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Income Tax: Satish Katkade
Income Tax: Satish Katkade
Satish Katkade
Income Tax
Comes from 1st April 1961 For understanding
The income tax Act 1961 The income tax Rules 1962 Circulars, clarification issued from time to time Judicial decisions
Judicial Decisions
Decision given by the Supreme Court becomes a low which will be binding on all the Courts
Scheme of Taxation
Every person, whose total income of the previous year exceeds the maximum amount which is not chargeable to income tax, is an assessee and chargeable to income-tax at the rate or rates prescribed in the Finance Act for the relevant assessment year, However, his total income shall be determined on the basis of his residential status in India.
The concepts
Person Assessee Assessment Year Previous Year Rate f Rates of tax Charge of Income Tax Maximum amount which is no chargeable to income tax Total income Residential Status
Association of persons
two or more persons who join for a common purpose with a view to earn an income
Body of individuals
Individuals who carry on some activity with the objective of earning some income. Members of a companies or firms.
Conti..
A local authority
Panchayat Municipal Committee and District Board
Conti..
Sum received by the assessee from his employees as contributions to any provident fund or supperannuation fund or any fund setup Gift come from special occasion From any relative
On the occasion of the marriage of the individual Under will or by way of inheritance In contemplation of death of the payer
Types of income
Regularity of income Form of income
The income received by the assessee need not be in the shape of the cash only
Contingent income
It is not income unless and until contingency happen
Personal Gifts
Conti
Basis of income Composite income Pin money
Money received by a women for her dress or private expenditure as also small savings effected by housewife out of money given to her by her husband for funning the expenses of the kitchen would not be a income in the eye of he law. Any property acquired with the aid of such money or saving would form a capital asset belonging to the leady
Lumpsum receipt
No effect whether salary receive in installment or in Lumpsum
Total of Income
There are following five head of income
Income from salary Income from house property Profits and gains from business or profession Capital gains Income from other sources
(Interest on securities, dividends, winning from lotteries, crossword puzzles, races, card games etc.)
Status of Residency
Conti..
A person may be a resident of more than one country for any previous year. Citizenship of a country and residential status of that country are separate concepts Residential status of a person is to be determined for every previous year because it may change form year to year
Status of Residency
The residential status of an assessee decides the extent of his taxable income. It determine on physical presence and/ or prescribed criterion an against nationality or domicile of the individual A person may be a resident in one previous year and non-resident in next year
Individual
Resident and ordinarily resident in India
1. First find out whether such individual is resident in India 2. Then find out whether he is ordinarily resident in India
Basic Condition
Resident in India in any previous, if he satisfies at least one following basic condition He is in India in previous year for a 182 day or more He is in India for 60 days or more during the previous year
365 days or more during the 4 preceding year
Exceptions for rules A citizen of India and who leaves India in any previous year for the purpose of employment outside India.(182 day than) Citizen of India or is a person of Indian origin. Comes on a visit to India in any previous year, the period of 60 days
Non-resident An individual is non-resident in India if he satisfies non of the basic condition. In case of non-resident, additional condition are not relevant
Non-Resident in India
When management and Control from out of India
Association of Person
Resident in India
Control and management of heir affairs are wholly or partly situated within India
Non-resident in India
Control and management of their affairs are situated wholly outside India
Company
Indian company is always resident in India Foreign company is resident in India when management and control situated in India
Particulars of income
Where taxable
Resident Notordinarily resident
NonResident
Yes
Yes
Yes
Income, which accrues or arises in India during the previous year, whether received in India or elsewhere. Income, which accrues or arises outside India received outside India from a business controlled from India.
Yes
Yes
Yes
Yes
Yes
No
Income, which accrues or arises outside India in the previous year from any other source.
Yes
No
No
Income, which accrues or arises outside India during the year preceding the previous year and remitted to India during the previous year.
No
No
No