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CA Umesh Sharma

CA Umesh SharmaArjuna (Fictional Character): Krishna, Today “Karneeti” is completing its Century and we will continue it. In these “Karneeti” Articles we have discussed about various taxes like Income Tax, VAT, Companies Act, Service Tax etc. Krishna, please tell the 100 things of taxes that everyone must know.

Krishna (Fictional Character): Arjuna, following are the some 100 things of Tax, refer relevant section or rule for details:

Income Tax:

1) Detailed information of Income Tax is available on www.incometaxindia.gov.in

2) As per Income Tax Act, Income is taxable under five heads- Salary, House Property, Business or Profession, Capital Gain and Other Sources.

3) Salaried person must obtain Form 16 from his Employer Every Year.

4) Income Tax Return should be filed by considering Form 16 and other Income.

5) Transport Allowance is exempt up to Rs. 1,600 per month.

6) 30% Standard deduction is available on Income from House Property.

7) Income to be considered as deemed let out on second House property.

8) For self-occupied house property, deduction of Interest on Housing Loan is allowed up to Rs. 200,000/- and for other house property actual expenditure of Interest on Housing Loan is allowed.

9) Repayment of Principal amount of Housing Loan is deductible u/s 80C up to Rs. 150,000/-.

10) Tax Audit is compulsory if sales turnover exceeds Rs. 1 crore in case of business.

11) Tax Audit is compulsory if the Gross Receipts of Professionals exceeds Rs.25 lakhs.

12) If sales turnover is below Rs. 1 crore, then net profit of 8% or higher is to be taken as business income otherwise tax audit is required.

13) The Due Date for Tax Audit and income Tax Return is 30th September.

14) Assessee other than Company and those eligible for Tax Audit are required to file Income Tax Return before 31st of July. Extended date is 31st Aug for F.Y. 14-15.

15) Accurate Stock Valuation should be done on 31st of March.

16) Cash payment should not be made to a person in single day exceeding Rs.20, 000.

17) Cash Payment limit for Transporters is Rs. 35,000/-.

18) Loans, deposits and Immovable Properties transactions should not be carried out above Rs. 20,000 in cash.

19) Business loss can be carried forward to Next 8 Years.

20) Tax Audit applicable assesses should deduct TDS on particular transactions.

21) TDS should be made on the date of Credit or Payment basis of whichever is earlier.

22) TDS payment should be made on or before 7th day of Next Month.

23) TDS Returns are to be filed Quarterly.

24) TDS returns can be revised any number of times.

25) TDS should be deducted and paid if applicable.

26) If TDS is not deducted then deduction of 30% of Expenditure is not allowed.

27) Late filling of TDS return attracts late filing fees of Rs. 200 per day.

28) Long Term Capital Gain will arise if transfer of specified Capital Assets is made after 3 years.

29) Generally Long Term Capital Gains is taxable @ 20%

30) STT paid Long Term Capital Gain on Shares,etc is exempt from Tax.

31) Short Term Capital Gain is Taxable @ 15% if STT is paid.

32) Capital Gain on Immovable Properties is chargeable at Stamp Duty Value or Selling Price whichever is higher.

33) Dividend received from domestic company is exempt from Tax.

34) Agricultural Income is exempt from Tax.

35) Gifts received form stranger of an Amount exceeding Rs. 50,000 is taxable.

36) Income Tax is not chargeable on Gifts received at the time of Marriage, Will, and in case of Succession and from specified relatives.

37) Maximum deduction limit u/s 80C, 80CCC and 80 CCD is Rs.1, 50,000.

38) Deduction of Medical Insurance Premium is available up to Rs. 25,000.

39) Deduction of Medical Insurance Premium paid for Parents is available up to Rs. 20,000.

40) Deduction limit of Interest earned on Saving Account is up to Rs.10, 000.

41) Income earned by a Minor child is clubbed in the hands of Parents.

42) Every Taxpayer should verify his Form 26AS.

43) Form 26AS provides the Information regarding the TDS, Advance Tax paid and details of refund.

44) Notice may be sent to the Taxpayer if the Income mentioned in Form 26AS and the Income Tax Return filed is having difference.

