hand book for 6th semester b.com bangalore university

6th Semester B.Com

Management Accounting

Hand Book

Compiled By

Sanjay Sharma.K.R

Financial Statement Analysis

Financial Statements Analysis Financial Statements Analysis is a process of methodical classification of the data given in financial

statements into the desired homogeneous and comparable component parts and study and

explanation of the relationship between them to provide a full picture of the profitability and

financial position of the organization.

Methods of Financial Analysis:

The important techniques or methods of financial analysis include the following:-

1) Comparative Statements, 2) Common size Statements, 3) Trend Analysis, 4) Ratio Analysis

5) Fund Flow Analysis, 6) Cash Flow Analysis, 7) Break Even Point.

Comparative Financial Statement Analysis Comparative Financial Statements are prepared to reflect the financial data for two or more

periods.

Comparative Financial Statements includes:

a) Comparative Income Statement: It is prepared to compare the various items of income

statements of different periods to ascertain the changes from one period to another.

b) Comparative Balance Sheet: It is prepared to facilitate the comparison of assets and liabilities

of a business on two different balance sheet dates to find out the changes in them.

Comparative Income Statement For the year ended___________

Particulars 2013

(Rs)

2014

(Rs)

Increase/Decrease

(Amount)

Increase/Decrease

(Percentage)

Sales

Less: Cost Of Goods Sold

Gross Profit

Less: Indirect Expenses

/Operating Expenditure

Profit Before Tax

Less: Income Tax

Net Profit After Tax

Comparative Financial Balance Sheet Particulars 2013

(Rs)

2014

(Rs)

Increase/Decrease

(Amount)

Increase/Decrease

(Percentage)

ASSETS

Fixed Assets

Land & Building XXX XXX XXX XX

Plant & Machinery XXX XXX XXX XX

Furniture & Fixtures XXX XXX XXX XX

Other Fixed Assets XXX XXX XXX XX

Total Fixed Assets (A) XXX XXX XXX XX

Add: Current Assets

Cash in hand & at Bank XXX XXX XXX XX

Bills Receivable XXX XXX XXX XX

Sunday Debtors XXX XXX XXX XX

Stock XXX XXX XXX XX

Prepaid Expenses XXX XXX XXX XX

Total Current Assets (B) XXX XXX XXX XX

Total Assets (A+B) XXXX XXXX XXXX XXX

LIABILITES

Proprietor’s Capital

Preference Share Capital XXX XXX XXX XX

Equity Share Capital XXX XXX XXX XX

Reserves & Surplus XXX XXX XXX XX

Profit & Loss a/c XXX XXX XXX XX

Total Proprietor’s Capital (X) XXX XXX XXX XX

Add: Loan’s Capital

Long term Loans XXX XXX XXX XX

Debentures XXX XXX XXX XX

Total Loans ’s Capital (Y) XXX XXX XXX XX

Add: Current Liabilities

Bills Payable XXX XXX XXX XX

Sundry Creditors XXX XXX XXX XX

Bank Overdraft XXX XXX XXX XX

Other Current Liabilities XXX XXX XXX XX

Total Current Liabilities (Z) XXX XXX XXX XX

Total Liabilities (X+Y+Z) XXXX XXXX XXXX XXX

Interpretation:

(1) Long Term Solvency = Increase or Decrease of (Fixed Assets – Share Capital).

(2) Short Term Solvency = Increase or Decrease in Working Capital (Current Assets – Current

Liabilities). (3) Profitability = Increase or Decrease of Reserves and Surplus.

Trend Analysis (Performa)

Year Sales Stock Profit before Tax

Amount Trend

Percentage

Amount Trend

Percentage

Amount Trend

Percentage

2003 XXX XX XXX XX XXX XX






Common size Financial Statement Analysis Common size Financial Statements are the statements to which the dates given in financial

statements are converted into (%) percentages of a Common base amount. Common Size

Statements are also known as component (%) Percentage Statements or 100% statements.

It is a statement in which the sales is taken as 100% and all other items in given data are expressed

are expressed in percentage (%) of sales

Common size Financial Statements includes:

1) Common size Income Statement: It is a statement in which the sales is taken as 100% and

all other items in the given data are expressed are expressed in Percentage of Sales.

2) Common size Balance Sheet: It is a statement in which the total Assets or Liabilities is

taken as 100% and all the items of the balance sheet are expressed as a 100% and all the

items of the balance sheet are expressed as a percentage to the total Assets or Liabilities.

Common size Income Statement

Particulars 2013 2014

Amount Percentage Amount Percentage

Sales XXX XX XXX XX

Less: Cost Of Goods Sold XXX XX XXX XX

Gross Profit XXX XX XXX XX

Less: Indirect Expenses/ Operating

Expenditure

XXX XX XXX XX

Profit Before Tax XXX XX XXX XX

Less: Income Tax XXX XX XXX XX

Net Profit After Tax XXX XX XXX XX

Common Size Financial Balance Sheet

Interpretation:

(1) Long Term Solvency = Increase or Decrease of (Fixed Assets – Share Capital).

(2) Short Term Solvency = Increase or Decrease in Working Capital (Current Assets – Current

Liabilities). (3) Profitability = Increase or Decrease of Reserves and Surplus.

Particulars 2013 2014

Amount Percentage Amount Percentage

ASSETS

Fixed Assets

Land & Building XXX XX XXX XX

Plant & Machinery XXX XX XXX XX

Furniture & Fixtures XXX XX XXX XX

Other Fixed Assets XXX XX XXX XX

Total Fixed Assets (A) XXX XX XXX XX

Add: Current Assets

Cash in hand & at Bank XXX XX XXX XX

Bills Receivable XXX XX XXX XX

Sunday Debtors XXX XX XXX XX

Stock XXX XX XXX XX

Prepaid Expenses XXX XX XXX XX

Total Current Assets (B) XXX XX XXX XX

Total Assets (A+B) XXXX XXX XXXX XXX

LIABILITES

Proprietor’s Capital

Preference Share Capital XXX XX XXX XX

Equity Share Capital XXX XX XXX XX

Reserves & Surplus XXX XX XXX XX

Profit & Loss a/c XXX XX XXX XX

Total Proprietor’s Capital (X) XXX XX XXX XX

Add: Loan’s Capital

Long term Loans XXX XX XXX XX

Debentures XXX XX XXX XX

Total Loans ’s Capital (Y) XXX XX XXX XX

Add: Current Liabilities

Bills Payable XXX XX XXX XX

Sundry Creditors XXX XX XXX XX

Bank Overdraft XXX XX XXX XX

Other Current Liabilities XXX XX XXX XX

Total Current Liabilities (Z) XXX XX XXX XX

Total Liabilities (X+Y+Z) XXXX XXX XXXX XXX

Fund Flow Analysis

Fund:Fund:Fund:Fund: Fund in fund flow statement refers to net working capital.Net working capital

refers to excess of current assets and liabilities.

