How To Fill ITR2

10 February 2009 ©Taxmann/Dr. Vinod K.
Singhania
Taxmann’s
TAX PAYERS’ PRESENTATION
RETURN OF INCOME
[ITR - 2]
By Dr. Vinod K.
Singhania
Form ITR - 2
INDIAN INCOME TAX
RETURN
[For Individuals and HUFs not

having Income from Business
or Profession]
10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

Guidelines for filing out parts
and schedules
General
All items must be filled in the manner indicated therein;
otherwise the return maybe liable to be held defective or even
invalid.
If any schedule is not applicable score across as “---NA---”.
If any item is inapplicable, write “NA” against that item.
Write “Nil” to denote nil figures.
Except as provided in the form, for a negative figure/ figure of
loss, write “-” before such figure.
All figures should be rounded off to the nearest one rupee.
However, the figures for total income/ loss and tax payable be
finally rounded off to the nearest multiple of ten rupees.
Guidelines for filing out parts
and schedules
Sequence for filling out parts and schedules
You are advised to follow the following sequence while
filling out the form:
Part A: General on page 1
Schedules
Part B-TI and Part B-TTI
Verification
Details relating to TRP and counter signature of TRP if
return is prepared by him.

Personal information
Write 10 digit PAN, please
Write first Write middle Write ensure that first five letters
name name (If no surname of PAN are alpha and next
middle name four letters are numeric and
leave blank the last one is alpha. For, e.
g., – AMUPK0123N

Write Flat/Door/ Write Premises/ Write Area/
Block No. Building/ Village Locality
Write Road/
Street/ Post Write Town/ Write State Write 6 digit
Office City/ District name PIN Code
Tick on applicable status if
Write Date of
Write Gender individual tick on Individual
Birth
otherwise on HUF
Optional Optional Write Employer

Category
Filing Status
Write Ward/
Circle
Description Code
Voluntarily before the due date 11
Voluntarily after the due date 12
In response to notice under section 142(1) 13
In response to notice under section 148 14
In response to notice under section 153A 15
If it is not revised
Filing Status return tick on
original.
Tick the residential status. A person

is resident if he is in India in the
previous year for 182 days or more.
Total Income
It can be taken from Form No. 16 given by the employer.
Alternatively
Salary it can be calculated as – XXX
Allowances XXX
Perquisites XXX
Gross salary XXX
Less : Deduction under section 16
Standard deduction [Sec. 16(i)] Nil
Entertainment allowance deduction [Sec. 16(ii)] XXX
Professional tax [Sec. 16(iii)] XXX
Income under the head “Salaries” XXX

Total Income
Take from Schedule HP.
Enter nil if it is negative
Short-term capital gain if

securities transaction tax
is paid
Any other short-term

capital gain
Long-term capital gain
take from Schedule CG

Total Income
Income from owning
and maintaining race
horses
Income from other sources

not being from owning and
maintaining race horses

Total Income
Take from Schedule CYLA
(Details of income after set
off of current year loss)
Take from
Schedule BFLA
(Details of income
after set off of
brought forward
losses of earlier
years)
Take from
Schedule VIA

Total Income
Take from Schedule
EI (Details of
Exempt Income)
Take from Schedule CFL

(Details of Losses to be
carried forward to future
years)

Computation of tax liability
Calculate tax on total income other than income chargeable at

special rates
Resident woman Resident senior citizen Any other Slab rate
(> 65 years of age)
0 – 1,80,000 0 – 1,95,000 0 – 1,10,000 Nil
1,80,001 – 3,00,000 2,25,001 – 3,00,000 1,50,001 – 3,00,000 10%
3,00,000-5,00,000 3,00,000-5,00,000 3,00,000-5,00,000 20%
Above 5,00,000 Above 5,00,000 Above 5,00,000 30%

Surcharge is applicable only if
total income exceeds Rs. 10
Lakh. Rate of surcharge is 10
per cent of income-tax.
Education cess is 2 per cent and

