TRINITY INSTITUTE OF PROFESSIONAL STUDIES

Sector – 9, Dwarka Institutional Area, New Delhi-75Affiliated Institution of G.G.S.IP.U,

Delhi

BBA(B&I) Vth sem

Taxation lawPaper ID-18311Paper code-BBA311

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

Income tax is charged in assessment year at rates specified by the Finance Act applicable on 1st April of the relevant assessment year.

It is charged on the total income of every person for the previous year.

Total Income is to be computed as per the provisions of the Act

Income tax is to be deducted at source or paid in advance wherever required under the provision of the Act.

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Charge of Income Tax

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

Important Definitions

1. Person u/s 2(31) includes,a. An Individual, b. Hindu Undivided Family (HUF),c. A Company,d. A Firm,e. An Association of Persons(AOP) or Body of

Individuals (BOI),f. A Local Authority,g. Every other Artificial Juridical Person

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

Contd…

Assessment Year u/s 2(9) means, the period of 12 months commencing on the 1st April every year. It is the year (just after previous year) in which income is earned is charged to tax. The current Assessment is 2013-2014.

Previous Year u/s 2(34) means, the year in which income is earned

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

Contd…

4. Gross Total Income (G.T.I) :- The aggregate income under the 5 heads of income (viz. Salary, House Property, Business or Profession, Capital Gains & Other Sources) is termed as “Gross Total Income”.

5. Total Income (T.I) :- Total Income of assessee is gross total income as reduced by the amount permissible as deduction under sections 80C to 80U.

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

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Residential Status

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

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Types of Residential Status

Resident(R)

Not Ordinarily Resident (NOR)

Non-Resident (NR)

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

The residential status of individual will be determined as under-

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Residential Status of Individual

Assessee Basic Condition Additional Condition

Resident He must satisfy at one of the basic conditions. Not required.

Not Ordinarily Resident

He must satisfy at least one of the basic conditions.

He must satisfy either one or both the additional conditions given u/s 6(6).

Non-Resident Should not satisfy any of the basic conditions. Not required.

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

Basic Conditions u/s 6(1): i. He must be in India for a period of 182 days or more

during the previous year; orii. He must be in India for a period of 60 days or more

during the previous year and 365 days or more during the four years immediately preceding the previous year.

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Contd…

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

Contd…….

Additional Conditions u/s 6(6):i.He must be a non-resident in India in nine out of the ten previous years preceding that year; orii.He must be in India during 7 preceding previous years for aggregate period of 729 days or less.

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

The residential status of HUF depends upon the control and management of its affairs.

Resident HUF: If the control and management of the affairs of HUF is situated wholly or partly in India then HUF is said to be Resident in India.

Non- Resident HUF: If the control and management of the affairs of HUF is situated wholly outside India then HUF is said to be Non- Resident in India.

Not Ordinarily Resident HUF: A resident HUF is said to be ‘Not Ordinarily Resident’ in India if Karta or manager thereof, satisfies any of the additional conditions u/s 6(6).

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Residential Status of HUF

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

According to section 6(3) an Indian Company is always Resident in India. A foreign Company will be resident in India if Control or Management of its affairs is wholly situated in India.Residential Status of a firm or AOP or other person depends upon control and management of its affairs.

Resident: If the control and management of the affairs of a firm or AOP or other person is situated wholly or partly in India then such a firm or AOP or other person is said to be resident in India.

Non-Resident: If the control and management of the affairs of a firm or AOP or other person is situated outside India then such a firm or AOP or other person is said to be non-resident in India.

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Residential Status

TRINITY INSTITUTE OF PROFESSIONAL STUDIESSector – 9, Dwarka Institutional Area, New Delhi-75

ParticularsTax Incidence

R NOR NRIncome received in India by or on behalf of assessee Yes Yes Yes

Income deemed to received in India by or on behalf of assessee Yes Yes Yes

Income accruing or arising in India Yes Yes Yes

Income deemed to accrue or arise in India Yes Yes Yes

Income which accrues or arise outside India Yes No No

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Incidence of Tax