post graduation diploma in taxation project for gju studnts

7/29/2019 post graduation diploma in taxation project for gju studnts

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TRAINING REPORT ON TAXATION IN BUSINESS MANAGEMENTANNEXURE-i

PRACTICAL TRAINING REPORTON

TAXATION IN BUSINESS MANAGEMENT

SUPERVISOR:- SUBMITTED BY:-MR.ANIL KUMAR GUPTA MR. ASHUTOSH GOYAL

C/O MR. RAM KUMAR GUPTA ENROLLMENT NO. 11281114001

BHAMASHAH NAGAR HISAR SESSION 2011-2012

COURSE NAME PGDT

MR. ASHUTOSH GOYAL ENROLLMENT NO. 11281114001 PGDT 2011-12 1


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TRAINING REPORT ON TAXATION IN BUSINESS MANAGEMENT

(ANNEXURE-ii)

CERTIFICATEThis is to certify that Mr. Ashutosh Goyal Enrolment No. 11281114001 has

worked under my supervision to prepare his Practical Training Report in Taxation

on TAXATION IN BUSINESS MANAGEMENT. The work embodied in this

report is original and was conducted at from 1st January 2012 to 31st January

2012. The work has been submitted in part or full to this or any other university

for the award of any degree or diploma. His work and conduct during the training

period under my direct guidance was satisfactory and is recommended for

evaulatuion for the award of PG Diploma in Taxation

Date: ____________ Signature of Supervisor(with name and seal)

Name:

Designation:

Organisation:

Countersigned by Director/Principal of Study Center (with name and seal)



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ANNEXURE iii

RESUME OF SUPERVISOR

1.NAME

2.DESIGNATION

3.QUALIFICATION

4.AREA OF SPECIALISATION

5.EXPERIENCE

6.OFFICIAL ADDRESS

7.TELEPHONE NO.:

8.MOBILE NO.:

9.E-MAIL:

DATE:______________

I have supervised Mr. ASHUTOSH GOYAL

ENROLMENT NO. 11281114001 ON THE TOPIC TAXATION IN

BUSINESS MANAGEMENT

(SIGNATURE OF SUPERVISOR)

WITH SEAL



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(Annexure iv)

DECLARATION

I, ASHUTOSH GOYAL hereby declare that the practical training report entitled

TAXATION IN BUSINESS MANAGEMENT is my original work and neither

identical report has been prepared by me nor the same has been produced

elsewhere for publication purpose to get any award of Diploma/Degree from any

other institution/university in India or Abroad.

Place: HISAR

Date: Name of student(with signature)

MR. ASHUTOSH GOYAL

Enrolment No.11281114001

Session 2011-2012



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Table of Contents

.......................2

(ANNEXURE-ii).................................................................2

Table of Contents.................................................................5

SYNOPSIS..........................................................................6

OBJECTIVES......................................................................7LIMITATIONS OF THE STUDY......................................8

METHODOLOGY............................................................81

SCHEDULE.......................................................................82

REFERENCES..................................................................83



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SYNOPSIS

The project intends to undertake an intensive study of taxation in the Indian

Commodities Market along with Global Commodities Market and the working of

different commodities exchanges and finally the risk management techniques

used by them.

A commodity futures market (or exchange) is, in simple terms, defined as a

public market where commodities are contracted for purchase or sale at an

agreed price for delivery on a specified date. This purchase or sale of

commodities must be made through a broker who is a member of an organized

exchange and the purchase should be made under the terms and conditions of a

standardized futures contract.Also, as the factors that drive commodity prices

are observed to be different from the factors that drive equity prices,

commodities are perceived to be effective diversifying agents.

Commodity derivatives play a pivotal role in the price risk management process

especially in any agricultural surplus country. As unique hedging instruments

derivatives such as forwards, futures, swaps, options and exotic derivative

products are extensively used in the global market.

Commodity analysis will involve the study of the movement of different

commodity exchanges of world how each one affect the other, which commodity

exchanges set the trend, and how changes like government and international

policies, economic trends as indicated by the growth rate of the GDP, inflation etc

affect the market. The next step will be to study the commodity exchanges

respect to its structure, function, regulatory framework of FMC, vulnerability to

policies, budget, business cycle etc. This will be followed by the company

analysis which will involve financial analysis and future prospects.The study has surveyed the various publicly available websites of recognized

commodity exchanges and their organizational and the regulatory set up for

futures trading.



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OBJECTIVES

To find different parameters that decides the pricing of commodities at

different exchanges.

To compare the difference in the working of different exchanges locally

and globally.

Risk management techniques used by different commodities exchanges.

Identify the reasons about how and why some exchanges control the

prices of certain commodities.

To find out the effect of change in global commodity derivative on Indian

commodity derivatives

Where the Indian commodity derivative market stand as comparison to

global commodity market

To find the scope of Indian commodity derivative market



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LIMITATIONS OF THE STUDY

Time is less and I have to attend classes regularly

Internet problems and electricity problems

Time constraint due to which I had to limit my study to five commodity

exchanges.

Due to more use of secondary sources data inaccuracy may be there

Owing to the dynamic nature of the global economy in particular, the

findings of the report will not be applicable after a point of time.

No practical access to global market exchanges.

Busy schedule of companys employees so that give less time to me for

providing information.



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VARIOUS INCOME TAX AUTHORITIES

1.1. VARIOUS AUTHORITIES

Section of the Income Tax Act, 1961 provides for the administrative and judicial

authorities for administration of this Act. The Direct Tax Laws Act, 1987 has brought

far-reaching changes in the organizational structure. The implementation of the Act

lies in the hands of these authorities. The change in designation of certain authorities

and creation of certain new posts in the structure are the main features of

amendments made by The Direct Tax Laws Act, 1987. The new features of authorities

has been properly depicted in a chart on the facing page. These authorities have been

grouped into two main wings :

(i) Administrative [ Sec. 116 ]

(a) the Central Board of Direct Taxes constituted under the Central Boards

of Revenue Act, 1963 (54 of 1963),

(b) Directors-General of Income-tax or Chief Commissioners of Income-tax,

(c) Directors of Income-tax or Commissioners of Income-tax or

Commissioners of Income-tax (Appeals),

(c) Additional Directors of Income-tax or Additional Commissioners of

Income-tax or Additional Commissioners of Income-tax (Appeals),

(cca) Joint Directors of Income-tax or Joint Commissioners of Income-tax.

(d) Deputy Directors of Income-tax or Deputy Commissioners of Income-tax

or Deputy Commissioners of Income-tax (Appeals),

(e) Assistant Directors of Income-tax or Assistant Commissioners of

Income-tax,

(f) Income-tax Officers,

(g) Tax Recovery Officers,

(h) Inspectors of Income-tax.