Net Working Capital = Total Current Assets – Total Current Liabilities.

Funds flow:Funds flow:Funds flow:Funds flow: It refers to inflow or outflow of working capital.

Inflow of fund:Inflow of fund:Inflow of fund:Inflow of fund: It refers to any transactions which increase net working capital of a

firm.

Outflow of fund:Outflow of fund:Outflow of fund:Outflow of fund: It refers to any transactions which reduce net working capital of a

firm.

Fund Flow Statement:Fund Flow Statement:Fund Flow Statement:Fund Flow Statement: It refers to a statement which shows ‘Sources’ and ‘Application’ of a firm during an accounting year.

Current Assets:Current Assets:Current Assets:Current Assets: These are the assets which are realized within duration of one year. For example: Cash in hand, Cash at Bank, Debtors, Bills Receivable, Accounts Receivable, Stock, Prepaid Expenses.

NonNonNonNon----CurrentCurrentCurrentCurrent AssetsAssetsAssetsAssets:::: These are also called as fixed assets, which are employed and

realized for more than one year. For example: Land and Building, Plant and Machinery, Furniture and Fixtures, Livestock.

Current Liabilities:Current Liabilities:Current Liabilities:Current Liabilities: These are those liabilities which are paid within duration of one

accounting year. For example: Creditors, Bills payable, Provision for Taxation, Bad Debts, and Bank Overdraft.

NonNonNonNon----CurrentCurrentCurrentCurrent Liabilities:Liabilities:Liabilities:Liabilities: These are those liabilities, which are borrowed and repaid

for more than one accounting year. For example: Share Capital, Debenture, Long Term Loan

Statement of Changes in Working Capital:Statement of Changes in Working Capital:Statement of Changes in Working Capital:Statement of Changes in Working Capital: It refers to statements which shows net

Increase or Decrease in Working Capital when the Total Current Assets are compared to Total Current Liabilities between two accounting years

(1) Preparation of Statement in Changes in Working Capital

Particulars Previous Year

Current Year

Effects on Working Capital Increase Decrease

A. Current Assets Bank Bills Receivable Cash Debtors Stock Total Current Assets (A) B. Current Liabilities Bank Overdraft Bills payable Creditors Total Current Liabilities (B) C=(A-B) = Working Capital Net Increase or decrease of Working Capital

Total

(2) Working Note:

Preparation of APreparation of APreparation of APreparation of Assets or Liabilities ssets or Liabilities ssets or Liabilities ssets or Liabilities accounts (only in case of adjustments)accounts (only in case of adjustments)accounts (only in case of adjustments)accounts (only in case of adjustments)

Asset a/c

Particulars Amount Particulars Amount

To balance b/d xxx By Cash / Bank

(Asset Sold)

xxx

To Cash/ Bank a/c

(Asset Purchased)

xxx By Adjusted P&L a/c

(Deprecation)

xxx

To Profit on Sale of Investment xxx By Loss on sale of Asset xxx

By balance c/d xxx

XXXX XXXX

Provision for Taxation a/c


To Cash/ Bank

(Tax Paid)

xxx By balance b/d xxx

To balance c/d xxx By Adjusted P&L

(New Provision)

xxx

XXXX XXXX

Proposed Dividend a/c


To Cash/ Bank

(Dividends Paid)

xxx By balance b/d xxx

To balance c/d xxx By Adjusted P&L

(New Provision Created)

xxx

XXXX XXXX

(3) Calculation of Funds from Operation (FFO)

Particulars Amount

Net Profit of the Current Year XXX

Add: Non-Operating Expenditure

Depreciation XXX

Dividends/ Interest Provision XXX

Goodwill/Preliminary Expenses Written Off XXX

Loss on sale of Asset/Investment XXX

Tax Provision XXX

XXX

Less : Non-Operating Income

Profit on Sale of Investment / Fixed Assets XXX

Dividend / Interest Received XXX

XXX

Less: Net Profit of Last Year XXX

Fund from Operation(FFO) XXXX

(4) Preparation of Fund Flow Statement (F.F.S)

In the books of___________________

Fund Flow StatementFund Flow StatementFund Flow StatementFund Flow Statement

For the year ended_____________

Particulars Amount Sources of Fund : Issue of Shares XXX Issue of Debentures XXX Sale of Fixed Assets / Investments XXX Raising of long term loans XXX Funds From Operation XXX Net Decrease in Working Capital XXX

Total Sources (A) XXXX Applications of Fund: Purchase of Fixed Assets / Investments XXX Redemption or Repayment of Shares or Debentures or Long term Loan

XXX

Tax Paid XXX Dividends Paid XXX Net Increase in Working Capital XXX

Total Applications (B) XXXX

Fund: Fund: Fund: Fund: Fund in Cash flow statement refers to cash and cash equivalents. Cash refers to Cash in Hand & Cash at Bank. Cash equivalents refer to those assets which can be converted into cash easily without much loss.

Cash flow:Cash flow:Cash flow:Cash flow: It refers to inflow or outflow of cash and cash equivalent balance in an accounting year.

Cash Inflow:Cash Inflow:Cash Inflow:Cash Inflow: It refers to any transactions which increase cash and cash equivalent of a firm.

Cash Outflow:Cash Outflow:Cash Outflow:Cash Outflow: It refers to any transactions which reduce cash and cash equivalent of a firm.

Cash Flow Statement:Cash Flow Statement:Cash Flow Statement:Cash Flow Statement: It refers to a statement prepared to show inflow or outflow of cash and cash equivalent balance due to changes in transaction of operating, investing & financing activities of a firm.

Cash flow from activitiesCash flow from activitiesCash flow from activitiesCash flow from activities

In the cash flow statement the business activities are classified into:

Operating Activities

Investing Activities

Financing Activities

a) Operating Activities:Operating Activities:Operating Activities:Operating Activities: These are principles or primary revenue generally activities which involves consideration of operating Sales Income or increase or decrease in current assets or current liabilities.

b) Investing Activities:Investing Activities:Investing Activities:Investing Activities: These are those activities which make increase or decrease in cash balances due to acquisition (purchase) and disposal (sale) of Fixed Assets and Long Term Investments.

c) Financing Activities:Financing Activities:Financing Activities:Financing Activities: These are those activities involved in issue or repayment of shares, debentures and long term loans.

