Residential status
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This document provides an overview of basic income tax concepts in India. It defines key terms like assessee, previous year, assessment year, and heads of income. It explains the different types of taxes in India including direct and indirect taxes. It also outlines the criteria for determining an individual's residential status for income tax purposes as normal resident, resident but not ordinarily resident, or non-resident. Specific examples are provided to illustrate how to determine an individual's residential status based on their period of stay in India.
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Residential status notes
This document discusses residential status under Indian income tax law. It defines residential status and explains why it is important for determining tax liability. There are different residential statuses for individuals, HUFs, firms, companies and other persons. For individuals, residential status depends on the number of days spent in India. Ordinary residents meet additional criteria of being resident in at least two of the last ten years and being present in India for at least 730 days in the last seven years. Residential status must be determined separately for each tax year and can vary between years. Control and management determines residential status for firms, companies and other persons. The document provides examples to illustrate how residential status is assessed.
Residential status
This document discusses the determination of residential status of assessees in India for tax purposes. It defines resident and non-resident individuals and the rules used to determine their status. An individual is a resident if they were in India for 182 days or more in the previous year, or were in India for at least 365 days in the last 4 years and 60 days in the previous year. To be ordinarily resident, they must also meet additional criteria of being resident in 2 of the last 10 years and being in India for at least 730 days in the last 7 years. Anyone who does not meet the basic or additional criteria is considered a non-resident.
Income tax act 1961
Tax is an important source of revenue for governments worldwide. Taxes are collected on income, sales, purchases, and properties to fund government operations. There are two types of taxes: direct taxes which are paid directly by individuals like income tax; and indirect taxes which are passed on through other entities like sales tax. Income tax was first introduced in India in 1860 under British rule to fund expenses from the 1857 rebellion. The current Income Tax Act of 1961 governs income tax in India and has been amended over time. It details the taxation of various types of income for individuals and organizations.
S 3-Accounts and Records
This document summarizes the key accounting and record keeping requirements for businesses under the Goods and Services Tax (GST) law in India. It notes that businesses must maintain records of production or manufacturing, inward and outward supplies, stock levels, input tax credits claimed, and output tax payable. Records can be kept electronically or manually and must be retained for 6 years. Businesses with over 2 crore annual turnover must undergo statutory audit. Penalties may be imposed for failing to maintain proper records or providing false information.
Residential status
This document discusses residential status under Indian income tax law. It explains that an individual's tax liability depends on their residential status, which can be resident, non-resident, or ordinarily resident. It also discusses how residential status is determined for individuals, HUFs, firms, companies and other persons. Key factors include number of days present in India and control and management of affairs. The document provides examples to illustrate how residential status is assessed and its implications for taxing different types of income received in or outside of India.
EXEMPTED INCOME
This document summarizes exempted incomes under Section 10 of the Indian Income Tax Act. It lists 87 exempted incomes across various sub-sections of Section 10. Some key exempted incomes include agricultural income, interest income from certain bonds/deposits, leave travel concession, provident fund payments, gratuity, family pension received by central/state govt. employees, scholarship amounts, and dividends received from Indian companies. The document was prepared by Dr. Sangeetha R of Hindusthan College of Arts and Science to outline various types of incomes that are exempted from taxable income calculations under the Income Tax Law in India.
Income under head salaries
THIS POWERPOINT PRESENTATION IS FOR THE STUDENTS OF CA-IPCC/ CS-EXECUTIVE / CWA INTER & GRADUATION FOR QUICK RECAP OF PROVISION OF SALARY HEAD.
568441375-Unit-2-Income-Tax-Authorities-Powers-and-Functions.pdf
The document summarizes the income tax authorities in India and their powers and functions. It outlines that the Central Board of Direct Taxes is the highest authority, followed by Commissioners, Assessing Officers, and other officers. It describes the appointment and powers of these various authorities such as powers related to assessment, searches, surveys, inspection of documents, and collection of information from taxpayers. The scope of these powers is also briefly explained with references to relevant sections of the Income Tax Act.
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Residential status notes
This document discusses residential status under Indian income tax law. It defines residential status and explains why it is important for determining tax liability. There are different residential statuses for individuals, HUFs, firms, companies and other persons. For individuals, residential status depends on the number of days spent in India. Ordinary residents meet additional criteria of being resident in at least two of the last ten years and being present in India for at least 730 days in the last seven years. Residential status must be determined separately for each tax year and can vary between years. Control and management determines residential status for firms, companies and other persons. The document provides examples to illustrate how residential status is assessed.
