Income Tax Act 2025
Learning & Tools Hub
A step-by-step, modular dashboard for understanding and computing Indian Income Tax. Each module teaches you the concept and gives you an interactive calculator.
Modules
Live
Residential Status
Determine if an individual is ROR, RNOR, or Non-Resident under Section 6. Includes all Budget 2020 amendments.
Live
Tax Slabs & Regimes
Old vs New regime comparison with break-even analysis. Compute tax under both regimes and see which saves more.
Live
Heads of Income
Learn the five heads — Salary, House Property, Business/Profession, Capital Gains, and Other Sources.
Live
Business / Profession
Sections 26-66. Presumptive (58/58A/60), regular P&L, depreciation, disallowed expenses, partner income, books & audit.
Live
Exempt Income (Sec 10)
Income fully exempt from tax — agricultural income, PPF, gratuity (govt), scholarships, and partial integration method.
Live
Set-Off & Carry Forward
Rules for adjusting losses against income — intra-head, inter-head, and carry forward for up to 8 years.
Live
Clubbing of Income
Sections 96-100 — When income of spouse, minor child, HUF is added to your income. Cross-gifting, substantial interest, and tax planning.
Live
Deductions (Chapter VIII)
123, 126, 80E, 131 and more. Interactive deduction planner to maximize tax savings under Old Regime.
Planned
TDS Provisions
Section-wise TDS rates, thresholds, due dates, and challan filing guidance.
Planned
Full Tax Calculator
End-to-end tax computation combining all modules — from GTI to final tax payable including cess and surcharge.
Residential Status
Section 6, IT Act 2025 — Determine ROR / RNOR / Non-Resident
1 Step 1 — Resident or Non-Resident?
An individual is Resident if they satisfy at least one Basic Condition:
B1
Present in India for 182 days or more during the tax year (PY).
— OR —
B2
Present in India for 60 days or more in the PY AND 365 days or more in the 4 preceding tax years.
Exceptions to B2:
• Indian citizen leaving for employment / crew member — B2 threshold raised to 182 days.
• Indian citizen / PIO visiting India — B2 threshold raised to 182 days (pre AY 2021-22). From AY 2021-22: raised to 120 days if income (other than foreign sources) > ₹15 lakh; such person is deemed RNOR.
• Deemed Resident (Budget 2020) — Indian citizen with income > ₹15L (other than foreign sources) not taxable in any other country → deemed Resident & RNOR.
• Indian citizen leaving for employment / crew member — B2 threshold raised to 182 days.
• Indian citizen / PIO visiting India — B2 threshold raised to 182 days (pre AY 2021-22). From AY 2021-22: raised to 120 days if income (other than foreign sources) > ₹15 lakh; such person is deemed RNOR.
• Deemed Resident (Budget 2020) — Indian citizen with income > ₹15L (other than foreign sources) not taxable in any other country → deemed Resident & RNOR.
2 Step 2 — Ordinarily Resident or Not?
A Resident is Ordinarily Resident (ROR) if both Additional Conditions are met:
A1
Resident in India in at least 2 of the 10 preceding tax years.
A2
Present in India for 730 days or more in the 7 preceding tax years.
If either is not met → Resident but Not Ordinarily Resident (RNOR)
3 Tax Scope by Status
ROR
- Indian income
- Foreign income
- Income deemed to accrue in India
→ Worldwide income taxable
RNOR
- Indian income
- Income deemed to accrue in India
- Foreign income from India-controlled business
→ Partial exemption on foreign income
NR
- Indian income only
- Income deemed to accrue in India
→ Foreign income fully exempt
Residential Status Calculator
Enter the days present in India and related details to determine residential status.
Current Tax Year
April 1 to March 31 of the tax year
Preceding Years Data
Total across the 4 years before current PY
Total across the 7 years before current PY
Count of years person was Resident in last 10 PYs
Special Categories
Condition-by-Condition Analysis
Tax Implication
Tax Slabs & Regimes
Section 202 — Old vs New Tax Regime Comparison & Calculator (Tax Year 2026-27 / Tax Year 2026-27)
1 Two Regimes — What & Why?
Since FY 2020-21, India offers two parallel tax structures. The New Regime (Section 202) has lower slab rates but strips away most deductions/exemptions. The Old Regime has higher base rates but lets you claim 123, 126, HRA, home loan interest, and more. From FY 2023-24, the New Regime is the default — you must actively opt out to use the Old Regime.
Key rule: Salaried taxpayers (non-business income) can switch between regimes every year at the time of filing ITR. Those with business income can switch only once and revert once.
2 New Regime Slabs — Tax Year 2026-27 (w.e.f. 1 April 2026)
Uniform rates for all age groups. No separate slabs for senior/super-senior citizens.
| Income Slab | Rate |
|---|---|
| Up to ₹4,00,000 | NIL |
| ₹4,00,001 — ₹8,00,000 | 5% |
| ₹8,00,001 — ₹12,00,000 | 10% |
| ₹12,00,001 — ₹16,00,000 | 15% |
| ₹16,00,001 — ₹20,00,000 | 20% |
| ₹20,00,001 — ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Rebate u/s 191 (New Regime): Tax rebate of up to ₹60,000 for resident individuals with taxable income up to ₹12,00,000. With standard deduction of ₹75,000, salaried individuals with gross salary up to ₹12,75,000 pay zero tax.
Standard Deduction (New): ₹75,000 for salaried/pensioners.
Deductions allowed: Only employer's NPS contribution (123CD(2)), Agniveer (123CH). Most other deductions (123, 126, HRA, LTA, 24b etc.) are NOT allowed.
Standard Deduction (New): ₹75,000 for salaried/pensioners.
Deductions allowed: Only employer's NPS contribution (123CD(2)), Agniveer (123CH). Most other deductions (123, 126, HRA, LTA, 24b etc.) are NOT allowed.
3 Old Regime Slabs — Tax Year 2026-27 (Individuals < 60 years)
Senior citizens (60-80) get ₹3L exemption; Super seniors (80+) get ₹5L exemption.
| Income Slab | Rate |
|---|---|
| Up to ₹2,50,000 | NIL |
| ₹2,50,001 — ₹5,00,000 | 5% |
| ₹5,00,001 — ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Rebate u/s 191 (Old Regime): Tax rebate of up to ₹12,500 for resident individuals with taxable income up to ₹5,00,000.
Standard Deduction (Old): ₹50,000 for salaried/pensioners.
Full deductions available: 123 (₹1.5L), 126, 80E, 131, 123CD(1B), HRA, LTA, Section 24(b) home loan interest (₹2L), and 70+ other exemptions.
Standard Deduction (Old): ₹50,000 for salaried/pensioners.
Full deductions available: 123 (₹1.5L), 126, 80E, 131, 123CD(1B), HRA, LTA, Section 24(b) home loan interest (₹2L), and 70+ other exemptions.
4 Surcharge & Health Education Cess
After computing base tax, surcharge applies on high income and 4% cess on everything.
| Total Income | New Regime | Old Regime |
|---|---|---|
| Up to ₹50L | Nil | Nil |
| ₹50L — ₹1Cr | 10% | 10% |
| ₹1Cr — ₹2Cr | 15% | 15% |
| ₹2Cr — ₹5Cr | 25% | 25% |
| Above ₹5Cr | 25% (capped) | 37% |
+ Health & Education Cess: 4% on (Tax + Surcharge) — applies to both regimes, all income levels.
Marginal relief: Available at each surcharge threshold to ensure tax doesn't exceed income gain.
5 Old vs New — Quick Decision Guide
✅ New Regime is better if...
- You have few or no investments/deductions
- Total deductions + exemptions < ₹3.75L approx
- You want simpler filing with less documentation
- Your income is ≤ ₹12.75L (salaried) — zero tax
- You're a high earner (>₹5Cr) — surcharge capped at 25%
✅ Old Regime is better if...
- You claim HRA + 123 + 126 + home loan
- Total deductions + exemptions > ₹3.75L approx
- You have a high home loan interest component
- You're a senior/super-senior citizen
- You have heavy LTA, medical, or education loan deductions
Old vs New Regime Tax Comparator
Enter your income and deduction details to see tax under both regimes side by side.
Income Details
Total income before any deductions
New: ₹75,000 | Old: ₹50,000 standard deduction
Deductions (Old Regime Only)
These deductions are ONLY applicable under the Old Regime. They are ignored under New Regime.
PPF, ELSS, LIC, EPF, tuition fees etc.
Self: ₹25K (₹50K for senior). Parents: additional.
Additional NPS deduction beyond 123
Self-occupied property, max ₹2L
Calculated as per Section First Schedule (HRA) rules
All other Chapter VIII & Schedules (Exempt) exemptions
NEW REGIME (Sec 202)
Total Tax Payable
OLD REGIME
Total Tax Payable
Slab-wise Tax Computation
Heads of Income
Sections 15-95, IT Act 2025 — All income classified under five heads for computation
§ Section 14 — Classification of Income
All income earned by a person must be classified under one of the five heads prescribed by Section 14. Each head has its own set of rules for computing taxable income — what's included, what's exempt, and what deductions are allowed. The sum of income from all five heads gives the Gross Total Income (GTI).
1. Income from Salary
Sections 15–19. Covers basic salary, allowances, perquisites, retirement benefits. Employer-employee relationship required.
Click to explore →
2. Income from House Property
Sections 20–25. Rental income or deemed rental income from property ownership. Annual value concept.
Click to explore →
3. Profits & Gains from Business/Profession
Sections 26–66. Business income, professional income. Presumptive taxation (58/58A).
Click to explore →
4. Capital Gains
Sections 67–91. Gains from transfer of capital assets — STCG, LTCG, indexation, exemptions.
Click to explore →
5. Income from Other Sources
Sections 92–95. Residual head — interest, dividends, gifts, lottery, virtual digital assets.
Click to explore →
Σ GTI Computation Flow
Salary
+
House Property
+
Business/Prof
+
Capital Gains
+
Other Sources
After set-off of losses ↓
= Gross Total Income (GTI)
− Chapter VIII Deductions ↓
= Total Income (Taxable)
1 Income from Salary — Sections 15, 16, 17
Salary income arises only when there is an employer-employee relationship. Taxable on due or receipt basis, whichever is earlier. Below are interactive calculators for every salary component, exemption, and deduction.
Computation Flow: Gross Salary (Basic + DA + HRA + Bonus + Perquisites + Profits in lieu) → Less Exemptions (HRA, LTA, Gratuity, etc.) = Gross Taxable Salary → Less Sec 16 Deductions (Standard Ded + Professional Tax + Entertainment Allowance) = Net Taxable Salary
Total Income from Salary
This auto-populates from the individual calculators. Fill each component tab first, then come back here to see your complete salary computation.
Only enter Basic Salary here — everything else auto-fills
Component Status — filled from individual calculators
NEW REGIME
Net Taxable Salary
OLD REGIME
Net Taxable Salary
HRA Exemption Calculator
Section First Schedule (HRA) — Exempt portion of House Rent Allowance (Old Regime only). New regime: HRA is fully taxable.
📐 Rule: HRA Exemption u/s First Schedule (HRA)
Exempt Amount = Least of:
① Actual HRA received from employer
② Rent Paid − 10% of Salary (Basic + DA)
③ 50% of Salary (Metro: Delhi, Mumbai, Chennai, Kolkata) or 40% of Salary (Non-Metro)
Conditions: Must live in rented accommodation. Not available if you live in own house. "Salary" = Basic + DA (if part of retirement benefits) + Turnover-based commission.
Regime: Old Regime only. New Regime — HRA is fully taxable, no exemption.
① Actual HRA received from employer
② Rent Paid − 10% of Salary (Basic + DA)
③ 50% of Salary (Metro: Delhi, Mumbai, Chennai, Kolkata) or 40% of Salary (Non-Metro)
Conditions: Must live in rented accommodation. Not available if you live in own house. "Salary" = Basic + DA (if part of retirement benefits) + Turnover-based commission.
Regime: Old Regime only. New Regime — HRA is fully taxable, no exemption.
DA only if it forms part of retirement benefits
Three-Way Comparison (Exempt = Least)
Dearness Allowance Computation
DA is fully taxable. This calculator shows its impact on salary components like HRA, PF, and Gratuity.
📐 Rule: Dearness Allowance
Taxability: DA is fully taxable under both regimes.
Impact on other components: If DA forms part of terms of employment for retirement benefits, it is included in "Salary" for computing HRA exemption, PF contribution, Gratuity, and Leave Encashment.
Types: DA can be a fixed % of Basic (revised periodically) or linked to CPI. Govt employees get DA per Central Pay Commission recommendations.
Impact on other components: If DA forms part of terms of employment for retirement benefits, it is included in "Salary" for computing HRA exemption, PF contribution, Gratuity, and Leave Encashment.
Types: DA can be a fixed % of Basic (revised periodically) or linked to CPI. Govt employees get DA per Central Pay Commission recommendations.
Typically 17%–50% depending on sector
DA Computation & Impact
LTA Exemption Calculator
Schedules (Exempt)(5) — Leave Travel Allowance exemption. Available only under Old Regime. Limited to 2 journeys in a block of 4 years.
📐 Rule: LTA Exemption u/s 10(5)
Exempt = Lower of: LTA received OR actual travel cost incurred
Conditions:
① Travel must be within India (domestic only)
② Maximum 2 journeys in a block of 4 calendar years (current block: 2022-25)
③ Only fare is exempt — hotel, food, sightseeing NOT covered
④ Air travel: economy class fare. Rail: AC first class. No rail/air: AC first class rail fare equivalent
⑤ Covers employee + family (spouse, children, dependent parents/siblings)
Regime: Old Regime only. New Regime — LTA fully taxable. Unclaimed LTA can be carried to next block (1 journey).
Conditions:
① Travel must be within India (domestic only)
② Maximum 2 journeys in a block of 4 calendar years (current block: 2022-25)
③ Only fare is exempt — hotel, food, sightseeing NOT covered
④ Air travel: economy class fare. Rail: AC first class. No rail/air: AC first class rail fare equivalent
⑤ Covers employee + family (spouse, children, dependent parents/siblings)
Regime: Old Regime only. New Regime — LTA fully taxable. Unclaimed LTA can be carried to next block (1 journey).
Shortest route economy fare — domestic travel only
Computation
Special Allowance Computation
Special allowances are generally fully taxable. Some allowances under Schedules (Exempt)(14) read with Rule 2BB are exempt to the extent of actual expenditure.
📐 Rule: Special Allowances u/s 10(14) & Rule 2BB
General Rule: Special Allowance (catch-all component in CTC) is fully taxable.
Partially Exempt Allowances (Rule 2BB):
• Conveyance Allowance — exempt to extent of actual expenditure on commuting
• Uniform/Dress Allowance — exempt to extent of actual expenditure
• Research Allowance — for research expenses, exempt to actual spend
• Helper Allowance — to extent of actual expense on helper
• Children Education Allowance — ₹100/month/child (max 2 children = ₹2,400/yr)
• Hostel Expenditure Allowance — ₹300/month/child (max 2 children = ₹7,200/yr)
New Regime: Most special allowances are fully taxable. Transport allowance for disabled persons remains exempt.
Partially Exempt Allowances (Rule 2BB):
• Conveyance Allowance — exempt to extent of actual expenditure on commuting
• Uniform/Dress Allowance — exempt to extent of actual expenditure
• Research Allowance — for research expenses, exempt to actual spend
• Helper Allowance — to extent of actual expense on helper
• Children Education Allowance — ₹100/month/child (max 2 children = ₹2,400/yr)
• Hostel Expenditure Allowance — ₹300/month/child (max 2 children = ₹7,200/yr)
New Regime: Most special allowances are fully taxable. Transport allowance for disabled persons remains exempt.
Exemption limited to actual expenditure
Breakdown
Perquisites Computation
Section 17(2) — Value of benefits provided by employer. Some are taxable for all, some for specified employees, some are exempt.
📐 Rule: Perquisites u/s 17(2) & Valuation Rules
Rent-Free Accommodation: Govt → licence fee deducted. Others → 15% of salary (population >25L), 10% (10-25L), 7.5% (<10L). Furnished: add 10% of furniture cost.
Motor Car: Engine ≤1.6L cc → ₹1,800/month. >1.6L cc → ₹2,400/month (if employer owns, used personally). Driver: ₹900/month extra.
Interest-free Loan: Taxable if loan >₹20,000. Value = SBI lending rate − actual rate charged. Computed monthly.
ESOP: FMV on date of exercise − exercise price paid. Taxable in year of allotment/transfer.
Free Meals: Exempt up to ₹50/meal (2 meals/day). Excess taxable. Tea/snacks exempt.
Gifts: Aggregate gifts/vouchers up to ₹5,000/year exempt. Excess fully taxable.
Employer PF+NPS+Super >₹7.5L: Combined contribution exceeding ₹7.5L/year is a taxable perquisite u/s 17(2)(vii)/(viia).
Motor Car: Engine ≤1.6L cc → ₹1,800/month. >1.6L cc → ₹2,400/month (if employer owns, used personally). Driver: ₹900/month extra.
Interest-free Loan: Taxable if loan >₹20,000. Value = SBI lending rate − actual rate charged. Computed monthly.
ESOP: FMV on date of exercise − exercise price paid. Taxable in year of allotment/transfer.
Free Meals: Exempt up to ₹50/meal (2 meals/day). Excess taxable. Tea/snacks exempt.
Gifts: Aggregate gifts/vouchers up to ₹5,000/year exempt. Excess fully taxable.
Employer PF+NPS+Super >₹7.5L: Combined contribution exceeding ₹7.5L/year is a taxable perquisite u/s 17(2)(vii)/(viia).
Govt: licence fee. Others: 15%/10%/7.5% of salary based on city
₹1,800/₹2,400 pm based on engine CC if personal use
Taxable if loan > ₹20,000. Rate: SBI lending rate
Component-wise Breakdown
Gratuity Exemption Calculator
Schedules (Exempt)(10) — Exemption on gratuity received on death, retirement, or resignation.
📐 Rule: Gratuity Exemption u/s 10(10)
Government Employees: Gratuity is fully exempt.
Private — Covered under Payment of Gratuity Act:
Exempt = Least of: ① Actual gratuity ② ₹20,00,000 ③ 15 × Last drawn salary × Years of service ÷ 26
"Years" rounded to nearest full year (6 months+ = 1 year). "Salary" = Basic + DA. 26 = working days/month.
