STP Submission

ACKNOWLWDGEMENT
I would like to gracefully acknowledge the contributor of all the people who took active part
and provided valuable support to me during the course of this project. To begin with, I would
like to offer my sincere thanks to CA Roopali Makhija (Deputy Manager Taxation) for giving
me the opportunity to do my Summer Internship at Radico Khaitan without her guidance,
support and valuable suggestions during the internship, the project would not have been
accomplished.
Heartfelt gratitude also goes out to the entire Radico Khaitan family for their cooperation and
willingness to answer all my queries and provide valuable assistant.
I also sincerely thanks, my faculty mentor professor Ms Neha Joshi who provide valuable
suggestions shared his rich corporate experience, and helped me script the requisites.
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TRAINING CERTIFICATE
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DECLARATION
I,DEEPSHI GARG, a student of DIT University, hereby declare that I have worked on a
project titled “Source of Income” during my summer internship at “Radico Khaitan Limited”
in partial fulfillment of the requirement of the masters of business administration.
I gurantee/ underwrite my research work to be authentic and original to the best of my

knowledge in all respects of the process carried out during the project tenure.
My learning experience at Radico Khaitan under the guidance of CA Roopali Makhija and
professor Ms Neha Joshi has been truly enriching.
Date:
(Signature) Deepshi Garg
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List of Contents
i. Acknowledgement
ii. Declaration
iii. Executive summary
1. Background of Radico Khaitan
2. Company history
3. Business profile
4. Timeline for Launches and acquisition
5. Vision, Mission and Values
6. Brand Portfolio
7. Brand story
8. Types of alcohol
9. Brands
10. Awards
11. Challenges of Liquor industry
12. Brand creation journey
13. Last five year sale growth
14. Future of alcohol industry
15. SWOT Analysis of Radico
16. Five heads of income
i.Income from salary
ii.Income from house property
iii.Income from business and profession
iv.Income from capital gain
v.Income from other sources
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17. Deductions and exclusions
18. Computation of Income
19. Conclusion
20. References
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Executive Summary
This report is about the detailed study of“source of income” of Radico Khaitan. The company
belongs to the Liquor beverage industry (FMGC), It is an Indian company that manufactures
industrial alcohol, Indian made foreign liquor (IMFL). The company was established in
Rampur , united provinces, British India (1943). The founder member of radico is Dr. Lalit
Khaitan (Chairman and Managing director), An eminent industrialist, Dr. Khaitan has been at
the helm of affairs of the company for more than 50 years.
Currently, Radico Khaitan reported strong set of numbers for Q3FY18, Significantly ahead of
consensus estimates. The net revenue (net of excise duty) for the quarter stood at Rs.482.5 Cr,
16.8% higher yoy. The company total Income in 2017-18 was at Rs.6,279.03crore as against
Rs. 4887.60 Crore a year ago.
In this report I have included about the Background of company, history of company, Brand
story, Business profile, Types of alcohol and Awards of Radico Khaitan.
The project that was given to me is “Source of Income” in which I have explained five different
source of income i.e
-Income from salary(It means fixed, weekly or monthly remuneration)
-Income from house property (Any income which arises from property or Land)
-Income from business and profession (Any income which is shown in profit and loss account
after considering all allowed expenditure)
-Income from capital gain (means profit and arising to the assesse from a transfer of capital
asset)
-Income from other sources (Income from lottery, gifts etc.)
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Back ground of Radico Khaitan Ltd.
Radico Khaitan is one of India’s oldest and largest liquor manufacturers. Formerly known as
Rampur Distillery& Chemical Works which was established in 1943.Radico Khaitan Ltd. one
of the largest and most profitable liquor companies in the country, is best known for its brands
8 PM Whisky and Contessa Rum. 8 PM Whisky has the unique distinction of having touched
sales of one million cases in the first year of its launch and is the fastest growing brand in the
world in its segment (Source: Drinks international) Contessa rum is the largest selling Rum
brand among Defense forces. Old Admiral Brandy another winner from the portfolio of Radico
is the fastest growing brand in the world in its segment.
Company History
The Company is committed with manufacture and sale of liquors in India and internationally.
Radico spans in the areas of whisky, rum, brandy, vodka and gin under the brands include 8PM
Royale, 8PM Bermuda XXX, Contessa, Old Admiral VSOP, Black Cat and Whitefield. The
Company's plants are located at Uttar Pradesh, Rajasthan, Andhra Pradesh, Uttaranchal and
Haryana. The Company was merged with Abhishek Cement Ltd (ACL) with effective from 1st
January of the year 1997. The merged company renamed as Radico Khaitan Ltd. Radico's
flagship brand, 8 PM Whisky was launched in the year 1999. In the first year alone, it sold one
million cases - a record for any Indian or foreign brand operating in India. This also made it
the first brand in the liquor industry to make it to the Limca Book of Records. The Old Admiral
VSOP, brandy was launched in the state of Kerala during the year 2002 and also introduced in
Andhra Pradesh markets. Radico had acquired M/s Anab-e-Shahi Wines and Distilleries Pvt
Ltd in 2003-04. The Company had set up a state of the art of the bottling unit at Shree
Khatushyamji Industrial Complex, in Sikar, Rajasthan with a capacity of 12lac cases per
annum, became operational in January of the year 2004. During the same year 2004, the
company made its entry into Tamil Nadu by the way of its brands, Contessa Rum, Old Admiral
Brandy and 8 PM Select whisky, launch in the Tamil Nadu market through Golden Midas
Distilleries, who is bottling partner of the company in Tamil Nadu. A green field bottling plant
of the company was set up at Bajpur Industrial area, Uttaranchal for bottling of 600000 cases
during the year 2004-05. It had set up a fully automatic 750 ml kidney shaped PET bottle
manufacturing plant in Uttaranchal and also added additional capacity for molasses at Rampur.
In the identical year of 2004-05, the company had acquired Anabeshahi Wines & Distilleries
Pvt ltd (AES), which owned a bottling unit in the state of Andhra Predesh. The Company had
inked overseas Joint Venture (JV) agreement in UK and Western Africa in May of the year
2006. Diageo, the world's largest drinks company and Radico made an equal JV in Indian sprits
market during August of the same year 2006. In March 2007, Diageo Radico Distilleries Pvt
Ltd, the joint venture between Diageo and the company had launched Masterstroke Deluxe
Whisky, a blend of Premium whiskies. During the financial year 2007, the company had set up
a grain-based distillery at its Rampur plant with a capacity of 27 KLPA. In February of the
same year 2007, the company's JV with Diageo - DiaegoRadico Distilleries Pvt Ltd had
launched a new brand - Masterstroke Deluxe whiskey - in the premium segment. Radico also
acquired other brands from Brihan Maharashtra Sugar Syndicate Ltd. The brand Old Admiral
under the category of brandy won the Monde Selection award for its overall quality in the year
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2008. In May 2008, Radico Global Limited and Radico International DMCC ceased to be the
subsidiaries of the company. Radico forayed into the flavoured vodka market by launching six
flavours under its Magic Moments extension brand-Remix in August of the year 2008. Radico
Khaitan now wants to enter the beer market but would do so only if it gets to tie-up with a
foreign beer major.
Business Profile
Radico Khaitan’s product range comprise whisky, rum, vodka, gin, and brandy. Brands include
8PM Whiskey, Contessa Rum, Old Admiral Brandy, and Magic Moments Vodka, amongst
others. It has a distillery in Rampur, UP and operates bottling plants spread across Rajasthan,
Uttarakhand, and AP. The company has an installed capacity of 60,000 KL of malt spirit, as a
part of backward integration, it has also set up a PET manufacturing plant with an installed
capacity of 47.3 mm bottles p.a. It entered into agreement with certain local distilleries and
bottling units in other states to manufacture its own IMFL brands. Radico Khaitan exports
products to foreign markets like Africa, the Middle East, Eastern Europe etc.
Timeline for launches and acquisition
Vision, Mission and Values

