Administration of income tax
Administration of Income Tax in IndiaIncome tax law
Finance Act: Every year a Budget is presented before the parliament by the Finance Minister. One of the important components of the Budget is the Finance Bill. The Bill contains various amendments such as the rates of income tax and other taxes. When the Finance Bill is approved by both the houses of parliament and receives the assent of President, it becomes the Finance Act.
Notifications: The CBDT issue 7notifications from …
Basic concepts or terms of income tax
Basic Concepts or Terms of Income TaxIncome tax law
1. Person: Income-tax is charged in respect of the total income of the previous year of every person. Hence, it is important to know the definition of the word person. As per section 2(31),
Person includes:• an Individual• a Hindu Undivided Family (HUF)• a Company• a Firm• an Association of Persons or a Body of Individuals (BOI) whether incorporated or not• a Local Authority• every Artificial, Juridical person, not falling wi…
Residential status and tax liability
Residential Status and Tax LiabilityIncome tax law
Residential status of an assessee is important in determining the scope of income on which income tax has to be paid in India. Broadly, an assessee may be resident or non-resident in India in a given previous year.The incidence of liability to income-tax depends in every case upon the residential status and source of income of the assessee. Residential Status is calculated for all kind of Assessee that is of• Individual• HUF…
Income under the head salary
Income Under Head SalariesIncome tax law
Salaries Defined: Section 15Under Sec. 15, the following incomes are chargeable to Income tax under the head “Salaries”:a) Any salary due form an employer or a former employer to an assessee in the previous year whether paid or not;b) Any salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer though not due or before it becomes due to him;c) Any arrears of salary paid or allowed to him in…
Sec. 10 of income tax act,1961 - exempted incomes
Sec. 10 of the Income Tax Act,1961 - Exempted IncomesIncome tax law
1. Agriculture Income [Sec.10 (1)]:Agriculture income is fully exempted from tax u/s 10(1) and as such does not form part of total income. As per Section 2(1A) agriculture income includes:
i. Any rent or revenue derived from land which is situated in India and is used for agricultural purpose.
ii. Any income derived from such land by agriculture or by the process employed to render the product fit for market or…
House property.- Deduction under sec. 24
Income From House Property - Deduction under Sec. 24Income tax lawFollowing two deductions will be allowable from the net annual value to arrive at the taxable income under the head ‘income from house property’:
1. Statutory Deduction: 30 per cent of the net annual value will be allowed as a deduction towards repairs and collection of rent for the property, irrespective of the actual expenditure incurred.
2. Interest on Borrowed Capital: The interest on borrowed capital will b…
Short note of income under the head house property
Income From House Property - Short NotesIncome tax law
Short Notes on:1. Exempted House Property Income2. Deemed Ownership3. Unrealised rent and its Treatment4. Property owned by co-owners5. Dispute about ownership6. Deduction of Municipal tax
1. Properties exempted from tax under the head income from house property (Sec. 10)
i. Income from a farm house.ii. Annual value of one palace in the occupation of an ex-ruler.iii. Property income of a local authority.iv. Property income …
Income under the head capital gains
Income under the Head Capital GainsIncome tax law
Capital gain is the gain which arises from the transfer of a capital asset. Any profit or gain, which arises during a previous year, is chargeable under the head "capital gains" under Section 45. For a gain to be charged under the head "capital gain," it should arise due to a transfer of a capital asset. Such a profit or gain should not be exempt from tax under sections 54, 54B, 54D, 54EC, 54ED, 54FD, and 5…
Capital Assets and its Types
Capital Asset and its TypesIncome tax law
Under section 2(14), property of any kind whether movable assets, immovable assets, tangible-intangible assets, incorporated rights, held by any assessee, is a capital asset for the purpose of Income Tax Act. However, the following assets are excluded from the definition of capital assets:
i. Any stock in trade, consumable stores or raw material, held for the purposes of business or profession.
ii. Personal effects of the assessee, i.e.…
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