“ A STUDY ON INCOME TAX FILING “

At

Raghunandan and Associates

Stage II, Kengeri Satellite Town ,Bengaluru, Karnataka 560060

Submitted in Partial Fulfillment Of the Required for the Degree

Of the Bachelor of commerce of Bangalore University

BY
MUZAMMIL PASHA.A

( REG NO : U03CF21C0065 )

Under the Guidance of

Prof. MADHAVI SRINIVAS

Dept. Of Commerce and Management

DARSHAN COLLEGE
(2023 -24 )

KENGERI ,
RV College Post ,
Bangalore -560059

College Certificate
 STUDENT DECLARATION

I MUZAMMIL PASHA .A ,hereby declare that this report is entitled A Study on “ Income Tax
FILING “ a study conducted by me from 13-03-2024 to 17-03-2024 under the Supervision and
guidance of Prof.Madhavi Srinivas ,assistant professor, Department of Commerce and
Management ,Darshan college ,R.V College Post ,Bangalore - 59

Date:
 ACKNOWLEDGEMENT

The success and final outcome of this project required a lot of guidance and assistant from many
people and I am extremely fortunate to have their support till the completion of my report work.
1. Firstly, I would like to thank Sri. CA Raghunandan Sir, Managing Partner, RAGHUNANDAN
AND ASSOCIATES for giving me the opportunity to do an Internship within the organization. It
was a great chance for my career and professional development.
2. I also thank the employees of Raghunandan and Associates for sharing their knowledge and
their immoral support to improve my technical skills and analytical skills in the field of Auditing
and Taxation.
It is indeed a great sense of pleasure and immense sense of gratitude that I acknowledge their help
which will be remembered throughout my career.
3. I would like to express my special thanks of gratitude to our Director Rev. Fr. Robin Victor
D’Souza as well as our Principal Fr. Joy D'Souza for providing me with the invaluable opportunity
to undertake an internship. Their support and encouragement throughout this experience have been
instrumental in shaping my professional growth and development.
4. I would like to thank Prof. Mohammed Tazeer, HoD of Commerce and faculty coordinator Prof.
Madhavi Srinivas for their immersive guidance and advices throughout the Internship.
I am extremely grateful to my department faculty members for their suggestions and input helped me
in successful completion of this Internship.

Thank you
 SL NO TOPICS PAGE NO

1 Executive summary

2 Chapter-1 Introduction and organization profile

3 Chapter-2 Design of the study

4 Chapter-3 Discussion

5 Chapter-4 Learning outcomes

6 Bibliography

7 Annexures

8 Letter of applications to the employer for

internship

9 Letter of acceptance by the employer

 EXECUTIVE SUMMARY

I Muzammil Pasha.A currently pursuing my graduation in bachelor of commerce

at DARSHAN COLLEGE.

B com is an undergraduate programmer under NEP syllabus. BACHELOR IN

COMMERCE is a 3year undergraduate program that offers in depth knowledge in
Accounting & Financial subject by different means such as classroom teachings,
seminars, projects, practical training, industrial visit, conference, expert talks etc.

This report summarizes my internship program from March 13th 2024 to April
17th 2024 covering 90 hours on going internship. I had magnificently
concluded the placement in RAGHUNANDAN AND ASSOCIATES as a
requirement of Bachelor of Commerce. I earned different sides of experiences
with assist of RAGHUNANDAN sir, I am unable to conclude all my experiences
as text which I gained from internship. Though I hope the internship skills are
vital for my career path. In this course of period I learnt Income taxation
concepts which widely encompasses of registration process, objectives, wide
analysis, scope, filing returns of various forms and even usage of tally
software, making entries in tally, and calculating the income of the taxpayer,
exporting data from tally to excel and finally calculation of different heads.

Overall, it was a knowledge driven to me for getting exposed to such a new

environment and having been learnt different topics which was very new to
me in the beginning. I earned different sides of experiences with assist of
RAGHUNANDAN sir, I am unable to conclude all my experiences as text which
I gained from internship. Though I hope the internship skills are vital for my
career path. Principally I attached Income tax concepts, I had great opportunity
to work in a new environment and it was a comfortable for me to develop my
communication, punctuality, commitments, talents and team work abilities.
The report was prepared as per Bangalore university guidelines which begins
with content, cover page, introduction, design of study , discussion, learning
outcomes and ends with bibliography.
“A STUDY ON INCOME TAX FILING AT RAGUNANDHAN AND ASSOCIATES”

CHAPTER 1
INTRODUCTION

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TAX:
Tax is a mandatory fee or financial charge levied by any government on an
individual or an organization to collect revenue for public works providing the
best facilities and infrastructure. The collected fund is then used to fund different
public expenditure programs . If one fails to pay the taxes or refuses to contribute
towards it will invite serious implications under the pre-defined law.

Tax in India

To run a nation judiciously, the government needs to collect tax from the eligible
citizens; paying taxes to the local government is an integral part of everyone’s life,
no matter where we live in the world. Now, taxes can be collected in any form
such as state taxes, central government taxes, direct taxes, indirect taxes, and
much more. For your ease, let’s divide the types of taxation in India into two
categories, viz. direct taxes and indirect taxes. This segregation is based on how
the tax is being paid to the government.
Who introduced Income Tax in India?

James Wilson, the first Finance Minister of the British Indian

Government introduced the tax system in India. In 1860, income tax
was introduced by James Wilson in India. The current Income Tax Act
has been adopted in 1961, and bought into force with effect from April
1, 1962. It encompasses the whole of India, including Sikkim, Jammu
and Kashmir. The Central Board of Revenue bifurcated and created a
separate Board for Direct Taxes called as the Central Board of Direct
Taxes under the aegis of Central Board of Revenue Act, 1963.Taxes in
India are levied by the Central Government and the State
Governments by virtue of powers conferred to them from the
Constitution of India. Some minor taxes are also levied by the local
authorities such as the Municipality.
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TAX STRUCTURE:

DIRECT TAX:

Direct tax is a tax paid directly by the taxpayer to the government and cannot be
shifted, like federal income tax. This is the opposite of indirect tax, which is a tax
levied on goods and services and can be passed on to another entity or individual.

The tax is progressive in nature or, in other words, is largely based on the ability-
to-pay concept. What does this mean? It means that a taxpayer who makes a high
income will pay a disproportionate share of the tax burden, while a taxpayer who
makes a lower income will face a relatively small tax burden.
As noted earlier, there are various types of direct tax, which is where things can start to get
complex. The more common types of direct tax are:

1. Individual income tax

2. Corporate income tax
3. Capital gains tax
4. Estate tax
5. Property tax
6. Payroll tax
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 INDIVIDUAL INCOME TAX

One type of direct tax is individual income tax, which is also known as personal
income tax. This is a tax imposed on the salaries, wages, investments, or other forms
of income that a person or household earns.

The U.S. levies a progressive individual income tax, which is imposed at the federal
level, as well as in the majority of states. The income tax rates range and kick in at
specific income thresholds.

 CORPORATE INCOME TAX

Incorporated businesses are taxed on their profits (minus allowable deductions),

which is known as corporate income tax.

Corporate income tax is a significant source of revenue for governments and is

actually the third largest source of federal revenue, albeit smaller than individual
income tax and payroll taxes.

 CAPITAL GAINS TAX

Capital gains tax is a tax levied on the profit made from the sale of an asset, such as
property and stocks, but the tax rates vary and that variance will depend on two
factors. Those factors are: one’s income level and how long the asset was held. The
latter refers to whether it is considered a long-term capital gain (held one year or
more) or short-term capital gain (held less than one year).

 ESTATE TAX

Estate tax is a tax levied on the net value of a person’s taxable estate (after any
exclusions or credits) at the time of their death. The estate pays the tax before the
assets are distributed to the heirs.

This is not to be confused with an inheritance tax, which is levied on the heirs of
the deceased. The federal government does not levy an inheritance tax.
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 PROPERTY TAX

Property tax which is a critical source of revenue for state and local governments,
is a tax imposed on both commercial and residential “real property” like buildings
and land. It is also levied on tangible personal property such as inventories, business
equipment, and vehicles.

What can make property tax especially tricky to navigate is that varies significantly
among states and localities.

 PAYROLL TAXES

Payroll taxes, which are taxes paid on the salaries and wages of employees, are used
to finance such programs as Medicare and Social Security. These taxes are collected
via payroll deduction and remitted to the federal government.

Employees and employers are both expected to pay an equal share of Social
Security and Medicare taxes. However, those who are self-employed obviously do
not have an employer who can remit the tax on their behalf. Therefore, a self-
employed person must cover both the employer and employee portions of the tax
on their own.

Benefits of Direct Taxes:

1. Equity
2. Progressive
3. Productive
4. Economic

Disadvantages of Direct Taxes:

1. Tax evasion

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2. Social conflict
3. Inconvenience
INCOME TAX

Income tax is tax on income. Income tax is a central subject according to the
Constitution of India. Income tax is a very important direct tax. It is an important
and most significant source of revenue of the Government. The government needs
money to maintain law and order in the country; safeguard the security of the
country from foreign powers and promote the welfare of the people. It is the
foremost duty of the government to bring out such welfare and development
programmes which will bridge the gap between the rich and the poor. For this
purpose, mobilization of funds from various sources is required. These sources may
be direct or indirect. Income tax is one of the most important tools to achieve
balanced socio-economic growth. In the modern times, income tax is an annual tax
on income. The Indian Income Tax Act (Section 4) provides that in respect of the
total income of the previous year of every person, income tax shall be charged for
the corresponding assessment year at the rates laid down by the Finance Act for that
assessment year. Section 14 of the Income Tax Act further provides that for the
purpose of charge of income tax and computation of total income all income shall
be classified under the following heads of income: salaries, income from house
property, profits and gains of business or profession, capital gains, income from
other sources. The total income from all the above heads of income is calculated in
accordance with the provisions of the Act as they stand on the first day of April of
any assessment year. The Income Tax Department is responsible for all activities

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OBJECTIVES OF INCOME TAX

The objectives of income tax may be –

 To reduce inequalities in the distribution of income and wealth.

 To bring out equity between classes of taxpayers
 To accelerate the economic growth and development of country.
 To make available of funds for economic development.
 To encourage investment in new capital goods.
 To channelize investment into those sectors which contribute the most
economic growth.

WHO IS LIABLE TO PAY INCOME TAX?

Every person, whose taxable income for the previous financial year
exceeds the minimum taxable limit, is liable to pay income tax to the Central
Government during the current financial year on the income of the previous
financial year at the rates in force during the current financial year.

FEATURES OF INCOME TAX

 Income tax is charged on the income of previous year, at a rate which is

prescribed by the Finance Act for the relevant Assessment year.
 The Finance Act is passed every year by the parliament in the form of
‘Budget’.
 Income tax is levied on a person in relation to his income of the previous
year.
 The taxpayer’s liability is determined with reference to his residential
status in the previous year or accounting year.
 Liability to income tax arises only where the total income in the accounting
year exceeds the maximum tax-free amount prescribed by the Finance Act
to that relevant year.
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IMPORTANT DEFINITIONS
Under Sec. 2 and 3 of the Income Tax Act, 1961, definitions of important terms aregiven
– 10Gross Total Income (Sec. 14):

 Income of a person is computed under the following five heads -

 Salaries.
 Income from house property.
 Profits and gains of business or profession.
 Capital gains.
 Income from other sources. The aggregate income under these heads is termed
as ‘Gross Total Income’. In other words, gross total income means total
income derived from the above five sources before making any deduction
under section 80C to 80U.
1) Total Income:
Total income means the amount of income left after making the deductions
under sections 80C to 80U from the gross total income. The amount so
arrived is rounded off to the nearest multiple of ten rupees.

