How This Act Works — Logical Flow

The Income Tax Act follows a remarkably logical sequence that every taxpayer and practitioner must internalize. Income is earned during the previous year under one or more of the five heads. It is then computed under each head applying specific provisions, deductions, and exemptions. All heads are aggregated into Gross Total Income. Losses from one head are set off against income of another head (inter-head set off), and unabsorbed losses are carried forward. Deductions under Chapter VI-A (Sections 80C to 80U) are then claimed to arrive at Total Income. Tax is computed at applicable slab rates or special rates. TDS, TCS, and advance tax already paid are adjusted against the total liability. The taxpayer files a return within the due date. The department processes it through assessment (intimation, scrutiny, or best judgement). If the taxpayer disagrees, appeals lie to CIT(A)/NFAC, ITAT, High Court, and Supreme Court. Non-compliance at any stage attracts penalties and prosecution.

This page maps every major provision of the Act along this logical flow. Use it as your single-point reference to locate any section, rule, or form.

Part 1: Who Pays Tax & On What Income

These foundational sections determine the charge, scope, and applicability of income tax in India.

Section 2 — Key Definitions

| Term | Section (2025 Act) | Meaning | |------|---------|---------| | Assessee | 2(7) | Any person by whom tax or any other sum of money is payable under the Act | | Tax Year (TY) (formerly Assessment Year) | 2(9) | The 12-month period starting 1st April (Tax Year 2026-27 = April 2026 to March 2027). Note: In the Income Tax Act, 2025, "Tax Year" replaces "Assessment Year" | | Tax Year (formerly Previous Year) | 2(34) read with Section 3 | The financial year in which income is earned (Tax Year 2025-26). In the Act, 2025, there is no separate "Previous Year" — "Tax Year" covers both concepts | | Income | 2(24) | Inclusive definition covering profits, gains, dividends, perquisites, capital gains, and any receipt included by specific provisions | | Person | 2(31) | Includes individual, HUF, company, firm, AOP, BOI, local authority, and every artificial juridical person | | Total Income | 2(45) | Total amount of income computed in accordance with the provisions of the Act | | Transfer | 2(47) | Includes sale, exchange, relinquishment, compulsory acquisition, and any conversion of capital asset into stock-in-trade |

Section 4 — Charge of Income Tax

Section 4 is the charging section — the bedrock of the entire Act. It provides:

Income tax shall be charged for any tax year at the rates laid down by the relevant Finance Act
Tax is levied on the total income of every person for the tax year (formerly "previous year")
Tax shall be deducted at source or paid in advance where applicable
Without Section 4, no tax can be levied — it is the legislative authority for the entire levy

Section 5 — Scope of Total Income

| Income Category | ROR (Resident & Ordinarily Resident) | RNOR (Resident but Not Ordinarily Resident) | NR (Non-Resident) | |----------------|-------|------|------| | Income received or deemed received in India | Taxable | Taxable | Taxable | | Income accruing or arising in India | Taxable | Taxable | Taxable | | Income accruing outside India from a business controlled in India | Taxable | Taxable | Not Taxable | | Income accruing outside India (all other) | Taxable | Not Taxable | Not Taxable |

Section 6 — Residential Status Determination

For Individuals: Basic condition is met if present in India for 182+ days in the tax year, OR 60+ days in the tax year and 365+ days in preceding 4 tax years.

Special exceptions:

Indian citizens leaving for employment abroad or as crew of Indian ship: 182 days (not 60 days)
Indian citizens/PIOs visiting India with total income (excluding foreign sources) exceeding Rs. 15 lakh: 120 days threshold
Deemed resident (Sec 6(1A)): Indian citizen with total income exceeding Rs. 15 lakh (excluding foreign sources) who is not liable to tax in any other country — deemed RNOR

For Companies: Indian company is always resident. Foreign company is resident if its Place of Effective Management (POEM) is in India in that year.

Related Rule: Rule 126 — Guidance for determination of POEM.

Section 9 — Income Deemed to Accrue or Arise in India

Income from the following is always deemed to arise in India regardless of residential status:

Income from business connection in India
Income from any property, asset, or source in India
Salary earned in India (including rest period salary for services rendered in India)
Dividends paid by an Indian company
Income by way of interest, royalty, or fees for technical services payable by resident or for business carried on in India
Income from transfer of capital asset situated in India (including shares of Indian companies and indirect transfers under Sec 9(1)(i) Explanation 5)

Section 10 — Exempt Incomes (Key Provisions)

| Section (2025 Act) | Exempt Income | Limit / Condition | |---------|--------------|-------------------| | Schedule II/10(1) | Agricultural income | Fully exempt (but aggregation method applies for rate purposes if > Rs. 5,000) | | Schedule II/10(2) | Share from HUF | Exempt in hands of member (taxed at HUF level) | | Schedule II/10(10) | Gratuity — Government employee | Fully exempt | | Schedule II/10(10) | Gratuity — Non-government (covered) | Rs. 25,00,000 | | Schedule II/10(10A) | Commuted pension — Government | Fully exempt | | Schedule II/10(10AA) | Leave encashment on retirement — Government | Fully exempt | | Schedule II/10(10AA) | Leave encashment — Non-government | Rs. 25,00,000 | | Schedule II/10(10BC) | Disaster compensation | Fully exempt | | Schedule II/10(10C) | VRS compensation | Rs. 5,00,000 (Rule 2BA conditions) | | Schedule II/10(10D) | Maturity proceeds of life insurance (sum assured condition) | Exempt if annual premium does not exceed 10% of sum assured (20% for policies before 01.04.2012) | | Schedule II/10(11)/(12) | Statutory PF / Recognised PF | Exempt subject to conditions | | Schedule II/10(13A) | HRA | Least of: actual HRA, 50%/40% of salary, rent paid minus 10% of salary | | Schedule II/10(14) | Special allowances (Rule 2BB) | Prescribed limits for transport, children education, hostel, etc. | | Schedule II/10(15) | Interest on specified bonds/securities | As notified (PPF interest fully exempt) | | Schedule III/10(23C) | Income of specified educational/medical institutions | With conditions | | Schedule II/10(34) | Dividend from domestic company | Abolished from Tax Year 2021-22 — now taxable in hands of shareholder | | Schedule II/10(37) | Capital gain on compulsory acquisition of agricultural land | Fully exempt if used for agriculture in 2 preceding tax years | | Schedule II/10(38) | LTCG on listed equity (pre-2018 regime) | Replaced by Section 198 (formerly Sec 112A) from Tax Year 2019-20 |

Part 2: Computing Income — The 5 Heads

Head 1: Income from Salaries (Sections 15-17)

| Section | Provision | Quick Analysis | |---------|-----------|---------------| | 15 | Chargeability and basis of charge | Salary taxable on due or receipt basis, whichever is earlier. Arrears taxable in year of receipt. | | 16(ia) (→ Sec 19) | Standard deduction | Rs. 75,000 (new regime) / Rs. 50,000 (old regime) for Tax Year 2025-26 | | 16(ii) | Entertainment allowance deduction | Government employees only — least of Rs. 5,000, 20% of salary, or actual allowance | | 16(iii) | Professional tax | Deduction for tax on employment — maximum Rs. 2,500 per year | | 17(1) | Definition of salary | Includes basic, DA, advance salary, commission, fees, bonus, gratuity, pension, leave encashment | | 17(2) | Perquisites | Taxable value of rent-free accommodation, car, club, interest-free loan, ESOP, etc. | | 17(3) | Profits in lieu of salary | Compensation on termination, payment from unrecognised PF, Keyman insurance policy |

Key Rules:

Rule 2A: Valuation of unfurnished and furnished rent-free accommodation
Rule 3: Valuation of perquisites (motor car, gas/water/electricity, domestic servant, education, interest-free loans, ESOP, sweat equity)
Rule 2BB: Prescribed allowances exempt under Sec 10(14)

Forms: Form 16 (TDS certificate from employer), Form 12BA (statement of perquisites), Form 12BB (declaration by employee for deductions)

Head 2: Income from House Property (Sections 22-27)

| Section | Provision | Quick Analysis | |---------|-----------|---------------| | 22 | Chargeability | Annual value of property consisting of buildings or lands is taxable under this head (owner or deemed owner) | | 23 | Annual value determination | GAV = higher of municipal value and fair rent, but capped at standard rent; NAV = GAV minus municipal taxes paid | | 23(2) | Self-occupied property | Annual value deemed NIL for up to 2 self-occupied properties | | 23(4) | Unrealised rent | Deductible from actual rent if conditions of Rule 4 are met | | 24(a) | Standard deduction | 30% of NAV (no deduction if self-occupied — NAV is NIL) | | 24(b) (→ Sec 22) | Interest on borrowed capital | Rs. 2,00,000 limit for self-occupied (Rs. 30,000 if construction not completed in 5 years); no limit for let-out | | 25 | Unrealised rent recovered later | Taxable in year of recovery (minus 30% standard deduction) | | 25A | Arrears of rent | Taxable in year of receipt minus 30% deduction | | 26 | Co-ownership | Each co-owner taxed on proportionate share as if they own a separate property | | 27 | Deemed owner | Includes transferor under Sec 53A, holder of impartible estate, member allotted by co-operative society, lessee under 12-year+ lease, holder of rights under Sec 269UA(f) |

Key Rules: Rule 4 — Determination of GAV and conditions for unrealised rent

Loss from house property: Maximum loss that can be set off against other heads is Rs. 2,00,000 per year. Balance carried forward for 8 tax years (set off only against house property income).

