CONTENTS

Chapter 1

Preliminary

[1] Section 1 : Short title, extent and commencement...................................1

Chapter 2 — Definitions

[1] Section 2(1A) : Agricultural Income...........................................................4
[2] Section 2(12A) : “books or books of account” include ..........................18
[3] Section 2(14) : “Capital asset” means ......................................................19
[4] Section 2(15) : Charitable purpose ...........................................................21
[5] Section 2(19AA) : “demerger” ..................................................................30
[6] Section 2(22)(c) : “Distribution to shareholders on liquidation”.........31
[7] Section 2(22)(e) : Deemed dividend.........................................................33
[8] Section 2(23) : Firm.....................................................................................35
[9] Section 2(24) : Income ................................................................................36
[10] Section 2(29c) : Maximum Marginal Rate .............................................39
[11] Section 2(31) : Person ...............................................................................40
[12] Section 2(35) : “principal officer” ...........................................................41
[13] Section 2(41) : “relative” ..........................................................................41
[14] Section 2(43) : “Tax” .................................................................................42
[15] Section 2(47) : Transfer.............................................................................44

Chapter 3 — Basis of Charge

[1] Section 4 : Charge of Income-tax..............................................................50
[2] Section 5 : Scope of total income ..............................................................53
[3] Section 6 : Residence in India....................................................................55
[4] Section 9 : Income deemed to accrue or arise in India..........................62
Chapter 4 — Incomes which do not Form Part of Total Income....................68
[1] Section 10(1) : Agricultural Income..........................................................68
[2] Section 10(2A) : Share of profit from a partnership firm .....................75
[3] Section 10(3) : Any receipts which are of a casual and
non-recurring nature, to the extent such receipts do not
exceed five thousand rupees in the aggregate .....................................76
[4] Section 10(4) : Interest income of non-resident......................................77
[5] Section 10(5) : Leave Travel Allowance or Leave Travel
Concession or Leave Travel assistance received by an individual
from his employer......................................................................................78
[6] Section 10(10) : Any death-cum-retirement gratuity
reveived - Subject to certain limits...........................................................79
[7] Section 10(10A) : Commuted value of pension subject to conditions ......80
[8] Section 10(AA) : Leave encashment on retirement................................82
[9] Section 10(10B) : Retrenchment Compensation received by
workers ........................................................................................................86
[10] Section 10(10C) : Amount received under a Voluntary
Retirement Scheme (VRS) subject to limits...........................................87
[11] Section 10(10D) : Any sum received under life insurance
policy (not being a key-man insurance policy)....................................91
[12] Section 10(13A) : House Rent Allowance (HRA)..................................91
[13] Section 10(14) : Special allowances or benefits granted to
employees to meet certain expenses......................................................93
[14] Section 10(16) : Scholarships granted to meet the cost of
education ...................................................................................................94
[15] Section 10(20) : Income of a Local authority.........................................95
[16] Section 10(23AA): Exemption from income-tax in the case of
regimental funds, non-public funds, etc., set up by armed forces .........99
[17] Section 10(23B): Income of funds or institutions established
for charitable purposes and existing solely for the development
of khadi or village industries or both..................................................100
[18] Section 10(23C): Income of certain funds, institutions,
educational institutions, and hospitals (subject to specific
conditions)...............................................................................................101
[19] Section 10(26): Income of scheduled tribe members residing
in certain areas ........................................................................................111
[20] Section 10(26A) : Any income accruing or arising to any person
from any source in the district of Ladakh or outside India..............114
[21] Section 10(26AAA): Income of a “Sikkimese” individual
exempt from tax subject to certain conditions ...................................115
[22] Section 10(26AAB) : Income of an Agricultural Produce
Marketing Committee or Board ...........................................................116
[23] Section 10(26B) : Income of a corporation set-up for promoting
the interests of Scheduled Castes, Scheduled Tribes or
Backward Classes ...................................................................................116
[24] Section 10(26BBB) : Any income of a Corporation established
for Ex-Servicemen ..................................................................................117
[25] Section 10(37) : Capital gain on compensation received on
compulsory acquisition of urban agricultural land situated within
specified urban limit ..............................................................................120
[26] Section 10(38) : Long-term capital gain...............................................124
[27] Section 10AA : Special provisions in respect of newly
established Units in Special Economic Zones ....................................128
[28] Section 10B: Special provisions in respect of newly
established hundred percent export-oriented undertakings. ..........129

Chapter 5 — Charitable Trusts or Institutions

[1] Section 11: Income from Property held for charitable or
religious purposes ....................................................................................133
[2] Section 11(2) : Accumulation of income in excess of 15% of
the income earned ..................................................................................138
[3] Section 11(4) : Income from a Business Carried on by the Trust.......140
[4] Section 11(4A) : Profits and Gains from Incidental Business .............143
[5] Section 11(7) : Assessee can either Obtain Registration under
Section 12AB or Obtain Approval under Section 10(23C), but he
cannot Adopt both....................................................................................146
[6] Section 12(1) : Voluntary Contributions (Donation) not Forming
Part of Corpus of the Trust or Institution Treated as Income............146
[7] Section 12A(1) : Conditions for Applicability of Sections 11 and 12......147
[8] Section 12AA : Trust Registration..........................................................149
[9] Section 12AA(3) & 12AA(4): Cancellation of Registration of
the Trust or Institution [As applicable up to 31.03.2021]....................156
[10] Section 12AB : Procedure of for fresh Registration of a Trust/
Institution (Applicable from 01.04.2021)...............................................158
[11] Section 13 : Section 11 not to apply in certain cases ..........................159
[12] Section 13A : Special provision relating to incomes of political
parties ......................................................................................................161