Residential status
This document discusses the determination of residential status of assessees in India for tax purposes. It defines resident and non-resident individuals and the rules used to determine their status. An individual is a resident if they were in India for 182 days or more in the previous year, or were in India for at least 365 days in the last 4 years and 60 days in the previous year. To be ordinarily resident, they must also meet additional criteria of being resident in 2 of the last 10 years and being in India for at least 730 days in the last 7 years. Anyone who does not meet the basic or additional criteria is considered a non-resident.
Income tax act 1961
Tax is an important source of revenue for governments worldwide. Taxes are collected on income, sales, purchases, and properties to fund government operations. There are two types of taxes: direct taxes which are paid directly by individuals like income tax; and indirect taxes which are passed on through other entities like sales tax. Income tax was first introduced in India in 1860 under British rule to fund expenses from the 1857 rebellion. The current Income Tax Act of 1961 governs income tax in India and has been amended over time. It details the taxation of various types of income for individuals and organizations.
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This document summarizes the key accounting and record keeping requirements for businesses under the Goods and Services Tax (GST) law in India. It notes that businesses must maintain records of production or manufacturing, inward and outward supplies, stock levels, input tax credits claimed, and output tax payable. Records can be kept electronically or manually and must be retained for 6 years. Businesses with over 2 crore annual turnover must undergo statutory audit. Penalties may be imposed for failing to maintain proper records or providing false information.
Residential status
This document discusses residential status under Indian income tax law. It explains that an individual's tax liability depends on their residential status, which can be resident, non-resident, or ordinarily resident. It also discusses how residential status is determined for individuals, HUFs, firms, companies and other persons. Key factors include number of days present in India and control and management of affairs. The document provides examples to illustrate how residential status is assessed and its implications for taxing different types of income received in or outside of India.
EXEMPTED INCOME
This document summarizes exempted incomes under Section 10 of the Indian Income Tax Act. It lists 87 exempted incomes across various sub-sections of Section 10. Some key exempted incomes include agricultural income, interest income from certain bonds/deposits, leave travel concession, provident fund payments, gratuity, family pension received by central/state govt. employees, scholarship amounts, and dividends received from Indian companies. The document was prepared by Dr. Sangeetha R of Hindusthan College of Arts and Science to outline various types of incomes that are exempted from taxable income calculations under the Income Tax Law in India.
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THIS POWERPOINT PRESENTATION IS FOR THE STUDENTS OF CA-IPCC/ CS-EXECUTIVE / CWA INTER & GRADUATION FOR QUICK RECAP OF PROVISION OF SALARY HEAD.
568441375-Unit-2-Income-Tax-Authorities-Powers-and-Functions.pdf
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The document discusses the rules for set off and carry forward of business losses under the Income Tax Act. It can be summarized as follows:
1) Section 70 allows for set off of losses from one source of income against profits from another source within the same head. Section 71 allows set off of losses under one head against income under another.
2) Business losses can be carried forward for 8 years and set off against future profits of any business. Speculation losses can be carried forward for 4 years against future speculation profits only.
3) Capital losses can be carried forward for 8 years against capital gains. House property losses can be carried forward for 8 years against future house property income. Losses from specified businesses
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03 residential status 17 18 ay
- Residential status determines an individual's tax liability in India and depends on the number of days spent in India in the relevant fiscal year and previous years.
- For individuals, residential status can be ordinarily resident, not ordinarily resident, or non-resident depending on whether basic conditions regarding number of days in India are met as well as additional conditions for ordinarily resident status.
- For Hindu Undivided Families (HUFs), residential status depends on whether control and management of the HUF is wholly or partly located in India. Ordinarily resident status for HUFs also considers conditions for the karta or manager.
- Other entities like firms, companies, and other persons are considered
Residential status
- An individual's residential status in India for tax purposes depends on how many days they spent in India during the year, not their citizenship.
- Individuals are classified as resident, resident but not ordinarily resident (RNOR), or non-resident based on the number of days spent in India.
- To be a resident, an individual must spend 182 days or more in India during the year or 60 days and at least 365 days in the last 4 years.
- Exceptions apply for Indian citizens working abroad or visiting India temporarily.
Taxation Law
PERSON:
Income-tax is charged in respect of the total income of the previous year of every person. Hence, it is important to know the definition of the word person. As per section 2(31),Person includes:
an Individual
a Hindu Undivided Family (HUF)
a Company
a Firm
an Association of Persons or a Body of Individuals (BOI) whether incorporated or not
a Local Authority
every Artificial, Juridical person, not falling within any of the above
Principles of Taxation Notes.pdf
This document defines key tax-related terms and concepts. It discusses the differences between direct and indirect taxes, and explains normal, special, and transitional tax years. It also covers topics like types of income, computation of taxable income, total income, deductible allowances, and residential status for tax purposes. The document provides examples to illustrate tax calculations and determinations of tax year and residential status.