Private — NOT covered under Gratuity Act:
Exempt = Least of: ① Actual gratuity ② ₹20,00,000 ③ ½ × Average salary (last 10 months) × Completed years
"Salary" = Basic + DA + commission (% of turnover). Only completed years count (no rounding).
Both Regimes: Gratuity exemption is available in both Old and New regimes.
Private — Covered under Payment of Gratuity Act:
Exempt = Least of: ① Actual gratuity ② ₹20,00,000 ③ 15 × Last drawn salary × Years of service ÷ 26
"Years" rounded to nearest full year (6 months+ = 1 year). "Salary" = Basic + DA. 26 = working days/month.
Private — NOT covered under Gratuity Act:
Exempt = Least of: ① Actual gratuity ② ₹20,00,000 ③ ½ × Average salary (last 10 months) × Completed years
"Salary" = Basic + DA + commission (% of turnover). Only completed years count (no rounding).
Both Regimes: Gratuity exemption is available in both Old and New regimes.
Covered: Basic + DA. Non-covered: Basic + DA + Commission (% of turnover)
Covered: rounded to nearest full year. Non-covered: completed years
Computation
Leave Encashment Exemption Calculator
Schedules (Exempt)(10AA) — Exemption on leave encashment received at the time of retirement/resignation.
📐 Rule: Leave Encashment Exemption u/s 10(10AA)
Government Employees: Leave encashment on retirement is fully exempt.
Private Sector — Exempt = Least of:
① Actual leave encashment received
② ₹25,00,000 (statutory limit, enhanced from ₹3L w.e.f. 1/4/2023)
③ 10 months × Average salary of last 10 months
④ Cash equivalent of unavailed leave (max 30 days/year × completed years of service)
"Salary" = Basic + DA (if part of retirement) + Commission (% of turnover).
Note: Exemption is only on retirement or resignation. Leave encashment during service is fully taxable.
Both Regimes: Available in both Old and New regimes.
Private Sector — Exempt = Least of:
① Actual leave encashment received
② ₹25,00,000 (statutory limit, enhanced from ₹3L w.e.f. 1/4/2023)
③ 10 months × Average salary of last 10 months
④ Cash equivalent of unavailed leave (max 30 days/year × completed years of service)
"Salary" = Basic + DA (if part of retirement) + Commission (% of turnover).
Note: Exemption is only on retirement or resignation. Leave encashment during service is fully taxable.
Both Regimes: Available in both Old and New regimes.
Max 30 days per year of service
4-Way Comparison (Exempt = Least)
Provident Fund Tax Computation
Taxability of EPF/RPF employer contributions and interest. Combined employer contributions to RPF+NPS+Superannuation exceeding ₹7.5L are taxable perquisites.
📐 Rule: Provident Fund Taxation
Employer Contribution: Combined employer contribution to RPF + NPS + Superannuation Fund exceeding ₹7,50,000/year is a taxable perquisite u/s 17(2)(vii)/(viia).
Employee Contribution: Eligible for 123 deduction (old regime only, up to ₹1.5L limit). Under new regime — no 123, but contribution still goes to PF.
Interest Taxability (w.e.f. 1/4/2021): Interest on employee contribution exceeding ₹2,50,000/year (private) or ₹5,00,000/year (govt — where employer doesn't contribute) is taxable as Income from Other Sources. PF account is split into taxable and non-taxable portions.
Withdrawal: RPF — exempt if 5+ years of continuous service. EPF — TDS @10% if withdrawn before 5 years (unless transferred). Interest on PF above ₹9.5% rate is taxable as perquisite.
Employer NPS u/s 123CD(2): Up to 14% of salary (Govt) / 10% (others) — allowed in both regimes.
Employee Contribution: Eligible for 123 deduction (old regime only, up to ₹1.5L limit). Under new regime — no 123, but contribution still goes to PF.
Interest Taxability (w.e.f. 1/4/2021): Interest on employee contribution exceeding ₹2,50,000/year (private) or ₹5,00,000/year (govt — where employer doesn't contribute) is taxable as Income from Other Sources. PF account is split into taxable and non-taxable portions.
Withdrawal: RPF — exempt if 5+ years of continuous service. EPF — TDS @10% if withdrawn before 5 years (unless transferred). Interest on PF above ₹9.5% rate is taxable as perquisite.
Employer NPS u/s 123CD(2): Up to 14% of salary (Govt) / 10% (others) — allowed in both regimes.
Typically 12% of Basic + DA
Up to 14% of salary (Govt) / 10% (others)
Eligible for 123 deduction (old regime, up to ₹1.5L)
Interest on employee contribution >₹2.5L (private) or >₹5L (govt) is taxable
PF Tax Analysis
Pension Tax Computation
Schedules (Exempt)(10A) — Commuted pension exemption. Uncommuted pension is fully taxable as salary income.
📐 Rule: Pension Taxation u/s 10(10A) & 17(1)(ii)
Uncommuted Pension: Monthly pension received = fully taxable as salary u/s 17(1)(ii). Eligible for standard deduction u/s 58(2).
Commuted Pension (lump sum):
• Government employee: Fully exempt u/s 10(10A)(i)
• Non-govt + received gratuity: Exempt = 1/3rd of full commuted value
• Non-govt + did NOT receive gratuity: Exempt = 1/2 of full commuted value
Family Pension (received by family after employee death) = taxable under "Other Sources" (not salary). Deduction: lower of ₹25,000 or 1/3rd of pension u/s 57(iia).
Both Regimes: Commuted pension exemption available in both. Family pension deduction also in both.
Commuted Pension (lump sum):
• Government employee: Fully exempt u/s 10(10A)(i)
• Non-govt + received gratuity: Exempt = 1/3rd of full commuted value
• Non-govt + did NOT receive gratuity: Exempt = 1/2 of full commuted value
Family Pension (received by family after employee death) = taxable under "Other Sources" (not salary). Deduction: lower of ₹25,000 or 1/3rd of pension u/s 57(iia).
Both Regimes: Commuted pension exemption available in both. Family pension deduction also in both.
Full pension value if entire pension were commuted
This is fully taxable as salary every month
Computation
Voluntary Retirement Exemption
Schedules (Exempt)(10C) — Compensation received on voluntary retirement is exempt up to ₹5,00,000.
📐 Rule: VRS Exemption u/s 10(10C) & Rule 2BA
Exempt: Up to ₹5,00,000 of VRS compensation received.
Conditions under Rule 2BA:
① Applicable to employees of public/private sector, authority, co-operative, university, IIT, state govt, central govt, local authority
② Employee should have completed 10 years of service OR attained age of 40 years
③ Scheme applies to all employees (not selective)
④ Vacancies caused by VRS are not to be filled up
⑤ Retiring employee shall not be employed in the same company/group
Excess above ₹5L: Taxable as salary. Relief u/s 89 may be available for the taxable portion.
Both Regimes: VRS exemption available in both Old and New regimes. Lifetime limit — ₹5L across all employers.
Conditions under Rule 2BA:
① Applicable to employees of public/private sector, authority, co-operative, university, IIT, state govt, central govt, local authority
② Employee should have completed 10 years of service OR attained age of 40 years
③ Scheme applies to all employees (not selective)
④ Vacancies caused by VRS are not to be filled up
⑤ Retiring employee shall not be employed in the same company/group
Excess above ₹5L: Taxable as salary. Relief u/s 89 may be available for the taxable portion.
Both Regimes: VRS exemption available in both Old and New regimes. Lifetime limit — ₹5L across all employers.
Company must have VRS scheme approved; employee age ≥40 or 10+ years service, etc.
Computation
Standard Deduction
Section 94(2) — Flat deduction from gross salary. No proof required.
📐 Rule: Standard Deduction u/s 58(2)
What: A flat deduction from Gross Taxable Salary — no proof, receipts, or bills required.
Amount:
• New Regime: ₹75,000 (increased from ₹50,000 w.e.f. FY 2024-25)
• Old Regime: ₹50,000
Eligible: Salaried employees and pensioners (pension is salary u/s 17(1)(ii)).
Limit: Deduction cannot exceed gross taxable salary (no negative salary income from this alone).
History: Replaced the earlier transport allowance (₹19,200) and medical reimbursement (₹15,000) in Budget 2018. Family pension also gets a separate deduction u/s 57(iia) — not this one.
Amount:
• New Regime: ₹75,000 (increased from ₹50,000 w.e.f. FY 2024-25)
• Old Regime: ₹50,000
Eligible: Salaried employees and pensioners (pension is salary u/s 17(1)(ii)).
Limit: Deduction cannot exceed gross taxable salary (no negative salary income from this alone).
History: Replaced the earlier transport allowance (₹19,200) and medical reimbursement (₹15,000) in Budget 2018. Family pension also gets a separate deduction u/s 57(iia) — not this one.
After all exemptions (HRA, LTA, etc.)
Standard Deduction
Entertainment Allowance Deduction
Section 94(3) — Deduction available ONLY to Government employees under Old Regime.
📐 Rule: Entertainment Allowance Deduction u/s 58(3)
Who can claim: Only Government employees (Central or State). Private sector employees cannot claim this deduction even if they receive entertainment allowance.
Deduction = Least of:
① Actual entertainment allowance received
② 20% of Basic Salary
③ ₹5,000
Treatment: EA received is first added to gross salary (fully taxable), then the deduction is allowed under Sec 58(3). So it's a two-step process — include in income, then deduct.
Regime: Old Regime only. Not available under New Regime.
Private sector: Entertainment allowance is fully taxable with NO deduction.
Deduction = Least of:
① Actual entertainment allowance received
② 20% of Basic Salary
③ ₹5,000
Treatment: EA received is first added to gross salary (fully taxable), then the deduction is allowed under Sec 58(3). So it's a two-step process — include in income, then deduct.
Regime: Old Regime only. Not available under New Regime.
Private sector: Entertainment allowance is fully taxable with NO deduction.
Entertainment Allowance Deduction
Professional Tax Deduction
Section 94(4) — Tax levied by state government on profession/employment. Deductible under Old Regime only.
📐 Rule: Professional Tax Deduction u/s 58(4)
What: Tax levied by state governments on salaried individuals and professionals under Article 276 of the Constitution.
Maximum: ₹2,500 per year (Constitutional cap). Most states charge ₹200/month or ₹2,400-2,500/year.
Deduction: Actual professional tax paid during the year is deductible from Gross Salary — even if employer pays on behalf of employee (in that case, it's first included as perquisite, then deducted).
Who pays: Varies by state — Maharashtra, Karnataka, West Bengal, Andhra Pradesh, Telangana, Gujarat, etc. Some states (Delhi, Rajasthan, UP) don't levy it.
Regime: Old Regime only. Not deductible under New Regime.
Maximum: ₹2,500 per year (Constitutional cap). Most states charge ₹200/month or ₹2,400-2,500/year.
Deduction: Actual professional tax paid during the year is deductible from Gross Salary — even if employer pays on behalf of employee (in that case, it's first included as perquisite, then deducted).
Who pays: Varies by state — Maharashtra, Karnataka, West Bengal, Andhra Pradesh, Telangana, Gujarat, etc. Some states (Delhi, Rajasthan, UP) don't levy it.
Regime: Old Regime only. Not deductible under New Regime.
Max ₹2,500/year. Varies by state.
Professional Tax Deduction
2 Income from House Property — Sections 20–25
Taxable when you own a property (building or land appurtenant). Tax is based on Annual Value, not actual rent. Property used for own business/profession is exempt from this head. Fill individual calculators below, then use the Total HP Income tab to auto-compute your total.
Key Rules: Max 2 Self-Occupied properties allowed. 3rd+ vacant property = Deemed Let-Out (taxed on notional rent). 30% standard deduction on NAV (flat, no proof). Interest u/s 22(b): SOP max ₹2L, Let-out unlimited. Loss from HP: set-off up to ₹2L against other heads; balance c/f 8 years.
New Regime: SOP interest u/s 22(b) NOT allowed. Let-out interest allowed (no limit). 30% std deduction allowed.
New Regime: SOP interest u/s 22(b) NOT allowed. Let-out interest allowed (no limit). 30% std deduction allowed.
Total Income from House Property
Auto-populates from individual property calculators. Fill SOP / Let-Out / Deemed Let-Out tabs first, then compute here.
Property Status — filled from individual calculators
NEW REGIME
HP Income (New)
OLD REGIME
HP Income (Old)
Self-Occupied Property (SOP)
Section 23(2) — Annual Value is NIL. Only deduction: interest on home loan u/s 22(b). Max 2 properties as SOP.
📐 Rule: Self-Occupied Property u/s 23(2)
Annual Value: Deemed to be NIL for self-occupied property (no notional rent taxed).
Max 2 SOPs: From FY 2019-20, you can claim up to 2 properties as self-occupied. The 3rd+ empty property becomes deemed let-out.
Only Deduction — Interest u/s 22(b):
• Loan taken after 1/4/1999 for purchase/construction (completed within 5 years): Max ₹2,00,000
• Loan taken before 1/4/1999 or for repair/renewal/reconstruction: Max ₹30,000
• 30% Standard Deduction u/s 22(a) is NOT applicable (since NAV = 0, 30% of 0 = 0)
Pre-construction Interest: Interest paid during construction period → deductible in 5 equal annual installments starting from the year of completion. This is part of the ₹2L/₹30K cap.
New Regime: SOP interest u/s 22(b) is NOT allowed. HP income from SOP = ₹0 under new regime.
Old Regime: SOP interest creates a loss from house property (negative income), which can be set off against salary/other income up to ₹2L.
Max 2 SOPs: From FY 2019-20, you can claim up to 2 properties as self-occupied. The 3rd+ empty property becomes deemed let-out.
Only Deduction — Interest u/s 22(b):
• Loan taken after 1/4/1999 for purchase/construction (completed within 5 years): Max ₹2,00,000
• Loan taken before 1/4/1999 or for repair/renewal/reconstruction: Max ₹30,000
• 30% Standard Deduction u/s 22(a) is NOT applicable (since NAV = 0, 30% of 0 = 0)
Pre-construction Interest: Interest paid during construction period → deductible in 5 equal annual installments starting from the year of completion. This is part of the ₹2L/₹30K cap.
New Regime: SOP interest u/s 22(b) is NOT allowed. HP income from SOP = ₹0 under new regime.
Old Regime: SOP interest creates a loss from house property (negative income), which can be set off against salary/other income up to ₹2L.
Old: max ₹2L if loan taken after 1/4/1999 for purchase/construction completed within 5 yrs. Else ₹30,000.
Deductible in 5 equal installments starting from year of completion
Pre-1999 or repair loans: interest cap is ₹30,000
Step-by-Step
Let-Out Property
Section 23(1) — Annual Value = higher of actual rent or expected rent, minus municipal taxes. Deductions: 30% standard + full interest.
📐 Rule: Let-Out Property u/s 23(1) & Sec 24
Step 1 — Expected Rent: Higher of (Municipal Value, Fair Rent), but capped at Standard Rent (if Rent Control Act applies).
Step 2 — Gross Annual Value (GAV): Higher of (Expected Rent, Actual Rent Received/Receivable) − Unrealised Rent (Rule 4) − Vacancy Loss.
Step 3 — Net Annual Value (NAV): GAV − Municipal Taxes actually paid by owner during the year (payment basis, not accrual).
Step 4 — Deductions u/s 24:
• 24(a) Standard Deduction: Flat 30% of NAV — covers repairs, collection charges, insurance. No proof needed, no actual expenditure required.
• 24(b) Interest on Borrowed Capital: No upper limit for let-out property. Includes current year interest + 1/5th of pre-construction interest.
Step 5 — Income from HP: NAV − 30% Std Deduction − Interest = Taxable Income (can be negative = loss).
Unrealised Rent (Sec 25A): If recovered later, taxed in year of receipt after 30% std deduction.
Arrears of Rent (Sec 25B): Taxed in year of receipt after 30% deduction, even if owner has changed.
Both Regimes: Let-out property computation is same in both regimes. Interest u/s 22(b) allowed in both (no cap for let-out).
Step 2 — Gross Annual Value (GAV): Higher of (Expected Rent, Actual Rent Received/Receivable) − Unrealised Rent (Rule 4) − Vacancy Loss.
Step 3 — Net Annual Value (NAV): GAV − Municipal Taxes actually paid by owner during the year (payment basis, not accrual).
Step 4 — Deductions u/s 24:
• 24(a) Standard Deduction: Flat 30% of NAV — covers repairs, collection charges, insurance. No proof needed, no actual expenditure required.
• 24(b) Interest on Borrowed Capital: No upper limit for let-out property. Includes current year interest + 1/5th of pre-construction interest.
Step 5 — Income from HP: NAV − 30% Std Deduction − Interest = Taxable Income (can be negative = loss).
Unrealised Rent (Sec 25A): If recovered later, taxed in year of receipt after 30% std deduction.
Arrears of Rent (Sec 25B): Taxed in year of receipt after 30% deduction, even if owner has changed.
Both Regimes: Let-out property computation is same in both regimes. Interest u/s 22(b) allowed in both (no cap for let-out).
Expected rent cannot exceed standard rent
Only taxes paid by owner during the year
Reduces GAV if property was vacant part of year
Detailed Computation
Deemed Let-Out Property
Section 23(4) — If you own more than 2 properties and keep them vacant, the 3rd+ are deemed let-out at expected rent.
📐 Rule: Deemed Let-Out Property u/s 23(4)
When it applies: If you own more than 2 house properties and the additional properties are not actually let out, the 3rd property onwards is deemed to be let-out.
Annual Value: Computed at expected rent (higher of municipal value and fair rent, capped at standard rent). No actual rent is received, but notional rent is taxed.
Computation: Same as let-out property → GAV (expected rent) − Municipal Taxes = NAV → 30% Std Deduction → Interest u/s 22(b) (no limit).
Your choice: You can choose which 2 properties to designate as self-occupied. Strategy: pick the 2 properties with highest notional rent as SOP (to avoid tax on notional rent), and let the rest be deemed let-out.
Vacancy ≥12 months (Finance Act 2025): If a property is vacant >12 months due to any reason, no notional rent shall be charged.