Head 3: Profits & Gains from Business or Profession (Sections 28-44)

Charging & Income Provisions

| Section | Provision | Quick Analysis | |---------|-----------|---------------| | 28 | Chargeability | Profits of business/profession, export incentives (MEIS/SEIS/RoDTEP), keyman insurance proceeds, cash received for non-compete | | 29 | Computation | Income shall be computed in accordance with Sections 30 to 43D |

Allowable Deductions (Sections 30-37)

| Section | Deduction | Key Conditions | |---------|-----------|---------------| | 30 | Rent, rates, taxes, repairs for premises | Revenue expenditure on business premises | | 31 | Repairs and insurance of machinery/furniture | Revenue expenditure; capital expenditure via depreciation | | 32 | Depreciation | On tangible and intangible assets at prescribed rates (Rule 5); additional depreciation 20% for new plant & machinery in manufacturing | | 32(1)(iia) | Additional depreciation | 20% on new plant/machinery (manufacturing sector); used for less than 180 days — 50% allowed, balance next year | | 33AB/33ABA | Tea/coffee/rubber development & site restoration deposits | Deduction for amounts deposited in specified accounts | | 35 | Scientific research expenditure | 100% for in-house R&D; weighted deduction 150% for contributions to approved bodies (phased out — now 100%) | | 35AD | Capital expenditure on specified businesses | 100% deduction (cold chain, hospital, housing, fertiliser, etc.) — investment-linked deduction | | 36(1)(i) | Insurance premiums | For stock and stores | | 36(1)(ii) | Bonus/commission to employees | Not otherwise payable as profits or dividends | | 36(1)(iii) | Interest on borrowed capital | For purposes of business/profession; disallowed to extent of interest-free advances to related parties without business justification | | 36(1)(va) | Employee contribution to PF/ESI | Must be deposited by due date under the relevant Act (strict compliance required after SC ruling in Checkmate Services) | | 36(1)(vii) | Bad debts written off | Must be actually written off; no need to prove irrecoverable (TRF Ltd. SC ruling) | | 37(1) | General/residual deduction | Any expenditure not being capital or personal, laid out wholly and exclusively for business — NOT if for an offence or prohibited by law |

Disallowances (Sections 40 & 40A)

| Section | Disallowance | Details | |---------|-------------|---------| | 40(a)(i) | Non-deduction of TDS on payments to non-residents | 100% disallowed if TDS not deducted or not deposited by due date | | 40(a)(ia) | Non-deduction of TDS on payments to residents | 30% disallowed if TDS not deducted/deposited; however, if deductee includes income in return and pays tax, disallowance does not apply | | 40(a)(ii) | Income tax, wealth tax paid | Not deductible | | 40(a)(ib) | Equalisation levy paid | Not deductible | | 40(b) | Partner remuneration & interest | Interest exceeding 12% p.a. disallowed. Remuneration limited to Sec 40(b) formula: Rs. 3,00,000 or 90% of book profit (whichever higher) on first Rs. 6 lakh of book profit; 60% on balance | | 40A(2) | Excessive/unreasonable payments to related persons | AO can disallow excess over fair market value | | 40A(3) (→ Sec 36) | Cash payment exceeding Rs. 10,000 | Entire payment disallowed; exceptions in Rule 6DD (transport operators, banks, agent payments, etc.) | | 40A(3A) (→ Sec 36, deemed income limb) | Cash repayment of existing liability > Rs. 10,000 | Same disallowance as above |

Special Provisions (Sections 43-44)

| Section | Provision | Quick Analysis | |---------|-----------|---------------| | 43(1) | Definition of actual cost | For depreciation purposes — includes purchase price, installation costs; excludes government subsidies | | 43(5) | Speculative transaction | Defined as settlement without delivery; exceptions for hedging, trading in derivatives on recognised exchanges | | 43(6) | Written down value | For block of assets — opening WDV + additions minus deletions | | 43B | Payment basis deductions | Tax, duty, cess, employer contribution to PF/ESI, bonus/commission, interest to financial institutions, leave encashment — allowed only in year of actual payment (not accrual) | | 43CA | Transfer of land/building below stamp duty | Sale consideration deemed to be stamp duty value if actual is less (tolerance of 10%) | | 44AA | Books of accounts maintenance | Mandatory if income exceeds Rs. 2,50,000 or turnover exceeds Rs. 25,00,000 in any of 3 preceding years (profession); business follows Sec 44AB threshold | | 44AB (→ Sec 58) | Tax audit | Turnover > Rs. 1 crore (Rs. 10 crore if cash receipts and payments do not exceed 5% of total); professionals > Rs. 50 lakh. Due date: 30th September | | 44AD (→ Sec 55) | Presumptive taxation — Business | Turnover up to Rs. 3 crore (if digital receipts > 95%, threshold is Rs. 3 crore; else Rs. 2 crore). Deemed income: 8% of turnover (6% for digital receipts) | | 44ADA (→ Sec 56) | Presumptive taxation — Profession | Gross receipts up to Rs. 75 lakh (if digital receipts > 95%; else Rs. 50 lakh). Deemed income: 50% of gross receipts | | 44AE (→ Sec 57) | Presumptive taxation — Goods carriage | Up to 10 goods vehicles. Deemed income: Rs. 7,500/month per heavy goods vehicle, Rs. 7,500/month for others |

Key Rules: Rule 5 (depreciation rates and block of assets), Rule 6 (written down value), Rule 6DD (exceptions to cash payment disallowance under Section 36; formerly Section 40A(3)), Rule 6G (tax audit report), Rule 8D (disallowance of expenditure for earning exempt income — Sec 14A)

Key Forms: Form 3CA (audit report for persons already audited under other law), Form 3CB (audit report for others under Section 58; formerly Section 44AB), Form 3CD (statement of particulars — the detailed tax audit annexure), Form 3CEB (accountant's report for international transactions and specified domestic transactions — transfer pricing; under Section 171; formerly Section 92E)

Head 4: Capital Gains (Sections 45-55A)

| Section | Provision | Quick Analysis | |---------|-----------|---------------| | 45(1) | Chargeability | Profits or gains from transfer of a capital asset are taxable in the year of transfer | | 45(1A) | Insurance claim on capital asset | Deemed transfer; FMV on date of damage minus cost = capital gain | | 45(2) | Conversion of capital asset to stock | FMV on date of conversion is deemed sale consideration; taxable in year of actual sale of stock | | 45(3) | Transfer to firm by partner | Amount recorded in firm's books is deemed sale consideration | | 45(4) | Distribution on dissolution/reconstitution | FMV on date of receipt is deemed sale consideration | | 45(5A) | Joint development agreement (JDA) | Capital gain taxable in year of completion certificate (not year of JDA), subject to conditions | | 46A | Buyback of shares | Taxed in hands of company under Sec 115QA (distribution tax on buyback); now taxable in hands of shareholder from 01.10.2024 | | 47 | Transactions not regarded as transfer | Gift, transfer under amalgamation/demerger (conditions apply), conversion of sole proprietorship/firm to company, transfer between holding-subsidiary (100% ownership) | | 48 | Mode of computation | Sale consideration minus (cost of acquisition + cost of improvement + transfer expenses). Indexation benefit available for assets acquired before 23.07.2024 under old regime option | | 49 | Cost to previous owner | For gifted/inherited/amalgamated assets — cost is what the previous owner paid | | 50 | Depreciable assets | No separate short-term/long-term; WDV of block after deletion is the cost basis. If block becomes NIL, STCG arises on the excess | | 50C | Stamp duty value as deemed consideration | For land/building, if sale consideration is less than stamp duty value, the stamp duty value is deemed consideration (10% tolerance band) | | 50CA | Unquoted shares — FMV as deemed consideration | If actual consideration is less than FMV determined per Rule 11UA, FMV is deemed consideration | | 54 | Exemption — Sale of residential house (individual/HUF) | Invest capital gain in one residential house within 1 year before / 2 years after sale, or construct within 3 years. Cap: Rs. 10 crore | | 54B | Agricultural land | Invest in new agricultural land within 2 years | | 54D | Compulsory acquisition of land/building of industrial undertaking | Invest in new land/building within 3 years | | 54EC | Investment in specified bonds (NHAI/REC) | Up to Rs. 50 lakh; 5-year lock-in. Must invest within 6 months of transfer | | 54F | Sale of any long-term capital asset (other than house) | Invest net consideration in one residential house. Proportionate exemption. Must not own more than one house on date of transfer or purchase another within 2/3 years | | 55 | Meaning of cost of acquisition | For self-generated goodwill, tenancy rights, etc. cost is NIL. For assets acquired before 01.04.2001, cost can be actual cost or FMV as on 01.04.2001, at assessee's option |