SHEC is 1% of Income-tax and
surcharge.
Relief in respect
Double Taxation of income which
Relief – Where no Available if arrears
is taxable in
agreement exists. of salary/gratuity,
India as well as
etc. are received.
outside India.
Simple interest is levied when return is furnished after due date or no return
has been furnished @ 1% per month or part of the month (even part of month
will be taken as full month).
Interest will be calculated as –
1% per month or part of month of amount of tax [as determined on the regular
assessment and assessment u/s 143(1)] – Advance tax – Tax deducted/Tax
collected at source – Relief u/s 90, 90A and 91.
When interest is Amount on Rate of Period for which interest is

payable which interest interest payable
is payable
When assessee On assessed Simple From April 1 of the AY to the date
who is liable to pay tax* interest @ 1% of determination of total income
advance tax, has for every u/s 143(1) or where regular
failed to pay such month or part assessment is made to the date of
tax of month such regular assessment
When advance tax Assessed tax* - do - - do -
paid but it is less – Advance tax
than 90% of
assessed tax
*Assessed tax means tax on total income on the basis of regular assessment or assessment
u/s 143(1) – Tax deducted/collected at source
Simple interest is levied when advance tax is not paid or under estimated instalments of advance tax @
1% per month.
When interest is payable Rate of interest Period of Amount on which
interest interest is payable
If advance tax paid on or before September 15 Simple interest @ 3 months 30% (a – b) – c
is less than 30% of (a) – (b) 1% per month
If advance tax paid on or before December15 is Simple interest @ 3 months 60% (a – b) – d
less than 60% of (a) – (b) 1% per month
If advance tax paid on or before March 15 is Simple interest @ – 100% (a – b) – e
less than 100% of (a) – (b) 1% per month
a. Tax on total income declared in the return.
b. Tax deducted/collected at source (double tax relief u/s 90, 90A and 91.
c. Amount of advance tax paid on or before September 15 of the financial year immediately preceding the relevant AY.
d. Amount of advance tax paid on or before December 15 of the financial year immediately preceding the relevant AY.
e. Amount of advance tax paid on or before March 15 of the financial year immediately preceding the relevant AY.
Tax paid
Take from
Schedule-IT
Take from Schedules

TDS 1 and TDS 2
Take from
Schedule IT

Refund
Enter bank account
number (essential in
case of refund)
Magnetic Ink
Character Recognition
(MICR) may be taken
from cheque leaf of the
assessee
Write your name Write your father’s
Verification name
I, …………………………….son/daughter of……………………….. Solemnly declare that

to the best of my knowledge and belief, the information given in the return thereto is correct
and complete and that the amount of total income and other particulars shown therein are
truly stated and are in accordance with the provisions of the Income-tax Act, 1961, in
respect of income chargeable to income-tax for the previous year relevant to the assessment
year 2008-09.
Place Date Sign here
Write place Write date Put signature here

If you are filing your return TRP means, Tax Return Preparer who has
yourself then these columns been issued as per Tax Return Preparer
are not to be filled up Scheme, 2006, a Tax Return Preparer
Certificate and a unique Identification
Number to prepare return of income of Tax
Payers
Write identification
number of TRP, if Write name of TRP, if
return is prepared by return is prepared by TRP
TRP

Write 10 digit PAN of employer,
Salaries please ensure that first five digits
of PAN are alpha and next four
Write name digits are numeric and the last
of employer digit is alpha. For, e.g., –
AMUPK0123N
Write address Write Town/ Write State Write 6 digit

of employer City name PIN Code
Salaries
House rent allowance,
education allowance,
conveyance allowance,
travelling allowance, etc.
if certain conditions are
satisfied.
Fixed medical allowance,

conveyance allowance/travelling
allowance used for personal
purposes, telephone allowance,
lunch allowance, etc.
Salaries
Perquisites which are taxable
– rent-free/concessional
accommodation, education
facility, free-gas, electricity
or water supply, domestic
servants, interest-free loan,
transfer of movable assets,
use of movable assets.
Gratuity, leave encashment,

retrenchment compensation,
leave travel concession,
compensation for voluntary
retirement, etc. to the extent
chargeable to tax.
House property
Write address Write Town/
City Write State
name
Write 6 digit
PIN Code
House property Write 10 digit PAN of
tenant, please ensure that
first five letters of PAN are
Write name of alpha and next four letters
tenant are numeric and the last
one is alpha6. For, e.g., –
AMUPK0123N
Let out property Gross annual value

