TAXATION LAW
By: Manali Bansal

TAX
A tax is a mandatory fee or financial charge
levied by any government on an individual or an
organization to collect revenue for public works
providing the best facilities and infrastructure. The
collected fund is then used to fund different public
expenditure programs.
Tax is a mandatory contribution levied on an
individual or corporation by a government body.

WHY DOES THE GOVERNMENT COLLECT
TAXES?
 Taxes are the primary source of revenue for most
governments. Among other things, this money is
spent to improve and maintain public infrastructure,
including the roads we travel on, and fund public
services, such as schools, emergency services,
and welfare programs.
 3 major sources of government revenue

UTILIZATION OF COLLECTED TAXES BY
GOVERNMENT
 War expenditures
 The enforcement of law and public order
 Economic infrastructure
 Government operations
 Education system
 Healthcare system
 Unemployment Benefits
 Pension Schemes
 Public transportation, energy, water, and waste
management systems, common public utilities, etc.

CHARACTERISTICS OF TAXES
 It is compulsory
 It is a contribution
 No direct benefits
 Public Benefits
 Paid out of income of the tax payers
 Government has power to impose tax
 Economic growth & public welfare

CHARACTERISTICS OF GOOD TAX SYSTEM
 Equity
 Certainty
 Economy
 Convenience
 Redistribution
 Flexible

OBJECTIVES
 Revenue
 Social objectives
 Social welfare
 Redistribution of wealth
 Economic growth
 Government policies enforcement
 Diversion of resources to other essential channels
 Economic stability

HISTORY OF TAX SYSTEM IN INDIA
 Ancient Times:
 Manusmriti (first legal constitution of India)
 Kautilya’s Arthashastra (300BC)
 Modern Times:
 Income Tax Act, 1860
 Income Tax Act, 1886
 Income Tax Act, 1918
 Income Tax Act, 1922
 Income Tax Act, 1961

TAX STRUCTURE
 Article 265
 Article 246

TYPES OF TAXES
 Direct Taxes
 Indirect Taxes

COMPONENTS OF INCOME TAX LAW
 Income Tax Act, 1961
 Annual Finance Act
 Income Tax Rules, 1962
 Notifications
 Circulars/Clarifications
 Judicial Decisions (Case Laws)