Chapter 6 — Heads of Income

[1] Income held as Income from Salary .....................................................163
[2] Income held as income from house property......................................164
[3] Income held as Business Income ..........................................................187
[4] Income held as income from capital Gains..........................................197
[5] Income held as income from other sources .........................................198

Chapter 7 — Expenditure Incurred in Relation to Income not

Includible in Total Income .................................................................................203
[1] Section 14A : Expenditure incurred in relation to income not
includible in total income........................................................................203

Chapter 8 — Income from Salary

[1] Section 15 : Salary ....................................................................................216
[2] Sector 16 : Deductions from Salary........................................................218
[3] Section 17 : Salary, “perquisite” and “profit in liew of salary” ........219
Chapter 9 — Income from House Property......................................................225
[1] Section 22 : Chargeability of income under the head ‘House Property’ ...............225
[2] Section 23 : Annual value how determined..........................................229
[3] Section 24 : Deductions from Income from house property ..............236
[4] Section 26 : Property owned by co-owners...........................................241
[5] Section 27 : “Owner of house property”, “annual charge”, etc. ........242
Chapter 10 — Profits and Gains of Business or Profession ..........................244
[1] Section 28 : Profits and gains of business or profession....................244
[2] Section 30 : Rent, Rates, Taxes, Repairs and Insurance for
Buildings ...................................................................................................247
[3] Section 31 : Repair and insurance of machinery, plant
and furniture ............................................................................................248
[4] Section 32 : Depreciation .........................................................................251
[5] Section 32A : Investment allowance ......................................................261
[6] Section 32AB : Investment deposit account..........................................261
[7] Section 35 : Expenditure on Scientific Research...................................262
[8] Section 35AB : Expenditure on know-how...........................................264
[9] Section 35ABB: Expenditure for obtaining licence to operate
telecommunication services....................................................................265
[10] Section 35AC : Expenditure on eligible projects schemes ................267
[11] Section 35D : Amortisation of certain preliminary expenses ..........268
[12] Section 35E : Deduction for expenditure on prospecting, etc.,
for certain minerals. ...............................................................................269
[13] Section 36(1)(ii): Any sum paid to an employee as bonus or
commission..............................................................................................270
[14] Section 36(1)(iii) : Interest paid on borrowed capital ........................270
[15] Section 36(1)(va) : Employees’ contributions (PF/ESI)......................276
[16] Section 36(1)(vii) : Deduction for Bad debts and provision
for bad and doubtful debt.....................................................................280
[17] Section 36(1)(viia) : Deductions for provision for bad and
doubtful debts created by certain banks, Financial Institutions
and Non-Banking Financial Company................................................288
[18] Section 36(1)(viii) : Special reserve created and maintained
by financial corporation (Transfer to Special Reserve).....................290
[19] Section 37 : General conditions for allowable deductions...............291

Chapter 11 — Depreciation

[1] Section 32 : Depreciation .........................................................................320
[2] [Section 32(1)(iia) : Additional Depreciation in case of any
eligible New Machinery or Plant (Other than Ship and Aircraft).....334
Chapter 12 —Amounts not Deductible ............................................................336
[1] Section 40(a)(ia) : Disallowance for non-deduction or
non-payment of TDS................................................................................336
[2] Section 40(a)(ii) : Business disallowance – Any rate or tax levied.....339
Chapter 13 — Expenses or Payments not Deductible in Certain
Circumstances ..............................................................................341
[1] Section 40A(2) : Business disallowance - Excessive or
unreasonable payments...........................................................................341
[2] Section 40A(3) : Cash payments exceeding prescribed limits............347
Chapter 14 — Profits Chargeable to Tax ...........................................................357
[1] Section 41(1) : Recovery against any loss, expenditure or
trading liability earlier allowed as deduction .....................................357
[2] Section 41(2) : Balancing charge (Impairment loss on disposal
of assets).....................................................................................................362
[3] Section 41(4) : Profits chargeable to tax - Recovery of bad debt........363

Chapter 15 — Special Provision for Deductions, Plant, Speculative
Transaction, etc.

[1] Section 42 : Special provision for deductions in the case of
business for prospecting, etc., for mineral oil ......................................365
[2] Section 43(5) : Speculative transaction ..................................................366

Chapter 16 — Certain Deductions to be only on Actual Payment

[1] Section 43B : Certain deductions to be only on actual payment .......369

Chapter 17 — Presumptive Taxation Schemes

[1] Section 44AD : Special provision for computing profits and
gains of business on presumptive basis ................................................373
[2] Section 44AE : Special Provision for Computing Profits and
Gains of Business of Plying, Hiring or Leasing Goods Carriages.....382
[3] Section 44AF : Special Provisions for Computing Profits and
Gains of Retail Business ..........................................................................386
[4] Section 44B : Special Provision for Computing Profits and Gains
of Shipping Business in the Case of Non-Residents............................387
[5] Section 44BB : Business of Providing Services and Facilities in
Connection with Exploration, etc., of Mineral Oils.............................389
[6] Section 44C : Deduction of Head Office Expenditure in the
Case of Non-Residents.............................................................................395
[7] Section 44D : Special Provisions for Computing Income by
Way of Royalties, etc., in the Case of Foreign Companies .................397