Tick if property Self-occupied Nil
is let out property
House property
Deductible only in the case of

bona fide tenancy if the defaulting
tenant has not occupied any other
property, steps have been taken to
compel the tenant to vacate the
property and it is not possible to
realise the uncollected rent.
House property
Deduction is available only in

respect of municipal taxes
(not being penalty or interest)
actually paid during the
Available only previous year. Not deductible
if property is if the house is self-occupied.
let out.
House property
If capital is borrowed for

construction, reconstruction,
purchase, renewal or repair of
house property, interest is
deductible on accrual basis. No
maximum ceiling in the case of let
out property. In the case of self-
occupied property, amount
deductible cannot exceed Rs.
1,50,000.
In case, there is no Write
second house House property Town/
Write
property, write NIL State
City name
in items 2a to 2i Write address
Write name of
tenant
Write 6 digit
PIN Code
Tick if property
is let out Write 10 digit
PAN of tenant
Capital gains
Any profit or gain arising from the sale or
transfer of a capital asset is chargeable to
tax under the head “Capital gains”.
Applicable in the case of

non-resident if securities are
purchased in foreign
currency.
If period of holding is not more than 36

months (12 months in the case of shares,
units, quoted debentures, etc.)
Capital gains
Section 94(7) - It is
applicable if
shares/securities/units
are purchased within 3
months before the
“record date” and
transferred within 3
months (9 months in
the case of units) from
the record date.
Section 94(8) - It is
applicable in the case
of bonus stripping.

Capital gains
Exemption is available only under sections 54B
(agricultural land), 54D (compulsory acquisition
of industrial land or building), 54G/54GA
(transfer of an industrial undertaking from urban
area to rural area/SEZ). Exemption under sections
54, 54EC, 54F is not available in the case of
short-term capital gain.

Capital gains
A capital asset was
purchased to get exemption
under sections 54B, 54D,
54G, 54GA in an earlier
year. This asset is
transferred in the current
year before completion of 3
years.

Capital gains
Equity shares or units of
mutual fund/UTI are
transferred within 12
months and securities
transaction tax is applicable
(i.e., transfer in a
recognised stock exchange
or transfer to the mutual
fund).

Capital gains
If period of holding is Applicable in the case

more than 36 months of non-resident if
(12 months in the securities are
case of shares, units, purchased in foreign
quoted debentures, currency.
etc.

Capital gains
Cost of acquisition × 551 (Cost Inflation

Index for financial year 2007-08)
Cost inflation index of the year in which
the capital asset was first held by the
assessee.
Capital gains
Cost of improvement incurred on or after April 1, 1981 × 551*

(Cost Inflation Index for financial year 2007-08)
Cost inflation index of the year in which the improvement took
place.
*Financial year Cost Inflation Index
2007-08 551

Capital gains

Capital gains
A capital asset was purchased to get

exemption under these sections in an
earlier year. This asset is transferred
in the current year before completion
of 3 years.

Other sources
1. Dividend means –
distribution entailing
release of company’s
assets;
distribution of
debentures, debenture-
stock, deposit
certificates, bonus to
preference shareholder,
etc.
2. Dividend from a domestic
company is not chargeable to
tax.
Fixed deposit interest, saving bank account
interest, post office interest, NSC interest,
Indira Vikas Patra (IVP)/Kisan Vikas Patra
interest, company deposit interest, etc.

