Income Tax || How to Fill Pass Through Income (PTI)
What is Pass Through Income (SECTION 115UA & 115UB):
Pass Through Income under Sections 115UA and 115UB of the Indian Income Tax Act pertains to the taxation of income earned through certain investment vehicles, such as Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), and Alternative Investment Funds (AIFs).
Section 115UA
Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs):
- These trusts are designed to attract investment into the real estate and infrastructure sectors.
- Under Section 115UA, the income generated by REITs and InvITs, which is distributed to their investors, is subject to a "pass-through" status. This means the income is taxed at the level of the investor rather than the trust itself.
- The income can be in the form of dividends, interest, or rental income, and the taxation depends on the nature of the income.
Section 115UB
Alternative Investment Funds (AIFs):
- This section pertains to Category I and Category II AIFs.
- Similar to REITs and InvITs, the income generated by these funds and distributed to their investors is treated as "pass-through" income.
- This means the income is taxed directly in the hands of the investors, according to their individual tax rates, rather than at the level of the AIF.
Key Points:
- Taxation at Investor Level: Investors are taxed on the income they receive from these vehicles, avoiding double taxation (once at the entity level and again at the investor level).
- Nature of Income Matters: The type of income (dividends, interest, capital gains) determines the tax rate applicable to the investors.
- Transparency: These provisions ensure transparency and encourage investment by providing clarity on the tax implications.
How to Fill Pass Through Income (PTI) in Software:
Step 1:
Go to Transaction >> General Information/ BS/ P&L >> Click on PTI:
Step 2:
1. Click on Pass Through Income (PTI) to enter the quarter-wise amount in the related head of income.
2. Click on the related head of income, then press the F4 key on your keyboard. This will make the option visible to enter the input on a quarter-wise basis.
Step 3:
Now, click on Schedule PTI to enter the summary of Section 115UA/115UB:
Step 4:
1. Select the Section >> 115UA and 115UB
2. Enter the Name Of Business Trust/Investment Fund.
3. Enter the PAN of Entity
4. Go to Applicable Head of Income>> Press F4 on "Current Year Income" Option (If Applicable):
Step 5:
Enter the amount of income and TDS amount in the applicable section:
1. Select the Applicable section Which is Income Relatable
2. Enter the Current Year Income
3. Enter the Share of Current Year Loss Distributed By Investment Fund
4. Enter the TDS amount (if Applicable).
Step 6:
Go to Forms >> Computation:
1. Total Tax Amount Of PTI Income.
2. Here is Your PTI Income Available which is entered in Schedule PTI.
Hope this Helps.
Related Articles
Income Tax || Schedule TPSA
Schedule TPSA: Any information regarding taxation on secondary adjustments under Section 92CE (2A). To fill in details, follow these steps → STEP 1: Transaction → General Information/BS/P&L → Other Information 1. STEP 2: Check the box indicating ...
Income Tax || Advance Tax
Advance Tax Summary → Advance tax is the payment of income tax in installments throughout the financial year based on an estimated income. Rather than a lump sum payment at the end of the year, taxpayers are required to remit their tax liabilities ...
Income Tax || How to enter rebate and relief u/s 90/91
How to enter rebate and relief u/s 90/91 in Software: Step 1: Go to Transaction >> Rebate & Relief: Step 2: Here 2 Option Available: 1. DTAA Income (Section 90 and 90A). 2. Other than DTAA Income (Section 91). 1. DTAA Income (Section 90 and 90A): (a) ...
Income Tax || TDS Details
To enter TDS/TCS details in the software, please follow the process outlined below: Steps for Manual Entry of TDS/TCS Details : Navigate to "Transactions → Tax Detail". By default, the TDS Details section is selected. If you're entering details ...
Income Tax || Section 54 Exemption for Capital Gain
SECTION 54 EXEMPTION FOR CAPITAL GAINS A person wanted to shift his residence due to certain reason, hence, he sold his old house and from the sale proceeds he purchased another house. In this case the objective of the seller was not to earn income ...