ASSESSMENT YEAR 2004-2005
RELEVANT TO FINANCIAL YEAR 2003-2004
Tax Rates for Individuals:
Upto 50,000 - NIL
50,000 to 60,000 - 10% of the amt exceeding 50,000
60,000 to 1,50,000 - Rs.1000 + 20% of the amt exceeding 60,000
1,50,000 & above - Rs.19000+ 30% of the amt exceeding 1,5,0000
Standard Deduction:
a) Rs.30,000 or 40% of Salary whichever is less for Gross Salary Rs.5,00,000 or below.
b) Rs.20,000 for Gross Salary exceeding Rs.5,00,000 .

Surcharge on income-tax:
a) In case of every individual, Hindu undivided family, association of person and body of individuals, Surcharge on Income-tax is calculated @ 10% if the total taxable income exceeds Rs. 8,50,000/-.
b) In the case of every Co-operative Society, Firm, Local Authority and Company, Surcharge on Income-tax is calculated @ 2.5%.

The Surcharge is calculated on the net tax. (Tax as reduced by Rebate u/s.88, 88B and 88C but before giving Relief u/s.89(1).

House Rent Allowance Exempt u/s. 10 (13A)
HRA is exempted subject to the least of the following:
a) Actual HRA received                                   : Rs. xxxx
b) Rent paid in excess of 10% of Salary        : Rs. xxxx
c) 50% of Salary in Metro Cities or
    40% of Salary in other Cities                     : Rs. xxxx

Note: Here Salary means Basic Salary as well as DA if the terms of employment so provide.
Conveyance Allowance:
Any allowance granted to meet the expenditure incurred wholly, necessarily and exclusively on conveyance in performance of the duties of office and so certified by the employer is exempt u/s 10(14).
Transport Allowance:
Any allowance granted to an employee to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty to the extent of Rs.800/- per month is exempt u/s.10(14).
Medical Reimbursement:
An amount of Rs.15,000 or the actual amount reimbursed by the employer whichever is less is exempt under proviso V of Sec. 17(2).
Deduction u/s.24(a)
For let out property, deduction of 30% of the Net Annual Value is allowed. No separate deduction for repairs, Collection Charges Insurance Premium, Annual Charge and ground rent is allowed.
Deduction u/s.24(b)
For self occupied property, deduction on account of interest on borrowed capital for individuals is Rs.30,000 or actual interest paid / payable whichever is less is allowed at source by the DDO on receipt of an application from the assessee in Form No.12C alongwith the Interest Certificate.

Where the property is acquired or constructed with capital borrowed on or after 1/4/1999, and such construction is completed within 3 years from the date of taking the loan, deduction of Rs.1,50,000/- or actual interest paid / payable whichever is less is allowed. Also if an assessee takes a new housing loan for the purpose of repayment of old housing loan (old loan taken after 1/4/99), a deduction up to Rs. 1,50,000/- or actual interest repaid on the balance outstanding of the old loan is allowed subject to the production of a certificate.
Standard Deduction for family pension u/s.57(iia):
An amount of Rs.15,000/- or 33 1/3% of family pension whichever is less is allowed as deduction.
If an assessee receives arrears of family pension, then, relief u/s. 89(1) can be claimed by him.
Exemption u/s.54 EC:
The Capital Gain arising out of sale of long term capital asset can be invested in National Bank for Agriculture and Rural Developement, National Highways Authority of India, Rural Electrification Corporation Limited, National Housing Bank or Small Industries Development Bank of India within six months from the date of sale. (Lock-in period is 3 years)
Deduction u/s.80 D:
Any sum paid by cheque to keep in force an insurance on health of the assessee or his dependents in accordance with the Scheme framed by the General Insurance Corporation of India or any other insurer and approved by the Insurance Regulatory and Development Authority, upto Rs.10,000/- is allowed as a deduction. Where the premium is paid in respect of a Senior Citizen, the permissible deduction will be Rs.15,000/-.
Deduction u/s.80DD:
The amount (a) of expenditure incurred by way of medical treatment, training and rehabilitation of a handicapped dependent or (b) paid or deposited under any scheme framed in this behalf by the LIC or any other insurer or the Administrator and approved by the Board for the maintenance of the handicapped dependent, shall be allowed a deduction of Rs.50,000/- either under (a) or (b) or aggregate of (a) and (b) on the production of a certificate from the Government Hospital in the prescribed form and manner, along with the return of income u/s. 139 in respect of the assessment year for which the deduction is claimed. Where such dependant is a person with severe disability, a deduction of Rs. 75,000/- can be claimed.
Deductioin u/s.80 DDB:
If any expenditure is actually incurred for the medical treatment of specified diseases or ailments for the assessee or his dependent then a deduction of Rs.40,000/- is allowable on the production of a certificate in Form No.10-I, issued by a Neurologist, an Oncologist, Urologist, a Hematologist, an Immunologist or such other specialist as may be prescribed, working in a Government Hospital, while filing the Return of Income.If the expenditure is incurred in respect of Senior Citizen, the limit of deduction is Rs. 60,000/-.
Deductioin u/s.80 E:
Applicable to Individuals only.