Performa of Cash Flow Statement (AS-3)

(Indirect Method)

Particulars Amount Amount

CASH FLOW FROM OPERATING ACTIVITIES

Net Profit for the Current Year xxx

Add: Non Cash and Non-Operating Expenses

Depreciation xxx

Loss on Sale of Fixed Assets or Investments xxx

Goodwill Written off xxx

Preliminary Expenses Written off xxx

Provision for Taxation xxx

Provision for Dividend xxx

Transfer to Gross Profit xxx

Dividends, Interest Paid xxx

XXX

Less: Non Cash and Non-Operating Income

Dividend, Interest Received xxx

Profit on Sale of Fixed Assets or Investments xxx

Operating Profit before adjustment of changes in

Current Assets and Current Liabilities

XXX

Add: Increase in Current Liabilities xxx

Decrease in Current Assets xxx

XXX

Less: Decrease in Current Liabilities xxx

Increase in Current Assets xxx

Operating profit before extra-ordinary items

adjustment

XXX

Less: Extra Ordinary Items:

Income Tax Paid xxx

Cash flow for used in Operating Activities XXXX

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed Assets or Investments xxx

Sale of fixed Assets or Investments xxx

Dividend or Interest Received xxx

Cash flow for used in Investing Activities XXXX

CASH FLOW FROM FINANCING ACTIVITIES

Issue of Shares or Debentures xxx

Raising of long term loan xxx

Redemption of Shares or Debentures xxx

Repayment of LLT xxx

Payment of Interest, Dividend xxx

Cash flow used in Financing Activities XXXX

Net Cash Flow used XXXX

Add: Opening balance of Cash and Cash Equivalent XXXX

Closing balance of Cash and Cash Equivalent XXXX

Difference between Fund Flow Statement and Cash Flow Statement

Advantages of Cash flow Statement:

� It reveals the causes of change in cash position.

� It is helpful in understanding the current cash position of the business

� It helps the Management in demerging policies regarding Financial Management

� It facilities effective and efficient cash planning

� It helps the management to understand the cycle of the business and to control the

cash in future

Disadvantages of Cash flow Statement:

� It may not represent the real liquidity of a business

� It cannot help to replace an income statement or a Fund Flow Statement.

� It is very difficult to define the term cash precisely and hence cash analysis may not be

useful under all the circumstance

Basis of difference Fund Flow Statement Cash Flow Statement

Basis of concept It is based on a wide concept of funds It is based on a narrow Concept

of fund

Basis of Accounting

It is based on accurate basis of

accounting

It is based on cash Basis of

accounting

Schedule of changes on W.C

Schedule of changes in W.C prepared to

show changes in CA and CL

No such Schedule of changes in

W.C prepared

Method of Preparing

F.F.S reveals the sources and application

of funds.Net diff b/w sources &

application of funds represent net

increase or decrease in Working Capital

It is prepared by classifying all

cash inflows & out flows in terms

of operating, investing &

financing activities

Basis of Usefulness

It is useful in planning intermediate and

long term financing

It is more useful for short term

and cash planning

Rule of Thumb= 2:1

Rule of Thumb= 1:1

Rule of Thumb= 1:2

or 0.50:1

Ratio Analysis

Liquidity ratio

1) Current Ratio/Working Capital Ratio:-

Current Ratio is called as Working Capital ratio. This ratio expresses relationship between Current Assets

and Current liabilities.

Current Ratio = ��

��

Where; Current Assets= 2

Current Liabilities= 1

2) Quick /Acid Test/Liquid Ratio:-

Quick Ratio expresses relationship between Quick Assets and Current Liabilities.

Quick Assets refer to current assets which are excluded Inventory and Prepaid Expenses.

Quick Ratio = ��

��

OR

Quick Ratio = ��

��

Where; Quick Assets= 1

Current Liabilities= 1

3) Absolute Liquid Ratio / Cash Ratio:-

Absolute Liquid Ratio is also called as Cash ratio the expresses relationship between Absolute Liquid Assets

and Current liabilities. Absolute Liquid Assets are Cash in hand, Cash at Bank & Marketable Securities

Absolute Liquid Ratio = � ��

��

Turnover Ratios

1) Stock/Inventory turnover /Velocity Ratio

It is a ratio which shows the speed at which the stock or Inventory is converted into Sales. It can be

calculated by using the following formula

Inventory Turnover Ratio = �� !��"��

��#��/��

OR

Inventory Turnover Ratio = %��"��

��

OR

Inventory Turnover Ratio = %��"��

��#�"��/��

Where:

Cost of Goods Sold (COGS) = Sales – Gross Profit

Average Stock = &��#"��#"��

'

Inventory or Stock Conversion Period:

Inventory Conversion Period = %��

"��(��)��

2) Debtors Turnover Ratio (Velocity)

Debtors Turnover Ratio is a ratio which indicates the speed at which the average debtors are turnover into

sale during the year.

Debtors Turnover Ratio = %��"��

��#�*� ��

(Sundry Debtors = Average Debtors – Bills Receivable)

Where: Net Annual Credit Sales = Total Sales – Cash Sales – Return Inwards.

Average Debtors = &��#*� ��#*� ��+��)��

'

Debtors Collection Period or Average Collection Period:

Debtors Collection Period = %�� ,��#��

*� ��(��)��

Or

Debtors Collection Period = ��#�*� ��

%��"��*��

3) Creditors Turnover Ratio (Velocity):

Creditors Turnover Ratio = %��-��

��#��

Average Creditors = &��#��#��+��

'

4) Creditors Payment Period or Average Payment Period:

Creditors Payment Period = %�� ,��#��

��(��)��

Or

Average Payment Period = ��#��

%��-��*��

5) Working Capital Ratio:

Working Capital Ratio = �� "��&!"

��#�.��#��

Rule of Thumb= 1:1

SOLVENCEY RATIOS

1) Debt Equity Ratio: It is a ratio which expresses the relationship between Debt Capital and Own

Capital.

Debt Equity Ratio = *� ��

��

Where, Debt Capital = Total Liabilities – Shareholders fund.