The sum of all money received by an individual or organization, including

income from employment or providing services, revenue from sales,
payments from pension plans, income from dividends, or other sources .

Total income may be calculated for purposes of assessing taxes, evaluating

the net worth of a company, or determining an individual or organization's
ability to make payments on a debt .
DIFFERENCE BETWEEN GROSS TOTAL INCOME AND TOTAL
INCOME

Gross Total Income Total Income

No.
1. Aggregate of various heads of After deduction U/s 80C to 80U,
income the balance is called Total
is called Gross Total Income. Income.

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2. Gross Total Income is not Total Income is rounded off to the

rounded off. nearest multiple of ten rupees.
3. Tax is not levied on Gross Total Tax is levied on the Total Income
Income. at the prescribed rates.
4. Gross Total Income is not less Total Income can be equal to
than Gross Total Income or
the Total Income. less than Gross Total Income.
5. Agricultural income is not If agricultural income excess Rs.
included in Gross Total Income. 5,000/-, it is included in the total
income of an individual or HUF
to determine the tax payable by
the assessee.

2) Person sec. 2(31):

The term ‘person’ includes:
 An individual: An individual means a natural person or a human being, who
may be male, female, minor child, or a lunatic.
 A Hindu undivided family: A Hindu Undivided Family means a Hindu
family which consists of all persons lineally descended from a common
ancestor including their wives and unmarried daughters.
 A company: A company may be defined as an artificial person created by
law with perpetual succession, a common seal and shares carrying limited
liability.
 A firm: A firm means a partnership firm which is defined under the
Partnership Act. There are two conditions for partnership firm (i) There
must be registered partnership deed (ii) Profit sharing ratio must be included
indeed.
 An association of persons (AOP) or a body of individuals (BOI), whether
incorporated or not: An association of persons means two or more persons
joining for a common purpose for the purpose of earning income. It may

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consist of two or more individuals or any other person, i.e., an individual

and a company or two or more companies.


 A local authority: Local authority includes

Municipality, Municipal Corporation, District Board, etc.
 Every artificial juridical person not falling within any of the preceding
categories: An idol or deity is assessable as an artificial juridical person,
but through persons managing them. Similarly, all other artificial persons,
with a juristic personality are artificial persons, like universities.

3) Assesses Sec. 2(7):

An assesse is a person -
 Who is liable to pay any tax; or
 Who is liable to pay any other sum of money under this Act (e.g., interest,
penalty, etc.); or
 In respect of whom any proceeding under this Act has been taken for the
assessment of his income; or
 In respect of whom any proceeding under this Act has been taken for the
assessment of the income of any other person in respect of which he is
assessable; or
 In respect of whom any proceeding under this Act has been taken for the
assessment of the loss sustained by him; or
 In respect of whom any proceeding under this Act has been taken for the
amount of refund due to him; or
 Who is deemed to be an assessee under any provision of this Act; or
 Who is deemed to be an assessee in default under any provision of this Act.

4) Deemed Assessee:
A person, who is deemed to be an assessee for some other person, is called
‘Deemed Assessee’. For example,
 After the death of a person, his legal representative will be treated as an

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assessee for that income of the deceased on which tax has not been paid by
the deceased before his death.
 A person representing a foreigner or a minor or a lunatic is treated as an

assessee f or the income of such foreigner or minor or lunatic.

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 A local authority: Local authority includes Municipality, Municipal

Corporation, District Board, etc.
 Every artificial juridical person not falling within any of the preceding
categories: An idol or deity is assessable as an artificial juridical person,
but through persons managing them. Similarly, all other artificial persons,
with a juristic personality are artificial persons, like universities.

5) Assesses Sec. 2(7):

An assesse is a person -
 Who is liable to pay any tax; or
 Who is liable to pay any other sum of money under this Act (e.g., interest,
penalty, etc.); or
 In respect of whom any proceeding under this Act has been taken for the
assessment of his income; or
 In respect of whom any proceeding under this Act has been taken for the
assessment of the income of any other person in respect of which he is
assessable; or
 In respect of whom any proceeding under this Act has been taken for the
assessment of the loss sustained by him; or
 In respect of whom any proceeding under this Act has been taken for the
amount of refund due to him; or
 Who is deemed to be an assessee under any provision of this Act; or
 Who is deemed to be an assessee in default under any provision of this Act.

6) Deemed Assessee:
A person, who is deemed to be an assessee for some other person, is called
‘Deemed Assessee’. For example,
 After the death of a person, his legal representative will be treated as an
assessee for that income of the deceased on which tax has not been paid by
the deceased before his death.
 A person representing a foreigner or a minor or a lunatic is treated as an

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assessee for the income of such foreigner or minor or lunatic.

7) Assessee in Default:
When a person is responsible for doing any work under the Act and he fails to do
it, he is called an ‘Assessee in Default’. For example, if a person while making any
payment to another person, is liable to deduct income tax thereon at source, does
not deduct income tax there from, or having deducted it, does not deposit it in the
Government Treasury, he will be treated as an Assessee in Default for that income
tax.

8) Assessment Year [Sec. 2(9)]:

Assessment year means the period of twelve months commencing on the first day
of April every year and ending on 31st March of the next year. An assessee is liable
to pay tax on the income of the previous year during the next following assessment
year. For example, during the assessment year 2017-18, tax shall be paid for the
previous year 2016-17.

9) Previous Year (Sec. 3):

Previous year means the financial year immediately preceding the assessment year.
In other words, the year in which income is earned is known as previous year and
the next year in which this income is taxable is known as assessment year. Income
tax is charged on the total income of the previous year at the rates prescribed by the
relevant Finance Act for the assessment year.

10) Financial Year:

The year started from 1st April to 31st March of the next year. A financial year is
both a previous year as well as an assessment year. It is previous year for the income
earned during that financial year and assessment year for the income earned during
the preceding financial year. For example, Financial Year 2017-18 is assessment
year for the income earned during the financial year 2016-17.

11) Rounding-off of income (Sec. 288A):

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The taxable income shall be rounded off to the nearest multiple of ten rupees and
for this purpose any part of a rupee consisting of paise shall be ignored and
thereafter if such amount is not a multiple of ten, then if the last figure in that amount
is five or more, the amount shall be increased to the nearest higher amount which is
a multiple of ten and if the last figure is less than five, the amount shall be reducedto
the next lower amount which is a multiple of ten.
12) Rounding-off of tax (Sec 288B):
Any sum payable by an assessee and the amount of refund due, under the provisions
of the Act shall be rounded off to the nearest ten rupees.

13) Casual Income:

Any receipt which is of a casual and non-recurring nature is casual income. In other
words, casual income is that income the receipt of which is accidental and without
any stipulation. It is in nature of an unexpected windfall.
Winning from lottery, crossword puzzles, card games and other games of any sort
or from gambling or betting of any form or nature, whatsoever are casual incomes.
Receipts even from habitual betting are non-recurring receipts and assessable as
casual income.
The casual income does not include –
 Capital gains; or Receipts arising from business or the exercise of a
profession or occupation; or Receipts by way of addition to remuneration
of an employee, such as bonus, gratuity, perquisites, etc.
 Voluntary payment received in exercise of an occupation is not treated as
casual income. For example, if an architect submitted a plan in a competition
for construction of a building, the prize won by him, is income from
profession.
 A gift from a relative is not income at all. A gift from a relative does not
become income merely because it is repeated year after year. A regular
allowance given year after year purely as a voluntary gift, by husband to his
wife, by a parent to a child, is merely a fresh gift every time, it is paid and
does not amount to income.
 Payment by husband to his wife under an agreement to live apart as
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maintenance allowance is neither causal income nor a personal gift. Hence,

it is taxable.
14) Rounding-off of tax (Sec 288B):
Any sum payable by an assessee and the amount of refund due, under the provisions
of the Act shall be rounded off to the nearest ten rupees.

15) Casual Income:

Any receipt which is of a casual and non-recurring nature is casual income. In other
words, casual income is that income the receipt of which is accidental and without
any stipulation. It is in nature of an unexpected windfall.
Winning from lottery, crossword puzzles, card games and other games of any sort
or from gambling or betting of any form or nature, whatsoever are casual incomes.
Receipts even from habitual betting are non-recurring receipts and assessable as
casual income.
The casual income does not include –
 Capital gains; or Receipts arising from business or the exercise of a
profession or occupation; or Receipts by way of addition to remuneration
of an employee, such as bonus, gratuity, perquisites, etc.
 Voluntary payment received in exercise of an occupation is not treated as
casual income. For example, if an architect submitted a plan in a competition
for construction of a building, the prize won by him, is income from
profession.
 A gift from a relative is not income at all. A gift from a relative does not
become income merely because it is repeated year after year. A regular
allowance given year after year purely as a voluntary gift, by husband to his
wife, by a parent to a child, is merely a fresh gift every time, it is paid and
does not amount to income.
 Payment by husband to his wife under an agreement to live apart as
maintenance allowance is neither causal income nor a personal gift. Hence,
it is taxable.

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OTHER PROVISIONS RELATING TO CASUAL INCOME:

 Expenses are not deductible: If expenses are incurred to receive casual
income, such expenses are not deductible from any income. For example,
an individual purchases lottery tickets, the cost of lottery tickets is not
deductible from any income.
 Set-off off losses not permitted: If instead of casual income there is casual
loss, such loss cannot be set-off from any income. For example, If a person
wins a card game on the first day and loses the next day, he cannot set-off
the loss against any income.
 Tax deduction at source:
o If the winnings from horse race exceed Rs. 10,000/-, tax will
be deducted at source at the prescribed rate.
o If the winnings from any lottery, crossword puzzle, card
game and other game of any sort exceed Rs. 10,000/-, tax
will be deducted at source at the prescribed rate.
 Rate of tax: On winning from lottery, crossword puzzle, races, gambling,
betting, etc tax is chargeable @ 30%.

BASIS OF CHARGE OF INCOME TAX:

The following basic principles are the basis of charging income tax -
 Income tax is an annual tax on income.
 Income of previous year is taxable in the next following assessment year at
the rate or rates applicable to that assessment year. However, there are
certain exceptions to this rule. For Example, Tax in the same Financial
Year –
o Income of non-resident from shipping (Sec. 172)
o Person leaving permanently / long time (Sec 174)
o Bodies form for short duration (174A)
o Person trying to alienate his assets to avoid tax (175)
o Income of discontinued business (176)
 3. Tax rates are fixed by the annual Financial Act.
 4. Tax is charged on every person as defined in Section 2(31).

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1) RESIDENTIAL STATUS OF AN INDIVIDUAL

On the basis of residence, the assessees are divided into three categories. As per
the provisions of the Income Tax Act, an individual and a Hindu undivided family
can either be –
1) Resident and Ordinarily Resident; or
2) Resident but not Ordinarily Resident; or
3) Non-Resident
1) Resident and Ordinarily Resident: -
An individual is said to be resident in India in any previous year if he satisfies any
one of the basic conditions and both the additional conditions.