(ii) Assessing Officer [ Sec. 2(7A)]



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"Assessing Officer" means the Assistant Commissioner or Deputy

Commissioner or Assistant Director or Deputy Director or the Income-tax

Officer who is vested with the relevant jurisdiction by virtue of directions or

orders issued under sub-section (1) or sub-section (2) of section 120 or any

other provision of this Act, and the Joint Commissioner or Joint Director who

is directed under clause (b) of sub-section (4) of that section to exercise or

perform all or any of the powers and functions conferred on, or assigned to,

an Assessing Officer under this Act;

Importance of Assessing Officer :

In the organizational setup of the income tax department Assessing Officer plays a

very vital role. He is the primary authority who initiates he proceedings and is directly

connected with the public. Form the time of filing of return till the assessement iscompleted he plays a pivotal role . He can start proceedings for non filing of return,

imposition of penalties etc. Orders passed by him can be challenged only on approval.

The department can revise his orders only if it is proved that there are prejudicial to

the revenue and that too only by the Commissioner of Income Tax.

(iii) Appointment of Income-Tax Authorities [ Sec. 117 ]

(1) Power of Central Government : The Central Government may appoint such

persons as it thinks fit to be income-tax authorities. It kept with itself the powers to

appoint authorities upto and above rank of an Assistant Commissioner of Income-Tax

[ Sec. 117 (1) ]

(2) Power of the Board and Other Higher Authorities : Subject to the rules and orders

of the Central Government regulating the conditions of service of persons in public

services and posts, the Central Government may authorize the Board, or a Director-

General, a Chief Commissioner or a Director or a Commissioner to appoint income-tax

authorities below the rank of an Assistant Commissioner or Deputy Commissioner.

[ Sec. 117 (2) ]

(3) Power to appoint Executive and Ministerial Staff : Subject to the rules and orders of

the Central Government regulating the conditions of service of persons in public



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services and posts, an income-tax authority authorized in this behalf by the Board may

appoint such executive or ministerial staff as may be necessary to assist it in the

execution of its functions.

(iv) Control of Income-Tax Authorities [ Sec. 118 ]

The Board may, by notification in the Official Gazette, direct that any income-tax

authority or authorities specified in the notification shall be subordinate to such other

income-tax authority or authorities as may be specified in such notification.

Power Of Income Tax Authorities Relating To Search And Seizure [ Section 132 ]

1.2. POWER OF INCOME TAX AUTHORITIES RELATING TO SEARCH AND

SEIZURE [ SECTION 132]

Entering and Searching the Premises :

Where the Director General or Director or the Chief Commissioner or Commissioner

or any such Joint Director or Joint Commissioner as may be empowered in this behalf

by the Board , in consequence of information in his possession, has reason to believe

that

(a) any person to whom a summons under sub-section (1) of section 131 of this Act,

or under sub-section (1) of section 142 of this Act was issued to produce, or cause to

be produced, any books of account or other documents has omitted or failed to

produce, or cause to be produced, such books of account or other documents as

required by such summons or notice, or

(b) any person to whom a summons or notice as aforesaid has been or might be

issued will not, or would not, produce or cause to be produced, any books of account

or other documents which will be useful for, or relevant to, any proceeding under the

Indian Income-tax Act or ;

(c) any person is in possession of any money, bullion, jewellery or other valuable

article or



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thing and such money, bullion, jewellery or other valuable article or thing represents

either wholly or partly income or property [which has not been, or would not be,

disclosed] for the purposes of the Indian Income-tax Act.

Then---

(A) the Director General or Director or the Chief Commissioner or Commissioner, as

the case may be, may authorise any Joint Director, Joint Commissioner, Assistant

Director or Deputy Director, Assistant Commissioner or Deputy Commissioner or

Income-tax Officer, or

1. such Joint Director, or Joint Commissioner , as the case may be, may

authorise any

1. Assistant Director or Deputy Director, Assistant Commissioner or Deputy

Commissioner or Income-tax Officer, the officer so authorised in all

cases being hereinafter referred to as the authorised officer to

(i) enter and search any [building, place, vessel, vehicle or aircraft] where he has

reason to suspect that such books of account, other documents, money, bullion,

jewellery or other valuable article or thing are kept;

(ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for

exercising the powers conferred by clause (i) where the keys thereof are not available;

(iia) search any person who has got out of, or is about to get into, or is in, the building,

place,

vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such

person has secreted about his person any such books of account, other documents,

money, bullion, jewellery or other valuable article or thing;

(iib) require any person who is found to be in possession or control of any books of

account or

other documents maintained in the form of electronic record as defined in clause (t) of



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subsection (1) of section 2 of the Information Technology Act, 2000 (21 of 2000), to

afford the authorised officer the necessary facility to inspect such books of account or

other documents;]

(iii) seize any such books of account, other documents, money, bullion, jewellery or

other valuable article or thing found as a result of such search:

(iv) place marks of identification on any books of account or other documents or make

or cause to be made extracts or copies therefrom;

(v) make a note or an inventory of any such money, bullion, jewellery or other valuable

article or thing :

Where any building, place, vessel, vehicle or aircraft referred to in clause (i) is withinthe area of jurisdiction of any [Chief Commissioner or Commissioner], but such [Chief

Commissioner or Commissioner] has no jurisdiction over the person referred to in

clause (a) or clause (b) or clause (c), then, notwithstanding anything contained in

section [120], it shall be competent for him to exercise the powers under this sub-

section in all cases where he has reason to believe that any delay in getting the

authorisation from the [Chief Commissioner or Commissioner] having jurisdiction over

such person may be prejudicial to the interests of the revenue :]

The Finance Act, 1988 has further that where it is not possible or practicable to take

physical possession of any valuable article or thing and remove it to a safe place due

to its volume, weight or other physical characteristics or due to its being of a

dangerous nature, the authorised officer may serve an order on the owner or the

person who is in immediate possession or control thereof that he shall not remove,

part with or otherwise deal with it, except with the previous permission of such

authorised officer.

Application Of Seized Or Requisitioned Assets [Section132(B)]

1.3. APPLICATION OF SEIZED OR REQUISITIONED ASSETS [SECTION132(B)]

1. Any Assets seized under this section shall be first applied to pay the

existing liability under Income-Tax Act, or Wealth Tax Act or Gift Tax Act.

2. Next it shall be adjusted against the tax liability determined uder block



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assessment and any penalty levied or interest payable under such

asseessment.

3. In case assessee has explained the source of any asset, the authority

may recover the amount of tax liability as mentioned above and

remaining portion if any may be released but with the prior approval of

CCIT or CIT. Such asset may be released to the assessee within 120

days from last authorization made for search and seizure.