Both Regimes: Deemed let-out treatment applies in both regimes. Interest deduction also allowed in both (no cap).
Annual Value: Computed at expected rent (higher of municipal value and fair rent, capped at standard rent). No actual rent is received, but notional rent is taxed.
Computation: Same as let-out property → GAV (expected rent) − Municipal Taxes = NAV → 30% Std Deduction → Interest u/s 22(b) (no limit).
Your choice: You can choose which 2 properties to designate as self-occupied. Strategy: pick the 2 properties with highest notional rent as SOP (to avoid tax on notional rent), and let the rest be deemed let-out.
Vacancy ≥12 months (Finance Act 2025): If a property is vacant >12 months due to any reason, no notional rent shall be charged.
Both Regimes: Deemed let-out treatment applies in both regimes. Interest deduction also allowed in both (no cap).
Higher of municipal value and fair rent, capped at standard rent
Computation
Home Loan Interest Calculator u/s 22(b)
Compute allowable interest deduction based on property type, loan date, and regime. Includes pre-construction interest treatment.
📐 Rule: Interest on Home Loan u/s 22(b)
Deduction allowed for: Interest on capital borrowed for purchase, construction, repair, renewal, or reconstruction of a house property.
Limits by property type:
• Self-Occupied (Old Regime): Max ₹2,00,000 (loan after 1/4/1999 for purchase/construction completed within 5 yrs). Max ₹30,000 for pre-1999 loans or repair/renewal.
• Self-Occupied (New Regime): ₹0 — NOT allowed.
• Let-Out / Deemed Let-Out: No upper limit in both regimes.
Pre-construction Interest: Interest paid from date of borrowing to 31st March immediately before the year of completion. Deductible in 5 equal installments starting from year of completion. This amount is part of the ₹2L/₹30K cap for SOP, but unlimited for let-out.
5-year completion rule: For the ₹2L limit to apply (instead of ₹30K), construction must be completed within 5 years from the end of FY in which the loan was taken.
Joint loan: Each co-borrower can claim interest deduction proportional to their share of loan repayment, subject to individual ownership in the property.
Interest payable outside India: Not deductible unless TDS has been deducted on such interest u/s 195.
Limits by property type:
• Self-Occupied (Old Regime): Max ₹2,00,000 (loan after 1/4/1999 for purchase/construction completed within 5 yrs). Max ₹30,000 for pre-1999 loans or repair/renewal.
• Self-Occupied (New Regime): ₹0 — NOT allowed.
• Let-Out / Deemed Let-Out: No upper limit in both regimes.
Pre-construction Interest: Interest paid from date of borrowing to 31st March immediately before the year of completion. Deductible in 5 equal installments starting from year of completion. This amount is part of the ₹2L/₹30K cap for SOP, but unlimited for let-out.
5-year completion rule: For the ₹2L limit to apply (instead of ₹30K), construction must be completed within 5 years from the end of FY in which the loan was taken.
Joint loan: Each co-borrower can claim interest deduction proportional to their share of loan repayment, subject to individual ownership in the property.
Interest payable outside India: Not deductible unless TDS has been deducted on such interest u/s 195.
Allowed in 5 equal installments from year of completion
Breakdown
Annual Value Computation
Section 23(1) — Determine Gross Annual Value (GAV) for let-out property. GAV = Higher of (Expected Rent, Actual Rent) − Unrealised Rent − Vacancy Loss.
📐 Rule: Annual Value Determination u/s 23(1)
Annual Value is the amount for which the property might reasonably be expected to be let out from year to year. It is a notional concept, not necessarily the actual rent received.
Step-by-step determination:
① Municipal Value: Value assigned by the local municipal authority for property tax purposes.
② Fair Rent: Rent a similar property in the same locality would fetch in the open market.
③ Expected Rent = Higher of (Municipal Value, Fair Rent) — but if property is under Rent Control Act, expected rent cannot exceed Standard Rent.
④ GAV = Higher of (Expected Rent, Actual Rent) received or receivable.
⑤ Less: Unrealised Rent (rent tenant failed to pay, per Rule 4 conditions) and Vacancy Loss (rent lost during vacant period).
Special case — vacancy: If GAV after vacancy loss falls below Expected Rent, GAV is taken at the reduced actual rent figure (vacancy is allowed to reduce below expected rent).
Composite rent: If rent includes charges for services (lift, water, electricity), the service portion is taxable under "Other Sources" or PGBP — not HP.
Step-by-step determination:
① Municipal Value: Value assigned by the local municipal authority for property tax purposes.
② Fair Rent: Rent a similar property in the same locality would fetch in the open market.
③ Expected Rent = Higher of (Municipal Value, Fair Rent) — but if property is under Rent Control Act, expected rent cannot exceed Standard Rent.
④ GAV = Higher of (Expected Rent, Actual Rent) received or receivable.
⑤ Less: Unrealised Rent (rent tenant failed to pay, per Rule 4 conditions) and Vacancy Loss (rent lost during vacant period).
Special case — vacancy: If GAV after vacancy loss falls below Expected Rent, GAV is taken at the reduced actual rent figure (vacancy is allowed to reduce below expected rent).
Composite rent: If rent includes charges for services (lift, water, electricity), the service portion is taxable under "Other Sources" or PGBP — not HP.
Expected rent capped at standard rent if applicable
Step-by-Step
House Property Loss — Set-Off & Carry Forward
Loss from HP can be set off against other income heads up to ₹2,00,000 per year. Remaining loss carried forward for 8 tax years.
📐 Rule: Loss from HP — Set-Off & Carry Forward u/s 71 & 71B
How loss arises: When interest on home loan u/s 22(b) exceeds the Net Annual Value (after 30% deduction), the result is a loss from house property. Most common for SOP where NAV = 0 but interest is deducted.
Inter-head Set-Off (Sec 109): Loss from HP can be set off against income from any other head (salary, business, capital gains, other sources) in the same year, up to a maximum of ₹2,00,000.
Carry Forward (Sec 109B): Unabsorbed loss (amount exceeding ₹2L) can be carried forward for 8 Tax Years. But carried-forward loss can only be set off against HP income (not salary or other heads).
Intra-head set-off: If you have income from one property and loss from another, first set off loss within the same head (HP vs HP). Only the net loss goes for inter-head set-off.
₹2L cap applies in both regimes. However, under New Regime, SOP interest is not allowed — so the loss from SOP is NIL in new regime.
Must file ITR on time: To carry forward HP loss, the return must be filed within the due date u/s 139(1). Late return = lose carry-forward benefit.
Inter-head Set-Off (Sec 109): Loss from HP can be set off against income from any other head (salary, business, capital gains, other sources) in the same year, up to a maximum of ₹2,00,000.
Carry Forward (Sec 109B): Unabsorbed loss (amount exceeding ₹2L) can be carried forward for 8 Tax Years. But carried-forward loss can only be set off against HP income (not salary or other heads).
Intra-head set-off: If you have income from one property and loss from another, first set off loss within the same head (HP vs HP). Only the net loss goes for inter-head set-off.
₹2L cap applies in both regimes. However, under New Regime, SOP interest is not allowed — so the loss from SOP is NIL in new regime.
Must file ITR on time: To carry forward HP loss, the return must be filed within the due date u/s 139(1). Late return = lose carry-forward benefit.
Enter as positive number
Loss Set-Off Analysis
Co-Ownership Apportionment
Section 26 — When property is co-owned, income is computed for the whole property first, then split per ownership share.
📐 Rule: Co-Ownership u/s 26 & Sec 25 (Deemed Ownership)
Section 26 — Co-Ownership: When a property is owned by two or more persons with definite and ascertainable shares, income is computed for the whole property as one unit, then apportioned to each co-owner based on their share.
Each co-owner is assessed separately. Each gets their proportionate share of income/loss and can individually claim the ₹2L SOP interest cap, set-off limits, etc.
Undetermined shares: If shares are not definite/ascertainable, the entire property is assessed as an AOP (Association of Persons).
Section 27 — Deemed Ownership:
• Transfer to spouse (without adequate consideration) → transferor is deemed owner
• Transfer to minor child (without adequate consideration) → transferor is deemed owner (except minor married daughter)
• Holder of an impartible estate → deemed individual owner
• Person with rights via lease ≥12 years → deemed owner of that property
Joint home loan: Each co-owner/co-borrower claims interest deduction proportional to their repayment share, subject to their ownership share in the property. Both must be co-owners AND co-borrowers.
Each co-owner is assessed separately. Each gets their proportionate share of income/loss and can individually claim the ₹2L SOP interest cap, set-off limits, etc.
Undetermined shares: If shares are not definite/ascertainable, the entire property is assessed as an AOP (Association of Persons).
Section 27 — Deemed Ownership:
• Transfer to spouse (without adequate consideration) → transferor is deemed owner
• Transfer to minor child (without adequate consideration) → transferor is deemed owner (except minor married daughter)
• Holder of an impartible estate → deemed individual owner
• Person with rights via lease ≥12 years → deemed owner of that property
Joint home loan: Each co-owner/co-borrower claims interest deduction proportional to their repayment share, subject to their ownership share in the property. Both must be co-owners AND co-borrowers.
Can be positive (income) or negative (loss)
Co-Ownership Split
🏢
Business / Profession — Separate Module
This head now has its own dedicated module with detailed provisions for Sections 26–66, presumptive taxation, regular P&L computation, depreciation, disallowed expenses, partner income, and books/audit requirements.
4 Capital Gains — Sections 67–91
Profits from transfer of a capital asset. Fill individual calculators, then use Total CG Income tab to auto-compute.
Section 67 — Charging Section: Any profits/gains from transfer of a capital asset during the tax year shall be chargeable to tax as "Capital Gains" in the tax year of transfer. Capital asset = property of any kind (movable/immovable, tangible/intangible) EXCEPT: stock-in-trade, personal effects (excluding jewellery, paintings, sculptures, archaeological collections), rural agricultural land, specified gold bonds (1999), special bearer bonds (1991), gold deposit bonds.
Post July 2024 Regime: LTCG uniformly at 12.5% (no indexation for most assets). STCG on equity (STT paid) at 20%. STCG on other assets at slab rates. LTCG on equity exempt up to ₹1.25L. VDA flat 30%.
Post July 2024 Regime: LTCG uniformly at 12.5% (no indexation for most assets). STCG on equity (STT paid) at 20%. STCG on other assets at slab rates. LTCG on equity exempt up to ₹1.25L. VDA flat 30%.
| Asset Type | LTCG if held > | LTCG Rate | STCG Rate |
|---|---|---|---|
| Listed equity / equity MF (STT paid) | 12 months | 12.5% (112A) | 20% (196) |
| Unlisted shares | 24 months | 12.5% (112) | Slab rates |
| Land / Building | 24 months | 12.5% (112)* | Slab rates |
| Gold / Gold ETF / Debt MF / Bonds | 24 months | 12.5% (112) | Slab rates |
| Virtual Digital Assets (Crypto, NFT) | N/A | Flat 30% (194) | |
* Property acquired before 23/7/2024 by individuals/HUFs: choose 12.5% without indexation OR 20% with indexation (whichever is lower tax).
STCL Set-Off
Against STCG ✓ and LTCG ✓. Carry forward 8 Tax Years.
LTCL Set-Off
Against LTCG ✓ only. NOT against STCG. Carry forward 8 Tax Years.
VDA Loss
NO set-off against anything. NO carry forward. Completely isolated.
CG vs Other Heads
Capital loss CANNOT be set off against Salary, HP, Business, or Other Sources.
Total Income from Capital Gains
Auto-populates from individual calculators. Fill each tab first, then come here.
CAPITAL GAINS SUMMARY
Equity LTCG — Section 198
Listed equity shares, equity MFs, business trust units where STT is paid. Holding >12 months.
📐 Rule: LTCG on Equity u/s 198 (Sections 112A, 55(2)(ac))
Applicability: Listed equity shares, equity-oriented MF units (≥65% in equity), units of business trust — where STT is paid on both acquisition (for shares) and transfer.
Holding period: >12 months = Long-term.
Tax rate: 12.5% (w.e.f. 23/7/2024, earlier 10%). No indexation. No cost inflation adjustment.
Annual exemption: First ₹1,25,000 of aggregate LTCG per FY is exempt. This is a combined limit across all equity LTCG transactions in the year.
Grandfathering (Sec 55(2)(ac)): For shares/MFs acquired before 1 Feb 2018:
— FMV = Higher of (price on NSE/BSE on 31/1/2018, or actual cost of acquisition)
— But FMV cannot exceed sale price (to prevent artificial losses)
— Deemed cost = Higher of (actual cost, FMV as computed above)
— This only applies if asset was listed on a recognised stock exchange as on 31/1/2018
STT condition: For equity shares, STT must be paid on acquisition. Exception: shares acquired via bonus, rights issue, ESOPs, etc. where STT wasn't paid on acquisition — 112A still applies if STT paid on transfer.
Sec 191 rebate NOT available on LTCG u/s 198 even if total income ≤ ₹12L.
Surcharge: Capped at 15% on LTCG u/s 198 (not 25%/37% even for high income).
Both regimes: Same treatment in old and new regime.
Holding period: >12 months = Long-term.
Tax rate: 12.5% (w.e.f. 23/7/2024, earlier 10%). No indexation. No cost inflation adjustment.
Annual exemption: First ₹1,25,000 of aggregate LTCG per FY is exempt. This is a combined limit across all equity LTCG transactions in the year.
Grandfathering (Sec 55(2)(ac)): For shares/MFs acquired before 1 Feb 2018:
— FMV = Higher of (price on NSE/BSE on 31/1/2018, or actual cost of acquisition)
— But FMV cannot exceed sale price (to prevent artificial losses)
— Deemed cost = Higher of (actual cost, FMV as computed above)
— This only applies if asset was listed on a recognised stock exchange as on 31/1/2018
STT condition: For equity shares, STT must be paid on acquisition. Exception: shares acquired via bonus, rights issue, ESOPs, etc. where STT wasn't paid on acquisition — 112A still applies if STT paid on transfer.
Sec 191 rebate NOT available on LTCG u/s 198 even if total income ≤ ₹12L.
Surcharge: Capped at 15% on LTCG u/s 198 (not 25%/37% even for high income).
Both regimes: Same treatment in old and new regime.
Transaction Details
Only needed if acquired before 1/2/2018
If you've already used part of the ₹1.25L exempt on other equity sales this FY
Detailed Computation
Equity STCG — Section 196
Listed equity shares, equity MFs where STT paid. Holding ≤12 months.
📐 Rule: STCG on Equity u/s 196
Applicability: Listed equity shares, equity-oriented MF units — where STT is paid on transfer.
Holding period: ≤12 months = Short-term.
Tax rate: 20% flat (w.e.f. 23/7/2024, earlier 15%). This is a concessional special rate (normal STCG on other assets = slab rates which can go up to 30%).
No exemption threshold. Entire STCG is taxable from first rupee.
Basic exemption: If your total income including STCG falls below the basic exemption limit (₹2.5L old / ₹4L new), the STCG within that limit is effectively tax-free.
Surcharge: Capped at 15% on STCG u/s 196.
Intra-day trading: Gains from intra-day share trading are speculative business income, NOT STCG u/s 196.
F&O trading: Futures & Options gains are non-speculative business income, NOT capital gains.
Both regimes: Same treatment. Sec 191 rebate available on 196 STCG (unlike 112A LTCG).
Holding period: ≤12 months = Short-term.
Tax rate: 20% flat (w.e.f. 23/7/2024, earlier 15%). This is a concessional special rate (normal STCG on other assets = slab rates which can go up to 30%).
No exemption threshold. Entire STCG is taxable from first rupee.
Basic exemption: If your total income including STCG falls below the basic exemption limit (₹2.5L old / ₹4L new), the STCG within that limit is effectively tax-free.
Surcharge: Capped at 15% on STCG u/s 196.
Intra-day trading: Gains from intra-day share trading are speculative business income, NOT STCG u/s 196.
F&O trading: Futures & Options gains are non-speculative business income, NOT capital gains.
Both regimes: Same treatment. Sec 191 rebate available on 196 STCG (unlike 112A LTCG).
Transaction Details
Computation
Property Capital Gains — Land & Building
Capital gains from sale of immovable property (residential/commercial). LTCG if held >24 months.
📐 Rule: Property CG u/s 45, 48, 50C, 54, 54EC, 54F & Sec 197
Holding period: >24 months = LTCG. ≤24 months = STCG (taxed at slab rates).
LTCG Rate (post 23/7/2024): 12.5% without indexation.
Special option for pre-23/7/2024 acquisitions: Individuals/HUFs who acquired property before 23 July 2024 can choose: 12.5% without indexation OR 20% with indexation — whichever results in lower tax. CII for FY 2024-25 = 363.
Section 50C — Stamp Duty Valuation: If sale consideration < stamp duty value (SDV) by >10%, SDV is deemed as full value of consideration. Safe harbour: if actual price ≥ 90% of SDV, actual price is accepted.
Cost of Acquisition: Actual purchase price. For inherited/gifted property — cost to the previous owner. For property acquired before 1/4/2001 — can use FMV as on 1/4/2001 as cost.
Cost of Improvement: Capital expenditure for additions/alterations (not repairs). Only improvements after 1/4/2001 counted if property acquired before that date.
Indexation (if opted): Indexed Cost = Cost × (CII of year of transfer ÷ CII of year of acquisition). CII table starts from FY 2001-02 (CII=100).
Exemptions available: Sec 86 (house→house), Sec 86EC (invest in bonds ₹50L), Sec 86F (any asset→house). Can deposit in CGAS if reinvestment not done by ITR date.
TDS u/s 393(T1-Prop): Buyer deducts 1% TDS if consideration ≥ ₹50L.
LTCG Rate (post 23/7/2024): 12.5% without indexation.
Special option for pre-23/7/2024 acquisitions: Individuals/HUFs who acquired property before 23 July 2024 can choose: 12.5% without indexation OR 20% with indexation — whichever results in lower tax. CII for FY 2024-25 = 363.
Section 50C — Stamp Duty Valuation: If sale consideration < stamp duty value (SDV) by >10%, SDV is deemed as full value of consideration. Safe harbour: if actual price ≥ 90% of SDV, actual price is accepted.
