Direct Tax & Income Tax — Cheatsheets
The five heads of income
|---|---|
| Salary | Employment income, allowances, perquisites |
|---|
| House Property | Rental income (and notional income from certain owned properties) |
| Business or Profession | Business/professional income (revenue less legitimate expenses) |
| Capital Gains | Profit from sale of capital assets (short-term vs. long-term) |
| Other Sources | Residual category — interest, dividends, etc. |
Old regime vs. new regime
| Property | Old regime | New regime |
|---|
|---|---|---|
| Tax rates | Higher | Generally lower |
|---|
| Deductions/exemptions | Wide range available | Mostly unavailable |
| Best suited for | High deduction-eligible expenses/investments | Fewer deduction-eligible items |
(needs verification — recheck against current source: rate structures and default-regime rules revised periodically.)
Deduction vs. TDS
|---|---|---|
| Affects | Taxable income (the base) | Amount already paid (credited against liability) |
|---|
| When applied | At tax computation | During the year, at time of payment |
| Head-specific? | Some are (e.g. home-loan interest → House Property only) | No — applies at payment source regardless of head |
Capital gains — short-term vs. long-term
| Property | Short-term | Long-term |
|---|
|---|---|---|
| Holding period threshold | Below asset-specific threshold | Above asset-specific threshold |
|---|
| Tax treatment | Generally less favorable | Generally more favorable (lower rates/exemption) |
| Threshold varies by | Asset type (equity vs. real estate, etc.) | — |
(needs verification — recheck against current source: holding-period thresholds and rates periodically revised.)
TDS reconciliation
|---|---|
| Form 26AS / Annual Information Statement | Consolidated record of TDS deducted on taxpayer's behalf |
|---|
| Reconciliation | Verify own records match Form 26AS before filing |
Advance tax quick reference
|---|---|
| Who it applies to | Taxpayers with estimated liability above threshold after TDS |
|---|
| When paid | Installments during the financial year |
| Consequence of shortfall | Interest charged on timing shortfall, separate from underlying tax owed |
(needs verification — recheck against current source: advance tax thresholds, installment schedules, interest provisions periodically revised.)
ITR filing — what it integrates
|---|---|
| Total income | Five heads, correctly classified |
|---|
| Deductions | Old/new regime rules, head-specific where applicable |
| TDS credit | Form 26AS reconciliation |
| Advance tax paid | Installments during the year |
| Result | Final tax payable or refund due |
