resident_ benefits allowable

3/4/2015 Resident: Benefits allowable

http://www.incometaxindia.gov.in/Charts%20%20Tables/Benefits_available_only_to_Resident_Persons.htm 1/10

2.g Benefits available to Resident Persons and Indian Companies*[AY 201516]

S.No. Section Particulars Limit of exemption Available to

A. Business or Profession

1. 35D Amortization of certainpreliminary expenses (Subject tomaximum of 5% of cost of theproject or capital employed,whichever is more) Incurredbefore commencement ofbusiness or after commencementof business in connection withextension of an undertaking(Subject to certain conditionsand nature of expenditures)

Qualifying preliminaryexpenditure is allowable in eachof 5 successive years beginningwith the previous year in whichthe extension of undertaking iscompleted or the new unitcommences production oroperation.

IndianCompany

2. 35D Amortization of certainpreliminary expenses (Subject tomaximum of 5% of cost of theproject) Incurred beforecommencement of business orafter commencement of businessin connection with extension ofan undertaking (Subject tocertain conditions and nature ofexpenditures)

Qualifying preliminaryexpenditure is allowable in eachof 5 successive years beginningwith the previous year in whichthe extension of undertaking iscompleted or the new unitcommences production oroperation.

Resident Noncorporateassessees

3. 35DD Amortization of expenditureincurred in connection withamalgamation or demerger on orafter 01.04.1999(Subject to certain conditions)

Allowed as deduction in 5successive years in equalinstallments, beginning with theprevious year in which suchamalgamation or demerger takesplace.

IndianCompany

4. 35E Deduction for qualifyingexpenditure incurred wholly andexclusively on prospecting, forcertain minerals or developmentof a mine, etc. (Subject to certainconditions)

Qualifying expenditure isallowed as deduction in equalinstallments over a period of 10years.

IndianCompany andResident NonCorporateAssesseesengaged inprospecting forminerals, etc.

5. 44AD Computation of income fromeligible business on presumptivebasis under Section 44AD(Subject to certain conditions).

Presumptive income of eligiblebusiness shall be 8 % of grossreceipt or total turnover (ifturnover of eligible businessdoes not exceed Rs. 1 crore).

ResidentIndividual,Resident HUFor ResidentPartnershipFirm (Other



than LLP)

B. Capital Gain

1. 47(iv) Transfer of capital asset by aparent company to its whollyowned Indian subsidiarycompany shall not be treated as‘transfer’.

No capital gains shall arise in thehands of holding company due totransfer of capital assets.

Transfereeshould be anIndianCompany

2. 47(v) Transfer of capital asset by awholly owned subsidiarycompany to its Indian holdingcompany shall not be treated as‘transfer’ (Subject to certainconditions).

No capital gains shall arise in thehands of subsidiary companydue to transfer of capital assets.


3. 47(vi) Transfer of capital asset in ascheme of amalgamation byamalgamating company toIndian amalgamated companyshall not be treated as ‘transfer’.

No capital gains shall arise in thehands of amalgamating companydue to transfer of capital assets.


4. 47(vib) Transfer of capital asset in ascheme of merger by demergedcompany to Indian resultingcompany shall not be treated as‘transfer’ (Subject to certainconditions).

No capital gains shall arise in thehands of demerged company dueto transfer of capital assets.


5. 47(vii) Allotment of shares of Indianamalgamated company to theshareholders in theamalgamating company in lieuof their amalgamation shall notbe treated as ‘transfer’ (Subjectto certain conditions).

No capital gains shall arise in thehands of shareholders in theamalgamating company due tosuch amalgamation.

Amalgamatedcompanyshould be anIndianCompany

6. 111A Adjustment of unutilized portionof maximum exemption limitfrom shortterm capital arisingfrom transfer of equity shares orunits of equity oriented funds orunit of a business trust and taxon balance shortterm capitalgains at 15%

If total income as reduced bysuch shortterm capital gains isbelow maximum exemption limit(shortfall), such shorttermcapital gains shall be reduced bysuch shortfall and tax on thebalance of such capital gainsshall be computed at 15%.

ResidentIndividual andHUF

7. 112 Adjustment of unutilized portionof maximum exemption limitfrom longterm capital and taxon balance longterm capitalgains at 20%

If total income as reduced bysuch longterm capital gains isbelow maximum exemption limit(shortfall), such longtermcapital gains shall be reduced bysuch shortfall and tax on




balance of such capital gainsshall be computed at 20%.