4. In case seize assets consists of money or partly of money and partly of

other assets, the authority may apply such money to the tax liabilities

mentioned above and assessee shall be discharged of such liability upto

the extent of such money.

5. The other assets shall be under distraint (cannot be sold) and he

Assessing Office shall sell the assets but after prior approval of CCIT or

CIT and apply such money to the existing liabilities and liability under

block assessment.

6. The authority can realize the tax by any other mode also.

7. The reaming assets shall be handed over to the assessee from whose

custody they were seized.

8. The Govt. shall pay an interest @ 1 % for every month or part of a

month if there is any surplus of assets over the liability so adjusted. This

interest shall be calculated from the date on which 120 days expire from

the day last authorization was made till the day block assessment is

made.

Power Of Survey [ Section 133 a ]

1.4. POWER OF SURVEY [ SECTION 133A ]

An Assessing Officer or his duly authorized inspector, Deputy Commissioner orAssistant Director has the power to enter :

1. any place within the limits of the area assigned to him, or

2. any place occupied by any person in respect of whom he exercises jurisdiction

3. any place in respect of which he is authorised for the purposes of this section



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by such income-tax authority, who is assigned the area within which such place

is situated or who exercises jurisdiction in respect of any person occupying

such place.

It may require the proprietor or any other person attending to such business or

profession to afford him necessary facilities :

1. to inspect such books of account or other documents as he may require and

which may be available at such place

2. to check or verify the cash, stock or other valuable article or thing which may be

found therein, and

3. to furnish such information as he may require as to any matter which may be

useful for, or relevant to, any proceeding under this Act.

4. An income-tax authority acting under this section may

1. place marks of identification on the books of account or other documents

inspected by him.

2. impound and retain in his custody for such period as he thinks fit any

books of account or other documents inspected by him

3. retain in his custody any such books of account or other documents for a

period exceeding 10 days (exclusive of holidays) without obtaining the

approval of the Chief Commissioner or Director General therefore

In case the Income Tax Authority is not provided with such facility, such authority can

proceed u/s 131(1) and 131(2) against the proprietor or nay other person attending to

such business.

Provision Relating To Power To Collect Certain Information [Section 133B]

1.5. PROVISION RELATING TO POWER TO COLLECT CERTAIN INFORMATION

[SECTION 133B]

(1) An income-tax authority may, for the purpose of collecting any information which

may be useful for, or relevant to, the purposes of this Act, enter

(a) any building or place within the limits of the area assigned to such authority ; or



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(b) any building or place occupied by any person in respect of whom he exercises

jurisdiction,

at which a business or profession is carried on, whether such place be the principal

place or not of such business or profession, and require any proprietor, employee or

any other person who may at that time and place be attending in any manner to, or

helping in, the carrying on of such business or profession to furnish such information

as may be prescribed.

(2) An income-tax authority may enter any place of business or profession only during

the hours at which such place is open for the conduct of business or profession.

(3) An income-tax authority acting under this section can not remove from the building

or place wherein he has entered, any books of account or other documents or any

cash, stock or other valuable article or thing.

Disclosure Of Information Regarding Assessees To Certain Authorities

[ Section 138 ]

1.6. DISCLOSURE OF INFORMATION REGARDING ASSESSEES TO CERTAIN

AUTHORITIES

[ SECTION 138 ]

(1) (a) The Board or any other income-tax authority may furnish or cause to be

furnished to

(i) any officer, authority or body performing any functions under any law relating to the

imposition of any tax, duty or cess,; or

(ii) such officer, authority or body performing functions under any other law as the

Central Government may specify,

any such information which was received or obtained by any income-tax authority in

the performance of his functions under this Act, be necessary for the purpose of



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enabling the officer, authority or body to perform his or its functions under that law.

(b) Where a person makes an application to the Chief Commissioner or Commissioner

in the prescribed form for any information relating to any assessee received or

obtained by any income-tax authority, the Chief Commissioner or Commissioner may,if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished

the information asked for and his decision in this behalf shall be final and shall not be

called in question in any court of law.

Payment of Tax

2.1. PAYMENT OF TAX

When is Tax Payable ? [ Sec. 220(1) ]

Any amount, otherwise than by way of advance tax shall be paid within 30 [thirty] days

of the service of the notice of demand. All the assesses who are served with such notices

must deposit such amount which is written in the notice and at the place and to the person

mentioned in the notice :

But where the Assessing Officer has any reason to believe that it will be detrimental to

revenue if the full period of 30 [thirty] days is allowed, he may, with the previousapproval of the Joint Commissioner , reduce the number of days which shall be less than

30 days and may be specified by him in the notice of demand.

Payment of Interest: [ Sec. 220(2) ]

If the amount specified in any notice of demand is not paid within the specified limit, the

assessee shall be liable to pay simple interest at 1% [one] per cent for every month or part

of a month.

If due to any reason the amount on which interest was payable under this section had been

reduced, the interest shall be reduced accordingly and the excess interest paid, if any,

shall be refunded

Extension of Date : [ Sec. 220(3) ]

The Assessing Officer is empowered to extend the date of payment of tax if he is



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approached by the assessee with an application before the expiry of the due date, the

Assessing Officer may extend the time for payment or allow payment by installments,

subject to such conditions as he may think fit to impose in the circumstances of the case.

However, interest shall be charged in such a case and it will be calculated from the date

specified in the notice of demand.

Assessee in Default : [ Sec. 220 (4) ]

The assessee shall be considered to be an Assessee in Default if he fails to pay tax within

the time allowed originally or extended and to the person and place mentioned in he

notice. The assessee can not be treated as being in default unless a notice of demand has

been duly served.

Payment of Tax in Installments: [ Sec. 220 (5) ]

If, in a case where payment by instalments is allowed, the assessee commits defaults in

paying any one of the instalments within the time fixed, the assessee shall be deemed to

be in default as to the whole of the amount then outstanding, and the other instalment or

instalments shall be deemed to have been due on the same date as the instalment actually

in default.

Penalty Payable when Tax is in Default : [ Sec. 221 ]

When an assessee is in default or is deemed to be in default in making a payment of tax,

he shall, in addition to the amount of the arrears and the amount of interest payable, be

liable, by way of penalty, to pay such amount as the Assessing Officer may direct , and in

the case of a continuing default, such further amount or amounts as the Assessing Officer

may, from time to time, direct, so, however, that the total amount of penalty does not

exceed the amount of tax in arrears :

This Section expressly provides that before levying any such penalty, the assessee shall

be given a reasonable opportunity of being heard :

Where the Assessing Officer is satisfied that the default was for good and sufficient

reasons, no penalty shall be liable under this section.