Other sources
If not chargeable to tax
under the head “Profits
and gains of business or
profession”.
In this category if
income does not fall in
above four items.
Gross winning is
taxable. No deduction
for expenses or losses

Current year loss adjustment
House property loss

cannot be set off
against salary
income.
Short-term capital
loss can be set off
only against short-
term or long-term
capital gains.
Long-term capital
loss can be set off
only against long-
term capital gains.
Brought forward loss adjustment
House property loss
can be set off only
against house
property income.
Short-term capital
loss can be set off Long-term capital
only against short- loss can be set off
term or long-term only against long-
capital gains. term capital gains.
Carry forward of loss
Type of loss to Profit against For how Should the Is it

be carried which carried many years business necessary
forward to next forward loss loss can be be to submit
year(s) can be set off carried continued return of
in next year(s) forward loss in time
1. House Income under 8 years NA No
property loss the head
pertaining to the “Income from
assessment year house
2000-2001 or property”
any subsequent
year
Type of loss to Profit against For how Should the Is it

be carried which carried many years business necessary
forward to next forward loss loss can be be to submit
year(s) can be set off carried continued return of
in next year(s) forward loss in time
2. Speculation Speculation 4 years* Not Yes#

loss profits necessary
*8 years up to the assessment year 2005-06.
#If return of income is submitted after the due date, the delay may be condoned
if certain conditions are satisfied—Circular No. 8/2001, dated May 16, 2001.

Type of loss to be Profit against For how Should Is it

carried forward to which carried many years the necessary
next year(s) forward loss loss can be business to submit
can be set off carried be return of
in next year(s) forward continued loss in time
3. Non-speculation
business loss
3.1 On account of Any income No time- Not No
unabsorbed (not being limit necessary
depreciation, salary income
capital expenditure from the
on scientific assessment
research and year 2005-06)
family planning
Type of loss to be Profit against which For how Should the Is it

carried forward to carried forward loss many years business be necessary to
next year(s) can be set off in next loss can be continued submit
year(s) carried return of
forward loss in time
3.2 Other remaining Any business profit 8 years Not Yes#
business loss (whether from necessary**
speculation or
otherwise)
4. Capital loss
4.1 Short-term Any income under the 8 years Not Yes#
capital loss head “Capital gains” necessary
**From the assessment year 2000-01 the loss can be carried forward even if the
business/profession is discontinued.
#If return of income is submitted after the due date, the delay may be condoned if certain
conditions are satisfied—Circular No. 8/2001, dated May 16, 2001.
Type of loss to be Profit against which For how Should the Is it

carried forward to carried forward loss can many years business necessary to
next year(s) be set off in next year(s) loss can be be submit
carried continued return of
forward loss in time
4.2 Long-term Long-term capital gains 8 years Not Yes#
capital loss (up to the assessment necessary
year 2002-03 any
income under the head
“Capital gains”)
5. Loss from the Income from the activity 4 years Yes Yes#
activity of owning of owning and
and maintaining maintaining race horses
race horses
#Ifreturn of income is submitted after the due date, the delay may be condoned if certain
conditions are satisfied—Circular No. 8/2001, dated May 16, 2001.
Total deductions
80C - Deduction in respect of LIC
premium, contribution to PF,
amount paid under Home Loan
Account Scheme of NHB, etc.
80CCC - Deduction in respect

of contribution to Pension
Fund.
80CCD - Deduction in
respect of contribution to
Pension Scheme.

Total deductions
The aggregate amount of deduction under
sections 80C, 80CCC and 80CCD shall
not, in any case exceed one lakh rupees.

Total deductions
Deduction in respect of Medical
Insurance Premium maximum
amount of Rs. 15,000 ; Rs. 20,000
in case of senior citizen
Deduction in respect of maintenance of

a handicap dependant who is with
disability, maximum amount Rs. 50,000
(Rs. 75,000 where disability is over
80%).
Total deductions
Deduction in respect of Medical Treatment,
maximum amount Rs. 40,000 or Rs. 60,000
Deduction in respect of loan taken for higher

education. Entire payment of interest is
deductible for maximum of 8 years
Total deductions
Deduction in respect of
donations to certain funds,
charitable institutions, etc.
100% or 50%
rent paid if a few
conditions are satisfied.
Total deductions
certain donations for
scientific research or rural
Deduction in respect of development
contributions given by any
person to political parties
Deduction in case of a
person with disability
Royalty on patents is
deductible up to Rs. 3 lakh if a
few conditions are satisfied.
Income of Specified Persons for
inclusion
Income of minor child (after

exemption of Rs. 1,500).
Income of a spouse/son’s wife
from an asset transferred
directly or indirectly without
consideration.
Special rates

Special rate

Special rates

Exempt income
Interest income from UTI,
Mutual Fund, etc.

