Determination of Tax in Special Cases

Total income is ₹12 lakh, including ₹1 lakh on which the Act provides no tax. The relief is the average tax rate multiplied by ₹1 lakh, subject to the precise charging provisions.

An employee withdraws before satisfying the qualifying service condition. The taxable fund balance must be worked through Schedule XI rather than treating the entire amount as ordinary current-year salary without reconstruction.

Undisclosed block income determined under section 294 is ₹40 lakh. Base tax is computed at 60%, before applicable surcharge and cess.

A resident employee receives ₹2 lakh GDR dividend and ₹5 lakh qualifying long-term gain. Those buckets are taxed separately at 10% and 12.5%; other income remains under normal rates.

A taxpayer has ₹3 lakh VDA gain on one token and ₹2 lakh VDA loss on another. The loss cannot be set off against VDA gain or other income and cannot be carried forward.

An unexplained investment of ₹8 lakh is determined under section 103. It enters the 30% special-rate bucket without expense deduction or loss set-off.

A resident individual has ordinary income ₹2.5 lakh and eligible STCG ₹3 lakh. The unused basic-exemption amount may reduce the STCG before applying 20%.

A resident individual sells land acquired in 2015. Compute both prescribed outcomes and ignore the excess tax, if any, under the section 197 formula.

Qualifying section 198 gains are ₹1.80 lakh. Tax applies at 12.5% on ₹55,000, after other statutory adjustments.

A qualifying manufacturer has an old loss attributable to a barred profit-linked deduction. That loss cannot be set off under the section 199 computation and is treated as fully given effect.

A domestic company with substantial unabsorbed additional depreciation compares normal tax with section 200. On opting, the attributable balance is deemed fully absorbed and cannot be revived later.

A qualifying company earns manufacturing profit and separate treasury interest not incidental to manufacture. The latter enters the 22% bucket unless another specific rate applies.

A salaried individual compares the default regime with the alternative after including standard deduction, eligible employer NPS and deductions available only outside section 202.

A co-operative society opting for section 203 distributes qualifying dividend to members at least one month before the return due date. The preserved deduction is capped by the statutory conditions.

A new manufacturing co-operative earns profit from an excluded non-manufacturing activity. That can invalidate or move income outside the 15% lane depending on the statutory condition breached.

A manufacturer routes high-margin sales to a connected entity under non-arm's-length terms. The Assessing Officer may determine ordinary profit and tax the excess at the special 30% rate.

A company has low regular taxable income but substantial book profit. Compute tax under normal provisions and section 206, apply the higher liability, and separately track eligible credit.

A foreign company receives qualifying royalty under an approved agreement. Domestic tax is computed at 20% on the gross statutory base, but treaty entitlement and PE facts must also be tested.

A non-resident holds notified units subscribed in convertible foreign exchange. Income and capital gain are separated from other income and taxed under the section-specific rates.

A non-resident earns ₹4 lakh interest from notified foreign-currency bonds and ₹6 lakh qualifying long-term gain. The two special buckets are taxed at 10% and 12.5%.

A specified fund has ₹10 crore security gain but only 70% is attributable to qualifying non-resident units under Rule 140. The concessional section 210 bucket is limited to the computed attributable amount.

A non-resident athlete receives appearance fee and India-related endorsement income. Both enter the 20% gross special-rate bucket without expense deduction.

An NRI buys shares of an Indian company using rupee funds already in India. The foreign-exchange-acquisition condition must be tested before treating them as foreign exchange assets.

An NRI has investment income ₹5 lakh and salary income ₹3 lakh. Chapter VIII deduction eligibility is tested against GTI reduced by the investment-income bucket.

An NRI earns ₹2 lakh qualifying investment income and ₹4 lakh qualifying LTCG. Compute separate 20% and 12.5% buckets before ordinary income.

Net consideration is ₹20 lakh and ₹12 lakh is reinvested within six months. Relief is proportionate: capital gain multiplied by 12/20.

An NRI has only qualifying investment income with full TDS and no other return trigger. Section 216 can remove the section 263(1) filing requirement.

An NRI becomes resident while retaining qualifying government securities purchased in foreign currency. A timely declaration can continue the special treatment until transfer or conversion into money.

An IFSC unit has ₹10 crore qualifying section 147(3) income and ₹2 crore other income. The first bucket is taxed at 15%; the balance follows applicable rates.

A foreign bank subsidiarises its Indian branch but later breaches a notified condition. Previously granted relief can be treated as wrongly allowed and recomputed.

A foreign company is first found resident because POEM is in India. It must apply the notified transition rules to opening assets, losses, tax collection and compliance.

A securitisation trust distributes interest and recovery gain. The investor reports each component with the same nature and proportion communicated in the prescribed statement.

A venture capital fund earns capital gain but retains cash. Investors can still have deemed year-end income in their entitlement ratio.

A business trust distributes SPV interest and rent. The unit holder reports each bucket separately based on Form 77 rather than treating the entire distribution as dividend.

A Category II AIF has capital loss and business profit. Business result remains in the fund; qualifying non-business loss may flow to eligible unit holders after the holding-period test.

A shipping company with a valid option computes qualifying shipping income using tonnage rather than voyage accounting profit.

A vessel earns unusually high freight margin. For qualifying business under a valid option, taxable shipping profit remains the section 227 tonnage income, subject to anti-avoidance rules.

A company operates two qualifying vessels for different day counts and buys container slots. Compute vessel daily tonnage plus Rule 146 deemed tonnage.

A tonnage company earns vessel-management fees and port consultancy income. Rule 146 identifies prescribed incidental activities, but the statutory limit must also be tested.

A ship is sold after years under tonnage tax. The gain computation uses the statutory asset and WDV rules rather than simply using book carrying value.

A company has tonnage business and logistics business. Shared head-office cost and losses must be allocated under the statutory rules, not entirely against normal income.

A company voluntarily exits in year four. It loses the scheme and faces the statutory ten-year re-entry bar.

A company creates the reserve but uses it for dividend distribution. The amount becomes taxable under the section and the default can affect scheme continuation.

A tonnage tax company demerges its shipping undertaking. The resulting company must independently satisfy the statutory continuation framework.

A shipping company routes high-margin non-shipping services into a tonnage entity through a connected arrangement. Exclusion can apply from the start of that tax year.

A company operates a harbour ferry and an ocean cargo vessel. The ferry is excluded, while the cargo vessel may qualify if all certificate and tonnage conditions are met.