Roles: CA Staff (prepares), CA Manager (reviews), CA Partner (approves and files), CA Client (e-approves via portal) - The preparation, review, and filing of income tax computations spans all four roles. Each role’s actions are called out throughout this page.
What is an income tax computation?
An income tax computation (auto-named CA-ITC-YYYY-#####) is a complete, submittable record covering all heads of income for one assessee for one assessment year. It is the central working document for ITR preparation: you enter every income source, every deduction, and every tax payment, and the system produces the tax figure, compares old vs new regime, and generates the ITR JSON ready for upload to the income tax portal.
Who uses this feature
Before you start
- The CA Engagement for this client must be active and carry a valid PAN.
- Confirm the assessment year with the manager before starting (e.g. AY 2025-26 means income earned in FY 2024-25).
- Collect all source documents from the client: Form 16, bank interest certificates, capital gain statements, investment proofs, house loan certificates, foreign asset disclosures.
- If the client has brought-forward losses from prior years, obtain the prior year’s return or loss schedule before you begin. Losses entered incorrectly cannot be corrected after filing.
Assessee types and company regimes
The computation covers five assessee types:
For Company assessees, select the applicable regime:
Status tracks
Every computation has two parallel status tracks. Both must reach their terminal status before the ITR can be filed.Computation status
Client approval status
The CA Manager can send the computation for client approval only after the computation status reaches Computed. The CA Partner can file only after the approval status is Approved (unless the partner explicitly waives approval on the record).
Step-by-step: prepare an income tax computation
Step 1: Create the computation
Path: Filings section → Income Tax → New- Select the CA Engagement (client and PAN auto-populate).
- Select the Assessment Year.
- Select the Assessee Type.
- Set the Residential Status (Resident, RNOR, or Non-Resident).
- Select the Governing Act (Income Tax Act 1961 or the new Direct Tax Code if applicable).
- Save. The record is created in Draft status with the auto-name CA-ITC-YYYY-#####.
Step 2: Enter income from salary
Tab: Salary Income (CA Salary Detail) Add one row per employer. For each row:- Enter basic salary, HRA received, allowances, and perquisites as shown on Form 16.
- The system applies the standard deduction (currently Rs. 50,000 under the old regime) automatically.
- HRA exemption is computed based on the city tier you select (Metro or Non-Metro).
Step 3: Enter income from house property
Tab: House Property (CA House Property Detail) Add one row per property. For each row:- Select Self-Occupied or Let-Out.
- For let-out properties: enter the annual rent received, municipal taxes paid, and the annual value is computed automatically. The system applies the 30% standard deduction on the Net Annual Value.
- Enter the interest on a home loan (up to Rs. 2 lakh for self-occupied; unrestricted for let-out).
- Loss on house property (from interest) is automatically carried forward if it exceeds the set-off limit.
Step 4: Enter business and profession income
Tab: Business and Profession Select the computation method:
For the Regular method, you can link to the ERPNext company record to import the P&L and balance sheet figures directly, rather than entering them manually.
If there are expenses to be disallowed (such as personal expenses charged to the business), enter them in the Inadmissible Expenses sub-table. These are added back to the profit.
If the client follows ICDS (Income Computation and Disclosure Standards), enter the required adjustments in the ICDS Adjustments sub-table.
Depreciation: For businesses on the Regular method, enter each asset block (Plant and Machinery, Buildings, Vehicles, etc.) in the CA Depreciation Block sub-table. The system calculates WDV depreciation under the Income Tax Act separately from the book depreciation.
Step 5: Enter capital gains
Tab: Capital Gains (CA Capital Gain Entry) Add one row per asset or transaction batch. For each row:- Select the asset type (Listed Equity, Unlisted Shares, Immovable Property, Mutual Fund, etc.).
- Select Short-Term or Long-Term.
- Enter the sale consideration, cost of acquisition (with indexation if applicable), and the gain or loss.
- If the client has brought-forward capital losses from previous years, enter them in the Brought-Forward Loss column. The system applies the setoff in the correct order (short-term loss against both short-term and long-term gain; long-term loss only against long-term gain).
Step 6: Enter income from other sources
Tab: Other Sources (CA Other Source Entry) Enter all remaining income: savings account interest, fixed deposit interest, dividends, gifts received, family pension, and other miscellaneous income. Add one row per source.Step 7: Enter clubbed income
Tab: Clubbed Income (CA Clubbed Income) If income from a spouse or minor child is required to be clubbed with the assessee’s income under sections 60 to 64, enter it here. Specify the person whose income is being clubbed and the amount.Step 8: Enter foreign income and assets (if applicable)
Tab: Foreign Income and Assets For clients with foreign income or assets:- Use CA Foreign Remittance rows for income from foreign sources, linked to any Form 15CA/15CB already filed.
- Use CA Foreign Asset rows to disclose foreign bank accounts, immovable property, or other assets held abroad (required for Schedule FA in the ITR).
Step 9: Enter deductions
Tab: DeductionsChapter VIA deductions (CA Chapter VIA Deduction)
Add one row per deduction section. Common sections:
The system validates the 80C limit (Rs. 1.5 lakh cap) and the 80D limits automatically.