Exempt income
Dividend from
domestic companies

Exempt income
Long-term capital gain on transfer of

equity shares/units of equity oriented
mutual funds where securities
transaction tax is applicable.

Exempt income
Net agricultural
income in
India.

Exempt income
Other incomes which are exempt under section 10,

i.e., exempted portion of house rent allowance,
gratuity, pension, transport allowance, education
allowance, etc.

Exempt income

Tax payments
These will be
Please ensure taken from the
that BSR Code is counter foil of the
of 7 digit Challan 280
Amount Rs.

TDS on salary
These details can be
taken from Form 16
Write here 10 digits TAN of the deductor,

please ensure that first four digits are alpha,
next five digits are numeric and last digit is
alpha. For e.g., - AATK01298K
TDS on other income
These details can be
taken from Form 16A

Points to be noted while filing
ITR-2 in paper format
No document (including TDS certificate)
should be attached to this form.
Please fill acknowledgement slip and
then submit the return.
The return form is not required to be
filed in duplicate.

Income from house property
(let out)
Rs.
Gross annual value xxxxxxxxx
Less : Municipal taxes xxxxxxxxx
Net annual value
- Standard deduction xxxxxxxxx
- Interest on borrowed capital xxxxxxxxx
Income from house property xxxxxxxxx

Income from house property
(one self-occupied property)
Rs.
Gross annual value Nil
Less : Municipal taxes Nil
Net annual value
- Standard deduction Nil
- Interest on borrowed capital Deductible*
Income from house property xxxxxxxxx
*Subject to maximum of Rs. 30,000/Rs. 1,50,000

Capital asset
Any asset other than the following –
Stock in trade.
Personal effects.
Rural agricultural land in India.
Gold bonds.
Special bearer bonds.
Gold deposit bonds.
Short-term/long-term capital
assets
Time gap: 36 months (generally)
Time gap: 12 months (in the
following cases) –
Shares
Quoted securities
Units of UTI/mutual fund
Zero coupon bonds.

Transfer – What it includes
Sale
Exchange
Relinquishment of the asset
Extinguishments of any rights
Compulsory acquisition

Transfer – What it does not
include
46(1) - Distribution of asset in
kind by a company to its
shareholders at the time of
liquidation
47(i) - Distribution of capital
asset on total or partial partition
of Hindu Undivided Family
Transfer – What it does not include
47(iii) -Transfer of capital asset under a gift

or will or an irrevocable trust
47(iv) - Transfer of a capital asset by a
company to its 100 per cent subsidiary
company
47(v) - Transfer of a capital asset by a 100
per cent subsidiary company to its holding
company
Transfer – What it does not
include
47(vi) - Transfer of capital asset in a
scheme of amalgamation
47(via) - Transfer of shares in an Indian
company held by a foreign company to
another foreign company under a scheme
of amalgamation of the two foreign
companies
47(viaa) - Transfer of capital asset in a
scheme of amalgamation of a banking
47(vib) - Transfer in a demerger of a

capital asset by the demerged
company to resulting company
47(vic) - Transfer of shares held in an
Indian company by a demerged
foreign company to the resulting
foreign company

47(vid) -Transfer or issue of shares by the

resulting company, in a scheme of
demerger to the shareholders of the
demerged company
47(vii) - Allotment of shares in
amalgamated company in lieu of shares
held in amalgamating company

47(viia) -Transfer of capital asset

(being foreign currency convertible
bonds or GDR) by a non-resident to
another non-resident
47(viii) - Transfer of agricultural land
in India before March 1, 1970

47(ix) - Transfer of a capital asset

(being work of art, manuscript,
painting, etc.) to
Government/University/National
museum, etc.
47(x) - Transfer by way of
conversion of bonds or debentures
into shares
47(xi) -Transfer by way of exchange

of a capital asset being membership
of a recognized stock exchange for
shares of a company
47(xii) - Transfer of land by a sick
industrial company which is managed
by its workers’ co-operative

47(xiii) - Transfer of a capital asset by a

firm to a company in the case of
conversion of firm into company
47(xiiia) - Transfer of a capital asset,
being a membership right held by a
member of a recognised stock exchange
in India

47(xiv) - Transfer of a capital

asset to a company in the case of
conversion of proprietary
concern into a company
47(xv) - Transfer involved in a
scheme of lending of securities

Transfer of long-term capital asset
Indexed cost of acquisition.