Cost of Acquisition: Actual purchase price. For inherited/gifted property — cost to the previous owner. For property acquired before 1/4/2001 — can use FMV as on 1/4/2001 as cost.
Cost of Improvement: Capital expenditure for additions/alterations (not repairs). Only improvements after 1/4/2001 counted if property acquired before that date.
Indexation (if opted): Indexed Cost = Cost × (CII of year of transfer ÷ CII of year of acquisition). CII table starts from FY 2001-02 (CII=100).
Exemptions available: Sec 86 (house→house), Sec 86EC (invest in bonds ₹50L), Sec 86F (any asset→house). Can deposit in CGAS if reinvestment not done by ITR date.
TDS u/s 393(T1-Prop): Buyer deducts 1% TDS if consideration ≥ ₹50L.
Sale Details
If SDV > sale price by >10%, SDV is deemed consideration (Sec 79)
Only individuals/HUFs can choose 20% with indexation for pre-23/7/2024 property
Cost Details
Exemptions
Detailed Computation
Other Assets CG — Gold, Debt MF, Unlisted, Bonds
Capital gains on non-equity, non-property assets.
📐 Rule: Other Assets CG u/s 45, 112 & Special Provisions
Gold / Gold ETF / Gold MF: LTCG if held >24 months → 12.5%. STCG → slab rates. Sovereign Gold Bonds: LTCG on maturity fully exempt (only on redemption, not exchange sale).
Debt Mutual Funds (purchased after 1/4/2023): Sec 50AA — "Specified Mutual Funds" (<65% in equity) are always taxed as STCG at slab rates regardless of holding period. No LTCG benefit.
Unlisted Shares: LTCG if held >24 months → 12.5%. STCG → slab rates. FMV determination may be required (Rule 11UA for unlisted shares).
Listed Bonds/Debentures: LTCG if held >12 months (listed on exchange) → 12.5%. STCG → slab rates.
Jewellery/Archaeological Collections: Capital assets (excluded from "personal effects" exemption). LTCG if held >24 months → 12.5%.
Foreign assets: Same rules. Convert to INR at SBI TT buying rate on date of transfer/acquisition.
Debt Mutual Funds (purchased after 1/4/2023): Sec 50AA — "Specified Mutual Funds" (<65% in equity) are always taxed as STCG at slab rates regardless of holding period. No LTCG benefit.
Unlisted Shares: LTCG if held >24 months → 12.5%. STCG → slab rates. FMV determination may be required (Rule 11UA for unlisted shares).
Listed Bonds/Debentures: LTCG if held >12 months (listed on exchange) → 12.5%. STCG → slab rates.
Jewellery/Archaeological Collections: Capital assets (excluded from "personal effects" exemption). LTCG if held >24 months → 12.5%.
Foreign assets: Same rules. Convert to INR at SBI TT buying rate on date of transfer/acquisition.
Asset & Transaction Details
Computation
Virtual Digital Assets — Section 194
Crypto, NFTs, tokens — flat 30% tax, no deductions except cost.
📐 Rule: VDA Taxation u/s 194 & 393(T3-VDA)
Section 194 — Tax rate: Flat 30% on income from transfer of VDA. No distinction between short-term and long-term. No benefit of slab rates or basic exemption.
Only deduction allowed: Cost of acquisition. NO other deduction — no infrastructure cost, electricity, mining expenses, internet costs, or any other expenditure.
No set-off of losses: Loss from VDA cannot be set off against income under any head (including other VDA gains). Also no carry-forward of VDA losses.
No benefit of basic exemption: Even if your total income is below ₹2.5L/₹4L, VDA income is taxed at 30%.
TDS u/s 393(T3-VDA): 1% TDS on transfer of VDA if consideration >₹50,000 in a FY (₹10,000 for specified persons). Buyer is responsible for TDS deduction.
Gifts of VDA: Received as gift — taxable u/s 56(2)(x) if value >₹50,000.
Includes: Bitcoin, Ethereum, all cryptocurrencies, NFTs, tokens, stablecoins, and any asset the central govt notifies as VDA. CBDCs (Digital Rupee) are NOT VDA.
Surcharge + Cess: 30% + applicable surcharge + 4% cess. Effective rate can be 31.2% to ~42.7%.
Only deduction allowed: Cost of acquisition. NO other deduction — no infrastructure cost, electricity, mining expenses, internet costs, or any other expenditure.
No set-off of losses: Loss from VDA cannot be set off against income under any head (including other VDA gains). Also no carry-forward of VDA losses.
No benefit of basic exemption: Even if your total income is below ₹2.5L/₹4L, VDA income is taxed at 30%.
TDS u/s 393(T3-VDA): 1% TDS on transfer of VDA if consideration >₹50,000 in a FY (₹10,000 for specified persons). Buyer is responsible for TDS deduction.
Gifts of VDA: Received as gift — taxable u/s 56(2)(x) if value >₹50,000.
Includes: Bitcoin, Ethereum, all cryptocurrencies, NFTs, tokens, stablecoins, and any asset the central govt notifies as VDA. CBDCs (Digital Rupee) are NOT VDA.
Surcharge + Cess: 30% + applicable surcharge + 4% cess. Effective rate can be 31.2% to ~42.7%.
Computation
Capital Gains Exemptions — 54 / 54EC / 54F / 54B
Reduce or eliminate LTCG tax by reinvesting gains within specified time.
📐 Rule: CG Exemptions u/s 54, 54B, 54EC, 54F
Section 54 — House to House:
• LTCG from sale of residential house property (must be owned for >24 months)
• Reinvest in one residential house in India: purchase within 1 year before or 2 years after transfer, OR construct within 3 years
• If LTCG ≤ ₹2 Cr: can invest in up to 2 houses (one-time option in lifetime)
• Exemption = LTCG or cost of new house, whichever is lower
• New house must NOT be sold within 3 years (else exemption revoked)
• Available to individuals and HUFs only
Section 54EC — Bonds:
• LTCG from sale of land or building (any person, not just individuals)
• Invest in NHAI / REC / PFC / IRFC bonds within 6 months of transfer date
• Maximum investment: ₹50 lakhs per FY
• Lock-in: 5 years (cannot transfer, pledge, or convert before that)
• Interest on bonds is taxable as "Other Sources"
Section 54F — Any Asset to House:
• LTCG from sale of any long-term capital asset OTHER than a residential house
• Invest net consideration (not just LTCG) in one residential house in India
• Exemption = LTCG × (amount invested ÷ net consideration). Full exemption if entire net consideration invested
• Must not own >1 residential house (other than new one) on date of transfer
• Must not purchase another house within 2 years or construct within 3 years (other than the exempt house)
Section 54B — Agricultural Land:
• CG from transfer of agricultural land (urban or rural) used for agriculture by individual/parent in preceding 2 years
• Reinvest in other agricultural land within 2 years
CGAS (Capital Gains Account Scheme): If reinvestment cannot be completed before ITR filing due date, deposit the amount in a CGAS account with a designated bank. Invest within the specified period. If not invested, the amount is treated as LTCG in the year the period expires.
• LTCG from sale of residential house property (must be owned for >24 months)
• Reinvest in one residential house in India: purchase within 1 year before or 2 years after transfer, OR construct within 3 years
• If LTCG ≤ ₹2 Cr: can invest in up to 2 houses (one-time option in lifetime)
• Exemption = LTCG or cost of new house, whichever is lower
• New house must NOT be sold within 3 years (else exemption revoked)
• Available to individuals and HUFs only
Section 54EC — Bonds:
• LTCG from sale of land or building (any person, not just individuals)
• Invest in NHAI / REC / PFC / IRFC bonds within 6 months of transfer date
• Maximum investment: ₹50 lakhs per FY
• Lock-in: 5 years (cannot transfer, pledge, or convert before that)
• Interest on bonds is taxable as "Other Sources"
Section 54F — Any Asset to House:
• LTCG from sale of any long-term capital asset OTHER than a residential house
• Invest net consideration (not just LTCG) in one residential house in India
• Exemption = LTCG × (amount invested ÷ net consideration). Full exemption if entire net consideration invested
• Must not own >1 residential house (other than new one) on date of transfer
• Must not purchase another house within 2 years or construct within 3 years (other than the exempt house)
Section 54B — Agricultural Land:
• CG from transfer of agricultural land (urban or rural) used for agriculture by individual/parent in preceding 2 years
• Reinvest in other agricultural land within 2 years
CGAS (Capital Gains Account Scheme): If reinvestment cannot be completed before ITR filing due date, deposit the amount in a CGAS account with a designated bank. Invest within the specified period. If not invested, the amount is treated as LTCG in the year the period expires.
Exemption Calculator
Needed for Sec 86F — proportional exemption based on net consideration
Exemption Computation
Capital Gains Loss — Set-Off & Carry Forward
Compute how capital losses are set off against gains.
📐 Rule: CG Loss Set-Off u/s 70, 71 & 74
Intra-head set-off (Sec 108):
• STCL → set off against STCG + LTCG (any type of capital gain)
• LTCL → set off only against LTCG (NOT against STCG)
• Special exception: LTCL incurred up to 31/3/2026 can be set off against STCG in AY 2027-28 (one-time provision)
Inter-head set-off (Sec 109): Capital loss CANNOT be set off against income from any other head (Salary, HP, Business, Other Sources).
VDA Loss: Completely ring-fenced. Cannot be set off against any income — not even other capital gains or other VDA gains. No carry-forward.
Carry Forward (Sec 74):
• Unabsorbed capital loss → carry forward for 8 Tax Years
• STCL c/f → can be set off against STCG + LTCG in future years
• LTCL c/f → can be set off only against LTCG in future years
• Must file ITR within due date u/s 139(1) to carry forward (late filing = lose carry-forward right)
Order of set-off: First intra-head (CG vs CG), then inter-head (CG vs other heads — not allowed for CG), then carry forward. Within CG: first set off STCL, then LTCL.
• STCL → set off against STCG + LTCG (any type of capital gain)
• LTCL → set off only against LTCG (NOT against STCG)
• Special exception: LTCL incurred up to 31/3/2026 can be set off against STCG in AY 2027-28 (one-time provision)
Inter-head set-off (Sec 109): Capital loss CANNOT be set off against income from any other head (Salary, HP, Business, Other Sources).
VDA Loss: Completely ring-fenced. Cannot be set off against any income — not even other capital gains or other VDA gains. No carry-forward.
Carry Forward (Sec 74):
• Unabsorbed capital loss → carry forward for 8 Tax Years
• STCL c/f → can be set off against STCG + LTCG in future years
• LTCL c/f → can be set off only against LTCG in future years
• Must file ITR within due date u/s 139(1) to carry forward (late filing = lose carry-forward right)
Order of set-off: First intra-head (CG vs CG), then inter-head (CG vs other heads — not allowed for CG), then carry forward. Within CG: first set off STCL, then LTCL.
Current Year Gains & Losses
Enter as positive number
Enter as positive number
Loss Set-Off Analysis
5 Income from Other Sources — Sections 92–95
The residual head — any income not classified under the other four heads. Fill individual calculators, then use Total Other Sources tab to auto-compute.
Section 92 — Charging Section: Income of every kind which is not chargeable under any of the other four heads (Salary, HP, PGBP, CG) shall be taxable under "Other Sources." This includes interest, dividends, royalty, rental of machinery, gifts, lottery winnings, share buyback proceeds, and any residual income. Deductions u/s 57 are allowed only for expenses incurred wholly and exclusively to earn such income (not personal expenses). Sec 58 lists amounts NOT deductible (personal expenses, wealth tax, etc.).
Special rates: Lottery/games/puzzles/gambling → flat 30% u/s 193. Everything else → normal slab rates. Clubbing provisions (Sec 96-64) may add income of spouse, minor child, etc. to your total.
Special rates: Lottery/games/puzzles/gambling → flat 30% u/s 193. Everything else → normal slab rates. Clubbing provisions (Sec 96-64) may add income of spouse, minor child, etc. to your total.
| Income Type | Tax Rate | TDS Section | Deduction Available |
|---|---|---|---|
| Savings Bank Interest | Slab rates | — | 143 ₹10K / 144 ₹50K |
| FD / RD Interest | Slab rates | 393(T1) (>₹40K/₹50K) | 144 for seniors |
| Dividends | Slab rates | 194 / 194K (>₹5K) | 57(i) loan interest (20% cap) |
| Lottery / Games / Betting | Flat 30% | 194B (>₹10K) | None |
| Online Gaming | Flat 30% | 393(T1-Gaming) (net winnings) | None |
| Gifts (>₹50K aggregate) | Slab rates | — | None |
| Family Pension | Slab rates | — | 57(iia) ₹25K or 1/3rd |
| Rental of Machinery/Furniture | Slab rates | 393(T1-Rent) (>₹2.4L) | 57 (repairs, depreciation) |
| Share Buyback (w.e.f. 1/10/2024) | Slab rates | 194 (>₹5K) | Cost of acquisition |
Sec 93 — Deductions Allowed
57(i): Interest on loan for investment (dividend income) — max 20% of gross dividend
57(ii): Depreciation/repairs of machinery/furniture let out
57(iia): Family pension — lower of ₹25,000 or 1/3rd
57(iii): Any other expense wholly and exclusively for earning such income
57(ii): Depreciation/repairs of machinery/furniture let out
57(iia): Family pension — lower of ₹25,000 or 1/3rd
57(iii): Any other expense wholly and exclusively for earning such income
Sec 58 — NOT Deductible
Personal expenses of the assessee
Interest/salary paid to partners (for AOP/BOI)
Wealth tax (abolished but still listed)
Any expenditure for lottery/games/betting income
Any expense for VDA income (Sec 194)
Interest/salary paid to partners (for AOP/BOI)
Wealth tax (abolished but still listed)
Any expenditure for lottery/games/betting income
Any expense for VDA income (Sec 194)
Clubbing (Sec 96-64)
64(1)(ii): Income from assets transferred to spouse without consideration
64(1)(iv): Income from assets transferred to son's wife
64(1A): Minor child's income >₹1,500/yr clubbed with parent having higher income
Exemption: ₹1,500/child for minor's clubbed income
64(1)(iv): Income from assets transferred to son's wife
64(1A): Minor child's income >₹1,500/yr clubbed with parent having higher income
Exemption: ₹1,500/child for minor's clubbed income
Total Income from Other Sources
Auto-populates from individual calculators. Fill each tab first, then compute here.
NEW REGIME
OS Income (New)
OLD REGIME
OS Income (Old)
Interest Income Calculator
All interest income taxable at slab rates. Enter each source separately for accurate computation.
📐 Rule: Interest Income u/s 56(2)(id), 143, 144, 393(T1)
General principle: All interest income is taxable at slab rates. No special concessional rate. Taxed on accrual basis (when it becomes due, even if not received — except for individuals/HUFs on cash basis for some instruments).
Savings Bank — Sec 143: Deduction of up to ₹10,000 on interest from savings accounts (bank, co-op, post office). Old Regime only. NOT for FD/RD interest. Not available to senior citizens claiming 144.
Senior Citizens — Sec 144: Deduction of up to ₹50,000 on interest from all deposits (savings, FD, RD, post office). For residents aged 60+. Old Regime only. If claiming 144, cannot claim 143.
FD Interest: TDS u/s 393(T1) deducted by bank if interest >₹40,000/yr (₹50,000 for seniors). Submit Form 121 (non-seniors) or Form 121 (seniors) to avoid TDS if total income is below taxable limit.
NSC Interest: Accrued interest is taxable each year even though reinvested. In the final year, total interest received minus interest already taxed in earlier years. NSC purchase itself qualifies for 123 deduction (old regime).
PPF Interest: Fully exempt — EEE (Exempt-Exempt-Exempt) status. Not taxable under any head.
Post Office Schemes: SCSS interest — taxable but eligible for 144 (seniors). Monthly Income Scheme — fully taxable. Sukanya Samriddhi — exempt (EEE).
Income Tax Refund Interest: Interest received on IT refund u/s 244A is taxable under "Other Sources".
New Regime: 143/144 deductions NOT available. All interest income is fully taxable.
Savings Bank — Sec 143: Deduction of up to ₹10,000 on interest from savings accounts (bank, co-op, post office). Old Regime only. NOT for FD/RD interest. Not available to senior citizens claiming 144.
Senior Citizens — Sec 144: Deduction of up to ₹50,000 on interest from all deposits (savings, FD, RD, post office). For residents aged 60+. Old Regime only. If claiming 144, cannot claim 143.
FD Interest: TDS u/s 393(T1) deducted by bank if interest >₹40,000/yr (₹50,000 for seniors). Submit Form 121 (non-seniors) or Form 121 (seniors) to avoid TDS if total income is below taxable limit.
NSC Interest: Accrued interest is taxable each year even though reinvested. In the final year, total interest received minus interest already taxed in earlier years. NSC purchase itself qualifies for 123 deduction (old regime).
PPF Interest: Fully exempt — EEE (Exempt-Exempt-Exempt) status. Not taxable under any head.
Post Office Schemes: SCSS interest — taxable but eligible for 144 (seniors). Monthly Income Scheme — fully taxable. Sukanya Samriddhi — exempt (EEE).
Income Tax Refund Interest: Interest received on IT refund u/s 244A is taxable under "Other Sources".
New Regime: 143/144 deductions NOT available. All interest income is fully taxable.
Interest Income Sources
Eligible for 143 (₹10K) / 144
Eligible for 144 only (seniors)
Interest Income — Old vs New Regime
Dividend Income Calculator
Fully taxable at slab rates since FY 2020-21. DDT abolished.
📐 Rule: Dividend Income u/s 56(2)(i), 57(i), 194, 194K
Since FY 2020-21: Dividends are fully taxable in the hands of the shareholder at slab rates. The earlier DDT (Dividend Distribution Tax) paid by companies has been abolished.
TDS provisions:
• 194: Company deducts 10% TDS if dividend to resident > ₹5,000 in FY
• 194K: MF/specified company deducts 10% TDS if dividend > ₹5,000
• NRI: TDS at 20% (or DTAA rate) u/s 195
Deduction u/s 57(i): Interest on loan taken to purchase shares/MFs from which dividend is received — deductible up to 20% of gross dividend income. No other expense is deductible against dividend income.