Chapter 18 — Capital Gains

[1] Section 45 : Capital Gains arising out of ‘transfer’ of a capital
asset ...........................................................................................................400
[2] Section 45(1A) : Capital gains when insurance is received ...............402
[3] Section 45(2) : Capital gains on conversion of capital assets
into stock-in-trade ..................................................................................402
[4] Section 45(3) : Capital gain on transfer of capital asset by a
partner, member to a firm or association of persons or body of
individuals, as capital contribution .......................................................403
[5] Section 45(4) : Capital gain on transfer of capital assets by a
firm/AOP/BOI to partner/member on its reconstitution ....................404
[6] Section 45(5) : Capital gain on transfer by way of compulsory
acquisition of an asset by Government.................................................406
[7] Section 45(5A) : Special provisions for computation of capital
gains in case of Joint Development Agreement...................................410
[8] Section 46 : Capital gains on distribution of assets by companies
in liquidation.............................................................................................414
[9] Section 47 : Transactions not treated as Transfer.................................415
[10] Section 48 : Mode of computation of capital gains...........................416
[11] Explanation (v) to Section 48 : Cost Inflation Index .........................420
[12] Section 49 : Cost with reference to certain modes of acquisition ...421
[13] Section 50 : Special provision for computation of capital gains
in case of depreciable assets..................................................................422
[14] Section 50C : Determining the full value of consideration in
cases of transfer of immovable property - Deemed capital gain ....423
[15] Section 51 : Advance money received .................................................429
[16] Section 54 : Exemption available for investment of long-term
capital gains arising on transfer of a residential house.....................430
[17] Section 54B : Exemption from capital gain arises from the
transfer of urban agricultural land used for agricultural purpose.......435
[18] Section 54EE : Exemption of investment of long-term capital
gains by an investor in units of a specified fund notified
by Central Government.........................................................................437
[19] Section 54F : Exemption from Capital gain arises from the
transfer of a long-term capital asset other than a house property ..438
[20] Section 55(2) : Cost of acquisition for the purpose of sections
48 and 49 ..................................................................................................447
[21] Section 55(3) : Cost of acquisition to the previous owner where
the cost for which the previous owner acquired the property
cannot be ascertained.............................................................................449

Chapter 19 — Income from Other Sources

[1] Section 56 : Income from other sources.................................................453
[2] Section 56(2)(viii) : Income by way of Interest on Compensation
or on Enhanced Compensation Referred to in Section 145A(b) .......457
[3] Section 56(2)(x) : Money/Property Received without Consideration
or Inadequate Consideration on or after 01.04.2017 ...........................462
[4] Section 57 : Deductions ...........................................................................463

Chapter 20 — Income of Other Persons, Included in Assessee’s Total
Income

[1] Section 61: Income Arising from Revocable Transfer of Assets ........472
[2] Section 63 : “Transfer” and “Revocable Transfer” Defined ..............480
[3] Section 64(1)(ii) : Income by Way of Salary, Commission, Fees
or Remuneration Paid to Spouse from A Concern in Which an
Individual has Substantial Interest........................................................482
[4] Section 64(1)(iii) : Income of Individual to Include Income
of Spouse, Minor Child, etc.....................................................................484
[5] Section 64(1)(iv) : Income Arising to the Spouse from an Asset
Transferred without Adequate Consideration.....................................489
[6] Section 64(1)(v) : Income of Individual to Include Income
of Spouse ...................................................................................................497
[7] Section 64(1)(vi) : Income Arising to Son’s Wife (i.e., Daughter-in
-Law) from the Assets Transferred Without Adequate
Consideration by the Transferor, i.e., Father-in-Law/
Mother-in-Law..........................................................................................503
[8] Section 64(1)(vii) : Clubbing of Income from Assets Transferred
to A Person for the Benefit of Spouse ....................................................506
[9] Section 64(1A) : Minor Child’s Income Clubbed with the Income
of Parent ....................................................................................................508
[10] Section 64(2) : Conversion of Self-acquired Property into the
Property of a Hindu Undivided Family.............................................516

Chapter 21 — Unexplained Cash Credits, Investments, Money, etc.

[1] Sections 68 : Unexplained Cash Credits ..............................................523
[2] Section 69 : Unexplained Investments..................................................563
[3] Section 69A : Unexplained money, etc.................................................570
[4] Section 69B : Amount of investments, etc., not fully disclosed
in books of account.................................................................................582
[5] Section 69C : Unexplained Expenditure ..............................................585
[6] Section 69D : Amount Borrowed or Repaid on Hundi ......................594