Equity Capital = Share Capital (Equity+ Preference) + Reserves & Surplus

2) Funded Debt to Total Capitalisation:

Funded Debt to Total Capitalisation = /��*� �

0123453672347832719X 100

Where, Funded Debt = Total liabilities – Shareholder’s Fund - Current Liabilities

Total Capitalisation= Total liabilities - Current Liabilities

3) Proprietary (or) Equity Ratio:

Proprietary Ratio = "-��-��/��

(��

Where, Shareholders Fund = Share Capital + Reserves & Surplus

Total Assets = Fixed Assets + Current Assets

4) Solvency Ratio:

Solvency Ratio = (�� &��

(��

Where, Total Liabilities to Outsiders = Total Liabilities – Shareholders fund

Total Assets = Fixed Assets + Current Assets

5) Fixed Assets to Proprietors Fund (or) Net Worth Ratio:

Net Worth Ratio: It is a ratio express relation between Fixed Assets after depreciation and

Proprietor’s fund.

Proprietors Fund = /��

"-��-��/��

6) Fixed Assets to Long Term Funds Ratio:

Fixed Assets to Long Term Funds Ratio = /��

��#(��:/��

7) Current Assets to Shareholders Funds Ratio:

Current Assets to Shareholders Funds Ratio = ��

"-��-��/��

8) Interest Coverage Ratio:

Interest Coverage Ratio = %�� (��

/��-��#�

Profitability ratios

Profitability Ratios: These are the ratios used to measure the profitability of a firm.

1) Gross Profit Ratio:

Gross Profit Ratio = !��

%��"�� X 100

Net Sales = Credit Sales + Cash Sales – Sales Returns

2) Operating Ratio:

Operating Ratio = &��#��

%��"��x 100

Operating Cost = Cost of Goods Sold + Operating Expenses

3) Operating Profit Ratio:

Operating Profit Ratio = &��#��

%��"�� X 100

4) Expenses Ratios:

a) Cost Of Goods Sold Ratio:

Cost Of Goods Sold Ratio = �� !��"��

%��"�� X 100

b) Office and Administration Expenses Ratio:

Office and Admin Expenses Ratio =OfficeandAdministrationExpenses

NetSales x100

c) Selling and Distribution Expenses Ratio:

Selling and Distribution Expenses Ratio =SellingandDistributionExpenses

NetSales x100

d) Non-Operating Expenses Ratio:

Non-Operating Expenses Ratio = %��&��#��

%��"�� x 100

5) Cash profit Ratio:

Cash Profit Ratio = ��-��

%��"�� x 100

Were, Cash Profit = Net Profit + Depreciation

6th Semester B.Com

Income Tax-II

Hand Book

Compiled By

Sanjay Sharma.K.R

Income from Business Income from Business Income from Business Income from Business (Sec 28 to 44D)

Computation of Taxable Income from Business. Assessee: ___________ Assessment Year: 2013-14,

Status: ____________ Previous Year: 2012-13


Net profit as per Profit & Loss a/c XXXX

Add: Inadmissible expenses debited to P & L a/c

1. Bad debts recoverable XXX

2. Bearer Cheque or Cash Payment above (Rs 20,000) XXX

3. Capital expenses like purchase of machinery, Extension of Building,

cost of permanent sign board fixed on office premises

XXX

4. Charities and Donation XXX

5. Contribution to Staff Welfare fund XXX

6. Contribution to unapproved or unrecognized fund or political party XXX

7. Difference In trial balance XXX

8. Direct Taxes like Income Tax, Advance tax, Wealth Tax, Interest on

loan for payment of IT

XXX

9. Employee’s contribution to P.F or not paid or before the due date

filing returns

XXX

10. Excess Depreciation XXX

11. Excessive and unreasonable Payments made to relatives XXX

12. Expense relating to other heads of Income such as Municipal taxes of

H.P let out

XXX

13. Expenses incurred to earn tax free Incomes like Cultivation Expenses,

Agricultural Expenses

XXX

14. Fines and Penalties XXX

15. Fringe benefit Tax XXX

16. Gift & Presents (Non Publicity) XXX

17. Illegal Expenses XXX

18. Interest on Capital XXX

19. Legal Expenses to acquire a title or cure a defect in Assessee in title of

Assets

XXX

20. Loss from discontinued Business XXX

21. Loss on sale of Asset (Plant, Machinery, Car, etc.) XXX

22. Preliminary Expenses(Expenses relating to preparation of feasibility

report, Conducting market survey)

XXX

23. Provision for Bad Debts XXX

24. Provisions or Reserves like Reserves for future losses, Provision for

Bad debts & Doubtful debts.

XXX

25. Salary or Interest on Loan Payable outside India without T.D.S XXX

26. Sales Tax, Excise duty, custom duty, local taxes of premises used for

business not paid or before due date.

XXX

27. Speculation Losses XXX

28. Personal expenses like LIC premium paid, NSC, NSS,PPF, Proprietor’s

(salary, bonus) Drawings ,theft from residence, rent paid for self,

household expenses

XXX

XXXX

Less: In Admissible Incomes

1 Agricultural Income XXX

2 Bad Debts recovered but disallowed earlier XXX

3 Customs Duty or Excise Duty recovered but disallowed earlier XXX

4 Dividend from Indian Company or UTI XXX

5 Dharmada Mandir and Gruhashala receipt u/s 113 ITR.579(Allahabad) XXX

6 Gift from friends above (Rs.50,000) XXX

7 Interest from post Savings Bank a/c XXX

8 Income Tax Refund XXX

9 Refund from L.I.C XXX

10 Withdrawal from PPF XXX

11 Depreciation (*) XXX

XXXX

Add: Overvaluation of Opening Stock XXX

Undervaluation of Closing Stock XXX

XXXX

Less: Overvaluation of Closing Stock XXX

Undervaluation of Opening Stock XXX

Taxable Income from Business XXXX

(*) Depreciation rates for the Assessment year 2012-13

Particulars Rate

Buildings

a) Residential Buildings except hotel and Boarding Houses 5%

b) Non Residential Building or factory or godens buildings 10%

c) Furniture and fittings 10%

Plant and Machinery

General Plant and Machinery 15%

Motor Car 15%

Airplane 40%

Motor Buses, Lorries & Motor Taxies used in Business 30%

Computers 60%

P&M used in Weaving, Processing & Govt sector or Textile Industry Purchased

50%

Books; If owned by Assessee : Carrying Profession

Annual Publication 100%

Other books 60%

If books owned by Assessee carrying on Lending business 100%

Typewriter 15%

Surgical Instruments 15%

Intangible Assets (such as patents, Copyrights, Trademarks, license, franchise or Technical knowhow or Commercial rights)

