income. This is normal income. So, in normal income, we will apply slab rates. If this person is individual, this normal income will be applying slab rates. But here, we will be applying your flat rates. So, what we should do is, so, what student will do, so, they will apply 20% on this. So, 20% on this is 70,000. 15% on this is 3,000. Here, it is no income. Here, it is 3,00,000. There is no income. And on 1,30,000, we will say, it is less than 3 lakhs so we are not going to apply any tax on this and this is the entire text and we will apply says four percent over there this is my tax liability but but but you should first see what was my basic exemption limit basic exemption limit let's say this person is following default x regime that it is 3 lakh so whether this remaining income is up to 3 lakh the answer is no there is some unexhausted there is some unexhausted basic examination limit. This particular concept which I am explaining right now, you have to apply only and only in the case of resident individual or resident HUF. This concept which I am explaining to you right now, you have to apply only in the case of resident individual and HUF, not for anyone else. If this person would have been a non-resident, then my first or whatever i have calculated just now was correct i have calculated on 350 000 20 is 70 000 then it is 3000 and so on that was correct if this person would have been non-resident please don't uh care about this unexhausted limit you just simply calculate the taxes but if this person is an individual retriever you should know about is there any unexhausted limit the answer is yes because my basic exemption limit is 3 lakh and this remaining amount Normal income which is coming is 130. So there is a difference of 1,70,000. There is a difference of 1,70,000. This is unexhausted basic commission limit. And this is applicable in old scheme also. Let's say this person is following an old scheme, optional scheme. So, his basic exemption limit would have been 2.5 lakh. So, how much is the deficiency? 1.20. Right? 2.5 minus 1.30, 1.20 is the deficiency. That is called unexhausted basic exemption limit. So, this unexhausted basic exemption limit provision you will apply only and only in the case of resident individual or HOF. Not for anyone else. So, here, how much is my deficiency? 1.70,000. I am taking basic exemption limit as 3 lakh default exchange rate. Okay. So, what you can do is... you can fulfill this unexhausted limit from these three from these three you can fulfill you cannot take this uh basic unexhausted basic exemption limit from casual income or undisclosed income only from these three you can fulfill and in the same order first you will see whether 1,70,000 which i want over here whether it can be moved from ldcg of 20 the answer is if it is yes please move it from there so here we can move it because we need it 1,70,000 which is the unexhaustible limit we need it here so we can move it from our LTCG subtract 1,70,000 from here because we have 350 available we can easily move 170 out of it. So first move from LTCG 20% this should be in the same order LTCG 111A and then 112A right we cannot move it from casual income or undisclosed income first move it from LTCG so it can easily be moved. Let's say if there would have been just 1 lakh. If there would have been just 1 lakh. So how can you move 170? You can just move 1 lakh out of it. So if we move 1 lakh out of it, so it would be 2 lakh 30,000. Again, there is a deficiency of 70,000. Then we can move it from 111. We can move it from 111A. And if we can move 20,000 out of it, still there is deficiency. Then we can move from 112A if it is available. If it is not available, then what we can do is Can we go in casual income? No, we cannot go in casual income or undisclosed income to get the amount. So for movement, these two will not be used. Only these three and also in the same order. Okay. So first of all, I'll be moving 170 out of it. So if I deduct 350 minus 170, so this is 180,000, it will become 180,000. We don't want to move anything from here because we have already, whatever the amount which you require, that came from LTCG 170. So here it is 20,000. Okay, so and it becomes 3 lakh now. So now you have to apply your tax rate. So this movement provisions, this concept you will apply only in the case of resident individual or HEOF, not for anyone else. Okay, so on 180 you apply 20% tax rate, 36,000. On 20,000, 15%, this is 3,000. 1, 1, 2A we don't have. Casual income 10 lakh, 30% is 3 lakh. We don't have undisclosed and on 3 lakh. we will apply slab rates and it would be nil right just add this text so this is texas 3 lakh 39 000 apply four percent says on it is rebate available no there is no portion uh question of rebate the income is 15 lakh over here three lakh thirty nine thousand four percent is 13 560. And this will become 352560. Got it? Let me check it once again. Yes, 352560. Should we round it off? It's not required to round off because it is already in the multiple of 10. So this is how you move. This is how the concept of unexhausted basic emission limit is will be applied. But this will be applied only in the case of resident individual product share. Right? so this is about the chapter number one revision i hope that you find this revision interesting now uh what you should do is you must be having your study material or any other book which you follow please do those questions also you should write them you should have a practice of writing the answers let's say i'm not saying that you should do entirely all questions let's say if there is 10 questions in your book you should attempt at least five or four you should attempt them by writing. It is very important examination that you should have a practice of writing, right? So, you can easily grab very good marks in your examinations. Okay, let us meet in our next lecture and next lecture would be about residential status. Let us meet there. Okay, bye, take care.

First, we will start with income tax and then we'll go to GST, right? Here, I'll be discussing each and every chapter with you. In fact, every topic which is as per our syllabus, as per our CA study material, I'll be discussing everything with you, right? So, let's start with the very first chapter of income tax that is basic concepts of income tax You can, I'll be using my book, my handwritten book, and you can also download this book.

It is available. It's a very beautifully crafted book and it covers all your topics, which is as per your syllabus, right? As per the new course, which is applicable and it covers all the amendments also, which is applicable for our 2024 exams, right? So you can visit our website.

This is rajatmogha.com and there is a download section over there. right so uh there you will find a book uh go to ca intermediate part and there is a link of the book you can easily download this it is downloadable in pdf format okay so let's start uh with basic concepts of income text and this chapter is introductory so i'll be uh starting with very elementary topics very basic topics what is takes uh and there are two different types of taxes direct tax indirect taxes what are the tax rates applicable who is an assay see what is the assessment here so i'll be discussing those points over here in this first chapter okay so we all understand what is sticks why government of any country needs takes because of economic development we understand that uh if any economy needs to get developed so their education sector must be strong their health sector, their infrastructure, they should have a good infrastructure in the country and defense system must be strong. So for making these things strong, for developing a nation, we require funds.