45) Basic Exemption Limit for individuals for F. Y. 2015-16 is Rs. 2,50, 000.

46) Basic Exemption Limit for Senior Citizen i.e. above 60 years age is Rs. 3,00, 000.

47) Basic Exemption Limit for Super Senior Citizen i.e. above 80 years age is Rs. 5,00,000.

48) Advance Tax is to be paid if Tax Liability during the year exceeds Rs. 10,000.

49) 12% of Surcharge is applicable if Income Exceeds Rs. 1Crore.

50) Income Tax Return should be filed if Income exceeds Basic Exemption Limit.

51) 30% of Tax applicable on Income of Partnership Firm, Company, LLP etc.

52) For Companies – Minimum Alternate Tax and for other Assesses – Alternate Minimum Tax rate is 18.5%.

53) Details of all Bank Accounts have to be given in Income Tax return.

54) Passport number is required to be given in Income Tax return.

55) Detail of Fixed Assets held in Foreign Country is required to be given in Income Tax return.

56) If taxable income of Individual is less than Rs. 5 Lakhs then relief of Rs. 2,000/- is available in Tax.

57) Aadhar Card No. is required to be mentioned in Income Tax return.

58) E-filling of return is compulsory if income exceeds Rs. 5 lakhs.

59) In Income Tax, E-filling of return can be done for Previous 2 Years only.

60) PAN Card is essential for Taxpayer and it should not be used as Id Proof.

61) From FY 2014-15 Depreciation is to be calculated as per New Companies Act.

62) Domestic Transfer Pricing is applicable on transaction exceeding an Amount Rs. 20 Crores.

Now some points about MVAT:

63) VAT registration is compulsory if Gross Turnover exceeds Rs. 10 lakhs.

64) VAT rate is 1%, 5%, 12.5%, and 20% and CST rate is 2% on respective commodities.

65) Return Periodicity should be verified every year from the Departments site www.mahavat.gov.in

66) Periodicities of Returns are Monthly, Quarterly and Half yearly.

67) Vat payment and return should be filed within 21st of next Quarter, Month or Half Year.

68) Late payment of VAT will attract Interest @ 1.25% p.m.

69) A late fee of Rs. 1000 is to be paid if late return is filed.

70) Late fee of Rs. 5000 is charged if Return filed after 30 days.

71) Full set off can be taken on Plant and Machinery and Electrical Fitting.

72) 3% of retention is to be taken on Office Equipment’s and Computer.

73) Setoff of Software, Building and passenger car is not available.

74) AnnexureJ1 mentioning TIN of sellers has to be filed with Vat return.

75) AnnexureJ2 mentioning TIN of buyers has to be filed with Vat return.

76) Vat Setoff cannot be carried forward to next year if it exceeds Rs. 5 lakhs.

77) VAT Audit is compulsory if Gross Turnover exceeds Rs. 1 Crore.

78) Due date for filling VAT Audit report is 15th January.

79) Dealer can verify the details of return filed and Registration from the “Dealer information System.”

80) Mis-match report of Annexure J1 and J2 should be verified and should be reconciled.

81) Composition Scheme is available for Retailers having Gross turnover less than Rs. 50 Lakhs.

82) WCT is to be deducted if Works Contract exceeds Rs. 5 lakhs.

83) 5% of WCT is to be deducted for non-registered dealers instead of 2%.

84) TDS deductor has to file return before 30th June after end of financial year.

Profession Tax:

85) Profession Tax is required to be paid for Employer and Employee.

86) Every Businessmen and Professional assesse has to pay his Professional Tax before 30th June.

87) Employer has to pay Profession Tax of employees by deducting from the salary.

88) If Professional Tax Liability exceeds Rs. 50,000 then monthly Return have to be filed otherwise annually.

89) A late fee of Rs. 1000 is to be paid if Profession Tax return in not filed before due date.

90) Profession Tax is not Applicable to Men if salary does not exceed Rs. 7, 500.

91) Profession Tax is not Applicable to Women if salary does not exceed Rs. 10,000.

Service Tax:

92) Service Tax is applicable if Taxable Service Provided exceeds Rs. 10 lakhs.

93) 14% of service Tax is applicable w.e.f 1st June, 2015.

