Law of Taxation Notes | B.A. LL.B. (Five Years) Semester 7 | KSLU | munotes

Contents

Unit I General

1. Taxation: What This Paper Covers, and How to Read This Book 1
2. What a Tax Is: Tax, Fee, Cess and Surcharge 5
3. The Kinds of Taxes: Direct and Indirect, and How Each Falls 11
4. Taxation in Ancient India 16
5. The Wealth-tax Act, 1957 19
6. No Tax Without Authority of Law 25
7. Who May Tax What: The Taxing Entries 31
8. Sharing the Revenue Between the Union and the States 36
9. Delegation of Taxing Power to the States and Local Bodies 40
10. Limits on the Power to Tax 45
11. Immunity of State Agencies and Instrumentalities from Tax 50
12. Tax Laws, Fundamental Rights and the Money Bill 55
13. The Commerce Clause: Inter-State Trade and Taxation 61
14. Retrospective Taxation 66
15. Reading a Taxing Statute 71
16. Tax Evasion, Tax Avoidance and Tax Planning 76
17. The General Anti-Avoidance Rule 82
18. Transfer Pricing and the Arm's Length Price 87
19. Other Anti-Avoidance Provisions 91

Unit II Direct Tax Regime

1. Two Income-tax Acts: 1961 and 2025 95
2. Income Tax Under British Rule, 1860 to 1947 101
3. From the 1961 Act to the 2025 Act 105
4. The Income-tax Act and the Income-tax Rules 109
5. The Charge of Income Tax and the Annual Finance Act 113
6. Person 117
7. Assessee 122
8. Previous Year, Assessment Year and Tax Year 126
9. Income 130
10. Capital and Revenue Receipts 135
11. Gross Total Income, Total Income and Taxable Income 142
12. Residence of an Individual 146
13. Residence of a HUF, Firm, Company and Others 151
14. Scope of Total Income 157
15. Income Deemed to Accrue or Arise in India 163
16. Residential Status: Worked Problems 171
17. Agricultural Income 177
18. Incomes Not Included in Total Income 183
19. Exempt Incomes of Individuals and HUFs 189
20. Exempt Receipts of Employees 194
21. Registered Non-profit Organisations 201
22. The Five Heads of Income 208
23. Salary: The Charge and the Employer-Employee Relation 212
24. Allowances 216
25. Perquisites 220
26. Profits in Lieu of Salary and Retirement Benefits 225
27. Deductions from Salary 229
28. Income from Salary: Worked Problems 232
29. House Property: The Charge 235
30. Annual Value 239
31. Deductions from House Property 243
32. Arrears of Rent, Co-owners and Deemed Owners 246
33. Income from House Property: Worked Problems 250
34. Business or Profession: The Charge 253
35. Computing Business Income: The Allowable Deductions 258
36. Depreciation 267
37. What Is Not Deductible 275
38. Deemed Profits, Foreign Exchange and Special Costs 282
39. Research, Preliminary Expenses and Other Special Allowances 287
40. Special Businesses: Insurance, Mineral Oil, Banks and Non-residents 292
41. Presumptive Taxation 296
42. Books of Account and Tax Audit 300
43. Business and Profession: Worked Problems 304
44. Capital Asset and Transfer 308
45. Capital Gains: The Charge 313
46. Transactions Not Regarded as Transfer 319
47. Computing Capital Gains 324
48. Special Cases: Depreciable Assets, Slump Sale and Deemed Values 329
49. Exemptions from Capital Gains 334
50. Reference to a Valuation Officer 339
51. The Rates on Capital Gains 343
52. Capital Gains: Worked Problems 347
53. Income from Other Sources 350
54. Gifts and Receipts Without Consideration 355
55. Other Sources: Deductions and Disallowances 359
56. Deemed Income: Unexplained Credits, Investments and Expenditure 363
57. Clubbing: Transfers of Income and Revocable Transfers 368
58. Clubbing: Spouse, Minor Child and Son's Wife 372
59. Clubbing of Income: Worked Problems 378
60. Set Off of Losses 382
61. Carry Forward of Losses 386
62. Losses After a Change of Ownership, and After a Search 389
63. Set Off and Carry Forward: Worked Problems 393
64. Deductions from Gross Total Income: The Scheme 396
65. Deductions for Savings, Insurance and Pension 400
66. Deductions for Disability and Medical Treatment 405
67. Deductions for Interest on Education, Housing and Vehicle Loans 409
68. Deductions for Donations, Contributions and Rent 413
69. Deductions for Interest on Deposits, Royalties and Authors 417
70. Deductions for Undertakings, Co-operatives and Businesses 420
71. Rebate and Relief 424
72. Double Taxation Relief 428
73. The Two Tax Regimes 433
74. Rates, Surcharge and Cess 437
75. Tax Regimes for Companies and Co-operatives, and Minimum Alternate Tax 441
76. Firms, Associations and Their Members 446
77. Computing Total Income and Tax Liability: Worked Problems 451
78. PAN and the Return of Income 454
79. Self-assessment and the Updated Return 463
80. Electronic Filing and the Income-tax Portal 470
81. Faceless Assessment and E-proceedings 474
82. Inquiry Before Assessment 479
83. Assessment: Processing and Scrutiny 485
84. The Types of Assessment 492
85. Best Judgment Assessment 498
86. Income Escaping Assessment 503
87. Time Limits, Rectification and the Notice of Demand 511
88. Block Assessment of Search Cases 518
89. Legal Representatives, Representative Assessees and Executors 525
90. Successions, Partitions, Liquidations and Directors' Liability 531
91. Income-tax Authorities 537
92. Jurisdiction of Income-tax Authorities 543
93. Powers of Income-tax Authorities 549
94. Search, Seizure and Survey 555
95. Tax at Source: The Scheme 563
96. Tax Deducted from Salary 567
97. Tax Deducted from Other Payments 570
98. Tax Collected at Source 575
99. Certificates, Statements and the Deductor in Default 578
100. Advance Tax 583
101. Interest and Fees for Default 587
102. Collection and Recovery of Tax 591
103. Refunds 601
104. Appeals to the Joint Commissioner and Commissioner (Appeals) 607
105. The Income Tax Appellate Tribunal 613
106. Appeals to the High Court and the Supreme Court 620
107. Revision by the Commissioner 626
108. The Dispute Resolution Panel and the Dispute Resolution Committee 632
109. Settlement of Grievances 637
110. Advance Rulings 642
111. Penalty for Under-reporting and Misreporting of Income 647
112. Other Penalties 654
113. Penalty Procedure, Waiver and Limitation 659
114. Offences 665
115. Prosecution: Companies, Presumptions, Sanction and Special Courts 671
116. Cash Transactions and Electronic Modes 676
117. The Miscellaneous Provisions 681