Vision- “To go to the depth of the consumer’s heart and be his friend forever”
Mission- “To provide consumer with quality products and services by using sate of the art
technology, and in the process ensure competitive leadership and build timeless brands”
Values- Respect for People, Integrity, Quality, Excellence and Customer Focus
Radico Khaitan Ltd. believes that customer focus is very important for any business whether it
B2B or B2C. Without this no one can create high performance organization and can’t create
value for its stakeholders.
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Brand Portfolio
Over past 20 years, RKL has created strong brands in almost all segments.
Whisky Brandy Vodka Rum Beer
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Brand story
From its inception as a distillery in 1943 , today radicokhaitan is 3rd largest IMFL spirits
company in India . it has 32 bottling units spread across India, 5 of which are self owned.
The Radico stable today has 4 millionaire brands- Magic moments vodka, 8 PM Whisky, old
admiral Brandy, and contessa Rum. The company made its foray into semi premium segment
with the launch of Magic Moments Vodka in 2005.
With the launch of Morpheus brandy in 2009 and ‘After Dark’ and ‘Eagles Dare’ Whisky in
2010, Radico has established itself as a key player in the premium segment.
Radico brand symbolizes youthfulness, a contemporary attitude and aspirational values as they
deliver smother blends and values for money.
TYPES OF ALCOHOL
WHISKY
The general term ‘Whisky’ refers to an alcoholic distillate from a fermented mash of cereal
grains, such as barley and possesses the taste, aroma, and characteristics generally attribute
to whisky. Among the alcoholic beverages, Whisky is perhaps the most universal drink
worldwide. Whisky is the type of the drink is achieved after it is fermented in charred white
oak wood. The aging process of whisky stop once it is bottled from the casks. Up to 40% of
alcohol is presented in a good whiskey.
BRANDY
The name comes from the Dutch brandeqijn (‘burnt wine’) referring to the application of heat
in distillation. Commercial distillation of brandy from wine originated in the 16th century.
Brandy is distilled from wine or a fermented fruit mash. Cognac is the brandy distilled in and
shipped from the legally delimited area surrounding the town of cognac in central France. In
India, brandy is a blend made with ENA , matured grape spirit and added flavorings.
RUM
Rum is distilled liquor made from sugarcane products, usually produced as a by-product of
sugar manufacture. Rum originated in the West Indies and are first mentioned in records from
Barbados in about 1650. They were called “Kill Devil”or “Rum Bullion” and by 1657 were
simply called rum. In India, rum is made using rum spirit or cane juice spirit along with the
base ENA and flavorings.
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GIN
GIN is an alcoholic liquor obtained by distilling grain mash or redistilling spirits with
botanicals such as, juniper berries, orris, angelica, liconice roots, lemon and orange peels,
cassia bark, caraway, cardamom, anise and fennel. The name of the beverage comes from the
French name for the juniper berry, “geniievre” altered by the Dutch to “genever” and
shortened by the English to gin. The principal kind of gin are the American variety, usually
described as London gin or Dry gin, and the Dutch type, called Geneva schnapps or
Holland’s. Indian gins are blend of ENA with botanical concentrates and / or flavorings.
VODKA
Vodka is distilled liquor, clean in color and without definite aroma or taste. It is highly neutral.
It can be made from a mash of the cheapest and most readily available raw materials suitable
for fermentation. Potatoes, traditionally employed in Russia and Poland have largely been
supplanted there and in other vodka - producing countries by cereal grains. Vodka originated
in Russia during the 14th century. In Russian “voda” means “water”. Vodka is usually
consumed unmixed and chilled in small glasses, and accompanied by appetizers. In other
countries, Including India, It is popular for use in mixed drinks because of its neutral
character. India vodka are made out of ENA.
Brands
IMFL – INDIAN MADE FORIGN LIQUOR
1) Whisky
a) 8PM whisky
b) 8PM Royale
c) Master stroke
d) Rampur single malt
e) Crown whisky
f) Royal-Lancer whisky
g) Radico-Gold whisky
h) Royal whytehall whisky
i) After dark whisky
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2) RUM
a) ContessaDark rum
b) Contessa white rum
c) Contessa cola rum
d) Contessa double chocolate rum
e) Contessa coffee rum
f) Black cat rum
g) Afri bull cafe rum
h) Afri bull power rum
i) 8PM Bermuda
3) Brandy
a) Morpheus brandy
b) Old Admiral brandy
c) 8PM Excellency brandy
d) Florence
4) Vodka
a) Magic moments vodka
b) Magic moments remix vodka
c) Verve
5) Electra
a) Magic moments Electra
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AWARDS
Magic moments verve
Year Award Category
2015 Monde selection award Gold
Magic moments vodka
Year Award Category
2010 Monde selection award For winning awards three

year in a row
2008 International wine and spirit competiton Silver
2008 Alcobev Best packing innovation
2008 International spirits challenge, U.K. Commended
2007 Vodka master-standard category Silver
2007 Vodka master-rest of the world category Best in class
2007 International wine and spirit competiton, U.K Silver
2007 Magic moments vodka Silver medal
2007 International spirit challenge, U.K Commended
2006 Monde selection award Silver
2006 International wine and spirit competiton Bronze
2006 International spirit challenge, U.K Seal of approval
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Magic moments Remix vodka
Year Flavour Award Category
2015 Remix green apple flavored vodka Monde selection Gold

award
2015 Remix lemon grass & ginger Monde selection award Grand Gold
flavored vodka
2015 Remix orange flavored vodka Monde selection award Gold
2015 Remix lemon flavored vodka Monde selection award Gold
2015 Remix chocolate flavored vodka Monde selection award Gold
2015 Remix raspberry flavored vodka Monde selection award Gold
2015 Remix peach flavored vodka Monde selection award Grand Gold
2013 Remix green apple flavored vodka Monde selection award Gold
Monde selection award
flavored vodka
2013 Remix lemon flavored vodka Monde selection award Grand Gold
2013 Remix chocolate flavored vodka Monde selection award Grand Gold
2013 Remix raspberry flavored vodka Monde selection award Grand Gold
2011 Remix chocolate flavored vodka International spirit Silver

challenge
2011 Remix lemon flavored vodka International spirit Bronze medal

challenge
2011 Remix orange flavored vodka International spirit Bronze medal

challenge
2011 Remix raspberry flavored vodka International spirit Bronze medal

challenge
2011 Remix green apple flavored vodka Monde selection award Bronze
flavored vodka
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2011 Remix lemon flavored vodka Monde selection award Gold
2010 Remix green apple flavored vodka Monde selection award Silver
2010 Remix chocolate flavored vodka Monde selection award Gold
2010 Remix lemon grass & ginger Monde selection award Master
flavored vodka Trophy
2010 Remix chocolate flavored vodka Monde selection award Silver
2009 Remix green apple flavored vodka Monde selection award Bronze
2009 Remix lemon grass & ginger Monde selection award Gold
flavored vodka
2008 Remix orange flavored vodka International spirit Silver

challenge
2008 Remix orange flavored vodka International wine and Silver

spirit competition
2008 Remix green apple flavored vodka International wine and Silver(best in
spirit competition class)
After Dark whisky
Year Award Category
Morpheus Brandy
Year Award Category
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Contessa Rum
Year Award Category
2008 Monde selection award-overall quality Silver
Challenges for liquor Industry

. Liquor in India is a state subject. Addressing each state is like addressing a country
. High investments are required for production and distribution channels.
. Liquor advertising which is restricted.
. High entry barriers for new entrants.
BRAND CREATION JOURNEY

Within a short span of a launch, Magic moments created a strong positioning for itself in the
fast growing vodka category. Today, Magic Moments leads the vodka industry in India with
over 50% market share.
YEAR BRAND
1998 8PM Whisky (Regular Range)
2002 Old Admiral Brandy (Regular Range)
2006 Magic moments vodka (semi premium range)
2009 Morpheus Brandy(Super premium range)
2011 After Dark Whisky (Premium range)
2012 Verve Vodka (Super premium range)
2013 Verve flavoured vodka(Super premium range)
2014 Morpheus Blue Brandy(Super premium range)
2015 Electra ready to drink (Super premium range)
2016 Rampur Indian Single Malt, Regal Talons whisk, Pluton bay rum
The last five year sales growth of Radico Khaitan
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Net sales (including CBU sales) increased by 1.7% y-o-y to Rs 1680 Crore. This despite the
second half of the year being impacted by a number of operating challenges such as
demonetization and the national highway liquor ban.
EBITDA increased by 13.3% y-o-y with margins of 12.5%. This increase in EBITDA was
after absorbing a 6.9% y-o-y increase in the ENA costs during the year. However, given a
favourable monsoon forecast in FY2018 ENA prices are expected to stabilize in the near term.
EBITDA during FY 2017 included a non cash profit of Rs 0.8 Crore on account of foreign
exchange fluctuation related to ECBs (compared to a non-cash charge of Rs 19.8 Crore in
2016
Future of alcohol industry
 The ministry of food processing industry has taken lead to rationalize and develop
Model excise policy. The industry supports this totally
 The industry would like the ministry of food processing to de-license the distillation
and bottling of alcohol from substrates other than molasses
 This would help the industry to utilize the damaged cereals, fruits and vegetables to
produce alcohol.
SWOT Analysis of Radico Khaitan

1) Strength’s
 Second largest player in the Indian spirit market
 3 millionaire brands
 Innovation in brand creation
 Established distribution network
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2) Weakness
 Surrogate advertisement
 Not present in all price points
3) Opportunities
 Launching new premium brands
 Making inroads in the untapped markets
 Uniform federal excise policy
 Strategic tie up with global players
4) Threats
 Volatility in raw material prices
 Change in regulatory environment
Following are the five heads of income

1. Income from salary
2. Income from house property
3. Income from business and profession
4. Income from capital gain
5. Income from other sources
Income from salary

Income from salary is the first head or source of income. Salary means fixed, weekly or
monthly remuneration. Salary is a fixed amount of money or compensation paid to employee
to employer in return to work performed.
Income Chargeable to Income-tax under the head “Salaries” (Section 15)

(a)Any salary due from an employer or a former employer to an assessed in the previous year,
whether paid or not;
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(b)Any salary paid or allowed to him in the previous year by or on behalf of an employer or a
former employer, though not due or before it became due to him;
(C)Any arrears of salary paid or allowed to him in the previous year by or on behalf of an
employer, if not charged to income tax for any earlier previous years.
Salary includes-
 Wages
 Any annuity or pensions
 Any Gratuity
 Any fees, commission,perquisite or profit in lieu of salary or in addition to salary.
 Any Advance salary
 Any Leave salary
 Amount transferred to RRF to the extent is taxable
1.) Wages
The term salary includes wages. Wages means pay given for Labor, usually manual or
mechanical, at short stated intervals.
2.) Annuity or Pensions
Pension is a regular payment or allowance granted to the employee by his employer on account
of his past service rendered. Pension is described in the sec 60 of the CPC and section 11 of
the pension Act.
There are three important features of ‘pension’:

Firstly, Pension is a compensation for past service.
Secondly, it owes its origin to a past employer-employee or master-servant relationship.
Thirdly, it is paid on the basis of earlier relationship of an agreement of service as opposed to

an agreement for service. This relationship terminates only on the death of the concerned
employees.
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Broadly pension is of two types:
1. Uncommuted pension
It is the pension received on a regular interval or periodically. Any amount received as

uncommuted pension is fully taxable irrespective of the source. Example: monthly, say you
receive Rs.33000 per month.
Tax treatment on uncommuted pension
 Monthly pension received by an employee is taxable
 Uncommuted Pension received from UNO by an employee or his family is not taxable
 Family pension received by the family of armed force employee after his death is
exempted from tax.
 Family pension received after the death of the employee is taxable as
 ‘Income from other source’. 1/3rd of the pension amount or Rd.’s 15,000/- whichever
is lower, is exempt from tax.
Commuted pension
Commuted means Replace. So, commuted pension means when an employee forgoes a
portion of his pension or his full pension for lump-sum amount, the amount so received is
termed as commuted pension
Tax treatment on commuted pension
 Commuted pension received by government employees is not taxable.
 Non-government employees, who receive gratuity along with commuted pension, get
a tax exemption of up to 1/3rd of the total amount so commuted.
 Non-government employees who do not receive Gratuity, exemption amount for tax
is ½ of the total commuted pension received.
3) Gratuity
Gratuity is a sum of money paid by an employer to an employee for services rendered in the
company. However, gratuity is paid only to employees who complete 5 or more years with
the company .it can be understood as a form of tip paid by employer to the employee for
services offered in the company. Since tips are a function of culture, various countries have
various gratuity limits that are doled out by employers.
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Eligibility Criteria for Gratuity payment:
Following are the few instances when you will be eligible to receive gratuity.
1.An employee should be eligible for superannuation
2. An employee retires
3. An employee resigns after working for 5 years with a single employer
4. An employee passes away or suffers disability due to illness or accident.
To calculate how much gratuity is payable is payable, the Payment of Gratuity Act,1972 has
divided non-government employees into two categories:
a) Employees covered under the Act.
b) Employees not covered under the Act.
An employee will be covered under the Act if the organization employees at least 10 persons
on a single day in a preceding 12 months. And once an organization comes under the purview
of the gratuity Act, then it will always remain covered even if the number of employees is
falls below 10.
Calculation of gratuity
a) For employees covered under the Act
There is a formula using which the amount of gratuity payable is calculated .the formula is
based on the 15 days of last drawn salary for each completed year of service on part of thereof
in excess of six months.
The formula is as follows:
(15 X last drawn salary X tenure of working) divided by 26
Here the last drawn salary means him basic salary, dearness allowance, and commission
received on sales.
Suppose A’s last drawn basic pay is Rs 60,000 per month and he has worked with xyz Ltd for
20 years and 7 months. In this case, using the formula above, gratuity will be calculated as:
(15 X 60,000 X 21)/26= Rs.7.26 lakh
In the above case, we have taken 21 years as tenure of service because A has worked for more
than 6 months in year. Had he worked for 20 years and 5 months, 20 years of service would
have been taken into account while calculating the gratuity amount.
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b) For employees not covered under the Act
There is no law that restricts an employer from paying gratuity to his employees even if the
organization is not covered under the Act.
The amount of gratuity payable to the employee can be calculated based on half month’s salary
for each completed year .Here also salary is inclusive of basic, dearness allowance, and
commission based on sales.
The formula is as follows:
(15 X last drawn salary X tenure of working) divided by 30
In the above mentioned example, if A‘s organization was not covered under the Act,then his
gratuity will be calculated as:
(15 X 60,000 X 20)/30= Rs 6 lakh
Here the number of years of service is taken on the basis of each completed year. So, since A
has worked with the company for 20 years and 7 months, his tenure will be taken as 20 and
not 21.
As per the government pensioners’ portal website, retirement gratuity like this: (¼ of the
month basic pay)+ dearness allowance drawn before retirement for each completed six
monthly period of a qualifying service.
The retirement gratuity payable is 16 times the basic pay subject to maximum of Rs 20 lakh.
In case of death of employee, the gratuity is paid based on the length of service, where the
maximum benefit is restricted to Rs20 lakh.
Qualifying service Rate
2 times of basic pay
One year or more but less 6 times of basic pay
than five years
5 years or more but less than 20 years 12 times of basic pay
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11 years or more but less than 20 years 20 times of basic pay
20 years or more Half of emoluments (salary)for every

completed 6 monthly period subject to
maximum of 33 times of emoluments
INCOME TAX EXEMPTION ON GRATUITY

Gratuity is a benefit given by the employer to the employee. A recent approved amendment
by the Centre has increased the maximum limit of gratuity, to be exempted from tax to Rs20,
00,000 from the existing ceiling of Rs10, 00,000. This will be applicable to public sector and
private sector employees.
Calculation for exemption of gratuity under the Income Tax Act is covered under section
10(10).
a) In case of a government employee [sec. 10(10) (I)]
Any death –cum retirement gratuity received by an employee of the central government,state
government or local authority, is wholly exempt from tax.
b) In the case of an employee covered by the payment of gratuity Act [Sec. 10(10) (ii)].
Gratuity act 1972 is applicable to an establishment where 10 or more employees are employed
during the financial year. If on a single day, an establishment has employed more than 10 or
more employees then this gratuity act will be applicable to them. Once gratuity act 1972 is
applicable it will continue to be applicable even though number of employees are reduced
below 10.
In case the employee is covered under gratuity act 1972, the least of the following will be
exempted and gratuity in excess of the exemption limit will be taxable in the hands of the
employee.
1.Gratuity actually received
2. Rs 20, 00,000
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3. 15 days of salary for every completed year of service or part thereof in excess of 6 months
(15/26* last drawn salary*length of service)
C) In case the employee is not covered under gratuity Act [Sec. 10(10) (iii)].
In other cases ,where the employee receive gratuity due to his retirement, death, termination,
resignation or being incapacitated prior to his death then the least of the following will be
exempted;
1. 20, 00,000
2. 1/2 month average salary for each completed year of service
3. Gratuity actually received
4) Any fees, commission, Perquisites or profits in lieu of an addition to salary
Fees
Fees may be understood to mean “reward” or compensation for services rendered or to be

rendered: especially payment for professional services, optimal amount, or fixed by custom
or laws, charge.
Commission
Commission means the percentage or allowance made to a factor or agent for transacting
business for another. For this purpose, there is no difference between the commission which
is wholly dependent on the work done and fixed salary on a monthly basis.
Perquisite
Perquisites are benefits provided by the employers in addition to the normal salary at a free of
cost or concession rates. Income tax act defines Perquisites as any casual emolument or
benefit attached to an office or position in addition to salary or wages. Value of these
perquisites is added to the income of the employees.
A Perquisites can be provided both by way of a
. Monetary payment
Employer either reimburses the expenses incurred by the employee for such facilities or pays
on behalf of the employee.
Ex: personal gas bill of the employee are in the name of employee and the employer
reimburses the amount of such gas bills to him or pays on his behalf to the gas agency, it is
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in monetary terms and taxable in case of all employees; On the other hand, if such bills are
in the name of employer, it will be perquisite in case of specified employee only.
.Non-monetary payment
Payments which can be called non-monetary payments are car facility, benefit on account of
interest-free loans, rent free accommodation, furniture provided to employees etc.
Perquisites Includes
1. Rent free accommodation provided by employer (Accommodation related to perquisite

(1-3) including sweeper, gardener, watchman, gas, electricity etc.)
2. Concessional accommodation provided By employer
3. Value of benefits like furniture in the accommodation
4. Personal obligation of employee Met by employer
5. Fund paid by employer other than RPF/ Insurance fund
6. Fringe benefits allowed to employee of organization other than companies
Following are the tax treatment of different perquisites
Taxable Perquisites
1. The value of rent free accommodation [Sec 17(2) (I)]
2. The value of concessional accommodation [Sec. 17(2) (ii)]
3. Any sum paid by employer in respect of any obligation in which, but for such payment
would have been payable by employee [Sec. 17(2) (IV)]
4. Any sum payable by the employer, whether directly or through a fund, other than recognized
P.F. or recognized superannuation fund to effect an assurance on the life of assesses or family
members
[Sec 17(2) (v)].
5. Value of any other fringe benefits as may be prescribed under [Sec .17(2) (VI)]
FMS, DITU 2017-19 25

 Non-tax perquisites
 .Medical benefits
 .Tea, snack, free food, free lunch or beverage provided during office hours at work
place
 .Telephone including mobile bill
 .Contribution to Staff Group Insurance Scheme
 .Scholarship to employees or their children
 .Conveyance facility from residence to office and return back
 .Refresher courses
 .Perquisite to government employee who are posted abroad
 .Rent free house and conveyance to judges of High court and Supreme Court
 .Rent free house provided to a minister, specified officers of parliament or a leader of

opposition in parliament.
 .Laptop and computer provided by the employer to employee or family members.
 Interest free or concessional loan (below Rs.20, 000)
 .Transfer without consideration to an employee of a movable asset(other than

computers, electronic items and car) by the employer after using it for a period of 10
years or more
 .Leave travel concession
 .Any benefit or amenity on which employer is liable to Fringe Benefit Tax
Perquisites taxable in specified cases
The value of any benefit or amount granted to an employee (on which employee has no
obligation) is taxable only in the hands of specified employees.
[Sec. 17(2) (iii)].
FMS, DITU 2017-19 26

 Specified employees
 A person who satisfies any of the following conditions;
 . By a company, an employee who is a director thereof;
 .By a company, an employee who has a substantial interest in the company (i.e. holding
more than 20% of Equity shares);
 .An employee whose salary, excluding value of perquisites, exceeds Rs.50000 during
the P.Y
Profit in lieu addition to salary and wages
According to sec 17(3), profit in lieu of salary includes:
1) The amount of any compensation due or received by an assessed from his employer or
former employer at or in connection with the termination of his employment or the
modifications of the terms and conditions relating thereto;
2) Any payment (other than any payment referred to in clause (10) clause (10A) clause (10B,
clause(11), clause (12), clause(13) or clause 13(A) of section 10), due to or received by an
assessedfrom an employer or a former employer or from a provident or other fund, to the
extent to which it does not consists of contribution by the assesse or interest on such
contribution or any sum received under a Key man insurance policy, including the sum
allocated by way of bonus of such policy. The expression “key man insurance policy” shall
have the meaning assigned to it in clause section 10(D) of section 10;
3) Any amount due or received, whether in lump sum or otherwise, by an assessed from any
person in the following cases:
A) Before his joining any employment with that person; or
B) After cessation of his employment with that person.
5.) Any Advance salary
Any salary paid to him in the previous year by an employer or a former employer though not
due or before it became due to him.
6.) Leave salary
Any payment received by an employee in respect of any period of leave not availed of by him
shall be included within the meaning of ‘salary’ chargeable to income tax. Leave salary is the
salary received by an individual for leave period. It is a chargeable income whether he is a
government employee or not. Under Section 10(10AA) (I) there is also a provision of
exemption in case of leave encashment depending upon whether he is a government
employee or any other employees
FMS, DITU 2017-19 27