25%

Income from Profession

Medical Practitioner / Doctor

Computation of Taxable Income from Profession (Doctor)

Assessee: ___________ Assessment Year: 2013-14,


Particulars Amount

Professional Receipt

Consulting Fees XX

Examiner’s fees XX

Fees for Conducting Operation XX

Gift received from patient for professional services rendered XX

Nursing Home Receipt XX

Sale of Medicine XX

Visiting Fees XX

Any other Professional Receipt XX

Total Professional Receipt XXX

Professional Payments

Less: Professional Expenses or Payments

Rent, Light , Water charges, Salary to staff, Telephone

Expenses of Clinic and hospital

XX

Cost of Medicine(it is calculated in two different scenarios)

a) If accounts are maintained in Cash Basis:

cost of Actual Medicine Purchased during the year

b) If accounts are maintained in Mercantile Basis (P&L) :

Opening Stock + New Purchase – Closing Stock

XX

Depreciation on Books at Prescribed rates XX

Depreciation on Surgical Equipment’s and X-Ray machine at

Prescribed rates

XX

Expenditure incurred to increase professional knowledge XX

Motorcar Expenses –Depreciation relating to Profession work XX

Any other expenditure incurred during the year pertaining to

Profession

XX

Taxable Income from Profession XXXX

Note: If Consultation Fees and Rent given in problem has values more than one year values then:- In case if the problem is in Cash Basis (consider all year’s Values).

In case if it is in Mercantile Basis (Consider only Financial Year value)

Chartered Accountant / Auditor

Computation of Taxable Income from Profession (Auditor)



Particulars Amount

Professional Receipt:

Audit Fees XX

Consultancy Services XX

Examiners Fees XX

Gain from Accountancy Work XX

Gift from Client XX

Institute Fees XX



Professional Payments:


Audit office Expenditure XX


Depreciation on Office Equipment or Vehicles XX

Depreciation on office furniture XX


Membership Fees XX

Motorcar Expenses –Depreciation relating to Profession work XX

Stipend to trainees XX

Subscriptions XX


Advocate / Lawyer

Computation of Taxable Income from Profession (Lawyer) Assessee: ___________ Assessment Year: 2013-14,


Particulars Amount

Professional Receipt:

Arbitration fees XX

Examiners Fees XX

Legal Fees XX

Practicing Fees XX

Present from Client XX

Special Commission XX



Professional Payments:




Office Expenditure XX

Purchase of Stamp Paper & Court fees XX

Salary to Staff (if any) XX

Subscriptions XX

Travelling Expenses XX


Income from Capital Gain (Sec 45 to 55a)

Capital Assets

Specified Assets Non-Specified Assets

Shares of Company (Preference

or Equity)

Listed Securities (i.e. Debenture

and Govt Securities) quoted on a

listed stock exchange

Specified units of UTI, Mutual

Funds.

All those assets other than

specified assets. (Includes

Jewelry)

Non-Specified assets =

(From the date of Acquisition to

the date of Sale)

Short Term Assets = < 36 Months

Long Term Assets = > 36 Months

Non-Specified assets =

(From the date of Acquisition to

the date of Sale)

Short Term Assets = < 12 Months

Long Term Assets = > 12 Months

Computation of Income from Capital Gain (Short Term Capital Gain)


Sale Consideration / Full Value Consideration xxxx

Less: Expenses relating to Consideration

i.e. (Brokerage, Commission, Stamp Duty, etc.)

xxx

Net Sale Consideration xxxx

Less: Cost of Acquisition xxx

Less: Cost of Improvement xxx Short Term Capital Gain xxxx

Less: Exemption u/s 54,54B,54D,54G,54GA xxx Taxable Income From Short Term Capital Gain XXXX

Computation of Income from Capital Gain (Long Term Capital Gain)




Sale Consideration / Full Value Consideration xxxx

Less: Expenses relating to Consideration

i.e. (Brokerage, Commission, Stamp Duty, etc.)

xxx

Net Sale Consideration xxxx

Less: Indexed Cost of Acquisition

a) If asset purchased before 1981

Cost of Asset or Fair Market Value (WEH)

Cost of Acquisition X Indexed value of 2012-13

Indexed value (CII)

xxx

Less: Indexed Cost of Improvement

Cost of Acquisition X Indexed value of 2012-13

Indexed value (CII)

xxx

Long Term Capital Gain xxxx

Less: Exemption u/s 54,54B,54D,54G,54GA xxx Taxable Income From Long Term Capital Gain XXXX

Note: There will be no indexing no indexing no indexing no indexing of cost for bondsbondsbondsbonds and debenturesdebenturesdebenturesdebentures

Exemptions U/S 54Exemptions U/S 54Exemptions U/S 54Exemptions U/S 54

U/S 54: a) Capital Gain arising on transfer of Purchase of Residential House. (If Assessee acquires another HP within one year before or within two years from the date of transfer or constructs another residential HP within three years from the date of such

transfer). b) Deposited Capital Gain Account Scheme, 1988 opened in any branch of the nationalized banks before the last date of filing returns that is 31st July of every year.

U/S 54 B: Capital Gain arising on transfer to purchase of Agricultural Land.

U/S 54 D: Capital Gain arising on transfer of Industrial Undertaking (i.e. Land, Building, Plant which is being part in Industrial Undertaking).

U/S 54 EC: Capital Gain arising on purchase of Long Term Specified Capital Asset such as R.E.C = Rural Electrification Corporation. NHAI = National Highway Authority of India.

Note: i) The investments in long term specified assets should be made within six months from the date of the date of transfer of original asset. ii) Long-term specified assets means ANY bond redeemable after three years and issued after 01-04-2006 by NHAI or the REC

U/S 54 F: Capital Gain arising on transfer to purchase of other than Residential House.(i.e. Land, Gold, Jewelry,)

Formula: L.T.C.G X Purchase of Asset

N.S.C

U/S 54 G: Capital Gain on the transfer of shifting Industrial Undertaking from Urban Area to Rural Area.

U/S 54 GA: Capital Gain on the transfer of shifting Industrial Undertaking from Urban Area to Specialized Economic Zone (S.E.Z).

Transactions not regarded as Transfer [sec 47]

1. Any transfer by way of conversion of bonds or debentures, certificates in any form

of a company.

2. Any transfer of a capital asset being any work of national importance notified by the

government

3. Any transfer of capital asset by the predecessor co -operative bank to the successor

co -operative bank in a business re-organization

4. Any transfer of foreign currency bonds or global depository receipts held by a non-

resident to another non-resident, where the transfer is made outside of India.

