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1. DHANALAKSHMI SRINIVASAN
ENGINEERING COLLEGE
(AUTONOMOUS)
NAME : ARIVAZHAGAN.A
REG.NO.:810422631008
SUBJECT: COMPANY LAW
SUB.CODE: P20BA111
SUBMITTED TO: Mrs. R. VIMALA

2. Income Tax
SUBMITTED BY
ARIVAZHAGAN.A
I-MBA
8104226301008

3. HISTORY
• Income Tax Act 1922 was repealed and the new Act Income
Tax Act 1961 came into force effective Assessment Year 1961-
62
• Every year particularly in the Annual Budget several changes
are made through the Finance Act to amend changes to the Act.

4. LEGISLATIVE SUPPORT
• 1. Article 246 of the Constitution of India on Legislative
Powers of the Parliament
• 2. Seventh Schedule – List I
• 3. Entry No. 82
• 4. “ Taxes on Income other than Agricultural Income”

5. IMPORTANT DEFINITIONS
• 1. Sec.2(1A) Agricultural Income
• 2. Sec.2(7) Assessee
• 3. Section 2(17) Company
• 4. Section 2 (22) Dividend
• 5. Section 2(24) Income
• 6. Section 2(31) Person
• 7. Section 2(45) Total Income

6. ASSESSEE
• 1. Section 2(7)
• 2. Person who is liable to pay the Income Tax , Interest or
penalty under the Act
• 3. Person against whom proceeding under the Act can be
taken for collection of tax etc. or to whom refund due to him
can be paid .
• 4. Also include person deemed to be an assessee.
• 5. Assessee are persons and are divided into various categories
as stated in Section 2(31) like : Individuals , HUF , Firm ,
Company , AOP , BOI , Local authority , Artificial juridical
person

7. ASSESSMENT
• Machinery for computing the Total Income of a previous year
from various sources
• Computation of income and assessment is after allowing
various exclusions, exemptions, and deductions, as provided in
the Act.
• Income Tax Act does not prescribe rates of tax to be charged.
Section 4 states that the rate of tax shall be as prescribed in the
Finance Act which is passed every year.
• Three aspects, therefore, are important 1) Computation of
Income 2) Assessment by authorities of the Income so
computed and 3) Determine the tax payable on such finally
computed income, as assessed.

8. ASSESSMENT YEAR
• 1. Section 2(9)
• 2. This is the Income Tax year in which income of previous
year which ended before commencement of assessment
year is assessed .
• 3. Assessment year is a period of twelve months from 1st
April to 31st March .

9. PREVIOUS YEAR
• 1. Section 3
• 2. Financial year immediately preceeding the assessment
year
• 3. Only one previous year for allsources of income
• 4. 12 months period but must be uniform
• 5. Newly set up business previous year will end on 31st
March even if it is for a period of less than 12 months .
For all subsequent assessment years previous year will be
12 months from 1st April to 31st March .

10. RESIDENTIAL STATUS OF ASSESSEE
• 1. Section 6
• 2. Divided into 2 categories
• a) Resident in India and
• b) Non Resident in India
• 3. Resident in India applicable to Individuals and HUF are
again classified into two further categories
• a) Ordinarily resident
• b) Not ordinarily resident

11. INDIVIDUALS WHEN ORDINARILY RESIDENT
IN INDIA
• 1. Any of the two conditions are fulfilled :
• a) he is in India for a period of 182 days or more
• OR
• b) He has in 4 years preceding that year been in India for 365 days or more and
has been in India for 60 days or more in that year
• 2. If an individual ( citizen of India ) is rendering service outside India and visits
India during leave or vacation or individual ( citizen of India or persons of Indian
Origin ) who is outside India and comes on visit to India , for that year his
residential status shall be determined as follows :
• a) his stay in India in that year is 182 days or more (not 60 days ) shall be
treated as Resident
• b) His stay in India in that year is less than 182 days shall be non resident for
that year and his foreign income would not attract tax liability

12. HUF FIRM & OTHER AOP- WHEN
ORDINARILY RESIDENT IN INDIA
• 1. Shall be resident in India when in any part of that year
the control and management of its affairs is situate in
India
• 2. Shall be Non resident i.e., not resident in India if during
the whole of the year the control and management of its
affairs is situate in India

13. NOT ORDINARILY RESIDENT IN
INDIA
• 1. Applicable to Individuals and HUF only
• 2. Will be not ordinarily resident in India in a previous
year if any of the following 2 conditions are fulfilled
• 3. a) Has been a non resident in India in 9 out of the 10
previous years preceeding that year OR
• b) Has during 7 previous years preceeding that year
been in India for 729 days or less
• 4. In the case of HUF the same rule shall apply except that
the period of stay shall be in respect of the Manager of
the HUF .