Indexed cost of improvement.
Benefit of indexation is not available in the following cases –
Debentures/bonds
Shares and debentures in the case of non-residents
Depreciating assets
Slump sale
Cases covered by sections 115AB, 115AC, 115ACA,
115AD

Notional cost of acquisition
Cost to the previous owner

Fair market value on April 1, 1981
Depreciable asset
Forfeiture of advance money

Computation of capital gains in
special cases
Conversion of stock-in-trade into capital asset [Sec.
45(2)].
Transfer of capital asset by a partner to firm [Sec. 45
(3)]
Distribution of capital asset on dissolution of
partnership firm [Sec. 45(4)]
Compulsory acquisition [Sec. 45(5)]
Capital gain in the case of non-resident [First proviso
to sec. 48]
Self-generated assets.
Computation of capital gains in
special cases
Bonus shares
Distribution in the case of liquidation
Conversion on debentures into shares
Securities in de-mat form
Insurance claim
Slump sale
Land and building [50C]
Exemptions
Section 54 Section 54G

Section 54B Section 54GA
Section 54D Section 10(33)
Section 54EC Section 10(37)
Section 54ED Section 10(38)
Section 54F
Computation of tax in the case
of long-term capital gain [Sec.
112]
Tax rate: 20% (in some cases
10%)
No deduction under section 80C
to 80U
Exemption limit in some cases
Computation of tax
In the case of short-term capital gain
when securities transaction tax is
applicable [Sec. 111A]
Tax rate: 10%

No deduction under section 80C
to 80U
Exemption limit in some cases

Income-tax rates
(Add surcharge and education cess as well as Secondary and Higher
Education Cess)
Capital asset If transaction If it is not covered by
is covered by securities transaction tax
securities
transaction tax
at the time of
transfer
Long- Short- Long-term Short-
term term term
Without With
indexati indexat
on ion
US-64 0% 0% 0% 0% 0%
Units (equity oriented) 0% 10% 10% 20% NA
Units (others) NA NA 10% 20% NA
Contd..
Income-tax rates
Education Cess)
Capital asset If transaction is If it is not covered by
covered by securities transaction
securities tax
transaction tax
at the time of
transfer
Long- Short- Long-term Sho
term term Without With rt-
Indexati Indexa term
on tion
Equity shares (listed) covered 0% 10% 0% 0% NA
by section10(36)
Equity shares (listed) any other 0% 10% 10% 20% NA
Equity shares (not listed) NA NA NA 20% NA
Preference shares (listed) NA NA 10% 20%Contd..
NA
Income-tax rates
Education Cess)
Capital asset If transaction is If it is not covered by
covered by securities transaction tax
securities
transaction tax at
the time of transfer
Long- Short- Long-term Short
term term Without With -term
Indexati Indexa
on tion
Preference shares (not NA NA NA 20% NA
listed)
Debentures (listed) NA NA 10% NA NA
Debentures (not listed) NA NA 20% NA NA
Government securities NA NA 10% 20% NA
Transfer of income without
transfer of asset [Sec. 60]
The ownership of asset is not
transferred.
The income from the asset is
transferred to any person under a
settlement, trust, covenant, agreement
or arrangement.
Transfer may be revocable/
irrevocable
Revocable transfer of asset
[Sec. 61]
Transfer to a trust which is revocable
during the lifetime of beneficiary.
Transfer to a person which is revocable
during the lifetime of transferee.
Transfer before April 1, 1961 which is
revocable within 6 years.
Power to get re-transfer to the transferor.
Right of the transferor to reassume
power over the assets/income.
Remuneration of spouse
[Sec. 64(1)(ii)]
The taxpayer is an individual.
He/she has a substantial interest in a
concern.
Spouse of the taxpayer (i.e., husband/wife
of the taxpayer) is employed in the
above-mentioned concern.
Spouse is employed in the concern
without any technical or professional
10 Februaryknowledge
2009 or experience.
©Taxmann/Dr. Vinod K. Singhania
Income of assets transfer to
spouse [Sec. 64(1)(iv)]
He/she has transferred an asset (other than a
house property).
The asset is transferred to his/her spouse.
The transfer may be direct or indirect.
The asset is transferred otherwise than (a) for
adequate consideration, or (b) in connection with
an agreement to live apart.
The asset may be held by the transferee-spouse in
the same form
10 February 2009
or in a different form.
©Taxmann/Dr. Vinod K. Singhania
Income of assets transfer to
son’s wife [Sec. 64(1)(vi)]
He/she has transferred an asset after May 31,
1973.
The asset is transferred to his/her son’s wife.
The transfer may be direct or indirect.
The asset is transferred otherwise than for
adequate consideration.
The asset may be held by the son’s wife in
the
10 February 2009 same form or in
©Taxmann/Dr. VinodaK. different
Singhania form.
Income of minor child
[Sec. 64(1A)]
All income which arises or accrues to
the minor child shall be clubbed in
the income of his parents.
Clubbing in the hands of father or
mother whose income is higher.
Income of minor child (from all
sources) suffering from any disability
of the nature specified under section
80U is not subject to clubbing.
Income of minor child not
subject to clubbing
Income of minor child suffering from
any disability of the nature specified
under section 80U.
Income of minor child on account of
any manual work.
Income of minor child on account of
any activity involving application of his
skill, talent or specialised knowledge
and experience.
Income of minor child
Exemption under section 10(32)
Exemption of Rs. 1,500 in