Chapter 22 — Set off, or Carry Forward and Set off

[1] Section 70 : Set-off of Loss from One Source Against Income
from Another Source Under the Same Head of Income ....................596
[2] Section 71 : Set-off of Loss from One Head Against Income
from Another ............................................................................................597
[3] Section 72 : Carry Forward and Set-off of Business Losses ..............599
[4] Section 72A : Provisions Relating to Carry Forward and Sett-off
of Accumulated Loss and Unabsorbed Depreciation
Allowance in Amalgamation or Demerger, etc....................................601
[5] Section 73 : Losses in Speculation Business .......................................607
[6] Section 74 : Loss under the Head “Capital Gains” ..........................608
[7] Section 74A : Losses from Certain Specified Sources Falling
Under the Head “Income from other Sources” ................................608
[8] Section 77 : Losses of Unregistered Firms or their Partners ............609
[9] Section 79 : Carry Forward and Set-off of Losses in Case of
Certain Companies .................................................................................610
[10] Section 80 : Submission of Return for Losses ....................................611

Chapter 23 — Deduction not to be Allowed unless Return Furnished

[1] Section 80AB : Deductions to be made with reference to the
income included in the gross total income...........................................613
[2] Section 80AC : Deduction not to be allowed unless return
furnished ...................................................................................................614
[3] Sections 80B : Definitions ........................................................................615
Chapter 24 — Deduction in Respect of Certain Payments............................618
[1] Section 80C : Deduction in respect of life insurance premia,
deferred annuity, contributions to provident fund, subscription
to certain equity shares or debentures, etc. ..........................................618
[2] Section 80G : Donations to certain funds, charitable
institutions, etc..........................................................................................618
[3] Section 80GGA : Deduction in respect of certain donations for
scientific research or rural development...............................................620
[4] Section 80GGC : Contributions given by any person to
political parties .........................................................................................620

Chapter 25 — Deductions in Respect of Certain Incomes

[1] Section 80HH : Profits and gains from hotels or industrial
undertakings, etc., in backward areas ...................................................622
[2] Section 80HHA : Deduction in respect of profits and gains from
newly established small-scale industrial undertakings in certain
areas ...........................................................................................................624
[3] Section 80HHB : Deduction in respect of profits and gains from
projects outside India...............................................................................626
[4] Section 80HHC : Deduction in respect of profits retained for
export business .........................................................................................626
[5] Section 80HHD : Deduction in respect of earnings in convertible
foreign exchange.......................................................................................634
[6] Section 80-I : Deduction in respect of profits and gains from
industrial undertakings after a certain date, etc. ................................635
[7] Section 80-IA : Deductions in respect of profits and gains from
industrial undertakings or enterprises engaged in infrastructure
development, etc.......................................................................................636
[8] Section 80-IAB : Deductions in respect of profits and gains by an
undertaking or enterprise engaged in development of Special
Economic Zone .........................................................................................647
[9] Section 80-IB : Deductions in respect of profits and gains from
certain industrial undertakings other than infrastructure
development undertakings.....................................................................648
[10] Section 80IBA : Deductions in respect of profits and gains
from housing projects ............................................................................652
[11] Section - 80IC : Special provisions in respect of certain
undertakings or enterprises in certain special category States........653
[12] Section - 80-ID : Deduction in respect of profits and gains from
business of hotels and convention centres in specified area.................654
[13] Section 80-IE : Special provisions in respect of certain
undertakings in North-Eastern States .................................................655
[14] Section 80-JJA : Deduction in respect of profits and gains from
business of collecting and processing of bio-degradable waste ......656
[15] Section 80M : Deduction in respect of certain inter-corporate
dividends .................................................................................................656
[16] Section 80-O : Deduction in respect of royalties, etc., from
certain foreign enterprises.....................................................................657
[17] Section 80-P : Deduction in respect of income of co-operative
societies ....................................................................................................660
[18] Section 80-R : Deduction in respect of remuneration from certain
foreign sources in the case of professors, teachers, etc. ....................693
[19] Section 80-RR : Deduction in respect of professional income
from foreign sources in certain cases...................................................694

Chapter 26 — Deductions in Respect of Other Incomes/Other Deductions

[1] Section 80TTA : Deduction in respect of interest on deposits
in savings account ...................................................................................698
[2] Section 80U : Deduction in case of a person with disability ..............698
Chapter 27 — Rebates and reliefs ......................................................................701
[1] Section 87 : Rebate to be allowed in computing income-tax..............701
[2] Section 89 : Relief when salary, etc., is paid in arrears or in
advance ......................................................................................................702

Chapter 28 — Double Taxation Relief

[1] Section 90 : Agreement with Foreign Countries or Specified
Territories ..................................................................................................703
[2] Section 91 : Countries with which no Agreement Exists ....................709

Chapter 29 — Special Provisions Relating to Avoidance of Tax

[1] Sections 92 : Computation of income from international
transaction having regard to arm’s length price..................................712
[2] Section 92A : Meaning of associated enterprise...................................714
[3] Section 92B : Meaning of International transaction.............................716
[4] Section 92BA : Meaning of Specified Domestic Transactions ............720
[5] Section 92C : Computation of arm’s length price ...............................721
[6] Section 92CA : Reference to Transfer Pricing Officer..........................723
[7] Section 94A : Special measures in respect of transactions with
persons located in notified jurisdictional area ...................................723

Chapter 30 — General Anti-Avoidance Rule (GAAR)

[1] Section 95 : Applicability of General Anti-Avoidance Rule ...............725
Chapter 31 — Determination of Tax in Certain Special Cases.....................729
[1] Section 111A : Tax on short-term capital gains in certain cases........729
[2] Section 112 : Tax on long-term capital gains.........................................730
[3] Section 112A : Tax on long-term capital gains in certain cases..........732
[4] Section 115BAA : Tax on income of certain domestic companies .....732
[5] Section 115BBE : Unexplained cash attracts Section 69A and
Section 115BBE de hors Assessee’s income disclosure &
categorization............................................................................................733

