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Question 1: Write Note On: ST ST

1. Assessment year means the period from April 1 to March 31 when income earned in the previous financial year is taxed. 2. Income is broadly defined and includes profits, gains, dividends, perquisites, lottery winnings, and capital gains. 3. Total income refers to the total taxable income computed under the Income Tax Act and includes all income earned in India or abroad for residents, and income earned in India for non-residents.

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36 views

Question 1: Write Note On: ST ST

1. Assessment year means the period from April 1 to March 31 when income earned in the previous financial year is taxed. 2. Income is broadly defined and includes profits, gains, dividends, perquisites, lottery winnings, and capital gains. 3. Total income refers to the total taxable income computed under the Income Tax Act and includes all income earned in India or abroad for residents, and income earned in India for non-residents.

Uploaded by

Viren Kamani
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Question 1: Write note on

a. Assessment Year
Assessment Year means the period of twelve months starting from 1st of April
every year and ending on 31st of March of the next year. The income of a
Previous Year or Financial Year of an assessee is taxed during the following
assessment year at the rates prescribed for such assessment year by the relevant
Finance Act.

b. Income
The definition of the term ‘Income’ in section 2(24) is inclusive and not
exclusive. Therefore, the term ‘Income’ not only includes those items which
are included in section 2(24) but also includes such items which the term
signifies according to its general and natural meaning. The definition of the
expression ‘Income’ is rather longish and it is not necessary for our purpose to
deal with its various aspects of detail. Income for instance includes: Profits and
gains, dividend income, voluntary contributions received by a trust created
wholly or partly for charitable or religious purpose. Income also includes the
value of any perquisite or profit in lieu of salary and also any special allowance
or benefit other than perquisite specially granted to a person to meet expenses
wholly, necessarily and exclusively for the performance of duties of an office
or employment of profit. Further, income includes any capital gains chargeable
u/s 45, any winning from lotteries, crossword puzzles, races, including horse
races, card games & other games. There are other heads of earning included in
the definition of income but only major items of income are given above.

Income 52(24)

Income includes

1. Profits and Gains


2. Dividend
3. The value of any perquisite or profit in lieu of salary taxable under
Classes (2) & (3) of Sec. 17
4. Any special allowance
5. Income from Lottery, crossword puzzles, Races Gambling &
Betting

Total Income:
As per S.2(45), ‘total income’ means the total amount of income referred to in
S.5, computed in the manner laid down under this Act.
Scope of total income:
1. The scope of total income as per sec. 5 of any previous year of a person
who is resident includes all income whatever source derived which:
a) Is received or is deemed to be received in India in such
year by or on behalf of such person or
b) Accrues or arises or is deemed to accurue or arise to him
in India during such year or
c) Accrues or arises to him outside India during such year
2. Subject to the provisions of this act total income of any previous year of
the person who is non-resident includes an income from whatever source
derived which:
a) Is received or deemed to be received in India in such year
by or on behalf of such person or
b) Accrues or arises or is deemed to accurue or arise to him in
India during such year

S.5 of the Act deals with Scope of total income U/S 5(1) the total income of
any PY of a person who is a resident, is fully taxable under the Act, whether yt
the same accrues or arises in India or outside India. In other words all the
income of a person, who is resident in India, is liable to tax under the Act
irrespective of the fact whether the same earned in India or outside India.
However, as per proviso to S.5(1) in the case of a person who is resident but
not ordinary resident (R but NOR) in India, the income, which accrues or arises
to him outside India, shall not be included in the total income unless it is
derived from a business controlled in or a profession set up in India.
As per S.5 (2) the total income of any PY of a person who is non-resident (NR)
includes only the income which accrues or arises to him in India. In other
words, in case of a non-resident only income accrued or received in India liable
to tax under the IT Act.
Thus it is clear that in the case of a person who is NR or R but not NOR in
India, any income earned by him outside India, is not liable to tax under the IT
Act.

C. Rights and Duties of tax payer


Filling of the Income Tax return

Advance tax shall be payable during the financial year in every case where the
amount of such tax payable by the assessee during the year as computed is five
thousand and more.

Liability for payment of Advance Tax

All the assessee other than companies who are liable to pay advance tax, the
same will be paid in three installments during the financial year and due date of
each installment and the amount of such installment shall be specified below.

Due date of installment Amount Payable


1. On or before the 15th September Not less than thirty percent of such
advance tax
2. On or before the 15th December Not less than sixty percent of such
advance tax
3. On or before the 15th March The full amount of tax liability of the
financial year.

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