7.) Amount transferred to RPF to the extent is taxable
Recognized Provident Fund as recognized by commissioner of Income tax under EPF and
Miscellaneous provision Act, 1952. It applies to enterprises employing at least 20 employees.
It is exempted up to 12% of salary basic + Dearness allowance + commission and if employee
left the job after at leastfive years of service. Balance of RPF is transferred to new employer.
Allowances
Allowances is generally defined as a fixed quantity of money given regularly in addition to

salary for the purpose of meeting some particular requirements connected with the service
rendered by the employee or as compensation for unusual conditions for that service. It is
fixed, pre-determined and given irrespective of actual expenditure. Under the Act, it is
taxable under Sec 15 on due or receipt basis, whichever is earlier irrespective of the fact that
it is paid in addition to or in lieu of salary.
Following are the tax treatment of different allowances
A) Taxable allowances
1. Dearness Allowances
Dearness Allowance is an allowance paid to employees as a cost of living adjustment

allowance paid to the employee to cope with Inflation.DA is paid to employees is fully
taxable with salaryThe IT Act mandates the tax liability for DA along with salary must be
declared in the filed return.
2. Entertainment Allowance:
Employees are allowed the lowest of the declared amount-1/4 of the basic salary .actual
amount received as allowance or Rs. 5,000. This is an allowance provided to employees to
reimburse the expenses incurred on the hospitality of customers. However, Government
employees can claim exemption in the manner provided in section 16(ii).All other employee
have to pay tax on it.
3. Overtime Allowance
Employers may provide an overtime allowance to employees working over and above the
regular work hours. This is called overtime and any allowance received for this is fully
taxable.
4. City compensatory allowances
City compensatory Allowance is paid to employees in an urban Centre which may be highly
expensive and to cope up with the inflated living costs in the cities. This Allowance is fully
taxable.
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5. Interim allowance
When an employer gives any Interim Allowance in lieu of final Allowance, this becomes fully
taxable.
6. Project Allowance
When an employer provides an allowance to employee to meet project expenses, this is also
fully taxable.
7. Tiffin/Meals Allowances
Sometimes employees may provide. Tiffin/Meals Allowance to the employees. This isfully
taxable.
8. Cash Allowance
When the employer provides a cash allowance like marriage allowance, bereavement
allowance or holiday allowance, it become fully taxable
9. Non-practicing amount
When physicians are attached to clinical centers of the various Laboratories/Institutes, any
non-practicing allowance paid to them become fully taxable. As per 6th pay commission the
NPA rate was 25% of the basic pay. After 7th pay commission, the rate is been reduced to
20%.
10. Warden Allowance
When an employer pays an allowance to an employee working as a warden i.e. Keeper in

an educational Institute, the allowance received is fully taxable.
11. Servant Allowance
When an employer pays an employee to engage services of a servant, such an allowance is

taxable.
b) Partly Taxable
1. House rent Allowance (HRA)
When an employer pays an allowance for the employees accommodation it is called House
Rent Allowance. Tax exemption under section 10 (13A) can be claimed on whichever amount
is lower of the three:
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HRA as per actuals received by the employee
 .Rent paid as per actuals less 10% of Basic Salary
 .In Metros i.e. Delhi, Mumbai, Chennai or Kolkata,
 As much as 50% of basic salary or else 40% of it if the accommodation is in a non-

metro.
 Any amount of House Rent Allowance received after claiming such deduction is
taxable.
2. Fixed Medical Allowance
This is an allowance paid by an employer when the employee or any of his family members
fall sick for the cost incurred on their treatment. If any such reimbursement exceeds Rs.15,
000 per year; the same is taxable.
3. Special Allowance
A special allowance paid to employees is covered undersection 14(I) and does not fall within
the purview of a perquisite, it is essentially for performance of a duty is partly taxable.
4. Children education
It is exempt in whole of India @Rs.100 p.m. per child up to a maximum of two children.
5. Children hostel Allowance
It is exempt in whole of India @ Rs.300 p.m. per child up to a maximum of two children.
Non- Taxable Allowance
1. Allowance paid to Govt. servants abroad
When servant of govt. of India are paid an allowance while serving abroad, such income is
fully exempt from taxes.
2. Sumptuary allowances
Sumptuary allowances paid to judges of HC AND SC are non-taxed.
3. Allowance paid by UNO
Allowance received by employees of UNO are fully exempt from tax.
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4. Compensatory allowance paid to judges
When a judge receives compensatory allowance, it is not taxable.
INCOME FROM HOUSE PROPERTY (SECTION 22 – 27)

Any income which arises from property or land appurtenant thereto is to be charged under
“Income from house property”
Income from house property covers the rent earned from the House property which is
chargeable to tax. Sometimes, the owner may have to pay tax on ‘deemed rent’ in case the
property is not let out.
Conditions for taxing income under the head house property.
1. There should be a building or a land appurtenant there to
2. The property should be owned by the assesse
3. The property may be used for any purpose except used by the owner for the purpose of
running his business or profession.
DEEMED OWNER
It is a legal owner of a house property who is chargeable to tax in respect of property income.
The following persons are deemed to be owners of the house property for the purpose of
computing income from house property.
 .An individual, who transfers house property otherwise than for adequate
consideration to his or her spouse (not being a transfer in connection with an agreement
to live apart) or to his minor child (not being a married daughter ), is deemed owner of
the house property
 . The holder of any impartible estate is a deemed owner of all properties comprised in
the estate.
 . A member of a cooperative society, company or other association of persons, to

whom a building or a part thereof is allotted or leased under a house building scheme
of the society, company or association of persons, is deemed owner of the property.
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COMPOSITE RENT
In certain cases, the owner charges rent from the tenant not only on account of rent for the
house property but also on account of service charges for various facilities provided with the
house. Such rent is known as composite rent.
The composite can fall under two categories:
(a) Composite rent on account of rent for the property and service charges for various facilities
provided along with the house like lift, gas, water, electricity, watch and ward, air
conditioning etc. In this case such composite rent should be split up and the portion of rent
attributable to the letting of the premises shall be assessable as
“Income from House Property”. The other portion of composite rent received for rendering
service shall be assessable as ‘Income from other sources”
(b) Composite rent on account of rent for the property and the hire charges of machinery, plant
or furniture belonging to the owner. In this case if the letting of the property is separable from
the letting of other assets, then the portion of rent attributable to the letting of the premises
shall be assessable as “Income from House property” and the other portion of the for
composite rent for letting other assets shall be assessable as “business income” or as other
sources.
(c) On the other hand, if the letting of the property is inseparable from the letting of the other
assets like machinery, furniture the entire income would be taxable as ‘business income’ or
as ‘other sources’
ANNUAL VALUE
As per sec 23(1) (a), the annual value of any property shall be the sum for which property
might reasonably expected to be left from year to year. It may neither be the actual rent
derived nor the municipal of the property. It is something like notional rent which could have
been derived, had the property been let.
Determining Annual Value
In determining the annual value there are four factors which are normally taken into
consideration. These are:
 . Actual rent received or receivable
 . Municipal value
 . Fair rent of the property
 . Standard rent
Computation of annual value of a property [Section 23(1)]
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As per income tax, annual value is the value after deduction of municipal taxes, if any, paid
by the owner. Annual value may be determined in the following two steps:
1) Determining gross annual value
2) From gross annual value, deduct municipal taxes paid by the owner during previous year.
The balance shall be the net value which, as per the Income tax act, is the Annual value
Different categories of properties
The Annual value has to be determined for different categories of properties these are:
1. House property which is let throughout the previous year
2. House property which is let and was vacant during whole or any part of previous year.
3. House property which is part of the year let and part of the year self-occupied.
4. House property which is self-occupied for residential purposes or could not actually be self-
occupying owing to employment in any other place.
(A)House property which is let throughout the previous year
The annual value of any such property shall be deemed to be:
(a)The sum for which the property might reasonably be expected to let from year to year; or
(b)Where the property or any part of the property is let and the actual rent received or
receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the
amount so received or receivable.
Determination of Gross Annual Value
As per clause (a) above, the first step is to determining the gross annual value is calculate the
sum for which the property might reasonably expected to let from year to year. For estimation
of the same, the higher of the following is two is to taken to be the expected rent.
1) Municipal value
2) Fair rent
But, in case the property is governed by the Rent control act, its annual value cannot exceed
the standard rent.
To conclude,
FMS, DITU 2017-19 33

The first step is to calculate the gross annual value which will be the maximum of Municipal
value or fair rent, but restricted to the standard rent. However the actual rent received or
receivable exceeds such amount then the actual rent so received/ receivable shall be the gross
annual value.
The second step is tax levied by any local authority in respect of the property. I.e. Municipal
taxes levied by local authority are to be deducted from the gross annual value, if the following
conditions are satisfied;
a) The municipal taxes are borne by the owner
b) These have been actually paid during the previous year.
(B) House property which is let and was vacant during the whole or part of the previous
year
(a)Gross annual value where the property is let and was vacant for part of the year and the
actual rent received or receivable is more than the reasonable expected rent in spite of
vacancy period:
The gross annual value shall be:
(I)The sum for which might be reasonably be expected to be let from year to year
(ii) Actual rent received or receivable whichever is higher
(b)Gross annual value where the property is let and was vacant for the whole or part of the
year and the actual rent received or receivable owing to such vacancy is less than the expected
rent.
The annual value of the property shall be determined under this situation if all he following
three condition are fulfilled
(I)The property is let
(ii)It was vacant during the whole or part of the previous year.
(iii)Owing to such vacancy, the actual rent received or receivable is less than the expected
rent,
FMS, DITU 2017-19 34

