Section Quick-Reference

The charging section — income of the previous year is taxed in the assessment year at the Finance Act's rates.

Practice note: Every computation ultimately hangs off s.4; cite it when a notice questions the very basis of charge.

House rent allowance is exempt to the extent of Rule 2A's min-of-three formula.

Practice note: Old regime only. Rent to a relative is fine if genuine — money trail + landlord declares it. PAN of landlord needed above ₹1L/yr rent.

Flat deduction from salary — ₹50,000 (old) / ₹75,000 (new regime, FY 2025-26).

Practice note: Applies to pension too (it's salary income). No documents needed — don't let clients forget it exists in BOTH regimes.

Interest on borrowed capital for house property — up to ₹2L for self-occupied (old regime).

Practice note: Let-out property: full interest deductible but s.71(3A) caps house-property LOSS set-off at ₹2L/yr; excess carries forward 8 years.

Small businesses declare 6-8% of turnover, professionals 50% of receipts, as deemed income — no books needed.

Practice note: 44ADA cap ₹75L (cash ≤5%). One advance-tax installment (15 Mar). Opting out after opting in bars 44AD re-entry for 5 years — advise carefully.

LTCG from house (54) or any asset (54F) is exempt if reinvested in a residential house within the window.

Practice note: 54F needs FULL net consideration reinvested (proportionate otherwise). CGAS deposit before the s.139(1) due date preserves the claim — the most-missed step.

PPF, ELSS, EPF, LIC, principal repayment, tuition fees — capped at ₹1.5L together.

Practice note: Old regime only. 5-yr lock-in for tax-saver FDs; ELSS is 3. Stamp duty on a house purchase also qualifies — often forgotten.

(1B): extra ₹50k self-contribution. (2): employer's contribution up to 10%/14% of basic — works in BOTH regimes.

Practice note: 80CCD(2) is the only big lever left under the new regime — restructure CTC to use it. 14% ceiling now applies to private employees in the new regime.

₹25k self/family (+₹25k parents; ₹50k if senior). Preventive check-ups ₹5k within the limit.

Practice note: Old regime only. Cash premium kills the claim (except preventive). Multi-year policies: deduction is proportionate per year.

Resident individuals: tax fully rebated up to ₹12L income (new regime, FY 2025-26); ₹5L (old).

Practice note: Marginal relief above ₹12L stops the cliff. Rebate does NOT apply against s.112A LTCG — a frequent computational error in returns.

Short-term gains on listed shares/equity MF (STT paid) — flat 20% (post-Jul 2024 rate).

Practice note: Slab-rate basic exemption can absorb 111A gains for residents (s.111A(2)). Chapter VI-A deductions cannot be set against these gains.

Long-term listed-equity gains above ₹1.25L/yr taxed at 12.5% — no indexation.

Practice note: The ₹1.25L exemption is per year, not per scrip — harvest it annually. Grandfathering (FMV 31-1-2018) still matters for old holdings.

Default concessional slabs; most exemptions/deductions (HRA, 80C, 80D…) are off the table.

Practice note: Salaried can switch every year in the return; business income gets ONE lifetime switch-back — document the 10-IEA election.

Due 31 Jul (non-audit). Belated/revised returns until 31 Dec of the AY.

Practice note: Belated returns forfeit loss carry-forward (except house property) and the old-regime option. ITR-U allows updated returns up to 4 years — with additional tax.

Automated processing — arithmetic errors, obvious inconsistencies, TDS mismatches.

Practice note: It's an intimation, not an assessment. 30 days to respond to adjustment proposals; rectification u/s 154 for mistakes apparent from record.

Income escaping assessment — notice after a show-cause procedure (148A).

Practice note: Time limits: 3 years standard, 5 years (post-2024 amendment) where escaped income ≥ ₹50L. Check the 148A(b) notice was actually served — procedural lapses win cases.

Payer deducts tax at source — salary (192), interest (194A), contractor (194C), professional fees (194J), rent (194-I).

Practice note: Individuals paying rent > ₹50k/month must deduct 2% u/s 194-IB — tenants almost never know. Form 26AS/AIS reconciliation is the first step of every engagement.

1% per month (or part) on unpaid tax from the due date to filing.

Practice note: Runs only on the NET unpaid amount — if taxes were fully paid by the due date, late filing costs the s.234F fee but no 234A interest.

Paid less than 90% of assessed tax by 31 March → 1%/month from 1 April.

Practice note: Computed on assessed tax, so it grows through assessment — settle self-assessment tax fast. Rule 119A: round the base down to ₹100.

Quarterly advance-tax shortfalls vs 15/45/75/100% — 1%/month for 3 months (1 for March).

Practice note: 12%/36% safe harbour for the first two quarters. Capital gains/lottery arising mid-year: no 234C if paid in remaining installments.

₹5,000 flat (₹1,000 if income ≤ ₹5L) for a belated return.

Practice note: It's a fee, not interest — no waiver jurisdiction. Payable even on nil-tax belated returns if filing was mandatory.

50% of tax on under-reported income; 200% for misreporting.

Practice note: s.270AA immunity: pay the demand + don't appeal, within 30 days. Distinguish under-reporting from misreporting in every reply — the difference is 4×.

Wilful failure to furnish a return can be prosecuted — up to 7 years where tax evaded exceeds ₹25L.

Practice note: No prosecution if the return is filed before the AY ends or tax due (after TDS/advance) ≤ ₹10,000 — the classic defence checklist.

Salary arrears taxed at the marginal rate of the year received get relief via spread-back recomputation.

Practice note: Form 10E BEFORE filing is mandatory — CPC disallows the claim without it, every single time.

Rent deduction when salary has no HRA component — least of ₹5k/month, 25% of income, rent − 10% of income.

Practice note: Old regime only; Form 10BA required; claimant (or spouse/minor child) must not own a house in the work city.