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

1. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Affiliated Institution of G.G.S.IP.U, Delhi
BBA(B&I) Vth sem
Taxation law
Paper ID-18311
Paper code-BBA311

2. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 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.
10/31/2015
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Charge of Income Tax

3. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 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

4. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 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

5. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 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”.
4. 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.

6. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
6

7. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
10/31/2015
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Types of Residential Status
Resident(R)
Not Ordinarily Resident (NOR)
Non-Resident (NR)

8. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 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.

9. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 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; or
ii. 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.
10/31/2015
Contd…

10. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 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; or
ii.He must be in India during 7 preceding
previous years for aggregate period of 729
days or less.

11. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 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).
10/31/2015
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Residential Status of HUF

12. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 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.
10/31/2015
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Residential Status

13. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Particulars
Tax Incidence
R NOR NR
Income 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