Perquisites
The document discusses various types of perquisites that are taxable in the hands of an employee. It defines perquisites as casual emoluments or benefits provided to an employee in addition to their salary. Some key points include:
- Rent-free accommodation provided by the employer is taxable as a perquisite. The taxable amount depends on factors like location and whether the property is owned or rented by the employer.
- Other common taxable perquisites include utilities like gas, electricity and water paid by the employer, as well as facilities like transport and education for employees' families.
- There are certain exemptions, like a fixed allowance of up to Rs. 100 per child for education or Rs. 300
Scope of Total Income
The document discusses the scope of total income under the Income Tax Act for different residential statuses - resident and ordinarily resident, resident but not ordinarily resident, and non-resident. It provides examples of income that would be taxable for each status, depending on whether the income is received, accrued, or earned in India or abroad. It also contains sample problems calculating total income for individuals with various sources of income under each of the three residential statuses.
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- Provisions dealing with set-off and carry forward
- Inter-head and Inter-Source Set-off of Losses
- Carry Forward and Set-off of Losses in Special Cases
Clubbing of income ppt
- Clubbing of income provisions allow the income of one person to be taxed in the hands of another person if certain conditions are met (Sections 60-64).
- Key situations include transfer of income without asset transfer, revocable transfers of assets/income, income of a spouse from the other spouse's business, income from assets transferred to a spouse or minor children, and income of HUF property.
- The objectives are to prevent tax avoidance by transferring income/assets to family members while still enjoying the benefits. Income is clubbed and taxed in the transferor's hands in many situations.
Scope of total income and residential status
Objectives & Agenda :
To know when income will be taxable in India and to understand the determination of residential status for individuals, HUF, Firms, AOP/BOI and Companies. To analyse the concept of POEM in relation to determination of residential status of Company.
Residential status
1. The document discusses the residential status of individuals, HUFs, AOPs, and firms under the Indian Income Tax Act. It provides examples and solutions for determining residential status based on the number of days spent in India and the location from which business affairs are controlled.
2. Residential status is determined based on satisfying conditions for being a resident under section 6(1) or by being ordinarily resident as defined in section 6(6).
3. Location of control and management is the determining factor for residential status of HUFs, AOPs and firms, regardless of the residential status of members.
Income tax basics
Income tax is a tax paid to the government on income. There are different types of taxes including direct taxes like income tax paid directly by taxpayers. Income tax is assessed based on an individual's gross total income, which is the aggregate income from five heads - salaries, house property, business/profession, capital gains, and other sources. Key concepts include taxable income, tax exemption limits, tax rates, residential status, tax deductions, and different types of income like casual income, capital gains income etc.
Income tax-ppt
The document discusses various aspects of income tax in India such as residential status, types of income, tax rates, deductions, and allowances. It provides definitions for key terms, outlines the process for determining residential status, and specifies tax treatment and exemptions for different types of income like salary, gratuity, pension, and perquisites. The document also details income tax slabs and surcharge rates for individuals, HUFs, firms, and companies.
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An allowance is additional compensation provided by an employer beyond an employee's regular salary. Allowances can be categorized as taxable, partly taxable, or non-taxable. Taxable allowances include dearness allowance, entertainment allowance, and overtime allowance. Partly taxable allowances include house rent allowance, medical allowance, and conveyance allowance. Non-taxable allowances are those provided to government servants serving abroad and allowances for judges.
Charge of Income Tax
Charge of Income Tax
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.
Person u/s 2(31) includes,
An Individual,
Hindu Undivided Family (HUF),
A Company,
A Firm,
An Association of Persons(AOP) or Body of Individuals (BOI),
A Local Authority,
Every other Artificial Juridical Person
Incidence of Tax
Incidence of Tax
Exempted Incomes
The document lists various types of incomes that are fully or partially exempted from tax under Section 10 of the Indian Income Tax Act. Some key exemptions include agricultural income, income from house property, income of members of armed forces, income of MPs/MLAs, income from certain investments, scholarships, pension funds, and capital gains from sale of certain assets held for long term. The exemptions are subject to various conditions specified under the relevant sections of the Income Tax Act.
Central Goods and Sales Tax Act (Overview)
This document outlines the provisions of the Central Goods and Services Tax Act (CGST Act), 2017 in India. It provides an overview of key aspects of the Act including levy and collection of tax, input tax credit, registration requirements, tax invoices and credit/debit notes. Specifically, it notes that the CGST Act provides for the levy and collection of tax on intra-state supply of goods or services. It also summarizes some of the major chapters and provisions related to administration, determination of tax liability, registration, returns and payments.
