Tax is a financial burden imposed by Government on a Person.

Income Tax Act, 1961 The Income-Tax Act, 1961 is the charging Statute of Income Tax in India. It
provides for levy, administration, collection and recovery of Income Tax.
The Income Tax Act is the most complex statute in India. But this is soon to
change.
Income Tax Rules, 1962 CBDT is empowered to frame rules from time to time to carry out the
purpose and proper administration of the Act. All forms, procedures and
principles of valuation of perquisites prescribed under the Act are
provided in the Rules framed by CBDT.
Government Notifications Notification issued by Central/ State Government from time to time to
deal with provisions of Income Tax.
Finance Act(Annual) The Finance Minister presents the Finance Bill in both houses of
Parliament. Part A of the Budget contains proposed policies of the
Government in fiscal areas and Part B contains the detailed tax proposals.
Once the Finance Bill is approved by the parliament and gets the assent of

Circulars & Clarification of
CBDT
Judicial Decision
the President, it becomes the Finance Act.
CBDT issues Circulars and Notifications from time to time, these Circulars
clarify doubts regarding the scope and meaning of the various provisions
of the Act. These Circulars are binding on Assessing Officers but not on
assesses and Courts and are issued by the CBDT which shall not be
contrary to the provisions of the Act.
The decision of High Court is applicable to respective state while decisions
of Supreme Court becomes law and applies to all state.

Previous Year [Sec. 3]- The Financial Year in which income is earned is known as previous year. It is of 12
months period commencing from April 1 and ending on March 31 of the next year. It can be of less than
12 months in case of:

Assessment Year [Sec. 2(9)]- The Financial Year in which income earned in the previous year is taxed is
known as Assessment Year. “Assessment Year” means the period of 12 months starting from April 1 and
ending on March 31 of the next year. For instance, the Assessment Year 2022-23 which will commence
on April 1, 2022, will end on March 31, 2023. Income of previous year of an assessee is taxed during the
next following Assessment Year at the rates prescribed by the relevant Finance Act.

Person [Sec. 2(31)]

The term “person” includes:

1. An Individual
2. A Hindu Undivided Family
3. A Company
4. A Firm and Limited Liability Partnership
5. An Association of Persons
6. A Body of Individuals
7. A Local Authority i.e. Gram Panchayat, Municipal Corporation.
8. Every Artificial Juridical Person (not falling within any of the preceding categories) i.e. University,
Temple.

Assessee [Sec. 2(7)]

“Assessee” means:

1. A person by whom Income-Tax or any other sum of money (interest or penalty) is payable under the
Act.

2. Person in respect of whom any proceeding under the Act has been taken for the assessment of his
income or loss.

3. Person who is deemed to be assessee (person who is assessable in respect of income or loss of
another person).

4. Person who is deemed to be an assessee in default.

(a) Fails to comply with the provision of TDS
(b) Fails to pay advance tax Deemed Assessee.

Deemed Assessee means a person who is treated as an assessee under the Income Tax Act. This would
include –
1. Trustee of a trust,

2. Legal representative of a deceased person u/s 159,

3. Representative Assessee of a Non-Resident u/s 160(2) (Agent of a Non-Resident),

4. Legal Guardian or manager entitled to receive the income on behalf of a Minor, Lunatic or Idiot,Court
of Wards/ Official Trustee/ Receiver entitled to receive Income on behalf of any other person.

Hindu Undivided Family- “Hindu undivided family” has not been defined under the Income-tax Act. The
expression is, however, defined under the Hindu Law as a family, which consists of all males lineally
descended from a common ancestor and includes their wives and daughters. Under the Income-tax Act,
1961, Jain undivided families and Sikh undivided families would also be assessed as a HUF. Hindu Co-
parceners Some members of the HUF are called co-parceners. They are related to each other and to the
head of the family. HUF may contain many members, but members within four degrees including the
head of the family (karta) are called co-parceners. It may be noted that only the coparceners have a
right to partition.

A daughter of coparcener by birth shall become a coparcener in her own right in the same manner as
the son. However, other female members of the family, for example, wife or daughter-in-law of a
coparcener are not eligible for such coparcenary rights.

Schools of Hindu Law:

Dayabaga School of Hindu law Mitakshara School of Hindu law

Prevalent in West Bengal and Assam Prevalent in rest of India
The children do not acquire any right, share in the The children acquire the right to the family
family property, as long as his father is alive and property by his birth and not by succession
only on death of the father, the children will irrespective of the fact that his elders are living
acquire right/share in the property.