Basic Conditions: -
 He is in India in the relevant previous year for a period of 182 days or more,
or
 He is in India for at least 60 days or more during the relevant previous year
and he has been in India for at least 365 days or more during the four
years immediately preceding the previous year.
Exceptions to the above rules of 60 days stay in India: -
o An individual who is a citizen of India and leaves India in any
previous year for the purpose of employment or as a member of the
crew of an Indian ship must have stayed in India for at least 182
days during the previous year instead of 60 days;
o If any citizen of India or a foreign national of Indian origin, who
is living outside India, comes on a visit to India in the previous year,
he must have stayed in India for at least 182 days during the previous
year instead of 60 days.
Notes:
 A person is deemed to be of ‘Indian origin’ if he, or either of his parents or
any of his
 grandparents, was born in undivided India. It may be noted that
grandparents include both maternal and paternal grandparents.
 It is not at all necessary that he should stay at a stretch for 182 days. His total
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stay for at least 182 days may be with gaps.

16) Rounding-off of tax (Sec 288B):

Any sum payable by an assessee and the amount of refund due, under the provisions
of the Act shall be rounded off to the nearest ten rupees.

17) Casual Income:

Any receipt which is of a casual and non-recurring nature is casual income. In other
words, casual income is that income the receipt of which is accidental and without
any stipulation. It is in nature of an unexpected windfall.
Winning from lottery, crossword puzzles, card games and other games of any sort
or from gambling or betting of any form or nature, whatsoever are casual incomes.
Receipts even from habitual betting are non-recurring receipts and assessable as
casual income.
The casual income does not include –
 Capital gains; or Receipts arising from business or the exercise of a
profession or occupation; or Receipts by way of addition to remuneration
of an employee, such as bonus, gratuity, perquisites, etc.
 Voluntary payment received in exercise of an occupation is not treated as
casual income. For example, if an architect submitted a plan in a competition
for construction of a building, the prize won by him, is income from
profession.
 A gift from a relative is not income at all. A gift from a relative does not
become income merely because it is repeated year after year. A regular
allowance given year after year purely as a voluntary gift, by husband to his
wife, by a parent to a child, is merely a fresh gift every time, it is paid and
does not amount to income.
 Payment by husband to his wife under an agreement to live apart as
maintenance allowance is neither causal income nor a personal gift. Hence,
it is taxable.

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18)Rounding-off of tax (Sec 288B):

Any sum payable by an assessee and the amount of refund due, under the provisions
of the Act shall be rounded off to the nearest ten rupees.

18) Casual Income:

Any receipt which is of a casual and non-recurring nature is casual income. In other
words, casual income is that income the receipt of which is accidental and without
any stipulation. It is in nature of an unexpected windfall.
Winning from lottery, crossword puzzles, card games and other games of any sort
or from gambling or betting of any form or nature, whatsoever are casual incomes.
Receipts even from habitual betting are non-recurring receipts and assessable as
casual income.
The casual income does not include –
 Capital gains; or Receipts arising from business or the exercise of a
profession or occupation; or Receipts by way of addition to remuneration
of an employee, such as bonus, gratuity, perquisites, etc.
 Voluntary payment received in exercise of an occupation is not treated as
casual income. For example, if an architect submitted a plan in a competition
for construction of a building, the prize won by him, is income from
profession.
 A gift from a relative is not income at all. A gift from a relative does not
become income merely because it is repeated year after year. A regular
allowance given year after year purely as a voluntary gift, by husband to his
wife, by a parent to a child, is merely a fresh gift every time, it is paid and
does not amount to income.
 Payment by husband to his wife under an agreement to live apart as
maintenance allowance is neither causal income nor a personal gift. Hence,
it is taxable.

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 For calculating number of days stay in India, days of entry and exit should be
included in the period of stay in India.

Additional Conditions:
A person has to satisfy both the following additional conditions besides satisfying
any one of the above-mentioned basic conditions in order to become ‘Resident and
Ordinarily Resident’.
 He has been resident in India in at least 2 out of 10 previous years
immediately preceding the relevant previous year.
 He has been in India for at least 730 days in all during the seven previous
years preceding the relevant previous year.

Note:
The day on which he enters in India as well as the day on which he leaves India
shall be taken into account as the stay of the individual in India

2. Resident but not Ordinarily Resident:

If an individual satisfies any one of the above basic conditions but does not satisfy
the two additional conditions, he is said to be ‘Not Ordinarily Resident’.

3. Non-Resident:
If an individual satisfies none of the basic conditions, he is said to be ‘Non-
Resident’.
RESIDENTIAL STATUS OF FIRM
A partnership firm is said to be resident in India if –
 Resident: The control and management of their affairs are wholly or partly
situated within India during the relevant previous year.
 Non-resident in India: If the control and management of their affairs are
situated wholly outside India.
A firm cannot be ordinarily or not ordinarily resident. The residential status of the
partners is not relevant in determining the status of the firm.

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2) RESIDENTIAL STATUS OF COMPANY

 Resident: A company is said to be a resident in India in any previous year, if
o It is an Indian company; or
o Its place of effective management, in that year, is in India.
An Indian company is always resident in India. A foreign company is
resident in India only if during the previous year, place of effective management is
situated wholly in India.
 Non-resident: A foreign company is treated as non-resident if during the
previous year, place of effective management is either is wholly or partly
situated out of India.
A company can never be ordinarily or not ordinarily resident in India. In
case of a foreign company even the slightest place of effective management is
exercised from outside India, it would be treated as a non-resident.

STRUCTURE OF IT AUTHORITIES (SEC. 116):

There shall be the following classes of income tax authorities for purposes
of the Income Tax Act.

The Central Board of Direct Tax

Principal Directors General of income tax

Directors -General of income tax

Principal Director of income tax

Directors of income tax

Additional Directors of income tax

Joint Directors of income tax

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Deputy Directors of income tax

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Assistant Directors of income tax

Income Tax Office

Tax Recovery Office

Inspector Of Income Tax

ADVANCE PAYMENT OF TAX:

Advance payment of tax is also known as the 'pay-as-you-earn' scheme. It
means that assesse has to pay tax simultaneously along with the earning of his
income. This tax is paid on the current year’s income in the same year. In fact, it is
paid as advance, and it is called ‘Advance payment of tax’.

LIABILITY FOR PAYMENT OF ADVANCE TAX:

Advance tax shall be payable during any financial year in respect of the
total income of the assessee which should be chargeable to tax for the assessment
year immediately following that financial year, and it shall be called ‘Current
Income’.
An individual resident shall not be liable, if –
 He does not have any income chargeable under the head PGBP.
 He is of the age of 60 years or more at any time during the previous year.

CONDITION OF LIABILITY TO PAY ADVANCE TAX:

Advance tax shall be payable if your tax liability exceeds Rs. 10,000 in a financial
year.

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INSTALMENTS OF ADVANCE TAX AND DUE DATES:

Instalment Due Date Amount Payable

I One or before Not less than 15% of advance tax
15th June
II One or before Not less than 45% of advance Tax. It means
15th September 45% of advance tax, less the amount paid in
earlier instalment i.e. 30%
III One or before Not less than 75% of advance Tax. It means
15th December 75% of advance tax, less the amount paid in
earlier instalment i.e. 30%
IV One or before 100% of advance Tax. Reduced the amounts
15th March paid earlier instalments i.e. 25%

TAX DEDUCTION AT SOURCE (TDS):

The tax deduction at source means that the person responsible for
making payment of certain incomes to the income earners, deduct income tax at the
prescribed rates on such incomes before payment is made to them. The amount so
deducted at source shall be deposited by the deduct or in the government treasury
within the prescribed time limit. The tax so deducted is called deduction of tax at
source. TDS should be deposited to government on or before 7 days from the end
of the month in which the deduction is made.

TAX COLLECTED AT SOURCE (TCS):

Tax collected at source (TCS) is the tax payable by a seller which he
collects from the buyer at the time of sale. The Income-tax act governs the goods
on which the seller has to collect tax from the purchasers. The seller deposits the
TCS amount within 7 days from the last day of the month in which the tax was
collect

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PERMANENT ACCOUNT NUMBER (PAN):

PAN means a number which the Assessing Officer may allot to any
person for the purpose of identification. PAN has ten alphanumeric characters.

APPLICATION FOR PAN:

If an assessee has not been allotted a Permanent Account Number, he
must apply for it in Form No. 49A within the prescribed time. The Assessing
Officer has also got power to allot to any other person a Permanent Account Number
if tax is payable by such person.

QUOTING PAN: Once a Permanent Account Number has been allotted, such
number must be quoted in all Returns, correspondence with Income Tax
Authorities, challans for payment and in all documents prescribed by the Board.
It helps in linking the aforesaid documents to his assessment records to
facilitate quick disposal of his assessment and refund claim.
The assessee must intimate to Assessing Officer about any change in the
address, name or nature of business carried on by him.
TAX DEDUCTION AND COLLECTION ACCOUNT NUMBER (TAN):
Every person, deducting tax or collecting tax at source, who has not been
allotted a tax deduction account number or a tax collection account number shall
apply in duplicate in Form No. 49B within one month from the end of the month
in which the tax was deducted or collected to the A.O. for the allotment of
 a ‘Tax Deduction and Collection Account Number’ (TAN).
Where a ‘Tax Deduction and Collection Account Number’ has been allotted to a
person, he shall quote such number in prescribed documents.

TAX AVOIDANCE:

Tax avoidance means taking undue advantage of the loopholes, lacunae or

drafting mistakes for reducing tax liability and thus avoiding payment of tax
which is lawfully payable. Generally, it is done by twisting or interpreting the
provisions of law and avoiding payment of tax. Tax avoidance considers the
loopholes of law.
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TAX EVASION:
Tax evasion means avoiding tax by illegal means. Generally, it involves
suppression of facts, falsifying records, fraud, or collusion. It is an attempt to evade
tax liability with the help of unfair means. Tax evasion is illegal and would result
in punishment by way of penalty, fines and sometimes prosecution.

TAX PLANNING:
Tax planning may be defined as an arrangement of one’s financial affairs
in such a way that without violating in any way the legal provisions of an Act, full
advantage is taken of all exemptions, deduction, rebates, and reliefs permitted under
the Act, so that the burden of the taxation on an assessee, as far as possible, is the
least. It is within the framework of law.

COMPARISON OF TAX PLANNING, TAX AVOIDANCE, TAX EVASION

No. Basic Tax Planning Tax Avoidance Tax Evasion

1. Meaning Reduce tax Liability Reduce tax liabilityby Reduce tax
by claiming
finding loopholes in liability
deduction, exemption,
allowance, rebate, etc. the law in dishonest
manner.

2. Legality It is fully legaland It is also legal but It is unethical.

ethical. against the intention
the law maker.

3. Example Claiming deduction Clubbing of Income. Increasing

u/s80C to 80U. expenses by
showing
fake bills.

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26

PROFILE OF THE ORGANIZATION:-

 Raghunandan & Associates established in 2016, is one of the fast- growing

Chartered Accountant firms in Bengaluru serving business needs
 With industry knowledge and technical expertise and highly trained
personnel with specialized service capabilities, we are the advisors and
auditors for many Indian companies.
 Our professionals have in-depth experience in sectors like Information
Technology, Service Oriented Industries, Healthcare Services and Trading
Sector etc.
 An Honest Partner to work with as we value our integrity and strive to
provide top notch value to the markets and clients.
 An assurance that your interests are given priority, as the firm aims at being
the best rather than being the biggest professional services association.
 Wealth Maximization with a peace of mind.
 End to End well thought of Pragmatic Holistic Solutions.
 We help you focus on your core business, because we take care of the
Financial & Regulatory strategies.
 Branch Statutory Audit of SBI we have handled & Union Bank concurrent

HUMAN CAPITAL:

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 Our human resource strategy is to develop and deploy best

capabilities in each of the service area.
 Our people have expertise in various disciplines and have varied
Experience ,We encourage diversity of views in our staff .
 Our firm is represented by a strong team which always thinks of
enhancing the value being given to all stakeholders and clients.
The team includes Chartered Accountants, Company Secretaries
and other technically qualified persons.


