The document discusses the concept of "business connections" under Section 9 of the Indian Income Tax Act of 1961. It notes that the Act allows for taxation of foreign companies and non-residents only on income sourced from India. Section 9 then deems certain types of income as accruing or arising in India in specific circumstances, including income from "business connections" in India. The document aims to analyze judicial pronouncements related to the term "business connection" and how its meaning has evolved over time under Section 9 of the Act.

1. INCOME TAX
DEPARTMENT

2. OUR VISION
The Department will be recognised as a
professional organisation, collecting
resources efficiently, considerate towards its
clients, adapting and improving and
promoting voluntary compliance.

3. OUR MISSION
To promote compliance with
our direct tax laws, through
caring taxpayer service
and strict enforcement
and thus realize maximum
resources for the Nation

4. OUR VALUES
Integrity of conduct,
Dedication to our duties and values,
Professionalism in our work,
Attitude of service to our clients and
Fostering
mutual confidence.

5. Organisational structure
Chairman
Vice-Chairman
Members
Secretary
Director of Investigation
Deputy Director of Investigation

6. Chairman
• The Chairman of the Commission is a statutory authority under
the Income Tax and Wealth-tax Acts.
• He is the administrative head of the Commission.
Vice-Chairman
• The Vice-Chairman is the Presiding Officer of the additional
bench and decides settlement applications along with other
members of the bench.

7. Members
• The Members hear and decide settlement applications
along with the Chairman/Vice-Chairman.
Secretary
• The Secretary is a statutory authority under the
Income Tax Settlement Commission (Procedure) Rules,
1987 and Wealth-tax (Procedure) Rules, 1987.
• He performs both technical and administrative
functions.

8. Director of Investigation
• The Director of Investigation is over-all in-charge of the
work of Additional/Joint/Deputy directors of
Investigation and assists the commission in passing
orders under section 245D(4) of the Income Tax Act and
22D(4) of the Wealth-tax Act.
Deputy Director of Investigation
• The Deputy Directors of Investigation make enquiries
on behalf of the Commission and verify correctness of
the facts stated in the annexures and statements of fact
accompanying settlement applications

9. • Basic
• HRA
• Conveyance
• Children Education Allowance
• Allowances in any other name
GENERAL GROSS COMPONENTS

10. Basic : Taxable
HRA :
Taxable. Exemption can be claimed
Required Document – Rent receipt
Computation of exemption - Least of the following :
1. Actual amount of HRA received
2. 50% (Metro) / 40% (Non Metro) of Salary (Basic + DA)
3. Actual Rent paid Less 10% of Salary ( Basic + DA)
Conveyance :
Taxable. Exempted upto Rs.800 per month & Upto
Rs.1600 per month if the employee is handicapped.

11. Children Education Allowance :
Taxable. Exempted upto Rs.100 per
month per child restricted to 2 children.
Other Allowances :
All other allowances (except LTA) are
Taxable.

12. 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.
12
08/07/2009

13. 13
08/07/2009

14. • Income Tax Rates applicable for Individuals,
Hindu Undivided Family (HUF), Association of
Persons (AOP) and Body of Individuals (BOI) in
India is as under:
•
Assessment Year 2014-15, Relevant to
Financial Year 2013-14

15. For Individuals below 60 years age
(including Woman Assessees):
Income Tax Rate
Upto 200,000 Nil
200,000 to 500,000 10% of the amount exceeding 200,000
500,000 to 1,000,000 Rs.30,000 + 20% of the amount exceeding
500,000
1,000,000 & above Rs.130,000 + 30% of the amount
exceeding 1,000,000

16. For Individuals aged 60 years and
above but below 80 years (Senior
Citizen):
Income Tax Rate
Upto 250,000 Nil
250,000 to 500,000 10% of the amount exceeding 250,000
500,000 to 1,000,000 Rs.25,000 + 20% of the amount exceeding
500,000
1,000,000 & above Rs.125,000 + 30% of the amount
exceeding 1,000,000

17. For Individuals aged 80 years and
above (Very Senior Citizen):
Income Tax Rate
Upto 500,000 Nil
500,000 to 1,000,000 20% of the amount exceeding 500,000
1,000,000 & above Rs.100,000 + 30% of the amount
exceeding 1,000,000

18. For Firm
• i. Income-tax: 30% of total income.
• ii. Surcharge: Nil
• iii. Education Cess: 3% of the total of Income-
tax and Surcharge.

19. For Domestic Company
• i. Income-tax: 30% of total income.
• ii. Surcharge: The amount of income tax as
computed in accordance with above rates,
and after being reduced by the amount of tax
rebate shall be increased by a surcharge at the
rate of 5% of such income tax, provided that
the total income exceeds Rs. 1 crore.
• iii. Education Cess: 3% of the total of Income
Tax and Surcharge.

20. For Company other than a Domestic
Company
• i. Income-tax:
@ 50% of on so much of the total income as consist of (a) royalties
received from Government or an Indian concern in pursuance of an
agreement made by it with the Government or the Indian concern after
the 31st day of March, 1961 but before the 1st day of April, 1976; or (b)
fees for rendering technical services received from Government or an
Indian concern in pursuance of an agreement made by it with the
Government or the Indian concern after the 29th day of February, 1964
but before the 1st day of April, 1976, and where such agreement has, in
either case, been approved by the Central Government.
@ 40% of the balance
ii. Surcharge: The amount of income tax as computed in accordance with
above rates, and after being reduced by the amount of tax rebate shall be
increased by a surcharge at the rate of 2.5% of such income tax, provided
that the total income exceeds Rs. 1 crore.
iii. Education Cess: 3% of the total of Income Tax and Surcharge.

21. How Income Tax Is Related With
Business

22. “Business Connections” - “
Under section 9 of Income Tax Act
1961, –Gradual Changes and
Development

23. • The Indian Income-tax Act provides for levy of income-tax
on the income of foreign companies and non-residents, but
only to the extent of their income sourced from India.
• Under section 5 of the Act, a foreign company or any other
non-resident person is liable to tax on income which is
received or is deemed to be received in India by or on
behalf of such person, or income which accrues or arises or
is deemed to accrue or arise to it in India.
• Income tax is payable by a taxpayer, regardless of whether
he is a resident taxpayer, a non-resident taxpayer, or a non-
resident Indian, on the total income computed by the
Assessing Officer under the provisions of the Income Tax
Act 1961. Section 9 thereafter specifies certain types of
income that are deemed to accrue or arise in India in
certain circumstances.

24. Cntd……
• These two sections embody the source rule of income
taxation in the domestic law.
• No income of a non-resident can be taxed in India unless it
falls within the four corners of section 5 read with section 9
of the Income-tax Act. Section 9(1) of the I.T. Act specifies
that for the income to be taxed in India, it should deemed
to accrue or arise in India .
• And one among those incomes are income from “business
connection” in India .The basic aim of this paper work is to
look into the series of judicial pronouncements related to
the term “business connection” and the changes which
have been introduced therein after.