PRESENTATION ON LAWS

RELATING TO INCOME TAX

Submitted by
• Nasim Akhtar (004)
•Iftikar Rahman (042)
 WHAT IS INCOME TAX
 Income tax is an annual tax levied in every
assessment year at the prescribed rates, on every
person, in respect of his/her total income for the
relevant previous year.
 INCOME TAX ACT 1961
 Income Tax Act, 1961 is an act to levy,
administrate, collect and recover Income tax
in India. It came into force from 1st April
1962. The Income Tax Act has total of 298
sections and 14 schedules.
 CONCEPT OF INCOME
 Income Tax Act 1961 does not explain the word
“Income” rather definition of income as given in
section 2(24) includes the following
 Profits and Gains

 Dividend

 Voluntary contribution received by a

trust/institution created wholly or partly for
charitable or religious purposes or by any
association or institution.
 The value or any perquisite or profit in lieu of

salary taxable under section 17.

 INCOME HEADS
 There are 5 Heads of Income
 Salaries
 Business or Profession
 House Property
 Capital Gains
 Other Sources
 WHAT IS AN ASSESSE
 According to section 2(7), assessee means a person
by whom any tax is payable under the act and
includes.
 FINANCIAL YEAR
 In India the government maintain its account for
period of 12 month i.e. from 1st April to 31st March
every year
 ASSESSMENT YEAR
 According to section 2(9) assessment year means
the period of 12 month commencing on 1st day of
April. The particular financial year which the
income is earned is known as Income year or
previous year and the next financial year in which
the self income is flexible is known as assessment
year.
 PREVIOUS YEAR
 According to section 3 of the Income Tax Act
previous year means the financial year immediately
after the preceding year.
 EXEMPT OF INCOMES
 An assesse is not required to pay tax on all his/her
incomes. Some income are exempt from tax under
the various provisions of the income tax act. Such
income are called exempted income or tax free
income.
 The various incomes exempted from tax are

 As per section 10(10) of the Income Tax Act that

cum retirement gratuity is exempt from subject to

the conditions and exempt stated that section.
 As per section 10(10AA) of the Income Tax Act
encashment earned leave received by an employee
is exempt from tax subject to the condition and
exempt stated in the act.
 As per section 10(10BB), Compensation received

by any victim of Bhopal gas leak disaster is exempt

from Income Tax Act.
 As per section 10(13A) of Income Tax Act hose

rent allowance received by an employee is exempt

from tax subject to certain limits, subject to the
condition and exempt stated in that section.
RESIDENTIAL STAUS
THANK YOU