CILENT SERVICE STANDARD:-

 Execute the client service plan in a manner, which ensures commitments are
met, potential problems anticipated and surprises avoided. 

 Establish effective communications, both internal and external, to enhance

client perceptions of the value and quality of our service. 

 Provide management with insights on the current condition of their business

and meaningful suggestions for improvement.

 Continually broaden and strengthen our relationships with key management

personnel to facilitate effective communication. 

 Ensure that any professional, technical, or client-service problem is resolved

promptly with timely consultation in an environment of mutual respect.

 Obtain from the client, formally and informally, a regular assessment of our
performance.

 Receive fees that reflect the value of services provided and responsibilities
assumed and are considered fair and reasonable by our clients.

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Our rigorous client service standards are designed to ensure that we

fulfil our professional responsibilities to the satisfaction of our clie

OUR SERVICES

 AUDIT AND ASSURANCE

Auditing is a highly complex process, and the importance of auditors as a
vital link in the financial reporting chain and their role as trusted advisors
has increased manifold in the present era.
Our firm provides a range of audit and advisory services to assist clients in
achieving their business objectives, managing their risk and improving their
business performance. Using our state-of-the-art tools enables our audit
professionals to deliver the assurance service quality and excellence.
Within our firm, we have robust audit tools, resources and procedures to provide
the means for our professionals to deliver high-quality audit services. In delivering
these services we adhere to the highest standards of independence, professional
objectivity and technical excellence.

Our audit approach is applied consistently, while providing the flexibility to serve
the unique circumstances and complexities of our clients. Our audit approach
focuses on understanding the client’s business and control issues from the inside
out. It combines a rigorous risk assessment, diagnostic processes, and audit testing
procedures as well as a continuous assessment of our clients' service performance.

QUALITY CONTROL SYSTEM

We have a very strong quality assurance system in place, the policies adopted in
this respect include involvement of an additional partner as advisory partner in
every major audit, dedicated team for specified sector, specialized training courses,
engagement quality assurance review programs and a formalized consultative
framework. We bring to every aspect of our service the highest levels of
commitment, professionalism, energy, and enthusiasm.

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Key components of quality control

1.Client acceptance and continuance
To ensure that we do not incur unacceptable risks, we have rigorous client
acceptance and continuance procedures.

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2. Commitment to training and specialization

Our extensive curriculum covers ethics, independence, core and advanced technical
matters, and a variety of business advisory and management programmes.
3. Internal practice reviews
To help maintain a high level of consistency, partners periodically review the
quality control standards and audit work of colleagues.

TAX ADVISORY
We keep you up to date on developments that affect your business, help you
interpret their significance and integrate tax considerations into your business
strategy. Our taxation services include:
o Corporate and individual tax advisory.
o Compliance services including preparation of income tax and sales
tax returns.
o Representing clients before tax authorities and assisting legal
counsel in preparing appeals to the higher courts.
o International tax consultancy including tax on international
transactions and advising on double taxation treaties.

Risk and Internal Control

With increasing accountability at boardroom and senior

management levels, changes to regulatory environment, and continual
technological innovation, managing risk has become more complex.

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Our team helps clients to manage risk through business processes at all levels of
operation – whether organizational, technical, operational or financial.

In this regard, we offer clients a broad range of risk-related services which include:
o Internal Audit.
o Internal Financial Control Implementation.

 FINANCIAL ADVISORY
We provide a diverse range of strategic and financial advice to clients in relation to
corporate finance, valuation and other corporate activities
We are focused and relationship-driven while maintaining standards of
independence, objectivity and confidentiality. Every problem is addressed with an
independent and unbiased approach.

We offer following services:

o Due Diligence.
o Corporate Finance.
o Business Valuation.

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OBJECTIVES OF THE STUDY

In this introductory segment of my internship report, I aim to elucidate the core
objectives that have guided my study and experiences throughout this insightful
journey. As an intern within RAGHUNANDAN & ASSOCIATES, I embarked on
a mission to unravel key insights, sharpen essential skills, and contribute
meaningfully to the firm's endeavours.

The primary objective of my internship are as follows

 Technical Skills Development: Gain proficiency in programming languages

relevant to the field, such as Java, Python, or JavaScript. Learn to use industry-
standard software development tools and platforms (e.g., Git, Docker,
AWS).Acquire hands-on experience with databases and data management
systems..

 Project Experience: Participate in real-world IT projects under the guidance of

mentors. Contribute to the development and maintenance of software
applications or IT systems. Collaborate with team members to solve technical
challenges and deliver solutions on time. Gain exposure to different phases of
the software development lifecycle, from requirements gathering to deployment
and maintenance.
 Professional Development: Improve communication skills by interacting with
team members and stakeholders. Learn how to effectively prioritize tasks and
manage time to meet project deadlines. Enhance problem-solving abilities by
troubleshooting issues encountered during projects. Develop a deeper
understanding of the role of IT in business operations and how technology
supports organizational goals. Build a professional network by connecting with
colleagues, attending industry events, and seeking feedback on performance.

 Personal Growth: Reflect on experiences to identify strengths, weaknesses,

and areas for improvement. Set personal learning goals and track progress
throughout the internship. Embrace challenges as opportunities for growth and
learning. Foster a mindset of continuous learning and adaptation to keep pace

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with advancements in the IT industry. Cultivate resilience in the face of setbacks

and learn from failures to become a more resilient professional.

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 Documentation and Reporting: Maintain detailed documentation of tasks,

projects, and solutions developed during the internship. Write clear and concise
reports summarizing project outcomes, lessons learned, and recommendations
for future improvements. Present findings and deliverables to supervisors and
stakeholders in a professional manner. Develop skills in technical writing and
presentation to effectively communicate complex concepts to diverse
audiences.

METHODOLOGY
For the preparation of this report secondary sources of data are used. The secondary
data are collected from annual reports, brochures, website of IT, different financial
magazine, published documents. Most of the information in this report is written on
the basis of experience gained by the internee in the company during the period of
internship. While preparing this report I took help from company staff and group
discussion with friends. I have consulted related departmental staff as a primary
source. For the secondary data I used IT website, financial express website, and
clear tax website.

TYPES OF DATA RESEARCH

Secondary Data: Secondary data is the data that are already available i.e., they
refer to the data which have already been collected and analysed the by someone.
After doing the data collection in primary data, the researcher did the collection
through the secondary data.

SCOPE OF STUDY
During an IT internship, the scope of study encompasses a broad range of
opportunities aimed at fostering technical skills, professional development, and
industry exposure. Interns engage in hands-on projects that may involve software

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development, system upgrades, and troubleshooting technical issues, allowing them

to refine their problem-solving abilities. Research and analysis play a crucial role
as interns explore new technologies, trends, and best practices in the IT industry.
Collaboration and communication skills are honed through teamwork and
participation in meetings, while networking opportunities provide valuable
connections within the industry. Feedback and mentorship facilitate continuous
learning and growth, fostering adaptability to the ever-evolving landscape of IT.
Overall, IT internships offer a dynamic environment for interns to develop both
technical expertise and essential soft skills essential for a successful career in the
field.

LIMITATIONS OF THE STUDY

 Limited Scope: Internship projects may be constrained by the organization's

needs and resources, limiting the breadth and depth of the topics interns can
explore.
 Time Constraints: Internships typically have a fixed duration, which may not
allow interns to fully delve into complex projects or explore certain topics in
depth.
 Access to Resources: Interns may not have access to the same resources (e.g.,
software, hardware, databases) as full-time employees, which can impact the
scope and quality of their work.
 Supervision and Mentorship: The level of supervision and mentorship
provided to interns can vary, impacting their ability to learn and grow during
the internship.
 Despite these limitations, IT internships remain valuable learning experiences
that provide hands-on exposure to the field and help interns develop valuable
skills and industry knowledge. It's essential for interns to make the most of
their internship experience by actively seeking out opportunities for learning,
networking, and professional growth.

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TAXABLE HEADS OF INCOME TAX

The total income of a person is divided into five heads taxable.

1. Income from Salary

2. Income from House Property
3. Income from profits and gains of Business or Profession
4. Income from Capital Gains
5. Income from Other sources

INDIVIDUAL HEADS OF INCOME

INCOME FROM SALARY

All income received as salary under Employer-Employee relationship is taxed

under this head. Employers must withhold tax compulsorily, if income exceeds
minimum exemption limit, as Tax Deducted at Source (TDS), and provide their
employees with a Form 16 which shows the tax deductions and net paid income. In
addition, the Form 16 will contain any other deductions provided from salary such
as:

 Medical reimbursement: Up to Rs. 15,000 per year is tax free if supported

by bills. (Company pays Fringe Benefit Tax on this amount)
 Conveyance allowance: Up to Rs. 800 per month (Rs. 9,600 per year) is tax free if
provided as conveyance allowance. No bills are required for this amount.
 Professional taxes: Most states tax employment on a per- professional basis,
usually a scabbed amount based on gross income. Such taxes paid are deductible from
income tax.
 House rent allowance: the least of the following is available as deduction

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 actual HRA received

 50%/40%(metro/non-metro)of ‘salary'

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INCOME FROM HOUSE PROPERTY

Income from House property is computed by taking what is called Annual Value.
The annual value (in the case of a let out property) is the maximum of the following:

 Rent received
 Municipal Valuation
 Fair Rent (as determined by the I- T department)

If a house is not let out and not self-occupied, annual value is assumed to have
accrued to the owner. Annual value in case of a self-occupied house is to be taken
as NIL. (However if there is more than one self-occupied house then the annual
value of the other house/s is taxable.) From this, deduct Municipal Tax paid and
you get the Net Annual Value. From this Net Annual Value, deduct :

30% of Net value as repair cost (This is a mandatory deduction)

Interest paid or payable on a housing loan against this house

In the case of a self-occupied house interest paid or payable is subject to a maximum

limit of Rs,1,50,000 (if loan is taken on or after 1 April 1999) and Rs.30,000 (if the
loan is taken before 1 April 1999). For all non-self-occupied homes, all interest is
deductible, with no upper limits.

The balance is added to taxable income.

INCOME FROM BUSINESS OR PROFESSION

The Profits and Gains of Business or Profession (PGBP) constitutes a pivotal

segment within the framework of the Indian Income Tax Act, 1961. This category
encapsulates the spectrum of income generated by individuals or entities through

their business endeavours or professional engagements. Under PGBP, the

computation of income hinges upon deducting permissible expenses from the
gross receipts or turnover associated with the business or profession. These

allowable deductions encompass a broad array of expenditures incurred wholly and

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exclusively for the purpose of conducting the business or profession. Among these

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deductions are expenses such as rent, salaries, wages, repairs, depreciation,

insurance, and legal costs.

Depreciation on assets utilized for business purposes emerges as a significant facet,

with prescribed rates varying according to the nature of the assets. Furthermore, the
Income Tax Act extends provisions for a presumptive taxation scheme under
Sections 44AD, 44ADA, and 44AE, affording a simplified approach to tax
assessment for certain small businesses or professions.