Holding Period for Long-Term: | Asset Type | Holding Period for LTCG | |-----------|------------------------| | Listed equity shares, equity-oriented mutual funds, listed bonds | 12 months | | Unlisted shares, immovable property | 24 months | | All other assets | 36 months |

Tax Rates on Capital Gains: | Type | Tax Rate | Section (2025 Act) | Formerly | |------|---------|---------|------| | STCG on listed equity (STT paid) | 20% | Section 196 | 111A | | LTCG on listed equity (STT paid) | 12.5% above Rs. 1.25 lakh exemption | Section 198 | 112A | | LTCG on other assets | 12.5% without indexation (new default); option to use 20% with indexation for assets acquired before 23.07.2024 | Section 197 | 112 | | STCG on other assets | Slab rates | Normal | — |

Key Rules: Rule 11UA (valuation of unquoted equity shares — Net Asset Value method), Rule 11UAC (specified transaction for Sec 47 exemption), Rule 8D (indexation cost inflation index — discontinued for acquisitions after 22.07.2024 under new regime)

Head 5: Income from Other Sources (Sections 56-59)

| Section | Provision | Quick Analysis | |---------|-----------|---------------| | 56(1) | General charging section | Any income not taxable under any other head (residuary head) | | 56(2)(i) | Dividends | Now taxable in hands of shareholder (post abolition of DDT from AY 2021-22) | | 56(2)(ii) | Winnings from lotteries, card games, etc. | Taxable at flat 30% (Sec 115BB); no deductions or set-off | | 56(2)(vii) | Gifts received — aggregate exceeding Rs. 50,000 | Money, immovable property, or movable property received without consideration or for inadequate consideration. Exceptions: from relatives, on occasion of marriage, under will/inheritance, from local authority, from trust, under Sec 47 transfers | | 56(2)(viia) | Shares received by firm/company below FMV | Aggregate FMV exceeds consideration by more than Rs. 50,000 | | 56(2)(x) | Deemed income — receipt of property without/below FMV | Comprehensive clause covering all persons receiving any property below FMV; exceptions mirror 56(2)(vii) | | 57 | Deductions from other sources | Interest on securities — collection charges and 50% of family pension (max Rs. 15,000). No deductions from lottery/gaming income | | 58 | Amounts not deductible | Personal expenses, interest and salary payable outside India without TDS | | 59 | Deemed income — recovery of amounts | Amounts previously allowed as deduction and now recovered are deemed income |

Part 3: Aggregation & Loss Adjustment

Clubbing of Income (Sections 60-65)

| Section | Provision | Details | |---------|-----------|---------| | 60 | Transfer of income without transfer of asset | Income clubbed with transferor | | 61 | Revocable transfer of assets | Income clubbed with transferor until transfer becomes irrevocable | | 62 | Irrevocable transfers — exceptions | Not clubbed if transfer is irrevocable and not for benefit of transferor or spouse | | 63 | Definition of transfer and revocable transfer | Transfer includes any settlement, trust, covenant, agreement, or arrangement | | 64(1)(ii) | Remuneration to spouse from a concern | If spouse has no technical qualification and concern has substantial interest of individual | | 64(1)(iv) | Income from assets transferred to spouse | Without adequate consideration — income clubbed with transferor (except in connection with live-apart agreement) | | 64(1)(vi) | Income from assets transferred to son's wife | Without adequate consideration — clubbed with transferor | | 64(1A) | Income of minor child | Clubbed with parent having higher income; exemption of Rs. 1,500 per child under Sec 10(32) | | 65 | Clubbing in case of AOP/BOI | Individual share in AOP taxed at AOP level if members are unknown or indeterminate |

Unexplained Income Additions (Sections 68-69D)

| Section | Addition | Consequence | |---------|----------|------------| | 68 | Unexplained cash credits | Sum credited in books treated as income if assessee fails to explain nature and source. Applies to share application money, unsecured loans, advances | | 69 | Unexplained investments | Investment not recorded in books and source not explained — deemed income | | 69A | Unexplained money/bullion/jewellery | Found in possession, not recorded in books — deemed income | | 69B | Excess investment over recorded value | Actual cost exceeds recorded cost — difference deemed income | | 69C | Unexplained expenditure | Source of expenditure not explained — deemed income | | 69D | Amount borrowed or repaid on hundi | Otherwise than through banking channel — deemed income |

All additions under Sections 68-69D (→ Sections 102-106 in the Income Tax Act, 2025) are taxed at flat 78% (60% tax + 25% surcharge + 4% cess) under Section 195 (formerly Section 115BBE). No deduction or set-off of any loss is allowed against such income.

Set Off & Carry Forward (Sections 70-80)

| Section | Provision | Key Rules | |---------|-----------|-----------| | 70 | Intra-head set-off (within same head) | STCL only against STCG or LTCG; LTCL only against LTCG. Speculative loss only against speculative profit | | 71 | Inter-head set-off | Loss from one head set off against income of another head. Exceptions: house property loss capped at Rs. 2,00,000; capital loss not against any other head; speculative loss not against non-speculative | | 71B | Carry forward of house property loss | 8 tax years | | 72 | Carry forward of business loss | 8 tax years; set off only against business income. Return must be filed within due date | | 73 | Speculative business loss | 4 tax years; set off only against speculative profits | | 73A | Loss from specified business (Sec 35AD) | No time limit; set off only against income from specified business | | 74 | Capital loss carry forward | STCL: 8 years against STCG or LTCG. LTCL: 8 years against LTCG only | | 74A | Loss from owning/maintaining racehorses | 4 years; only against income from same activity | | 78(2) | Carry forward on change of constitution | Loss of predecessor can be carried forward by successor in amalgamation, demerger, succession under specified conditions | | 79 | Carry forward restriction for companies | Change in shareholding > 51% — loss cannot be carried forward (exceptions: listed companies, startups under Sec 79(1) proviso, amalgamation/demerger) | | 80 | Filing requirement | Losses (except house property) can only be carried forward if the return is filed within the due date under Section 263 (formerly Sec 139(1)) |

Part 4: Deductions & Tax Computation

Chapter VI-A Deductions (Sections 80C to 80U) — Old Regime Only

Most Chapter VIII deductions (Sections 122–154; formerly Chapter VI-A, Sections 80C–80U) are NOT available under the new tax regime (Section 202; formerly Sec 115BAC), which is the default regime from Tax Year 2024-25.

