Frequently Asked Questions

Capital gains arise from the sale of capital assets. These include:

• Property and real estate
• Stocks and securities
• Mutual funds
• Jewelry and precious metals
• Business assets

Tax Treatment:

• Long-term gains (held > 36 months): Lower tax rates with indexation benefits
• Short-term gains (held = 36 months): Taxed at regular income tax rates
• Special rates apply for listed securities (12 months holding period)

The ITR form depends on your income sources:

• ITR-1 (Sahaj): For salaried individuals with income up to ?50 lakhs
• ITR-2: For individuals with capital gains or foreign income
• ITR-3: For business income or professional income
• ITR-4 (Sugam): For presumptive business income
• Other forms apply for specific cases and entities

Form 16 is a crucial tax document that contains:

• Complete salary breakdown
• Tax deductions by employer
• Tax-saving investments considered
• Final tax computation

It serves as proof of TDS deduction and is essential for filing your ITR accurately.

TDS (Tax Deducted at Source) rates vary by income type:

• Salary: As per tax slab rates
• Interest: 10% (if above ?40,000)
• Professional Fees: 10%
• Rent: 10% for individuals (if above ?2.4 lakhs)
• Contract Payments: 2% for individuals

Taxable salary components include:

• Basic Salary
• Dearness Allowance (DA)
• HRA (subject to exemption rules)
• Special Allowances
• Performance Bonus
• Perquisites and Benefits

Calculation involves:

• Gross Annual Value (GAV)
• Municipal Taxes paid
• Standard Deduction (30% of NAV)
• Interest on Housing Loan

For self-occupied property, only interest deduction up to ?2 lakhs is allowed.

Senior citizens enjoy several benefits:

• Higher basic exemption limit (?3 lakhs)
• Higher deduction for medical insurance (?50,000)
• Special savings scheme with higher interest
• No TDS on interest up to ?50,000
• Additional deduction for medical treatment

Tax audit is required when:

• Business turnover exceeds ?1 crore
• Professional income exceeds ?50 lakhs
• Presumptive taxation cases with lower profits
• Specific business cases under various sections

TAN (Tax Deduction Account Number) is required for:

• All employers deducting TDS from salary
• Businesses deducting TDS from payments
• Banks deducting TDS from interest
• Any person responsible for TDS/TCS

For Non-Residents, taxable income includes:

• Income received in India
• Income accruing in India
• Income deemed to accrue in India
• Income from business controlled in India
• Special DTAA benefits may apply