Any Ammount paid by the assessee in the previous year out of his income chargeable to tax by way of repayment of loan, taken by him from any Financial / approved Charitable Institution for the purpose of pursuing his higher education or interest on such loan is eligible for a deduction not exceeding Rs. 40,000/-.
Deduction u/s.80 GG:
An assessee not in receipt of HRA incurs any expenditure on Rent, is allowed a deduction of least of the following:
a) Rent paid in excess of 10% of the total income
b) 25% of the total income
c) Rs.2,000 per month
Note: Total Income means Total Income before allowing deduction under this section. The above deduction is allowable only if the assessee or spouse or minor child does not own a house in th palce of employment / business.

To claim such a deduction, the assessee should file a declaration in Form No.10BA.
Deduction u/s.80L:
Applicable to individual and HUF.
A deduction of upto Rs.12,000/- is available. An additional deduction of Rs.3,000 is available if income includes interest on Government Securities.
Note: Any income by way of :
i) Dividends from Company.
ii) Income received in respect of the Units of a mutual fund, from the Administrator of the specified undertaking & from specified Comapany.
iii) Income received in respect of Units of Unit Trust of India are exempt.

Deduction u/s.80 U:
Any assessee suffering from a permanent physical disability (including blindness) or is subject to mental retardation, on the production of medical certificate from Government Hospital in the prescribed form and manner , along with a Return of Income, shall be allowed a deduction of Rs.50,000/.

Where such assessee is a person with severe disability, a deduction of Rs.75,000/- can be claimed.

Rebate u/s.88:
1) In the case of an individual or a HUF, whose gross total income before giving effect to deductions under chapter VI-A, is Rs.1,50,000/- or less, a Rebate of 20% of the amount invested subject to a maximum of Rs.70,000/- is available from the tax payable. Also a rebate of 20% on an additional amount of Rs.30,000/- is available when such sum is invested in specified investments.

2) In the case of an individual or a HUF, whose gross total income before giving effect to deductions under chapter VI-A, is more than Rs.1,50,000/- and less than Rs.5,00,000/-, a Rebate of 15% of the amount invested subject to a maximum of Rs.70,000/- is available from the tax payable. Also a rebate of 15% on an additional amount of Rs.30,000/- is available when such sum is invested in specified investments.

3) Further, an individual shall be entitled for a Rebate of 30%, if is income is chargeable under the head Salaries does not exceed Rs.1,00,000/- before allowing deduction u/s.16 and is not less than 90% of his gross total income.

Rebate u/s. 88B for Senior Citizens:
For a resident individual who has attained the age of 65 years or more,at any time during the previous year is entitled to a deduction of 100% of the income-tax or Rs.20,000/- whichever is less from the tax payable.
Rebate u/s. 88C for women below the age of 65years
A resident woman individual below the age of 65 years is entitled to a deduction of Rs.5,000/- or actual tax payable whichever is less from the tax payable.
Penalty u/s.271F:
If a person who is required to furnish a return of income as required under section 139(1) or by the proviso to that sub-section, fails to furnish such return before the end of the relevant assessment year, shall be liable to pay by way of penalty a sum of Rs.5,000/-.
Interest u/s.234A:
Where the Return of Income of any assessment year u/s.139(1) or 139(4) or in response to a notice u/s.142(1), is furnished after the due date, as specified in sub-section 1 of section 139, or is not furnished, the assessee shall be liable to pay simple interest at the rate of one and quarter percent for every month or part of a month comprised in the period commencing on the date immediately following the due date.
Interest u/s.234B:
Where an assessee who is liable to pay advance tax under section 208 has failed to pay such tax or, where the advance tax paid by such assessee under the provisions of section 210 is less than 90% of the assessed tax, the assessee shall be liable to pay simple interest at the rate of one and quarter percent for every month or part of a month comprised in the period from the 1st day of April following the financial year.
Interest u/s.234C:
Where an assessee other than a Company, who is liable to pay advance tax under section 208 has failed to pay such tax or,
i) the advance tax paid by the assessee on his current income on or before the 15th day of September is less than 30% of the tax due on the returned income or the amount of such advance tax paid on or before the 15th day of December is less than 60% of the tax due on the returned income, then, the assessee shall be liable to pay simple interest interest at the rate of one and quarter percent per month for a period of three months on the amount of the shortfall from 30% or, as the case may be, 60% of the tax due on the returned income;

ii) the advance tax paid by the assessee on his current income on or before the 15th day of March is less than the tax due on the returned income, then, the assessee shall be liable to pay simple interest at the rate of one and quarter percent on the amount of the shortfall from the tax due on the returned income.

Due Dates for Filing Return of Income:
All Individuals/HUF/Firms deriving Income from Salary, House Property, Capital Gains, Business or Others Sources and not covered u/s. 44AB are required to file the Return of Income by 31st July.

All Tax Audit Cases covered u/s. 44AB, Company returns and person satisfying any one of the Economic Criteria (2C) are required to file the Return of Income by 31st October.

Permanent Account Number:
All assessee are required to quote PAN in the Return of Income/Challans/Correspondance etc. Failure to quote PAN or quoting of wrong PAN will attract penlaty of Rs.10,000/- u/s. 272B. Assesses who have not applied for PAN are required to apply for the same in Form 49A before the Jurisdictional Assessing Officer.