| Section (1961 Act) | Section (2025 Act) | Deduction | Limit | Eligibility | |---------|---------|-----------|-------|-------------| | 80C | Section 123 + Schedule XV | Investment in PPF, ELSS, LIC, NSC, housing loan principal, tuition fees, SSY, FD (5yr), NPS Tier-I | Rs. 1,50,000 | Individual, HUF | | 80CCC | included in Sec 123 | Pension fund contribution (LIC/other insurer) | Included in Section 123 limit of Rs. 1,50,000 | Individual | | 80CCD(1) | Section 124(1) | Employee contribution to NPS | 10% of salary (14% for govt); part of Section 123 limit | Individual (salaried/self-employed) | | 80CCD(1B) | Section 124(1B) | Additional NPS contribution | Rs. 50,000 (over and above Section 123 limit) | Individual | | 80CCD(2) | Section 124(2) | Employer contribution to NPS | 14% of salary (govt) / 10% of salary (others) — no overall cap; available in new regime too | Individual (salaried) | | 80D | Section 126 | Medical insurance premium | Rs. 25,000 (self/family) + Rs. 25,000 (parents); Rs. 50,000 each if senior citizen. Preventive health check-up Rs. 5,000 within limit | Individual, HUF | | 80DD | Section 127 | Maintenance of disabled dependent | Rs. 75,000 (40%+ disability) / Rs. 1,25,000 (80%+ severe disability) | Resident individual, HUF | | 80DDB | Section 128 | Medical treatment of specified diseases | Rs. 40,000 (Rs. 1,00,000 for senior/super senior citizen) | Resident individual, HUF | | 80E | Section 129 | Interest on education loan | Entire interest (no cap); for 8 years from year of first repayment | Individual | | 80EE | Section 130 | Interest on housing loan (first-time buyer, loan up to Rs. 35 lakh, value up to Rs. 50 lakh) | Rs. 50,000 | Individual (loan sanctioned in FY 2016-17) | | 80EEA | Section 131 | Interest on housing loan (affordable housing — stamp duty value up to Rs. 45 lakh) | Rs. 1,50,000 | Individual (loan sanctioned between 01.04.2019 and 31.03.2022) | | 80EEB | Section 132 | Interest on loan for electric vehicle | Rs. 1,50,000 | Individual (loan sanctioned before 01.04.2023) | | 80G | Section 133 | Donations to specified funds/institutions | 100% or 50% without qualifying limit; 100% or 50% of qualifying limit (10% of adjusted GTI) | All assessees | | 80GG | Section 134 | Rent paid (no HRA received) | Least of: Rs. 5,000/month, 25% of total income, or rent minus 10% of total income | Individual (not receiving HRA) | | 80GGA | Section 135 | Donations for scientific research or rural development | 100% deduction | All assessees (not having business income) | | 80GGB | Section 136 | Company contributions to political parties | 100% (only through non-cash modes) | Indian companies | | 80GGC | Section 137 | Individual contributions to political parties | 100% (only through non-cash modes) | Any person (not companies, not local authorities) | | 80-IA | Section 140 | Profit-linked deduction for infrastructure | 100% for specified years | Enterprises developing infrastructure, SEZ, power, etc. | | 80-IAB | Section 141 | SEZ developer | 100% for 10 consecutive years out of 15 years from notification | SEZ developer | | 80-IAC | Section 142 | Eligible startup | 100% for 3 consecutive years out of 10 years from incorporation | Startup incorporated between 01.04.2016 and 31.03.2025, turnover up to Rs. 100 crore | | 80JJAA | Section 146 | Employment generation | 30% of additional employee cost for 3 tax years | Employer (new employees with salary up to Rs. 25,000/month; at least 240 days' employment) | | 80P | Section 147 | Co-operative society income | Deduction on income from banking, cottage industry, etc. | Co-operative societies (not co-operative banks from Tax Year 2007-08) | | 80QQB | Section 149 | Royalty income of authors | Rs. 3,00,000 | Resident individual (author of books in certain fields) | | 80RRB | Section 150 | Royalty on patents | Rs. 3,00,000 | Resident individual (registered patent holder) | | 80TTA | Section 153 | Interest on savings account | Rs. 10,000 | Individual, HUF (not senior citizens) | | 80TTB | Section 153 | Interest income of senior citizens | Rs. 50,000 (on deposits with bank/co-operative/post office) | Resident senior citizen (60+) | | 80U | Section 154 | Person with disability | Rs. 75,000 (40%+ disability) / Rs. 1,25,000 (80%+ severe disability) | Resident individual |

Tax Computation — Rates & Special Provisions

Individual / HUF Tax Rates — AY 2026-27

New Regime (Section 202; formerly Sec 115BAC — Default):

| Income Slab | Tax Rate | |-------------|---------| | Up to Rs. 4,00,000 | Nil | | Rs. 4,00,001 to Rs. 8,00,000 | 5% | | Rs. 8,00,001 to Rs. 12,00,000 | 10% | | Rs. 12,00,001 to Rs. 16,00,000 | 15% | | Rs. 16,00,001 to Rs. 20,00,000 | 20% | | Rs. 20,00,001 to Rs. 24,00,000 | 25% | | Above Rs. 24,00,000 | 30% |

Rebate under Section 156 (formerly Sec 87A): Tax payable is NIL if total income does not exceed Rs. 12,00,000 (salaried with standard deduction: effective Rs. 12,75,000). Marginal relief applies.

Old Regime (exercised by filing Form 10-IEA):

| Income Slab | Tax Rate | |-------------|---------| | Up to Rs. 2,50,000 (Rs. 3,00,000 for senior citizen; Rs. 5,00,000 for super senior citizen) | Nil | | Rs. 2,50,001 to Rs. 5,00,000 | 5% | | Rs. 5,00,001 to Rs. 10,00,000 | 20% | | Above Rs. 10,00,000 | 30% |

Company Tax Rates

| Section (2025 Act) | Formerly | Applicable To | Rate | |---------|------|--------------|------| | Section 200 | 115BAA | Domestic companies (exercising option, no exemptions/deductions) | 22% + 10% surcharge + 4% cess = 25.17% | | Section 201 | 115BAB | New manufacturing companies (incorporated on/after 01.10.2019, commences manufacturing by 31.03.2024) | 15% + 10% surcharge + 4% cess = 17.16% | | Normal rate | — | Turnover up to Rs. 400 crore in FY 2021-22 | 25% | | Normal rate | — | Other domestic companies | 30% |

Special Tax Rates

| Section (2025 Act) | Formerly | Income Type | Rate | |---------|------|-----------|------| | Section 195 | 115BBE | Unexplained income (Sections 102-106; formerly 68, 69, 69A-D) | 60% + 25% surcharge + 4% cess = 78% | | Section 193 | 115BB | Lottery, crossword, racing, card games | 30% (flat) | | Section 194 | 115BBH | Virtual Digital Assets (crypto) | 30% + applicable surcharge + cess; no deduction except cost of acquisition | | Section 206 | 115JB | Minimum Alternate Tax (MAT) on companies | 15% of book profit (credit available for carry forward 15 years) | | Section 207 (approx.) | 115JC | Alternate Minimum Tax (AMT) on non-corporate assessees | 18.5% of adjusted total income |

Surcharge Rates (Individuals — AY 2026-27): | Total Income | Surcharge | |-------------|-----------| | Up to Rs. 50 lakh | Nil | | Rs. 50 lakh to Rs. 1 crore | 10% | | Rs. 1 crore to Rs. 2 crore | 15% | | Rs. 2 crore to Rs. 5 crore | 25% | | Above Rs. 5 crore | 25% (new regime max) / 37% (old regime) |

Health & Education Cess: 4% on tax + surcharge (all assessees, no exceptions)

Part 5: Tax Collection Machinery

TDS — Key Sections and Rates (Tax Year 2025-26)

Note: In the Income Tax Act, 2025, all TDS provisions (formerly Sections 192–206C) are consolidated into Sections 392–394 with a Table-based structure. The old section numbers are shown for reference.