Chapter 32 — Special Provisions Relating to Certain Incomes
of Non-Residents

[1] Section 115E : Tax on Investment Income and Long-Term
Capital Gains.............................................................................................736
[2] Section 115H : Benefit under Chapter to be available in certain
cases even after the assessee becomes resident....................................738
Chapter 33 — Special Provisions Relating to Certain Companies .............741
[1] Section 115J : Special provisions relating to certain companies ........741
[2] Section 115JA : Deemed income relating to certain companies.........744
[3] Section 115JAA : Tax credit in respect of tax paid on deemed
income relating to certain companies....................................................744
[4] Section 115JB : Special provision for payment of tax by certain
companies..................................................................................................745

Chapter 34 — Special Provisions Relating to Certain Persons
Other than a Company

[1] Section 115JC : Special provisions for payment of tax by certain
persons other than a company ...............................................................747

Chapter 35 — Income-tax Authorities

[1] Section 116 : Income-tax authorities ......................................................750
[2] Section 119 : Instructions to subordinate authorities ..........................750

Chapter 36 — Jurisdiction

[1] Section 120 : Jurisdiction of Income-tax authorities ...........................755
[2] Section 124 : Jurisdiction of Assessing Officers....................................756
[3] Section 127 : Centralization of Search Cases - Transfer of cases
from one Assessing Officer to another Assessing Officer...................757
[4] Section 129 : Change of incumbent of an office....................................769

Chapter 37 — Power Regarding Discovery, Production of Evidence, etc

[1] Section 131 : Examination of Assessees & Witnesses for Personal
Attendance.................................................................................................771
[2] Section 131(1A) : Empowers the officers of the Investigation
Wing viz., Assistant Director, Deputy Director or the Principal
Director of Income-tax (Investigation)..................................................771

Chapter 38 — Search and Seizure

[1] Section 132(1) : When can Search be Authorised .................................776
[2] [Section 132(3) : Prohibitory Order .......................................................786
[3] Section 132(4) : Recording of Statement ...............................................788
[4] Section 132(4A) : Presumptions as to Assets, Books of
Account, etc. .............................................................................................790
[5] Section 132(5) : Estimating the undisclosed income in a
summary manner ....................................................................................792
[6] Section 132(8) : Time limit for retention books of account or
other documents seized or deemed to be seized ................................792
[7] Section 132(9A) : Where the authorised officer is not the
Assessing Officer of the person searched ............................................793
[8] Section 132A : Powers to requisition books of account, etc................793
[9] Section 132B : Application of seized or requisitioned assets ............796

Chapter 39 — Power to Calling for Information & Power of Survey

[1] Section 133(6) : Calling for information ................................................802
[2] Sections 133A : Power of Survey............................................................803

Chapter 40 — Disclosure of Information Respecting Assessees

[1] Sections 138 : Disclosure of information respecting assessees ..........806

Chapter 41 — Procedure for Assessment

[1] Section 139(1) : Return of Income...........................................................808
[2] Section 139(3) : Return of loss ................................................................813
[3] Section 139(5) : Filing of Revised Return of Income ..........................813
[4] Section 139A : Permanent Account Number.......................................815
[5] Section 139AA : Quoting of Aadhaar Number....................................817
[6] Section 140 : Return by whom to be verified........................................818
[7] Section 140A : Self-Assessment ..............................................................820
[8] Section 141 : Provisional Assessment ....................................................821
[9] Section 142 : Power of Assessing Officer to make enquiry
before assessment...................................................................................823
[10] Section 142(2A) : Giving direction to get Books of Account
Audited ....................................................................................................823
[11] Section 142A : Estimate of value of assets by Valuation Officer......824
[12] Section 143 : Processing of an income-tax return – Scope of
adjustments under section 143(1).........................................................826
[13] Section 143(2) : Scrutiny Assessment notice .....................................835
[14] Section 143(3) : Scrutiny Assessment...................................................840
[15] Section 144 : Best judgment assessment..............................................845
[16] Section 144B : Faceless Assessment......................................................851
[17] Section 144C : Reference to Dispute Resolution Panel......................855

Chapter 42 — Method of Accounting

[1] Section 145 : Method of Accounting ......................................................860
[2] Section 145A : Method of accounting in certain cases ........................875

Chapter 43 — Income Escaping Assessment

[1] Section 147 : Income Escaping Assessment ..........................................880
[2] Section 148 : Issue of notice under section 148 where income
has escaped assessment...........................................................................886
[3] Section 148A : Procedure before issuance of notice under
section 148 .................................................................................................907
[4] Section 149 : Time Limit for Notices under Sections 148 and 148A.......923
[5] Section 150 : Provision for Cases where Assessment is in
Pursuance of an Order on Appeal, etc. .................................................926
[6] Section 151 : Sanction for Issue of Notice under Section 148 .............930
[7] Section 151A : Faceless assessment of income escaping
assessment...............................................................................................935

Chapter 44 — Time Limit for Completion of Assessment, Reassessment
and Recomputation

[1] Section 153 : Time limit for completion of assessment,
reassessment..............................................................................................939

