SJCTNC-PCM914T

1. INCOME TAX LAW-PCM914T
A.Albert Ravi
Assistant Professor in Commerce
St.Joseph’s College of Arts and Science(Autonomous)
Cuddalore

2. WHAT IS INCOME TAX?
 Income tax in India is a tax you pay to the government
based on your income (and profit, in the case of
companies).
 The government uses this tax money for various purposes
including public services, infrastructure development,
defence spending and subsidies among other options.
 If you earn income beyond a certain limit, it is mandatory
to pay income tax every year.

3. INCOME TAX LAW-
 The Income Tax Act, 1961 is an act to levy,
administer, collect, and recover income tax in
India.
 The act is effective from 1 April 1962

 The Income Tax Act contains a total of 23
chapters and 298 sections according to the official
website of the Income Tax Department of India[

4. THESE DIFFERENT SECTIONS DEAL WITH
VARIOUS ASPECTS OF TAXATION IN INDIA.
The various heads for which you have to pay income tax
include:
Salary
Income from house property
Capital gains
Profit and gains from business or profession
Income from other sources

5. OBJECTIVES OF TAXES
 Raising Revenue
 Regulation of Consumption and Production
 Encouraging Domestic Industries
 Stimulating Investment
 Reducing Income Inequalities
 Promoting Economic Growth
 Development of Backward Regions
 Ensuring Price Stability

6. IMPORTANT DEFINITION UNDER INCOME-TAX ACT
1961:
 Income Tax:
It is the tax that is collected by
Central Government for each
financial year levied on total taxable
income of an assessee during the
previous year.

7. ASSESSEE-SEC2(7)
 Assessee is a person who pays tax or any sum of
money under the provisions of the Income Tax Act,
1961.
 An assessee is any individual who is liable to pay
taxes to the government against any kind of income
earned or any losses incurred by him for a particular
assessment year.
 Each and every person who has been taxed in the
previous years for income earned by him is treated as
an Assessee

8. ASSESSMENT:
Assessment is primarily a process of
determining the correctness of income declared
by the assessee and calculating the amount of
tax payable by him and further procedure of
imposing that tax liability on that person.

9. PREVIOUS YEAR-SEC:2(34) & SEC 3(FINANCIAL YEAR )
&ASSESSMENT YEAR-SEC 2(9)
 Previous Year is the financial year, in which the
assessee earns income.A Financial Year (FY) is the period
between 1 April and 31 March – the year in which you earn an
income.
 Assessment year (AY) is the year that comes after the FY.
This is the time in which the income earned during FY is
assessed and taxed. Both FY and AY start on 1 April and end
on 31 March.
 For instance, FY 2020-21 and AY 2021-22

10. EX.( PY & AY)
Period Previous Year Year Assessment Year
1 April 2019 to 31
March 2020
2019-20 2020-2021
1 April 2018 to 31
March 2019
2018-19 2019-2020

11. PERSON:
As per section 2(31) of Income-Tax Act 1961, a Person
would be any one who is-
 An Individual
 A HUF (Hindu Undivided Family)
 A Company
 A Firm
 An association of person or body of
individuals
 A local Authority
 Every artificial and juridical person who is not
included in any of the above mentioned
category.

12. INCOME
Income is money that a person or
a business receives in return for
working, providing a product or
service, or investing capital. A
person's income may also derive
from a pension, a government
benefit, or a gift.

13. INCOME –DEFINITION ( SEC-2(24)
Income includes :
1.Profits and gains
2.Dividend
3.Voluntary Contributions received by a trust. Voluntary contributions received by a trust
are included in the definition of income. As such contributions received by following
types of trusts, funds, associations, bodies etc. are included in the income of such bodies.
i.Contributions received by a trust created wholly or partly for charitable or
religious purposes.
ii.Contributions received by a scientific research association.
iii.Contributions received by a fund or institution set up for charitable purposes and
notified u/s 10(23c)(iv)(v).
iv.Contribution received by any university or other educational institution, hospital
referred in section 10(23c).
4.The value of any perquisite or profit in lieu of salary taxable under section 17(2)(3)
5.Any special allowance or benefit, other than perquisite included under sub-clause (iii),
specifically granted to the assessee to meet expenses wholly, necessarily and exclusively
for the performance of the duties of an office or employment of profit

14. INCOME –DEFINITION ( SEC-2(24)………
6.Any allowance granted to the assessee either to meet his personal expenses at the
place where the duties of his office or employment of profit are ordinarily performed
by him or at a place where he ordinarily resides or to compensate him for the increased
cost of living
7.Value of any benefit or amenity, whether convertible into money or not, obtained by a
representative assessee or by any person on whose behalf such benefit is received by
representative assessee and sum paid by representative assessee in respect of any
obligation which hut for such payment would have been payable by the person on
whose behalf representative assessee has made such payments
A.The profits and gains of any business of banking (including providing credit
facilities) carried on by a co-operative society with its members;
8.The value of any benefits or perquisites, whether convertible into money or not,
obtained from a company either by a director or by a person, who has a substantial
interest in the company, or by a relative of a director of such person, and any sum paid
by such company in respect of any obligation but for which, such payment would have
been payable by the director or other person aforesaid

15. 9.Any sum chargeable to income-tax under section 28(u) and (iii) or section 41 or section 59;
10.Any sum chargeable to tax u/s 28 (iiia)
11.Any sum chargeable to tax u/s 28(iiib)
12.Any sum chargeable to tax u/s 28 (iiic) , -
13.The value of any benefit or perquisite taxable under section 28 (iv)
14.Any capital gain taxable under section 45
15.Any sum whether received or receivable in cash or in kind under an agreement for—not
carrying out any activity in relation to any business ; or not sharing any know-how, patent,
copyright, trade-mark, license, franchise or any other business or commercial right of similar
nature or information or technique likely to assist in the manufacture or processing of goods or
provision of services
16.The profit and gains of any business of insurance carried on by a mutual insurance company or
by a co-operative society, computed in accordance with section 44 or any surplus taken to be such
profits and gains by virtue of provisions contained in the first schedule
17.Any winnings from lotteries, crossword puzzles, races including horse races, card games and
other games of any sort or from gambling or betting of any form or nature whatsoever
18.Any sum received by the assessee as his employers’ contributions to any provident fund or
superannuation fund or any fund set up under the provisions of the Employee’s State Insurance
Act, 1948 or any other fund for the welfare of’ such employees
19.Any sum received under a key man insurance policy including the sum allocated by way of
bonus on such policy
20.Any sum received by an individual or HUF from any person during 2013-14
A.in cash or by issue of cheque ordraft or by any other mode or by way of credit
B.otherwise than by way of consideration for goods or services but does not include

16. Thank you