Government of any country requires funds and so is India. We require funds. So there are different sources of revenue for the government and taxation is one of the major sources of revenue. So we can say that tax is a revenue to the government.

it's a revenue for the government and they levy taxes on various goods various services that we known as gst and also on uh people's income if they are earning then they have to pay taxes so taxes are fees charged by the government on products income or activity that we understand and we also know that there are two different types of taxes direct x and indirect see this is introductory lecture so that is the reason i am starting with very basic topics so direct x and indirect x What is direct text and indirect text? You easily understand this. Direct text is that here you just have to remember two things. One is called burden of text and other is called collection of text.

And if it is on the same person, then we call it as a direct text. So we understand if the burden of text, burden of text is that who will bear this text, who will bond this text, from whose pocket it will actually go. So that is called burden of tax and the burden of tax and collection of tax.

Collection of tax means government will collect from whom. So if these both the things are from the same person, we call it as a direct tax and income tax is a classic example. See, for example, if I am earning income, then I have to pay taxes.

Burden of taxes on my pocket. I have to pay tax from my pocket. And will the government... or income tax department officers will go to my neighbor's place or to any of my relatives place to collect the tax the answer is no they will come to me i have to pay tax because i if i will not be paying tax they will be sending me notices they will be applying penalties and other provisions also to collect tax from me so pocket from whose pocket it is going from my pocket and they will call also collect it from me right so this is both the things are on the same person that is for direct things But if these things are from different person, burden of taxes on some other person and collection of taxes is going to happen from some other person then we call it as an indirect taxes.

A classic example is GST. Customs duty is also one of the examples which you will learn in your CA finals and there was a text there in fact there it was not was it was is because excise duty is not completely abolished still there are some goods rarely there are some goods left on which excise duties also have legal so excise duty is another example of indirect taxes so in indirect taxes Let's say if you go to market, if you purchase any product or if you purchase any services, then you have to pay that amount. For example, you go to a restaurant or you go to a Pizza Hut or Domino's, you purchase a pizza for you and the pizza cost is 400 plus 50 rupees as taxes. So you have to pay 450 rupees.

So who is bearing the burden from whose pocket it is going from the consumer pocket? They have to pay 400 for the pizza also and 50 rupees for the taxes also. Correct.

So 450 is going from the... consumer pocket but will government will collect this 50 rupees from that consumer with that consumer has to go somewhere and deposit this text no he will simply pay to that restaurant owner or that restaurant manager he will pay and government will collect from someone else right uh in gst we know that it is a supplier generally in case of forward charge and reverse charge that we will discuss in gst so burden of takes and collection of taxes on different person it is indirect taxes This is, and I tell you that this is just for your knowledge purpose, not very important for examination purpose, these things. But this is, this can come in your MCQ. You should remember this article 245. What does this article say?

It says that no tax can be collected unless and until there is a law. There should be a law. Without law, if you are collecting taxes, that is illegal. So in income tax, we have Income Tax Act 1961. In GST, we have GST Act, CGST, SGST and all.

we have 2017. so there must be a law if there is no law you cannot collect term and cannot collect text this is written in article 245 this is important second important thing is you should know about those three lists list one list two list three remember list one is called union list list one let me explain you we have list one we have list two we have list three List 1 is your union list, list 2 is your state list and list 3 is concurrent list. Only once it has been asked for examination, although not very important, but still they can ask you. So, you should know about these three lists. These lists are mentioned in Schedule 7 of Constitution of India. So, list 1, it contains all the...

activities which are governed by central government so here union government that is central government there are different points written over there and one of the point is 82 here income tax is written that on income government can collect tax so what we call these points we call these points as entry so this is entry number 82 this you should remember this can come in your examination in mcq so entry 82 says that central government has power to collect taxes on the person's income if they are earning income central government has the power state government cannot collect tax on income tax right so please tell me income tax is a central law or it is a state law it is a central law right it is not a state law it is central law all over india it is applied uniformly right and entry number 82 says that you can collect taxes on income except agriculture income on agriculture income we cannot collect tax Because that power is given to state government. There is in list 2, there is entry number 46. There it is written that on agriculture income, state government can collect tax. Although they do not collect it, but still that power is with the state government. It is not with the central government. So, we do not collect tax on agriculture income.

We say that agriculture income is exempt. But yes, you will also learn in your partial integration, we do not tax on agriculture income. But we take that. agriculture income into account while calculating tax that we will learn in our agriculture portion when i'll explain partial integration with you that is important for examination okay coming back so you should remember entry 82 that is in your uh union list second is what are the components of income tax law see income tax law whenever you have to understand income tax law you cannot uh understand income tax act in isolation Income Tax Act is just one component. Income Tax Act 1961 is just one component of income tax law.

And there are also various other things which you should know if you would like to have a knowledge on entire income tax law. So second thing is Annual Finance Act. Annual Finance Act, every year there is a budget.

and in that budget session our finance minister presents a finance bill which later on becomes a will become finance act so for our examination we have finance act 2023 which is applicable to us finance act 2023 so all the amendments which have had happened in finance 2023 we have to do that also so we don't only look at income tax act provisions we also look at finance and provisions so we have to understand these things also there are again income tax rules and some of the chapters, I tell you how these percusives are calculated. These all are mentioned in rules that how you have to because in there are different sections where it is written, where you have you must have seen that it is written as may be prescribed. So, that things are prescribed in rules.

So, wherever act says in any section that as may be prescribed, so as prescribed by rules, so you have to understand rules also, then notifications central government from time to time they make some changes in income tax so they what they do is they issue notifications so we should know all the notifications circulars and also there are some decisions of court also that we have to understand and finally we do various decisions of court but in inter we don't do so many decisions but yes one of the decision i think you should remember that we will do in capital gain chapter manjula jay shah right that i'll discuss in capital gain chapter so these all are things are which are components of income tax law you should know this okay then various there are various stamps who is an assessee assessee is a person who has to pay tax the person who is earning income and he has to pay tax not only tax if that person has to pay other amount also to the income tax let's say that person has paid the tax but he has not paid the interest let's say interest is also levied on him or any other penalties levied on him if income tax department has to collect taxes or any other amount like interest penalty etc then that person from that person from whom we have to collect this that person becomes an assessee so in simple word the person who is earning income is an assessee right and also if income tax officers assess any person if they do some assessment on that we will discuss in our chapter that is return of income that how many types of assessments are there so if Income tax officers are doing assessment on any person. So that person also becomes an assessee. So assessee is a person from whom any tax or any other sum of money is payable under this act.

