Direct Tax Law OR Income tax

Introduction to income tax :Overview : • Passed in September 1961• Come into operation i.e. of

01.04.1962• Extends to whole of India.• Rate of IT are given in the ‘finance

act’ passed by the parliament every year

Meaning of Income Tax

o Income tax is a direct tax In case of direct tax the burden and

incidence are on the same person who pays the tax.

But in the case of indirect tax the burden is on the one and the incidence on another.

Exempted Incomes

Meaning of Exempted Incomes: Agricultural income fully exempted u/s 10(1) Share of income from HUP-fully exempted Share of income from firm assessed as firm (PEAF)

fully exempted u/s 10(2A) Any income from investment by an NRI in bonds

and securities –fully exempted. No exemption such bonds issued after 1.06.2002

Interest paid to a non resident person who is a person of Indian origin-full exempted . No exemption on such bonds issued after 1.06.2002

Travel concession to an Indian citizen employee-exempted up to limits laid down u/s 10(5)

Meaning :PAN CARD As permanent account number is a ten

digit alphanumeric number issued in the form of laminated ,by the income tax department to any persons who applies for it or to whom the department allots the number without an application .

Brief Introduction of Heads Of Incomes :

Under income tax 1961 (section 14) income of a person is calculated under various defined heads of income. The total income is first assessed under heads of income and then it is charged from as Income Tax as under rules of income tax act . According income tax act under section 14:

There are following heads of income under which total income of a person is calculated :

Salary House property Profit in business Capital gains Other income sources

1ST HEAD OF INCOME : Salary Overview : An income can be taxed

under head salaries if there is relationship of an employer and employee between the payer and payee. If this relationship does not , then the income would not be deemed to be income from salary

• If there is no element of employer-employee relationship the income shall not be assessable under this head of income

2nd HEAD OF INCOME : House property Overview : Tax on income from house property is the

tax on rental income which is being earned from the house property. However in case the property is not being rented out, tax would be levied on the expected rent that would have been received if this property was rented out.

• Income from house property is perhaps the only income is charged to tax on notional basis. Tax under this head does not only include income from letting out of house property but also includes income from letting out of commercial properties & all types of properties. Various deductions like:

• Standard deduction• Deduction for municipal taxes paid• Deduction for interest on home loan is also allowed under

this head of income.

3rd HEAD OF INCOME : Profits & gains from business or profession

Any income earned from any trade/commerce/ manufacture/profession shall be chargeable under this head of income after deducting specified expenses.

4th HEAD OF INCOME : Capital Gains Overview : Any profit or gains

arising from the transfer of a capital asset effected in the financial year shall be chargeable to Income tax under the head ‘Capital Gains’ & shall be deemed to be the income of the year in which the transfer took place unless such capital gain is exempt under SECTION 54,54B,54D,54EC,54ED,54F OR 54GA

5th HEAD OF INCOME :Other income sources

Overview : Any income which is not

chargeable to tax under the above mentioned 4 heads of income shall be chargeable under this head of income provided that income is not exempt from the computation of total income

E-Filing

Instructions about E-filing :

Historical Perspective about e-filing

TYPES OF E-FILING

Diagram of types of e-filing

Procedure of e-filing :

THANK YOU …………..

Submitted by :

Megha Sharma BBA – 4th

sem… Roll no : 5821