5. Capital assets derived from total or partial partition of HUF

6. Transfer of capital asset under Amalgamation in India

7. Transfer of capital assets by a Holding company to its Subsidiary in India

8. Transfer of capital assets by a Subsidiary company to its Holding company in India

9. Transfer of land by sick company to its workers

10. Transfer of membership in a registered Stock Exchange

11. Under a will or gift or irrevocable trust

COST INFLATION INDEXCOST INFLATION INDEXCOST INFLATION INDEXCOST INFLATION INDEX

SlNo FinancialYear

CIICIICIICII SlNo FinancialYear

CIICIICIICII

1 1981-82 100100100100 19 1999-00 389389389389

2 1982-83 109109109109 20 2000-01 406406406406

3 1983-84 116116116116 21 2001-02 426426426426

4 1984-85 125125125125 22 2002-03 447447447447

5 1985-86 133133133133 23 2003-04 463463463463

6 1986-87 140140140140 24 2004-05 480480480480

7 1987-88 150150150150 25 2005-06 497497497497

8 1988-89 161161161161 26 2006-07 519519519519

9 1989-90 172172172172 27 2007-08 551551551551

10 1990-91 182182182182 28 2008-09 582582582582

11 1991-92 199199199199 29 2009-10 632632632632

12 1992-93 223223223223 30 2010-11 711711711711

13 1993-94 244244244244 31 2011-12 785785785785

14 1994-95 259259259259 32323232 2012201220122012----13131313 852852852852

15 1995-96 281281281281 33 2013-14 939939939939

16 1996-97 305305305305

17 1997-98 331331331331

18 1998-99 351351351351

Income from Other Sources (Sec.56 to 59) Computation of Taxable Income from Other Sources



Particulars Amount

Agricultural Income from a place outside India XXX

Any Annuity (or)Pension received from L.I.C XXX

Bank Interest on Fixed Deposit XXX

Casual Income XXX

Composite Rent XXX

Deemed Income XXX

Directors fees (or) Commission XXX

Dividend XXX

Examination Fees received by a teacher (not from the Employer) XXX

Gift XXX

Income from Family Pension XXX

Income from Subletting XXX

Insurance Commission XXX

Interest on employees contribution to an URPF XXX

Interest on securities XXX

Mining rent (or) Royalty(or) Ground Rent XXX

Remuneration for lectures delivered XXX

Remuneration received for writing articles in Journals XXX

Rent from land XXX

Rental income from Machinery, Plant, Furniture XXX

Salaries received by a member of parliament (or)M.L.A (or) M.L.C’s XXX

Withdrawal from National Saving Scheme XXX

Other Incomes XXX

Less: Exemptions U/s 57

(Any expenditure incurred wholly for the purpose of earning the

income is deductible )

XX

Taxable Income from Other Sources XXXX

Generally What‘s Income from Other Sources? Ans: This is the last and residual head of any income which is taxable under Act, but does not find place under any head of Income [Income from Salary, H.P, Business and Capital Gains] will be Assessable under this Head Income from Other Sources.

If the Assessee is getting Family Pension

1/3 (or) 33.33 % of Family Pension Received

(Or) (Which Ever is Less)

Rs 15,000 Types of SecuritiesTypes of SecuritiesTypes of SecuritiesTypes of Securities

Government Securities Non- Government Securities /

Commercial Securities

Tax-free Government Securities

(Fully Exempted)

Tax-free Commercial Securities (Always to be Grossed up)

a) Either the rate of Interest is given

(Or)

b) Interest Amount is given.

Less Tax-free Commercial Securities

a) If Interest Amount is given then

Gross Up

b) If Interest Rate is given do not

Gross Up

Less Tax-free Government Securities

{Fully Taxable without deducting T.D.S}

(No Grossing Up)

Tax-free Government Securities: These securities are those, then interested on which is fully exempt from tax U/S 10(15). Interest on such securities is neither included in Total Income nor is taxed.

Interest on the following securities, bonds, deposits, etc., is fully exempt from tax:Interest on the following securities, bonds, deposits, etc., is fully exempt from tax:Interest on the following securities, bonds, deposits, etc., is fully exempt from tax:Interest on the following securities, bonds, deposits, etc., is fully exempt from tax:

� 12-Year National Savings Annuity Certificate

� Bonds issued by local authority and specified by the Central Government.

� Capital Investment Bonds

� Fixed Deposit Scheme governed by the Government Savings Certificate (Fixed

Deposit) Rules, 1968

� Fixed Deposit Scheme governed by the Post Office (Fixed Deposit) Rules, 1968

� Gold Deposits Bonds, 1999

� Interest on 7% Capital Investment Bonds

� Interest on notified bonds or debentures of Public Sector Companies

� Interest on securities held by the Welfare Commissioner of Bhopal Gas

Victims in the Reserve Bank

� N.R.I bonds issued by R.B.I

� National Defense Gold Bonds, 1980

� National Plan Certificate (10 Years)

� National Plan Savings Certificate (12 Years)

� Non Resident Rupee Deposit Scheme

� Post Office Cash Certificates (5 Years)

� Post Office Cumulative Time Deposit Account (15 Years)

� Post Office National Savings Certificate (12 Years / 7 Years)

� Post Office Savings Bank Account:-

a) Individual Account = Maximum exemption limit = Rs 3,500

b) Joint Account = Maximum exemption limit = Rs 7,000

� Public Account in Post Office. (Upto Rs 5,000)

� Relief Bonds

� Special Bearer Bonds, 1991

� Special Deposit Scheme, 1981

� Treasury Savings Deposit Certificates (10 Years)

Dividend

In case Dividend from Indian Company Not Taxable

In case Dividend from Foreign Company Taxable

In case Dividend from Cooperative Societies Taxable

No T.D.S made for the following

4 ¼ % of National Defense Bonds

6 ½ % Gold Bonds 1977 or 7 % Gold Bonds 1980.

Debenture issue by Cooperative Society

Interest in Government Securities

Interest on Foreign Govt Securities is not grossed up has no TDS on Income.

Seven Year National Saving Certificate.

Rates of TDS:-

Particulars Rate

Bank Interest 10%

Casual Income 30%

Insurance Commission 10%

Interest Received on Securities issued by Stationery bodies

(or) Local Authority

10%

Listed Securities and Unlisted Securities 10%

Grossing Up

Formula for Grossing Up of Income

Net Income X 100

100 – Tax Rate

Rules of Grossing Up of Interest

If The Interest is paid to the Assessee after T.D.S, Such interest should be Grossed Up

because the amount of T.D.S is considered to be a part of the income of the assesse.