Who has to pay income tax or interest or penalty and all. Right? Person.

Because here it is mentioned assessee means a person. So who is a person? Only individual can be person or there are some artificial persons also. There are some artificial person also. So income tax has also given us a definition of person.

So in person. that person could be our natural person like individual and they could be like huf aop boi association of person body of individual they can be artificial juridical person like temple mosque gurudwara like east church etc right they can be partnership firm also partnership is also assessed as a person right as a firm or a company also could be a person so they are individual hvf company partnership aop local authority artist juridical person so you should know that these are all person if they are earning income they have to pay taxes what is assessment year and what is previous year this is the easy so what is assessment year it is a period of 12 months first you understand it is a period of 12 months and in assessment year we assess the income of the income which we have earned in the last year in last year we say is previous year So in previous year whatever income we have earned we will assess it in the assessment year. So assessment year is always a period of 12 months and it follows the previous year.

After previous year there would be an assessment year. So for our examination which previous year is applicable? Previous year 23-24 is applicable. So whatever income which we have earned in previous year 23-24 that is from 1st April 23 to 31st March.

2024 whatever income which we have earned we have to assess that income in the assessment year so uh previous year means the year in which we earn income and the assessment year is the next year where we have to pay the taxes or we have to assess our income so assessment year one thing you should remember assessment it is also always a period of 12 months is previous year is also a period of 12 months this is important the answer is generally yes i'm saying generally why i'm saying generally Because previous year is generally of 12 months. Previous year starting from 23 and 24. But sometimes it could be less than 12 months also. How? Let's say there is a person who has just started his business. He has just started his business or he has just started his profession.

Before that, he was not having any income. Before that, he was not having any income. He has just started a new business or new profession.

So is it necessary that he will start the business from 1st April? The answer is no. He could start the business from 1st May, 1st June and not even 1st.

In the middle of the month also, he can start their business or profession. So in that case, the previous year is not of 12 months. It can be reduced also. So if...

there is any new business or profession which is set up during the year okay and also if there is any source of income which comes for the very first time let's say there is a person for example there is a person Mr. Amit and he was doing CA he was doing CA and in May let's say 2020 24 he gives examinations and he becomes CA so when he will become CA once result will be declared so result will be declared in May, June, July somewhere in July let's say the result will be declared so when once the result was declared in July 24 he started his job let's say he started his job or he started his practice or profession or business anything so let's say he started his job so before that he was not doing anything let's say he was just uh studying he was not earning but from july onwards or from august onwards he got a job now he started earning so his previous year would start from this particular date from where he has started his earning right this is a new source of income which has come into picture so in from april 24 he was not earning anything may 24 he was not earning june he was not earning and let's say he started earning from july onwards so his previous year will start from july right so you It is a very rare situation. Generally, it is a period of 12 months. But yes, examiner can ask you whether the previous year can be less than 12 months. Also, the answer is yes. In these cases, it can be less than 12 months also.

Right. Okay. Income earned during the previous year is assessed and takes in the assessment.

In previous year, whatever income will be earned, it will be taxed and assessed in the assessment year. One very important question. can there be certain cases where the income of the previous year will be assessed in the same previous year can there be any cases the answer is yes examiners favorite question they can ask this question generally we know general law is that in previous year whatever income we will be earning that will be assessed in assessment year but are there any cases where the previous year income is assessed in the same previous year the answer is very much yes there are certain cases In what cases, in what circumstances can it be?

Let's say if there is any assessee, which income tax officers believe that he will not be available in assessment year, he will not be available, he will be either gone from, he will be leaving India forever or he will not come back. So in that case, we will assess the income of the previous year in the same previous year itself. Or there is any non-resident if he will not come back. So this is something which is important. So you can mark this important.

This is page number 1.4. So please mark this important. So you don't have to remember the section number, but you should know these cases where the income of the previous year is assessed in the same year. So if there is a shipping business of a non-resident, so if there is any US company, they are into shipping business.

So once they came India. Once in a blue moon, they came to India and they are now leaving. And we don't know whether they will come back or not. In that case, before leaving that Indian port, we will ask them to pay their taxes also. So, non-resident shipping business.

So, it is resident shipping business or non-resident? It is non-resident shipping business. Second is person leaving India with no intention of returning.

If he is going out and he has no intention of coming back, then we will collect the tax from in the same previous year. AOP, BOI formed for a particular event or purpose. If there is any association of person or body of individual that is formed only for a particular purpose. Let's say if there is any event happening or any function happening and there is two or three person they join together as an AOP or BOI and they will be managing that particular function for that they will be paid and that function will last for three or four days.

So after that for only for four days they got together and they are doing that particular venture and after that they will be all divided right so in that case because in us if we wait till assessment here there will be no aop or by in the assessment here so in that case we will be texting them in the same previous year right person likely to transfer property to avoid taxes if there is any person who is has so much of black money and if income tax officer get to know about it and if they also get to know that he is just now disposing all his property so that he will not be able to will not be able to recover that tax also so in that case we will go and tax in the same previous year or any business which is discontinued so these are the cases where we will tax the income in the same previous year. Okay. Oh, this is easy.

What are heads of income? We all know there are five heads of income. First, we'll start with salary, then house property, PGVP, capital gain and IFOS.

Okay. Now it is important and there is an amendment also in the income tax rates. So you should know about income tax rates also. For individual HUF, there is an amendment also and in the new scheme which we call now a default scheme there is an amendment also now the income tax has been rate has been changed from the last year in 2024 now we have different income tax rate so for individual huf aop by artificial juridical person we understand that these people these kinds of assessees pay their taxes at the rate on a slab rate basis and for companies and firms they pay tax on flat rate system so in india we have both types of rates slab rates and flat rates but first we'll talk about this and specifically in intermediate examinations you understand that individual is most important you should know about individual they will not ask you uh questions about partnership firm or companies and all rarely they will ask you the rates and everything but entire your all the questions will cover generally of individual or actually mainly individual okay so these people individual i repeat individual huf aop by artificial juridical person they pay taxes on the basis of this labor rates so and they have two option either they can pay their taxes by using the new scheme that is called new regime and now it is called as a default tax regime and the section number is 115 bac this is one of the important section and if you can remember the section number then it will be good 115 bac it is for the new tax regime which we call it as a default tax regime so these people have an option They can pay their taxes as per the default tax regime also or as per the old scheme, which we call it as an optional scheme. We don't call it an old scheme.