Taxation under PGBP adheres to applicable slab rates as per the Income Tax Act,
with taxpayers obligated to fulfil advance tax payments if their liability exceeds
specified thresholds. Compliance also entails adherence to tax audit requirements
for businesses or professions surpassing designated income thresholds, mandating
audit by a chartered accountant under Section 44AB. Filing of income tax returns
is obligatory, necessitating the disclosure of business or professional income
alongside deductions claimed.

Non-compliance with PGBP taxation provisions can result in penalties and interest,
emphasizing the importance of adhering to statutory requirements and seeking
guidance from tax professionals for comprehensive understanding and compliance.

INCOME FROM CAPITAL GAINS

Transfer of capital assets results in capital gains. A Capital asset is defined under
section 2(14) of the I.T. Act, 1961 as property of any kind held by an assessee such
as real estate, equity shares, bonds, jewellery, paintings, art etc. but does not include
some items like any stock-in-trade for businesses and personal effects. Transfer has
been defined under section 2(47) to include sale, exchange, relinquishment of asset,
extinguishment of rights in an asset, etc. Certain transactions are not regarded as
'Transfer' under section 47.

For tax purposes, there are two types of capital assets: Long term and short term.
Long term asset are held by a person for three years except in case of shares or
mutual funds which becomes long term just after one year of holding. Sale of such

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long term assets gives rise to long term capital gains. There are different scheme of
taxation of long term capital gains. These are:

As per Section 10(38) of Income Tax Act, 1961 long term capital gains on shares
or securities or mutual funds on which Securities Transaction Tax (STT) has been
deducted and paid, no tax is payable. STT has been applied on all stock market
transactions since October 2004 but does not apply to off-market transactions and
company buybacks; therefore, the higher capital gains taxes will apply to such
transactions where STT is not paid.

In case of other shares and securities, person has an option to either index costs to
inflation and pay 20% of indexed gains, or pay 10% of non-indexed gains. The
indexation rates are released by the I-T department each year.

In case of all other long term capital gains, indexation benefit is available and tax
rate is 20%.

All capital gains that are not long term are short term capital gains, which are taxed
as such:

Under section 111A, for shares or mutual funds where STT is paid, tax rate is 10%
From Asst yr. 2005-06 as per Finance Act 2004. For Asst yr. 2009-10 the tax rate
is 15%.

In all other cases, it is part of gross total income and normal tax rate is applicable.

For companies abroad, the tax liability is 20% of such gains suitably indexed (since
STT is not paid).

INCOME FROM OTHER SOURCES

This is a residual head, under this head income which does not meet criteria to go
to other heads is taxed. Also there are also some specific incomes which are to be
taxed under this head.

 Income by way of Dividends

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 Income from horse races

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 Income from winning of lotteries

 Income from winning bull races
 Any amount received from key man insurance policy. 
 Any sort or from gambling or betting
 Income from commission
 Income from crossword puzzles
 Income from card games

INCOME EXEMPT FROM TAX

Sections 10,10A, 10AA, 10B, 10BA, and 13A deal with income which does not
form part of an assessee's total income. While section 10 provides a list of income
absolutely exempt from tax, sections 10A, 10AA, 10B, 10BA, and 13A deal with
specific exemptions available to newly established industrial undertakings in free
trade zones, and political parties. These exemptions are provided from social,
political, Constitutional considerations, for avoiding double taxation, on the basis
of casual and non-recurring nature ,on the basis of non- residents and non-citizens
status, on the basis of Certain specific securities, bonds, certificates, funds and the
like, on the basis of Education, science, research, achievements, rewards, sports,
charity, on the basis of certain types of bodies, funds and institutions, Subsidies to
promote business, and international, economic, and other considerations. Sikkim is
the only state of India where citizens do not pay income tax. Residents of Sikkim
are eligible for this exemption but excluding the non-Sikkimese spouse of a
Sikkimese.

Agricultural Income [Section 10(1)] Eligible Assesses :- All assesses Exempt

income :- Agricultural income Other points :- Agricultural income means as it is
defined in Section 2(1A) In case of individual, HUF, AOP, BOI, unregistered firms
and artificial juridical persons, agricultural income is to be aggregated for the
purpose of determining the rate of tax on Non-Agricultural income and they would
get tax rebate or relief.

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DIVIDENDS

Dividend income (as referred u/s 115-O of the I.Tax Act) paid by Companies and
Mutual Funds are exempt from tax. A 15% dividend distribution tax and surcharge
of 3% is paid by companies before distribution. Equity mutual funds (with more
than 65% of assets invested in equities) do not pay a dividend distribution tax,
though other funds do. Liquid and Money Market funds pay 25% dividend
distribution tax.01123

OTHER EXEMPT INCOME

The Indian Income tax act specifically exempts certain income from tax:

Money received from an Insurance company as proceeds of an insurance policy (by

way of an insurance claim, or by maturity) is generally exempt. However there are
three types of payments under life insurance policy that are not tax free .

These are :

any sum received under sub-section (3) of section 80DD or sub- section (3) of
section 80DDA - this refers to specific policies for disabled dependants; or

 any sum received under a Keyman insurance policy; or

 any sum received under policies issued on or after 1 April 2003 wherepremium
paid is greater than 1/5th the sum assured
 Maturity proceeds of a Public Provident Fund (PPF) account.

SALIENT FEATURES

 Convenience of filing taxes online:

Gone are the days of making an appointment with your accounting office
and waiting around while they punch a calculator in between asking for your
signature.
You can file online from anywhere. Web-based tax programs only require
an internet connection and therefore make everywhere your tax office. Even
with locally downloaded programs, taxes can still be filed anywhere you

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take that computer.

The step-by-step programs give users the confidence that they’re not
missing anything and won’t be subject to any penalties for inaccuracy. You
can even start filing, get as far as your time allows, save what you’ve already
done and return to it at a later time. All in all, filing online is just more
convenient.

 Electronic records of tax forms:

It’s best practice to keep records of your taxes up to seven years out.
Throwing out old tax records can be risky, though, and open you up for
identity the if they’re not disposed of properly. On the other hand, that stack
of part taxes will continue to grow and grow each year, taking up more and
more space. Fingers crossed for no floods or fires.

 Faster processing:
Everything processes faster when you file online. You won’t have to read
the instructions for each form you’re filing and determine which number
goes in which box. E-filing asks simple and intuitive questions, makes it
clear where to input information and fills out the proper forms on its own in
the back-end.
Electronic signatures even make it so that you don’t have to write your name
a million times in order to file. Simply draw your signature on your device’s
trackpad, and then copy and paste it when indicated to do so.
Beyond the time that you spend in front of your computer actually filing
your tax returns, completing them online also means that the information
gets passed on the back-end faster, as well. As soon as you finish your end,
that information is sent directly to the IRS immediately. This eliminates any
wait-time for the postal service to deliver the documents, the IRS mail room
to sort them and then eventually get them to someone who can approve
them.
It also means that, if you get a refund, you’ll get that back faster as well. Not
only because the tax return information can be processed more quickly, but

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also because features like direct deposit make it so that your tax refunds are
automatically wired to your bank account, as opposed to being at the mercy
of the postal service and having to wait for a physical check.

 Electronic records of tax forms:

It’s best practice to keep records of your taxes up to seven years out.
Throwing out old tax records can be risky, though, and open you up for
identity the if they’re not disposed of properly. On the other hand, that stack
of part taxes will continue to grow and grow each year, taking up more and
more space. Fingers crossed for no floods or fires.

 Faster processing:
Everything processes faster when you file online. You won’t have to read
the instructions for each form you’re filing and determine which number
goes in which box. E-filing asks simple and intuitive questions, makes it
clear where to input information and fills out the proper forms on its own in
the back-end.
Electronic signatures even make it so that you don’t have to write your name
a million times in order to file. Simply draw your signature on your device’s
trackpad, and then copy and paste it when indicated to do so.
Beyond the time that you spend in front of your computer actually filing
your tax returns, completing them online also means that the information
gets passed on the back-end faster, as well. As soon as you finish your end,
that information is sent directly to the IRS immediately. This eliminates any
wait-time for the postal service to deliver the documents, the IRS mail room
to sort them and then eventually get them to someone who can approve
them.
It also means that, if you get a refund, you’ll get that back faster as well. Not
only because the tax return information can be processed more quickly, but
also because features like direct deposit make it so that your tax refunds are
automatically wired to your bank account, as opposed to being at the mercy
of the postal service and having to wait for a physical check.

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 Accuracy of filing taxes online:

The most important part about filing taxes is accuracy. Giving incomplete
or incorrect information to the IRS can result in hefty fines, penalties and
even jail time. Filing online ensures that, as long as the information you
input is accurate, the forms sent to the IRS will be accurate.

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E FILING

E-filing for IT (Income Tax) refers to the electronic submission of income tax
returns and related documents specific to individuals or entities in the Information
Technology (IT) sector. Here's a brief overview:

BENEFITS OF IT E-FILING:

 Convenience: Taxpayers can file their returns from the comfort of their homes or
offices, without the need to visit tax offices in person.
 Accuracy: E-filing software often includes built-in checks and prompts to help ensure
accuracy, reducing the likelihood of errors.
 Speed: E-filing typically results in faster processing times and quickerrefunds, if
applicable, compared to traditional paper filing.
 Confirmation: Taxpayers receive instant confirmation upon successfulsubmission
of their returns, providing peace of mind.

ELIGIBILITY AND REQUIREMENTS:

IT e-filing is available to individuals, businesses, and organizations in the IT sector,

subject to the specific requirements and regulations of the tax jurisdiction

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TYPES OF E FILING

Individual Income Tax E-filing:

This type of e-filing is for individual taxpayers, including IT professionals who earn
income from salaries, freelance work, investments, or other sources.

Individual income tax e-filing allows individuals to electronically submit their tax
returns, including details of their income, deductions, credits, and other relevant
information.

Business Income Tax E-filing:

Businesses operating in the IT sector, such as IT consulting firms, software

development companies, or IT service providers, may need to file income tax
returns for their business activities.

Business income tax e-filing enables companies to electronically report their

business income, expenses, deductions, and other financial details to the tax
authorities.

Corporate Income Tax E-filing:

Larger IT companies, including corporations and enterprises, are subject to

corporate income tax on their profits.

Corporate income tax e-filing allows corporations to electronically file their

corporate tax returns, including detailed financial statements, income calculations,
deductions, and other relevant information.

These types of e-filing cater to the diverse tax filing needs of individuals,
businesses, and corporations operating within the IT sector. Each type may have
specific requirements, forms, and deadlines dictated by tax authorities in the
respective jurisdictions. It's essential for taxpayers to understand the type of e-filing
applicable to their tax situation and ensure compliance with tax laws and
regulations.

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STEP BY STEP E FILING PROCESS

An Income Tax Return (ITR) is a form that enables a taxpayer to declare his income,
expenses, tax deductions, investments, taxes, etc. The Income-tax Act, 1961 makes
it mandatory for a taxpayer to file an income tax return under various scenarios.
However, there may be various other reasons to file an income tax return even in
the absence of requisite income, like carrying forward losses, claiming an income
tax refund, for availing the VISA, loan from banking institutions, term Insurance,
etc.

E-filing refers to the process of filing an Income Tax Return (ITR) online, using the
Internet. By accessing the new income tax portal using PAN-based login
credentials, individuals can take advantage of a range of features that simplify the
tax filing process.