14. COMPANY – RESIDENT IN INDIA
• Company is resident in India in a year if it satisfies
any of the following two conditions
a) It is an Indian Company
OR
b) During that year the control and management
of its affairs is situated wholly in India .

15. NON RESIDENT
• 1. Individual will be Non resident if he is niether ordinarily
resident nor resident but not ordinarily resident
• 2. HUF , Firm or AOP will be Non Resident if in that year
control and management of its affairs is situated wholly
outside India
• 3. Company will be a Non resident in a year if it is not an
Indian Company and if its control and management of its
affairs is not situated wholly in India

16. SCOPE OF INCOME LIABLE TO
TAX
• 1. Section 5 , 5A & 9
• 2. Resident and Ordinarily resident are chargeable to Income :
• a) received or deemed to be received in India
• b) accrues or arises or is deemed to accrue or arise in India AND
• c) accrues or arises outside India
• 3. Resident but not ordinarily resident are chargeable to income :
• a) Received or deemed to be received in India
• b) Accrues or arises or is deemed to accrue or arise in India AND
• c) Accrues or arises outside India only if it is derived from a business controlled in or a profession setup in India
• 4. Non Residents are liable only in respect of
• a) received or deemed to be received in India
• b) accrues or arises or is deemed to accrue or arise in India
• Non Residents are not liable to income accruing or arising outside India even if it is remitted to India .

17. SCOPE OF INCOME LIABLE TO
TAX
• 5. Irrespective of residential status the following income
shall be deemed to accrue or arise in India and
chargeable to Tax if it is directly or indirectly through or
from :
• a) any business connection in India OR
• b) any property in India OR
• c) any asset or source of income in India OR
• d) transfer of a capital asset situate in India

18. SCOPE OF INCOME LIABLE TO
TAX
• 6. Following income even if payable outside India are
deemed to arise in India :
• a) Dividend paid by Indian Company
• b) Interest payable on moneys borrowed or brought to
India
• c) Royalty and Technical service fees where Royalty is
payable in respect of any right or fees are paid in respect
of any technical services used for business or profession
in India

19. TYPES OF INCOMES
Income received in India:
The source of income may be situated , anywhere in the
world but if its first receipt is in India, it is taxable for all.
Deemed to be received in India:
These incomes are actually not received by assessee instead
these are credited to his account to be paid at a later date or
are appropriated against future liability e.g.
▪ Employer’s contribution to provident fund.
▪ Interest accrued on provident fund balance
▪ Interest accrued on N.S.C VIII issue
▪ Tax deducted at source

20. CORPORATE TAX PLANNING
 Corporate tax planning provides significant opportunities
for comparisons to manage and increase cash flows
throughthe minimization or deferral of taxes on
corporate earnings. It is so because corporate tax
represents a significant part of overhead cost for these
companies.
 The key objective in “ Corporate tax planning “ is to
identify the main factors in the organization’s structure
that dictate the opportunities for tax efficiencies / savings
savings . Thus, corporate tax planning aims to structure a
business in such a way as to minimize both its current
and future income tax liabilities.

21. BENEFITS OF CORPORATE TAX
PLANNING
▪ Reduction in Tax liability.
▪ Minimization of litigation.
▪ Healthy growth business.
▪ Healthy growth of nation.
▪ A sources of working capital.
▪ Increase in distributable profits.
▪ Enables to face competition from
Multinationals.
▪ Maximizing market valuation.

22. COMPUTATION OF GROSSS TOTAL INCOME OF COMPANY
1.Head wise calculation
The income of company is to be computed under following
five
heads of income under various provisions of the Income tax
Act
1961. The heads of incomes are as follows :
▪ Income under the head “ House Property “ ( as per sec 22
to 27 )
▪ Income under the head “ profits and Gains of Business and
Profession “ (as per sec 28 to 44)
▪ Income under the head “ Capital gains “ ( as per sec 45 to
55)
▪ Income under the head “ Income from other sources “ (as
per sec 56 to 59 )
2. Agricultural income of a company
Agricultural income of a company is totally exempt under

23. Due Date for Company Tax Return
Filing
 All companies registered in India are required to file
income tax return on or before the 30th of September.
 Companies incorporated between January – March can
file MCA annual return after 18 months in the first year.
 However, the same type of exemption is not available
under the Income Tax Act.
 Hence, even companies registered from January – March
must file income tax return on or before 30th September
of the same calendar year.

24. THANK
YOU