The assessee shall not cease to be liable to any penalty by reason of the fact that before

the levy of such penalty he has paid the tax.

Where as a result of any final order the amount of tax, on which the penalty was levied



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shall be cancelled and the amount of penalty paid shall be refunded.

Modes of recovery of Tax

2.2. MODES OF RECOVERY OF TAX

Section 222 provides that in case assessee fails to pay any sum imposed by way

of interest, fine, penalty, or any other sum payable under the provisions of thisAct, the same shall be recoverable in the manner specified in the Act for the

recovery of arrears of tax.

Tax Recovery Officer means :

A Collector or an Additional collector

Any such officer empowered to effect recovery of arrears of land revenue or

other public demand under any law relating to land revenue or other public

demand for the time being in force in the State as ma be authorized by the State

Government , by general or special notification in the Official Gazettee, to

exercise the powers of a Tax Recovery Officer.

Any Gazetted Officer of the Central or s State Govt. who may be authorized by

the Central Govt. by general or special notification in the Officer Gazette, to

exercise the powers of a Tax Recovery Officer

When an assessee is in default or is deemed to be in default in making a

payment of tax, the Tax Recovery Officer may draw up under his signature a

statement in the prescribed form specifying the amount of arrears due from the

assessee and shall proceed to recover from such assessee the amount specified

in the certificate by one or more of the modes mentioned below, in accordance

with the rules laid down in the Second Schedule :

(a) attachment and sale of the assessees movable property ;

(b) attachment and sale of the assessees immovable property ;

(c) arrest of the assessee and his detention in prison ;(d) appointing a receiver for the management of the assessees movable and

immovable properties.

Tax Recovery Officer by whom recovery is to be effected [ Sec. 223 ]

(1) The Tax Recovery Officer competent to take action shall be



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(a) the Tax Recovery Officer within whose jurisdiction the assessee carries on

his business or profession or within whose jurisdiction the principal place of his

business or profession is situate, or

(b) the Tax Recovery Officer within whose jurisdiction the assessee resides or

any movable or immovable property of the assessee is situate,

Jurisdiction assigned to the Tax Recovery Officer under the orders or directions

issued by the Board, or by the Chief Commissioner or Commissioner who is

authorised in this behalf by the Board.

(2) Where an assessee has property within the jurisdiction of more than one Tax

Recovery Officer and the Tax Recovery Officer by whom the certificate is drawn

up

(a) is not able to recover the entire amount by sale of the property, movable or

immovable, within his jurisdiction, or

(b) is of the opinion that, for the purpose of expediting or securing the recovery of

the whole or any part of the amount under this Chapter, it is necessary so to do,

he may send the certificate or, where only a part of the amount is to be

recovered, a copy of the certificate certified in the prescribed manner and

specifying the amount to be recovered to a Tax Recovery Officer within whosejurisdiction the assessee resides or has property and, thereupon, that Tax

Recovery Officer shall also proceed to recover the amount under this Chapter as

if the certificate or copy thereof had been drawn up by him.

Other Mode of Recovery [ Sec. 226 ]

Where no certificate has been drawn up, the Assessing Officer may recover the

tax by any one or more of the modes provided in this section.

Where a certificate has been drawn up, the Tax Recovery Officer may recover

the tax by any one or more of the modes provided in this section.

(i) Deduction from Salary

If any assessee is in receipt of any Salaries income, the Assessing Officer or

Tax Recovery Officer may approach such person paying salary to deduct arrears

of tax from the salary of the assessee, and such person shall comply with any



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such requisition and shall pay the sum so deducted to the credit of the Central

Government or as the Board directs.

But any part of the salary exempt from attachment in execution of degree of a

civil court, shall be exempt from any requisition made under this sub-section.

(ii) Collection from persons who owe money to assesee :

(i) The Assessing Officer or Tax Recovery Officer may, at any time or from time

to time, by notice in writing require any person from whom money is due or may

become due to the assessee or any person who holds or may subsequently hold

money for or on account of the assessee to pay to the Assessing Officer or Tax

Recovery Officer (when the money becomes due or is held) the amount which

may be sufficient to pay the amount due by the assessee in respect of arrears or

the whole of the money when it is equal to or less than that amount.

(ii) A notice may be issued to any person who holds or may subsequently hold

any money for or on account of the assessee jointly with any other person and

the shares of the joint holders in such account shall be presumed, until the

contrary is proved, to be equal.

(iii) A copy of the notice shall be forwarded to the assessee at his last address

known to the Assessing Officer or Tax Recovery Officer, and in the case of a

joint account to all the joint holders at their last addresses known to the

Assessing Officer or Tax Recovery Officer.(iv) Save as otherwise provided in this sub-section, every person to whom a

notice is issued under this sub-section shall be bound to comply with such

notice, and, in particular, where any such notice is issued to a post office,

banking company or an insurer, it shall not be necessary for any pass book,

deposit receipt, policy or any other document to be produced for the purpose of

any entry, endorsement or the like being made before payment is made,

notwithstanding any rule, practice or requirement to the contrary.

(v) Any claim respecting any property in relation to which a notice under this sub-

section has been issued arising after the date of the notice shall be void as

against any demand contained in the notice.

(vi) Where a person to whom a notice under this sub-section is sent objects to it

by a statement on oath that the sum demanded or any part thereof is not due to



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the assessee or that he does not hold any money for or on account of the

assessee, then nothing contained in this sub-section shall be deemed to require

such person to pay any such sum or part thereof, as the case may be, but if it is

discovered that such statement was false in any material particular, such person

shall be personally liable to the Assessing Officer or Tax Recovery Officer to the

extent of his own liability to the assessee on the date of the notice, or to the

extent of the assessees liability for any sum due under this Act, whichever is

less.

(vii) The Assessing Officer or Tax Recovery Officer may, at any time or from time

to time, amend or revoke any notice issued under this sub-section or extend the

time for making any payment insection226 pursuance of such notice.

(viii) The Assessing Officer or Tax Recovery Officershall grant a receipt for any

amount paid in compliance with a notice issued under this sub-section, and the

person so paying shall be fully discharged from his liability to the assessee to the

extent of the amount so paid.

(ix) Any person discharging any liability to the assessee after receipt of a notice

under this sub-section shall be personally liable to the Assessing Officer or Tax

Recovery Officer to the extent of his own liability to the assessee so discharged

or to the extent of the assessees liability for any sum due under this Act,

whichever is less.(x) If the person to whom a notice under this sub-section is sent fails to make

payment in pursuance thereof to the Assessing Officer or Tax Recovery Officer

he shall be deemed to be an assessee in default in respect of the amount

specified in the notice and further proceedings may be taken against him for the

realisation of the amount as if it were an arrear of tax due from him, in the

manner provided in sections 222 to 225 and the notice shall have the same

effect as an attachment of a debt by the Tax Recovery Officer in exercise of his

powers under section 222.