Income tax Part I
This document provides an overview of income tax law in India. It discusses key concepts such as the history of income tax in India, heads of income (salary, house property, business, capital gains, other sources), important terms like assessee and residential status, and the incidence of tax based on residential status (resident, resident but not ordinarily resident, non-resident). The residential status of an individual depends on the number of days spent in India in the previous year or over the last few years. The incidence of tax, or who bears the tax burden, depends on the residential status of the assessee and where the income is earned and received.
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2) Business losses can be carried forward for 8 years and set off against future profits of any business. Speculation losses can be carried forward for 4 years against future speculation profits only.
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03 residential status 17 18 ay
- Residential status determines an individual's tax liability in India and depends on the number of days spent in India in the relevant fiscal year and previous years.
- For individuals, residential status can be ordinarily resident, not ordinarily resident, or non-resident depending on whether basic conditions regarding number of days in India are met as well as additional conditions for ordinarily resident status.
- For Hindu Undivided Families (HUFs), residential status depends on whether control and management of the HUF is wholly or partly located in India. Ordinarily resident status for HUFs also considers conditions for the karta or manager.
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Residential status
- An individual's residential status in India for tax purposes depends on how many days they spent in India during the year, not their citizenship.
- Individuals are classified as resident, resident but not ordinarily resident (RNOR), or non-resident based on the number of days spent in India.
- To be a resident, an individual must spend 182 days or more in India during the year or 60 days and at least 365 days in the last 4 years.
- Exceptions apply for Indian citizens working abroad or visiting India temporarily.
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PERSON:
Income-tax is charged in respect of the total income of the previous year of every person. Hence, it is important to know the definition of the word person. As per section 2(31),Person includes:
an Individual
a Hindu Undivided Family (HUF)
a Company
a Firm
an Association of Persons or a Body of Individuals (BOI) whether incorporated or not
a Local Authority
every Artificial, Juridical person, not falling within any of the above
Principles of Taxation Notes.pdf
This document defines key tax-related terms and concepts. It discusses the differences between direct and indirect taxes, and explains normal, special, and transitional tax years. It also covers topics like types of income, computation of taxable income, total income, deductible allowances, and residential status for tax purposes. The document provides examples to illustrate tax calculations and determinations of tax year and residential status.
Perquisites
The document discusses various types of perquisites that are taxable in the hands of an employee. It defines perquisites as casual emoluments or benefits provided to an employee in addition to their salary. Some key points include:
- Rent-free accommodation provided by the employer is taxable as a perquisite. The taxable amount depends on factors like location and whether the property is owned or rented by the employer.
- Other common taxable perquisites include utilities like gas, electricity and water paid by the employer, as well as facilities like transport and education for employees' families.
- There are certain exemptions, like a fixed allowance of up to Rs. 100 per child for education or Rs. 300
Scope of Total Income
The document discusses the scope of total income under the Income Tax Act for different residential statuses - resident and ordinarily resident, resident but not ordinarily resident, and non-resident. It provides examples of income that would be taxable for each status, depending on whether the income is received, accrued, or earned in India or abroad. It also contains sample problems calculating total income for individuals with various sources of income under each of the three residential statuses.
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Presentation on computation of income from other sources for the benefit of taxation students, based on provisions of Income tax Act 1961
Set-Off or Carry Forward of Losses in Income Tax Act
Key Takeaways:
- Provisions dealing with set-off and carry forward
- Inter-head and Inter-Source Set-off of Losses
- Carry Forward and Set-off of Losses in Special Cases
Clubbing of income ppt
- Clubbing of income provisions allow the income of one person to be taxed in the hands of another person if certain conditions are met (Sections 60-64).
- Key situations include transfer of income without asset transfer, revocable transfers of assets/income, income of a spouse from the other spouse's business, income from assets transferred to a spouse or minor children, and income of HUF property.
- The objectives are to prevent tax avoidance by transferring income/assets to family members while still enjoying the benefits. Income is clubbed and taxed in the transferor's hands in many situations.
Scope of total income and residential status
Objectives & Agenda :
To know when income will be taxable in India and to understand the determination of residential status for individuals, HUF, Firms, AOP/BOI and Companies. To analyse the concept of POEM in relation to determination of residential status of Company.
Residential status
1. The document discusses the residential status of individuals, HUFs, AOPs, and firms under the Indian Income Tax Act. It provides examples and solutions for determining residential status based on the number of days spent in India and the location from which business affairs are controlled.
2. Residential status is determined based on satisfying conditions for being a resident under section 6(1) or by being ordinarily resident as defined in section 6(6).