(C)House property which is part of the year let and part of the year occupied own
Residence
. Where the house property is, part of the year let and part of the year occupied own residence,
its annual value shall be determined as per the provisions relating to let out property.
.In this case, the period of occupation of property for own residence shall be irrelevant and the
value of such house property shall be determined as if it is let. Hence, the expected rent shall
be taken for full year but the actual rent receive or receivable shall be taken only for the
period let.
(D) House property which is self-occupied for residential purposes or could not actually
be self- occupying owing to employment in any other place.
.Where the annual value of such house shall be nil: where the property of the house or a
part of a house which:
A) is in the occupation of the owner of the purposes of his own residence and no other benefit
is derived therefrom, or.
b) Cannot actually be occupied by the owner by reason of the fact that owing to his
employment, business profession carried on at any other place, he has to reside at that place
in a building not belonging to him,
.Where the assesse has more than one house for self-occupation
a)if there are more than one residential houses, which are in the occupation of the owner for
his residential purposes then he may exercise an option to treat any one of the houses to be
self-occupied.
b) The other house shall be deemed to be let out and the annual value shall be the sum for
which the property might be reasonably be expected to let from year to year.
Income from business and profession (SECTION 28 – 44)

According to income tax act, 1961 ‘profit and gain of business and profession’ are also
subjected to taxation. The term “business” includes any trade, commerce, manufacture or
any adventure or concern in the nature of trade, commerce or manufacture.
The term “profession” implies professed attainments in special knowledge as distinguish

from mere ‘skill’ special knowledge which is to be acquired only after patient study and
application.eg-Tax experts, Financial and cost accounting, Lawyers etc.
The word “profit and gain” defined as the surplus by which the receipt from the business or
profession exceed the expenditure necessary for the purpose of earning those receipts. These
words should be understood to include losses also, so that in one sense ‘profit’ and gains
represent income while ‘losses’ represent minus income.
FMS, DITU 2017-19 35

Basis of charge
The following incomes are chargeable to tax under the head a “Profit and Gain of
Business and Profession”
1. Profit and gain of any business or profession carried on by the assesse.
2. Any compensation or other payment due to or received by assesse, for loss of agency due
to termination or modification in terms and condition of such agency.
3. Income derived by trade or professional or similar association, for specific service

performed; for its members.
4. Profit on a sale of license granted under the Imports (control) Order, 1995, are under the
Import &Export (control) Act, 1947.
5. Cash Assistance (by whatever name called) received/receivable by any person against
exports under any scheme of the government.
6. Any duty of customs/excise repaid or repayable as drawback to any person against exports
under any custom and central Excise Duties Drawback Rules, 1971
7. Value of any benefits or perquisites arising out from a business or the exercise of a
profession
8. Interest, salary, bonus, commission or remuneration due to or received by a partner of a

firm from such firm.
9. Any sum received for not carrying out any activity in relation to any business [or (with
effect from the assessment year 2017-18) profession] or not to share any know-how, patent,
copyright, trademark, etc.
10.The fair market value of the inventory as on the date on which it is converted into, or treated
as, as a capital asset determined in the prescribed manner (applicable from the assessment
year 2019-20)
11. Any um received under a Key man Insurance Policy including the sum by way of bonus
on such policy.
12.Any sum received (receivable)in cash or kind, on account of any capital asset(other than
land or goodwill or financial instrument) being demolished, destroyed, discarded or
transferred, if the whole of the expenditure on such capital asset has been allowed as a
deduction under section 35AD (applicable from the assessment year 2010-11 onward).
FMS, DITU 2017-19 36

Expense expressly allowed as deduction
Deduction in respect of the following has been expressively allowed against profits and gains
of business or profession
.Rent, Rates, taxes, repairs and insurance for building [sec30]
In respect of premises taken on rent, the actual rent paid by the assesse and, if he has
undertaken to bear cost of repairs, the expenditure on repair (not being capital expenditure
from the assessment year 2004-05) are permissible deductions. In respect of premises owned
by the assesse, no deduction is allowable on account of notion rent; amount spent on current
repairs (not being capital expenditure from the assessment year 2004-05) is, however allowed
as deduction. Besides, the amount paid on account of land revenue, local rates and insurance
premium against the risk of damage or destruction of the business premises are also allowable
as business deduction under this section.
.Repair and insurance of machinery, plant and furniture [sec.31]
Current repair (not being capital expenditure from the assessment year 2004-05), in respect of
the plant machinery and furniture used for business purpose is allowable as balance of
deduction under this section. If, asset, it cannot regarded as an expenditure on current repairs.
Similarly, the premium paid in respect of insurance against risk of damage or destruction of
such assets is an allowable deduction.
.Depreciation under [sec 32]
Depreciation means loss or decline in value of useful life of physical asset due to wear and
tear, etc. which cannot be restored by current repairs and maintenance.
Conditions;
A) The assesse must be the owner of the business
B) It must be used during the previous year for business
C) Allowed on tangible and intangible assets.
INCOME FROM CAPITAL GAIN (SECTION 45 – 55)

Income from capital gain means profits or gains arising to the assesse from a transfer of a
capital asset. Such capital asset is added to the total income of the previous year in which the
transfer of assets took place.
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Capital gain is the fourth head of the income. Section 45(1) of the Income Tax Act, 1961
talks about any profit or gains arising from a transfer of a capital asset effected in the previous
year.
Essential elements of a capital gain are:
(A) Capital Asset
(B) Transfer of Capital Asset
(C) Computation of capital gain
Capital Asset [Sec. 2(14)]
Capital asset means property of any kind held by an assessee, whether connected with his
business, profession or not. Capital asset may be movable or immovable, tangible or intangible,
fixed or floating.
What all capital asset includes:
1) Goodwill of a business
2) Partner share’s in a firm
3) Tenancy rights
4) Actionable claims
5) Loom hours (Hours for which a worker work in a factory)
6) Patent
7) Trade-Marks
8) Lease hold rights in mine
9) License for manufacturing of a commodity
EXCEPTIONS:-
The term capital asset doesn’t include the following:
1. Any stock in trade, consumable stores or raw materials.
2. Movable Assets for personal use i.e. Apparel and furniture but excluding jewelleryheld for
personal use by the assesse or any member to his family dependent on him.
3. Agricultural Land in India.
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4. Gold Bonds issued by the central government.
5. Special bearer bonds.
6. Gold Deposit bonds
Classification of capital Assets:-
It is divided into two categories
(a) Short term capital Assets
(b) Long term capital Assets
Short -Term Capital Asset-
It means capital Asset held by an assessed for not more than 36 months immediately preceding
the date of its transfer:
Provided that in case of a share held in a company or any other security listed in a recognize
stock exchange in India or a zero-coupon bond, the provisions of this clause shall have effect
as if for the words “36 months”, the word “12 months” has been substituted.
Long-term Capital Asset –
A Capital asset held for more than 36 months and 12 months in case of shares and securities is
a long term capital asset and the gain arising there from is a long term capital gain.
Long term capital gain are arrived at after deducting from the net sale consideration of the
long term capital asset the indexed cost of acquisition and the indexed cost of improvement of
the asset.
TRANSFER [Section. 2(47)]-
Any transaction whereby the ownership of an assessed in an capital asset ceases is transfer
according to sec. 2(47)
Transfers include:
(i)Sale, exchange or relinquishment of a capital asset
(ii)Extinguishment of any rights in a capital assets
(iii)Compulsory acquisition of the capital asset under any law
(iv)Conversion of a capital asset into stock-in-trade
(v)Part performance of a contract of sale
FMS, DITU 2017-19 39

(vi)Transfer of rights in immovable properties through the medium of co-operative societies,
companies etc.
(vii)Transfer by a person to a firm or other or a body of person to a Association of Persons