The following are:

In case Government Securities “tax is not deducted at Source”. Therefore securities should

not be grossed up .In case of less Tax Securities the amount of interest id given problem

such interest should be assumed to be net interest it should be grossed up.

On other hand if amount of investment and rate of interest id given gross interest

calculated straight away.

In case of tax free commercial securities the interests should always be grossed up

irrespective of fact the amount of investment is given.

Very Important Points to remember when grossing up:

Particulars Rate Amount

Income from Crossword Puzzle, Lottery Winnings,( Other than

Horse Race )

30% Above 10,000

Income from Horse Race 30% Above 5,000

Interest on Bank Deposits 10% Above 10,000

Insurance Commission received 10% Above 5,000

If commission is more than apply gross up 5,000

Gift received from relative Exempt

Gift received from Non relative (Fully Taxable if) Above 50,000

Bank Interest on fixed deposit if T.D.S taxable, if income

exceeding

Rs 10,000 p.a

Allowable Expenses under Section 57

1. Bank commission, collection charges

2. Interest on loan taken to acquire an asset whose income is taxable under this head.

3. Standard deduction @ 1/3 of family pension or 15,000 whichever is less

4. Amount paid towards provident fund or ESI authorities by appropriate date by the

employer

5. Depreciation and expenses on repairs, fire insurance premium, local taxes etc., relating

to let out period

6. Any other expenses which is not a personal expenditure or is of capital expenditure and

is incurred to earn an income taxable under this head.

Note 1: there is no deduction of any expenditure out of casual incomes, races, puzzles etc.,

u/s 56(2)

Note 2: Interest on loan payable outside India without TDS is not deductible.

Total Income Quick look at Deductions from 80C to 80U.

Deduction Applicable for Short Detail

80C Individual and HUF Contributing/Investing/Depositing in

the P.Y approved

80CCC Individual only Contribution towards Pension Fund of

LIC or any other Income

80CCD Individual (central govt employees

only)

Contribution for Pension Scheme of

Central Govt by Central Govt

Employee

80D Individual and HUF Contribution towards Medical

Insurance Premium

80DD Individual and HUF Medical Treatment of a dependent

who is a person with Disability

80DDB Individual and HUF Contribution towards any Expenditure

incurred for Medical Treatment of

Assessee or his dependents

80E Individual only Interest paid on Higher Educational

loan taken for Assessee Higher

Education

80G All Assesses For Approved Donation

80GG Individual only For Rent paid of the Residence

80GGA All Assesses Contribution made(Scientific Research

association or University ,Approved

Association, intuitions, Colleges)

80GGC All Assesses( other than local authority

& every artificial judicial person)

Contribution to any Political Party

80U

Individual only

For Assessee suffering with Disability

such as (Blindness, Low Vision,

Leprosy cured, Hearing Impairment,

Locomotory Disability, Mental

Retardation, Mental Illness)

Deduction U/S 80C

OR

Note: LIC premium on the life of the own or minor restricted to 20% of sum assured or

Spouse Life.

• Approved Super Anuation Fund

• Employees Contribution for SPF,RPF,PPF,(PPF minimum Rs 500 Maximum Rs 7000)

• Housing loan, Principal Amount (including Accrued Interest) (Upto Rs 100,000 per

annum)

• Investment in a term deposit for a period less than 5 Years with any scheduled Bank

• Investment in Shares and Debentures in Public Company engaged in creation of New

80 C

Applicable from A.Y 2006-07

Applicable for Individual &HUF

Contributing/Investing/Depositing in the P.Y for approved

Total Amount Contributed Rs 100,000

Which Ever is Less

Deduction Amount

Infrastructure facility.

• Jeevan Dhara, New Jeevan Dhara, New Jeevan Dhara 1, Jeevan Akshay ,New Jeevan

Akshay of LIC

• Non commutable Deferred Annuity Approved

• Notified Mutual Fund

• Notified Pension fund setup by Mutual Fund

• Subscription to National Saving Certificate VI, VII, VIII issue

• Tuition fees for full time education

• Unit Linked Insurance plan of UTI (ULIP of UTI) and (ULIP of LIC , Mutual funds)

Note : The total amount of deduction U/S 80C, 80CCC, and 80CCD cannot exceed

Rs100,000

Deduction U/S 80 CCC

OR

80 CCC

Applicable for Individual only

Contribution towards Pension Fund of LIC or any other Income

Total Amount Contributed Maximum Limit:

Rs 100,000

Which Ever is Less

Deduction Amount

Deduction U/S 80 CCD

Note 1 : The deduction is available for both Employee and Employer Contribution

Note 2 : Salary include :- Basic Salary + D.A (if enters) + Total Amount of Deductions U/S

(80C + 80CCC+ 80CCD) [Cannot Exceed Rs 100,000].

80 CCD

Applicable for Individual only (Central Govt Employees)

Contribution for Pension Scheme of Central Government

by Central Govt Employee

Total Amount Contributed 10% of Salary

Which Ever is Less

Deduction Amount

Applicable from A.Y 2006-07

Deduction U/S 80D

Note 1: The Deduction is available only of Premium is paid through Cheques

Note 2: Deduction is Increased to Rs 15,000 in case of Non Senior Citizen.

And Rs 20,000 in case of Senior Citizen .Applicable from Assessment Year 2008-09,

80 D

Applicable for Individual and HUF

Contribution towards Medical Insurance Premium Income

Insurance Premium Paid A ) In case of Non Senior Citizen: Rs 15,0000

B ) In case of Senior Citizen: Rs 20,0000

Which Ever is Less

Deduction Amount

Deduction U/S 80DD

Note: Amount actually spent is irrelevant (i.e. Rs 5,000 is fixed for deduction)

In case of Severe Disability deductions will be Rs 100,000.

80 DD


Deduction is in respect of maintenance including Medical

Treatment of a dependent who is a person with Disability

(Spouse, children, parents, Brothers and Sisters)

Maximum Limit:

Rs 50,000

Deduction Amount

Deduction U/S 80 DDB

Note: Contribution towards any Expenditure incurred for Medical Treatment of Assessee

or his dependents such as Spouse, or Children, Brother or Sister Suffering from Specified

Disease

Certificate is prescribed from a Specialist, Government Document Is a Must.

