Library / Income-tax Act, 2025: The Professional's Master Guide

List of Illustrations

Illustrations are numbered through the guide. The chapter number is shown in brackets.

1. Two returns, two Acts (Chapter 1) 11

2. New LLP (Chapter 3) 17

3. Discontinued business (Chapter 3) 18

4. Employee sent abroad (Chapter 4) 19

5. Returning NRI (Chapter 4) 19

6. Counting days (Chapter 4) 20

7. Visiting NRI with large Indian income (Chapter 4) 20

8. Deemed resident (Chapter 4) 21

9. Returning professional (Chapter 4) 21

10. POEM risk (Chapter 4) 22

11. Tie breaker (Chapter 4) 22

12. Scope of total income (Chapter 5) 23

13. Citing an exemption (Chapter 6) 25

14. Partial integration (old regime, individual below 60) (Chapter 6) 27

15. Priya, Mumbai, age 32, Tax Year 2026-27 (Chapter 7) 29

16. ESOP (Chapter 7) 31

17. Director remuneration (Chapter 7) 31

18. HRA in Ahmedabad (Chapter 7) 32

19. Company car and loan (Chapter 7) 33

20. Employer retirement contributions above Rs. 7.5 lakh (Chapter 7) 33

21. Gratuity (Chapter 7) 34

22. Leave encashment (Chapter 7) 34

23. Commuted pension (Chapter 7) 34

24. Arrears relief (Chapter 7) 36

25. RSUs of a US parent (Chapter 7) 37

26. Let out flat (Chapter 8) 38

27. Arrears (Chapter 8) 39

28. Vacancy (Chapter 8) 40

29. Pre-construction interest (Chapter 8) 40

30. Benefit from business (Chapter 9) 43

31. Sharma Traders Pvt. Ltd., Tax Year 2026-27 (Chapter 9) 43

32. Capital or revenue? (Chapter 9) 44

33. Professional fees without TDS (Chapter 9) 44

34. Partner remuneration (Chapter 9) 45

35. Cash purchase (Chapter 9) 45

36. MSME supplier (Chapter 9) 46

37. Liability written back (Chapter 9) 46

38. Half rate (Chapter 9) 47

39. Preliminary expenses (Chapter 9) 48

40. Builder sale (Chapter 9) 48

41. F&O turnover (Chapter 9) 48

42. Kirana trader (Chapter 9) 49

43. Doctor (Chapter 9) 49

44. Software and website costs (Chapter 9) 50

45. Capitalisation of interest (Chapter 9) 51

46. Salary to a relative (Chapter 9) 52

47. Bonus timing (Chapter 9) 52

48. Block of computers (Chapter 9) 53

49. Opting out of the business scheme (Chapter 9) 53

50. Goods carriages (Chapter 9) 53

51. VDA (Chapter 9) 55

52. Content creator (Chapter 9) 55

53. Percentage of completion (Chapter 9) 56

54. Interest on NPA (Chapter 9) 56

55. Share portfolio (Chapter 10) 57

56. Unlisted shares (Chapter 10) 58

57. Sale of flat with reinvestment (Chapter 10) 58

58. Buyback (Chapter 10) 59

59. Agricultural land (Chapter 10) 59

60. Joint development (Chapter 10) 60

61. Grandfathering of listed shares (Chapter 10) 61

62. Indexation comparison (Chapter 10) 62

63. Section 86 (Chapter 10) 62

64. Unused exemption (Chapter 10) 63

65. Sale of inherited house (Chapter 10) 64

66. Harvesting gains (Chapter 10) 65

67. Deemed dividend (Chapter 11) 66

68. Gifts from friends (Chapter 11) 67

69. Property bought below stamp value (Chapter 11) 67

70. Shares received below FMV (Chapter 11) 67

71. Interest on enhanced compensation (Chapter 11) 68

72. Family pension (Chapter 11) 68

73. Winnings (Chapter 11) 68

74. Sub-letting (Chapter 11) 69

75. Car won in a contest (Chapter 11) 69

76. SWP from an equity fund (Chapter 12) 70

77. Selling and buying in the same year (Chapter 13) 73

78. Gift to spouse (Chapter 14) 74

79. Cash deposit (Chapter 14) 74

80. Proportionate clubbing (Chapter 14) 75

81. Order of set off (Chapter 15) 77

82. Full set off computation (Chapter 15) 78

83. Health insurance for parents (Chapter 16) 79