(AOP) Individuals (BOI)
(viii)Distribution of capital assets on Dissolution
(ix)Distribution of money or other assets by a company on liquidation
Computation of capital gain[Section 48(1)]
Transfer of a short term capital asset give rise to “Short term capital Gain” (STCG) and transfer
of a Long term capital asset give rise to “Long term capital Gain” (LTCG) Identifying gains as
STCG and LTCG is a very important step in computing the income under the head Gains as
method of computation of gain and tax on the gains is different for STCG and LTCG
Short term capital gain
Computation of short term capital Gain:
1) Find out full value of consideration
2) Deduct the following
a) Expenditure occurred wholly and exclusively in connection with such transfer
b) Cost of acquisition
c) Cost of improvement
3) From the resulting sum deduct the exemption provided by section 54B, 54D, 54G
4) The balancing amount is short term capital gain.
Long term capital gain
Computations of long term capital gain
1) Find out full value of consideration
2) Deduct the following:
a) Expenditure occurred wholly and exclusively in connection with such transfer
b) Indexed cost of acquisition
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c) Indexed cost of improvement
3) From the resulting sum deduct the exemption provided by section 54,54B, 54D, 54EC, 54
ED, 54F and 54G
4) The balancing amount is long term capital gain.
Full value of consideration (Section 50-C)
This is amount for which a capital asset is transferred. It may be in money or money’s worth
or a combination of both.
Where the transfer is by way of exchange of one asset for another, fair market value of the
asset received is the full value of consideration. Where the consideration for the transfer is
partly in cash and partly in kind fair market value of the kind portion or cash consideration
together constitute full value of consideration.
Cost of acquisition (Section 55(2)).
Cost of acquisition of an asset is the sum total of amount spent for acquiring of asset. Where
the asset was purchased, the cost of acquisition is the price paid. Where the asset was acquired
by way of exchange of another asset, the cost of acquisition is the fair market value of that
other asset as on the date of exchange.
Any expenditure incurred in connection with such; purchase exchange or other transaction
e.g. brokerage paid, registration charges and legal expenses also forms a part of cost of
acquisition.
Sometime advance is received against agreement to transfer a particular asset. Later on, if the
advance is retain by the tax payer or forfeited for other party’s failure to complete the
transaction, such advance is to be deducted from the cost of acquisition.
Cost of acquisition with reference to certain modes or acquisition (section49(1))
Where the capital asset became the property of the assesee
(a) On any distribution of assets on the total or partial portion of a Hindu undivided family;
(b) Under a gift or will
(c) By succession, inheritance or devolution;
(d) On any distribution of assets of a firm, body of individuals, or other association of persons,
where such dissolution had taken place at any time before 01.04.1987.
(e) On any distribution of assets on the liquidation of a company
(f) Under a transfer to a revocable or an irrevocable trust
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(g) By transfer in a scheme of amalgamation;
(h) By an individual member of an Hindu undivided family living his separate property to the
assesse HUF any time after 31.12.1969.
The cost of acquisition of asset shall be the cost for which the previous owner of the property
acquired it, as increased by the cost of any improvement in the asset incurred or borne by the
previous owner or the assesse, as the case may be, till the date of acquisition of the asset by
the assesse
If the previous owner had also acquired the capital asset by any of the modes above, then the
cost to that previous owner who had acquired it by mode of acquisition other than the above,
should be taken as the cost of acquisition.
Cost of Improvement(Section 55(1) (b))
Cost of improvement means all expenditure of a capital nature incurred in making addition
or alterations to the capital asset. However any expenditure which is deductible in computing
the income under the head income from house property, profit and gain from business and
profession or income from other sources (internet on securities) would not be taken as cost of
improvement. Cost of improvement for goodwill of a business, right to manufacture, produce
or process any article or thing is NIL.
Capital Gain Exempted from Tax
Long term capital gain from the transfer of residential house property (section 54)
or the The exemption under the section 54 is available only to an individual or a HUF who
transfers (or sells) a residential house/property that result in a long term capital gain, and
then invests the amount of gain acquiring a new residential house. This exemption is
available subject to fulfillment of the following requirements:
(i)The transfer shall be an individual HUF
(ii)The asset must be transferred to be of long-term capital asset, being building of lands
appurtenant thereto, being a residential house.
(iii)The income from such residential house shall be assessable under the head “Income from
house property”
(iv)The transfer or assesse should purchase a residential house in India within a period of one
year before or two year from the date of transfer or construct a residential house within three
years from the date of the transfer of the original house.
(iv)The new house property purchased or constructed has not been transferred within a period
of three years from the date of purchase or construction.
Amount of Exemption
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The amount of exemption under section 54 is
.Equal to the amount of capital gain, if cost of new house property is more than the capital
gain,or
.Equal to the cost of the new house property, if the cost is less than the capital gain
Capital gain on the transfer of Agricultural Land (section 54B)
Capital gain arising on the transfer of land used by an individual or his parents for agriculture
purpose for a period of two year immediately preceding the date of transfer is exempt from
the tax.
Capital gain on compulsory acquisition of Land and Building of an Industrial

Undertaking (section 54D)
Capital gainarising on the compulsory acquisition of any land or building Capital forming of
an industrial undertaking is exempt subject to the followings requirements:
. Such land or building was used assesse for the purpose of industrial undertaking for two
yeatrs preceding the date of compulsory acquisition.
The assesse has purchased any land or building or construct a building within 3 years from
the date of the receipt of the compensation,
. Newly acquired land or building should be used for the purpose of shifting or reestablishing
the said undertaking or setting up another industrial undertaking.
Income from other sources (SECTION 56 – 27)

“Income from other source” is last and residuary head of income under section 56[1]. It covers
all such incomes, which are not chargeable under any other head of income via salary, Income
from house property, capital gains and profits and gains of business and profession. This head
also comprises of some well-defined incomes such as interest, dividend, winnings from
lotteries and gifts, etc under section 56(2)
Basis of charge
The following condition must be satisfied charging income to tax under income under the
head income from other source:
a) There must be an income
b) It should not be an exempt income
c) Such income should not be charged tax under any other head of income.
FMS, DITU 2017-19 43

Income which are charged to tax under the head “Income from other source”
There are certain incomes which are always taxed under this head. These income are as follows:
1. As per section 56(2)(i), dividends are always taxed under this head, However dividend from
domestic company other than those by section2 (22)(e) are exempt from tax under section
10(34).
2. Winnings from lotteries, crossword puzzles, races including horse races, card game and other
game of any sort, gambling and betting of any form whatsoever, are also taxed under this head.
3. Income by way of interest received on compensation or on enhanced compensation shall be

chargeable to tax under the head “Income from other source” and such income shall be deemed
to be the income of the year in which it is received, irrespective of the method of accounting
followed by the assesse, However, a deduction of a sum equal to 50% of such income shall be
allowed for such income. Apart from this, no other deduction shall be from such an income
4. Gifts received by an individual or HUF (which are chargeable to tax) are also taxed under
this head
5.Rental income from machinery, plant or furniture belonging to the assesse and let on hir if
not chargeable under the head business or profession.
6-Where assessee lets on hire machinery, plant or furniture belonging to him and also building
and letting of the building is inseparable from the letting of the said machinery, plant or
furniture, if not chargeable under the head business or profession.
7-Any sum including bonus received under key man insurance policy shall be treated as income
chargeable to tax under the head if not taxable as salary or business income.
8-Income from sub letting
9-Income from undisclosed source
10-Ground rent
11-Imterest on loans
12-Deposit with companies
13-Examiner fees from non-employer
14-Interest from URPF on employees Contribution
15-Casual Income and Non-recurring income.
Exempted income under section 10(15)
FMS, DITU 2017-19 44

1)12Year National Saving Annuity Certificates.
2)Treasury saving deposit certificates
3)Post office cash certificates
4)National planning saving certificates
5)Post office National Saving Certificates
6)Post office Saving Certificates
7)Post Office Cumulative Time Deposits
8) Schemes of Fixed Deposits Governed by the Government Savings Certificates rules 1968
9)Schemes of fixed deposits governed by the post office rules 1968
10) 10.5% Tax free Bonds Issued by the HUDCO
11) Interest payable by a Public company registered in India with the Main Object of providing
long term financer for purchase or Construction of Residential Houses
12) NRI Bonds-1988 Issued by State Bank of India
13) 9.25% Tax Free Bonds issued by Rural Electrician corporation ltd.
14) 10.5% secured, redeemable, non- convertible Tax Free bonds issued by NHPC Ltd.
15) Interest on Gold Deposit Bond Issued under the Gold Deposit scheme 1999 notified by the
central government
16) Interest on Bonds Issued by a Local authority and Notified by Central Govt.
Deductions and Exclusions
Deduction allowable under various sections of chapter VIA of Income Tax Act
Section 80C
This section has been introduced by the Finance Act 2005.Broadly speaking, this section
provides deduction from total income in respect of various investments/expenditures/payments
in respect of which tax rebate under section 88 was earlier available . The total deduction under
this section (along with section80CCC and 80CCD) is limited to Rs. 1 lack only.
. Life Insurance Premium for Individual, policy must be in self or spouse’s or any child’s name.
For HUF, it may be of any member of HUF
FMS, DITU 2017-19 45

. Sum paid under contract for deferred annuity For individual, on life of self, spouse or any
child
. Sum deducted from salary payable to govt. servant from securing deferred annuity for self
spouse or child payment limited to 20% of salary
. Contribution made under Employee’s Provident Fund Scheme
. Contribution to PPF for individual, can be in the name of self/spouse, any child & for HUF,
it can be in the name of any member of the family
. Contribution by employee to a Recognized Provident Fund
. Sum deposited in 10 years/15years account of post office saving bank
. Subscription o any notified securities/notified deposits scheme. e.g. NSS
. Subscription to any notified savings certificates, Unit Linked Savings certificates e.g. NSC
VIII issue.
. Cont5ribution to unit linked Insurance plan of LIC mutual fund e.g. Dhanrakhsa 1989
. Contribution to notified deposit scheme/pension fund set up by the National Housing scheme.
. Certain payment made by way of installment of part payment of loan taken for
purchase/construction of residential house property.
Condition has been laid that in case the property is transferred before the expiry of 5 years from
the end of the financial year in which possession of such property is obtained by him, the
aggregate amount of deduction of income so allowed for various years shall be liable to tax in
that year
. Contribution to notified annuity Plan of LIC (e.g. Jeevan Dhara) or units of UTI/notified
mutual fund. If in respect of such contribution, deduction under section 80CCC has been
availed of rebate under section 88 would not be allowable.
. Subscription to units of a Mutual fund notified under section 10(23D)
. Subscription to deposit scheme of a public sector, company engaged in providing housing

finance
. Subscription to equity shares/debentures forming part of any approved eligible issue of capital
made by a public company or public financial institutions.
. Tuition fees paid at the time of admission otherwise to any school, college, university or other
educational institute situated within India for the purpose of full time education of any two
children. Available in respect of any two children.
FMS, DITU 2017-19 46