Deemed dividend u/s 2(22)(e): Loan/advance by a closely-held company to its shareholder holding ≥10% voting power — treated as deemed dividend (taxable as "Other Sources"). Does not apply to loans in the ordinary course of lending business.
Inter-corporate dividend: If a domestic company receives dividend from another domestic company — eligible for deduction u/s 80M (amount of dividend distributed further, to avoid double taxation).
Both regimes: Same treatment. No special rate — taxed at your marginal slab rate.
TDS provisions:
• 194: Company deducts 10% TDS if dividend to resident > ₹5,000 in FY
• 194K: MF/specified company deducts 10% TDS if dividend > ₹5,000
• NRI: TDS at 20% (or DTAA rate) u/s 195
Deduction u/s 57(i): Interest on loan taken to purchase shares/MFs from which dividend is received — deductible up to 20% of gross dividend income. No other expense is deductible against dividend income.
Deemed dividend u/s 2(22)(e): Loan/advance by a closely-held company to its shareholder holding ≥10% voting power — treated as deemed dividend (taxable as "Other Sources"). Does not apply to loans in the ordinary course of lending business.
Inter-corporate dividend: If a domestic company receives dividend from another domestic company — eligible for deduction u/s 80M (amount of dividend distributed further, to avoid double taxation).
Both regimes: Same treatment. No special rate — taxed at your marginal slab rate.
DTAA relief may be available — claim in ITR
Dividend Income Computation
Lottery, Winnings, Betting & Online Gaming — Sec 193 / 115BBJ
Flat 30% tax. No deductions. No basic exemption. No slab benefit.
📐 Rule: Winnings & Gaming u/s 193, 115BBJ, 194B, 393(T1-Gaming)
Section 193 — Tax rate: Flat 30% on gross winnings + applicable surcharge + 4% cess. No slab rate benefit even if total income is below basic exemption.
Covered income types:
• Lottery winnings (state/private/online)
• Crossword puzzles, game shows (KBC etc.)
• Horse racing (net winnings from the activity in the year)
• Card games, betting, gambling (any form)
• Online gaming (Sec 193J w.e.f. 1/4/2023 — net winnings)
Absolutely NO deductions: No expense of any kind can be deducted from these winnings. Tax is on gross amount. Exception: horse racing — losses in one race can offset gains from another in the same year, but net loss cannot be carried forward.
TDS provisions:
• 194B: 30% TDS on lottery/crossword/card game winnings > ₹10,000
• 393(T1-Horse): 30% TDS on horse racing winnings > ₹10,000
• 393(T1-Gaming): TDS on online gaming — on net winnings at the time of withdrawal or at end of FY, whichever is earlier
Sec 191 rebate NOT available on this income. No carry-forward of gaming losses. No set-off against any other income.
Covered income types:
• Lottery winnings (state/private/online)
• Crossword puzzles, game shows (KBC etc.)
• Horse racing (net winnings from the activity in the year)
• Card games, betting, gambling (any form)
• Online gaming (Sec 193J w.e.f. 1/4/2023 — net winnings)
Absolutely NO deductions: No expense of any kind can be deducted from these winnings. Tax is on gross amount. Exception: horse racing — losses in one race can offset gains from another in the same year, but net loss cannot be carried forward.
TDS provisions:
• 194B: 30% TDS on lottery/crossword/card game winnings > ₹10,000
• 393(T1-Horse): 30% TDS on horse racing winnings > ₹10,000
• 393(T1-Gaming): TDS on online gaming — on net winnings at the time of withdrawal or at end of FY, whichever is earlier
Sec 191 rebate NOT available on this income. No carry-forward of gaming losses. No set-off against any other income.
Horse racing: losses within same year. Gaming: net winnings concept.
Tax on Winnings
Gift Taxation — Section 92(2)(x)
Aggregate non-exempt gifts >₹50,000 in a year → entire amount taxable (not just excess).
📐 Rule: Gift Taxation u/s 56(2)(x) — Complete Provisions
What is covered u/s 56(2)(x): Money, immovable property, and movable property received by any person without consideration (or for inadequate consideration).
Threshold: Aggregate value exceeding ₹50,000 in a financial year. If exceeded, the ENTIRE amount is taxable (not just excess over ₹50K). If total ≤₹50K → fully exempt.
Three scenarios:
① Money received without consideration: Taxable if aggregate > ₹50,000
② Immovable property without consideration: Stamp duty value taxable if > ₹50,000
③ Immovable property for inadequate consideration: If stamp duty value exceeds consideration by > ₹50,000, the difference is taxable
④ Movable property without consideration: FMV taxable if aggregate > ₹50,000
⑤ Movable property for inadequate consideration: If FMV exceeds consideration by > ₹50,000, difference is taxable
Fully Exempt Gifts — NO tax regardless of amount:
• From relatives: spouse, brother/sister, brother/sister of spouse, brother/sister of either parent, any lineal ascendant/descendant of the individual, any lineal ascendant/descendant of the spouse, spouse of any of the above
• On marriage of the individual (only the person getting married)
• Under a will or inheritance
• In contemplation of death of the donor
• From any local authority, registered trust/institution u/s 12A/12AA, hospital, educational institution
• By way of transaction not regarded as transfer u/s 47 (certain mergers, demergers, etc.)
Movable property includes: shares, securities, jewellery, archaeological collections, drawings, paintings, sculptures, any work of art, bullion, VDA.
Threshold: Aggregate value exceeding ₹50,000 in a financial year. If exceeded, the ENTIRE amount is taxable (not just excess over ₹50K). If total ≤₹50K → fully exempt.
Three scenarios:
① Money received without consideration: Taxable if aggregate > ₹50,000
② Immovable property without consideration: Stamp duty value taxable if > ₹50,000
③ Immovable property for inadequate consideration: If stamp duty value exceeds consideration by > ₹50,000, the difference is taxable
④ Movable property without consideration: FMV taxable if aggregate > ₹50,000
⑤ Movable property for inadequate consideration: If FMV exceeds consideration by > ₹50,000, difference is taxable
Fully Exempt Gifts — NO tax regardless of amount:
• From relatives: spouse, brother/sister, brother/sister of spouse, brother/sister of either parent, any lineal ascendant/descendant of the individual, any lineal ascendant/descendant of the spouse, spouse of any of the above
• On marriage of the individual (only the person getting married)
• Under a will or inheritance
• In contemplation of death of the donor
• From any local authority, registered trust/institution u/s 12A/12AA, hospital, educational institution
• By way of transaction not regarded as transfer u/s 47 (certain mergers, demergers, etc.)
Movable property includes: shares, securities, jewellery, archaeological collections, drawings, paintings, sculptures, any work of art, bullion, VDA.
Gift Details
For inadequate consideration cases
Gift Tax Computation
Family Pension — Section 93(iia)
Pension received by family after employee's death. Taxed under Other Sources (NOT Salary).
📐 Rule: Family Pension u/s 56(2)(ii) & 57(iia)
Definition: Regular income received by the spouse or children (or nominated family member) of a deceased employee from the employer or pension fund. This is categorically NOT salary.
Deduction u/s 57(iia): Lower of ₹25,000 or 1/3rd of family pension received. This is a flat statutory deduction — no proof required.
Distinction from regular pension:
• Employee's own pension (received by the retired employee themselves) → taxed as Salary u/s 17(1)(ii). Gets standard deduction u/s 58(2).
• Family pension (received by family after death) → taxed as Other Sources. Gets 57(iia) deduction.
• Not the same deduction — standard deduction ≠ 57(iia) deduction. Different sections, different heads.
Commuted family pension: If a lump sum is received by the family in commutation of family pension, it is fully exempt u/s 10(10A)(i) (same as commuted pension for govt employees).
Both regimes: Family pension deduction u/s 57(iia) is available in both Old and New regimes. This is one of the few deductions allowed in the New Regime.
Deduction u/s 57(iia): Lower of ₹25,000 or 1/3rd of family pension received. This is a flat statutory deduction — no proof required.
Distinction from regular pension:
• Employee's own pension (received by the retired employee themselves) → taxed as Salary u/s 17(1)(ii). Gets standard deduction u/s 58(2).
• Family pension (received by family after death) → taxed as Other Sources. Gets 57(iia) deduction.
• Not the same deduction — standard deduction ≠ 57(iia) deduction. Different sections, different heads.
Commuted family pension: If a lump sum is received by the family in commutation of family pension, it is fully exempt u/s 10(10A)(i) (same as commuted pension for govt employees).
Both regimes: Family pension deduction u/s 57(iia) is available in both Old and New regimes. This is one of the few deductions allowed in the New Regime.
Fully exempt if from govt. Private: same rules as commuted pension.
Family Pension Computation
Rental Income (Other than House Property)
Rental from machinery, plant, furniture, or composite rent (building + assets inseparable).
📐 Rule: Rental Income u/s 56(2)(ii)/(iii) & 57
When taxed here (not under HP):
• Letting out of machinery, plant, or furniture (not building) — always "Other Sources" unless it's a business activity
• Composite letting — building + machinery/furniture as inseparable package — taxed under "Other Sources" (if not a business)
• Sub-letting — rental income from sub-let property (you're not the owner) — "Other Sources"
Deductions u/s 57:
• Depreciation on machinery/furniture/plant at prescribed WDV rates
• Repairs and insurance for the let-out asset
• Any other expense wholly and exclusively incurred to earn such rental income
TDS u/s 393(T1-Rent): Tenant deducts TDS at 2% (plant/machinery/equipment) or 10% (land/building/furniture) if annual rent > ₹2,40,000.
• Letting out of machinery, plant, or furniture (not building) — always "Other Sources" unless it's a business activity
• Composite letting — building + machinery/furniture as inseparable package — taxed under "Other Sources" (if not a business)
• Sub-letting — rental income from sub-let property (you're not the owner) — "Other Sources"
Deductions u/s 57:
• Depreciation on machinery/furniture/plant at prescribed WDV rates
• Repairs and insurance for the let-out asset
• Any other expense wholly and exclusively incurred to earn such rental income
TDS u/s 393(T1-Rent): Tenant deducts TDS at 2% (plant/machinery/equipment) or 10% (land/building/furniture) if annual rent > ₹2,40,000.
Rental Income Computation
Share Buyback Income — w.e.f. 1/10/2024
From 1 Oct 2024, buyback proceeds taxed as dividend (Other Sources) in shareholder's hands.
📐 Rule: Share Buyback — Finance Act 2024 Amendment
Old Rule (before 1/10/2024): Buyback tax was paid by the company at 20%+surcharge. Shareholder received amount tax-free. No tax on shareholder's hands.
New Rule (w.e.f. 1/10/2024): Buyback proceeds are now taxed as deemed dividend in the shareholder's hands at slab rates under "Other Sources." Company no longer pays buyback tax.
Computation:
• Buyback consideration received = gross income
• Less: Cost of acquisition of shares tendered (proportional to shares bought back)
• Net amount = taxable as "Income from Other Sources"
Capital loss adjustment: The cost of shares tendered in buyback is treated as a deemed capital loss and can be set off against capital gains (STCG/LTCG based on holding period). This prevents double taxation.
TDS: Company deducts TDS at 10% u/s 194 on the buyback consideration (treated as dividend).
New Rule (w.e.f. 1/10/2024): Buyback proceeds are now taxed as deemed dividend in the shareholder's hands at slab rates under "Other Sources." Company no longer pays buyback tax.
Computation:
• Buyback consideration received = gross income
• Less: Cost of acquisition of shares tendered (proportional to shares bought back)
• Net amount = taxable as "Income from Other Sources"
Capital loss adjustment: The cost of shares tendered in buyback is treated as a deemed capital loss and can be set off against capital gains (STCG/LTCG based on holding period). This prevents double taxation.
TDS: Company deducts TDS at 10% u/s 194 on the buyback consideration (treated as dividend).
Share Buyback Computation
Clubbing Provisions — Sections 96–100
Income of spouse, minor child, or other persons may be clubbed with your income.
📐 Rule: Clubbing of Income u/s 60–64
Sec 96 — Transfer of income without transfer of asset: If you transfer income from an asset to another person (but retain ownership), the income is still taxable in YOUR hands.
Sec 97 — Revocable transfer of assets: Income from assets transferred under a revocable arrangement is clubbed with the transferor's income.
Sec 100(1)(ii) — Spouse: If you transfer any asset (other than house property) to your spouse without adequate consideration, income from that asset is clubbed in YOUR income. Exceptions: if it's in connection with an agreement to live apart; or if the transferred asset is invested and earns income — only the first-level income is clubbed, not income on reinvested income ("income on income" belongs to the spouse).
Sec 100(1)(iv) — Son's wife: Asset transferred to son's wife without adequate consideration → income clubbed with transferor.
Sec 100(1A) — Minor child: Income earned by a minor child is clubbed with the parent having higher total income. Exemption: ₹1,500 per child per year. Exception: income from manual work or from activity involving the minor's own skill/talent is NOT clubbed.
Practical examples:
• Husband gifts ₹10L to wife → she invests in FD → FD interest is clubbed with husband's income
• Parent invests in minor child's name → investment returns clubbed with higher-earning parent
• But: wife earns salary from a job → NOT clubbed (it's her independent income, not from transferred asset)
Sec 97 — Revocable transfer of assets: Income from assets transferred under a revocable arrangement is clubbed with the transferor's income.
Sec 100(1)(ii) — Spouse: If you transfer any asset (other than house property) to your spouse without adequate consideration, income from that asset is clubbed in YOUR income. Exceptions: if it's in connection with an agreement to live apart; or if the transferred asset is invested and earns income — only the first-level income is clubbed, not income on reinvested income ("income on income" belongs to the spouse).
Sec 100(1)(iv) — Son's wife: Asset transferred to son's wife without adequate consideration → income clubbed with transferor.
Sec 100(1A) — Minor child: Income earned by a minor child is clubbed with the parent having higher total income. Exemption: ₹1,500 per child per year. Exception: income from manual work or from activity involving the minor's own skill/talent is NOT clubbed.
Practical examples:
• Husband gifts ₹10L to wife → she invests in FD → FD interest is clubbed with husband's income
• Parent invests in minor child's name → investment returns clubbed with higher-earning parent
• But: wife earns salary from a job → NOT clubbed (it's her independent income, not from transferred asset)
Clubbed Income Details
Exempt: ₹1,500. Only income from transferred assets or passive income.
Clubbing Computation
Profits & Gains of Business or Profession
Sections 26–66 — Head 3 of Income | Comprehensive Module
3 Overview — Sections 26–66
Income from any business or profession carried on by the assessee during the tax year. This head covers trade, commerce, manufacturing, services, freelancing, and all professional activities. The computation follows: Revenue (Sec 26) − Allowable Expenses (Sec 28-35) − Specific Disallowances (Sec 38, 40A, 43B) = Taxable Business Income.
| Sections | What They Cover |
|---|---|
| Sec 26 | Charging section — what income is taxable under this head |
| Sec 27 | Computation method — Revenue minus allowable expenses |
| Sec 30–36 | Specific deductions — rent, repairs, insurance, depreciation, bad debts, EPF/gratuity contributions, etc. |
| Sec 35 | General deduction — any expenditure not covered above, wholly & exclusively for business |
| Sec 38 | Amounts NOT deductible — tax paid, TDS default, partner salary/interest (for firms) |
| Sec 38A | Cash payments >₹10K disallowed, unreasonable payments to relatives |
| Sec 41 | Payment basis — GST, PF, bonus, leave encashment deductible only on actual payment |
| Sec 30 | Depreciation on tangible & intangible assets |
| Sec 62 | Books of accounts — when mandatory to maintain |
| Sec 63 | Tax audit — when mandatory (₹1Cr/₹10Cr business, ₹50L/₹75L profession) |
| Sec 58 | Presumptive taxation — small business (turnover ≤₹2Cr/₹3Cr) |
| Sec 58A | Presumptive taxation — professionals (receipts ≤₹50L/₹75L) |
| Sec 96 | Presumptive taxation — goods vehicle owners (≤10 vehicles) |
Choose your path: Most small businesses/professionals use Presumptive Taxation (simpler). Larger businesses use Regular P&L (detailed). Select the appropriate calculator tab below.
Which computation method applies to you?
Answer these questions to find the right calculator.
Recommendation
Presumptive Business Income — Section 94
For small businesses with turnover ≤₹2Cr (₹3Cr if cash ≤5%). Declare 6% (digital) / 8% (cash) as income. No books or audit needed.
📐 Rule: Section 58 — Presumptive Business Income
Eligible: Resident Individual, HUF, or Partnership Firm (not LLP) engaged in any business.
NOT eligible: Companies, LLPs, persons in agency business, commission/brokerage earners, persons claiming deduction u/s 10A/10AA/10B/10BA, or those covered by Sec 96/44BB/44BBA/44BBB.
Turnover limit: ≤₹2,00,00,000. Enhanced to ₹3,00,00,000 if cash receipts ≤5% of total gross receipts + cash payments ≤5% of total payments.
Deemed income: 8% of gross turnover (cash receipts) + 6% of gross turnover (digital receipts — cheque, bank transfer, UPI, card). Can declare higher.
No separate expense deductions: All expenses including depreciation, salary, rent, etc. are deemed to be already included in the 6%/8%. No Sec 28-36 deductions allowed.
Partner's salary/interest: In case of a firm, partner salary and interest are deemed already deducted. No separate deduction for the firm. Partners report their share.
Books & Audit: NOT required if declaring at or above 6%/8%. If declaring lower AND income exceeds basic exemption → maintain books u/s 44AA and get audit u/s 44AB.
5-year lock-in: Once you opt for 58, must continue for 5 consecutive years. If you opt out before 5 years, ineligible for 58 for the next 5 years + must maintain books and get audit.
Advance tax: Entire advance tax payable by 15th March (not quarterly instalments). Interest u/s 234B/234C if not paid.
Both Old & New regime: Available in both. ITR-4 (Sugam) used for filing.
NOT eligible: Companies, LLPs, persons in agency business, commission/brokerage earners, persons claiming deduction u/s 10A/10AA/10B/10BA, or those covered by Sec 96/44BB/44BBA/44BBB.
Turnover limit: ≤₹2,00,00,000. Enhanced to ₹3,00,00,000 if cash receipts ≤5% of total gross receipts + cash payments ≤5% of total payments.
