Unit 2: Income aggregation and procedural compliance

• Residual head: dividends, interest on deposits and securities, family pension (deduction one-third or ₹15,000 — ₹25,000 new regime), rent from machinery, casual income (lotteries, crossword puzzles — taxed at 30% flat, no deductions), gifts over ₹50,000 a year from non-relatives (exempt from relatives, on marriage, under a will).
• Deductions (Section 57): commission for collecting dividends, depreciation on let-out machinery, standard deduction on family pension.

Clubbing and aggregation of income (Sections 60–69D)

• Clubbing: income of spouse (from assets transferred without adequate consideration, remuneration from a concern where the individual has substantial interest), son's wife, minor child (₹1,500 exemption per child), revocable transfers — included in the transferor's income.
• Aggregation (deemed income): unexplained cash credits (Section 68), unexplained investments (69), unexplained money (69A), unexplained expenditure (69C) — taxed at 60% + surcharge 25% + cess (Section 115BBE) with no deductions.

• Return of loss must be filed by the due date to carry forward losses (except house property loss and unabsorbed depreciation).

• Under the new regime (Section 115BAC — default), most Chapter VI-A deductions are not available (80CCD(2), 80CCH and 80JJAA are allowed).

• Rebate under Section 87A: resident individuals — new regime up to ₹60,000 if total income ≤ ₹12 lakh (with marginal relief just above); old regime up to ₹12,500 if income ≤ ₹5 lakh.
• Relief under Section 89: when salary arrears or advance salary are received, tax is recomputed as if received in the relevant years (Form 10E).
• Double taxation relief: Section 90 (countries with DTAA — exemption or credit method) and Section 91 (unilateral relief where no DTAA).

• HUF: taxed like an individual (same slabs, both regimes); income from HUF property; partition and its effects (Section 171).
• Firm (including LLP): flat 30% + surcharge (12% if income above ₹1 crore) + 4% cess; no basic exemption.

• Partner's share of profit is exempt (Section 10(2A)); interest and remuneration allowed to the firm are taxable in the partner's hands as business income.
• AOP/BOI: if shares of members are determinate and no member has income above the exemption limit — slab rates; if any member's income exceeds the limit — maximum marginal rate (MMR); if shares are indeterminate — MMR (Sections 167B, 86).

• Permanent Account Number (Section 139A): 10-character alphanumeric identifier; mandatory for return filing and specified transactions (Rule 114B — bank deposits above ₹50,000 in cash, property above ₹10 lakh, etc.); PAN–Aadhaar linking mandatory; inoperative PAN attracts higher TDS/TCS; penalty ₹10,000 for failure (Section 272B).

Tax deducted at source (TDS)

The payer deducts tax at the time of payment or credit, deposits it with the government and issues a certificate; the payee claims credit (Form 26AS / AIS).

• Due dates: deposit by the 7th of the next month (30 April for March); quarterly returns (24Q for salary, 26Q others); certificates Form 16 / 16A.
• Higher TDS (Section 206AA) at 20% if no PAN.

Tax collected at source (TCS — Section 206C)

Collected by the seller from the buyer on specified goods — scrap, forest produce, minerals, motor vehicles above ₹10 lakh, foreign remittances under LRS (above ₹10 lakh), overseas tour packages.

Advance tax (Sections 207–211)

Payable when the estimated tax liability (after TDS) is ₹10,000 or more; senior citizens without business income are exempt.

• Presumptive taxpayers (44AD/44ADA) pay 100% by 15 March.
• Interest: Section 234A (late return), 234B (shortfall below 90% of assessed tax), 234C (deferment of instalments) — 1% per month.
• Recovery (Sections 220–232): demand notice; if unpaid within 30 days, assessee in default — attachment of salary, bank accounts, property; interest under Section 220(2).

Self-assessment tax (Section 140A)

• Tax payable on the return after adjusting TDS, TCS and advance tax, along with interest under Sections 234A/B/C, must be paid before filing the return; paid through challan ITNS 280 on the e-pay tax portal.

• Return of income (Section 139): due dates — 31 July for non-audit individuals; 31 October for audited cases; 30 November for transfer pricing cases. Belated return (139(4)) and revised return (139(5)) up to 31 December; updated return (139(8A)) within 48 months with additional tax.
• ITR forms: ITR-1 (Sahaj), ITR-2, ITR-3, ITR-4 (Sugam), ITR-5, ITR-6, ITR-7.

• Faceless assessment (Section 144B): no physical interface; automated allocation of cases to assessment units across India.
• E-filing: on the income-tax portal using PAN as user ID; verify within 30 days through Aadhaar OTP, net banking, DSC or by sending ITR-V to CPC Bengaluru.
• Annual Information Statement (AIS) and Form 26AS show TDS, high-value transactions — taxpayers should reconcile before filing.