Section 80CCC: Deduction for premium paid for annuity plan of LIC or other Insurer
This section provides a deduction to an individual for any annuity plan of LIC or any other
insurer. The plan must be for receiving a pension from a fund referred to in section 10(23AAB)
Pension received from the annuity or amount received upon surrender of the annuity, including
interest or bonus accrued on the annuity, is taxable in the year of receipt.
Section 80CCD: Deduction for contribution to pension account
Employee’s contribution- Section 80CCD is allowed to an individual who makes deposits to

his/her pension account. Maximum deduction allowed is 10% of salary (in case the taxpayer is
an employee) or 20% of gross total income (in case the taxpayer being self –employed) or Rs
1, 50,000, whichever is less.
However, the combined maximum limit for section 80C, 80CCC and 80CCD (1) deduction is
Rs 1,50,000, which can be availed.
Deduction for self contribution to NPS- SECTION 80ccd (1B ) A new section 80CCD (1B)
has been introduced For an additional deduction up to Rs, 50,000 for the amount deposited by
a taxpayer to their NPS account. Contribution to Atal Pension Yojana are also eligible.
Employer’s contribution to NPS- section 80CCD(2)
Additional deduction is allowed for employer’s contribution to employee’s pension account of

up to 10% of the salary of the employee. There is no monetary ceiling on this deduction.
Section 80 TTA: Deduction from Gross Total Income for Interest on Savings Bank
Account
A deduction of maximum Rs 10,000 can be claimed against interest income from a savings
bank account. Interest from savings bank account should be first included in other income and
deduction can be claimed of the total interest earned or Rs 10,000, whichever is less. This
deduction is allowed to an individual or an HUF. It can be claimed for interest on deposits in
savings account with a bank, co-operative society, or post office. Section 80TTA deduction is
not available on interest income from fixed deposits, recurring deposits, or interest income
from corporate bonds.
Section 80 TTB: Deduction of Interest on Deposits for Senior Citizens
A new section 80TTB has been inserted vide Budget 2018 wherein, a deduction in respect of
interest income from deposits held by senior citizens will be allowed as a deduction from the
total income The limit for this deduction is Rs. 50,000. Further, no deduction under section
80TTA shall be allowed. In addition to section 80 TTB, section 194A of the Act will also be
amended so as to increase the threshold limit for deduction of tax at source on interest income
payable to senior citizens from the existing limit Rs 10,000 to Rs. 50,000.
Section 80GG: Deduction for House Rent Paid Where HRA is not Received
FMS, DITU 2017-19 47

 This deduction is available for rent paid when HRA is not received. The taxpayer,
spouse or minor child should not own residential accommodation at the place of
employment.
 The taxpayer should not have self-occupied residential property in any other place.
 The taxpayer must be living on rent and paying rent.
 The deduction is available to all individuals
Deduction available is the least of the following
1. Rent paid minus 10% of adjusted total income;

2. Rs 5,000/- per month;
3. 25% of adjusted total income*
*Adjusted Gross Total Income is arrived at after adjusting the Gross Total Income for certain
deductions, exempt incomes, long-term capital gains and income relating to non-residents and
foreign companies. An online e-filing software like that of ClearTax can be extremely easy as
the limits are auto-calculated and you do not have to worry about making complex calculations.
Section 80E: Deduction for Interest on Education Loan for Higher Studies
A deduction is allowed to an individual for interest on loan taken for pursuing higher education.
This loan may have been taken for the taxpayer, spouse or children or for a student for whom
the taxpayer is a legal guardian. The deduction is available for a maximum of 8 years
(beginning the year in which the interest starts getting repaid) or till the entire interest is repaid,
whichever is earlier. There is no restriction on the amount that can be claimed.
Section 80EE: Deductions on Home Loan Interest for First Time Home Owners
FY 2017-18 and FY 2016-17
This deduction is available in FY 2017-18 if the loan has been taken in FY 2016-17.
The deduction under this section is available only to an individual who is a first time home
owner. The value of the property purchased must be less than Rs 50 lakh and the home loan
must be less than Rs 35 lakh. The loan must be taken from a financial institution and must have
been sanctioned between 01 April 2016 to 31 March 2017.
Through this section, an additional deduction of Rs 50,000 can be claimed on home loan
interest. This is in addition to deduction of Rs 2,00,000 allowed under section 24 of the Income
Tax Act for a self-occupied house property.
FY 2013-14 and FY 2014-15
This section provides a deduction on the home loan interest paid. The deduction under this
section is available only to individuals for the first house purchased where the value of the
house is Rs 40 lakh or less and the loan taken for the house is Rs 25 lakh or less. The loan must
be sanctioned between 01 April 2013 to 31 March 2014. The aggregate deduction allowed
under this section cannot exceed Rs 1,00,000 and is allowed for FY 2013-14 and FY 2014-15.
FMS, DITU 2017-19 48

Section 80CCG: RGESS
The deduction under this section is available to a resident individual. Investors whose gross
total income is less than Rs. 12 lakhs. To avail the benefits under this section the following
conditions should be met:
1. The assessee should be a new retail investor as per the requirement specified under the
notified scheme.
2. The investment should be made in such listed investor as per the requirement specified
under the notified scheme.
3. The minimum lock in period in respect of such investment is three years from the date
of acquisition in accordance with the notified scheme.
Upon fulfillment of the above conditions, a deduction, which is lower of the following is
allowed.
o 50% of the amount invested in equity shares; or

o Rs 25,000 for three consecutive Assessment Years.
Rajiv Gandhi Equity Scheme has been discontinued starting from 1 April 2017. Therefore, no
deduction under section 80CCG will be allowed from FY 2017-18.
However, if you have invested in the RGESS scheme in FY 2016-17, then you can claim
deduction under Section 80CCG until FY 2018-19.
Section 80D: Deduction for premium paid for Medical Insurance

Deduction under this section is available to an individual or a HUF. A deduction of Rs. 25,000
can be claimed for insurance of self, spouse and dependent children. An additional deduction
for insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of
age or Rs 50,000 (has been increased in Budget 2018 from Rs 30,000) if parents are more than
60 years old.
In case, a taxpayers age and parents age is 60 years or above, the maximum deduction available
under this section is to the extent of Rs. 100,000.
Example: Rohan’s age is 65 and his father’s age is 90. In this case the maximum deduction
Rohan can claim under section 80D is Rs. 100,000.
From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for preventive
health check up to individuals.
Section 80DD: Deduction for Rehabilitation of Handicapped Dependent Relative

This deduction is available to a resident individual or a HUF and is available on:
1. Expenditure incurred on medical treatment (including nursing), training and

rehabilitation of handicapped dependent relative
2. Payment or deposit to specified scheme for maintenance of dependent handicapped
relative.
FMS, DITU 2017-19 49

Where disability is 40% or more but less than 80% – fixed deduction of Rs 75,000.
Where there is severe disability (disability is 80% or more) – fixed deduction of Rs 1,25,000.
To claim this deduction a certificate of disability is required from prescribed medical authority.
From FY 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs
1,00,000 has been raised to Rs 1,25,000
Section 80DDB: Deduction for Medical Expenditure on Self or Dependent Relative

A claim of Rs. 40,000 or the amount actually paid, whichever is less is available for deduction
to a resident individual or HUF. The expense should have been made on self or dependent
relative for medical treatment of specified disease or ailment.
From FY 2018-18 onwards, in case of senior citizen or very senior citizen, the deduction can
be claimed up to Rs 1,00,000 or amount actually paid, whichever. Earlier, the deduction that
could be claimed for a senior citizen and a super senior citizen was Rs 60,000 and Rs 80,000
respectively.
Section 80U: Deduction for Person suffering from Physical Disability

A deduction of Rs. 75,000 is available to a resident individual who suffers from a physical
disability (including blindness) or mental retardation. In case of severe disability, deduction of
Rs. 1,25,000 can be claimed.
From FY 2015-16 – The deduction limit of Rs 50,000 has been raised to Rs 75,000 and Rs
1,00,000 has been raised to Rs 1,25,000.
Section 80G: Deduction for donations towards Social Causes

The various donations specified in u/s 80G are eligible for deduction up to either 100% or 50%
with or without restriction as provided in section 80G.
From FY 2017-18 any donations made in cash exceeding Rs 2,000 will not be allowed as
deduction. The donations above Rs 2000 should be made in any mode other than cash to
qualify as deduction u/s 80G.
Donations with 100% deduction without any qualifying limit:
 National Defence Fund set up by the Central Government

 Prime Minister’s National Relief Fund
 National Foundation for Communal Harmony
 An approved university/educational institution of National eminence
 Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector
of that district
 Fund set up by a State Government for the medical relief to the poor
 National Illness Assistance Fund
 National Blood Transfusion Council or to any State Blood Transfusion Council
 National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation
and Multiple Disabilities
FMS, DITU 2017-19 50

 National Sports Fund
 National Cultural Fund
 Fund for Technology Development and Application
 National Children’s Fund
 Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any
State or Union Territory
 The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force
Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
 The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October
6,1993
 Chief Minister’s Earthquake Relief Fund, Maharashtra
 Any fund set up by the State Government of Gujarat exclusively for providing relief to
the victims of earthquake in Gujarat
 Any trust, institution or fund to which Section 80G(5C) applies for providing relief to
the victims of earthquake in Gujarat (contribution made during January 26, 2001 and
September 30, 2001) or
 Prime Minister’s Armenia Earthquake Relief Fund
 Africa (Public Contributions — India) Fund
 Swachh Bharat Kosh (applicable from financial year 2014-15)
 Clean Ganga Fund (applicable from financial year 2014-15)
 National Fund for Control of Drug Abuse (applicable from financial year 2015-16)
Donations with 50% deduction without any qualifying limit
 Jawaharlal Nehru Memorial Fund

 Prime Minister’s Drought Relief Fund
 Indira Gandhi Memorial Trust
 The Rajiv Gandhi Foundation
Donations to the following are eligible for 100% deduction subject to 10% of adjusted
gross total income
 Government or any approved local authority, institution or association to be utilised for

the purpose of promoting family planning
 Donation by a Company to the Indian Olympic Association or to any other notified
association or institution established in India for the development of infrastructure for
sports and games in India or the sponsorship of sports and games in India.
Donations to the following are eligible for 50% deduction subject to 10% of adjusted
gross total income
 Any other fund or any institution which satisfies conditions mentioned in Section
80G(5)
 Government or any local authority to be utilised for any charitable purpose other than
the purpose of promoting family planning
 Any authority constituted in India for the purpose of dealing with and satisfying the
need for housing accommodation or for the purpose of planning, development or
improvement of cities, towns, villages or both
FMS, DITU 2017-19 51