Chapter 45 — Procedure of Assessment in cases where a search was
initiated under Section 132/132A after 31.05.2003 but before 31.03.2021

[1] Sections 153A : Procedure of assessment in cases where
a search was initiated under section 132/132A after 31.05.2003
but before 31.03.2021 ...............................................................................946
[2] Section 153B : Time limit for completion of assessment under
Section 153A as applicable where a search was initiated under
section 132/132A after 31.05.2003 but before 31.03.2021.....................949
[3] Section 153C : Assessment of a person other than the person
searched [Third Party Assessment] as applicable where a search
was initiated under section 132/132A after 31.05.2003 but before
31.03.2021...................................................................................................949
[4] Section 153D : Prior Approval of JCIT - Applicable where a
search was initiated under section 132/132A after 31.05.2003
but before 31.03.2021................................................................................953

Chapter 46 — Rectification of Mistake etc.

[1] Section 154 : Rectification of mistake.....................................................954
[2] Section 156 : Notice of Demand..............................................................971
[3] Section 157 : Intimation of Loss .............................................................973

Chapter 47 — Special Procedure for Assessment of Search Cases

[1] Section 158BA : Assessment of total income as a result of search.....975
[2] Section 158BB : Computation of total income of block period ..........976
[3] Section 158BC : Procedure for Block Assessment................................977
[4] Section 158BD : Undisclosed income of any other person .................977
[5] Section 158BE : Time-limit for completion of block assessment........978
[6] Section 158BFA : Levy of interest and penalty in certain cases .........984
[7] Section 158BG : Authority competent to make assessment of
block period...............................................................................................984
[8] Section 158BH : Application of other provisions of this Act..............985
[9] Section 158BI : Chapter not to apply in certain circumstances..........986

Chapter 48 — Liability in Special Cases

[1] Section 159 : Legal Representative .........................................................987
[2] Section 160 : Representative Assessee ...................................................990
[3] Section 163 : Who may be regarded as agent in relation to a
Non Resident.............................................................................................994
[4] Section 164 : Charge of tax where share of beneficiaries unknown.......995
[5] Section 165 : Case where part of trust income is chargeable............1006
[6] Section 166 : Direct assessment or recovery not barred....................1008
[7] Section 167B : Charge of tax where shares of members in
association of persons or body of individuals unknown, etc ..........1012
[8] Section 170 : Succession to business otherwise than on death.........1013
[9] Section 171 : Assessment after partition of a Hindu undivided
family .......................................................................................................1014
[10] Section 172 : Shipping business of non-residents - Levy and
Recovery of tax......................................................................................1016
[11] Section 174 : Assessment of persons leaving India..........................1018
[12] Section 176 : Discontinued business .................................................1019
[13] Section 177 : Association dissolved or business discontinued.......1022
[14] Section 178 : Company in Liquidation ..............................................1028
[15] Section 179 : Liability of directors of private company...................1030
[16] Section 180 : Royalties or copyright fees for literary or artistic
work .......................................................................................................1031

Chapter 49 — Special Provisions Applicable to Firms

[1] Section 184 : Assessment as a firm......................................................1033
[2] Section 185 : Assessment when section 184 not complied with......1036
[3] Section 186 : Cancellation of registration...........................................1038
[4] Section 187 : Change in constitution of a firm....................................1039
[5] Section 188A : Joint and several liability of partners for tax
payable by firm.......................................................................................1040
[6] Section 189 : Dissolution of firm or discontinuance of business .....1041

Chapter 50 — Collection and Recovery of Tax

[1] Section 191 : Safeguard for Revenue - If no provision for TDS or
where tax not deducted - Tax is to be payable by Assessee Direct ......1045
[2] Section 192 : TDS from Salary...............................................................1045
[3] Section 194A : TDS from Interest other than Interest on
Securities .................................................................................................1047
[4] Section 194C : TDS from Payments to Contractors &
Sub-Contractors .....................................................................................1049
[5] Section 194E : TDS from Payments to Non-Resident Sportsmen
or Sports Associations ...........................................................................1052
[6] Section 194H : TDS from Commission or Brokerage .......................1054
[7] Section 194-1 : TDS from Rent ..............................................................1061
[8] Section 194J : TDS from Fees or Professional or Technical
Services ....................................................................................................1062
[9] Section 194LB : TDS from income by Way of Interest from
Infrastructure Debt Fund ......................................................................1063
[10] Section 194N : TDS from Cash Withdrawal Exceeding Rs. 1
Crore from Banks or Co-operative Bank or Post Office .................1063
[11] Section 195 : TDS from Payments (Other Than Salary) to
Non-Residents and Foreign Company .............................................1067
[12] Section 196 : No Tax deduction at source on Interest or
Dividend or Other Income Payable to Government, Reserve
Bank or Certain Corporations ............................................................1069
[13] Section 197 : Certificate for Deduction at Lower Rate ..................1071
[14] Section 199 : Credit for Tax Deducted ..............................................1072
[15] Section 201: Consequences of failure to Deduct or Pay..................1076
[16] Section 206C : Tax Collected at Source .............................................1077

Chapter 51 — Liability for Payment of Advance Tax

[1] Section 207 : Liability for payment of advance tax............................1078
[2] Section 214 : Interest payable by Government...................................1079
[3] Section 215 : Interest payable by assessee...........................................1080
[4] Section 217(1A) : Interest payable by assessee when no
estimate made ......................................................................................1080

