BASIC KNOWLEDGE OF INCOME TAX LAW
Income Tax Law
Income Tax Act,1961
Income Tax Rules, 1962
Circulars & Clarification
Judicial
Ministry of Finance is the Implementing Authority of Income Tax Law.
Ministry of Finance is Headed By Finance Minister.
It has two departments namely:
Department of Revenue
Department of Expenditure
Sources Of Revenue of Department.
Direct Tax- It is Governed by the Central Board of Direct Taxes
Indirect Tax- It is Governed by the Central Board of Excise & Customs.
When any tax is levied, it has two(2) effects:
Impact of tax- Who is first effected, means immediate effect.
Incidence of tax- Who is ultimately effected.
DIRECT TAX
If Impact and Incidence of tax is on the same person, and cannot be shifted onto any other person, it is called Direct Tax. i.e Tax is paid directly to the Government by the persons on whom it is imposed.
INDIRECT TAX
If Impact Of tax is on one person and Incidence of Tax is on the other Person, it is called Indirect Tax. i.e tax is collected by a person from the other person who ultimately bears the economic burden of tax.
Central Board Of Direct Taxes
CBDT is the implementing/administrative statutory authority of Direct Taxes, It has got delegative legislation to make Rules in relation thereto.
Notification
It is a notice to the public that a rule have been made by the CBDT. It is issued in the Magazine of Government of India "Offical Gazzette of India." Every notification has got unique number and date.
Hierarchy Under CBDT (Central Board Of Direct Taxes)
Chief Commissioner Of Income Tax/Director General Of Income Tax
Commission of Income Tax/Director Of Income tax
Additional Commissioner Of Income tax/Additional Director of Income tax.
Joint Commissioner of Income tax/ Joint Director of of Income tax
Deputy Commissioner of Income tax/ Deputy Director of Income tax.
Assistant Commissioner of Income tax/ Assistant Director of Income tax.
Income tax Officer.
Income tax Inspector.
1 What is Tax?
Tax is fee charged/levied by the government on the income or on a product or service
2 Why taxes are levied
Taxes are the basic source of the Revenue of the government , which is ultized for meeting the expenditure of the government on defence, health care, education , developing infrastructure facilities etc.
3 Types Of Taxes
There are two types of Taxes
Direct Tax : It is further classified into (a) Income Tax and (b) Wealth Tax.
Indirect Tax : It is further classified into (a) Excise Duty (b) Custom Duty ( c ) Service Tax (d) Sales tax/Value Added Tax.
4 Income Tax Law in India
Income tax law in India consists of the following Components:
Income Tax Act
Annual Finance Act
Income Tax Rules
Circulars and Notifications
Legal Decision of Courts
5 Income Tax Act
This Act came into force on 1st April, 1962, The Act contains 298 Sections and XVI schedules. The Finance Act passed by the parliament , brought into additions and deletion every year.
6 Annual Finance Act
Every year Finance Minister of India presents the Budget in the Parliament. Part A of the speech contains the proposed policies in fiscal areas. Part B of the speech Contains the detailed tax Proposal. The same are produced in the form of Finance Bill in the Parliament and once the same is approved by the Parliament and gets assent of the President, it thus become the Finance Act
7 Income- Tax Rules
CBDT is empowered to make rules from time to time for the proper administration of the Income Tax Act and for the carrying out the Purpose of the Act. These rules are collectively called Income Tax rules, 1962.
8 Circular and Notification.
Circulars are issued by CBDT from time to time to deal with the specific problems or clarifying the doubt of the provision of the Act. These are issued for the guidance of the officer or of the Assessse. Circulars are bindiong on the Income Tax department, though not on the Assesse.
9 Legal decision of Courts/Case Laws
Since it is not possible for the Parliament to provide for all issues that may arise in the implementation of the Act. Hence Judiciary will hear the disputes between the department and the assesses and give decision on various issues. Supreme court is the Apex court of the Country and the law laid down by the Supreme Court is the law of land.