8. 115ACA Concessional rate of tax on longterm capital gains arising fromtransfer of GDRSs issue by anIndian company, engaged inspecified knowledge basedindustry or service, to itsemployees in accordance withnotified ESOP Scheme. Providedsuch GDRs are purchased inforeign currency (Subject tocertain conditions)

Such longterm capital gainsshall be taxable at 10% withoutallowing benefits of first andsecond proviso to Section 48

ResidentIndividual Employee

C. Other Sources

1. 115ACA Concessional rate of tax ondividends on GDRSs issue by anIndian company, engaged inspecified knowledge basedindustry or service, to itsemployees in accordance withnotified ESOP Scheme. Providedsuch GDRs are purchased inforeign currency (Subject tocertain conditions)

Such dividend shall be taxable at10%

ResidentIndividual Employee

2. 115BBD Concessional rate of tax ondividends declared, distributedor paid by a specified foreigncompany. The benefits shall beallowed only if Indian companyholds 26% or more in nominalvalue of equity share capital of aforeign company

15% of such dividend IndianCompany

D. Deductions

1. 80C Only resident individuals canInvestment in Public providentFund scheme, 1968 either in hisown name or in the name ofminor of whom he is a guardian.

Maximum deposit in PPF Rs.1,50,000

ResidentIndividual

2. 80C Investment in Senior CitizensSavings Scheme 2004 for 5 year

Max. Deposit Rs. 15,00,000 Residentindividual whois 60 years ofage or by aresidentindividual whois 5560 years



of age andretired underVRS

3. 80CCG Amount invested by specifiedresident individuals, whose grosstotal income does not exceed Rs.12 lakhs, in listed shares or listedunits in accordance with notifiedscheme for a lockin period of 3years (Subject to certainconditions).

Deduction of 50 % of totalinvestment subject to maximumof Rs. 25,000 in 3 consecutiveassessment years, beginning withthe assessment year relevant tothe previous year in which thelisted shares or list units ofequity oriented funds are firstacquired

SpecifiedResidentIndividual(New retailinvestors)

4. 80DD Deduction allowed to residentIndividual and HUF for:a) Any expenditure incurred forthe medical treatment (includingnursing), training andrehabilitation of a dependent,being a person with disabilityb) Any amount paid or depositedunder an approved schemeframed in this behalf by the LICor any other insurer or theAdministrator or the specifiedcompany [as referred to in UTI(Transfer of Undertaking &Repeal) Act, 2002] for themaintenance of a dependent,being a person with disability(Subject to certain conditions).

Rs. 50,000 (Rs. 1,00,000 in caseof severe disability)


5. 80DDB Expenses actually paid byresident individual and HUF formedical treatment of specifieddiseases and ailments of:a) In case of Individual:Assessee himself or whollydependent spouse, children,parents, brothers and sistersb) In case of HUF: Any memberof the family who is whollydependent upon the family(Subject to certain conditions).

Up to Rs. 40,000 (Rs. 60,000 incase of senior citizen)

ResidentIndividual/HUF

6. 80GGB Sum contributed to politicalparty or electoral trust is allowedas deduction (Subject to certainconditions)

100% of amount contributed(excluding contribution in cash)is allowed as deduction

Indiancompany



9. 80JJAA Deduction in respect ofadditional wages paid to newregular workmen employed inthe previous year.(Subject to certain conditions)* Additional wages means thewages paid to the new regularworkman in excess of 100workmen employed during theprevious year. Provided that incase of an existing factory, theadditional wages shall be nil, ifthe increase in the number ofregular workmen employedduring the year is less than 10%of existing number of workmenemployed in such factory as onthe last day of the precedingyear.

Deduction of 30% of additionalwages paid to the new regularworkmen. Deduction shall beallowed for first 3 AssessmentYear including Assessment Yearrelevant to the previous year inwhich such employment isprovided.

IndianCompanyearning profitsand gains frommanufacturinggoods in afactory

10. 80QQB Royalty income of residentindividual authors of certainspecified category of books otherthan text books

Least of the following shall beexempt from tax:a) In case of Lump sum

payment Amount ofroyalty income subject tomaximum of Rs. 3,00,000

b) In other cases amount ofsuch income subject tomaximum of 15% of valueof books sold during theprevious year.