Chapter 52 — Collection and Recovery

[1] Section 220 : When tax payable and when assessee deemed
in default..................................................................................................1082
[2] Section 220(2) : Interest for non-payment of tax as per demand
notice (i.e., Interest on delayed payment of tax)................................1083
[3] Section 220(2A) : Reduce or Waiver of interest paid or payable
by an assessee under section 220(2A)..................................................1084
[4] Section 220(4) : Assessee shall be deemed to be in default...............1088
[5] Section 220(6) : Treat the assessee as not being in default in
respect of the amount in dispute in the appeal..................................1089
[6] Section 221 : Penalty for Default in Making Payment of Tax...........1090
[7] Section 222 : Certificate to Tax Recovery Officer ...............................1093
[8] Section 226(1) : Other Modes of Recovery ........................................1094
[9] Section 226(3) : Garnishee Proceedings - Recovery from Third
Parties.......................................................................................................1094

Chapter 53 — Interest Chargeable in Certain Cases

[1] Section 234A : Interest for defaults in furnishing return of
income .....................................................................................................1096
[2] Section 234B : Interest for defaults in payment of advance tax .......1097
[3] Section 234C : Interest for deferment of advance tax........................1098
[4] Section 234D : Interest on Excess Refund Granted to the
Assessee ................................................................................................1099
[5] Section 234E : Fee for default in furnishing statements....................1101

Chapter 54 — Refunds

[1] Section 237 : Refunds .............................................................................1105
[2] Section 239 : Form of Claim for Refund and Limitation...................1106
[3] Section 240 : Refund on Appeal, etc.....................................................1107
[4] Section 241A : Withholding of Refund in Certain Cases .................1109
[5] Section 243 : Interest on Delayed Refunds..........................................1110
[6] Section 244 : Interest on Refund where no Claim is Needed...........1111
[7] Section 244A : Interest on Refunds ......................................................1118
[8] Section 245 : Set off of Refunds against Tax remaining Payable .....1119

Chapter 55 — Settlement of Cases

[1] Section 245C : Application for settlement of cases ...........................1120
[2] Section 245D : Procedure on application under section 245C
(Full and true disclosure)......................................................................1126

Chapter 56 — Dispute Resolution Committee

[1] Sections 245MA : Dispute Resolution Committee ..........................1129

Chapter 57 — Advance Rulings

[1] Section 245N : Definitions .....................................................................1131
[2] Section 245Q : Application for advance ruling...................................1131
[3] Section 245R : Procedure on receipt of application ...........................1132

Chapter 58 — Appeals

[1] Section 246 : Appealable order.............................................................1134
[2] Section 249(3) : Condonation of Delay ................................................1135
[3] Section 249(4) : Payment of Admitted Tax Due before Filing an
Appeal before the Joint Commissioner (Appeals) or the
Commissioner (Appeals).......................................................................1138
[4] Section 251 : Powers of Commissioner (Appeals) .............................1139
[5] Section 253(4) : Memorandum of Cross-Objections ..........................1145
[6] Section 253(5) : Condonation of Delay in Filing of Appeal or
Memorandum of Cross-Objections before the Tribunal...................1146
[7] Section 253(6) : Form of Appeal & Requisite Fee...............................1148
[8] Section 254(1) : Orders of Appellate Tribunal....................................1149
[9] Section 254(2) : Appellate Tribunal - Power for Rectification of
Mistake Apparent on Record ...............................................................1153
[10] Section 254(2B) : Awarding Cost of any Appeal by the
Appellate Tribunal ...............................................................................1156
[11] Section 255(4) : Third Member Bench of the Appellate Tribunal.......1159
[12] Section 255(6) : Powers of the Appellate Tribunal...........................1161
[13] Section 258 : Power of High Court or Supreme Court to
require Statement to be Amended .....................................................1161
[14] Section 259 : Case before High Court to be Heard by not less
than two Judges ....................................................................................1162
[15] Section 260A : Appeal to High Court ................................................1164
[16] Section 260A(2) : Who can File Appeal to the High Court.............1171
[17] Section 260A(2A) : Condonation of delay.........................................1172
[18] Section 260A(7) : Applicability of Code of Civil Procedure,
1908.........................................................................................................1176
[19] Section 260B : Case before High Court to be Heard by not
less than two Judges.............................................................................1177
[20] Section 261 : Appeal to Supreme Court.............................................1178

Chapter 59 — Revision of Orders Prejudicial to Revenue

[1] Section 263 : Revision of orders prejudicial to revenue ....................1183

Chapter 60 — Revision of Other Orders

[1] Section 264 : Revision of other orders .................................................1255

Chapter 61 — General

[1] Section 268A : Filing of appeal or application for reference by
Income-tax authority..............................................................................1262

Chapter 62 — Requirement as to Mode of Acceptance, Payment or
Repayment in Certain Cases to Counteract Evasion of Tax

[1] Section 269SS : Mode of taking or accepting certain loans,
deposits and specified sum...................................................................1263
[2] Section 269ST : Mode of undertaking transactions. ..........................1263
[3] Section 269T : Mode of repayment of certain Loans or deposits.....1265