(iii) Application to Court for payment of money in courts custody [ Sec. 226(4)]

The Assessing Officer or Tax Recovery Officer may apply to the court in whose

custody there is money belonging to the assessee for payment to him of the

entire amount of such money, or, if it



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is more than the tax due, an amount sufficient to discharge the tax.

(iv) Distraint and Sale of Movable Property [ Sec. 226(5)]

The Assessing Officer or Tax Recovery Officer may, if so authorised by the Chief

Commissioner or Commissioner by general or special order, recover any arrears

of tax due from an assessee by distraint and sale of his movable property in the

manner laid down in the Third Schedule.

(v) Recovery through State Government [ Sec. 227]

If the recovery of tax in any area has been entrusted to a State Government, the

State Government may direct, with respect to that area or any part thereof; that

tax shall be recovered therein with, and as an addition to, any municipal tax or

local rate, by the same person and in the same manner as the municipal tax or

local rate is recovered.

Refunds

2.3. REFUNDS

If, any assessment year an assessee pays the tax which is more than the amount

for which he is actually chargeable and if the assessee proves excess payment

before the Assessing Officer, section 237 empowers the assessee to claim a

refund of the excess. Once the Assessing Officer is satisfied about the excess

payment made by the assessee, he can allow the claim or refund.

Under the following cases a claim to refund may arise

When tax is deducted at source from salary, interest on securities od debentures,

dividend at a rate higher than the rate applicable to the total income of an

assessee.

When tax paid in advance exceeds the amount of tax actually payable as

determined at the time of refular assessment.

When tax calculated was higher due to some mistake and later on tax liability is

reduced on account of rectification of a mistake.

When tax was calculated at the higher rate on the payment given to non-

residents whereas they were actually chargeable at a lower rate of income tax.

When due to double taxation , the assessee is entitled to a double taxation relief.

Who is allow to Claim Refund ? [ Sec. 238(1) ]



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Where the income of one person is included in the total income of any other

person, the latter alone shall be entitled to a refund in case of excess payment of

tax in this case.

In the case of death, incapacity, insolvency, liquidation or other cause, a person

is unable to claim or receive any refund due to him, his legal representative or the

trustee or guardian or receiver, as the case may be, shall be entitled to claim or

receive such refund for the benefit of such person or his estate.

A Claim for Refund must be filed in the prescribed form and verified in the

prescribed manner. Where any part of the total income of a person claiming

refund consists of dividends or any other income from which tax is deducted at

source, the claim for refund shall be accompanied by a certificate which is issued

by the tax-deducting authority. The claim for refund may be presented by the

claimant or through an agent or may be send by post.

Time Limit for Claiming Refund [ Sec. 239(2) ]

No such claim shall be allowed, unless it is made within the period specified

hereunder, namely :

(a) where the claim is in respect of income which is assessable for any

assessment year commencing on or before the 1st day of April, 1967, 4 years

from the last day of such assessment year;

(b) where the claim is in respect of income which is assessable for the

assessment year commencing on the first day of April, 1968, 3 years from the

last day of the assessment year;

(c) where the claim is in respect of income which is assessable for any other

assessment year, [one] year from the last day of such assessment year;

(d) where the claim is in respect of fringe benefits which are assessable for any



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assessment year commencing on or after the first day of April, 2006, 1 (one) year

from the last day of such assessment year.

Refund on Appeal etc. [ Sec. 240 ]

Where, as a result of any order passed in appeal or other proceeding under this

Act, refund of any amount becomes due to the assessee, the Assessing Officer

shall refund the amount to the assessee without his having to make any claim in

that behalf:

It is further provided that

(a) an assessment is set aside or cancelled and an order of fresh assessment is

directed to be made, the refund, if any, shall become due only on the making of

such fresh assessment;

(b) the assessment is annulled, the refund shall become due only of the amount,

if any, of the tax paid in excess of the tax chargeable on the total income returned

by the assessee.]

Interest On Delayed Refunds [ Sec. 243 ]

Central Government shall pay the assessee simple interest at 15% p.a. [fifteen

per cent per annum ] on the amount directed to be refunded from the date

immediately following the expiry of the period of 3 months aforesaid to the date of

the order granting the refund.

(2) Where any question arises as to the period to be excluded for the purposes of

calculation of interest under the provisions of this section, such question shall be

determined by the Chief Commissioner or Commissioner whose decision shall be

final.

[(3) The provisions of this section shall not apply in respect of any assessment for

the assessment year commencing on the 1st day of April, 1989 or any

subsequent assessment years.

Interest On Refund Where No Claim Is Needed [ Sec. 244 ]



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Where a refund is due to the assessee in pursuance of an order and the

Assessing Officer does not grant the refund within a period of 3 month [three

months] from the end of the month in which such order is passed, the Central

Government shall pay to the assessee simple interest at 15% p.a. [fifteen per

cent per annum ] on the amount of refund due from the date immediately

following the expiry of the period of 3 months [three] months aforesaid to the date

on which the refund is granted.

Interest on refunds [ Sec. 244A ]

Where refund of any amount becomes due to the assessee, he shall be entitled

to receive, in addition to the said amount, simple interest thereon calculated in

the following manner, namely :

(a) where the refund is out of any tax paid or collected at source or paid by way of

advance tax or treated as paid, during the financial year immediately preceding

the assessment year, such interest shall be calculated at the rate of 1 % [one-

half per cent] for every month or part of a month comprised in the period from the

1st day of April of the assessment year to the date on which the refund is

granted:

Provided that no interest shall be payable if the amount of refund is less than

10% [ten per cent] of the tax on regular assessment;

(b) in any other case, such interest shall be calculated at the rate of 1% [one-

half per cent] for every month or part of a month comprised in the period or

periods from the date or, as the case may be, dates of payment of the tax or

penalty to the date on which the refund is granted.

Introduction- (TDS)

The Tax on Total Income is collected in three ways---

Deduction of Tax at Source (TDS)

Advance Tax ; and

Tax on assessment through demand notice i.e. Direct Payment of Tax.



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3.1. INTRODUCTION - DEDUCTION OF TAX AT SOURCE(TDS)

When a person responsible for paying any income deducts Income Tax on income at the time of

payment of income, it is called Deduction of Tax at source-TDS.

TDS is a scheme of collecting tax in the year in which the income has been earned by the

assessee.