80 DDB


Contribution towards any Expenditure incurred for Medical Treatment

treatmentTreatment of Assessee or his dependents

Insurance Premium Paid A ) In case of Non Senior Citizen: Rs 15,0000

B ) In case of Senior Citizen: Rs 20,0000

Which Ever is Less

Deduction Amount

Deduction U/S 80 E

Note:

a) The deduction will be extended to only 8 Assessment Year from the Assessment Year in

which Assessment Year in which Assessee starts paying Interest

b) Preceding to A.Y. 2006-07 even Principle Amount was also eligible for deduction.

But A.Y .2006-07 onwards only Interest amount is eligible.

c) From A.Y. 2008-09 the Benefit extended to Spouse and Children Also.

80 E

Applicable for Individual Only

Interest Paid on Higher Education Loan Taken for Assessee Higher Education

Full Amount Paid as Interest

Only

Deduction Amount

Deduction U/S 80 G

Note 1: 100 % Deduction

1. Africa (Public Contribution-India) Fund

2. Andhra Pradesh Chief Minister Cyclone Relief Fund

3. Any fund set up by the Govt of Gujarat for providing Relief to Victims earthquake in

Gujarat

4. Any sum towards 5 Years Time deposit of Post Office from (2008-09)

5. Chief Minister Relief Fund or Governor Relief Fund

6. Fund Central Welfare Fund of the Army, Air force and The Indian Naval Benevolent

funds.

7. Fund set up by a State Government for the Medical Relief to the poor.

8. National Blood transfusion Council for blood transfusion

9. National Defense Fund set up by Central Government

10. National Foundation for Communal Harmony

11. National Illness Association Fund

12. National Sports Fund or National Cultural Fund or Fund for Technology development &

Application

13. National Trust for Welfare of Autism, Mental Retardation & Multiple disabilities.

80 G

Applicable for All Assessee

Interest Paid on Higher Education Loan Taken for Assessee Higher Education

100% Donation

Deduction Amount

50% Donation Other than

100% & 50% but

approved

14. Prime Minister Earthquake Relief Fund

15. Prime Minister National Relief Fund

16. The Maharashtra Chief Minister Relief Fund

17. University or any other Institute of National Importance

18. Zilla Shakarta Samithi

Note 2: 50% Donation

Indira Gandhi Memorial Fund

Jawaharlal Nehru Memorial Fund

National Children Fund

Prime Minister Drought Fund

Rajiv Gandhi Foundation

Note 3: Other than 100% & 50% but approved

Donation Approved by commissioner of Income Tax which satisfy U/S 80 F(5)(6)

Particulars Amount

Total other than 100% & 50% Donation XXX

OR

10% of GTI for this purpose (WEL) XXX

XXX

Calculation of GTI

Particulars Amount

GTI XXX

Less: Long Term Capital Gain XXX

XXX

Less: Short Term Capital Gain

(Only Sale of Share subject to STT)

XXX

XXX

Less: All Deduction U/S 80C to 80U

(Other than 80G)

XXX

GTI XXXX

Note:

Out of Deduction Amount Donation for Family Planning & Donation to Indian Olympic

Association is eligible for 100% Deduction.

The Balance deductible Amount is eligible for 50% Deductions

Deduction U/S 80 GG

Note 1: The GTI calculation same as in the above calculation but deduction U/S 80C to 80U

(other than 80GG)

Note 2: Assessee should not be getting any benefits of H.R.A or Similar helping money for

Paying Rent.

80 GG


For Rent paid of the Residence

Rs 2000 per Month

(Specified Limit)

25% of GTI for this

Purpose

Rent Paid – 10% of GTI for

this purpose

Deduction Amount

Which Ever is Less

Deduction U/S 80 GGA

Note 1): Contribution for Scientific Research Association or University or College or other

Institution for the purpose of Scientific research

2) Approved Association or Institution or Colleges or University or Statistical Research

or Social Sciences

3) National Urban Poverty Eradication Fund

4) Any approved Association Undertaking Rural Development Program (eligible project,

conservation of Natural Resources).

Note: Assessee should not have Income from Business & Profession to claim this deduction

Deduction U/S 80 GGC

80 GGA

Applicable for All Assessee

100% Contribution made

Contribution Made

80 GGC

Applicable for All Assessee other than Local authorities &

Every Artificial Juridical person wholly by Government

100% Contribution made

Contribution to Political Parties

Amount of Deduction

Deduction U/S 80 U

Note:

1) In case of severe disability deduction of Rs 100,000 is allowed

2) A Certificate from any hospital or Institution specified by notification by the appropriate

government for the purpose of person with disabilities.

80 U


For Assessee Suffering with disability such as (Blindness,

Low Vision, Leprosy Cured ,Hearing Impairment, Locomotors

Disability ,Mental Retardation, Mental Illness)

Fixed Amount of

Rs 50,000

Deduction Amount

Set Off of Losses & Carry Forwards

Set off of Losses means sitting off of Losses against Income of the same year.

Carry Forward:- If it is not possible to set off the losses during the same Assessment Year in

which they accrued so much of Losses can be carry forward for being Set off against his

income In succeeding years.

Set off of Losses at Glance:

Loss Set Off

1) Loss from House Property a) Income from any other House Property.

b) Any other Heads of Income

2) Loss from Business or Profession a) Income from any other Business or

Profession

b) Any other Heads of Income except salaries

3) Loss from Speculation Business a) Income from Speculation Business

4) Short Term Capital Loss a) Income from Short Term Capital Gain

b) Long Term Capital Gain

5) Long Term Capital Loss a) Income from Long Term Capital Gain Only

6) Loss from activity of owing &

Maintaining Race Horses

a) Income from activity of owing & Maintaining

Race Horses

7) Loss of Lottery, Crossword Puzzles,

Gambling, Card Games or Betting’s

a) Cannot be set off against any Income

Carry Forward And Set off of Losses At Glance

Loss Set Off and Carry Forward

1) Loss from House Property Income from any other House Property in the

following 8 Years

2) Loss from Business or Profession Income from any other Business or Profession in

Following 8 Years

3) Loss from Speculation Business Income from Speculation Business & Following

4 Years

4) Short Term Capital Loss Income from Short Term Capital Gain and Long

Term Capital Gain in following 8 Years

5) Long Term Capital Loss Income from Long Term Capital Gain in following

8 Years

6) Loss from activity of owing &

Maintaining Race Horses

Income from activity of owing & Maintaining Race

Horses in following 4 Years