Chapter 63 — Penalties Imposable

[1] Section 270A : Penalty for Under-Reporting and Misreporting
of Income .................................................................................................1267
[2] Section 271(1)(c) : Failure to furnish returns, comply with
notices, concealment of income, etc.....................................................1268
[3] Section 271A : Penalty for Failure to Keep, Maintain, or Retain
Books of Account, Documents, etc., as Required Under
Section 44AA...........................................................................................1287
[4] Section 271AAA : Penalty for Undisclosed Income in Search
Cases.........................................................................................................1288
[5] Section 271AAB : Penalty where search has been initiated on
or after 01.07.2012...................................................................................1289
[6] Section 271AAC : Penalty in Case of Income from Undisclosed
Sources ....................................................................................................1291
[7] Section 271B : Failure to get Accounts Audited or Furnish a
Report of Audit as Required Under Section 44AB ............................1291
[8] Section 271C : Penalty for Failure to Deduct Tax at Source..............1305
[9] Section 271D : Penalty for failure to comply with the provisions
of section 269SS.......................................................................................1306
[10] Section 271E : Penalty for Failure to Comply with the
Provisions of Section 269T...................................................................1310
[11] Section 271F : Penalty for Failure to Furnish Return of Income ...1311
[12] Section 271FA : Penalty for Failure to Furnish Statement of
Financial Transaction or Reportable Account as Required
Under Section 285BA(1) - [Previously Called as ‘Annual
Information Return (AIR)’] ................................................................1312
[13] Section 272B : Penalty for Failure to Comply with the
Provisions of Section 139A..................................................................1316
[14] Section 273 : False Estimate of, or Failure to Pay, Advance Tax ...1317
[15] Section 273A : Power to Reduce or Waive Penalty, etc., in
Certain Cases.........................................................................................1317
[16] Section 274 : Procedure for Levy of Penalty .....................................1319
[17] Section 275 : Bar of Limitation for Imposition of Penalty...............1319

Chapter 64 — Offences and Prosecutions

[1] Section 275A : Contravention of Order made to in Second Proviso
to Section 132(1) Or 132(3) in Case of Search And Seizure ..............1322
[2] Section 276B : Failure to pay tax to the credit of Central
government under Chapter XII-D or XVII-B .....................................1323
[3] Section 276C : Wilful attempt to evade tax, penalty or interest,
etc. ............................................................................................................1326
[4] Section 276CC : Failure to furnish returns of income .......................1332
[5] Section 277 : False statement in verification, etc. ...............................1340
[6] Section 278B : Offences by Companies................................................1343
[7] Section 278C : Offences by Hindu Undivided Families ...................1345
[8] Section 278E : Presumption as to culpable mental state ...................1346
[9] Section 279(1) : Prosecution at Instance of Chief
Commissioner/Commissioner .............................................................1348
[10] Section 279(2) : Compounding of Offences.......................................1349
[11] Section 280 : Disclosure of particulars by public servants .............1354

Chapter 65 — Miscellaneous

[1] Section 281 : Certain Transfers to be Void ........................................1356
[2] Section 281B : Provisional attachment to protect revenue in
certain cases ..........................................................................................1359
[3] Section 282 : Service of notice generally..............................................1360
[4] Section 288 : Appearance by authorized representative...................1367
[5] Section 292BB : Notice deemed to be valid in certain
circumstances ........................................................................................1367
[6] Section 292C : Presumption as to assets books of account, etc. .......1369
[7] Section 293 : Bar of suits in civil courts ..............................................1370
[8] Section 297 : Repeals and savings ........................................................1371

Chapter 66 — General Topics

[1] Affidavit – Evidentiary value................................................................1373
[2] Legal Heir ..............................................................................................1378
[3] Principle of mutuality............................................................................1378
[4] Concept of Principles of Natural Justice .............................................1380
[5] Surrounding circumstances and Test of applying human
probabilities.............................................................................................1383
[6] Concept of Perversity.............................................................................1389
[7] Principles of Cross-Examination in Income Tax Proceedings..........1392
[8] Reasonable cause....................................................................................1393
[9] The Term ‘Sufficient Cause’ – Certain Ratios Laid down
by the Court.............................................................................................1395
[10] Colourable devices cannot be part of tax planning.........................1398

Chapter 67 — The Prohibition of Benami Property Transactions Act, 1988

[1] Section 2(8) : Benami Property .............................................................1399
[2] Section 2(9) : Benami Transaction ........................................................1400
[3] Section 2(12) : Beneficial Owner...........................................................1405
[4] Section 2(16) : Fair Market Value..........................................................1406
[5] Section 24 : Notice and Attachment of Property Involved in
Benami Transaction..............................................................................1407

Chapter 68 — Black Money Act, 2015

[1] Section 2 : Definitions.............................................................................1420
[2] Section 40 : Interest Payable by Assessee ............................................1420
[3] Sections 43 : Penalty for Failure to Furnish in Return of Income,
an Information or Furnish Inaccurate Particulars About an
Asset (including financial interest in any entity) Located
Outside India ..........................................................................................1422
[4] Sections 46 : Procedure ..........................................................................1424
[5] Sections 48 : Chapter not in Derogation of any other Law or
any other Provision of this Act...........................................................1424
[6] Section 50 : Punishment for Failure to Furnish in Return of
Income, any Information about an Asset (including financial
interest in any entity) Located outside India......................................1426