The Income Tax Department provides the facility for e-filing an income tax return.
Before discussing the steps involved in e-filing an ITR, it is essential for a taxpayer
to keep the following documents/information readily available for e-filing their
ITR.

 PAN and Aadhaar

 Bank Statements
 Form 16
 Donation receipts
 Stock trading statements from the broker platform
 Insurance policy paid receipts related to life and health
 Bank account information linked to PAN
 Aadhaar registered mobile number for e-verifying the return
 Interest certificates from banks

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Step 1: Login

 Visit the official Income Tax e-filing website and click on 'Login'.
 Enter your PAN in the User ID section.
 Click on ‘Continue’.
 Check the security message in the tick box.
 Enter your password
 ‘Continue’

Step 2: Go to ‘File Income Tax Return’

 Click on the 'e-File' tab > 'Income Tax Returns' > ‘File Income Tax Return’

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Step 3: Select the right ‘Assessment Year’

Select ‘Assessment Year’ as ‘AY 2024-25’ if you file for FY 2023-24. Similarly,
select ‘AY 2023-24’ if you are filing for FY 2022-23 and use the mode of filing as
‘Online’. Select the filing type correctly as original return or revised return.

Step 4: Select the status

Select your applicable filing status: Individual, HUF, or Others.

For filing of persons like you and me, select 'Individual' and 'Continue'.

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Step 5: Select the ITR type

Now, select ITR type. The taxpayer must first ascertain which ITR form they must
fill out before filing returns. There are a total of 7 ITR forms available, of which
ITR 1 to 4 is applicable for Individuals and HUFs. For example, individuals and
HUFs without income from business or profession but with capital gains can use
ITR 2. Find out which ITR you should be filing.

Step 6: Choose the reason for filing ITR

In the following step, you will be prompted to specify the reason for filing your
returns. Select the appropriate option that is applicable to your situation:

 Taxable income is more than the basic exemption limit

 Meets specific criteria and is mandatorily required to file ITR
 Others

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Step 7: Validate the pre-filled information

Most of the details, such as your PAN, Aadhaar, Name, Date of birth, contact
information, and bank details will be pre-filled. Validate these details carefully
before you proceed further. Also, provide your bank account information. If you
have already provided these details, ensure they are pre-validated.

As you proceed step by step, ensure to disclose all relevant income, exemptions,
and deduction details. Most of your information will be pre-filled based on the data
provided by your employer, bank, etc. Review the information carefully to ensure
it is correct. Confirm the summary of your returns, validate the details and make the
payment of balance taxes, if any.

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Step 8: e Verify ITR

The last and crucial step is to verify your return within the time limit (30 days).
Failing to verify your return is equivalent to not filing it at all. You have the option
to e verify your return using different methods such as Aadhaar OTP, electronic
verification code (EVC), Net Banking, or by sending a physical copy of ITR-V to
CPC, Bengaluru.

Why is income tax return filing important?

The income tax department has mandated to file the return to individuals only if
their income is above basic exemption limit or if they meet certain criteria like
expenditure on foreign travel being more than Rs.2 lakh, the electricity consumption
of Rs.1 lakh or more, deposit an amount/aggregate of an amount above Rs.1 crore
in one or more current accounts in FY 2019-20 or onwards.

ITR filing is also mandatory if business receipts exceed Rs.60 lakhs, professional
receipts exceed Rs.10 lakhs and TDS and TCS amount exceeds Rs.25,000.

In the case of a resident whose asset is located outside India or who has signing
authority for an account-based account outside India, it is always a good idea to file
your ITR even if you are not eligible due to the benefits.

 Filing of ITR creates a valid proof of income or net worth,

 ITR is required for applying for any loan in the future
 ITR is required by banks even for applying credit cards
 ITR is required for VISA applications, etc.
 ITR is required for obtaining Term insurance
 ITR is required for obtaining government tenders

When do we need to file the income tax return?

 Income is more than basic exemption limit

 Deposited more than Rs. 1 crore in 'current' bank account
 Deposited more than Rs. 50 lakhs in 'savings' bank account
 Spent more than Rs. 2 lakhs on foreign travel

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 Electricity expenditure is more than Rs. 1 lakh

 TDS or TCS is more than Rs. 25,000
 Business turnover is more than Rs. 60 lakhs
 Professional income is more than Rs. 10 lakhs

How to file an income tax return after the due date?

The due date to file ITR is July 31st. If you miss filing your ITR within the deadline,
you can file a belated return or updated return. However, a late filing fee and interest
will be applicable. Penalty in terms of additional taxes is also applicable in case
of update return.
How to file an income tax return for previous years?

You can file the ITR of previous years using updated return (ITR U form).
Nevertheless, there are certain restrictions on eligibility and the number of years for
which ITR-U can be used.

How to check if ITR is filed?

Step 1: Log in to the e-filing portal with your user ID and password.

If your PAN is not linked with Aadhaar, a pop-up message will indicate its
inoperability. Link PAN with Aadhaar by clicking "Link Now" or continue
without linking.

Step 2: Go to e-File > Income Tax Returns > View Filed Returns.

Step 3: View all your filed returns on the page. Use "Filter" to sort returns based on
criteria like Assessment Year or Filing Type. Click "View Details" and you will be
able to see the status of your ITR in the form of a return's life cycle along with
action items (e.g., pending e-Verification).

Note:

If PAN is inoperative, refund issuance will be on hold until linked.

What will happen if I have missed the due date or made a mistake while filing
my Income Tax Return?

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I missed the deadline: You can file a belated return before 31st December of the AY,
i.e. For FY 2023-24 (AY 2024-25), the filing date of it would be till 31st Dec 2024.
(It is called a belated return, i.e., a late-filed return with the payment of late fees u/s
234F).

I made a Mistake: You can revise your already filed ITR before 31st December of
the AY, i.e. For FY 2022-23 (AY 2023-24), the filing date of it would be till 31st
Dec 2023.

If you missed the 31ST Dec 2023 deadline, file the Updated return (ITR U) within
the additional time limit only if the specified conditions are met.

Penalty in terms of additional taxes is also applicable in case of

updated return.

How to file an income tax return for previous years?

You can file the ITR of previous years using updated return (ITR U form).
Nevertheless, there are certain restrictions on eligibility and the number of years for
which ITR-U can be used.

How to check if ITR is filed?

Step 1: Log in to the e-filing portal with your user ID and password.

If your PAN is not linked with Aadhaar, a pop-up message will indicate its
inoperability. Link PAN with Aadhaar by clicking "Link Now" or continue
without linking.

Step 2: Go to e-File > Income Tax Returns > View Filed Returns.

Step 3: View all your filed returns on the page. Use "Filter" to sort returns based on
criteria like Assessment Year or Filing Type. Click "View Details" and you will be
able to see the status of your ITR in the form of a return's life cycle along with
action items (e.g., pending e-Verification).

Note:

If PAN is inoperative, refund issuance will be on hold until linked.

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How to file an income tax return for previous years?

You can file the ITR of previous years using updated return (ITR U form).
Nevertheless, there are certain restrictions on eligibility and the number of years for
which ITR-U can be used.

How to check if ITR is filed?

Step 1: Log in to the e-filing portal with your user ID and password.

If your PAN is not linked with Aadhaar, a pop-up message will indicate its
inoperability. Link PAN with Aadhaar by clicking "Link Now" or continue
without linking.

Step 2: Go to e-File > Income Tax Returns > View Filed Returns.

Step 3: View all your filed returns on the page. Use "Filter" to sort returns based on
criteria like Assessment Year or Filing Type. Click "View Details" and you will be
able to see the status of your ITR in the form of a return's life cycle along with
action items (e.g., pending e-Verification).

Note:

If PAN is inoperative, refund issuance will be on hold until linked.

What will happen if I have missed the due date or made a mistake while filing
my Income Tax Return?

I missed the deadline: You can file a belated return before 31st December of the AY,
i.e. For FY 2023-24 (AY 2024-25), the filing date of it would be till 31st Dec 2024.
(It is called a belated return, i.e., a late-filed return with the payment of late fees u/s
234F).

I made a Mistake: You can revise your already filed ITR before 31st December of
the AY, i.e. For FY 2022-23 (AY 2023-24), the filing date of it would be till 31st
Dec 2023.

If you missed the 31ST Dec 2023 deadline, file the Updated return (ITR U) within
the additional time limit only if the specified conditions are met.

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What are the consequences of non e- verifying the income tax return?

It is required to either e verify the return or send it by making the signature

physically to CPC, Income Tax Department, Bengaluru within 30 days of filing the
return. Failing to do so will result in invalidation of return, which means the return
will be considered as having never been filed.

If the return is verified after 30 days, the date of e-verification will be considered as
the date of filing, and if such date falls after the due date, then the late filing fees of
Rs.5000/Rs.1000 will be levied.

The tax regime shall be switched to the default regime, and the return will be
processed. (For FY 2023-24, if the new tax regime was opted out, then the return
will be processed under the new tax regime (default regime) by disallowing the
ineligible exemptions and deductions.

 ITR-1 FORM

 This form is for resident Indians who fall under the below-mentioned
categories:

 If income is created from a pension or salary

 If income is created from single house property, however, in case
the losses have been carried forward from the previous year, the
exclusion is allowed.
 In case the income is generated from agriculture (not more than Rs.5,000)
 The total income produced can be a maximum of Rs.50 lakh and not more

above Rs 50 lakh.

 An individual who is either a director of a company or has held any

unlisted equity shares at any time during the financial year.

 Residents not ordinarily resident (RNOR) and non-residents.

 Individuals who have earned income An individual with an income

through the following means:

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 More than one house property

 Lottery, racehorses, legal gambling.

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Income that has been created from other sources such as lottery or winning horse 

Applicability of ITR – 1
Return Form ITR – 1 (SAHAJ) can be used by a ordinarily resident individual
whose total income includes:
 Income from salary/pension; or
 Income from one house property (excluding cases where loss is brought
forward from previous years or loss to be carried forward; or
 Income from other sources (excluding winnings from lottery, income from
race horses and income chargeable to tax at special rates). Further, in a case
where the income of another person like spouse, minor child, etc., is to be
clubbed with the income of the taxpayer, this return form can be used only
when such income falls in any of the above categories.

Non-applicability of ITR – 1
 Who is a Non-resident or Not Ordinarily Resident
 Who is a director of a company
 Whose total income exceeds Rs. 50 lakhs
 Who has income from more than 1 house property
 Who has held unlisted equity shares at any time during the previous year
 Who claims deduction under Section 80QQB or Section 80RRB in respect of
royalty from patents or books
 Who claims deduction under Section 10AA or Part-C of Chapter VI-A
 Who has brought forward loss or losses to be carried forward under any head
[A s amended by Finance A c t, 2 021]
 Person claiming deduction under Section 57 from income taxable under the
head 'Other Sources'(other than deduction allowed from family pension)
 Who wants to claim relief under Section 90 or 91
 Who wants to claim credit of tax deducted at source in the hands of any other
person.
 Who has any assets (including Financial Interest in an entity) located outside
India.

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 Who has signing authority in any account outside India

 Who has any income to be apportioned in accordance with provisions of
Section 5A
 15. Who has any of the following income:
o Income from Business or Profession
o Capital Gains
o Income taxable under the head 'Other sources' which is taxable at special
rate
o Dividend income exceeding Rs. 10 lakhs taxable under Section 115BBDA
o Unexplained income (i.e., cash credit, unexplained investment, etc.)
taxable at 60% under Section 115BBE
o Agricultural Income exceeding Rs. 5,000
o Income from any source outside India 16. In whose case: The tax has been
deducted on cash withdrawal under Section 194N. The tax has been
deferred in respect of ESOPs allotted by an eligible start-up.