respect of each minor child if
the income of such minor as
includible under section 64
(1A) exceeds that amount.

Conversion of self-acquired property
into joint family property [Sec. 64(2)]
Where an individual (being member
of a Hindu undivided family) converts
(after December 31, 1969) his self-
acquired property into joint family
property.
When such an individual transfers his
self-acquired property, directly or
indirectly, to the family otherwise
than for adequate consideration.
How to proceed -
Step 1- Inter-source adjustment under the
same head of income.
Step 2- Inter-head adjustment in the same
assessment year.
Step 2 is applied only if a loss cannot be
set off under Step 1.
Step 3 - Carry forward of a loss. Step 3 is
applied only if a loss cannot be set off
under Steps 1 and 2.
Step 1 - Inter-source adjustment
General rule - If the net result for

any assessment year, in respect of any
source under any head of income, is a
loss, the assessee is entitled to have
the amount of such loss set off
against his income from any other
source under the same head of
income for the same assessment year.

Exceptions
Loss from speculation business
Long-term capital loss
Loss from the activity of owning and
Loss cannot be set off against
winnings from lotteries, crossword
puzzles, etc.
Loss from an activity whose income
is exempt
Step 2 - Inter-head
adjustment
General rule
Where the net result of computation
made for any assessment year in
respect of any head of income is a
loss, the same can be set off against
the income from other heads.

Exceptions
Loss in a speculation business
Loss under the head “Capital gains”
Business loss cannot be set off
against salary income
Loss cannot be set off against
winnings from lotteries, etc.
Step 3 - Carry forward of
loss
If a loss cannot be set off either
under the same head or under the
different heads, because of absence
or inadequacy of the income of the
same year, it may be carried forward
and set off against the income of the
subsequent year.