Unit III Indirect Tax Regime

1. Indirect Taxes from Excise to GST 687
2. The Central Sales Tax Act, 1956 693
3. GST: Why It Exists and How It Is Built 700
4. GST in the Constitution 706
5. The GST Council: Structure, Powers and Functions 711
6. GST Definitions I: Goods, Services, Business and Consideration 716
7. GST Definitions II: Persons, Places, Turnover and Credit 722
8. GST Officers and Their Powers 727
9. Scope of Supply 732
10. Composite and Mixed Supply 737
11. Levy, Collection and Reverse Charge 741
12. Composition Levy 746
13. Exemptions, Rates and the 2025 Rate Rationalisation 750
14. Time of Supply 757
15. Value of Supply 762
16. Input Tax Credit: Eligibility and Conditions 766
17. Apportionment and Blocked Credits 771
18. Credit in Special Circumstances, Job Work and Distribution 776
19. Registration: Who Must Register and How 781
20. Casual and Non-resident Persons, Amendment and Cancellation 786
21. GSTN: the Goods and Services Tax Network and the Common Portal 790
22. Tax Invoice, Accounts and Returns 794
23. Payment of Tax, Interest and the Electronic Ledgers 800
24. Assessment Under GST 805
25. Audit, Demands and Recovery of Short-paid Tax 809
26. Advance Ruling Under GST 814
27. Refunds Under GST 819
28. Inspection, Search, Seizure and Arrest 825
29. Recovery, and Liability in Special Cases 830
30. GST Appeals, Revision and the Appellate Tribunal 835
31. GST Offences and Penalties 845
32. GST Transitional and Miscellaneous Provisions 856
33. GST on Imports and Exports 865
34. The Benefits of GST: Trade, Industry, E-commerce, Services and Consumers 869
35. GST, GDP and Inflation 873

Unit IV Indirect Tax Regime:

1. Inter-State and Intra-State Supply 877
2. Place of Supply of Goods 881
3. Place of Supply of Services 884
4. Zero-rated Supply and Refund to Tourists 889
5. Settlement of IGST and the Rest of the IGST Act 893
6. State GST and the Karnataka GST Act 898
7. GST and State Revenue: the Compensation to States Act 904
8. UTGST: GST in the Union Territories 909
9. Securities Outside GST: the Sale and Purchase of Securities 913
10. Securities Transaction Tax 916

Unit V Custom Law

1. What the Law of Customs Is 920
2. The Definitions That Do the Work 931
3. The Customs Establishment 938
4. The Customs Map: Ports, Airports, Stations and Areas 945
5. The Custom of Charging Customs Duties 951
6. The Duties in the Tariff: Basic, Integrated and Preferential 957
7. Trade Remedy and Emergency Duties 965
8. Classifying Goods: the First Schedule and Its General Rules 975
9. Prohibiting Imports and Exports: Section 11 982
10. Notified Goods: Detecting Illegal Imports 990
11. Specified Goods: Preventing Illegal Exports 997
12. The Charge Applied: Pilferage, Sets, Re-import and Derelict Goods 1004
13. Abatement and Remission: Damaged, Lost and Abandoned Goods 1011
14. Valuation: Section 14 and the 2007 Rules 1017
15. The Date That Fixes the Rate 1025
16. Assessment: Self-Assessment, Verification and Provisional Duty 1032
17. Recovery of Duties Not Levied or Short-Paid 1041
18. The Exemption Power: Section 25 1051
19. Withdrawing an Exemption: Promissory Estoppel Against the State 1059
20. Refunds Under Sections 26 and 26A 1067
21. The Refund Claim: Section 27 and Unjust Enrichment 1074
22. Duty Drawback 1083
23. Conveyances Arriving and Leaving India 1091
24. Clearance of Imported Goods 1100
25. Clearance of Export Goods and Payments 1108
26. Transit, Transhipment and Fishing Operations 1115
27. Baggage 1122
28. Goods by Post and Courier 1129
29. Ship's and Aircraft Stores 1135
30. Licensing Warehouses 1142
31. The Warehousing Bond and the Warehousing Period 1148
32. Manufacture in a Warehouse 1156
33. Moving and Clearing Warehoused Goods 1164
34. Improper Removal and the End of Warehousing 1172
35. Searching Persons 1180
36. Arrest Under the Customs Act 1189
37. Searching Premises, Examining Persons and the Section 108 Summons 1198
38. Seizure and Provisional Release 1209
39. Confiscating Improper Imports 1218
40. Confiscating Improper Exports and the Fraud Penalties 1227
41. Adjudication: Notice, Hearing and the Order 1238
42. Burden of Proof, Redemption Fine and Vesting 1246
43. The Offences 1255
44. SEZ Units and the Customs Law 1265