PRESIDENCY COLLEGE (AUTONOMOUS), CHENNAI – 600005.
INCOME TAX – I STUDY MATERIAL
UNIT – I: INTRODUCTION TO INCOME TAX
Meaning of Income and tax – Features of Income Tax – Types – Important definitions under
the Income Tax Act – Assessee – Types – Rates of Tax – Residential Status – Scope of Total
Income – Incomes Exempt from tax.
UNIT – II: INCOME FROM SALARIES
Definition of salaries – Allowances – Valuation of perquisites – Deductions from Salary –
Gratuity – Pension – Commutation of Pension – Leave Salary – Profits in lieu of Salary -
Provident Funds – Deductions under Sec. 80s relating to salaries– Computation of income
from salaries.
UNIT – III: INCOME FROM HOUSE PROPERTY
Meaning of Annual Value – Let out Property, Self-Occupied – Deductions from annual value
- Computation of Income from House Property.
UNIT – IV: PROFITS AND GAINS FROM BUSINESS OR PROFESSION
Income from Business or Profession – Allowable expenses – Not allowable expenses -
General deductions – Provisions relating to Depreciation – Deemed Business Profits -
Undisclosed incomes – Investments – Compulsory maintenance of Books of accounts – Audit
of Accounts of certain persons – Special provisions for Computing Incomes on estimated
basis – Computation of Income from Business or Profession.
UNIT – V: E-FILING & SUBMISSION OF RETURNS
E-filing Procedure - 26AS – TDS – Traces – Types of Returns – Filing of Return –
Permanent Account Number (PAN) – Usage of PAN – Concepts of transfer pricing and its
fundamentals.
UNIT 1: INTRODUCTION TO INCOME TAX
INCOME TAX
Income tax is a direct tax that a government levies on the income of its citizens. The
Income Tax Act, 1961, mandates that the central government collect this tax.
WHAT IS INCOME?
Under Section 2(24), Income includes
• Profits & gains
• Dividend
• Voluntary contribution received by trust
• Perquisites in the hands of employees
• Any special allowances or benefit
• City compensatory allowances / dearness allowances
• Any perquisites or benefits to a directions
• Capital gains
• Insurance benefits
• Banking income of co-operative society
• Winning from lottery
• Employer contribution to provident fund
COMPUTATION OF TOTALINCOME (u/s 14)
➢ Income from salary
➢ Income from house property
➢ Income from business/profession
➢ Income from capital gain
➢ Income from other sources