| Old Section | 2025 Act | Nature of Payment | Threshold (Rs.) | TDS Rate | |---------|---------|------------------|-----------------|----------| | 192 | Section 392 | Salary | Basic exemption limit | Slab rates | | 193 | Section 393 Table | Interest on securities | Rs. 10,000 (debentures) | 10% | | 194 | Section 393 Table | Dividend | Rs. 5,000/year | 10% | | 194A | Section 393 Table | Interest other than on securities — Banks | Rs. 40,000 (Rs. 50,000 for senior citizens) | 10% | | 194A | Section 393 Table | Interest — Others | Rs. 5,000/year | 10% | | 194B | Section 393 Table | Lottery/crossword winnings | Rs. 10,000 | 30% | | 194BA | Section 393 Table | Online gaming winnings | Net winnings | 30% | | 194BB | Section 393 Table | Horse race winnings | Rs. 10,000 | 30% | | 194C | Section 393 Table | Contractor — Single transaction | Rs. 30,000 | 1% (Ind/HUF) / 2% (Others) | | 194C | Section 393 Table | Contractor — Aggregate in year | Rs. 1,00,000 | 1% (Ind/HUF) / 2% (Others) | | 194D | Section 393 Table | Insurance commission | Rs. 15,000 | 5% | | 194DA | Section 393 Table | Maturity of life insurance | Rs. 1,00,000 | 5% (on income component) | | 194E | Section 393 Table | Non-resident sportsmen/entertainers | No threshold | 20% | | 194G | Section 393 Table | Lottery commission | Rs. 15,000 | 5% | | 194H | Section 393 Table | Commission or brokerage | Rs. 15,000 | 2% | | 194-I | Section 393 Table | Rent — Plant & Machinery | Rs. 50,000/month | 2% | | 194-I | Section 393 Table | Rent — Land/Building/Furniture | Rs. 50,000/month | 10% | | 194-IA | Section 393 Table | Property purchase (> Rs. 50 lakh) | Rs. 50,00,000 | 1% | | 194-IB | Section 393 Table | Rent by individual/HUF (no audit) | Rs. 50,000/month | 5% | | 194-IC | Section 393 Table | Payment under JDA | No threshold | 10% | | 194J | Section 393 Table | Professional/Technical fees | Rs. 30,000/year | 10% (professional) / 2% (technical/call centre) | | 194K | Section 393 Table | Mutual fund units income | No threshold | 10% | | 194LA | Section 393 Table | Compulsory acquisition compensation | Rs. 2,50,000 | 10% | | 194M | Section 393 Table | Commission, brokerage, contractual payment by individual/HUF | Rs. 50,00,000/year | 5% | | 194N | Section 393 Table | Cash withdrawal from bank | Rs. 1 crore | 2% (filers) / 5% (non-filers above Rs. 20 lakh) | | 194O | Section 393 Table | E-commerce operator payments | Rs. 5,00,000/year | 1% | | 194P | Section 393 Table | Tax deduction for senior citizens (75+) | Specified bank handles TDS | Slab rates | | 194Q | Section 393 Table | Purchase of goods | Rs. 50,00,000/year | 0.1% | | 194R | Section 393 Table | Perquisite/benefit to business person | Rs. 20,000/year | 10% | | 194S | Section 393 Table | Virtual Digital Asset transfer | Rs. 50,000 (specified) / Rs. 10,000 (others) | 1% | | 194T | Section 393 Table | Payment to partners (salary, bonus, interest, commission) | Rs. 20,000 | 10% | | 195 | Section 393 | Payment to non-resident (any sum chargeable to tax) | No threshold | As per Act / DTAA rates | | 196B | Section 393 Table | Income from units to offshore fund | No threshold | 10% | | 196C | Section 393 Table | Income from foreign currency bonds/GDR (NR) | No threshold | 10% | | 196D | Section 393 Table | Income of FIIs from securities | No threshold | 20% |

Section 394 (formerly Sec 206AB): Higher TDS (twice the rate or 5%, whichever is higher) for non-filers who had TDS/TCS exceeding Rs. 50,000 in each of the two preceding years.

TCS — Key Provisions

Note: In the Income Tax Act, 2025, TCS provisions (formerly Section 206C) are consolidated into Section 394.

| Old Section | 2025 Act | Transaction | TCS Rate | |---------|---------|-----------|----------| | 206C(1) | Section 394 Table | Scrap, minerals, tendu leaves, timber, forest produce | 1% to 5% | | 206C(1C) | Section 394 Table | Toll plaza / Parking lot / Mining & quarrying (lease/licence) | 2% | | 206C(1F) | Section 394 Table | Sale of motor vehicle > Rs. 10 lakh | 1% | | 206C(1G) | Section 394 Table | LRS — Education (loan from financial institution) | 0.5% above Rs. 10 lakh | | 206C(1G) | Section 394 Table | LRS — Education (other source) | 5% above Rs. 10 lakh | | 206C(1G) | Section 394 Table | LRS — Medical treatment | 5% above Rs. 10 lakh | | 206C(1G) | Section 394 Table | LRS — Other purposes | 20% above Rs. 10 lakh | | 206C(1G) | Section 394 Table | Overseas tour package | 5% up to Rs. 10 lakh / 20% above Rs. 10 lakh | | 206C(1H) | Section 394 Table | Sale of goods > Rs. 50 lakh | 0.1% |

Advance Tax (Sections 207-219)

Applicable when estimated tax liability after TDS exceeds Rs. 10,000. Senior citizens (60+) with no business/profession income are exempt.

| Instalment | Due Date | Cumulative % | |-----------|---------|-------------| | 1st | 15th June | 15% | | 2nd | 15th September | 45% | | 3rd | 15th December | 75% | | 4th | 15th March | 100% |

Presumptive taxpayers (Sections 55/56; formerly Sec 44AD/44ADA): Entire tax in single instalment by 15th March.

Interest on Defaults

| Section | Default | Interest Rate | Period | |---------|---------|--------------|--------| | 234A | Late filing of return | 1% per month (part of month = full month) | From due date to date of filing | | 234B | Short payment of advance tax (paid < 90% of assessed tax) | 1% per month | From 1st April of AY to date of assessment | | 234C | Deferment of advance tax instalments | 1% per month | For each instalment shortfall period (3 months each) | | 234F | Late filing fee | Rs. 5,000 (Rs. 1,000 if total income does not exceed Rs. 5 lakh) | One-time fee |

Part 6: Returns & Assessment

Filing Obligations (Section 263; formerly Section 139)

| Sub-section (2025 Act) | Formerly | Provision | Details | |-------------|---------|-----------|---------| | 263(1) | 139(1) | Mandatory filing | Before due date: 31st July (non-audit); 31st October (audit/TP); 30th November (TP report). Companies, firms, and persons with income exceeding basic exemption must file | | 263(1) — 7th Proviso | 139(1) — 7th Proviso | Mandatory filing even if income is below exemption | If TDS/TCS exceeds Rs. 25,000 (Rs. 50,000 for senior citizens), deposits in savings exceed Rs. 50 lakh, electricity bill exceeds Rs. 1 lakh, or foreign travel expenditure exceeds Rs. 2 lakh | | 263(3) | 139(3) | Loss return | Must be filed within due date to carry forward losses (except house property loss) | | 263(4) | 139(4) | Belated return | Can be filed before 31st December of Tax Year (late fee under Section 234F applies; certain deductions/carry-forward lost) | | 263(5) | 139(5) | Revised return | Can be filed before 31st December of Tax Year or completion of assessment, whichever is earlier | | 263(8A) | 139(8A) | Updated return (ITR-U) | Within 24 months from end of Tax Year; additional tax of 25% (if filed within 12 months) or 50% (12-24 months) on tax + interest | | 263(9) | 139(9) | Defective return | AO issues notice; must rectify within 15 days (extendable) |

ITR Forms — Who Files Which

| Form | Applicable To | Key Conditions | |------|--------------|----------------| | ITR-1 (Sahaj) | Resident individual | Income up to Rs. 50 lakh from salary, one house property, other sources (interest), and agricultural income up to Rs. 5,000 | | ITR-2 | Individual / HUF | Not having business/profession income. Capital gains, multiple house properties, foreign income/assets, income above Rs. 50 lakh | | ITR-3 | Individual / HUF | Having business or profession income (includes partners in firms) | | ITR-4 (Sugam) | Individual / HUF / Firm (not LLP) | Presumptive income under 44AD/44ADA/44AE and total income up to Rs. 50 lakh | | ITR-5 | Firms, LLPs, AOPs, BOIs, Artificial Juridical Persons | All entities not filing ITR-7 and not being companies | | ITR-6 | Companies | All companies other than those claiming exemption under Sec 11 | | ITR-7 | Trusts, Political Parties, Institutions | Persons required to file under Section 263(4A)–263(4F) (formerly Sec 139(4A)–139(4F)) |