ResidentIndividualAuthor

11. 80RRB Royalty in respect of patentsregistered on or after 01.04.2003(Subject to certain conditions)

100% of royalty subject tomaximum of Rs. 3,00,000

ResidentIndividual

12. 80U A resident individual who, at anytime during the previous year, iscertified by the medical authorityto be a person with disability [asdefined under Persons withDisabilities (EqualOpportunities, Protection ofRights and Full Participation)Act, 1995]

Rs. 50,000 (Rs. 1,00,000 in caseof severe disability)

ResidentIndividual

13. 80IA Indian Company developing,maintaining and operating anyinfrastructure facility shall beentitled to claim deduction

100% of profit for 10consecutive AY falling within aperiod of 15 AY beginning withthe AY in which assessee begins

IndianCompany



(Subject to certain conditions). operating and maintaininginfrastructure facility.

14. 80IA Indian Company formed before30112005 with majority equityparticipation by public sectorcompanies to reconstruct orrevive a power generating plantshall be entitled to claimdeduction. Provided it begins togenerate or transmit or distributepower before 31032011(Subject to certain conditions).

100% of profit for 10consecutive AY falling within aperiod of 15 AY beginning withthe AY in which assessee beginsoperating and maintaininginfrastructure facility.

IndianCompany

15. 80IB Indian Company with scientificand industrial research anddevelopment as its main objectand approved by prescribedauthority shall be entitled toclaim deductions (Subject tocertain conditions).

a) 100% of profit for 5 yearsfrom the AY in which it isapproved by prescribedauthority (if approvedbefore 01041999)

b) 100% of profit for 10 yearsfrom the AY in which it isapproved by prescribedauthority (if approved after31032000 but before 01042007)

IndianCompany

E. TDS

1. 193 No TDS from interest paid ondebentures issued by a companyin which public are substantiallyinterested. Provided interest ispaid by account payee cheque toresident individual or HUF

If amount paid or payable duringthe financial year does notexceed Rs. 5,000

Residentindividual andHUF

2. 193 No TDS from interest on 8%Saving (Taxable) Bonds 2003paid to a resident persons


Residentpersons

3. 193 No TDS from interest on 6.5%Gold Bonds, 1977, or 7% GoldBonds, 1980

If a declaration is made that thenominal value of such bonds didnot exceed Rs. 10,000 at anytime during the previous year

ResidentIndividual

3A 193 No TDS from interest paid on4.25% National Defence Bonds,1972, 4.25% National DefenceLoan, 1968, or 4.75% NationalDefence Loan, 1972

No TDS from interest ResidentIndividual

3B 193 No TDS from payment of certaininterest

No TDS from payment ofinterest on following securities:

ResidentPersons



(a) National DevelopmentBonds;

(b) 7 Year National SavingsCertifications (IV Issue);

(c) Debentures issued bynotified persons;

(d) Any security of Central orState Government;

(e) Any listed security issuedby a company and held inDEMAT form;

(f) Securities beneficiallyowned by LIC, GIC,specified companies or anyother insurer.

4. 194 No TDS from dividend paid byaccount payee cheque to residentpersons.


Residentperson

5. 194A No TDS from interest other thanon securities paid by a bankingcompany or cooperative bankon time deposits


Residentpersons

6. 194A No TDS from interest on depositwith a post office under SeniorCitizens Saving Scheme Rules,2004


Residentpersons

7. 194A No TDS from interest other thanon securities (in any other case)


Residentpersons

8. 194A No TDS from interest oncompensation awarded by MotorAccident Claims Tribunal


Residentpersons

9. 194A No TDS from interest on zerocoupon bonds issued byInfrastructure Capital Co.,Infrastructure Capital Fund,Public Sector Co. or Scheduledbank

If Zero Coupon Bonds are issuedon or after 01062005 byspecified entities

Residentpersons

10. 194A Interest paid under any provisionof Incometax Act, 1961 orWealthtax Act, 1957

Entire interest is paid under theprescribed Acts

Residentpersons

11. 194A Interest paid in respect ofdeposits under any notified

If interest is earned on theprescribed deposits

Residentpersons



scheme or Post Office deposits,Kisan Vikas Patra, NSC VIIIIssue, Indira Vikas Patra, etc.

12. 194C No TDS from sum paid orpayable to contractor (Subject tocertain conditions)

a) If sum paid or payable to acontractor in a single paymentdoes not exceed Rs. 30,000b) If sum paid or payable tocontractor in aggregate does notexceed Rs. 75,000 during thefinancial year

ResidentContractor

13. 194C No TDS from sum paid orpayable to transport operatorwho is in the business of plying,hiring or leasing goods carriage

If transport operator furnisheshis PAN

Residenttransportoperator

16. 194C No TDS from payment made byan Individual or HUF to aresident contractor forexclusively personal purposes

If payment is made for personalpurpose of Individual or HUF

ResidentContractor

17. 197A(1) No deduction of tax shall bemade under Sections 194 and194EE, if resident individualfurnishes to the payer a writtendeclaration in prescribed formthat tax on his estimated totalincome of the previous year willbe nil.