We call it now. It is an optional scheme, but it is same thing. It is old scheme only.

Right. So there are two kinds of. So if any individual would like to pay their taxes, they have an option. Either they can go with the default tax regime or they can go with the old scheme. That is, we call it as an optional scheme.

So. what is the tax rate in the new tax regime this is important and there is an amendment also and certainly question will come even mc queen can come then they will ask you that this is the income of an ssc and he is following individual scheme what would be the text on that so if the individual hvf aop by or ajp that is our juridical person if they are following default scheme they have to pay rates they have to pay taxes as follows okay So if they have total income up to 3 lakh, so till 3 lakh they don't have to pay any taxes. If they have total income up to 3 lakh, the tax is nil.

And on next 3 lakh, that is from 3 lakh 1 rupees till 6 lakh rupees, that is for next 3 lakh, they have to pay 5%. Next 3 lakh from 6 to 9, 10%. 9 to 12, 15%. 12 to 15, 20. And after 15 lakh, 30%.

Right? So it is a concessional scheme of taxes. The answer is yes, because the old scheme in the optical scheme after 10 lakh, we pay 30%.

But here after 15 lakh, we are paying 30%. Right? So this is a concessional scheme.

And how you will learn that it is very easy to learn. So see, in total income, there is a difference of three, three lakh and after 15 lakh, it is going to 30%. So first three, next three, next three, next three, next three. And once you reach 15 lakh. it would be your 30%.

So there is a difference of 3, 3 lakh and there is a difference of 5, 5%. So that is easy to remember. First it was 0, then 5, 10, 15, 20 going on multiple of 5. Once you reach 15 lakh limit, that is 20%, after that it is not 25, it is now 30. So you should remember the last one.

Now from 20 onwards, it is not going to 25, it is going on 30. So these are concessional rate this is default x regime rate earlier it was 2.5 lakh and so now it is 3 lakh okay so this is an amendment and you understand that if any person, individual, HVF, AOP, BOI is following these particular rates, then there are certain deductions, there are certain exemptions which will not be available because we are not giving two benefits to them. One benefit we have given is concessional rate. So, we will take one benefit from them. The other benefit is which we are taking away from them is the sacrifice they have to make is they do not have to, they cannot claim certain exemptions and deductions which we will be doing in our... subsequent chapters in salary what deductions they cannot they will not be getting in house property what uh for self-occupied property they don't get that two lakh deductions in pgbp they don't get section 35 ad and all additional depreciation they will not get that we will learn in all those chapters what are the exemptions or deductions which is not available to them okay second most important thing you should remember is in default x regime uh there would be no benefit for the age also for senior citizen or for super senior citizen there will be no benefit.

All of them will be paying the taxes if the person is individual HFAOP, BOI. If the person is individual, their age is more than 60 years or more than 80 years also, they will be paying tax. There is a similar rate of tax for everyone. In optional scheme, in the old scheme, we have benefit for senior citizen and super senior citizen, but here we don't have any such benefit. So everyone would be treated equally.

So this is important thing which you should remember. Got it? Okay. So in optional scheme, what was the tax rate? It was earlier.

There is no amendment there. So it was the same as earlier. So up to 2.5 lakh, if the person is falling, he is saying, no, no, I want to take those.

I don't want to sacrifice those examinations, those reduction. I'll be taking that. That would be beneficial for me.

So if the person is opting for optional scheme, that is old scheme. So that rate of tax would be up to 2.5 lakh nil. Next 2.5 lakh, that is from 2.5 lakh to 5 lakh, it would be 5%. 5%. from 5 lakh to 10 lakh actually it is 5 lakh 1 rupees right it is 2 lakh 50 thousand 1 rupees so but we understand that first 2.5 black nail next 2.5 like 5 next 5 lakh is 20 and after 10 lakh we have to pay 30 see here after 5 lakh you are paying 20 and there you are paying 20 after 12 lakh so this is concessional and this is not concessional but yes you get certain benefits here you get certain deductions also here so there is a new chapter which is introduced in your syllabus that is income text we will do it in the last that is income text computation and optimization very important chapter and examination examiner will short will be asking questions on that particular point also specifically the first question which comes of total income they can ask you which particular scheme would be beneficial for him So that is income tax computation and optimization.

What is optimization means? That out of these two options, what will be the most beneficial for him? Should we advise him to go for default tax regime or we should advise him to go opt for optional tax regime? So that is another important question.

And one more thing, if the person is following optional scheme and if they are resident individual and whose age is more than. 60 years or more then they will be getting benefit of 50 000 that up to 2 point generally up to 2.5 lakh they don't have to pay tax but if the person is a senior citizen then up to 3 lakh they don't have to pay tax so there is a benefit of 50 000 up to 3 lakh there is no tax from 3 to 5 this is something which is the same as earlier 3 to 5 lakh 5 percent 5 to 10 lakh 20 and about 10 lakh it is 30 percent but The important thing is that the senior citizen must be a resident. And I tell you a very important thumb rule.

In income tax, there are so many benefits which are available to senior citizens. But in every case, wherever these benefits are available, it is important that that senior citizen must be a resident. In income tax act, we are not going to give any special benefits. to non-resident senior citizen.

So if a senior citizen is a non-resident, we will be giving them normal provisions. We will not be giving them any special benefits which are available to senior citizen. So that senior citizen must be a resident. This is important.

This is important. Resident can be ordinary, not ordinary. That is okay. But that person should be a resident individual.