Deemed income: 8% of gross turnover (cash receipts) + 6% of gross turnover (digital receipts — cheque, bank transfer, UPI, card). Can declare higher.
No separate expense deductions: All expenses including depreciation, salary, rent, etc. are deemed to be already included in the 6%/8%. No Sec 28-36 deductions allowed.
Partner's salary/interest: In case of a firm, partner salary and interest are deemed already deducted. No separate deduction for the firm. Partners report their share.
Books & Audit: NOT required if declaring at or above 6%/8%. If declaring lower AND income exceeds basic exemption → maintain books u/s 44AA and get audit u/s 44AB.
5-year lock-in: Once you opt for 58, must continue for 5 consecutive years. If you opt out before 5 years, ineligible for 58 for the next 5 years + must maintain books and get audit.
Advance tax: Entire advance tax payable by 15th March (not quarterly instalments). Interest u/s 234B/234C if not paid.
Both Old & New regime: Available in both. ITR-4 (Sugam) used for filing.
Taxed at 8%
Taxed at 6%
If actual profit is higher, enter here. Must be ≥ presumptive amount.
Computation
Presumptive Professional Income — Section 59
For specified professionals with gross receipts ≤₹50L (₹75L if cash ≤5%). Income presumed at 50%.
📐 Rule: Section 59 — Presumptive Professional Income
Eligible: Resident Individual or Partnership Firm (not LLP) in specified professions u/s 44AA(1):
• Legal (advocate, solicitor) • Medical (doctor, dentist, surgeon, physiotherapist) • Engineering • Architecture • Accountancy (CA, CMA, CS) • Technical consultancy • Interior decoration • Authorised representative • Film artist • Information technology • Company secretary • Any other profession notified
Receipts limit: ≤₹50,00,000. Enhanced to ₹75,00,000 if cash receipts ≤5%.
Deemed income: 50% of gross receipts. Can declare higher, but not lower without maintaining books + audit.
No separate deductions: All expenses, depreciation included in the 50%. No Sec 28-36 deductions.
No 5-year lock-in: Unlike 58, you can opt in/out freely each year.
Books & Audit: NOT required if declaring ≥50%. If declaring lower AND income > basic exemption → books u/s 44AA + audit u/s 44AB mandatory.
Advance tax: Entire amount by 15th March.
ITR: ITR-4 (Sugam). If opting out → ITR-3.
• Legal (advocate, solicitor) • Medical (doctor, dentist, surgeon, physiotherapist) • Engineering • Architecture • Accountancy (CA, CMA, CS) • Technical consultancy • Interior decoration • Authorised representative • Film artist • Information technology • Company secretary • Any other profession notified
Receipts limit: ≤₹50,00,000. Enhanced to ₹75,00,000 if cash receipts ≤5%.
Deemed income: 50% of gross receipts. Can declare higher, but not lower without maintaining books + audit.
No separate deductions: All expenses, depreciation included in the 50%. No Sec 28-36 deductions.
No 5-year lock-in: Unlike 58, you can opt in/out freely each year.
Books & Audit: NOT required if declaring ≥50%. If declaring lower AND income > basic exemption → books u/s 44AA + audit u/s 44AB mandatory.
Advance tax: Entire amount by 15th March.
ITR: ITR-4 (Sugam). If opting out → ITR-3.
If actual profit > 50%, enter here.
Computation
Goods Vehicle Owners — Section 96
For transporters owning ≤10 goods vehicles. Fixed income per vehicle per month.
📐 Rule: Section 60 — Goods Vehicle Presumptive
Eligible: Any person (individual, HUF, firm, company — resident or non-resident) in the business of plying, hiring, or leasing goods carriages. Must own ≤10 goods vehicles at any time during the year.
Deemed income:
• Heavy goods vehicle (≥12 MT): ₹1,000 per ton of gross vehicle weight per month
• Other goods vehicle (<12 MT): ₹7,500 per vehicle per month
• Part of month = full month
No separate deductions: All expenses including depreciation deemed included. No Sec 28-36 deductions.
Declaring lower: Allowed, but must maintain books u/s 44AA + audit u/s 44AB irrespective of income level.
No 5-year lock-in. Any person eligible — not limited to residents.
Deemed income:
• Heavy goods vehicle (≥12 MT): ₹1,000 per ton of gross vehicle weight per month
• Other goods vehicle (<12 MT): ₹7,500 per vehicle per month
• Part of month = full month
No separate deductions: All expenses including depreciation deemed included. No Sec 28-36 deductions.
Declaring lower: Allowed, but must maintain books u/s 44AA + audit u/s 44AB irrespective of income level.
No 5-year lock-in. Any person eligible — not limited to residents.
Computation
Regular P&L Computation — Sections 26-41
For businesses/professionals NOT using presumptive scheme. Full expense computation with allowed deductions and disallowances.
📐 Rule: Regular Computation — Sec 26-29, 30-37, 40, 40A, 43B
Section 26 — Income chargeable: Profits/gains from business, compensation for contract termination, export incentives (MEIS/SEIS/duty drawback), Keyman insurance proceeds, cash equivalent of benefits, value of any perquisite from business, income from speculative transactions, gifts from clients >₹50K.
Sections 30-36 — Specifically allowed deductions:
30: Rent, rates, taxes, repairs of business premises
31: Repairs & insurance of machinery/plant/furniture
32: Depreciation (tangible & intangible — see Depreciation tab)
35: Scientific research expenditure (100%/150% deduction)
36(1)(i): Insurance of stock & stores
36(1)(ii): Insurance on employee health
36(1)(iii): Interest on borrowed capital for business
36(1)(iv): Employer PF/super contribution
36(1)(v): Employer gratuity fund contribution
36(1)(va): Employee PF/ESI (deductible only if paid before ITR due date — Sec 41 amendment)
36(1)(vii): Bad debts written off (in respect of which income was previously recognised)
36(1)(viii): Reserve for specified business (scheduled bank/co-op/housing finance)
Section 35 — General deduction: Any expenditure not capital, not personal, wholly and exclusively for business purpose — allowed as deduction. Includes employee salaries, travel, marketing, professional fees, office expenses, etc. Fines/penalties for breach of law are NOT allowed.
Disallowed (Sec 38/40A/43B) — see Disallowed Expenses tab
Sections 30-36 — Specifically allowed deductions:
30: Rent, rates, taxes, repairs of business premises
31: Repairs & insurance of machinery/plant/furniture
32: Depreciation (tangible & intangible — see Depreciation tab)
35: Scientific research expenditure (100%/150% deduction)
36(1)(i): Insurance of stock & stores
36(1)(ii): Insurance on employee health
36(1)(iii): Interest on borrowed capital for business
36(1)(iv): Employer PF/super contribution
36(1)(v): Employer gratuity fund contribution
36(1)(va): Employee PF/ESI (deductible only if paid before ITR due date — Sec 41 amendment)
36(1)(vii): Bad debts written off (in respect of which income was previously recognised)
36(1)(viii): Reserve for specified business (scheduled bank/co-op/housing finance)
Section 35 — General deduction: Any expenditure not capital, not personal, wholly and exclusively for business purpose — allowed as deduction. Includes employee salaries, travel, marketing, professional fees, office expenses, etc. Fines/penalties for breach of law are NOT allowed.
Disallowed (Sec 38/40A/43B) — see Disallowed Expenses tab
Revenue (Sec 26)
Cost of Goods Sold (if trading/manufacturing)
Allowable Business Expenses (Sec 28-35)
Compute in Depreciation tab → enter result here
Disallowed Amounts (auto-add back)
Compute in Disallowed Expenses tab → enter here
P&L Computation
Depreciation — Section 30
Written Down Value (WDV) method. Rates prescribed in Rule 5. Not available in presumptive schemes or new regime.
📐 Rule: Section 30 — Depreciation
Method: Written Down Value (WDV) — (Opening WDV + Additions − Disposals) × Rate%.
Half-year rule: If asset put to use for less than 180 days in the year → only 50% of normal depreciation.
Additional depreciation (Sec 30(1)(iia)): 20% extra on new plant & machinery (manufacturing). Not available for second-hand, vehicles, office equipment, or buildings.
New Regime (202): Depreciation u/s 32 is NOT allowed. Only old regime gets depreciation deduction.
Unabsorbed depreciation: If depreciation exceeds income → carry forward unlimited years against any head (even salary).
Half-year rule: If asset put to use for less than 180 days in the year → only 50% of normal depreciation.
Additional depreciation (Sec 30(1)(iia)): 20% extra on new plant & machinery (manufacturing). Not available for second-hand, vehicles, office equipment, or buildings.
New Regime (202): Depreciation u/s 32 is NOT allowed. Only old regime gets depreciation deduction.
Unabsorbed depreciation: If depreciation exceeds income → carry forward unlimited years against any head (even salary).
| ASSET BLOCK | RATE |
|---|---|
| Buildings — residential | 5% |
| Buildings — non-residential | 10% |
| Furniture & Fittings | 10% |
| Plant & Machinery — general | 15% |
| Motor vehicles & aeroplane | 15% |
| Computers, software, data storage | 40% |
| Intangible assets (goodwill, patents, trademarks, licences, know-how, copyrights) | 25% |
| Pollution control / energy saving | 40% |
Depreciation Computation
Disallowed Expenses — Sections 40, 40A & 43B
Expenses debited in P&L but not allowed as tax deduction. Must be added back to income.
📐 Rule: Disallowed Expenses — Complete List
Section 38(a)(i): Any interest, royalty, fees paid to non-resident WITHOUT TDS deduction → disallowed (100%).
Section 38(a)(ia): Any payment to resident on which TDS was not deducted or not deposited → 30% disallowed.
Section 38(a)(ii): Income tax, wealth tax paid → NOT deductible (these are personal taxes, not business expenses).
Section 38(a)(v): Tax paid on perquisites of employees u/s 10(10CC) → NOT deductible.
Section 38(b): Partner salary/interest exceeding limits in Sec 38(b)(v) — for firms only.
Section 38A(2): Unreasonable/excessive payments to relatives or associated persons → excess portion disallowed.
Section 38A(3): Cash payment exceeding ₹10,000 to a single person in a day → entirely disallowed. Exception: ₹35,000 for transporters. Exception: payments mandated by banking regulations, or in exceptional/unavoidable circumstances.
Section 35(1) proviso: Fines, penalties for violation of law → NOT deductible. CSR expenditure → NOT deductible (compulsory under Companies Act, not voluntary).
Section 41 — Payment basis: The following are deductible ONLY in the year of actual payment (not just accrual):
• GST / Excise / Customs duties
• Employer PF / ESI contribution
• Employee PF/ESI (must be paid before ITR due date — Sec 34(1)(va) read with 43B)
• Bonus / Commission payable
• Leave encashment provision
• Interest on term loan from financial institutions (if converted to fresh loan)
• Payment to MSME suppliers (must be paid within 45 days per MSMED Act — else disallowed even on payment basis)
Section 38(a)(ia): Any payment to resident on which TDS was not deducted or not deposited → 30% disallowed.
Section 38(a)(ii): Income tax, wealth tax paid → NOT deductible (these are personal taxes, not business expenses).
Section 38(a)(v): Tax paid on perquisites of employees u/s 10(10CC) → NOT deductible.
Section 38(b): Partner salary/interest exceeding limits in Sec 38(b)(v) — for firms only.
Section 38A(2): Unreasonable/excessive payments to relatives or associated persons → excess portion disallowed.
Section 38A(3): Cash payment exceeding ₹10,000 to a single person in a day → entirely disallowed. Exception: ₹35,000 for transporters. Exception: payments mandated by banking regulations, or in exceptional/unavoidable circumstances.
Section 35(1) proviso: Fines, penalties for violation of law → NOT deductible. CSR expenditure → NOT deductible (compulsory under Companies Act, not voluntary).
Section 41 — Payment basis: The following are deductible ONLY in the year of actual payment (not just accrual):
• GST / Excise / Customs duties
• Employer PF / ESI contribution
• Employee PF/ESI (must be paid before ITR due date — Sec 34(1)(va) read with 43B)
• Bonus / Commission payable
• Leave encashment provision
• Interest on term loan from financial institutions (if converted to fresh loan)
• Payment to MSME suppliers (must be paid within 45 days per MSMED Act — else disallowed even on payment basis)
Identify Disallowed Amounts
Disallowed Expenses Summary
Partner Income from Firm — Schedules (Exempt)(2A), 40(b)
Partner's share of profit is exempt. Salary/interest from firm is taxable under Business head.
📐 Rule: Partner's Income — Second Schedule (Firm Profit), 28(v), 40(b)
Share of profit (Second Schedule (Firm Profit)): Partner's share of profit from a firm is EXEMPT from tax in the partner's hands. The firm is already taxed at 30% flat rate. No clubbing, no double taxation.
Salary/Remuneration (Sec 26(v)): Salary, bonus, commission received by a partner from the firm is taxable as Business Income in the partner's hands. The firm can deduct it subject to Sec 38(b) limits.
Section 38(b) — Limits for firm's deduction:
• Interest on capital: Max 12% simple interest p.a. Excess not deductible by firm.
• Salary/remuneration: Allowed only to working partners, as per deed. Limits:
First ₹6,00,000 of book profit → ₹3,00,000 or 90% of book profit (whichever is higher)
On balance book profit → 60%
Interest from firm (Sec 26(v)): Interest on capital received by partner is also taxable as Business Income.
TDS u/s 393(T1-Partner): From Tax Year 2026-27, firm must deduct 10% TDS on payments to partners (salary, interest, bonus, commission) >₹20,000/year. 🆕
Salary/Remuneration (Sec 26(v)): Salary, bonus, commission received by a partner from the firm is taxable as Business Income in the partner's hands. The firm can deduct it subject to Sec 38(b) limits.
Section 38(b) — Limits for firm's deduction:
• Interest on capital: Max 12% simple interest p.a. Excess not deductible by firm.
• Salary/remuneration: Allowed only to working partners, as per deed. Limits:
First ₹6,00,000 of book profit → ₹3,00,000 or 90% of book profit (whichever is higher)
On balance book profit → 60%
Interest from firm (Sec 26(v)): Interest on capital received by partner is also taxable as Business Income.
TDS u/s 393(T1-Partner): From Tax Year 2026-27, firm must deduct 10% TDS on payments to partners (salary, interest, bonus, commission) >₹20,000/year. 🆕
Partner Income Breakdown
Books of Accounts & Tax Audit — Sections 44AA, 44AB
Check if you need to maintain books and/or get tax audit done.
📐 Rule: Books of Accounts (Sec 62) & Tax Audit (Sec 63)
Section 62 — Books of Accounts:
• Specified professions: Mandatory if gross receipts >₹1,50,000 in any of 3 preceding years (or likely to exceed in current year)
• Other businesses: If income >₹2,50,000 or turnover >₹25,00,000 in any of 3 preceding years
• Presumptive (58/ADA/AE): NOT required if declaring income at or above presumptive rates
Section 63 — Tax Audit:
• Business: Turnover >₹1,00,00,000 (₹1 Crore). Enhanced to ₹10,00,00,000 (₹10 Crore) if cash receipts ≤5% AND cash payments ≤5%.
• Profession: Gross receipts >₹50,00,000. Enhanced to ₹75,00,000 if cash receipts ≤5%.
• 58 opted out: If declared lower than 8%/6% AND income > basic exemption → audit mandatory.
• 58A declared lower: If declared < 50% AND income > basic exemption → audit mandatory.
• 60 declared lower: Audit mandatory regardless of income.
Forms: Form 26 (if already audited under another law) OR Form 26 (others).
Due date: 30th September of tax year (if requiring audit). ITR due date also 31st October.
Penalty for non-audit: 0.5% of turnover or ₹1,50,000 — whichever is less. Plus Sec 251B prosecution possible.
• Specified professions: Mandatory if gross receipts >₹1,50,000 in any of 3 preceding years (or likely to exceed in current year)
• Other businesses: If income >₹2,50,000 or turnover >₹25,00,000 in any of 3 preceding years
• Presumptive (58/ADA/AE): NOT required if declaring income at or above presumptive rates
Section 63 — Tax Audit:
• Business: Turnover >₹1,00,00,000 (₹1 Crore). Enhanced to ₹10,00,00,000 (₹10 Crore) if cash receipts ≤5% AND cash payments ≤5%.
• Profession: Gross receipts >₹50,00,000. Enhanced to ₹75,00,000 if cash receipts ≤5%.
• 58 opted out: If declared lower than 8%/6% AND income > basic exemption → audit mandatory.
• 58A declared lower: If declared < 50% AND income > basic exemption → audit mandatory.
• 60 declared lower: Audit mandatory regardless of income.
Forms: Form 26 (if already audited under another law) OR Form 26 (others).
Due date: 30th September of tax year (if requiring audit). ITR due date also 31st October.
Penalty for non-audit: 0.5% of turnover or ₹1,50,000 — whichever is less. Plus Sec 251B prosecution possible.
Books & Audit Requirement
Exempt Income & Agricultural Income
Schedules (Exempt) — Income fully exempt from tax + Agricultural Income partial integration
§10 Exempt Income — Key Provisions
Schedules (Exempt) lists income that shall NOT be included in Total Income. These are completely tax-free — they don't even enter the GTI computation.
| Section | Income Type | Exempt Limit |
|---|---|---|
| 10(1) | Agricultural Income | Fully exempt (but used for rate calculation if >₹5K) |
| 10(2) | Share of profit from partnership firm | Fully exempt (firm already taxed) |
| 10(10) | Gratuity — Government employees | Fully exempt |
| 10(10A) | Commuted Pension — Government | Fully exempt |
| 10(10AA) | Leave Encashment — Govt on retirement | Fully exempt |
| 10(10C) | VRS Compensation | Up to ₹5,00,000 |
| 10(10D) | LIC / Insurance maturity proceeds | Exempt if premium ≤10% of sum assured (5% for policies after 1/4/2012) |
| 10(11) | PPF Interest & Maturity | Fully exempt (EEE status) |
| 10(11A) | Sukanya Samriddhi Account | Fully exempt (EEE status) |
| First Schedule (HRA) | HRA Exemption | Least of 3 conditions (Old Regime only) |
| 10(5) | Leave Travel Allowance | 2 journeys in 4-year block (Old Regime only) |
| 10(16) | Scholarships | Fully exempt |
| 10(34) | Dividend from Indian company (pre FY 2020-21) | Now taxable — exemption removed |
| 10(37) | Capital gain on compulsory acquisition of agricultural land | Fully exempt |
| 10(38) | LTCG on equity (pre 1/4/2018) | Replaced by Sec 198 (now taxable above ₹1.25L) |
Agricultural Income — Partial Integration Calculator
Agricultural income is exempt u/s 10(1), but if agri income >₹5,000 AND non-agri income exceeds basic exemption, the "partial integration" method applies to determine the tax rate on non-agri income.
