Principles of Taxation Notes | B.B.A. LL.B. (Five Years) Semester 10 | SPPU | munotes

Contents

Module 01 FOUNDATIONS OF TAXATION LAW AND BASIC CONCEPTS

1. Two Income-tax Acts: 1961 and 2025 1
2. Taxation in Ancient India 7
3. Income Tax Under British Rule, 1860 to 1947 10
4. From the 1961 Act to the 2025 Act 14
5. Indirect Taxes from Excise to GST 18
6. No Tax Without Authority of Law 24
7. Who May Tax What: The Taxing Entries 30
8. Sharing the Revenue Between the Union and the States 35
9. Limits on the Power to Tax 39
10. Tax Laws, Fundamental Rights and the Money Bill 44
11. What a Tax Is: Tax, Fee, Cess and Surcharge 50
12. The Kinds of Taxes: Direct and Indirect, and How Each Falls 56
13. Reading a Taxing Statute 60
14. The Charge of Income Tax and the Annual Finance Act 65
15. Income 69
16. Person 74
17. Assessee 79
18. Previous Year, Assessment Year and Tax Year 83
19. Capital and Revenue Receipts 87
20. Gross Total Income, Total Income and Taxable Income 94
21. The Two Tax Regimes 98
22. Rates, Surcharge and Cess 102
23. Residence of an Individual 106
24. Residence of a HUF, Firm, Company and Others 111
25. Scope of Total Income 117
26. Residential Status: Worked Problems 123
27. Income Deemed to Accrue or Arise in India 129
28. Agricultural Income 137
29. Incomes Not Included in Total Income 143
30. Exempt Incomes of Individuals and HUFs 149
31. Exempt Receipts of Employees 154

Module 02 COMPUTATION OF TOTAL INCOME

1. The Five Heads of Income 161
2. Salary: The Charge and the Employer-Employee Relation 165
3. Allowances 169
4. Perquisites 173
5. Profits in Lieu of Salary and Retirement Benefits 178
6. Deductions from Salary 182
7. Income from Salary: Worked Problems 185
8. House Property: The Charge 188
9. Annual Value 192
10. Deductions from House Property 196
11. Arrears of Rent, Co-owners and Deemed Owners 199
12. Income from House Property: Worked Problems 203
13. Business or Profession: The Charge 206
14. Computing Business Income: The Allowable Deductions 211
15. Depreciation 220
16. What Is Not Deductible 228
17. Deemed Profits, Foreign Exchange and Special Costs 235
18. Research, Preliminary Expenses and Other Special Allowances 240
19. Special Businesses: Insurance, Mineral Oil, Banks and Non-residents 245
20. Presumptive Taxation 249
21. Business and Profession: Worked Problems 253
22. Capital Asset and Transfer 257
23. Capital Gains: The Charge 262
24. Transactions Not Regarded as Transfer 268
25. Computing Capital Gains 273
26. Special Cases: Depreciable Assets, Slump Sale and Deemed Values 278
27. Exemptions from Capital Gains 283
28. Reference to a Valuation Officer 288
29. The Rates on Capital Gains 292
30. Capital Gains: Worked Problems 296
31. Income from Other Sources 299
32. Gifts and Receipts Without Consideration 304
33. Other Sources: Deductions and Disallowances 308
34. Clubbing: Transfers of Income and Revocable Transfers 312
35. Clubbing: Spouse, Minor Child and Son's Wife 316
36. Clubbing of Income: Worked Problems 322
37. Set Off of Losses 326
38. Carry Forward of Losses 330
39. Losses After a Change of Ownership, and After a Search 333
40. Set Off and Carry Forward: Worked Problems 337
41. Deductions from Gross Total Income: The Scheme 340
42. Deductions for Savings, Insurance and Pension 344
43. Deductions for Disability and Medical Treatment 349
44. Deductions for Interest on Education, Housing and Vehicle Loans 353
45. Deductions for Donations, Contributions and Rent 357
46. Deductions for Interest on Deposits, Royalties and Authors 361
47. Deductions for Undertakings, Co-operatives and Businesses 364
48. Rebate and Relief 368
49. Computing Total Income and Tax Liability: Worked Problems 372
50. Assessment of a Hindu Undivided Family 375
51. Successions, Partitions, Liquidations and Directors' Liability 380
52. Firms, Associations and Their Members 386
53. Registered Non-profit Organisations 391
54. Legal Representatives, Representative Assessees and Executors 398