So if a person is a resident individual and his age is 60 years or more, one important thing, we say see for our examination the previous year which is applicable is previous year 23 24. So, it starts from 1st April 2023 and will go till 31st March 2024. So, in this previous year, these dates, both these dates are included. So, if a person becomes of age 60 in any of this, on any date in this year, from 1st April 2023 till 31st March 2024, if he becomes 60 years of age, We will call him as a senior citizen. Let's say he becomes 60 years.

His birthday is on 31st March 2024. So we will call him as a senior citizen. Right. We don't have to see the date of assessment year.

We have to see of only of previous year. One important point. Also, we will give add one more day extra. That is 1st April 2024. 1st April. Only one day extra.

Not 2nd April. 1st April. Not 2nd April.

Just 1st April. we will give one day extra also so if a person is becoming a senior citizen on not in the previous year but on 1st april 2024 we will again consider him as a him or her as a senior citizen right so this we discussed generally we discussed this in our regular lecture why one more day is given but this is revision i think you will get to know this right so please remember if a person is becoming a senior citizen on first day of the assessment year also that is first april 2024 for examination then also we will be considering that person as a senior citizen correct so this is important okay and if a person is a super senior citizen that is 80 years or more same thing in at any time during the previous year that person becomes 80 years or even on first april 2024 if a person becomes 80 years or more then up to five lakh nil five to ten twenty percent and about ten lakh would be 30 Got it? Age must be attained during the previous year or on 1st April of assessment year.

Not 2nd April, 3rd April. No, it is only on the, we are giving only one day benefit, right? On 1st April of the assessment year.

But these benefits will be given only and only in the case of optional tax regime. It will not be given in default tax regime. Correct?

Okay. One more important question which examiner can ask, whether an individual, such individual that you have AOP, BOI. Can they in one year they can choose optional in second year they can choose default tax regime.

Is it OK with them? The answer is yes. Also, and the answer is no.

Also, right. Why? It depends upon their PGVB income.

It depends on PGVB income. If they would like to switch between if they would like to keep on switching between optional and your default tax regime. So it depends upon the PGVB income. If the assessee does not have PGVB income. then you are free.

You are free. In one year, if you find default tax regime is beneficial, you can go for default tax regime. In second year, if you find optional scheme is beneficial for you, then you can opt for optional tax regime.

So if you don't have PGVP, we have no problem. You can switch between the two schemes. But if you have PGVP income, if the assessee has a PGVP income, then they cannot switch. Once they have opted, if a person has a PGVP income and once they have adopted, default tax regime, they cannot go back.

They cannot go back. This is important. Got it? They cannot go back. But the exception here is if in any subsequent year, that person does not have PGVP income.

If that PGVP ceases, he shuts down his business or he shuts down his profession. If that PGVP income ceases, in that case, he can come back. But unless and until till the time he is having PGP pay income he cannot go back.

So once he has adopted default tax regime you cannot go back. So this was important it was on the previous page. So assessee time limit for exercising the option to shift out of the default tax regime if the assessee does not have PGP pay income so they can change every year whenever they will be filing their return they can change it they can opt just which scheme they are opting this year.

But if the assessee has PGVP income, once they have exercised the option of default tax regime, once default tax regime was applicable, they have exercised that option, they cannot go back till they have PGVP. Once that PGVP ceases, then they can go back. So this is important.

Companies and firms, we understand there is flat rate. For firm it is 30%, companies it is 30% also, 25% also and foreign companies it is 40% also. That I'll discuss with you. Okay. First, let us discuss a very important point 87a rebate and in default text regime in new scheme there is an amendment also that will be making this section very important and I am quite sure that one question will be coming from this 87A rebate.

I'll tell you which question. First of all, this rebate is eligible. The person who is eligible is only an only resident individual, not even insured. So this rebate, you should remember this rebate is only for individual, not for any other SSC and that individual must be a resident.

It is available in both Optional tax regime also, old one also and new one also. So, in optional tax scheme, there is no amendment. But in new tax regime, that is default tax regime, there is an amendment. So, what was in optional tax regime?

In optional tax regime, it was if a resident individual whose total income is up to 5 lakh, then they are eligible for rebate. And how much rebate they will be getting? Whatever the tax is there on their income or rupees 12,500, whichever is lower.

So, you understand? whatever the text is let's say a person is having income of 4 lakh so you have to calculate a text on 4 lakh or 12 500 whichever is lower that is the rebate available to them in new text regime resident individual if that person is earning a total income not gti i'm talking about total income after deductions and all right so if total income in now in new text game we generally don't get deduction of chapter 6a except those few section that 80 ccd And 80 CCH, there is a section that I'll be discussing with you in the chapter of deductions. So, and again, one more section 80 JJJ, that I'll be discussing with you.

Okay. So, eligible assessing. So, resident individual where total income is up to 7 lakh.

Now, it is 7 lakh. There is an amendment over here. So, if the total income is up to 7 lakh, then this person can go for rebate.

And how much rebate he will be getting? the tax on that income let's say if a person is earning 6 lakh or 6.5 lakh or even 7 lakh you calculate text on that income or 25 000 whichever is lower so you should remember this amount 25 000 whichever is lower how this 25 000 is calculated if you will calculate text on 7 lakh by following these rates you will get 25 000. see if a person is earning 7 lakh so on first 3 lakh nil on next three lakh five percent right three lakh 5% is 15,000 and on remaining 1 lakh, 3 plus 3 plus 1, 7, it is coming. So, on remaining 1 lakh, 10%, that is 10,000 rupees. So, this is 25,000.

So, this is how I am getting 25,000. So, if a person has a total income of up to 7 lakh, then they can go for rebate, tax on income or 25,000, whichever is lower. Right.

Now, the important point is, if any person. who has income of 7,1,000, will he be eligible for rebate? Will he be eligible for rebate? The answer is no, sir, because we know that up to 7,000,000, then you are eligible for rebate. But if the income is 7,1,000,000 to 7,2,000, will he be eligible for rebate?

The answer is still yes. The answer is still yes. There is some rebate available to him and how that rebate will be calculated.

For that, you should know the concept of marginal relief. because it is very similar to the concept of marginal relief. So, I will be discussing the concept of surcharge with you and I will be discussing the concept then with surcharge we will be doing marginal relief.