ITR 2 FORM

ITR-2 form is for individuals and Hindu Undivided Families (HUFs) who fall under
any of the following categories:

 The income of the taxpayer must be more than Rs.50 lakh

 Income can be created via salary or from a pension
 Income generated from house property
 Income generated from sources such as lottery or horse races
 In case the taxpayer is a company’s director)
 Agricultural income of the taxpayer is higher than Rs.5,000
 Revenue produced from capital gains
 In case any investments were made in equity bonds unlisted during the
financial year
 Income is generated from foreign assets and foreign income

Applicability of ITR – 2
This Return Form is to be used by an individual or an Hindu Undivided Family who

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is not having income chargeable to income-tax under the head “Profits or gains of

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business or profession”. Further, in a case where the income of another person like
spouse, minor child, etc., is to be clubbed with the income of the taxpayer, this
Return Form can be used if income to be clubbed falls in any of the above
categories.
Non-applicability of ITR – 2
Return Form ITR – 2 cannot be used by an individual or an Hindu Undivided Family
whose total income for the year includes income from Business or Profession or he
wants to claim deduction under section 10AA or part-c of chapter VI-A.

ITR 3 FORM

This form must be chosen by individual taxpayers and HUFs who make an income
from a profession or from owning a business. The following mentioned taxpayers
can select the ITR-3 form:

 Individuals creating a profit from a business or profession

 In case any investments were made in equity shares unlisted at any time
during a financial year
 In case the taxpayer is a partner in a company
 In case the taxpayer is a director of a company
 If income is produced from salary or a pension, house property, or any other
source of income
 Turnover of the business pension exceeds Rs.2 crore

Applicability of ITR – 3
Form ITR – 3 can be used by an individual or a Hindu Undivided Family who is
having income under the head business or profession.12
Non-applicability of ITR – 3
Form ITR – 3 cannot be used by any person other than an individual or a HUF.
Further, an individual or a HUF not having income from business or profession
cannot use ITR – 3.

ITR 4 FORM

In the case of individuals, HUFs and Partnership Firms who are residents of India

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create an income from a business or profession; they must select ITR-4. Limited

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Liability Partnerships (LLPs) cannot choose this type of ITR form. Taxpayers who
have also selected the presumptive income scheme under Section 44ADA, Section
44AD, and Section 44AE of the Income Tax Act 1961, must also choose this form.

Applicability of ITR – 4 (SUGAM)

Form ITR – 4 (SUGAM) can be used by an individual/HUF/Firm whose total
income for the year
includes:
 Business income computed as per the provisions of section 44AD or 44AE;
or
 Income from profession computed as per the provisions of section 44ADA;
or
 Income from salary/pension; or
 Income from one house property (excluding cases where loss is brought
forward from previous
 years or losses to be carried forward); or
 Income from other sources (excluding winnings from lottery and income from
race horses).
Further, in a case where the income of another person like spouse, minor child, etc.,
is to be clubbed with the income of the taxpayer, this return form can be used where
income to be clubbed falls in any of the above categories.
Non-applicability of ITR – 4 (SUGAM)
Form ITR – 4 (SUGAM) cannot be used by a person:
 Who is a Non-resident or Not Ordinarily Resident
 Who is a director of a company
 Whose total income exceeds Rs. 50 lakhs
 Who has income from more than one House Property
 Who has held unlisted equity shares at any time during the previous year
 Who claims deduction under section 80QQB or 80RRB in respect of royalty
from patent or books13
 Who claims deduction under section 10AA or Part-C of Chapter VI-A
 Who has brought forward loss or losses to be carried forward under any head
 Person claiming deduction under Section 57 from income taxable under the

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head 'Other Sources' (other than deduction allowed from family pension)

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 Who wants to claim relief under Sections 90 or 91

 Who wants to claim credit of tax deducted at source in the hands of any other
person.
 Who has any assets (including Financial Interest in an entity) located outside
India.
 Who has signing authority in any account outside India
 Who has any income to be apportioned in accordance with provisions of
Section 5A [A’s amended by Finance A c t, 2 021]
 15. Who has any of the following income:
o Income from Business or Profession
o Capital Gains or Loss
o Income taxable under the head 'Other sources' which is taxable at
special rate
o Dividend income exceeding Rs. 10 lakhs taxable under Section
115BBDA
o Unexplained income (i.e., cash credit, unexplained investment, etc.)
taxable at 60% under Section 115BBE
o Agricultural Income exceeding Rs. 5,000
o Income from any source outside India
o Income from speculative business and other special incomes.
o Income from agency business or commission or brokerage
 16. Who has income of the nature specified in section 17(2)(vi) on which tax
is payable/deductible under section 192(2) or 192(1C).
In case the assesse keeps and maintains all books of accounts and other documents
referred to in section 44AA, and also gets his accounts audited and obtains an audit
report as per section 44AB, filling up the Form ITR-4 (Sugam) is not mandatory. In
such a case, other regular return forms viz. ITR-3 or ITR-5, as applicable, should
be used.

ITR 5 FORM

Anyone following under the categories mentioned below can file ITR 5 Form:

 Artificial Juridical Person (AJP)

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 Business trusts
 Estate of insolvent
 Estate of deceased
 Associations of Persons (AOPs)
 Body of Individuals (BOIs)
 LLPs and companies

Applicability of ITR – 5
Form ITR-5 can be used by a person being a firm, LLP, AOP, BOI, Artificial
Juridical Person (AJP) referred to in section 2(31)(vii), local authority referred to in
section 2(31)(vi), representative assessee referred to in section 160(1)(iii) or (iv),
cooperative society, society registered under Societies Registration Act, 1860 or
under any other law of any State, trust other than trusts eligible to file Form ITR-7,
estate of deceased person, estate of an insolvent, business trust referred to in section
139(4E) and investments fund referred to in section 139(4F).
Non-applicability of ITR – 5
Form ITR – 5 cannot be used by a person who is required to file the return of income
under section 139(4A) or 139(4B) or 139(4C) or 139(4D) (i.e., trusts, political
parties, institutions, colleges, etc.).

ITR 6 FORM

ITR-6 is for any company that are not claiming exemptions related to Section 11 of
the Income Tax Act, 1961. Firms that are filing income tax returns under this section
can only do it electronically.

Applicability of ITR – 6
Form ITR – 6 can be used by a company, other than a company claiming exemption
under section 11 (exemption under section 11 can be claimed by a
charitable/religious trust).
Non-applicability of ITR – 6
Form ITR – 6 cannot be used by a company claiming exemption under section 11
(exemption under section 11 can be claimed by a charitable/religious trust).

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ITR 7 FORM

Individuals and firms that have furnished returns related to Section 139(4A),
Section 139(4B), Section 139(4C), Section 139(4D), Section 139(4E) and Section
139(4F) must choose this ITR form.

Listed below are the details of the returns that should be filed section-wise:

 Section 139(4A): The ITR forms must be submitted by individuals who gain
an income from a property that belongs to a charity/trust or other legal
obligations and the income that is produced is solely used for charitable or
religious purposes
 Section 139(4B): ITR forms must be filed under this section by a political
party if the gross income that has been generated is more than the maximum
sum
 Section 139(4C): ITR forms must be submitted under this section if it is a
Scientific Research association, hospitals, medical institutions, universities,
funds, News agencies and other educational institutions
 Section 139(4D): Any educational institution such as a college or university
that are not required to furnish any income or loss must submit ITR forms
under this section
 Section 139(4E): Business trusts that do not need to furnish any kind of
income or loss must file ITR forms under this section
 Section 139(4F): Investment funds present under Section 115UB and do not
need to furnish any income or losses must also submit ITR forms under this
section

Applicability of ITR – 7
Form ITR – 7 can be used by persons including companies who are required to
furnish return under section 139(4A) or section 139(4B) or section 139(4C) or
section 139(4D) (i.e., trusts, political parties, institutions, colleges, etc.).
Non-applicability of ITR – 7
Form ITR – 7 cannot be used by a person who is not required to furnish return under
section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) (i.e.,
trusts, political parties, institutions, colleges, etc.).

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STEPA TO FILE ITR 1 UNDER E TAX FILING PORTAL

For Filing the ITR you need to download a JSON-based offline utility. ITR-1 can
be filed online also. The following steps are help to file ITR-1 at New e-Filing
portal 2.0

STEP 1: After Login we should click on the Dashboard to find out the page where
we can file our return

STEP 2: Select the Assessment Year

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STEP 3: After selection of the Assessment Year, we should select mode of filing

STEP 4: After step 3 you will see the return option (Fresh Income Tax Return or
Saved Draft of Income Tax Return) , you can choose Start New Filing

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STEP 5: Under this step you can select the status of the Assessee

STEP 6: This step provides the option to choose the ITR Form i.e ITR 1 or ITR 4(If
the Assessee get any difficulty to choose his ITR Form he can click on the proceed
button which help the Assessee to decide his ITR Form.)

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STEP 7: Select ITR 1 and Click on Proceed with ITR 1

STEP 8: After finished all the above 7 steps you will see this screen shoot in your
screen, then click on Let’s Get Started

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STEP 9: Are you filing the income tax return for any of the following reasons? (you
can select any one or more reasons, if it is not available there then you can select
the Other Option)

STEP 10: After step 8 on pop up Message will come in your screen (We have pre-
filled your return based on information available with the Income Tax Department.
Please confirm that the details in each section are correct to proceed.)

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STEP 11: (PERSONAL INFORMATION) Your personal Information will be Auto

Populated. You can edit it if you want.

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Notes:

 Minimum of one account should be selected for refund credit.

 In the case of Refund, multiple accounts are selected for refund credit, then
the refund will be credited to one of the accounts decided by CPC after
processing
 the return.
 Please ensure that at least one preferred bank account is pre-validated.
 Please select Nature of the Employment any one of the following
o Central Government
o State Government
o Public Sector Undertaking
o Pensioners
o Others
o Not Applicable (eg. Family Pension etc.)

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After filling personal Information a Confirmed mark will come beside Personal
Information

STEP 12: (GROSS TOTAL INCOME) Your personal Information will be Auto
Populated. You can edit it if you want.

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Note:

You will also be required to enter the remaining / additional details including your
exempt income if any.

STEP 13: (TOTAL DEDUCTIONS) This Tab includes tax-saving deductions or

payments under section 80C or 80D etc. like life insurance, medical premium,
pension funds, provident fund, etc.

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STEP 14: (TAX PAID) In the Tax Paid section, you need to verify taxes paid by you
in the previous year. Tax details include TDS from Salary / Other than Salary as
furnished by Payer, TCS, Advance Tax, and Self- Assessment Tax.

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STEP 15: (TOTAL TAX LIABILITY)

In case you have Tax Liability, you can choose Pay Now or Pay Later Option.

 It is recommended to use the Pay Now option. Carefully note the BSR Code
and Challan Serial Number and enter them in the details of payment.
 If you opt to Pay Later, you can make the payment after filing your Income
Tax Return, but there is a risk of being considered as an assessee in default,
and liability to pay interest on tax payable may arise.

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STEP 16: After verifying all the data, you may proceed for Verification. It is
mandatory to verify your return, and e-Verification (recommended option – verify
Now) is the easiest way to verify your ITR – it is quick, paperless, and safer than
sending a signed physical ITR-V to CPC by post.