3. Location of control and management is the determining factor for residential status of HUFs, AOPs and firms, regardless of the residential status of members.
Income tax basics
Income tax is a tax paid to the government on income. There are different types of taxes including direct taxes like income tax paid directly by taxpayers. Income tax is assessed based on an individual's gross total income, which is the aggregate income from five heads - salaries, house property, business/profession, capital gains, and other sources. Key concepts include taxable income, tax exemption limits, tax rates, residential status, tax deductions, and different types of income like casual income, capital gains income etc.
Income tax-ppt
The document discusses various aspects of income tax in India such as residential status, types of income, tax rates, deductions, and allowances. It provides definitions for key terms, outlines the process for determining residential status, and specifies tax treatment and exemptions for different types of income like salary, gratuity, pension, and perquisites. The document also details income tax slabs and surcharge rates for individuals, HUFs, firms, and companies.
Allowance ppt
An allowance is additional compensation provided by an employer beyond an employee's regular salary. Allowances can be categorized as taxable, partly taxable, or non-taxable. Taxable allowances include dearness allowance, entertainment allowance, and overtime allowance. Partly taxable allowances include house rent allowance, medical allowance, and conveyance allowance. Non-taxable allowances are those provided to government servants serving abroad and allowances for judges.
Charge of Income Tax
Charge of Income Tax
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.
Person u/s 2(31) includes,
An Individual,
Hindu Undivided Family (HUF),
A Company,
A Firm,
An Association of Persons(AOP) or Body of Individuals (BOI),
A Local Authority,
Every other Artificial Juridical Person
Incidence of Tax
Incidence of Tax
Exempted Incomes
The document lists various types of incomes that are fully or partially exempted from tax under Section 10 of the Indian Income Tax Act. Some key exemptions include agricultural income, income from house property, income of members of armed forces, income of MPs/MLAs, income from certain investments, scholarships, pension funds, and capital gains from sale of certain assets held for long term. The exemptions are subject to various conditions specified under the relevant sections of the Income Tax Act.
Central Goods and Sales Tax Act (Overview)
This document outlines the provisions of the Central Goods and Services Tax Act (CGST Act), 2017 in India. It provides an overview of key aspects of the Act including levy and collection of tax, input tax credit, registration requirements, tax invoices and credit/debit notes. Specifically, it notes that the CGST Act provides for the levy and collection of tax on intra-state supply of goods or services. It also summarizes some of the major chapters and provisions related to administration, determination of tax liability, registration, returns and payments.
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Residential status
- The residential status of an individual or entity determines whether income earned inside or outside India is taxable in India.
- There are different residential statuses for individuals/HUFs and other entities like firms. For individuals, the statuses are resident and ordinarily resident, resident but not ordinarily resident, and non-resident.
- Determining the residential status involves assessing whether basic or additional conditions are met based on the number of days spent in India in the relevant period. Meeting these conditions establishes whether one is a resident and ordinarily resident, or resident but not ordinarily resident.
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This is a short presentation for beginners wanting to learn a bit about the Indian Income-tax Act. It gives a snapshot of some of the basic terms in the Indian income-tax law. Hard core tax practitioners may kindly stay away! It's only the common man.
UNIT 3: RESIDENTIAL STATUS
This document discusses residential status for income tax purposes in India. It defines the categories of resident, resident but not ordinarily resident (RNOR), and non-resident. An individual is considered a resident if they are in India for at least 182 days in a year or at least 60 days in the year and 365 days in the last 4 years. To be considered a resident and ordinarily resident (ROR), additional criteria of being in India for at least 730 days in the last 7 years and being a resident for at least 2 of the last 10 years must be met. The document provides examples to demonstrate how to determine residential status.
Residential status
The document discusses the residential status and tax liability of individuals and entities in India. It defines the basic conditions to determine if a person is a resident, ordinary resident, or non-resident based on the number of days spent in India. An ordinary resident's total income and tax liability is the highest, including both Indian and foreign income. A non-resident's total income and tax liability is based only on Indian income. The residential status of entities like HUF, companies, firms, and AOP is also determined based on the control and management of their affairs being within or outside of India.
Income_Tax- Basic Definition_ B.Com students docx
This document defines key terms related to the assessment of income tax in India. It explains that an assessment is the procedure by which an assessee's income is determined by the Assessing Officer. An assessee refers to any person whose income or loss is assessed. A deemed assessee is one who is considered an assessee for another person, while an assessee in default fails to fulfill their duties under tax law. The document also defines person, assessment year, previous year, and outlines the various categories of residential status and their implications for tax incidence: resident and ordinarily resident, resident but not ordinarily resident, and non-resident.
Understanding the Impact of Finance Act, 2020 on Residential Status of Indivi...