After that, I will be telling you how this rebate is calculated. So, surcharge, although in our study material surcharge is discussed in this particular chapter only, but I have been discussing surcharge in a separate chapter. And if you look at this book, There is a chapter, second last chapter, I believe it is of surcharge.

There I'll be discussing surcharge with you, marginal relief also with you and this concept also of rebate because which is very much related to it is like same like marginal relief, the same method which you apply for marginal relief, the same method you apply for rebate also. So, but here in optional scheme, if a person is having income of 5 lakh, 10 rupees also, there would be no that concept. There will not be using that concept.

Here it is just 5 lakh if that person is having income of 5 lakh then there is rebate if it is more than 5 lakh there is no rebate at all but here we have that concept in optional tax regime so that I will be discussing with the chapter of surcharge. Okay there are few points in chapter number one like agriculture income agriculture income I will not discuss in this class I will discuss agriculture income with our PGPP right so New tax regime also, I will be discussing in detail about new tax regime, what are the deductions which are not available. Because in every chapter, with every chapter, I will be telling you that this will apply only in official tax scheme. It will not apply in new tax regime.

So, in new tax regime, what are the deductions which are not available, I will be discussing in further chapters. In each and every chapter, I will be discussing with you, right. Search charge, we have a different chapter.

Agriculture income, although institute has discussed that agriculture income in the first chapter itself but i'll be discussing that chapter that particular topic with you in pgvp okay okay one more important point one more important point is there that rebate of 87a is not available from 112a income what is this 112a we understand we have a chapter of capital gain in capital gain capital gains are of two types short-term capital gain and long-term capital gain right if a person short-term capital gain generally we understand uh generally it is if person is transferring their asset before three years in some cases it is two years and in some cases it is one year also that we will discuss be discussing in uh the chapter of capital gain but here just i would like to give an overview if a person is selling equity shares if a person is selling equity shares or equity oriented units if the person is selling equity shares and equity oriented units on a stock exchange on a stock exchange it has written it is mentioned in the question that it is stock exchange or stt is mentioned securities transaction takes is mentioned then we understand that if this transaction is happening in a stock exchange so if a person is selling equity shares or equity oriented units on a stock exchange or stt is paid anything which is mentioned in the question then we call such short term we call such short term is as 111a that is called 111a other short term is not 111 other short term is not let's say if a person is selling gold after six months seven months that is also short term but that is not triple one way 111a is only and only if we sell equity shares for equity oriented units or units of business stress business stress is not in intermediate course so i'm not discussing that so okay equity shares equity oriented units then it is triple money right So you understand 111A is short term only and only in case of equity shares or equity oriented units. Okay. And the rate of taxes, 15%.

Here the rate of taxes, 15%. Everybody has to pay tax at a rate of 15%. Whether that person is individual also, HUF, AOP, BUI, artificial digital person, even partnership firm or companies also.

Everyone has to pay tax at a rate of 15%. Here we have special rate of taxes, 15%. Long term capital gain. If.

that equity shares or equity oriented units, if they are long term, we are selling it after one year, then we call them 112A. We call them 112A. Other long term, we call it 112. So, these are three sections which I would like to discuss. These are three sections which I would like to refer for you.

So, 111A is short term capital gain on equity shares or equity units. If they are short term, 111A, 15%. And if they are long term, then 112A. and here the rate is 10 percent here the rate is 10 percent also we understand that in 112a there is i'll be discussing that in capital gain that in 112a if you are having income of let's say five lakh six lakh or seven lakh then we give an exemption of one lakh one lakh is exemption is a flat exemption so we don't charge on entire five lakh if you have one one two or five lakh then only four lakh we have to pay tax of ten percent if you have income of six lakh just subtract minus one and it will be five lakh if you have income of seven lakh after 1 subtract minus 1 and then it would be 6 lakhs.

So, 1 lakh is exemption which is available over there in 112A, but the rate is 10%. And on other long term, let us say if equity shares or equity oriented units, it is 112A. And other long term, if the person is selling land and that is long term or if that person is selling gold or any other capital asset which they are selling, which is not equity shares or equity oriented units on a stock exchange, other than that, it is 112 and the rate is 20%. and these are special rates these are special rates it is applicable for everyone individual huf aop by even partnership firm companies and all everyone has to pay these special rates right we understand partnership rate is 30 but 30 is normal income but we have special income also right so i was telling you that this rebate this rebate of 87a is not available from 112a what was 112a long term equity shares or equity-oriented units on stock exchange or STD. So in that case, if a person is having, let's say there is a person who is having an income of 6,000,000, and he is in new tax regime and this 6 lakh is coming entirely from 112a so he will not be getting repaid so this is one thing which you should remember that 112 is not available sorry 87a rebate is not available from 112a right 112a i have written discussed later because this is a part of capital gain okay surcharge is an additional tax which you have to pay let's say for individual if he's earning income of more than 50 lakh then there is surcharge which is which would be applicable if more than 1 crore, then 2 crore, 5 crore, that I'll be discussing with you, I've already mentioned that I'll be discussing with you in a separate chapter, surcharge and margin relief.

Okay, health and education CES, so there is a CES of 4% on income tax plus surcharge, if applicable, you have to add both the things and then you will apply your CES. So if the person is having, if there is an individual who is not having any income more than 50 lakhs, so there will be no surcharge. So whatever tax we will calculate, we will add 4% on it.

Right. And if a person is having income, which is more than 50 lakh, then we will be calculating tax, then surcharge, and we will be adding both of them. Then after adding them, then we will be applying 4% on it. Correct. Okay.

And this, you know that you have to round off your income also and round off your taxes also. So, rounding of income is section 288a rounding of taxes 288b even if you don't remember the sections it's okay perfectly fine but you should know that you have to round off your income some person some students make this mistake that they keep on rounding of each and every head if they are earning income from salary they will round it off if they are earning income from house property they will round it off no you don't have to round off each and every of your head's income you have to round off your total income gti no gti only a total income you have to round it. So please remember that you have to round off your total income and how you will round off you in the multiples of 10 and simple mathematics concept will be followed over here.

If the last digit is up to 1, 2, 3 or 4, up to 4, then you have to come back in the previous multiple of 10. And if it is last digit is 5 or more than 5, then you have to further round it off. and the succeeding 10. So let's say if your total income is 2,40,343, then what you have to make? You have to go back.

