SUBJECT : FUNDAMENTALS OF BUSINESS TAXATION

Module: 1:- Introduction

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 Principles or Canons of taxation:

 Canon of Equality
 Canon of Certainty
 Canon of Convenience
 Canon of Economy
 Canon of Productivity
 Canon of Elasticity
 Canon of Simplicity
 Canon of Flexibility
 Canon of Co-ordination

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 BASIC TERMINOLOGIES UNDER INCOME TAX
 Income Tax:
It is a tax on the income earned by an assessee during the previous year and the tax is
payable in the assessment year at the rates prescribed by the relevant Finance Act. It is a
tax levied by the Central Government on the income earned by an assessee every year.
 Assessment U/S 2(8):
 Assessment Year U/S 2(9):
 Previous Year U/S 3
Exception to the General Rule Previous Year:
Normally all the incomes of the P.Y are assessed to tax in the A.Y. But there are certain
exceptions to this rule. In these cases, the income of a financial year is assessed to tax in
the same year. They are:
Sec. 172 – Income of non-resident from shipping business.
Sec. 174 – Income of persons leaving India either permanently or for a long period of time.
Sec. 174 (A) – Income of bodies formed for short duration.
Sec. 175 – Income of a person trying to transfer his/her assets to avoid the payment of tax.
Sec. 176 – Income of a discontinued business.

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  Assessee Sec 2(7)
 Deemed Assessee
 Assessee in Default
 Person Sec 2(31)
 Income Sec 2(24)
 Casual Income
 Gross Total Income
 Total Income
Heads of Income
 Income from Salary
 Income from House Property
 Profits and gains from Business or Profession
 Capital Gains
 Income from Other Sources

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 Thank you

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