Assessment Types (Sections 270–285; formerly Sections 143–148)

| Section (2025 Act) | Formerly | Assessment Type | Key Details | |---------|---------|----------------|-------------| | 270(1) | 143(1) | Intimation / Summary assessment | Computer-processed; adjustments for arithmetical errors, incorrect claims, disallowance of losses, unverified deductions. Must be issued within 9 months of filing | | 270(2) | 143(2) | Scrutiny assessment (notice) | AO issues notice to verify return; must be served within 6 months from end of FY in which return is filed | | 270(3) | 143(3) | Scrutiny assessment (order) | Assessment completed after examination of evidence, books, documents. Must be completed within prescribed time limits | | 271 | 144 | Best judgement assessment | When assessee fails to comply with notice / does not file return / fails to maintain books. AO makes assessment to best of his judgement | | 272 | 144B | Faceless assessment | All assessments to be conducted electronically through National e-Assessment Centre; personal hearing via video conferencing | | 279 | 147 | Income escaping assessment (reassessment) | AO has information suggesting income chargeable has escaped assessment. New regime: 3 years generally; up to 10 years if escaped income is Rs. 50 lakh or more. Approval of specified authority required | | 280 | 148 | Notice for reassessment | Must be issued before making assessment under Section 279 (formerly Sec 147). Must record reasons and provide copy to assessee. Section 281 (formerly Sec 148A): prior inquiry and opportunity before issuing notice | | 292 | 153A | Assessment in case of search (Section 252; formerly Sec 132) | AO assesses or reassesses total income for 6 tax years preceding the year of search + the year of search. Extended to 10 years if undisclosed income relating to assets found exceeds Rs. 50 lakh | | 294 | 153C | Assessment of person other than searched | If AO is satisfied that books/documents/assets seized belong to other person, proceedings initiated against such person |

Part 7: Appeals & Dispute Resolution

| Stage | Authority / Section (2025 Act) | Formerly | Time Limit | Key Details | |-------|-------------------|---------|-----------|-------------| | 1. Rectification | Section 287 — AO / CIT(A) | Sec 154 | Within 4 years from order | For mistakes apparent from the record; no reappreciation of evidence | | 2. First Appeal | Section 356 — CIT(Appeals) / NFAC | Sec 246A | 30 days from date of order | Faceless appeals (National Faceless Appeal Centre) is default. Written submissions, no personal hearing generally | | 3. Second Appeal | Section 361 — ITAT (Income Tax Appellate Tribunal) | Sec 253 | 60 days from date of CIT(A) order | Last fact-finding authority. Hearing is in person. Cross-objections allowed. Power to admit additional evidence under Rule 29 | | 4. High Court | Section 368 — High Court | Sec 260A | 120 days from date of ITAT order | Only on substantial question of law. No question of fact entertained | | 5. Supreme Court | Section 370 — Supreme Court | Sec 261 | SLP under Article 136 or appeal under Section 370 | Ultimate appellate authority | | 6. Revision | Section 378 — Commissioner (Revision) | Sec 264 | Within 1 year from date of order | Assessee can file revision application if no appeal is pending. CIT has wide powers including enhancing | | 7. Revision by CIT suo motu | Section 377 — Commissioner | Sec 263 | Within 2 years from date of order | CIT can revise AO's order if it is erroneous and prejudicial to interest of revenue |

Vivad se Vishwas (Direct Tax): Periodic dispute resolution scheme allowing settlement of pending disputes by paying disputed tax amount (plus additional amount if opted after specified date). Check latest notification for applicability.

Dispute Resolution Panel (Section 275; formerly Sec 144C): For eligible assessees (foreign companies and assessees in whose case TP adjustments are proposed), can approach DRP before AO finalises assessment. DRP must issue directions within 9 months.

Part 8: Penalties & Prosecution

Major Penalties

Note: Penalty provisions have been reorganized in the Income Tax Act, 2025 under Chapter XXI. Key old section references are shown alongside.

| Section (2025 Act) | Old Section | Offence | Penalty | |---------|---------|---------|---------| | Chapter XXI | 270A | Under-reporting of income | 50% of tax payable on under-reported income | | Chapter XXI | 270A | Misreporting of income | 200% of tax payable on misreported income | | Chapter XXI | 270AA | Immunity from penalty | If tax and interest paid on under-reported income before due date and no appeal filed — immunity from penalty | | Chapter XXI | 271(1)(b) | Failure to comply with notice under Section 270(2)/270(3) (formerly Sec 142(1)/143(2)) | Rs. 10,000 for each failure | | Chapter XXI | 271A | Failure to keep books of accounts | Rs. 25,000 | | Section 442 | 271AA | Failure to maintain information/documents for international transactions | 2% of value of international transaction | | Chapter XXI | 271AAB | Undisclosed income found during search | 30% if admitted and tax paid in specified manner; 60% if income not disclosed in return | | Chapter XXI | 271B | Failure to get accounts audited under Section 58 (formerly Sec 44AB) | 0.5% of turnover or Rs. 1,50,000, whichever is less | | Chapter XXI | 271C | Failure to deduct TDS | Equal to amount of TDS not deducted | | Chapter XXI | 271CA | Failure to collect TCS | Equal to amount of TCS not collected | | Chapter XXI | 271D | Accepting loan/deposit in cash in violation of Section 185 (formerly Sec 269SS) | Equal to amount of loan/deposit | | Section 186 penalty | 271DA | Receiving amount in cash in violation of Section 186 (formerly Sec 269ST) | Equal to amount received | | Chapter XXI | 271E | Repayment of loan/deposit in cash in violation of Section 188 (formerly Sec 269T) | Equal to amount repaid | | Section 234F | 271F | Failure to file return by due date | Rs. 5,000 / Rs. 1,000 late fee | | Chapter XXI | 271FA | Failure to file Statement of Financial Transaction (SFT) | Rs. 500 per day of default | | Chapter XXI | 271H | Failure to file TDS/TCS statement | Rs. 10,000 to Rs. 1,00,000 | | Chapter XXI | 272A(1) | Failure to answer questions, sign statements, attend | Rs. 10,000 for each default | | Chapter XXI | 272A(2) | Failure to comply with other provisions | Rs. 10,000 for each default |

Criminal Prosecution

| Section (2025 Act) | Old Section | Offence | Punishment | |---------|---------|---------|-----------| | Chapter XXII | 276B | Failure to pay TDS to government | Rigorous imprisonment 3 months to 7 years + fine | | Chapter XXII | 276BB | Failure to pay TCS to government | Rigorous imprisonment 3 months to 7 years + fine | | Chapter XXII | 276C(1) | Wilful attempt to evade tax | Rigorous imprisonment 6 months to 7 years + fine (if tax evaded exceeds Rs. 25 lakh) | | Chapter XXII | 276CC | Failure to file return of income | Rigorous imprisonment 6 months to 7 years (if tax payable exceeds Rs. 25 lakh); 3 months to 2 years otherwise | | Chapter XXII | 277 | Making false statement / false verification | Rigorous imprisonment 6 months to 7 years + fine (if tax evaded exceeds Rs. 25 lakh) | | Chapter XXII | 277A | Falsification of books of accounts | Rigorous imprisonment 3 months to 2 years + fine | | Chapter XXII | 278 | Abetment of false return | Same as for the principal offence |

Part 9: Special Provisions

International Taxation

| Section (2025 Act) | Old Section | Provision | Quick Analysis | |---------|---------|-----------|---------------| | Section 159 | 90 | Agreement with foreign countries for avoidance of double taxation (DTAA) | India has DTAAs with 90+ countries. Taxpayer can apply provisions of Act or DTAA, whichever is more beneficial | | Section 159A | 90A | Adoption of agreements between specified associations | For double taxation avoidance through specified associations | | Section 160 | 91 | Unilateral relief | If no DTAA exists, resident can claim deduction of tax paid in the foreign country on doubly taxed income | | Sections 161-171 | 92-92F | Transfer Pricing | Arm's length price determination for international transactions and specified domestic transactions. Methods: CUP, RPM, CPM, PSM, TNMM, or any other prescribed method | | Section 166 | 92CA | Reference to Transfer Pricing Officer (TPO) | AO refers to TPO if aggregate value of international transactions exceeds Rs. 1 crore (threshold may vary) | | Section 171 | 92D | Documentation requirements | Master file, local file, CbCR (Country-by-Country Report for groups with consolidated revenue exceeding Rs. 5,500 crore / EUR 750 million) | | Section 171 (merged) | 92E | Accountant's report | Form 3CEB to be filed by due date | | Section 393 | 195 | TDS on payments to non-residents | Any sum chargeable to tax; application for Nil/lower certificate under Section 395 (formerly Sec 195(2)/(3)) |

GAAR — General Anti-Avoidance Rule (Sections 178-181; formerly Sections 95-102)

Applies from AY 2018-19. The Commissioner must declare an arrangement as an Impermissible Avoidance Arrangement (IAA) if its main purpose is to obtain a tax benefit and it:

Creates rights/obligations not normally created between parties dealing at arm's length
Results in misuse or abuse of provisions of the Act
Lacks commercial substance
Is carried out in a manner not ordinarily employed for bona fide purposes

Consequence: Tax officer can disregard, reallocate, recharacterize, or treat the arrangement as if it had not been entered into.

