CHSE Odisha Vocational Tax Assistance flashcards

36 cards. Read the term and the definition here. The deck at the top of this page is optional.

Previous Year

The financial year in which income is actually earned or received by the assessee. It immediately precedes the assessment year in which that income is assessed and taxed.

Assessment Year

The period of twelve months beginning on 1 April immediately following the previous year, in which income of the previous year is assessed and tax liability is determined.

CBDT

The Central Board of Direct Taxes, a statutory body under the Central Board of Revenue Act that administers direct taxes and issues binding circulars and notifications for the Income Tax Department.

Person under Section 2(31)

Includes an individual, Hindu undivided family, company, firm, association of persons, body of individuals, local authority and artificial juridical person, each a separate taxable unit.

Basic Residence Condition

A person is resident if present in India for 182 days or more in the previous year, or 60 days or more plus 365 days in the preceding four years.

Resident but Not Ordinarily Resident

A resident who fails either the two-out-of-ten-years test or the 730-days-in-seven-years test. Foreign income is taxed only if from a business controlled or profession set up in India.

Deemed Resident 6(1A)

An Indian citizen with Indian income above fifteen lakh rupees, not liable to tax elsewhere, and staying under 120 days is treated as resident but not ordinarily resident.

Scope of Total Income

Residents are taxed on worldwide income, not ordinarily residents on Indian income plus specified foreign income, and non-residents only on income received, accruing or deemed in India.

Standard Deduction

A flat deduction under section 16(ia) from salary income of fifty thousand rupees under the old regime, or seventy-five thousand rupees under the new regime, without proof.

HRA Exemption

Least of actual house rent allowance, rent paid minus ten percent of salary, and fifty percent of salary in metro cities or forty percent elsewhere.

Gratuity Exemption Limit

For non-government employees covered by the Gratuity Act, exemption is the least of twenty lakh rupees, actual gratuity, and fifteen twenty-sixths of salary per year of service.

Perquisite Valuation

Non-cash benefits such as rent-free accommodation, cars and interest-free loans are valued under section 17(2) read with Rule 3 and added to taxable salary.

Annual Value

The higher of municipal value or fair rent, capped by standard rent, compared with actual rent received for let property; nil for self-occupied property.

Section 24 Deductions

From net annual value, a flat thirty percent standard deduction is allowed, plus interest on borrowed capital, subject to limits for self-occupied property.

Presumptive Business 44AD

Eligible businesses with turnover up to two crore rupees may declare six percent of digital receipts or eight percent of cash receipts as income, avoiding detailed books.

Written Down Value Depreciation

Depreciation under section 32 is allowed on the reducing balance of the block of assets at prescribed rates; additional depreciation applies to new manufacturing plant.

Long-Term Capital Asset

An asset held beyond the prescribed holding period: twelve months for listed shares and equity funds, twenty-four months for immovable property and unlisted shares.

Section 54 Exemption

Long-term capital gain on a residential house is exempt if reinvested in one residential house in India, purchased within two years or constructed within three years.

Section 54EC Bonds

Long-term capital gains on land or building can be exempted by investing up to fifty lakh rupees in specified bonds within six months, locked in for five years.

Taxable Gifts

Gifts in cash or kind exceeding fifty thousand rupees in aggregate from non-relatives are taxable as income from other sources; gifts from relatives are fully exempt.

Section 80C Limit

A deduction up to one lakh fifty thousand rupees for specified investments and payments including provident fund, life insurance premium, equity-linked savings and tuition fees.

Section 80D Health Insurance

Deduction for medical insurance premium up to twenty-five thousand rupees for self and family, increased to fifty thousand for senior citizens, plus a similar amount for parents.

Section 87A Rebate

A rebate reducing tax to nil for resident individuals whose total income does not exceed twelve lakh rupees under the new regime, subject to exclusion of special-rate income.

Section 80CCD(1B)

An additional deduction of up to fifty thousand rupees for contributions to the National Pension System made by an individual, over and above the section 80C limit.

Carry Forward of Losses

Business and capital losses may be carried forward for eight years against the same head; unabsorbed depreciation can be carried forward indefinitely; speculative losses only four years.

Health and Education Cess

A cess of four percent levied on the aggregate of income tax and surcharge, applicable to all assessees regardless of the tax regime chosen.

Marginal Relief

Relief granted where crossing a surcharge threshold makes the additional tax exceed the income above that threshold, limited to the excess amount.

Advance Tax Instalments

Corporate and non-corporate assessees pay fifteen, forty-five, seventy-five and one hundred percent of estimated tax by 15 June, 15 September, 15 December and 15 March.

TDS on Salary 192

The employer deducts tax at the average rate applicable to estimated salary income for the year, after considering declared exemptions, deductions and regime choice.

Section 194IA TDS

Buyer deducts one percent tax on consideration for immovable property of fifty lakh rupees or more, reported in Form 26QB within thirty days of payment.

Section 234F Late Fee

A fee of five thousand rupees for filing income tax return after the due date, reduced to one thousand where total income is below five lakh rupees.

ITR-1 Sahaj Eligibility

Resident individuals with total income up to fifty lakh rupees from salary, one house property and other sources, excluding capital gains and foreign assets.

GST Composition Scheme

Dealers with turnover up to one and a half crore rupees may pay one percent tax on turnover without claiming input tax credit or collecting tax from customers.

Input Tax Credit Conditions

Credit requires possession of a tax invoice, receipt of goods or services, tax paid by the supplier, return filing, and claim before the cutoff date.

E-Way Bill Threshold

An electronic document required for movement of goods valued above fifty thousand rupees, generated on the GST portal and valid for a specified distance and period.

Place of Supply

The statutory location determining whether a transaction is intra-state or inter-state; intra-state supplies attract CGST and SGST, inter-state supplies attract IGST.