Under the scheme , the person, who is making the payments under the specified sources, is

required to deduct tax at source at the prescribed rate.

The person who deducts tax is known as tax deducter or a payer of income.

if is the duty of the tax deducter to deposit the TDS into the Govt. treasury within the specified

time along with a statement, in the prescribed form.

if the Tax Deducter does not deduct tax at source or deducted but does not deposited with the

Govt. treasury he is treated as assessee in default and is liable for payment of interest. Penalty

proceedings may also be initiated.

The Tad Deducted at Source is regarded as the income of the assessee and it is included in his

gross total income

The Tax deducted at source is adjusted against the final payment of tax if proof of TDS

certificate is furnished along with the return of income.

The specified cases where tax is deducted at source are : Salaries, Interest on Securities, Interest

other than interest on securities, dividends, winning from lotteries and crossword puzzles,

payment to contractor, insurance commission, winning from horse races and also on other sums

chargeable under the Act, which are paid to non-resident.

Deduction of Tax from the Salary

[ Sec-192]

3.2. DEDUCTION OF TAX FROM THE SALARY [ SECTION-192]

The summarized provisions of Sec. 192 are given below :

Who is the taxpayer Employer

Who is the recipient Employee

Payment covered Taxable salary of the employee

At what time tax has to be deducted at source At the time of payment

Maximum amount which can be paid without

Tax Deduction

The amount of exemption limit ( i.e.

Rs.1,80,000 / Rs.2,25,000/Rs.1,50,000 for the

assessment year 2009-10.)



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Rate of tax deducted at source Normal Rates applicable to an individual

Is it possible to get the payment without tax

deduction or with lower tax deduction

The employee can make an application in Form

No.-13 to the Assessing Officer to get a

certificate of lower tax deduction or no tax

deduction.

Note: - Rs. 1,80,000 is for Resident Women below 65 years

- Rs. 2,25,000 is for Senior Citizen 65 years or more.

How to deduct Tax When a Person is employed by more than one Employer :

Where, during the financial year, an assessee is employed simultaneously under more than one

employer, In such case, Tax will be deducted on the aggregate Salary by one of the employers

( being the employer as the employee may choose, having regard to the circumstances of his

case, by submitting the information in Form No.12B.

Relief U/s 89 :If the employee furnishes information in Form No- 10E to the employer, relief under section 89

should be given to the concerned employee while deducting Tax at Source u/s 192. However,

this facility is available only if the employer is Government or Public Sector undertaking or

company , co-operative society, local authority, University, Institutions or association or Body.

Can the Employer Deduct Tax in Respect of Other Incomes of Employee :

The Provisions are given below :-

The employer may or may not declare his other incomes to the employer.

If the employee wants to declare his othe incomes to the employer, then such information should

be given on a plain paper to the employer.

The employee may declare details of his other incomes ( including loss under the head Income

from House Property but not any other loss ) and tax deducted thereon by others. If such

information is not submitted by the employee to the employer, then employer cannot take into

consideration other incomes of the employee.

Deduction Of Tax From Interest On Securities [ Section-193]

3.3 DEDUCTION OF TAX FROM INTEREST ON SECURITES [ SECTION-193]

The Provisions of section 193 are given below---

Who is the taxpayer Payer of Interest on Securities

Who is the recipient A resident person holding securities

Payment covered Interest on Securities

At what time tax has to be deducted at source At the time of payment or at the time of credit, whichever is



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earlier.

Maximum amount which can be paid without Tax Deduction -

Rate of tax deducted at source

- 10% in the case of listed debentures and - - 20% in he caseof non-listed debentures, if the recipient is resident non-corporate assessee.- 20% if the recipient is a domestic company ( these rates aresubject to surcharge, education cess and secondary andhigher education cess)

When the provisions are not applicableInterest on Central / State Government Securities and fewmore are there

Note : Rate of Tax includes .. Tax plus surcharges, education cess and secondary higher education cess.

Securities Interest which is not subject to Tax Deduction :No Tax is deductible at source from the amount of interest payable to the following :

FY-2008-2009

1.if the recipient is an Individual/ HUF/AOP/BOI and payment or credit subject to tax deductiondoes not exceed Rs.10 lakh.

NIL

2.if the recipient is an Individual/ HUF/AOP/BOI and payment or credit subject to tax deductionexceed Rs.10 lakh.

10%

3. if the recipient is an Artifitial Judicial Person 10%

4.if the recipient is Firm or a Domestic Company and payment or credit subject to tax deductiondoes not exceed Rs.1 Crore.

NIL

5.if the recipient is Firm or a Domestic Company and payment or credit subject to tax deductionexceed Rs.1 Crore.

10%

6.if the recipient is a Non-Domestic Company and payment or credit subject to tax deductiondoes not exceed Rs.1 Crore.

NIL

7.if the recipient is a Non-Domestic Company and payment or credit subject to tax deductionexceed Rs.1 Crore.

2.5 %

8. if the recipient is a Co-operative Soceity or Local Authority. NIL

Education Cess ( as percentage of Income Tax and surcharge) 2%

Secondary and Higher Education Cess (as a percentage of income tax and surcharge) 1%


Deduction Of Tax From Deemed Dividend[ Section-194]

3.4. DEDUCTION OF TAX FROM DEEMED DIVIDEND [ SECTION-194]

The Provisions of section 194 are given below---

Who is the taxpayer Domestic Company

Who is the recipient Resident Shareholders

Payment covered Deemed Dividend u/s 2(22)(e)


Maximum amount which can be paid without Tax Deduction -

Rate of tax deducted at source 20%When the provisions are not applicable Dividend covered by Section 115-O


Deduction Of Tax From Interest Other Than Interest On Securities [ Section 194A]



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TRAINING REPORT ON TAXATION IN BUSINESS MANAGEMENT3.5. DEEUCTION OF TAX FROM INTEREST OTHER THAN INTEREST ON SECURITIES [ SECTION 194A]

The Provisions of section 194A are given below---

Who is the taxpayerAny person paying interest other than interest on securities( not being an individual or a Hindu Undivided Family whosebooks of accounts are not required to be audited u/s 44AB )

Who is the recipient A Resident Person

Payment covered Interest other than interest on securities

At what time tax has to be deducted at sourceAt the time of payment or at the time of credit, whichever isearlier.

Maximum amount which can be paid without Tax DeductionFrom June 1, 2007 tax is not deductible if payment / creditdoes not exceed the specified amount.

Rate of tax deducted at source10% if the recipient is resident non-corporate assessee and20% if the recipient is resident corporate assessee.