94) Company Assesse has to pay Service Tax monthly.

95) Individual, Partnership Firm, LLP assesse has to pay Service Tax Quarterly.

96) Service Tax is payable on the 6th after end of Month or Quarter

97) Interest is payable @ 18%pa if Service Tax is not paid before the due date.

98) Interest @ 30% is to be paid if service Tax is not paid for a Year.

99) Service Tax return should be filed Half Yearly before 25th October and 25th April.

100) If service Tax is not paid of Rs. 50 lakhs then there is imprisonment.

Arjuna: Krishna, What one should learn from these 100 things of Tax?

Krishna: Arjuna, We continuously discussed complicated taxes and laws in very simple language. Everyone should learn to follow Tax from it. Thanks for reading Karneeti.


Author Bio

1. Central Council Member of ICAI. 2. Vice-Chairman of WIRC of ICAI for the period 2015-2021. 3. Youngest Chairman of Aurangabad Branch of WIRC of ICAI in 2002. 4. Author of Popular Tax articles series based on Krishna and Arjuna conversation i.e “KARNEETI” published in Lokmat on every View Full Profile

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  1. nadu says:

    Why so many Heads & sections. Make it more simple by Simplyfying Calculations to be made for Net profit for Cap Gains.Also reduce the unwanted compliances to be made.Theres no need to provide adahar bank details.

  2. CA Umesh Sharma says:

    Dear Sangeeta,
    1. If the house property is self occupied then dedcution of interest up to Rs. 150,000/- upto assessment year 2014-15 and Rs, 200,000/- from assessment year 2015-16 can be claimed.
    2. For interest paid during pre-construction deduction of interest in 5 equal installments can be claimed.

  3. yashdeep kothari says:

    Entry tax: After having gone through the the act and case laws of high court as regards entry tax I came to the conclusion that entry tax is levied so as not to discriminate between the imported goods and goods produced/purchased locally within the state. Since there is no distributor of bitumen located in rajasthan, leviability of entry tax can be challenged in such cases as there is no loss to state.

  4. yashdeep kothari says:

    There’s one more tax called as Entry Tax. In one of the case, the assessee is a road construction contractor/dealer located in rajasthan. Bitumen is required for road construction and there is no authorized dealer located in rajasthan so if the assessee purchases that good from outside state, entry tax is leviable @ 4% in addition to CST @ 2%.Simultaneously, as per state notification regarding works contractor, if any goods are purchased from outside state than the assessee will have to pay that much tax as is leviable in state ie 14% on purchase value in addition to composition amount payable on Works contract value.(ignored the point of sale in transit)
    In such cases levy of entry tax is clearly violative of the constitutional provisions and is acting as hindrance in trade and commerce.Hope,hon’ble supreme court comes with a clear verdict on entry tax soon till then pay this tax under protest or stop paying.

  5. Prof. N. Manohara Murthy says:

    An excellent review of the Income Tax Laws and very useful for Tax Payers.
    S.No. 39. Under Medical Insurance Rs. 5000/- is exempt for expenses incurred for Medical Checkup apart from Medical insurance paid, both added together not to exceed the limit specified.

  6. N.K.CHHABRA says:

    It is fascinating and Mr Sharma deserves esteemed appreciation

    Like these information specifically for senior citizens will be of extreme help

  7. sangeeta says:

    Sir ,please tell me the deduction on interest on home loan ,if possession is given by builder after 4 years of sanction of loan.There is confusion regarding deduction is it -30000 or 200000

  8. Vasudev says:

    Very good composition of essentials in a nutshell.
    Also to be included ‘capital gain tax exemption not available against sale/purchase of second house property’, if Iam not mistaken.

  9. Devdatta says:

    Good points. However some correction, addition needed as below.

    39) Deduction of Medical Insurance Premium paid for Parents is available up to Rs. 30,000 not 20,000 as mentioned in this article. Also For Super Senior Citizen ( age above 80 years) if the medical insurance is not available, Medical bills of Rs 30000 can be used.

    41) Income earned by a Minor child is clubbed in the hands of Parents. Also, there is exemption of Rs 1500 per child, max 2 children.




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July 2024