Overview of the Presentation:
1. Under the provisions of the Income-tax Act, an individual becomes a resident of India based on, his/her number of days of stay in India. The condition of ‘number of days’ is relaxed in case of a Person of Indian origin (PIO) / Citizen of India (COI), visiting India. Also, India unlike other countries classifies residents into Resident & Ordinary Resident (ROR)and Resident but Not Ordinary Resident (RNOR).
2. In few countries an individual becomes tax resident based on citizenship irrespective of whether he/she lives in that country or not. Examples: USA, Eritrea
3. The Finance Act, 2020 (FA 2020)has introduced citizenship-based residency provisions for Indian citizens apart from restricting the relaxations granted to COI/PIO visiting India. Further, the FA 2020 has also increased the criteria of qualifying RNOR
Residential status-ppt1 (2)
This document discusses residential status and tax liability in India. It defines the different categories of residential status as resident and ordinarily resident, resident but not ordinarily resident, and non-resident. An individual's residential status depends on the number of days spent in India in the relevant tax year and previous years. Similarly, the residential status of HUFs, firms, companies and other entities depends on where control and management of their affairs takes place. Finally, it outlines the different types of income that are taxable in India for each residential status.
Residential status
The document discusses the residential status of various persons under the Income Tax Act, including individuals, HUFs, companies, firms, AOPs and other entities. It explains the basic and additional conditions to determine whether a person is a resident, ordinarily resident or non-resident. It also summarizes the tax incidence on different types of incomes based on the residential status and source of income. Key points include that an individual is considered resident if present in India for 182 days or more, or 60 days and 182 days in last 4 years. For HUFs and firms, control and management needs to be wholly/partly in India. Companies are resident if incorporated in India or controlled from India.
Income tax
The document discusses residential status and tax liability in India. It defines resident, ordinarily resident, and non-resident status and the conditions to determine each status. An individual's residential status depends on the number of days spent in India in the relevant assessment year and previous years. It must be determined separately for each assessment year as it may vary year to year.
Tax2
Income tax in India is governed by the Income Tax Act of 1961. Individuals and entities are taxed based on their residential status and total income under various heads including income from salaries, house property, business/profession, capital gains, and other sources. Tax rates and exemptions vary based on taxpayer type. The Central Board of Direct Taxes governs income tax collection which is a major source of government revenue.
Income tax
This document provides an overview of income tax in India. It discusses how income tax was first introduced in India in 1860. It then summarizes the key definitions and concepts related to income tax, including assessment year, previous year, assessee, types of income (direct vs indirect), and definitions of agricultural income and non-agricultural income from land. The document also outlines the different types of residential statuses (resident, resident but not ordinarily resident, non-resident) and how they are determined based on days spent in India. It concludes with examples to illustrate how residential status is assessed.
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Business income
1) Business income is computed by adjusting the net profit as shown in the profit and loss account by adding back inadmissible expenses and deducting allowable expenses not accounted in the profit and loss account and income not taxable under the head 'profits and gains from business or profession'.
2) Several examples are given showing the computation of business income by making the prescribed additions and deductions like salary, interest, donations, depreciation, income from other heads etc.
3) House property income is also computed by deducting standard deduction and interest on home loan from annual rent received in case of let out and self-occupied properties respectively.
Forms of organisation non-corporate enterprises
This document summarizes different forms of business organization in India. It discusses sole proprietorships, partnership firms, and joint Hindu family firms. Some key points covered are:
- Sole proprietorships are owned and managed by one person who has unlimited liability. They are easy to form but have limited capital and managerial ability.
- Partnership firms require an agreement between partners to share profits and have features like implied agency and unlimited liability of partners. They allow for larger capital but can lack stability.
- Joint Hindu family firms are formed by operation of law between members of a Hindu undivided family. They provide continuity but can have restricted membership and lack of incentive or stability.
Professional income
The document provides examples of computing taxable professional income for different professionals - a doctor, chartered accountant, lawyer, and medical practitioner. It shows how to calculate professional receipts and allowable professional expenses to determine the net professional gain or income based on the accounting system and other details provided. The computations deduct expenses like rent, salary, depreciation allowances, and other costs from the total receipts to arrive at the taxable professional income.
Professional income
The document provides examples of computing professional income for different professionals including doctors, chartered accountants, lawyers, and medical practitioners. It shows how to calculate professional receipts and deduct allowable professional expenses to determine the taxable professional gain. Expenses include rent, salaries, depreciation, cost of medicines/supplies, and more. The net professional income is calculated by deducting total expenses from total receipts.
