Professional Documents
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Income Tax
Presented to:
Sanket Upadhyay-70 Rhutuja Gharat-82 Amey Parab-79 Mayuri Ghag-83 Nishant Hande-84 Apurva Singh-62
WHAT IS TAX??????????
A sum of money demanded by government for its support or for specific facilities or services, levied upon incomes, property, sales etc.
OR
A tax "is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority". Taxes consist of direct tax or indirect tax
DEVELOPMENT OF COUNTRY
CIVILISATION
TAXES IN INDIA
Some minor taxes are also levied by the local authorities such the Municipality or the Local Council.
Major tax enactment in India passed by the Parliament, which imposes a tax on income of individuals and corporations. This Act imposes a tax on income under the following five heads: Income from house and property Income from business and profession Income from salaries Income in the form of Capital gains Income from other sources
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a)
b)
c) d)
e)
India-territory of India as defined under International law. Applicable to person residing in India as well as to the income arising in India.
SECTION 2
ASSESSMENT YEAR PREVIOUS YEAR PERSON INCOME
The period of 12 months commencing on the 1st day of April every year. The Assessment Year is the Financial Year of the Govt. of India during which income a person relating to the relevant previous year is assessed to tax. The year in which whole of this process is under taken is called Assessment Year. Example- Assessment year 2008-09 which will commence on April 1, 2010, will end on March 31, 2011. 10
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PERSON
An Individual a Hindu undivided family (HUF) a company Firm Association of Persons Local Authority Artificial juridical person
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INCOME
Income is a periodical monetary return with some sort of regularity Profit Dividends Perquisites Special Allowances Capital Gains Winning from Lotterys
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INDIRECT TAXES
An Indirect tax is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the customer). An indirect tax is one that can be shifted by the taxpayer to someone else. An Indirect tax may increase the price of a good so that consumers are actually paying the tax by paying more for the products. The some important indirect taxes imposed in India are as under: Customs Duty Central Excise Duty Service Tax Sales Tax Value Added Tax (VAT) Securities Transaction Tax (STT)
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Social Welfare
Foreign exchange Regional Development
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RESIDENTIAL STATUS
The three residential status:
Resident Ordinarily Residents living in India at least 182 days during previous year In India 365 days during 4 years preceding previous year & 60 days in previous
year.
Resident but not Ordinarily Residents Non-resident in India 9 out of 10 years preceding previous year or have been in India in total 729 or less days out of last 7 years preceding the previous year. Non Residents
Non Residents are exempt from tax if accrue or arise or deemed to be accrue or arise outside India. Taxable if income is earned from business or profession 18 setting in India or having their head office in India.
fixed deposit is Rs. 5,000 in a bank, TDS at 10% and education cess
at 2% i.e. a total of 10.2% will be deducted at the time of credit or at the time of payment, whichever is earlier.
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TCS
Unlike tax deducted at source, TCS is collected by a seller of certain specified goods at the specified rates on the purchase of the goods and it is
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What leads to income tax raids, searches and seizures? The main reasons are non-compliance with summons under Section 131(1) of the Income Tax Act, 1961, or the possession of undisclosed property or income. It is therefore absolutely necessary for a current income tax assessee or a likely income tax assessee to comply with the summons or notice issued by the Assessing Officer, or any other such authorised person. A tax raid may also be conducted against a person in possession of undisclosed income or property not belonging to him but to someone else
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Make correct disclosure of income and wealth in returns. Comply with summons or notices to prevent a tax raid. Preserve important vouchers and other documentary evidence for the acquisition of assets.
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VODAFONE CASE-STUDY
Vodafone International Holdings B.V. vs. Union of India & Anr. An Analysis of the Judgment by Shalin on February 25, 2012 The battle between the Income Tax Department and telecom giant Vodafone which continued for over four years has finally come to an end with the Supreme Court giving its ruling in favour of Vodafone International Holdings. The Supreme Court in its landmark decision has set aside the
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The Apex Court held that the Government has no Jurisdiction over Vodafones
purchase of mobile assets in India as the transaction took place in Cayman Islands and Indian authorities have no jurisdiction over transactions, which have taken place outside the country. The Supreme Court has also ordered the IT department to refund Vodafone Rs. 2,500 crore with 4 percent interest. This long awaited decision will boost the investors confidence globally re-establishing the independence of Indian Judiciary. The aspect of whether a transaction between 2 non-residents can be taxed in India was dealt in detail by the Bombay High Court. The High Court held that the jurisdiction of a State to Tax a non-resident is based on the nexus connecting the person sought to be taxed with the jurisdiction which seeks to tax. The question as to whether the sum paid to a non-resident or a foreign company pursuant to a transaction is chargeable to tax is determined by sections 5(2), 9(1) and 195 of the Income Tax act, 1961. 24
The below diagrammed table will provide distinct clarity on Income Chargeability on the basis of ones Residential Status:-
Type of Income
ROR
RNOR
Non Resident
Indian Income
Taxable in India
Taxable in India
Taxable in India
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Type of Income
ROR
RNOR
Non Resident
Foreign Income
If it is Business Income business is control wholly or partly from India It is from Income from Profession which is setup in India
Taxable in India
Taxable in India
Taxable in India
Taxable in India
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Thank You
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