The document discusses various types of taxes in India including direct taxes like income tax and indirect taxes like sales tax. It explains the key concepts related to income tax like previous year, assessment year, residential status, total income and tax slabs. Residential status is determined based on the number of days spent in India and can be resident, non-resident or resident but not ordinarily resident. Total income includes income from various heads like salary, house property, business, capital gains and other sources after exemptions. Tax is calculated by applying the appropriate tax rates to the net taxable income.

1. TAXES ARE UNAVOIDABLE

4. INCOME TAX ACT, 1961 (will be replaced by Direct tax codes from 1.4.2011)

5. Income tax INCOME TAX WHEN WHO

6. INCOME U/s 2 (24): Meaning and Characteristics A PERIODICAL MONETARY RETURN COMING IN WITH OR SOME SORT OF FROM A DEFINITE SOURCE REGULARITY REGULARITY

8. Tax The outflow from income paid to the Government.

9. Who is liable to pay TAX? PERSON – U/s 2 ( 31 ) INDIVIDUAL H U F COMPANY FIRM BOI / AOP LOCAL AUTHORITY ANY OTHER ARTIFICIAL JURIDICAL PERSON

14. ASSESSMENT YEAR u/s 2(9) Year in which final tax is payable relating to the previous year. Always for 12 months. Example: PY 2008-09 AY 2009-10 PY 2009-10 AY 2010-11 (this is relevant or exam)

18. Kinds of Residential status: All Assesses Resident Non-resident Individual & HUF R & OR R but not OR

21. E.g. Mr. George Bush comes for the first time to India on 26.1.201009 and leaves India on 15.3.2010. Determine his residential status for AY 2010-11 Solution: Mr. George Bush Foreign Citizen PY 2009-10 AY 2010-11 Days in India in P.Y. 2009-10 Jan : 6 days Feb: 28 days Mar: 15 days Total: 49 days He does not satisfy any of the conditions. Therefore he is Non resident .

22. Conditions for determining residential status BASIC ADDITIONAL Stay in India for At least 182 days in Current PY 05-06 ( A ) OR Stay in India for at least 60 days in current PY. & Stay in India for at least 365 days in 4 PY preceding current PY. ( B ) AND Stay in India for 730 days in 7 PY preceding the current PY 05-06 Resident in India for 9 out of 10 PY preceding current PY & ( C ) ( D ) If {a or b}+ {c & d} satisfied: ROR If only a or b satisfied: RNOR If a or b NOT satisfied: Non-resident

30. E.g.: T- Taxable NT - Not Taxable Items of Income Nature ROR RNOR N R Salary received in India Received in India T T T Salary earned in India but received in Sri Lanka Accruing in India T T T Foreign Income: Income from business in Nepal controlled form Delhi Foreign Income controlled from India T T NT Income from business in Sri Lanka received there. Foreign Income NOT controlled from India T NT NT

34. Computation of Total Income PY 09-10 AY 10-11 Particulars Rs. Rs. Income from Salaries XX Income from House property XX Income from P & G of Business or profession XX Income from capital gains (short term) XX Income from Other sources XX X Add: Clubbed incomes X GROSS total Income XX Less: deductions u/s 80 - X Net taxable income YY Add: Long term capital gains GG Net taxable income MM

35. Computation of Final tax payable : Net taxable income YY Rates of tax (10 % 20% 30%) or as relevant ---------- Net tax payable 1 Add: Surcharge (tax on tax) 2 Tax payable [ 1 + 2 ] 3 Add: {education cess 3%} [1 x 3 %] 4 FINAL tax payable 5 Less: Tax already paid (T.D.S. / Advance tax) [5-6] 6 Assessed tax payable/refund 7