Threshold: GAAR provisions do not apply if tax benefit arising does not exceed Rs. 3 crore in aggregate.

Charitable Trusts (Sections 332-354; formerly Sections 11-13)

| Section (2025 Act) | Old Section | Provision | Key Conditions | |---------|---------|-----------|---------------| | Section 334(1)(a) | 11(1) | Exemption of income from property held for charitable purposes | At least 85% of income must be applied for charitable purposes; balance can be accumulated for 5 years (Form 10) | | Section 334(1A) | 11(1A) | Accumulation of income | Up to 15% can be accumulated indefinitely | | Section 334(2) | 11(2) | Specific accumulation | Accumulated income (Form 10) must be applied within 5 years for specified purpose | | Section 334 | 12 | Income of trusts from voluntary contributions | Treated as income from property held for charitable purposes | | Section 332 | 12A / 12AB | Registration requirement | Registration under Section 332 mandatory for claiming exemption under Section 334. Application in Form 10A. Provisional registration (3 years) for new trusts; regular registration (5 years) for existing trusts. Re-registration required periodically | | Section 351 | 13 | Denial of exemption | If income applied for benefit of specified persons (author/founder/trustee/relatives); investments in prohibited modes (Section 351(1)(d)); activities not genuine; objects not charitable | | Section 353(8)/(9) | 13(8)/(9) | Corpus donations to unregistered entities | Corpus donation taxable if given to entity not registered under Section 332 |

Cash Transaction Restrictions

| Section (2025 Act) | Old Section | Restriction | Limit | Penalty | |---------|---------|------------|-------|----------------| | Section 185 | 269SS | Accepting loan/deposit/specified advance in cash | Rs. 20,000 | 100% of amount — penalty under Chapter XXI | | Section 188 | 269T | Repayment of loan/deposit in cash | Rs. 20,000 | 100% of amount — penalty under Chapter XXI | | Section 186 | 269ST | Receiving any amount in cash | Rs. 2,00,000 from a single person in a day / for a single transaction / in respect of one event | 100% of amount — penalty under Section 186 | | Section 36 | 40A(3) | Business expenditure in cash | Rs. 10,000 (Rs. 35,000 for transport) | Disallowance of entire payment | | Section 186 (merged) | 269SU | Prescribed electronic modes mandatory | For businesses with turnover exceeding Rs. 50 crore | Rs. 5,000 per day — penalty under Section 186 |

Part 10: Important Forms Reference

| Form | Purpose | Section / Rule | Due Date | Who Files | |------|---------|---------------|----------|-----------| | ITR-1 | Income tax return — Sahaj | Sec 139 | 31st July | Resident individual (income up to Rs. 50 lakh, salary/one HP/other sources) | | ITR-2 | Income tax return | Sec 139 | 31st July | Individual/HUF without business income | | ITR-3 | Income tax return | Sec 139 | 31st July / 31st Oct (if audit) | Individual/HUF with business income | | ITR-4 | Income tax return — Sugam | Sec 139 | 31st July | Presumptive income (Sec 44AD/ADA/AE), income up to Rs. 50 lakh | | ITR-5 | Income tax return | Sec 139 | 31st July / 31st Oct (if audit) | Firms, LLPs, AOPs, BOIs | | ITR-6 | Income tax return | Sec 139 | 31st Oct | Companies (other than Sec 11 claimants) | | ITR-7 | Income tax return | Sec 139(4A)-(4F) | 31st Oct | Trusts, institutions, political parties | | ITR-U | Updated return | Sec 139(8A) | Within 24 months of end of AY | Any person who missed filing or needs to declare additional income | | Form 10-IEA | Option for old tax regime | Section 202(6); formerly Sec 115BAC(6) | Before due date of return | Individuals/HUF opting out of new regime (business income — once exercised, irrevocable unless business ceases) | | Form 16 | TDS certificate — Salary | Section 396 (formerly Sec 203) / Rule 31 | 15th June | Employer | | Form 16A | TDS certificate — Non-salary | Section 396 (formerly Sec 203) / Rule 31 | 15 days from TDS return due date | Deductor | | Form 16B | TDS certificate — Property purchase | Section 393 Table (formerly Sec 194-IA) | 15 days from filing 26QB | Buyer of property | | Form 16C | TDS certificate — Rent | Section 393 Table (formerly Sec 194-IB) | 15 days from filing 26QC | Tenant (individual/HUF) | | Form 26AS | Annual tax statement | Section 396 (formerly Sec 203AA) | Updated quarterly | Available to all assessees (auto-generated from TDS/TCS returns) | | AIS | Annual Information Statement | Section 285BB | Continuous | All assessees — comprehensive view of financial transactions | | Form 26Q | TDS return — Non-salary payments | Section 397(3) (formerly Sec 200(3)) | Quarterly (31 Jul, 31 Oct, 31 Jan, 31 May) | All deductors | | Form 24Q | TDS return — Salary | Section 397(3) (formerly Sec 200(3)) | Quarterly | Employer | | Form 27Q | TDS return — Payments to NRIs | Section 397(3) (formerly Sec 200(3)) | Quarterly | Deductor | | Form 27EQ | TCS return | Section 394(3) (formerly Sec 206C(3)) | Quarterly (15 Jul, 15 Oct, 15 Jan, 15 May) | Collector | | Form 26QB | TDS on property purchase | Section 393 Table (formerly Sec 194-IA) | 30 days from end of month of deduction | Buyer | | Form 26QC | TDS on rent | Section 393 Table (formerly Sec 194-IB) | 30 days from end of month of deduction | Tenant | | Form 3CA | Audit report (already audited under other law) | Section 58 (formerly Sec 44AB) / Rule 6G | 30th September | Tax auditor | | Form 3CB | Audit report (not audited under other law) | Section 58 (formerly Sec 44AB) / Rule 6G | 30th September | Tax auditor | | Form 3CD | Statement of particulars (tax audit annexure) | Section 58 (formerly Sec 44AB) / Rule 6G | 30th September | Tax auditor | | Form 3CEB | Transfer pricing audit report | Section 171 (formerly Sec 92E) | 31st October | Accountant (for international/specified domestic transactions) | | Form 10 | Accumulation of income by trust | Section 334(2) (formerly Sec 11(2)) | Before due date of return | Charitable trust | | Form 10A | Application for registration of trust | Section 332 (formerly Sec 12AB) | Before commencement of activities or within prescribed time | New trust/institution | | Form 10B | Audit report for charitable trust | Section 332(1)(b) (formerly Sec 12A(1)(b)) | Before due date of return | Trust auditor | | Form 12BA | Statement of perquisites | Rule 26A(2)(b) | Along with Form 16 | Employer | | Form 12BB | Declaration by employee for deductions | Rule 26C | Before end of Tax Year | Employee to employer | | Form 15CA | Information to be furnished for payment to NR | Section 393(6) (formerly Sec 195(6)) | Before remittance | Remitter | | Form 15CB | Certificate of chartered accountant for NR payments | Section 393(6) (formerly Sec 195(6)) | Before remittance (if amount exceeds Rs. 5 lakh) | Chartered Accountant | | Form 15G | Declaration to prevent TDS (non-senior citizen) | Section 395 (formerly Sec 197A) | Before first payment of income | Individual (below taxable limit, interest/dividend income) | | Form 15H | Declaration to prevent TDS (senior citizen) | Section 395(1C) (formerly Sec 197A(1C)) | Before first payment of income | Resident senior citizen (60+) | | Form 10-IC | Option for Section 200 concessional rate | Section 200 (formerly Sec 115BAA) | Before due date of return (one time, irrevocable) | Domestic company | | Form 10-ID | Option for Section 201 concessional rate | Section 201 (formerly Sec 115BAB) | Before due date of return (one time, irrevocable) | New manufacturing company | | Form 29B | MAT computation report | Section 206 (formerly Sec 115JB) | Before due date of return | Company subject to MAT | | Form 29C | AMT computation report | Section 207 approx. (formerly Sec 115JC) | Before due date of return | Non-corporate assessee subject to AMT |