Business income
The document defines business and profession and provides examples of computation of business income under various scenarios. It discusses adding inadmissible expenses and deducting allowable expenses not debited in arriving at business income. It also provides an example of computation of house property income where there is a let out property and self-occupied property with a loss.
Forms of organisation - non-corporate enterprises
This document summarizes different forms of business organization in India. It discusses sole proprietorships, partnership firms, and joint Hindu family firms. Some key points covered are:
- Sole proprietorships are owned and controlled by one person who has unlimited liability. They are easy to form but have limited capital and managerial ability.
- Partnership firms require an agreement between partners to share profits and have implied agency and unlimited liability unless otherwise agreed. They allow for larger capital but can lack stability.
- Joint Hindu family firms are formed by operation of Hindu law between co-parceners of a family. They provide continuity but can lack incentive and stability if mismanaged by the head of the family.
Nature of business
This document provides an overview of the nature of business. It defines business as an organization that obtains resources like funds, labor, and equipment to provide goods or services to customers in exchange for money. The document outlines key characteristics of business like the sale of goods/services, continuity, and profit motive. It also discusses the components/systems of business including personnel, finance, marketing, and production functions. The primary objective of modern business is stated as making a profit, with secondary objectives like creating customers, innovating new products, providing value, employment, and fair returns. Principles of organization, essentials of success, qualities of successful businessmen, and business ethics are also summarized.
Residential status problems
1. Mr. Prashant went to Germany for a diploma course from August 2020 to February 2021. As he was out of India for more than 182 days, his residential status for FY 2020-2021 is non-resident.
2. An individual was in India for 185 days in FY 2020-2021, 15 days in 2019-2020, and 26 days in 2018-2019. As the stay in India was less than 182 days in the last 2 years, the residential status for AY 2021-2022 is non-resident.
3. Mr. Rohan, a foreign national, has been in India for more than 120 days in 5 of the last 6 years. Therefore, his residential
Residential status
The document discusses the residential status rules for individuals, HUFs, firms, AOPs, and companies in India for income tax purposes. For individuals, residential status depends on the number of days spent in India in the relevant fiscal year or previous years. A HUF's residential status is based on the residential status of the Karta. For firms, AOPs, and other persons, residential status is determined by where their control and management is located. All Indian companies are considered residents, while foreign companies may be resident or non-resident depending on where their control and management is located.
Scope of TI problems
- The document discusses the tax treatment of various incomes for individuals with resident, not ordinary resident, and non-resident tax statuses in India. It provides examples of incomes from different sources and whether they would be taxable under each residential status.
- Tables are presented showing the taxable income for three individuals - Mr. X, Mr. Devilal, and Mr. Deepak - under each residential status. The types of incomes included business income, agriculture, salary, house property, capital gains, and more.
- Whether an income is taxable depends on factors like where it was earned, where it was received, and whether a business or property is controlled from India. In general, more income sources are taxable
Scope of Total Income
The document discusses the scope of total income based on a taxpayer's residential status in India as a resident and ordinarily resident, resident but not ordinarily resident, or non-resident. It outlines the different types of income that are taxable or not taxable in India for each residential status, based on factors such as where the income was earned and received, and whether it relates to a business or profession in or outside of India. The three main considerations for determining the scope of total income and tax incidence are the taxpayer's residential status, place of accrual or receipt of income, and the time at which income had accrued or was received.
Introduction to tax
This document provides an introduction to income tax in India. It discusses why taxes are paid, what the government does with tax revenue such as healthcare, education, national defense, and welfare programs. It defines key aspects of Indian taxation including that it is compulsory, imposed by the government, and not a voluntary donation. The major sources of tax revenue are income, wealth, sales, and expenditures related to service, production, imports and exports. The constitution outlines which levels of government can tax which areas. The history of income tax in India is also briefly discussed.
Unit v
The document discusses customs duty in India. It provides definitions and explanations of key terms:
1) Customs duty refers to taxes imposed on goods transported across international borders. Duties are determined based on factors like where goods were acquired or manufactured.
2) There are different types of customs duties including basic customs duty, additional customs duty, protective duty, and anti-dumping duty. Drawback allows refunds of import duties paid on goods that are later exported.
3) Sections 74-76 of the Customs Act cover duty drawback, allowing refunds of duties paid on imported goods that are re-exported, and on imported materials used to manufacture exported goods.
Capital Structure
The document discusses various methods of financing for businesses. It describes capital structure as the combination of debt and equity used to finance a company's assets. It then discusses three main methods of financing - equity financing, debt financing, and lease financing. Equity financing involves selling ownership stakes, debt financing involves taking loans that must be repaid with interest, and lease financing allows using assets without ownership through rental agreements.