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CONCLUSION

In summary, the income tax internship has been an enriching journey characterized
by substantial growth and learning experiences. Throughout the internship, I have
had the opportunity to delve into the intricate world of income tax, gaining a
profound understanding of its laws, regulations, and practical applications. By
actively participating in tax preparation tasks, conducting in-depth research, and
analysing complex tax scenarios, I have cultivated a robust skill set essential for
success in the tax profession.

One of the most significant takeaways from this internship has been the
development of my technical proficiency in tax preparation software and research
tools. From mastering tax forms to navigating electronic filing systems, I have
gained hands-on experience that is invaluable for future tax-related endeavours.
Additionally, engaging in tax research has equipped me with the ability to dissect
and interpret tax laws, rulings, and precedents, thereby enhancing my analytical
capabilities and problem-solving skills.

Moreover, the internship has provided ample opportunities for honing my

communication skills, both written and verbal. Interacting with clients, colleagues,
and supervisors has not only allowed me to articulate complex tax concepts with
clarity and precision but has also enabled me to effectively collaborate within a
professional environment. Furthermore, navigating ethical dilemmas and upholding
the highest standards of integrity and professionalism has been a central aspect of
my internship experience, contributing to my personal and ethical development as
a future tax professional.

Despite the inherent challenges of managing workload fluctuations, adapting to

workplace dynamics, and balancing academic commitments, I have embraced these
challenges as opportunities for growth and resilience. Receiving constructive
feedback and criticism has been instrumental in refining my skills and fostering a
growth mindset, while navigating the nuances of workplace culture has facilitated
my integration into the professional tax community.
In conclusion, the income tax internship has been a transformative experience that

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has equipped me with the knowledge, skills, and confident successful career
in the tax profession.

uring my internship it opened me to a real-world experience which basically

taught me the insights of income tax. This internship made me gain lot of pros which I
could indulge into my real life too. It was not just resourceful but also made me
connect to the professional environment, adapt to the workspace, and made me
evolve in all aspects.

 Understanding Tax Laws: This involves familiarizing oneself with the

Internal Revenue Code (IRC), tax regulations, revenue rulings, and other
authoritative sources. Interns may also learn about specific tax provisions,
deductions, credits, and exemptions applicable to different taxpayer
categories.
 Tax Preparation Skills: Interns may become proficient in preparing various
tax forms, such as individual income tax returns (e.g., Form 1040), corporate
tax returns (e.g., Form 1120), partnership returns (e.g., Form 1065), and
others. They may also learn about electronic filing procedures and IRS
guidelines for tax compliance.
 Research Abilities: Interns may learn how to use tax research tools such as
tax libraries, online databases, and IRS publications to find answers to
specific tax questions. They may also develop skills in analyzing tax cases
and understanding the rationale behind court decisions.
 Analytical Skills: This involves the ability to interpret complex tax laws
and regulations, assess their impact on different taxpayer scenarios, and
provide recommendations or strategies for minimizing tax liabilities or
maximizing tax benefits.
 Communication Skills: Interns may hone their communication skills
through client interviews, written correspondence, and oral presentations.
They may learn to communicate tax concepts in a clear and understandable
manner, especially when explaining tax implications to clients with varying
levels of tax knowledge.
 Problem-Solving: Interns may encounter a variety of tax-related problems

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or challenges, such as resolving discrepancies in financial records,

addressing IRS inquiries, or developing tax planning strategies to optimize
clients' tax positions.

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 Attention to Detail: Attention to detail is crucial in tax preparation to ensure

accuracy in calculations, proper documentation of deductions and credits,
and compliance with tax laws and regulations.
 Professional Etiquette: Interns may learn about professional conduct in a
tax office environment, including appropriate dress, communication
protocols, confidentiality requirements, and client interaction etiquette.
 Ethical Considerations: This involves understanding the ethical standards
governing the tax profession, including the duty to provide accurate advice,
maintain client confidentiality, avoid conflicts of interest, and adhere to
professional codes of conduct.
 Industry Insight: Interns may gain insights into the broader context of
taxation, including legislative developments, IRS enforcement priorities, tax
planning strategies, and the role of tax professionals in assisting clients with
their tax obligations.
 Networking Opportunities: Building professional relationships during an
internship can open doors to future career opportunities, whether through
referrals, job offers, or mentorship from experienced tax professionals.
 Self-Management: Developing effective time management, prioritization,
and organizational skills is essential for managing workload efficiently and
meeting deadlines in a fast-paced tax environment.

CHALLENGES FACED
 Complexity of Tax Laws: Tax laws are intricate and subject to frequent
changes, making them challenging to comprehend fully, especially for
interns with limited prior exposure. Moreover, navigating the nuances of tax
regulations for different entities and jurisdictions adds another layer of
complexity.
 Technical Skills: Proficiency in tax software and other technical tools is
essential for efficient tax preparation. However, mastering these tools
requires hands-on practice and familiarity, which can be challenging for
interns who are still learning.
 Time Management: Interns often juggle internship responsibilities with
academic coursework and personal commitments. Prioritizing tasks,

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adhering to deadlines, and managing competing demands on their time can

be demanding, requiring effective time management strategies.
 Client Interactions: Engaging with clients, explaining tax concepts, and
addressing their concerns require strong communication skills and
professionalism. However, interns may feel apprehensive or lack confidence
in these interactions, particularly when dealing with complex tax matters or
dissatisfied clients.
 Attention to Detail: Accuracy is paramount in tax preparation to avoid
errors that could result in financial repercussions or legal consequences.
Maintaining meticulous attention to detail, especially when reviewing
financial documents and performing calculations, is crucial but can be
mentally taxing.
 Ethical Dilemmas: Interns may encounter ethical dilemmas, such as
conflicting obligations to clients and the firm, handling confidential
information, or confronting unethical behaviour. Navigating these dilemmas
requires ethical awareness, sound judgment, and adherence to professional
codes of conduct.
 Feedback and Criticism: Receiving feedback is essential for growth, but
it can also be challenging, especially when it involves constructive criticism
or highlighting areas for improvement. Interns must develop resilience and
openness to feedback to leverage it as a tool for learning and development.
 Workload Management: The workload in tax firms or accounting
departments can vary significantly, with peak periods during tax season and
fluctuations throughout the year. Interns must adapt to these fluctuations,
manage their workload effectively, and remain productive during busy
periods.
 Adapting to Workplace Culture: Each workplace has its unique culture,
norms, and dynamics, which interns must navigate and adapt to effectively
integrate into the team. Understanding unwritten rules, building
relationships with colleagues, and aligning with the organization's values
are essential aspects of this adaptation process.
 Handling Stress: The demanding nature of tax work, coupled with tight

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deadlines and client expectations, can lead to stress and burnout if not

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managed effectively. Interns must develop resilience, coping mechanisms,

and self-care strategies to maintain their well-being and performance during
the internship.

SHORT TITLE, EXTENT AND COMMENCEMENT (SEC 1)

 Short Title: This may be called the Income Tax Act, 1961,
 Extent: It extends to whole of India. (It also means people of Jammu and
Kashmir earning income is required to pay income tax to Government of
India).
 Commencement: This act comes into force on 1st day of April 1962.

FINANCE BILL

‘Financial Bill’ means a bill ordinarily introduced every year to give effect to the
financial proposals of the Government of India for the next following financial year
and includes a bill to give effect to supplementary financial proposals for any
period. A Financial Bill is a Money Bill as defined in Article 110 of the
constitution. The proposals of the government for levy of new taxes, modification
of the existing tax structure or continuance of the existing tax structure beyond the
period approved by parliament are submitted to Parliament through this bill. The
finance bill can be introduced only in Lok Sabha. Rajya Sabha can recommend
amendments in the Bill. The bill must be passed by the Parliament within 75 days
of its introduction.

PROCEDURE FOR PASSING OF THE MONEY BILLS

 A money bill can be introduced or originated only in Lok Sabha.

 A money bill can be introduced only on prior recommendations of the
President.
 Lok Sabha speaker will decide whether it is a money bill or not. His decision
is final, no one is challenging his decision.
 A money bill can be a government bill only.
 Once a money bill is passed in Lok Sabha, it is transmitted to Rajya Sabha for

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its consideration. Rajya Sabha can neither reject nor amend the money bill.
It can make only recommendations and must return the bill with or without
recommendation to Lok Sabha in 14 days.



 The Lok Sabha may or may not accept the recommendations

of Rajya Sabha. Thus, returned bill is considered passed in both houses. If
Rajya Sabha does not even return the bill in 14 days, it is considered
passed in both houses.
 The bill has to passed by the Parliament within 75 days of its introduction.

ITR FORMS

return form Brief description

ITR 1 It is applicable to an ordinarily Resident individual having

salary or pension income or income from one house property
(not a case of brought forward loss or loss to be carried
forward) or income from other sources (not being lottery
winnings and income from race horses and income
chargeable to tax at special rates). However, an individual
who is a director in a company or has held equity shares of
an unlisted company shall not be eligible to use ITR -1.
Further, the ITR-1 shall not be available to a taxpayer in
whose case the tax has been deducted on cash withdrawal
under Section 194N or tax has been deferred in respect of
ESOPs allotted by an eligible start-up.
ITR2 It is applicable to an individual or a Hindu Undivided Family
not having income chargeable to income-tax under the head
“Profits or gains of business or profession”

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ITR3 It is applicable to an individual or a Hindu Undivided Family

who has any income chargeable to tax under the head
business or [A amended by Finance Act, 2021] profession

ITR4 Also known as SUGAM is applicable to individuals or

Hindu Undivided Family or partnership firm who has opted
for the presumptive taxation scheme of section
44AD/44ADA/44AE.
ITR5 This Form can be used by a person being a firm, LLP, AOP,
BOI, artificial juridical person referred to in section
2(31)(vii), cooperative society, local authority Private
Discretionary Trust, Society registered under Society
Registration Act, 1860, trust other than trusts eligible to file
ITR 7, estate of deceased person, estate of an insolvent,
business trust and investment fund. However, a person who
is required to file the return of income under section
139(4A) or 139(4B) or 139(4C) or 139(4D) shall not use this
form (i.e., trusts, political parties, institutions, and colleges.
ITR6 It is applicable to a company, other than a company claiming
exemption under section 11 (exemption under section 11 can
be claimed by charitable/religious trust).

ITR7 It is applicable to a person including companies who are

required to furnish return under section 139(4A) or section
139(4B) or section 139(4C) or section 139(4D).

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BIBILOGRAPHY

DARSHAN COLLEGE
“A STUDY ON INCOME TAX FILING AT RAGUNANDHAN AND ASSOCIATES”

THESE BELOW SOURCES ARE USED IN THIS REPORT

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 https://www.indeed.com/career-advice/career-development/it-
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 https://cleartax.in/s/5-heads-of-income-tax
 https://www.bankbazaar.com/tax/advance-tax.html
 https://www.bajajhousingfinance.in/types-of-itr-forms
 HTTPS://CHAT.OPENAI.COM
 https://taxguru.in/category/income-tax/
 https://icmai.in/upload/Students/Syllabus2022/Inter/P7.pdf
 https://www.incometax.gov.in/iec/foportal/
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difference-between-tds-and-tcs
https://himpub.com/product/income-tax-i-bangalore-univ/

DARSHAN COLLEGE
“A STUDY ON INCOME TAX FILING AT RAGUNANDHAN AND ASSOCIATES”