Professional Documents
Culture Documents
1 - Income Tax Introduction
1 - Income Tax Introduction
1 - Income Tax Introduction
A. Assessee
Any person assessable under the IT act for assessment of
o his income or
o income of any other person for whom he is assessable
(representative assessee)
Assessee in default
B. Person
(i) An individual
(ii) A Hindu Undivided Family (HUF)
(iii) A Company
(iv) A Firm or Limited Liability Partnership
(v) An Association of persons (AOP) or Body of
Individuals (BOI)
(vi) A local Authority
(vii) Every Artificial Judicial Person not falling
under any of the above
C. Assessment year
- 12 months commencing on the 1st April every year
D. Previous year
- the financial year (1st April - 31st March next year)
immediately preceding the assessment year
E. Charging of Tax
- Income of previous year chargeable to tax during
assessment year
- Income tax rates fixed by Finance Act
- For computing Total Income, provisions of the Act as
applicable on 1st April of the relevant Assessment Year
will be applied (for procedural matters, provisions of
the Act will be applicable from the date of amendment)
Sources of Income
Revenue Capital
Receipt from sale of trading asset Receipt from sale of capital asset
(assets of capital nature)
Test Question
b. Types of income
I. Cash or kind
II. Illegal income
III. Accrued or received
Methods of accounting
o Accrual or mercantile basis
o Cash basis
IV. Reimbursement
V. Diversion of income vs. Application of income
Dr. M. K. Khatri furnishes the following estimates of his income for the
financial year 2021-22: He is a professional doctor aged 27 years, works as a
resident physician of a private Nursing Home in Kolkata for a consolidated
salary and his employers allow private practice and other occupations.
Rs.
(1) Income from private practice as a doctor 5,30,000
(2) Share of profits from a registered partnership firm
which runs a diagnostic centre in Dhanbad in which
he is a partner 3,20,000
(3) Consolidated salary from private nursing home in Kolkata 4,00,000
(4) Share of income from HUF in which he is the Karta 40,000
(5) Interest estimated to be earned on Govt. securities (net
of TDS of Rs. 2000) 18,000
1. Show a statement of his estimated total income under specific heads of income
for the assessment year 2022-23.
530000 (business/ profession + 400000 (salaries) + (18000+2000) income from
other sources
HUF, partnership income exempt
TDS of 2000 to be deducted from total tax payable
1. True or False?
When salary is paid in Singapore to a Person of India Origin (PIO) who is a U.S
Citizen, for services rendered by him in India, such salary income will
(a) not be taxable under Indian Income Tax Act since such income is deemed to
accrue or arise outside India
(b) be taxable in India since such income is earned in India
(c) not be taxable based on provisions of relevant Double Taxation Avoidance
Agreement
(d) Sufficient information regarding residence of the person is not available to
determine taxability (please show reasons in support of your choice).
Residence in India: Individuals
Test Question
1. From the following incomes earned by Mr. Rajesh during the Previous
year 2021-22, determine the total income for the assessment year 2022-23 if
he is
Resident and ordinarily resident
Not ordinarily resident
Non-resident