When Taxis not required to be Deducted at Source : Following interest payments are not subjected to TDS.

o When the aggregate of inters during the financial year is Rs.5,000 or less.

o Where interest is paid to any building company or co-operative society, LIC, UTI or any company

or co-operative society carrying on the business of insurance or any financial corporation or nay

institution as the Central Government may notify in the official gazette.o Any scheme maintained at the post office.

o Interest paid by a firm to its partner.

o Where a declaration in Form 15G is furnished by the assessee.

Winning From Lottery Or CrosswordPuzzle Or Card game And Game Of AnySort [Section 194B]

3.6. WINNING FROM LOTTERY OR CROSSWORD PUZZLE OR CARD GAME AND GAME OF ANY SORT[ SECTION 194B]

The Provisions of section 194 B are given below---

Who is the taxpayerAny person paying winning from lotteries / cross-wordpuzzles / card games / other games.

Who is the recipient Any person

Payment coveredWinning from lotteries / cross-word puzzles / cardgames / other games.


Maximum amount which can be paid without Tax

Deduction

If the amount of payment is Rs.5,000 or less than

Rs.5,000

Rate of tax deducted at source30% plus surcharges, education cess and secondaryhigher education cess

Winning From Horse Race[ Section 194BB]



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TRAINING REPORT ON TAXATION IN BUSINESS MANAGEMENT3.7. WINNING FROM HORSE RACE [ SECTION 194BB]

The Provisions of section 194 B are given below---

Who is the taxpayer Any person paying winning from Horse Races

Who is the recipient Any person

Payment covered Winning from Horse Races

At what time tax has to be deducted at source At the time of paymentMaximum amount which can be paid without TaxDeduction

If the amount of payment is Rs.2,500 or less thanRs.2,500

Rate of tax deducted at source30% plus surcharges, education cess and secondaryhigher education cess

Payment To ContractorAndSub-Contractor

[ Section 194C]

3.8. PAYMENT TO CONTRACTOR AND SUB-CONTRACTOR [ SECTION 194C]

Payment to Contractor

1. Who is require deduct Tax at source ( Tax Deducter) :Anyperson responsible for paying any sum to any residentcontractor for carrying out any work (including supply of laborfor carrying out any work) in pursuance of a contract betweenthe contractor and following specified person.

Meaning of Specified Person

1. The Central Government or any State Government orany local authority ; or

2. Any PSU or any company or any co-operative societyor any society and any trust ; or

3. Any authority, constituted in India by or under anylaw, engaged either for the purpose of dealing withand satisfying the need for housing accommodationor for the purpose of planning ,development orimprovement of cities, towns and villages, or for both ;or

4. Any University including a deemed university.

5. Any Firm

Meaning of Work : The work shall also include ---

1. Advertising ;2. Broadcasting and telecasting including production of

programmes for such broadcasting or telecasting ;3. Carriage of goods and passengers by any mode of

transport other than by railways ;



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TRAINING REPORT ON TAXATION IN BUSINESS MANAGEMENT4. Catering.

2. When to deduct tax at source :At the time of payment or atthe time of credit, whichever is earlier.

3. What is the Rate of TDS : Where a sum is payable to aresident contractor for

1. Advertising contract @1% + surcharges & EducationCess as applicable

2. Any other contract @2% + surcharges & EducationCess as applicable

4. When Tax is not required to be deducted at source : Wherepayment of such income is Rs. 20,000 or less in the previousyear.

Payment to Sub-Contractor

1. Who is require deduct Tax at source ( Tax Deducter) :Anyperson responsible for paying any sum to any residentcontractor for carrying out any work (including supply of labor

for carrying out any work) in pursuance of a contract betweenthe contractor and following specified person.

However individual and HUF who are covered u/s 44AB(where tax audit is compulsorily) are also required to deducttax at source.

2. When to deduct tax at source :At the time of payment or atthe time of credit, whichever is earlier.

3. What is the Rate of TDS : Where a sum is payable to aresident Sub-Contractor, the Contractor shall deduct anamount equal to 1% of sum payable + surcharges andeducation cess as applicable.

4. When Tax is not required to be deducted at source :

a. Where payment of such income is Rs. 20,000 or less in theprevious year

b. Where an individual is a sub-contractor who is in thebusiness of playing, hiring or leasing goods carriages and whohas not owned more than two goods carriages at any timeduring the previous year.

Tax Deducted At SourceFrom InsuranceCommission [ Section194D]



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TRAINING REPORT ON TAXATION IN BUSINESS MANAGEMENT3.9. TAX DEDUCTED AT SOURCE FROM INSURANCECOMMISSION [SECTION 194D]

The Provisions of section 194 D are given below---

Who is the taxpayerAny person paying InsuranceCommission

Who is the recipient A resident person

Payment covered Insurance Commission

At what time tax has to bededucted at source

At the time of payment or at the time ofcredit, whichever is earlier.

Maximum amount which canbe paid without Tax Deduction

If the amount of payment is Rs.5,000 orless than Rs.5,000


10% + surcharges + education cess &higher secondary education cess, if therecipient is resident non-corporateassessee20% + surcharges + education cess &higher secondary education cess, if therecipient is resident corporate assessee

Is it possible to get thepayment without tax deductionor with lower tax deduction

The recipient can make an application

in Form No.13 to the Assessing Officerto get a certificate of lower taxdeduction or no tax deduction.

Payments To Non-ResidentSportsmen Or SportsAssociations [ Section 194E]

3.10 PAYMENTS TO NON-RESIDENT SPORTSMEN OR SPORTSASSOCIATIONS [ SECTION 194E]

Where any income referred to in section 115BBA is payable to a non-residentsportsman (including an athlete) who is not a citizen of India or a non-residentsports association or institution, the person responsible for making thepayment shall, at the time of credit of such income to the account of the payeeor at the time of payment thereof in cash or by issue of a cheque or draft or byany other mode, whichever is earlier, deduct income-tax thereon at the rate often per cent.]

Commission, Etc., On TheSale Of Lottery Tickets[Section 194G]3.11 COMMISSION, ETC., ON THE SALE OF LOTTERY TICKETS[SECTION 194G]

Any person who is responsible for paying, on or after the 1st day of October,1991 to any person, who is or has been stocking, distributing, purchasing orselling lottery tickets, any income by way of commission, remuneration or prizeon such tickets in an amount exceeding Rs. 1000 shall deduct income-taxthereon at the rate of 10% + surcharges + Education Cess & HigherSecondary Education cess.