Arrears relief (CA Arrears Relief)
If salary arrears relate to prior years, enter the year-wise break-up in the CA Arrears Relief sub-table. The system calculates the relief under section 89 and pre-populates Form 10E.Foreign tax relief (CA Foreign Tax Relief)
If the client has paid tax abroad and the country has a Double Taxation Avoidance Agreement (DTAA) with India, enter the foreign tax credit here. The system computes the relief and populates Schedule TR in the ITR.Step 10: Enter book profit adjustments (MAT/AMT)
Tab: Book Profit (CA Book Adjustment) For companies subject to Minimum Alternate Tax (MAT) or individuals/LLPs subject to Alternate Minimum Tax (AMT), enter the adjustments required to arrive at book profit. The system calculates the MAT/AMT liability and compares it against the normal tax to determine which is higher.Step 11: Enter related party transactions (if applicable)
Tab: Related Party Transactions (CA Related Party Txn) For businesses required to file Form 3CB-3CD, enter related party transactions here. These are the transactions that will be disclosed in the tax audit report.Step 12: Enter tax paid
Tab: Tax Paid (CA Tax Paid Entry) Add one row per tax payment:- TDS: Enter each TDS certificate (one row per deductor), with the TAN, amount, and the head of income it relates to. These are typically imported from Form 26AS or the AIS.
- Advance Tax: Enter each instalment with the BSR code, challan number, and date.
- Self-Assessment Tax: Enter any self-assessment tax paid after the year ends.
Step 13: Review the computed output
Once all data is entered, save the record. The system automatically calculates:- Gross Total Income (sum of all heads before deductions)
- Taxable Income (after Chapter VIA deductions)
- Tax under old regime (at slab rates with applicable rebate)
- Tax under new regime (at new slab rates without most deductions)
- Recommended regime (the one that results in lower tax; displayed prominently)
- Surcharge (based on income band)
- Health and Education Cess (4% on tax and surcharge)
- Total Tax Liability
- TDS and Advance Tax paid (from Step 12)
- Net Tax Payable or Refund
ITR form selection
The system suggests the correct ITR form based on the assessee type and income sources. You can override the selection if necessary.ITR JSON generation
Once the computation is in Computed status and client approval is received, you can generate the ITR JSON (or XML) for direct upload to the income tax e-filing portal:- Open the computation.
- Click Generate ITR JSON.
- The system produces the file in the schema required for the selected ITR form and the selected assessment year.
- Download the file and upload it to the portal.
Tax audit trigger (Form 3CD)
The system checks turnover automatically:
When a threshold is crossed, the system displays a Tax Audit Required indicator on the computation and automatically generates a linked Form 3CD record. The Form 3CD is pre-populated with figures from the computation. The CA Partner must review all clauses and attach the audit report before the ITR can be filed.
Client approval workflow
- CA Manager reviews the Computed computation and clicks Request Client Approval. The approval status moves to Pending Client Approval.
- The client receives an in-app and email notification with a link to the ITR Review page on their portal.
- The client reads the computation summary and clicks Approve using their OTP or DSC.
- The approval status moves to Approved and the computation is unlocked for filing.
- If the client spots an error and clicks Request Changes, the approval status moves to Changes Requested and the computation returns to the CA Staff for correction.
Filing and the filing record
Once the computation status is Computed and the approval status is Approved:- The CA Partner files the ITR on the income tax portal using the downloaded JSON.
- They open the computation in the system and click Mark as Filed.
- Enter the Acknowledgement Number (ITR-V) and the Filing Date.
- The system creates a CA Filing Record linked to this computation for permanent archival.
- The computation status moves to Filed.
Advance Tax Planner
The Advance Tax Planner estimates the quarterly instalment amounts a client should pay to avoid interest under sections 234B and 234C. Path: Filings section → Advance Tax Planner → New- Link to the CA Engagement and assessment year.
- Enter the projected income for the year (or import from the current computation).
- The system calculates the required instalment percentages (15% by 15 June, 45% by 15 September, 75% by 15 December, 100% by 15 March) and the amount due in each quarter.
- You can run a bulk MIS from the planner list view to export all clients’ advance tax schedules as an Excel file for the period.
Bulk import
To create multiple computations at once: Path: Income Tax list view → Bulk Import Paste a CSV with the engagement name, assessment year, and assessee type for each client. The system creates Draft computations for all rows. You can then open each one individually to enter income details. Bulk import does not enter income data; it only creates the computation shells.Field guide
Notifications and alerts
Workspace access
The Income Tax Computation section is accessible from two places:- Desk workspace shortcut: In the BIZ CA Practice Management workspace, click the Computations shortcut tile (blue).
- Portal (Filings section): Sign in to the portal, go to Filings, then Income Tax.
Best practices
- Enter brought-forward losses before computing. The setoff rules under section 71 and 72 are sequence-sensitive. If you add a brought-forward loss after the computation has been done, recalculate before requesting client approval.
- Compare old vs new regime before requesting client approval. The system shows the recommended regime, but always review the comparison with the client before locking in a choice, especially for clients with large 80C investments or home loan interest.
- Never file without the client’s e-approval unless the CA Partner has explicitly waived it on the record. An undocumented filing without client consent creates compliance risk for the firm.
- Keep the PAN on the engagement current. A stale or incorrect PAN causes a mismatch at the portal and can result in a failed upload.
- File Form 10E before filing the return if you are claiming relief under section 89 (salary arrears). Filing the ITR first and then Form 10E results in a mismatch notice from the department.
- For audit clients, complete Form 3CD before filing. The ITR cannot be filed (even if all other steps are done) until the CA Partner has reviewed and attached the Form 3CD.
- Use bulk import at the start of the ITR season to create computation shells for all clients at once, then assign them to staff for data entry. This gives the manager a complete view of season progress from day one.
Related features
- Client Engagement - the upstream record that every computation depends on
- Workflow Overview - the end-to-end filing journey including the client approval track
- Feature Overview - quick reference for all features and their role assignments