 Any corporation referred in Section 10(26BB) for promoting interest of minority
community
 For repairs or renovation of any notified temple, mosque, gurudwara, church or other
place.
Section 80GGB: Deduction on contributions given by companies to Political Parties
Allowed Limit
(maximum) FY 2018-
Section Deduction on 19
Section 80C – Investment in PPF Rs. 1,50,000
– Employee’s share of PF contribution
– NSCs
– Life Insurance Premium payment
– Children’s Tuition Fee
– Principal Repayment of home loan
– Investment in Sukanya Samridhi Account
– ULIPS
– ELSS
– Sum paid to purchase deferred annuity
– Five year deposit scheme
– Senior Citizens savings scheme
– Subscription to notified securities/notified
deposits scheme
– Contribution to notified Pension Fund set up
by Mutual Fund or UTI.
– Subscription to Home Loan Account scheme
of the National Housing Bank
– Subscription to deposit scheme of a public
sector or company engaged in providing
housing finance
– Contribution to notified annuity Plan of LIC
– Subscription to equity shares/ debentures of
an approved eligible issue
– Subscription to notified bonds of NABARD
80CCC For amount deposited in annuity plan of LIC or –
any other insurer for pension from a fund referred
to in Section 10(23AAB).
80CCD(1) Employee’s contribution to NPS account –
(maximum up to Rs 1,50,000)
80CCD(2) Employer’s contribution to NPS account Maximum up to 10% of
salary
FMS, DITU 2017-19 52

80CCD(1B) Additional contribution to NPS Rs. 50,000
80TTA(1) Interest Income from Savings account Maximum up to 10,000
80TTB Exemption of interest from banks, post office, Maximum up to 50,000

etc. Applicable only to senior citizens
80GG For rent paid when HRA is not received from Least of :
employer – Rent paid minus 10%
of total income
– Rs. 5000/- per month
– 25% of total income
80E Interest on education loan Interest paid for a

period of 8 years
80EE Interest on home loan for first time home owners Rs 50,000
80CCG Rajiv Gandhi Equity Scheme for investments in Lower of
Equities – 50% of amount
invested in equity
shares; or
– Rs 25,000
80D Medical Insurance – Self, spouse, children – Rs. 25,000
Medical Insurance – Parents more than 60 years – Rs. 50,000
old or (from FY 2015-16) uninsured parents
more than 80 years old
80DD Medical treatment for handicapped dependent or – Rs. 75,000
payment to specified scheme for maintenance of
handicapped dependent
– Disability is 40% or more but less than 80% – Rs. 1,25,000
– Disability is 80% or more
80DDB Medical Expenditure on Self or Dependent – Lower of Rs 40,000
Relative for diseases specified in Rule 11DD or the amount actually
paid
– For less than 60 years old – Lower of Rs 1,00,000

or the amount actually
paid
– For more than 60 years old

80U Self suffering from disability: – Rs. 75,000
– Individual suffering from a physical disability – Rs. 1,25,000
(including blindness) or mental retardation.
FMS, DITU 2017-19 53

– Individual suffering from severe disability
80GGB Contribution by companies to political parties Amount contributed
(not allowed if paid in
cash)
80GGC Contribution by individuals to political parties Amount contributed

(not allowed if paid in
cash)
80RRB Deductions on Income by way of Royalty of a Lower of Rs 3,00,000 or

Patent income received
Deduction is allowed to an Indian company for amount contributed by it to any political

party or an electoral trust. Deduction is allowed for contribution done by any way other
than cash.
Section 80GGC: Deduction on contributions given by any person to Political Parties

Deduction under this section, is allowed to a taxpayer except a company, local authority and
an artificial juridical person wholly or partly funded by the government, for any amount
contributed to any political party or an electoral trust. Deduction is allowed for contribution
done by any way other than cash.
Section 80RRB: Deduction with respect to any Income by way of Royalty of a Patent
Deduction for any income by way of royalty for a patent registered on or after 01.04.2003 under
the Patents Act 1970 shall be available up to Rs. 3 lakhs or the income received, whichever is
less. The taxpayer must be an individual resident of India who is a patentee. The taxpayer must
furnish a certificate in the prescribed form duly signed by the prescribed authority.
DEDUCTION TABLE
Section 80AC
As per existing provisions of Section 80AC of the Income-tax Act, no deduction would be
admissible under sections 80IA or section 80IAB or section 80IB or section 80IC or section
80ID or section 80IE, unless the return of income by the assessee is furnished on or before the
due date specified under Section 139(1). Other taxpayers who are claiming similar deductions
did not come within the purview of Section 80AC.
With an objective of bringing uniformity in all income-based deductions, the government vide
Budget 2018 has proposed that the scope of section 80AC be extended to all similar deductions
which are covered under the heading “C—Deductions in respect of certain incomes” under
Chapter VIA i.e from Sections 80IA to 80RRB. The impact of such amendment shall be that
no deduction would be allowed to a taxpayer under these provisions if income-tax return is not
filed on or before the due date prescribed under Section 139(1) of the Income-tax Act.
There also appears to be a misinterpretation that proposed amendment would apply even
to Section 80C i.e. to mean that the deduction under Section 80C would not be available if the
return of income is not filed within the due date prescribed under Section 139(1). This is not
FMS, DITU 2017-19 54

true. As already mentioned above, the benefit of claim of deduction is not available only from
Sections 80IA to 80RRB.
Computation of Income
Computation of Income- XYZ Ltd.

PAN: AABPG1234K
D.O.B. : 22.12.1984
Income for Salaries 445000

Less: Standard Deduction 40000 405000
Income from House Properties 72000

Rent received 21600
Less: Deduction @ 30% 24000 26400
Less: Interest on Housing Loan
Income from Business and Profession 404185
Income from Capital Gain 38000

short Term Capital Gain on sale of Jewellery
Income from other source

Less: Dividend 500
Less: Exempt 500
Less: Savings Bank Interest 18926
NSC Interest 108180
Interest on Infrastructure Bonds 825
FD Interest 264280
Int on dep with Omaxe 8497 400708
Gross Total Income 1274293
Deductions u/s
Less: 80 C 150000
Less: 80D 6153
Less: 80TTA 10000 166153
166153
Total Income 1108140
Tax on Total Income 144942
FMS, DITU 2017-19 55

Less: Rebate u/s 87A
144942
Add: Ed. Cess @ 4% 5798
150740
Less: TDS 65000
Less: Advance Tax 86000
Tax Payable/ Refund -260
FMS, DITU 2017-19 56

CONCLUSION
After detailed study of source of income we get to understand more about the five different
sources of income of Radico. i.e., Income from Salary, Income from House Properties, Income
from Business and profession, Income from Capital gain, and Income from other source. The
main income of Radico Khaitan is generated by the business and profession.
Income tax is payable by an assessed on his total income from all the source of Income. Each
source has its own unique features and requirement specific treatment for correct computation
of Income from that particular source. All the Heads of Income are mutually exclusive. If any
income is considered under a particular head, it will not be taken into consideration for another
head.
FMS, DITU 2017-19 57

REFERENCES
 Company Website: www.radicokhaitan.co.in
 Taxmann’s: Direct Taxes Ready Reckoner by Dr. Vinod K Singhania
 Taxmann’s: Income Tax Rules Volume I, IV and 38th edition
 www.wikipedia.org
 www.incometaxefiling.gov.in
FMS, DITU 2017-19 58

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ACKNOWLWDGEMENT

FMS, DITU 2017-19 1

FMS, DITU 2017-19 2

I gurantee/ underwrite my research work to be authentic and original to the best of my

(Signature) Deepshi Garg

FMS, DITU 2017-19 3

FMS, DITU 2017-19 4

FMS, DITU 2017-19 5

-Income from salary(It means fixed, weekly or monthly remuneration)

-Income from other sources (Income from lottery, gifts etc.)

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Timeline for launches and acquisition

Vision, Mission and Values

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Whisky Brandy Vodka Rum Beer

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IMFL – INDIAN MADE FORIGN LIQUOR

d) Rampur single malt

h) Royal whytehall whisky

i) After dark whisky

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b) Contessa white rum

c) Contessa cola rum

d) Contessa double chocolate rum

e) Contessa coffee rum

f) Black cat rum

g) Afri bull cafe rum

h) Afri bull power rum

b) Old Admiral brandy

c) 8PM Excellency brandy

a) Magic moments vodka

b) Magic moments remix vodka

a) Magic moments Electra

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Year Award Category

2015 Monde selection award Gold

2013 Monde selection award Gold

Magic moments vodka

Year Award Category

2015 Monde selection award Gold

2013 Monde selection award Gold

2011 Monde selection award Gold

2010 Monde selection award For winning awards three

2009 Monde selection award Gold

2008 Monde selection award Gold

2008 International wine and spirit competiton Silver

2008 Alcobev Best packing innovation

2008 International spirits challenge, U.K. Commended

2007 Vodka master-standard category Silver

2007 Vodka master-rest of the world category Best in class

2007 International wine and spirit competiton, U.K Silver

2007 Magic moments vodka Silver medal

2007 International spirit challenge, U.K Commended

2006 Monde selection award Silver

2006 International wine and spirit competiton Bronze

2006 International spirit challenge, U.K Seal of approval

FMS, DITU 2017-19 13

Year Flavour Award Category

2015 Remix green apple flavored vodka Monde selection Gold

2015 Remix orange flavored vodka Monde selection award Gold

2015 Remix lemon flavored vodka Monde selection award Gold