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Capital budgeting involves planning expenditures for long-term assets that provide returns over several years. It is an important process that requires evaluating projects carefully due to their large size, long-term implications, and irreversible nature. Key aspects of capital budgeting include identifying and evaluating investment proposals, determining which provide the highest expected rates of return, and preparing a capital expenditure budget. Various techniques can be used to evaluate projects, including payback period, accounting rate of return, net present value, internal rate of return, and risk-adjusted methods that account for uncertainty in projected cash flows.
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Residential status
- 1. Basic Concepts of Income tax
- 2. 'WHY SHOULD I PAY TAX?
- 3. What Government Do from our TAX? Health care and Education Cooking gas National Defense, Infrastructure Developments etc. Various welfare schemes Administrative cost Judicial Salaries, perks of Judges, Magistrates and judicial staff
- 5. Normal Assessee Representative Assessee Deemed Assessee Pay taxes for the income earned by him for a particular financial year Assessee IMPORTANT TERMS Assessee- in-Default Pay taxes for income or losses incurred not only by him, but also by a third party Pay taxes for some other person by the legal authorities Failed to fulfill his legal duty of paying tax
- 6. WHO ARE LIABLE FOR TAX? 1. Individuals 2. Hindu Undivided families 3. Companies 4. Firms (partnerships) 5. Association of persons or bodies of individuals 6. Local authority (municipal bodies) 7. Artificial juridical person
- 7. Determine the status of following persons 1. Reliance Industries Limited. 2. Madras University. 3. Calcutta Municipal Corporation. 4. A partnership firm with A, B and C partners. 5. A Brahmin Parivar consisting of Mr. A, his brother B, Mrs. A and B.
- 8. Determine the status of following persons 1. Reserve Bank of India. 2. Life Insurance Corporation of India. 3. Mr. Narendra Modi, Prime Minister of India. 4. A Village Panchyat. 5. Markfed, Housefed.
- 9. PREVIOUS YEAR (Section 2(34)) The financial year immediately preceding the assessment year Previous Year 2020-2021 Assessment Year 2021-2022
- 10. ASSESSMENT YEAR (Section 2(9)) The period of twelve months commencing on the 1st day of April every year and ending on 31st March every year.
- 11. Previous Year 1.4.2020 to 31.3.2021 Assessment Year 1.4.2021 to 31.3.2022
- 12. Determine the Previous year and Assessment year Financial Year 1.4.2000 to 31.3.2001 1.4.2006 to 31.3.2007 1.4.2010 to 31.3.2011 1.4.2017 to 31.3.2018
- 14. HEADS OF INCOME Gross Total Income = Aggregate of Five Heads of Income. Total Income = GTI – Deductions u/s 80C to 80U. Total Income is also called as Taxable Income.
- 15. RESIDENTIAL STATUS • World income is taxable in India RESIDENT • Only income arising or accruing in India is taxable in India NON RESIDENT (NRI) • Income accruing or arising outside India may also be taxable in India RESIDENT BUT NOT ORDINARLY RESIDENT
- 16. RESIDENT u/s 6(1) In India for a period of 182 days or more in the FY In India for 60 days or more during FY & in India for 365 days or more during 4 previous years immediately preceding the RFY. (a) (b) (or) RESIDENTIAL STATUS OF AN INDIVIDUAL
- 17. ORDINARY RESIDENT u/s 6(6) Resident in India in atleast 2 years out of 10 previous year immediately preceding the previous year. In India for a period of 730 days or more during 7 years immediately preceding the relevant previous year. (a) (b) RESIDENTIAL STATUS OF AN INDIVIDUAL
- 18. NON RESIDENT u/s 2(30) Individual who does not satisfy at least one of the basic conditions u/s 6 (1). RESIDENTIAL STATUS OF AN INDIVIDUAL
- 19. Example: Rickey Pointing, an Australian cricketer has been coming to India for 100 days every year since 2006- 07: (a) Determine his residential status for the assessment year 2020-2021. (b) Will your answer be different if he has been coming to India for 110 days instead of 100 days every year.
- 20. • RPY - 182 days Sec 6(1) a • RPY - 60 Days • Preceding 4 years – 365 days Sec 6(1) b • Resident in India 2 PY out of 10 preceding PY Sec 6(6) a • Stay in India 730 days out of 7 preceding PY Sec 6(6) b RESULT = R But Not OR R O R and or (a)
- 21. • RPY - 182 days Sec 6(1) a • RPY – 60 Days • Preceding 4 years – 365 days Sec 6(1) b • Resident in India 2 PY out of 10 preceding PY Sec 6(6) a • Stay in India 730 days out of 7 preceding PY Sec 6(6) b Result = Resident R OR and or (b)
- 23. 23