Module 03 CORPORATE TAXATION, INTERNATIONAL TAXATION AND ANTI-AVOIDANCE MEASURES

1. Tax Regimes for Companies and Co-operatives, and Minimum Alternate Tax 404
2. Amalgamation 409
3. Demerger 414
4. Double Taxation Relief 418
5. Special Tax Regimes: Non-residents, Funds and Trusts 423
6. Transfer Pricing and the Arm's Length Price 429
7. Tax Evasion, Tax Avoidance and Tax Planning 433
8. The General Anti-Avoidance Rule 439
9. Deemed Income: Unexplained Credits, Investments and Expenditure 444
10. Cash Transactions and Electronic Modes 449
11. Other Anti-Avoidance Provisions 454

Module 04 TAX ADMINISTRATION, ASSESSMENT AND DISPUTE RESOLUTION UNDER INCOME-TAX LAW

1. Income-tax Authorities 458
2. Jurisdiction of Income-tax Authorities 464
3. Powers of Income-tax Authorities 470
4. PAN and the Return of Income 476
5. Books of Account and Tax Audit 485
6. Interest and Fees for Default 489
7. Advance Tax 493
8. Tax at Source: The Scheme 497
9. Tax Deducted from Salary 501
10. Tax Deducted from Other Payments 504
11. Tax Collected at Source 509
12. Certificates, Statements and the Deductor in Default 512
13. Refunds 517
14. Self-assessment and the Updated Return 523
15. Inquiry Before Assessment 530
16. Assessment: Processing and Scrutiny 536
17. The Types of Assessment 543
18. Best Judgment Assessment 549
19. Income Escaping Assessment 554
20. Faceless Assessment and E-proceedings 562
21. Time Limits, Rectification and the Notice of Demand 567
22. Collection and Recovery of Tax 574
23. Search, Seizure and Survey 584
24. Block Assessment of Search Cases 592
25. Appeals to the Joint Commissioner and Commissioner (Appeals) 599
26. The Income Tax Appellate Tribunal 605
27. Appeals to the High Court and the Supreme Court 612
28. The Dispute Resolution Panel and the Dispute Resolution Committee 618
29. Revision by the Commissioner 623
30. Penalty for Under-reporting and Misreporting of Income 629
31. Other Penalties 636
32. Penalty Procedure, Waiver and Limitation 641
33. Offences 647
34. Prosecution: Companies, Presumptions, Sanction and Special Courts 653

Module 05 GOODS AND SERVICES TAX: LEVY, COLLECTION AND COMPLIANCE

1. GST: Why It Exists and How It Is Built 658
2. GST in the Constitution 663
3. The GST Council: Structure, Powers and Functions 668
4. The IGST Act: Scope, Object, Definitions, Administration and Levy 673
5. The Maharashtra GST Act 677
6. Inter-State and Intra-State Supply 681
7. Settlement of IGST and the Rest of the IGST Act 685
8. GST Definitions II: Persons, Places, Turnover and Credit 690
9. GST Definitions I: Goods, Services, Business and Consideration 695
10. Scope of Supply 701
11. Composite and Mixed Supply 706
12. Levy, Collection and Reverse Charge 710
13. Composition Levy 715
14. Exemptions, Rates and the 2025 Rate Rationalisation 719
15. Time of Supply 726
16. Value of Supply 731
17. Place of Supply of Goods 735
18. Place of Supply of Services 738
19. Zero-rated Supply and Refund to Tourists 743
20. Input Tax Credit: Eligibility and Conditions 747
21. Apportionment and Blocked Credits 752
22. Credit in Special Circumstances, Job Work and Distribution 757
23. Registration: Who Must Register and How 762
24. Casual and Non-resident Persons, Amendment and Cancellation 767
25. Tax Invoice, Accounts and Returns 771
26. Payment of Tax, Interest and the Electronic Ledgers 777
27. Refunds Under GST 782

Module 06 GST ADMINISTRATION, ASSESSMENT AND LITIGATION

1. GST Officers and Their Powers 788
2. Assessment Under GST 793
3. Audit, Demands and Recovery of Short-paid Tax 797
4. Inspection, Search, Seizure and Arrest 802
5. Recovery, and Liability in Special Cases 807
6. Advance Ruling Under GST 812
7. GST Appeals, Revision and the Appellate Tribunal 817
8. GST Offences and Penalties 827