Part 11: Important Rules Reference

| Rule | Topic | Related Section | |------|-------|----------------| | 2A | Valuation of rent-free/concessional accommodation (perquisite) | Sec 17(2) | | 2BB | Prescribed allowances exempt under Sec 10(14) | Sec 10(14) | | 3 | Valuation of perquisites (motor car, loan, club, etc.) | Sec 17(2) | | 4 | Determination of annual value of house property | Sec 23 | | 5 | Depreciation table — rates for different blocks of assets | Sec 32 | | 6 | Written down value computation for block of assets | Sec 43(6) | | 6DD | Exceptions to cash payment disallowance under Section 36 (formerly Sec 40A(3)) | Section 36 | | 6G | Form and particulars of audit report under Section 58 (formerly Sec 44AB) | Section 58 | | 8D | Computation of disallowance under Sec 14A (expenditure on exempt income) | Sec 14A | | 10D | Conditions for approved superannuation fund | Sec 10(13) | | 11AA | Conditions for 80G approval of institutions | Sec 80G | | 11UA | Determination of FMV of unquoted equity shares (Net Asset Value method) | Sec 50CA, Section 92 (formerly Sec 56(2)(x)) | | 11UAC | Conditions for Sec 47 exemptions in specified transactions | Sec 47 | | 12 | Conditions for recognition of provident fund | Sec 2(38) | | 17A | Books of account and documents under Sec 44AA | Sec 44AA | | 26A | Form 16 issuance procedure | Sec 203 | | 26C | Form 12BB submission by employee | Section 392 (formerly Sec 192) | | 29 | Admission of additional evidence before ITAT | Section 361 (formerly Sec 253) | | 29B | Form and manner of MAT report | Section 206 (formerly Sec 115JB) | | 30 | TDS return filing procedure | Section 397 (formerly Sec 200) | | 31 | TDS certificate format and time limit | Section 396 (formerly Sec 203) | | 37BA | Credit for TDS for the person on whose behalf tax is deducted | Section 399 (formerly Sec 199) | | 114 | Conditions for filing return of income | Section 263 (formerly Sec 139) | | 114E | Statement of Financial Transactions (SFT) — reporting obligations | Sec 285BA | | 126 | Determination of Place of Effective Management (POEM) | Sec 6(3) | | 128 | Conditions for revision application to CIT | Section 378 (formerly Sec 264) | | 132 | Form of appeal to ITAT and procedure | Section 361 (formerly Sec 253) |

Part 12: Key Thresholds & Limits (Tax Year 2025-26)

Basic Exemption Limits

| Category | New Regime (Section 202; formerly Sec 115BAC) | Old Regime | |----------|----------------------|------------| | Individual (below 60) | Rs. 4,00,000 (nil tax slab) | Rs. 2,50,000 | | Senior Citizen (60-80) | Rs. 4,00,000 | Rs. 3,00,000 | | Super Senior Citizen (80+) | Rs. 4,00,000 | Rs. 5,00,000 |

Rebate under Section 156 (formerly Section 87A)

| Regime | Income Limit for Nil Tax | Effective Limit (Salaried) | |--------|-------------------------|---------------------------| | New Regime | Rs. 12,00,000 | Rs. 12,75,000 (with standard deduction) | | Old Regime | Rs. 5,00,000 | Rs. 5,50,000 (with standard deduction) |

Deduction Limits

| Deduction (2025 Act) | Old Section | Limit (Rs.) | |-----------|---------|-------------| | Section 123 — Aggregate of investments/payments | 80C | 1,50,000 | | Section 124(1B) — Additional NPS | 80CCD(1B) | 50,000 | | Section 124(2) — Employer NPS contribution (Govt) | 80CCD(2) | 14% of salary | | Section 124(2) — Employer NPS contribution (Private) | 80CCD(2) | 10% of salary | | Section 126 — Mediclaim (self/family) | 80D | 25,000 (50,000 if senior citizen) | | Section 126 — Mediclaim (parents) | 80D | 25,000 (50,000 if senior citizen) | | Section 126 — Preventive health check-up | 80D | 5,000 (within overall limit) | | Section 127 — Disabled dependent | 80DD | 75,000 / 1,25,000 | | Section 128 — Specified diseases | 80DDB | 40,000 / 1,00,000 (senior) | | Section 129 — Education loan interest | 80E | No upper limit (full interest) | | Section 133 — Donations (qualifying limit) | 80G | 10% of adjusted GTI | | Section 134 — Rent paid (no HRA) | 80GG | 5,000/month | | Section 153 — Savings interest | 80TTA | 10,000 | | Section 153 — Senior citizen deposit interest | 80TTB | 50,000 | | Section 154 — Person with disability | 80U | 75,000 / 1,25,000 | | Section 19 — Standard deduction (salary, New regime) | 16(ia) | 75,000 | | Section 19 — Standard deduction (salary, Old regime) | 16(ia) | 50,000 | | House property loss set-off against other heads | — | 2,00,000 | | Section 22 — Housing loan interest (self-occupied) | Sec 24(b) | 2,00,000 |

TDS Thresholds (Key)

All TDS sections are now under Section 393 Table in the Income Tax Act, 2025. Old section numbers shown for reference.

| Old Section | 2025 Act | Nature | Threshold (Rs.) | |---------|---------|--------|-----------------| | 194A | Section 393 Table | Interest (Banks) | 40,000 (50,000 senior) | | 194A | Section 393 Table | Interest (Others) | 5,000 | | 194C | Section 393 Table | Contractor — Single | 30,000 | | 194C | Section 393 Table | Contractor — Aggregate | 1,00,000 | | 194H | Section 393 Table | Commission | 15,000 | | 194-I | Section 393 Table | Rent | 50,000/month | | 194-IA | Section 393 Table | Property purchase | 50,00,000 | | 194J | Section 393 Table | Professional fee | 30,000 | | 194Q | Section 393 Table | Purchase of goods | 50,00,000 | | 194R | Section 393 Table | Business perquisite | 20,000 | | 194T | Section 393 Table | Partner payment | 20,000 |

Audit & Compliance Thresholds

| Requirement | 2025 Act Section | Threshold | |-------------|-----------|-----------| | Tax audit — Business | Section 58 (formerly Sec 44AB) | Turnover > Rs. 1 crore (Rs. 10 crore if cash transactions < 5%) | | Tax audit — Profession | Section 58 (formerly Sec 44AB) | Gross receipts > Rs. 50 lakh | | Presumptive taxation — Business | Section 55 (formerly 44AD) | Turnover up to Rs. 3 crore (digital 95%+) / Rs. 2 crore (others) | | Presumptive taxation — Profession | Section 56 (formerly 44ADA) | Gross receipts up to Rs. 75 lakh (digital 95%+) / Rs. 50 lakh (others) | | Advance tax applicability | Sections 207-219 | Tax liability > Rs. 10,000 | | Books of accounts — Profession | Section 57 (formerly 44AA) | Income > Rs. 2,50,000 or receipts > Rs. 25,00,000 in any of preceding 3 years | | Transfer pricing report (Form 3CEB) | Section 171 (formerly Sec 92E) | International/specified domestic transactions exceeding Rs. 1 crore | | SFT reporting | Sec 285BA | Various transactions as prescribed in Rule 114E |

Cash Transaction Limits

| Transaction | Limit (Rs.) | Section (2025 Act) | Old Section | |-------------|-------------|---------|---------| | Accepting loan/deposit in cash | 20,000 | Section 185 | 269SS | | Repaying loan/deposit in cash | 20,000 | Section 188 | 269T | | Cash receipt from a person (single day/transaction/event) | 2,00,000 | Section 186 | 269ST | | Cash payment — Business expenditure | 10,000 (35,000 for transport) | Section 36 | 40A(3) | | Cash donation — No deduction under Section 133 | 2,000 | Section 133 | 80G(5D) |

Expert Tip

This page is your single-window reference to the entire Income Tax Act. Bookmark it. When you encounter any section number, rule, or form in practice, come back here to immediately understand where it fits in the overall scheme. The logical flow — from chargeability to assessment to appeal — is how every real-world tax problem is analyzed. Start from the charging section, trace through computation, deductions, and compliance, and you will never lose your way in the Act.

Disclaimer

The information presented on this page is for educational and general reference purposes only. It is based on the Income Tax Act, 2025 and applicable rules as understood for AY 2026-27. Tax laws are subject to frequent amendments through Finance Acts, circulars, and notifications. While every effort has been made to ensure accuracy, this content does not constitute professional tax advice. Readers are advised to consult a qualified Chartered Accountant or tax professional before making any decisions based on this information. CA Vrajkishor Changani and this website shall not be held responsible for any loss or damage arising from the use of this information.

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Income Tax Act, 2025 — Complete Section-wise Quick Analysis