So this is 240, 340, 4, 0, right? And if this is not 343, but it is 345 for 346, then you have to take it 2,40,350. Okay? Same concept of mathematics.

So you have to round off your total income, not every head, not GTI, total income you have to round off and you have to round off your taxes also. Before says and after says, after says, whatever is your tax payable, whatever is your tax payable or tax refundable, you have to round off that, right? Same concept will be followed.

If the last digit is up to 4, then previous multiple of 10, if it is 5 or more than 5, then next multiple of 10. Okay? Texas on other SSC. So partnership from we understand that the tax rate is 30% LLP LLP is also a partnership from once it was asked in an MDP that how LLP is assessed LLP is nothing but a kind of partnership firm.

So the tax rate is 30%. But on those special income, like which we have discussed triple one a 112 a and 112 we have tax rate of 15% 10% or 20% as applicable, right? So on normal income, they have to pay tax of 30%.

But on other income, they have If they have a special income, they will be paying tax at the special rates. Companies. First of all, companies, they have a flat rate.

Flat rate of 30%. Flat rate of 30%. But if it is not a very big company, it's not a very big company whose turnover is up to 400 crore in the previous year, 21-22.

Then that domestic company has to pay tax of 25%. So. For domestic company, it is 30%.

But for, if it is not a very big company, the turnover is not more than 400 crore in the previous year, 21-22. Why we take 21-22? I am not discussing here. We discuss in regular lectures. But here, just remember that in the previous year, 21-22, if it is 400 crores, up to 400 crores or less than 400 crores, then the flat rate would be 25%, otherwise 30%.

There are other rates also, 22%, 15% also. There is section like 115. BAA, BABA, etc. But that is not in intermediate. So, I am not discussing those sections.

Just remember that for companies, domestic companies, it is 30%. But if it is not a very big company, then it is 25%. For foreign company, you should know 40%. For foreign company, it is 40%. Just you remember this rates.

They can come in MCQ. But generally in intermediate questions doesn't come on companies. It comes generally on individual, right? Corporate societies up to 10,000, 10%, 10,000 to 20,000 is 20 and more than 20,000 is there.

Again, not very important. Okay. Special rate I have discussed also with you for long-term capital gain is 20%. Everyone has to pay 20%, right? STCG on equity shares or equity unit units, STCG that is called 1118 is 15%.

and if it is not LTCG, it is LTCG on equity units then it is 10%. But 1-1-2-A, we don't give rebate out of this. Second thing, there is an exemption of 1 lakh also. Whatever income you will be earning in 1-1-2-A, after 1 lakh there would be tax which is applicable of 10%.

In casual income, in your lottery income, game show, quiz etc., you know that the rate of tax is 30% and on unexplained income like unexplained cash credit, unexplained money, unexplained investment, unexplained... expenditure these sections i'll be discussing with you in bgbp here the tax rate is 60 percent right here the tax rate is 60 percent so these are special rates everyone if person is having income of these kinds of uh special income then they have to pay special tax rate let it be because we understand for companies we have 25 30 but if they have income in ltcg of 112 112 is other ltcg 112a is equity shares equity units they have to pay tax of this LTCG 20%, STCG 111 is 15% is for everyone. So about tax rate are for all SSE, whether they are individual, HOF, firm, companies, everyone.

They have to pay tax if they are having income of this special type of income. They have to pay tax on special type of rate. Second question it can come, whether it is applicable on new scheme or old scheme?

On both the schemes. It is same. It is both the scheme.

It is same. whether a person is opting for a new scheme that is default or their person is opting for an optional scheme these special rates on special income are same in both the cases correct so special rate will apply respect of the tax regime and what about those slab rates this is taxable on that slab rates which we have discussed for individual that is on other income that is on remaining income they have to pay tax but if they have special income they have to pay tax like this right and there is a special provision also for resident individual and hvf that if it is only for resident individual on hf i tell you with an example now let's say look here see if there is a person is an assessee mr k and he is following in previous year this is previous year 23 and 24 and he is following default tax regime default exchange we understand that there is a basic exemption limit basic exemption limit of how much three lakh till three lakh that that person is not required to pay taxes let's say in this year he has income from salary one lakh this is computed income 1 lakh and he has income from capital gains let's say 4 lakh and out of this rupees 380 000 is 1 1 2. this is 1 1 2 that is ltcg it is normal ltcg we understand that this is chargeable at 20 okay now let me add one more thing over here uh this is three lakh fifty thousand it is one one two and he has twenty thousand rupees as triple one this is triple one is stcg we understand that here the rate is fifteen percent one one two the rate is this is normal long term and the rate is here is we understand 20 we don't have 112a over here 1 1 2 a that is the rate is 10 which is after here and yes ios which is lottery income this is lottery income and let's say he has income of 10 lakhs so total income he has is 15 lakh is he eligible for rebate the answer is no in default exchange we understand after 7 lakh you are eligible for rebate and if it is marginally over 7 lakh that we will be discussing in that chapter of surcharge and marginal relief i'll be discussing that rebate but here he's not person is not eligible for rebate okay so the question is this is let's say his total income this is his total income So how we will calculate the tax over here? How will we be going to calculate the tax?

So first of all, we will see whether he has any special income. So a special income is taxable on special rates. So how we proceed with this type of question?

First of all, we have to calculate, we have to see, determine whether there is any special income. So first, it should be in this order. It should be in this order.

First, you will write LTCG that is of 112. If you don't remember this 112 section, it's okay, but you should know rate of 10%. LTCG which is flexible at 20%. Second is 111A short term which is applicable at a rate of 15% and 112A that is long term on equity shares. This is long term on equity shares or equity oriented units 10%. It should be in the same order.

First you should write LTCG 20% then 111A 15% and 112A 10%. So should we write LTCG and this LTCG together? The answer is no. Please you should write this.

We have to follow this order. Why we follow this order? Again, I'm not discussing over here. We discuss this in regular lecture, not here.

Okay. I think you should know this, that why we take this order. And after that, we say whatever is our casual income. Casual income is taxable at 30%. And if we have any undisclosed income, you will rarely find it.