📐 Rule: Agricultural Income & Partial Integration
Step 1: Compute tax on (Non-Agri Income + Agri Income) as if it were total income → Tax A
Step 2: Compute tax on (Agri Income + Basic Exemption Limit) → Tax B
Step 3: Tax payable = Tax A − Tax B
Effect: The agri income pushes your non-agri income into a higher slab bracket, resulting in higher effective tax on non-agri income. This prevents people from splitting business income as agricultural income to pay lower tax.
Applies only if: Agricultural income > ₹5,000 AND Non-agricultural total income > basic exemption limit.
What is agricultural income? Income from cultivation, land revenue, rent from agricultural land, income from farmhouse, income from nursery, income from saplings/seedlings. Agriculture on urban land — can still be exempt. Sale of agricultural land in rural area — not even a capital asset.
New Regime: Partial integration method applies in new regime too (using new regime slabs).
State tax: Some states levy agricultural income tax separately.
Step 2: Compute tax on (Agri Income + Basic Exemption Limit) → Tax B
Step 3: Tax payable = Tax A − Tax B
Effect: The agri income pushes your non-agri income into a higher slab bracket, resulting in higher effective tax on non-agri income. This prevents people from splitting business income as agricultural income to pay lower tax.
Applies only if: Agricultural income > ₹5,000 AND Non-agricultural total income > basic exemption limit.
What is agricultural income? Income from cultivation, land revenue, rent from agricultural land, income from farmhouse, income from nursery, income from saplings/seedlings. Agriculture on urban land — can still be exempt. Sale of agricultural land in rural area — not even a capital asset.
New Regime: Partial integration method applies in new regime too (using new regime slabs).
State tax: Some states levy agricultural income tax separately.
Partial Integration Computation
Exempt Income Checker
Enter your various receipts to check which ones are exempt under Schedules (Exempt).
Exempt Income Summary
Set-Off & Carry Forward of Losses
Sections 108–121 — Rules for adjusting losses against income
§70-80 Complete Set-Off Rules
After computing income under all 5 heads, losses from one source/head are adjusted against income from another — this is set-off. Unabsorbed losses are carried forward.
Intra-Head Set-Off (Sec 108)
Loss from one source can be set off against income from another source under the same head.
Example: Loss from one house property can be set off against income from another house property.
Exceptions: LTCL cannot be set off against STCG. Speculative loss cannot be set off against non-speculative business. Loss from specified business u/s 35AD only against specified business.
Example: Loss from one house property can be set off against income from another house property.
Exceptions: LTCL cannot be set off against STCG. Speculative loss cannot be set off against non-speculative business. Loss from specified business u/s 35AD only against specified business.
Inter-Head Set-Off (Sec 109)
| Loss Head | Can Set Off Against | Cannot Set Off Against |
|---|---|---|
| House Property Loss | Any head (max ₹2L) — Old Regime | New Regime: NO inter-head (only intra-head HP) |
| Business Loss (non-speculative) | Any head EXCEPT Salary | Salary income |
| Speculative Business Loss | Only speculative business income | Everything else |
| Capital Loss (STCL) | STCG + LTCG only | Salary, HP, Business, Other Sources |
| Capital Loss (LTCL) | LTCG only | STCG, Salary, HP, Business, Other Sources |
| Race Horse / VDA Loss | Same activity only / Nothing (VDA) | Everything |
Carry Forward (Sec 72–80)
| Loss Type | C/F Period | Set Off Against | File on Time? |
|---|---|---|---|
| HP Loss | 8 Tax Years | HP income only | Not required |
| Business Loss (non-spec) | 8 Tax Years | Any head except Salary | Yes — mandatory |
| Speculative Loss | 4 AYs | Speculative income only | Yes |
| Specified Business (35AD) | Unlimited | Specified business income only | Yes |
| Capital Loss (STCL) | 8 Tax Years | STCG + LTCG | Yes |
| Capital Loss (LTCL) | 8 Tax Years | LTCG only | Yes |
| Unabsorbed Depreciation | Unlimited | Any head (even Salary) | Not required |
| Race Horse Loss | 4 AYs | Race horse income only | Yes |
GTI Set-Off Calculator
Enter income/loss from each head to compute Gross Total Income after all set-offs.
📐 Rule: Order of Set-Off
Step 1: Intra-head set-off (within same head — e.g., loss from one HP against income from another HP)
Step 2: Inter-head set-off (loss from one head against income of another head, subject to restrictions)
Step 3: Brought-forward losses from earlier years
Step 4: Sum of all adjusted heads = Gross Total Income (GTI)
Important: Must file ITR within due date u/s 139(1) to carry forward losses (except HP loss and unabsorbed depreciation).
Step 2: Inter-head set-off (loss from one head against income of another head, subject to restrictions)
Step 3: Brought-forward losses from earlier years
Step 4: Sum of all adjusted heads = Gross Total Income (GTI)
Important: Must file ITR within due date u/s 139(1) to carry forward losses (except HP loss and unabsorbed depreciation).
Income / (Loss) from Each Head
Enter negative for loss, e.g. -200000
Use CG Loss Set-Off tab in Head 4 first
Can only set off against HP income
Can set off against any head except salary
Step-by-Step Set-Off
Clubbing of Income
Sections 96–100 — When another person's income is added to YOUR total income
§60-64 Why Clubbing Exists
India has progressive taxation — higher income = higher tax rate. To prevent taxpayers from splitting income among family members to pay lower tax, the IT Act clubs (adds) the income of certain persons back into the transferor's income. Clubbing applies only to individuals — not firms, companies, or HUFs (though HUF transfers have specific rules).
Complete Section-by-Section Provisions
| Section | Scenario | Clubbed With |
|---|---|---|
| Sec 96 | Transfer of income WITHOUT transfer of asset | Transferor |
| Sec 97 | Revocable transfer of assets | Transferor |
| Sec 100(1)(ii) | Spouse salary/commission from a concern where individual has substantial interest (≥20% voting/profit) | Individual (the one with substantial interest) |
| Sec 100(1)(iv) | Income from asset transferred to SPOUSE without adequate consideration | Transferor-spouse |
| Sec 100(1)(vi) | Income from asset transferred to SON'S WIFE without adequate consideration | Transferor |
| Sec 100(1)(viii) | Income from asset transferred to ANY person for benefit of SPOUSE | Transferor |
| Sec 100(1A) | ALL income of MINOR CHILD (except skill/talent/manual work) | Parent with higher income. ₹1,500 exempt per child. |
| Sec 100(2) | Income from individual assets converted into HUF property without adequate consideration | Individual member who transferred |
✓ When Clubbing Does NOT Apply
Major Children (18+)
No clubbing for major (adult) children — even if assets were gifted by parents. The child files their own ITR. If minor turns 18 during the year, clubbing applies only for the minor period.
Gifts to Parents
No clubbing if you gift money to parents. Income earned by parents on invested gift is taxed in parents' hands only. This is a legitimate tax planning strategy.
Spouse's Own Earnings
Salary/business income earned by spouse from their own skill, knowledge, or independent work is NOT clubbed. Only income from transferred assets or from concern with substantial interest (without qualification).
Income on Income (Accretion)
For spouse/daughter-in-law: Only first-level income is clubbed. Income earned by re-investing that income ("income on income") belongs to the transferee. Exception: for minor child, even accretions are clubbed.
Transfer Before Marriage
Assets transferred before marriage (to would-be spouse) — clubbing does not apply. Spouse relationship must exist at both time of transfer AND time of accrual of income.
Agreement to Live Apart / Divorce
Transfer to spouse in connection with agreement to live apart — not clubbed. After divorce, income from transferred assets is not clubbed. For minor, custody determines clubbing parent.
Minor's Skill / Talent Income
Income from manual work or activity involving minor's own skill, talent, specialised knowledge — NOT clubbed. Example: child actor earnings, child prodigy coding income. But accretions (investment of those earnings) ARE clubbed.
Disabled Minor (Sec 154)
If the minor child suffers from a disability specified under Section 154, their income is NOT clubbed with parent's income — even passive income from investments.
PPF Investments
PPF interest is exempt (EEE). Even if you invest in spouse's or minor child's PPF, interest is not taxable — clubbing becomes irrelevant. Separate ₹1.5L limit per account.
Marriage Gifts
Gifts received on marriage are exempt u/s 56(2)(x). Income earned from investing marriage gifts is taxed in the recipient's hands — no clubbing with giftor.
Total Clubbed Income
Fill individual tabs, then compute here. Shows total income to be added to YOUR GTI from clubbing provisions.
Clubbing Summary
Spouse — Income from Transferred Assets (Sec 100(1)(iv))
When you transfer assets to spouse without adequate consideration, income from those assets is clubbed in YOUR income.
📐 Rule: Sec 100(1)(iv) — Transfer to Spouse
When it applies: Individual transfers asset (other than house property) to spouse — directly or indirectly — without adequate consideration.
What is clubbed: Income from the transferred asset (interest, dividends, rent, etc.). Even if asset form is changed (cash → FD → MF), clubbing follows the chain.
Partial consideration: If partial consideration is paid, income is clubbed proportionally. E.g., asset worth ₹15L transferred for ₹5L → 2/3rd of income clubbed.
Income on income: Only the first-level income is clubbed. If spouse reinvests that income and earns further returns, those belong to the spouse (not clubbed).
House property exception (Sec 25(i)): If you transfer house property to spouse without consideration, YOU are deemed owner — the property income itself is taxed in your hands (not "clubbing" but deemed ownership).
Losses too: If the transferred asset generates a loss, that loss is also clubbed in transferor's income.
What is clubbed: Income from the transferred asset (interest, dividends, rent, etc.). Even if asset form is changed (cash → FD → MF), clubbing follows the chain.
Partial consideration: If partial consideration is paid, income is clubbed proportionally. E.g., asset worth ₹15L transferred for ₹5L → 2/3rd of income clubbed.
Income on income: Only the first-level income is clubbed. If spouse reinvests that income and earns further returns, those belong to the spouse (not clubbed).
House property exception (Sec 25(i)): If you transfer house property to spouse without consideration, YOU are deemed owner — the property income itself is taxed in your hands (not "clubbing" but deemed ownership).
Losses too: If the transferred asset generates a loss, that loss is also clubbed in transferor's income.
If gift, enter 0. If sold cheap, enter amount received.
Not clubbed — belongs to spouse
Computation
Spouse — Salary from Concern with Substantial Interest (Sec 100(1)(ii))
If your spouse earns salary/commission from a concern where YOU hold substantial interest, it may be clubbed.
📐 Rule: Sec 100(1)(ii) — Substantial Interest
Substantial Interest: Holding ≥20% voting power (company) OR entitled to ≥20% profits (firm/AOP).
Clubbing applies when:
① You have substantial interest in a concern
② Your spouse receives salary/commission/fees from that concern
③ The spouse does NOT possess technical or professional knowledge/experience that justifies the remuneration
Exception: If spouse has relevant qualifications, knowledge, or experience and remuneration is commensurate with their contribution — NOT clubbed. No formal degree needed — practical experience counts.
Both spouses have substantial interest? Income is clubbed with the spouse whose total income (before clubbing) is greater.
Clubbing applies when:
① You have substantial interest in a concern
② Your spouse receives salary/commission/fees from that concern
③ The spouse does NOT possess technical or professional knowledge/experience that justifies the remuneration
Exception: If spouse has relevant qualifications, knowledge, or experience and remuneration is commensurate with their contribution — NOT clubbed. No formal degree needed — practical experience counts.
Both spouses have substantial interest? Income is clubbed with the spouse whose total income (before clubbing) is greater.
Computation
Minor Child Income — Schedules (Exempt)0(1A)
All income of minor child is clubbed with the higher-earning parent. ₹1,500 exempt per child.
📐 Rule: Sec 100(1A) — Minor Child Income
Who is "minor": Below 18 years of age. If child turns 18 during the FY, clubbing applies only for the minor period.
Clubbed with: Parent having higher total income (excluding the minor's income being clubbed). If parents are divorced/separated — clubbed with parent who maintains the child.
Exemption u/s 10(32): ₹1,500 per minor child OR actual clubbed income, whichever is less. Available for each child separately.
NOT clubbed — Skill/Talent Income: Income earned by minor from manual work, skill, talent, specialized knowledge, or experience (e.g., child actor, sports prodigy, coding) → taxed in child's own hands. BUT accretions (income from reinvesting skill income) ARE clubbed.
Disabled minor (Sec 154): Income of a disabled minor is NOT clubbed — it is assessed separately.
TDS on minor's income: TDS deducted in minor's name can be claimed by the parent in whose hands income is clubbed. File declaration to bank per Rule 37BA(2).
All income types: Interest, dividends, rental income, capital gains — everything is clubbed (except skill/manual work earnings).
Clubbed with: Parent having higher total income (excluding the minor's income being clubbed). If parents are divorced/separated — clubbed with parent who maintains the child.
Exemption u/s 10(32): ₹1,500 per minor child OR actual clubbed income, whichever is less. Available for each child separately.
NOT clubbed — Skill/Talent Income: Income earned by minor from manual work, skill, talent, specialized knowledge, or experience (e.g., child actor, sports prodigy, coding) → taxed in child's own hands. BUT accretions (income from reinvesting skill income) ARE clubbed.
Disabled minor (Sec 154): Income of a disabled minor is NOT clubbed — it is assessed separately.
TDS on minor's income: TDS deducted in minor's name can be claimed by the parent in whose hands income is clubbed. File declaration to bank per Rule 37BA(2).
All income types: Interest, dividends, rental income, capital gains — everything is clubbed (except skill/manual work earnings).
Minor Child 1
NOT clubbed — child actor, sports, etc.
Minor Child 2
Minor Child Clubbing
Son's Wife — Asset Transfer (Sec 100(1)(vi))
Asset transferred to daughter-in-law without consideration — income clubbed with transferor.
📐 Rule: Sec 100(1)(vi)/(vii) — Transfer to Son's Wife
Applies to: Assets transferred (directly or indirectly) on or after 1 June 1971 to son's wife without adequate consideration.
Clubbed with: The individual transferor (father-in-law or mother-in-law), NOT the son.
Income on income: Same as spouse — only first-level income clubbed. Reinvestment income belongs to daughter-in-law.
Note: Does NOT apply to transfers to daughter's husband. Only son's wife is covered.
Clubbed with: The individual transferor (father-in-law or mother-in-law), NOT the son.
Income on income: Same as spouse — only first-level income clubbed. Reinvestment income belongs to daughter-in-law.
Note: Does NOT apply to transfers to daughter's husband. Only son's wife is covered.
Computation
HUF Property Transfer — Schedules (Exempt)0(2)
When individual member converts personal property to HUF property.
📐 Rule: Sec 100(2) — Individual to HUF Transfer
When it applies: A member of HUF transfers their individual/separate property to the common pool of HUF — without adequate consideration or by converting it to HUF property (after 31/12/1969).
What is clubbed: Income from that property is clubbed with the individual member who transferred — not taxed as HUF income.
On partition: If HUF is later partitioned, and the property (or its proceeds) is allocated to the spouse or minor child of the transferor → Sec 100(1) clubbing kicks in additionally.
Investment of HUF funds: If the HUF invests its own accumulated income and earns returns — that's genuine HUF income, not clubbed.
Gifting to HUF: Courts have held that gifts by a member to HUF are covered by Sec 100(2). The income from gifted property is clubbed with the donor member.
Strategy: Proper documentation is key. Keep separate books for HUF showing its own corpus (ancestral property, gifts from non-members) vs individual member's transfers.
What is clubbed: Income from that property is clubbed with the individual member who transferred — not taxed as HUF income.
On partition: If HUF is later partitioned, and the property (or its proceeds) is allocated to the spouse or minor child of the transferor → Sec 100(1) clubbing kicks in additionally.
Investment of HUF funds: If the HUF invests its own accumulated income and earns returns — that's genuine HUF income, not clubbed.
Gifting to HUF: Courts have held that gifts by a member to HUF are covered by Sec 100(2). The income from gifted property is clubbed with the donor member.
Strategy: Proper documentation is key. Keep separate books for HUF showing its own corpus (ancestral property, gifts from non-members) vs individual member's transfers.
HUF Clubbing
Cross-Gifting / Indirect Transfers
When two families gift to each other's spouses to avoid clubbing — the overlapping amount is still clubbed.
📐 Rule: Cross-Gifting & Indirect Transfers
Cross-Transfer scheme: Mr. A gifts ₹8L to Mrs. B. Mr. B gifts ₹15L to Mrs. A. Both gifts without consideration. The IT Department treats the overlapping amount (₹8L) as a cross-transfer — income on ₹8L in each case is clubbed with the respective husband.
Indirect Transfer (Sec 100(1)(iv) & (vi)): Even if the transfer is routed through an intermediary (friend, relative, trust), clubbing applies if the ultimate benefit goes to spouse/son's wife. The word "indirectly" in the section is very broad.
Example: Husband gifts to wife's brother → brother buys shares → gives shares to wife. This is an indirect transfer. Income from those shares is clubbed with husband.
Loan vs Gift: If you give a loan (properly documented, with interest) to spouse instead of a gift — clubbing does NOT apply. The interest income from the loan is your income, but the investment returns in spouse's hands are hers. Key: maintain proper loan documentation.
Indirect Transfer (Sec 100(1)(iv) & (vi)): Even if the transfer is routed through an intermediary (friend, relative, trust), clubbing applies if the ultimate benefit goes to spouse/son's wife. The word "indirectly" in the section is very broad.
Example: Husband gifts to wife's brother → brother buys shares → gives shares to wife. This is an indirect transfer. Income from those shares is clubbed with husband.