No tax shall be deducted fromspecified payments if the sumpaid does not exceed themaximum amount which is notchargeable to tax

ResidentIndividual

18. 197A(1C) No deduction of tax shall bemade under Sections 193, 194,194A, 194EE and 194K ifresident senior citizen furnishesto the payer a written declarationin prescribed form that tax on hisestimated total income of theprevious year will be nil.

No tax shall be deducted fromspecified payments

ResidentIndividual Senior Citizenand SuperSenior Citizen

19. 194LA No TDS from payment ofcompensation on compulsoryacquisition of immovableproperty (other than AgriculturalLand)

If amount paid or payable duringthe financial year does notexceed Rs. 2 Lakhs

Residentpersons

20. 194D No TDS from insurancecommission paid or payableduring the financial year


Residentpersons

20A. 194DA No TDS from sum payable under If amount paid or payable during Resident



a life insurance policy (includingbonus) to a resident person(w.e.f. 01102014)

financial year does not exceedRs. 1 Lakh

persons

21. 194H No TDS from payment ofcommission or brokerage

If amount paid or payable duringthe financial year does notexceed Rs. 5,000. Further no taxto be deducted from commissionpayable by BSNL/MTNL totheir PCO Franchisees.

Residentpersons

22. 194J No TDS from payment ofprofessional fees, technical fees,royalty and directors’remuneration


Residentpersons

23. 194I No TDS from payment of rent inrespect of land &building,furniture or fittings or plant andmachinery

If amount paid or payable duringthe financial year does notexceed Rs. 1,80,000

Residentpersons

24. 194IA No TDS from payment ofconsideration for purchase of animmovable property (other thanagriculture land)

If amount paid or payable duringthe financial year does notexceed Rs. 50 Lakhs

ResidentTransferor

25. 201 Payer shall not be deemed to bean assesseeindefault on failureto deduct or collect taxes frompayment made to a residentpayee (Subject to certainconditions).

If payee includes such income inits return of income, pays taxesthereon and submits a certificateto the payer in Form 26A/27BAto this effect from a CharteredAccountant.

Payment toresidentpersons

F. Advance Tax

1. 207(2) Exemption from payment ofadvance tax by a resident seniorcitizen or resident super seniorcitizen not having any incomefrom business or profession(who is at least 60 Years of ageat any time during the previousyear)

Not liable to pay advance tax ResidentSenior Citizenand ResidentSuper SeniorCitizen

2. 44AD Exemption from payment ofadvance tax by a taxpayer whohas opted for presumptivetaxation scheme under Section44AD

Not liable to pay advance tax ResidentIndividual,Resident HUFor ResidentPartnershipFirm (Otherthan LLP)



G. Exemptions

1. Maximum amount of incomewhich is not chargeable toIncometax in the hands of aresident senior citizen(who is at least 60 Years of ageat any time during the previousyear but less than 80 Years ofage on the last day of theprevious year)

Rs. 3,00,000 ResidentSenior Citizen

2. Maximum amount of incomewhich is not chargeable toIncometax in the hands of aresident super senior citizen(who is at least 80 Years of ageat any time during the previousyear)

Rs. 5,00,000 Resident SuperSenior Citizen

3. 87A Rebate to resident individualwhose total income does notexceed Rs. 5,00,000

Rebate shall be limited to taxpayable or Rs. 2,000, whicheveris less

ResidentIndividual

H. Tonnage Taxation

1. 115V to115VZC(TonnageTaxation)

Qualifying Company may optfor computation of income frombusiness of operating qualifyingship on presumptive basis.* A company is a ‘QualifyingCompany’ if:a) It is an Indian Company;b) The place of effective

management of it is inIndia;

c) It owns at least onequalifying ship; and

d) The main object of it is tocarry on business ofoperating ships.

The income from operating shipsshall be computed on basis oftonnage of each qualifying ship.

IndianCompany

* Public Sector Companies, Banking Companies and Insurance Companies have not been considered inthe document.

[As amended by Finance (No. 2) Act, 2014]

resident_ benefits allowable

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