If you want, you can also skip this. If the, uh, in the question it is not mentioned but still i am writing it over here so if there is any undisclosed income which is taxable at 60 tax rate so first of all these all are one two three four five these are five special income first out of this 15 lakh you should make this five special income and this is remaining income the last one is called remaining income which we also call it as a we also call this as a normal income okay So out of this 15 lakh, please ask yourself that whether there is any LTCG, which is normal LTCG 20%. The answer is yes, sir. Out of this 15 lakh, we have 3,50,000 as LTCG. So please write over here 3,50,000.

Triple 1A, is there any triple 1A? The answer is yes, sir. 20,000 was triple 1A also.

Was there any 112A? The answer is no, there was no 112A, right? there is casual income. Yes, sir.

10 lakh is the casual income lottery income. There is no undisclosed income. Now what you have to do is you just have to take the balancing figure over here. You just have to take the balancing figure over here.

Please don't compute from here that what are my normal income? No, please don't go that way. You just simply calculate what is the balancing figure.

So out of 15 lakh, subtract these all these things. So subtract out of this 15 subtract 3.5 20 10 lakh. So this is 1 lakh 30,000. 1,30,000 is your remaining income.

This is normal income. So, in normal income, we will apply slab rates. If this person is individual, this normal income will be applying slab rates. But here, we will be applying your flat rates.

So, what we should do is, so, what student will do, so, they will apply 20% on this. So, 20% on this is 70,000. 15% on this is 3,000. Here, it is no income.

Here, it is 3,00,000. There is no income. And on 1,30,000, we will say, it is less than 3 lakhs so we are not going to apply any tax on this and this is the entire text and we will apply says four percent over there this is my tax liability but but but you should first see what was my basic exemption limit basic exemption limit let's say this person is following default x regime that it is 3 lakh so whether this remaining income is up to 3 lakh the answer is no there is some unexhausted there is some unexhausted basic examination limit.

This particular concept which I am explaining right now, you have to apply only and only in the case of resident individual or resident HUF. This concept which I am explaining to you right now, you have to apply only in the case of resident individual and HUF, not for anyone else. If this person would have been a non-resident, then my first or whatever i have calculated just now was correct i have calculated on 350 000 20 is 70 000 then it is 3000 and so on that was correct if this person would have been non-resident please don't uh care about this unexhausted limit you just simply calculate the taxes but if this person is an individual retriever you should know about is there any unexhausted limit the answer is yes because my basic exemption limit is 3 lakh and this remaining amount Normal income which is coming is 130. So there is a difference of 1,70,000. There is a difference of 1,70,000. This is unexhausted basic commission limit.

And this is applicable in old scheme also. Let's say this person is following an old scheme, optional scheme. So, his basic exemption limit would have been 2.5 lakh.

So, how much is the deficiency? 1.20. Right?

2.5 minus 1.30, 1.20 is the deficiency. That is called unexhausted basic exemption limit. So, this unexhausted basic exemption limit provision you will apply only and only in the case of resident individual or HOF.

Not for anyone else. So, here, how much is my deficiency? 1.70,000. I am taking basic exemption limit as 3 lakh default exchange rate. Okay.

So, what you can do is... you can fulfill this unexhausted limit from these three from these three you can fulfill you cannot take this uh basic unexhausted basic exemption limit from casual income or undisclosed income only from these three you can fulfill and in the same order first you will see whether 1,70,000 which i want over here whether it can be moved from ldcg of 20 the answer is if it is yes please move it from there so here we can move it because we need it 1,70,000 which is the unexhaustible limit we need it here so we can move it from our LTCG subtract 1,70,000 from here because we have 350 available we can easily move 170 out of it. So first move from LTCG 20% this should be in the same order LTCG 111A and then 112A right we cannot move it from casual income or undisclosed income first move it from LTCG so it can easily be moved.

Let's say if there would have been just 1 lakh. If there would have been just 1 lakh. So how can you move 170? You can just move 1 lakh out of it. So if we move 1 lakh out of it, so it would be 2 lakh 30,000.

Again, there is a deficiency of 70,000. Then we can move it from 111. We can move it from 111A. And if we can move 20,000 out of it, still there is deficiency. Then we can move from 112A if it is available. If it is not available, then what we can do is Can we go in casual income?

No, we cannot go in casual income or undisclosed income to get the amount. So for movement, these two will not be used. Only these three and also in the same order. Okay. So first of all, I'll be moving 170 out of it.

So if I deduct 350 minus 170, so this is 180,000, it will become 180,000. We don't want to move anything from here because we have already, whatever the amount which you require, that came from LTCG 170. So here it is 20,000. Okay, so and it becomes 3 lakh now.

So now you have to apply your tax rate. So this movement provisions, this concept you will apply only in the case of resident individual or HEOF, not for anyone else. Okay, so on 180 you apply 20% tax rate, 36,000. On 20,000, 15%, this is 3,000. 1, 1, 2A we don't have.

Casual income 10 lakh, 30% is 3 lakh. We don't have undisclosed and on 3 lakh. we will apply slab rates and it would be nil right just add this text so this is texas 3 lakh 39 000 apply four percent says on it is rebate available no there is no portion uh question of rebate the income is 15 lakh over here three lakh thirty nine thousand four percent is 13 560. And this will become 352560. Got it? Let me check it once again.

Yes, 352560. Should we round it off? It's not required to round off because it is already in the multiple of 10. So this is how you move. This is how the concept of unexhausted basic emission limit is will be applied. But this will be applied only in the case of resident individual product share.

Right? so this is about the chapter number one revision i hope that you find this revision interesting now uh what you should do is you must be having your study material or any other book which you follow please do those questions also you should write them you should have a practice of writing the answers let's say i'm not saying that you should do entirely all questions let's say if there is 10 questions in your book you should attempt at least five or four you should attempt them by writing. It is very important examination that you should have a practice of writing, right? So, you can easily grab very good marks in your examinations.

Okay, let us meet in our next lecture and next lecture would be about residential status. Let us meet there. Okay, bye, take care.

Transcript for:CA Intermediate Taxation Revision Overview

Transcript for:
CA Intermediate Taxation Revision Overview