Basic concept
income tax is a tax on income, whether actual or deemed,in cash or in kind.According to Article 270 of the construction of India, levy and collection of taxes of income (excluding agricultural income) is within the power of the central government. The net tax proceed determined in the prescribed manner are,however,distributed between the centre and the states as per the recommendation of the finace commission,which is appointed by the recommendation of the finance commission, which is appointed by the president of India in every five years.according to art 265 of the constitution of India. Levy and collection of any tax shall be under the authority of a state law(a valid act of a componets legislation). The income tax Act 1961 extends to the whole of India.
the main thing under the income tax act cenres round the term "taxable income" and it shall be determined on the basis of residential status of the assessed. Thus there are certain income under the income tax Act which are specifically excluded, certain deduction are available which computing income under the different heads e.g . Salary,house property,profits and gains of business or profession, capital gains and income from other sources.moreover in computing taxable income one has to consider the deemed income.clubbing of incomes, setoff and carry forward of losses.once the taxable income is ascertained,the next step is to ascertain the income tax payable by the assesse.net tax payable is ascertained by dedicating the tax rebates, reliefs, advance tax paid and tax deducted at source from the tax so payable.
income tax is a tax on income, whether actual or deemed,in cash or in kind.According to Article 270 of the construction of India, levy and collection of taxes of income (excluding agricultural income) is within the power of the central government. The net tax proceed determined in the prescribed manner are,however,distributed between the centre and the states as per the recommendation of the finace commission,which is appointed by the recommendation of the finance commission, which is appointed by the president of India in every five years.according to art 265 of the constitution of India. Levy and collection of any tax shall be under the authority of a state law(a valid act of a componets legislation). The income tax Act 1961 extends to the whole of India.
the main thing under the income tax act cenres round the term "taxable income" and it shall be determined on the basis of residential status of the assessed. Thus there are certain income under the income tax Act which are specifically excluded, certain deduction are available which computing income under the different heads e.g . Salary,house property,profits and gains of business or profession, capital gains and income from other sources.moreover in computing taxable income one has to consider the deemed income.clubbing of incomes, setoff and carry forward of losses.once the taxable income is ascertained,the next step is to ascertain the income tax payable by the assesse.net tax payable is ascertained by dedicating the tax rebates, reliefs, advance tax paid and tax deducted at source from the tax so payable.