Income Tax Law
Income Tax Act,1961
Income Tax Rules, 1962
Circulars & Clarification
Judicial
Ministry of Finance is the Implementing Authority of Income Tax Law.
Ministry of Finance is Headed By Finance Minister.
It has two departments namely:
Department of Revenue
Department of Expenditure
Sources Of Revenue of Department.
Direct Tax- It is Governed by the Central Board of Direct Taxes
Indirect Tax- It is Governed by the Central Board of Excise & Customs.
When any tax is levied, it has two(2) effects:
Impact of tax- Who is first effected, means immediate effect.
Incidence of tax- Who is ultimately effected.
DIRECT TAX
If Impact and Incidence of tax is on the same person, and cannot be shifted onto any other person, it is called Direct Tax. i.e Tax is paid directly to the Government by the persons on whom it is imposed.
INDIRECT TAX
If Impact Of tax is on one person and Incidence of Tax is on the other Person, it is called Indirect Tax. i.e tax is collected by a person from the other person who ultimately bears the economic burden of tax.
Central Board Of Direct Taxes
CBDT is the implementing/administrative statutory authority of Direct Taxes, It has got delegative legislation to make Rules in relation thereto.
Notification
It is a notice to the public that a rule have been made by the CBDT. It is issued in the Magazine of Government of India "Offical Gazzette of India." Every notification has got unique number and date.
Hierarchy Under CBDT (Central Board Of Direct Taxes)
Chief Commissioner Of Income Tax/Director General Of Income Tax
Commission of Income Tax/Director Of Income tax
Additional Commissioner Of Income tax/Additional Director of Income tax.
Joint Commissioner of Income tax/ Joint Director of of Income tax
Deputy Commissioner of Income tax/ Deputy Director of Income tax.
Assistant Commissioner of Income tax/ Assistant Director of Income tax.
Income tax Officer.
Income tax Inspector.
1 What is Tax?
Tax is fee charged/levied by the government on the income or on a product or service
2 Why taxes are levied
Taxes are the basic source of the Revenue of the government , which is ultized for meeting the expenditure of the government on defence, health care, education , developing infrastructure facilities etc.
3 Types Of Taxes
There are two types of Taxes
Direct Tax : It is further classified into (a) Income Tax and (b) Wealth Tax.
Indirect Tax : It is further classified into (a) Excise Duty (b) Custom Duty ( c ) Service Tax (d) Sales tax/Value Added Tax.
4 Income Tax Law in India
Income tax law in India consists of the following Components:
Income Tax Act
Annual Finance Act
Income Tax Rules
Circulars and Notifications
Legal Decision of Courts
5 Income Tax Act
This Act came into force on 1st April, 1962, The Act contains 298 Sections and XVI schedules. The Finance Act passed by the parliament , brought into additions and deletion every year.
6 Annual Finance Act
Every year Finance Minister of India presents the Budget in the Parliament. Part A of the speech contains the proposed policies in fiscal areas. Part B of the speech Contains the detailed tax Proposal. The same are produced in the form of Finance Bill in the Parliament and once the same is approved by the Parliament and gets assent of the President, it thus become the Finance Act
7 Income- Tax Rules
CBDT is empowered to make rules from time to time for the proper administration of the Income Tax Act and for the carrying out the Purpose of the Act. These rules are collectively called Income Tax rules, 1962.
8 Circular and Notification.
Circulars are issued by CBDT from time to time to deal with the specific problems or clarifying the doubt of the provision of the Act. These are issued for the guidance of the officer or of the Assessse. Circulars are bindiong on the Income Tax department, though not on the Assesse.
9 Legal decision of Courts/Case Laws
Since it is not possible for the Parliament to provide for all issues that may arise in the implementation of the Act. Hence Judiciary will hear the disputes between the department and the assesses and give decision on various issues. Supreme court is the Apex court of the Country and the law laid down by the Supreme Court is the law of land.
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