Losses to be carried forward
Loss under the head “Income from
house property”
Loss under the head “Profits and gains
of business or profession” (i.e., loss
from speculative or non-speculative
business)
Loss under the head “Capital gains”
Business losses
Loss can be set off only against business income
Losses can be carried forward by the person who
incurred the loss
Exceptions –
Accumulated business loss of an amalgamating company
under section 72A or 72AA
Accumulated business loss of a demerged company
Accumulated business loss of a proprietary concern or a
firm when its business is taken over by a company by
satisfying conditions of section 47(xiii)/(xiv)
Loss of business acquired by inheritance
Business losses
Loss can be carried forward for 8 years

Return of loss should be submitted in
time
Loss of a speculative or non-speculative business (not
being unabsorbed depreciation)
Short or long-term capital loss
Loss (not being unabsorbed depreciation) from the activity
of owning and maintaining race horses.
Continuity of business not necessary
Business losses
Carry forward of unabsorbed

depreciation, capital expenditure
on scientific research and family
planning expenditure

Speculative business in the case of a
company
Where any part of the business of a company (other than a
company whose gross total income consists mainly of
income which is chargeable under the heads “Interest on
securities”, “Income from house property”, “Capital
gains” and “Income from other sources”, or a company
the principal business of which is the business of banking
or the granting of loans and advances), consists in the
purchase and sale of shares of other companies, such
company shall be deemed to be carrying on a speculation
business to the extent to which the business consists of
purchase/sale of such shares.
Loss on sale of shares,
securities or units [Sec. 94
(7)]
Condition 1 - Any person buys or

acquires any securities/ shares/units
within a period of 3 months before
the record date.

Condition 2 - Such a person sells or
transfers such securities/shares/units
within a period of 3 months (9 months
in the case of units from the
assessment year 2005-06) after the
record date.
Condition 3 - The dividend or income
on such securities/shares/units
received (or receivable) by such
person is exempt from tax.
Consequences if these conditions
are satisfied - Loss arising to the
taxpayer on account of purchase and
sale of securities/shares/units, to the
extent such loss does not exceed the
amount of dividend/income received
(or receivable) on such
securities/shares/units, shall be
ignored for the purpose of
computing the income chargeable to
tax
Loss arising in the case of
bonus stripping [Sec. 94
(8)]
1. The taxpayer buys or acquires

any unit (“original unit”) within a
period of 3 months prior to the
record date.

2. Such person is allotted additional
units without any payment on the
basis of holding of such units
(hereinafter referred to as “bonus
units”) on such record date.
3. Such person sells or transfers all
(or any) of the original units within a
period of 9 months after such record
date.
4. But he continues to hold all (or
any) of the bonus units.
Consequences
1. The loss (if any) arising to the
taxpayer on account of purchase and
sale of all (or any) of the aforesaid
original units shall be ignored for the
purposes of computing his income
chargeable to tax.
2. The amount of loss so ignored shall
be deemed to be the cost of purchase or
acquisition of bonus units as are held by
him on the date of such sale or transfer.

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10 February 2009 ©Taxmann/Dr. Vinod K.

[For Individuals and HUFs not

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

Optional Optional Write Employer

Tick the residential status. A person

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

Short-term capital gain if

Any other short-term

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

Income from other sources

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

Take from Schedule CFL

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

Calculate tax on total income other than income chargeable at

3,00,000-5,00,000 3,00,000-5,00,000 3,00,000-5,00,000 20%

Above 5,00,000 Above 5,00,000 Above 5,00,000 30%

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

Education cess is 2 per cent and

When interest is Amount on Rate of Period for which interest is

Take from Schedules

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

I, …………………………….son/daughter of……………………….. Solemnly declare that

Place Date Sign here

Write place Write date Put signature here

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

Write address Write Town/ Write State Write 6 digit

Fixed medical allowance,

Gratuity, leave encashment,

Let out property Gross annual value

Deductible only in the case of

Deduction is available only in

If capital is borrowed for

Applicable in the case of

If period of holding is not more than 36

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

If period of holding is Applicable in the case

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

Cost of acquisition × 551 (Cost Inflation

Cost of improvement incurred on or after April 1, 1981 × 551*

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

A capital asset was purchased to get

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

House property loss

Type of loss to Profit against For how Should the Is it

Type of loss to Profit against For how Should the Is it

2. Speculation Speculation 4 years* Not Yes#

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania

Type of loss to be Profit against For how Should Is it

Type of loss to be Profit against which For how Should the Is it

Type of loss to be Profit against which For how Should the Is it

80CCC - Deduction in respect

10 February 2009 ©Taxmann/Dr. Vinod K. Singhania