84. Additional employee cost (Chapter 16) 80

85. Donation with 10% cap (Chapter 16) 81

86. Rent deduction (Chapter 16) 81

87. Marginal relief (Chapter 17) 84

88. Marginal relief at Rs. 50 lakh (Chapter 17) 85

89. Gift to parents (Chapter 18) 88

90. Proprietorship vs company (Chapter 18) 88

91. Senior with pension and interest (Chapter 19) 89

92. Family trust for a disabled dependant (Chapter 20) 92

93. Planning with an HUF (Chapter 21) 94

94. Retiring partner (Chapter 22) 95

95. Application of income (Chapter 23) 98

96. Credit society (Chapter 24) 100

97. Normal regime vs MAT vs section 200 (Chapter 25) 102

98. Deferred tax on depreciation (Chapter 25) 103

99. MAT computation (Chapter 25) 104

100. Current tax for a company under section 200 (Chapter 25) 105

101. Inter-corporate dividend (Chapter 26) 106

102. Investor exit (Chapter 26) 106

103. Effective tax rate reconciliation (Chapter 26) 109

104. Reconciliation (Chapter 28) 113

105. Lease under Ind AS 116 (Chapter 29) 114

106. Shareholder in a merger (Chapter 30) 117

107. Depreciation split (Chapter 30) 117

108. Remaining life of a loss (Chapter 30) 117

109. Cost split on demerger (Chapter 30) 118

110. Slump sale (Chapter 30) 118

111. Buying from a non-resident (Chapter 30) 119

112. Unquoted shares below FMV (Chapter 30) 121

113. Earn out (Chapter 30) 122

114. Indirect transfer (Chapter 30) 123

115. Merging a loss-making sister company (Chapter 30) 123

116. Royalty to a US company (Chapter 31) 126

117. Fees for technical services and the "make available" clause (Chapter 31) 127

118. Service PE (Chapter 31) 127

119. Grossing up (Chapter 31) 127

120. Foreign tax credit (Chapter 31) 128

121. Short stay employee under a treaty (Chapter 31) 130

122. Schedule FA (Chapter 31) 132

123. TDS on purchase from an NRI (Chapter 32) 133

124. Seafarer (Chapter 32) 134

125. Software services to the US parent (Chapter 33) 136

126. Safe harbour check (Chapter 33) 136

127. Computing the range (Chapter 33) 138

128. Outbound loan (Chapter 33) 138

129. Interest cap (Chapter 34) 142

130. Treaty shopping through a shell (Chapter 34) 143

131. Round tripping (Chapter 34) 144

132. Professional fees (Chapter 35) 146

133. Contractor with several bills (Chapter 35) 146

134. Property purchase (Chapter 35) 146

135. Senior citizen FD (Chapter 35) 146

136. Late deposit (Chapter 35) 147

137. Job work (Chapter 35) 148

138. Rent with GST (Chapter 35) 149

139. Joint buyers (Chapter 35) 149

140. Monthly TDS (Chapter 36) 153

141. Shortfall (Chapter 37) 155

142. Instalments and interest (Chapter 37) 155

143. Missed FD interest (Chapter 38) 157

144. AIS mismatch (Chapter 38) 159

145. Mismatch intimation (Chapter 40) 163

146. Paying the right challan (Chapter 41) 165

147. Processing adjustment (Chapter 42) 166

148. Bank credits notice (Chapter 42) 167

149. Block assessment (Chapter 43) 170

150. Refund interest (Chapter 45) 174

151. Under-reporting (Chapter 46) 175

152. Immunity decision (Chapter 46) 176

PART A: FOUNDATIONS

The new structure, the Tax Year, residence and the scheme of taxation

This part sets the stage. It explains why the 2025 Act was enacted, how it is arranged, and how to decide which Act applies during the transition. It then covers the three questions that come before any computation: which year (Tax Year), who is taxable and to what extent (residential status and scope), and which head the income falls under, including what is exempt.