G IMMANUVEL

Heads of Income

 Income from Salary

 Income from House Property
 Income from Business or
Profession
 Capital Gains
 Income from Other Sources

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Computation of Total Income
S Particulars Amount
No
1 Income under Salary 6,00,000
2 Income from House Property 3,50,000
3 Business / Professional 1,00,000
Income
4 Capital Gains 5,00,000
5 Income from Other Sources 2,50,000
Gross Total Income 18,00,000
Less: Chapter VIA deduction 3,00,000
Total Income (Taxable 15,00,000
Income)
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Salary - definition

 Salary includes: (Section 17)

 Wages including advance wages
 Annuity or Pension
 Gratuity
 Perquisites
 Leave salary
 Fees or commission
 Profit in lieu of salary

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 Perquisites – Sec 17(2)
 Perquisites include:
 Accomodation
 Rent free accomodation
 Temporary accomodation
 Stay in Hotel
 Two accomodation
 Office cum Residence
 Value of any benefit, amenity granted or
provided free of cost or at concessional rate
 Sum paid by the employer in respect of any
obligation which, but for such payment, would
have been payable by the employee
 Fringe Benefits
 Medical facilities

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 Medical Treatment
 Reimbursement of Medical Expense are
exempted in the following cases:
 Medical treatment of employee or any member
of the family of such employee outside India
including travel and stay
 Medical treatment provided in any hospital /
dispensary / clinic maintained by the
employer.
 Any sum paid on medical treatment for self or family:
 In any hospital maintained by the Government or
any local authority or any other hospital approved
by the Government.
 In respect of prescribed diseases or ailments in
any hospital approved by the Chief
Commissioner of Income Tax AD - Tax
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 Perquisites….
 Perquisites may either be monetary or
non-monetary in nature
 NABARD bears the tax liability of
employees on both monetary and non-
monetary perquisites
 Non-monetary perquisite tax on employee
is paid directly by NABARD u/s 192(1A) of
the IT Act
 NMP tax paid by employer is exempted u/s
10(10CC)
 Tax on monetary perquisite payable by the
employee is reimbursed to the employee,
which is added to the income of the7
AD - Tax July 5, 2009 
Exemptions and Deductions

 Exemptions are generally allowed on

specific income and reduced from
the respective income earned and
does not form part of the Total
Income
 Deductions are generally allowed
after computing the Income under a
particular head or from the Gross
Total Income
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 LTC - u/s 10(5) read with Rule
 2B
(i) where the journey is performed by air, economy
air fare by shortest route;
 (ii) where places of origin of journey and
destination are connected by rail and the journey
is performed by any mode of transport other than
by air, an amount not exceeding the air-
conditioned first class rail fare by the shortest
route to the place of destination; and
 (iii)where the places of origin of journey and
destination or part thereof are not connected by
rail and the journey is performed between such
places, the amount eligible for exemption shall be
:
 (A) where a recognised public transport system exists,
an amount not exceeding the 1st class or deluxe class fare,
as the case may be, on such transport by the shortest route
to the place of destination; and
 (B) where no recognised public transport system exists, an
amount equivalent to the air-conditioned
AD - Tax first
July 5, class
2009 rail fare,
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Exemption from salary
income
 Gratuity
 Commutation of Pension
 Leave Salary
 Voluntary Retirement Scheme
 Maturity proceeds of Recognised
Provident Fund
 House Rent Allowance
 Medical expenses

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House Property Income
 One house owned by the assessee
could be treated as self-occupied
 If more than one house is owned by
the assessee, only one house could
be treated as self-occupied and other
house should be treated as let out
 Even if the second and subsequent
house is occupied by the assessee,
the same needs to be treated as
deemed let out property
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Computation of HP Income

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Income from other sources

 Dividend
 Winning from lotteries, crossword
puzzle, horse racces, card games etc
 Interest on securities
 Income from hiring plant, machinery
etc
 Gift received (except from relative,
on marriage, by will/inheritance,
local authority, charitable institution)
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Deduction from Gross Total
Income
 Investment specified u/s 80C
 Premium paid for pension policies u/s
80CCC
 Medical premium u/s 80D – 15000 /
20000
 Person with disability u/s 80U
 Treatment for disabled dependents
u/s 80DD
 Treatment for specified ailments u/s
80DDB AD - Tax July 5, 2009 14
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