Loan vs Gift: If you give a loan (properly documented, with interest) to spouse instead of a gift — clubbing does NOT apply. The interest income from the loan is your income, but the investment returns in spouse's hands are hers. Key: maintain proper loan documentation.
To estimate income subject to clubbing
Cross-Gifting Analysis
Deductions — Chapter VIII
Sections 123 to 154 — Reduce GTI to arrive at Total Income (Old Regime primarily)
§80 Chapter VIII Deductions — Complete Reference
Deductions are subtracted from GTI to arrive at Total Income. New Regime: Most deductions NOT available (only 123CD(2), 123CH, 80JJAA).
| Section | Deduction For | Max Limit | New Regime? |
|---|---|---|---|
| 123 | PPF, ELSS, LIC, EPF, NSC, tuition fees, home loan principal, SCSS, SSY, 5yr FD | ₹1,50,000 | ✗ |
| 123CC | Pension fund of LIC/other insurer | Part of ₹1.5L | ✗ |
| 123CD(1) | Employee NPS contribution | Part of ₹1.5L (10%/14% salary) | ✗ |
| 123CD(1B) | Additional NPS + NPS Vatsalya | ₹50,000 | ✗ |
| 123CD(2) | Employer NPS contribution | 14% of salary | ✓ |
| 126 | Health insurance premium — self, family, parents | ₹25K/₹50K + ₹25K/₹50K | ✗ |
| 126D | Maintenance of disabled dependent | ₹75K / ₹1.25L (severe) | ✗ |
| 126DB | Medical treatment of specified diseases | ₹40K / ₹1L (senior) | ✗ |
| 80E | Interest on education loan (higher studies) | No limit (8 yrs) | ✗ |
| 131 | Donations — 50% or 100% deduction | Varies (10% of GTI cap for some) | ✗ |
| 131G | Rent paid (if no HRA received) | ₹5,000/month | ✗ |
| 143 | Savings bank interest (non-seniors) | ₹10,000 | ✗ |
| 144 | All interest for senior citizens | ₹50,000 | ✗ |
| 154 | Person with disability | ₹75K / ₹1.25L (severe) | ✗ |
Combined limit: 123 + 123CC + 123CD(1) together capped at ₹1,50,000. 123CD(1B) is additional ₹50,000. 123CD(2) is separate (no cap, up to 14% salary). Total deduction under Chapter VIII cannot exceed GTI.
Chapter VIII Deductions Calculator (Old Regime)
Enter your investments and expenses to compute total deductions. These reduce GTI to arrive at Total Income.
Section 123 / 123CC / 123CD(1) — Combined ₹1.5L Limit
Section 123CD(1B) & 123CD(2) — NPS
Available in BOTH regimes
Section 126 — Health Insurance
Other Deductions
Enter the deductible amount (not gross donation)
Min of: rent−10% income, ₹5000/mo, 25% of income
Your GTI (from Set-Off module)
Total deductions cannot exceed GTI
Deductions Breakdown
TDS & TCS Provisions
Tax Deducted at Source / Tax Collected at Source — Tax Year 2026-27 (w.e.f. 1 April 2026)
✂️ TDS — How It Works
TDS is a "pay-as-you-earn" mechanism. The payer (employer, bank, tenant, etc.) deducts tax at the time of payment and deposits it with the government. The deductee (you) gets credit for TDS in Form 26AS / AIS. When filing ITR, you deduct TDS already paid from your total tax liability → the difference is either refund or balance payable.
Form 26AS
Annual tax statement showing all TDS/TCS deducted against your PAN. Download from TRACES / Income Tax portal.
AIS (Annual Information Statement)
Comprehensive statement with TDS, TCS, SFT (specified financial transactions), interest, dividends, and more. Available on IT portal.
Form 121 / 15H
Self-declaration to avoid TDS if your total income is below taxable limit. 15G = non-seniors, 15H = senior citizens (60+). Submit to bank/payer before FY starts.
No PAN → Higher TDS
If you don't furnish PAN to the deductor, TDS is deducted at 20% (or prescribed rate, whichever is higher) u/s 206AA.
📋 TDS Rate Chart — Tax Year 2026-27
| Section | Nature of Payment | Threshold (₹) | Rate — Indiv/HUF | Rate — Others | Dashboard Link |
|---|---|---|---|---|---|
| SALARY & EMPLOYMENT | |||||
| 192 | Salary | Basic exemption | Slab rates | — | → Salary Head |
| 192A | Premature EPF withdrawal | 50,000 | 10% | — | → PF Calculator |
| INTEREST INCOME | |||||
| 193 | Interest on Securities (debentures, govt bonds) | 10,000 | 10% | 10% | → Interest Calc |
| 393(T1) | Interest — Bank FD/RD (general) | 50,000 🆕 | 10% | 10% | → Interest Calc |
| 393(T1) | Interest — Bank (Senior Citizens) | 1,00,000 🆕 | 10% | — | → Interest Calc |
| 393(T1) | Interest — Others (non-bank) | 10,000 | 10% | 10% | |
| DIVIDENDS & MUTUAL FUNDS | |||||
| 194 | Dividends (from Indian company) | 10,000 | 10% | 10% | → Dividend Calc |
| 194K | Income from MF units (dividend) | 10,000 | 10% | 10% | → Dividend Calc |
| WINNINGS & GAMING | |||||
| 194B | Lottery, crossword, card games | 10,000 | 30% | 30% | → Winnings Calc |
| 393(T1-Gaming) | Online gaming (net winnings) | Nil | 30% | 30% | → Winnings Calc |
| 393(T1-Horse) | Horse racing winnings | 10,000 | 30% | 30% | → Winnings Calc |
| PROPERTY & RENT | |||||
| 393(T1-Prop) | Purchase of immovable property (buyer deducts) | 50,00,000 | 1% | 1% | → Property CG |
| 393(T1-Rent)B | Rent by individual/HUF (not liable to audit) | 50,000/month | 2% | — | → HP Calc |
| 194I(a) | Rent — Plant & Machinery | 50,000/mo 🆕 | 2% | 2% | → Rental (OS) |
| 194I(b) | Rent — Land, building, furniture | 50,000/mo 🆕 | 10% | 10% | → HP Calc |
| PROFESSIONAL / CONTRACTOR / COMMISSION | |||||
| 393(T1-Contr) | Contractors (single txn / aggregate FY) | 30,000 / 1,00,000 | 1% | 2% | |
| 393(T1-Comm) | Commission / Brokerage | 20,000 | 2% 🆕 | 2% 🆕 | |
| 393(T1-Prof)(a) | Fees for technical services / royalty (non-192) | 50,000 🆕 | 2% | 2% | |
| 393(T1-Prof)(b) | Professional fees (CA, lawyer, doctor, etc.) | 50,000 🆕 | 10% | 10% | |
| 393(T1-Partner) | Payment to partners (salary/interest/bonus) 🆕 | 20,000 | 10% | — | |
| INSURANCE & PENSION | |||||
| 194D | Insurance commission | 20,000 | 2% | 10% | |
| 393(T1-InsMat) | LIC / insurance maturity proceeds | 1,00,000 | 2% | 2% | |
| CAPITAL GAINS & VDA | |||||
| 393(T3-VDA) | Transfer of VDA / Crypto (buyer deducts) | 50,000 (specified) / 10,000 | 1% | 1% | → VDA Calc |
| 194LA | Compulsory acquisition of immovable property | 5,00,000 | 10% | 10% | |
| OTHER / SPECIAL | |||||
| 194M | Payment by individual/HUF (contract/commission/professional) — not liable to 393(T1-Contr)/H/J | 50,00,000 | 2% | — | |
| 393(T1-Cash) | Cash withdrawal (ITR filer) | 1,00,00,000 | 2% | 2% | |
| 393(T1-Cash) | Cash withdrawal (non-ITR filer, 3yr) | 20L: 2% / 1Cr: 5% | 2%/5% | 2%/5% | |
| 194O | E-commerce operator payments to sellers | 5,00,000 | 0.1% | 0.1% | |
| 194EE | NSS withdrawal | 2,500 | 10% | 10% | |
🆕 = Changed in Tax Year 2026-27 (Budget 2025). TDS at higher rate if PAN not furnished (20% or prescribed, whichever higher).
📋 TDS on Payments to Non-Residents — Sec 393 (Table 2 — Non-Residents)
Key Rule: Any person paying any sum to a non-resident (other than salary) which is chargeable to tax in India must deduct TDS. Rate = Domestic rate OR DTAA rate, whichever is more beneficial to the non-resident. DTAA rate does NOT require surcharge/cess. Domestic rate requires surcharge + 4% cess. Non-resident must furnish Tax Residency Certificate (TRC) + Form 10F to claim DTAA benefit.
| Section | Nature of Payment | Rate — Non-Corp | Rate — Foreign Co. | Notes |
|---|---|---|---|---|
| INTEREST | ||||
| 393(T2) | Interest (general — loans, deposits) | 20% | 20% | + surcharge + 4% cess. DTAA may reduce. |
| 393(T2-FC) | Interest — foreign currency bonds / loans (Sec 194LC) | 5% | 5% | Infrastructure debt fund, long-term bonds. |
| 393(T2-GS) | Interest — govt securities / rupee bonds to FPI | 5% | 5% | For FPIs and specified entities. |
| ROYALTY & FEES FOR TECHNICAL SERVICES (FTS) | ||||
| 393(T2) | Royalty | 10% | 10% | For agreements after 1/4/2020. DTAA may reduce/exempt. |
| 393(T2) | Fees for Technical Services (FTS) | 10% | 10% | Managerial, technical, consultancy. DTAA may exempt if no PE. |
| DIVIDENDS | ||||
| 393(T2-Div) | Dividends paid to non-resident (other than FPI) | 20% | 20% | DTAA rate often 10-15%. Need TRC. |
| 393(T2-FPI) | Income of FPI (dividends, interest, CG) | — | 20% | Foreign Portfolio Investors. |
| CAPITAL GAINS | ||||
| 393(T2) | LTCG on property (held >24 months) | 12.5% | 12.5% | Buyer deducts. No threshold. + surcharge + cess. |
| 393(T2) | STCG on property (held ≤24 months) | Slab rates | 40% | Foreign co. at 40%. NRI at slab. + surcharge + cess. |
| 393(T2) | LTCG on equity u/s 198 | 12.5% | 12.5% | After ₹1.25L exemption. STT paid. |
| 393(T2) | STCG on equity u/s 196 | 20% | 20% | STT paid shares/equity MF. |
| OTHER PAYMENTS | ||||
| 393(T2-Sport) | Sports association / entertainer (non-resident) | 20% | 20% | No threshold. |
| 393(T2-MF) | Income from MF units (to NR) | 20% | 20% | Except equity-oriented funds. |
| 393(T2-Off) | Income from units of offshore fund | 10% | 10% | |
| 393(T2) | Any other income chargeable to tax | 30% | 40% | Residual rate. Always check DTAA first. |
All domestic rates require + applicable surcharge + 4% H&E Cess. DTAA rates do NOT require surcharge/cess. Non-resident must provide TRC + Form 10F + self-declaration for DTAA benefit. If PAN not furnished → TDS at 20% or prescribed rate, whichever higher (Sec 206AA).
Form 15CA / 15CB
15CA: Online declaration by remitter for every foreign remittance. Filed on IT portal before payment.
15CB: CA certificate certifying TDS compliance, nature of payment, and applicable rate. Required for payments >₹5L in a FY where TDS is applicable.
15CB: CA certificate certifying TDS compliance, nature of payment, and applicable rate. Required for payments >₹5L in a FY where TDS is applicable.
DTAA Benefit — How to Claim
1. Obtain TRC from non-resident's home country tax authority
2. Non-resident files Form 10F (self-declaration)
3. Provide to deductor before payment
4. Deductor applies lower DTAA rate (no surcharge/cess)
2. Non-resident files Form 10F (self-declaration)
3. Provide to deductor before payment
4. Deductor applies lower DTAA rate (no surcharge/cess)
Sec 38(a)(i) — Non-compliance
If TDS not deducted on payment to NR → entire payment disallowed as business expense (100% disallowance, not 30%). Interest @1.5%/month. Penalty up to TDS amount.
Sec 197 — Lower/Nil Certificate
NR can apply to AO for lower/nil TDS certificate if actual tax liability is less than standard TDS rate. Especially useful for property sales where CG is much less than sale consideration.
📋 TCS Rate Chart — Tax Year 2026-27 (Section 394)
| Section | Nature | Threshold | TCS Rate |
|---|---|---|---|
| 394(1) | Scrap | — | 1% |
| 394(1) | Timber, tendu leaves, minerals (coal, lignite, iron) | — | 2% |
| 394(1F) | Motor vehicle (>₹10L), luxury goods 🆕 | 10,00,000 | 1% |
| LRS — Foreign Remittances (394(1G)) — w.e.f. 1/4/2025 | |||
| 394(1G) | LRS — Education (self-funded, above threshold) | 10,00,000 🆕 | 5% |
| 394(1G) | LRS — Education (via loan from financial institution) | — | Nil 🆕 |
| 394(1G) | LRS — Medical treatment (above threshold) | 10,00,000 🆕 | 5% |
| 394(1G) | LRS — Other purposes (above threshold) | 10,00,000 🆕 | 20% |
| 394(1G) | Overseas Tour Package (up to ₹10L) | — | 5% |
| 394(1G) | Overseas Tour Package (above ₹10L) | 10,00,000 | 20% |
🆕 LRS threshold raised from ₹7L to ₹10L from 1/4/2025. TCS on sale of goods (394(1H)) removed from 1/4/2025. Higher TDS/TCS for non-filers (206AB/394CA) removed from 1/4/2025.
📅 TDS/TCS Due Dates
| Action | Due Date |
|---|---|
| TDS deposit to government | 7th of next month (30th April for March deductions) |
| TDS Return — Q1 (Apr-Jun) | 31st July |
| TDS Return — Q2 (Jul-Sep) | 31st October |
| TDS Return — Q3 (Oct-Dec) | 31st January |
| TDS Return — Q4 (Jan-Mar) | 31st May |
| TDS Certificate (Form 16 for salary) | 15th June |
| TDS Certificate (Form 16A for non-salary) | 15 days from TDS return due date |
TDS / TCS Tracker — Total Tax Already Paid
Enter TDS deducted from each income source during the year. This tells you how much tax is already paid before filing ITR.
📐 Rule: TDS Credit & Adjustment
How it works in your ITR: Total Tax Liability (from Full Tax Calculator) − TDS − TCS − Advance Tax = Balance Tax Payable (or Refund if negative).
Claim TDS: TDS appears in Form 26AS / AIS. Always verify that deductor has deposited TDS with the government before claiming credit.
Mismatch: If TDS in your ITR doesn't match Form 26AS, the credit may be denied. Contact deductor to file correction.
Clubbed income TDS: TDS on minor's income (clubbed with parent) can be claimed by the parent per Rule 37BA(2).
Claim TDS: TDS appears in Form 26AS / AIS. Always verify that deductor has deposited TDS with the government before claiming credit.
Mismatch: If TDS in your ITR doesn't match Form 26AS, the credit may be denied. Contact deductor to file correction.
Clubbed income TDS: TDS on minor's income (clubbed with parent) can be claimed by the parent per Rule 37BA(2).
⚡ Auto-Fetch TDS from All Modules
Reads income computed in Salary, HP, CG, Other Sources modules and estimates TDS at applicable rates.
TDS from Each Head (auto-filled values are editable — override with actual Form 26AS amounts)
TCS & Advance Tax
Tax Paid Summary
Full Tax Calculator — Grand Finale
End-to-end tax computation | Tax Year 2026-27 (w.e.f. 1 April 2026) | Old vs New Regime
📖 How This Calculator Works — The Complete Flow
Step 1Income from all 5 Heads → Salary + House Property + Business/Profession + Capital Gains + Other Sources
Step 2Clubbing → Add income clubbed from spouse/minor child/HUF (Sec 96-64)
Step 3Set-Off of Losses → HP loss (max ₹2L inter-head, old regime), business loss (not vs salary)
Step 4Gross Total Income (GTI) = Sum of all heads after set-off + clubbing
Step 5Chapter VIII Deductions → 123 (₹1.5L), 126, 80E, etc. (Old Regime) / Only 123CD(2) (New Regime)
Step 6Total Income = GTI − Deductions (rounded to nearest ₹10)
Step 7Tax on Normal Income at slab rates (Old or New regime)
Step 8Tax on Special Rate Income → LTCG @12.5%, STCG equity @20%, Winnings @30%, VDA @30%
Step 9Agricultural Income partial integration (if agri >₹5K & non-agri > exemption)
Step 10Rebate u/s 191 → New: ₹60K if income ≤₹12L | Old: ₹12,500 if income ≤₹5L
Step 11Surcharge → 10%/15%/25%/37% based on income. Marginal relief. CG surcharge capped at 15%.
Step 12Health & Education Cess → 4% on (Tax + Surcharge)
Step 13Gross Tax Liability = Tax + Surcharge + Cess
Step 14Less: Relief → Sec 89 (salary arrears), DTAA relief (foreign income)
Step 15Less: Taxes Paid → TDS + TCS + Advance Tax + Self-Assessment Tax (from TDS Module)
FinalNet Tax Payable (or Refund Due) = Gross Tax − Relief − Taxes Paid
Auto-Fetch: Click "Fetch from All Modules" below to auto-populate income from Salary, HP, Business, CG, Other Sources, Clubbing, Deductions, and TDS modules. You can also enter values manually or override auto-fetched amounts.
Complete Tax Computation — Old vs New Regime
⚡ Auto-Fetch from All Modules
Reads computed values from Salary, HP, Business, CG, OS, Clubbing, Deductions & TDS modules.
Step 1–4: Income from All Heads → GTI
From Salary Master → Total Salary Income
From HP Master. Enter negative for loss.
Excludes winnings (separate special rate)
Step 8: Special Rate Incomes (taxed separately)
Step 9: Agricultural Income (for partial integration)
Exempt but used for rate calculation if >₹5K
Step 5: Chapter VIII Deductions
Old Regime only
Old Regime only
Both regimes
Old Regime only
Old Regime only
Step 14–15: Taxes Already Paid
Sec 392 + 393(T1) + 194 + 393(T1-Prop) + all TDS
Your Details
191 rebate only for residents
NEW REGIME
OLD REGIME