Payments To Non-Resident



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Sportsmen Or SportsAssociations [ Section 194E]

3.10 PAYMENTS TO NON-RESIDENT SPORTSMEN OR SPORTS ASSOCIATIONS[ SECTION 194E]Where any income referred to in section 115BBA is payable to a non-residentsportsman (including an athlete) who is not a citizen of India or a non-resident sportsassociation or institution, the person responsible for making the payment shall, at thetime of credit of such income to the account of the payee or at the time of paymentthereof in cash or by issue of a cheque or draft or by any other mode, whichever isearlier, deduct income-tax thereon at the rate of ten per cent.]

Commission, Etc., On The SaleOf Lottery Tickets [Section194G]3.11 COMMISSION, ETC., ON THE SALE OF LOTTERY TICKETS [SECTION 194G]

Any person who is responsible for paying, on or after the 1st day of October, 1991 toany person, who is or has been stocking, distributing, purchasing or selling lotterytickets, any income by way of commission, remuneration or prize on such tickets in anamount exceeding Rs. 1000 shall deduct income-tax thereon at the rate of 10% +surcharges + Education Cess & Higher Secondary Education cess.

Commission Or Brokerage[ Section 194H]

3.12. COMMISSION OR BROKERAGE [ SECTION 194H]

The Provisions of section 194 H are given below---

Who is the taxpayer

Any person paying Commission or Brokerage ( notbeing an individual or a Hindu Undivided Familywhose books of accounts are not required to beaudited u/s 44AB )


Payment coveredCommission or Brakeage ( not being InsuranceCommission )

At what time tax has to be deducted atsource

At the time of payment or at the time of credit,whichever is earlier.

Maximum amount which can be paidwithout Tax Deduction



10% + surcharges + education cess & higher

secondary education cess.

Is it possible to get the payment withouttax deduction or with lower taxdeduction

The recipient can make an application in Form No.13to the Assessing Officer to get a certificate of lowertax deduction or no tax deduction.

Payment Of Rent [ Section 194 I ]

3.13. PAYMENT OF RENT [ SECTION 194 I ]



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The Provisions of section 194 I are given below---

Who is the taxpayerAny person paying Rent ( not being an individual or aHindu Undivided Family whose books of accounts are notrequired to be audited u/s 44AB )


Payment covered Rent

At what time tax has to be deducted atsource

At the time of payment or at the time of credit, whicheveris earlier.

Maximum amount which can be paidwithout Tax Deduction

If the amount of payment is Rs.1,20,000 or less thanRs.1,20,000

Rate of tax deducted at source10% - for Rent of Machinery or Plant or Equipmentfor Rent of any Land or Building or Fittings 15% forIndividual or HUF & 20% for any other person.

Is it possible to get the payment withouttax deduction or with lower tax deduction

The recipient can make an application in Form No.13 tothe Assessing Officer to get a certificate of lower taxdeduction or no tax deduction.

Note : Rate of Tax includes .. Tax plus surcharges, education cess and secondary higher educationcess.

Fees For Professional Or TechnicalServices [ Section 194J]

3.14. FEES FOR PROFESSIONAL OR TECHNICAL SERVICES [ SECTION 194J]

The Provisions of section 194 J are given below---

Who is the taxpayer

Any person paying Fees for Professional /TechnicalService / Royalty ( not being an individual or a HinduUndivided Family whose books of accounts are not requiredto be audited u/s 44AB )


Payment covered Fees for Professional /Technical Service / Royalty

At what time tax has to be deducted at sourceAt the time of payment or at the time of credit, whichever isearlier.

Maximum amount which can be paid withoutTax Deduction


Rate of tax deducted at source10% + surcharges, education cess and secondary highereducation cess.

Is it possible to get the payment without taxdeduction or with lower tax deduction

The recipient can make an application in Form No.13 to theAssessing Officer to get a certificate of lower tax deductionor no tax deduction.



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Introduction-Filingof Return4.1. INTRODUCTION

Return of Income is a statement of total income andtax liability filled in the prescribed from duly signedand filed with the Income Tax Authority on or beforethe due date of furnishing of Return. The Actstipulates an obligation on the assessee that he filesReturn regularly in every assessment year to thedepartment disclosing the income earned by him.

When Return is to be filed as StatutoryObligation [ Sec. 139(1), (4A), (4B), (4C) ]

TaxpayerMinimum income toattract the provision offilling Return of Income

Company or Firm [ Sec.139(1) ]

Any Income or Loss

A person other than acompany or firm

Compulsory Return iftaxable income ( plusdeductions u/s 10A, 10B,10BA and Sec. 80C to80U ) exceeds theexemption limit.

A person in respect ofincome derived fromproperty held under aTrust for Charitable orReligious purposes [ Sec.139 (4A)]

IF the income ( withoutgiving exemption u/s 11to 12) exceeds theamount not chargeable totax.

Chief Executive Officer ofevery political party [Sec.139(4B)]

If the income ( withoutgiving exemption u/s 13A)exceeds the maximumamount not chargeable totax.

Scientific ResearchAssociation, NewsAgency, Association /Institute for control orsupervision of aprofession, institution fordevelopment of Khadi andVillage Industries,Fund/Institution refereed

to , Educational / MedicalInstitution, Trade Unionetc.

If the income ( withoutgiving exemption u/s 10)exceeds the amount notchargeable to tax.

University / EducationalInstitution existing solelyfor educational purposeand not for the purpose ofProfit if the aggregateannual receipt does notexceed Rs. 1 crore

If the income ( withoutgiving exemption u/s 10)exceeds the exemptionlimit.



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Hospital / other institutionexisting solely for MedicalPurpose and not for thepurpose of Profit if theaggregate annual receiptdoes not exceed Rs. 1crore.

If the income ( withoutgiving exemption u/s 10)exceeds the exemptionlimit.

Any University / College /Other Institution

Any Income or Loss( return has to besubmitted whether thereis income or loss. SuchReturn has to besubmitted even if it is notrequired by any otherprovision)

This provision applies to all persons whether theyare Resident or Non-Resident.

Time Limit For Filling Return Of Income [Section139(1)]

4.2. TIME LIMIT FOR FILLING RETURN OFINCOME [ SECTION 139(1)]

Description Due Date1. Salaried Employees

2. Business Class - Non-company Assesseea)Whose accounts need NOTbe compulsorily audited

b)Whose accounts required tobe compulsorily audited3. Co-operative Societies4. Trust/Charitable Institutionsclaiming exemption u/s115. Companies

July,31

July,31

September, 30

Note : Failure to file Returns within the due dateattracts interest @ 1% p.m. on the balance taxpayable from the due date to the actual date offilling.

If a person required to file Return u/s 139(1)fails to file Return before the end of the relevantAssessment Year a penalty of Rs. 5,000 shall belevied.

When Return Of Loss Should Be Filed [Section139(3)]

4.3. WHEN RETURN OF LOSS SHOULD BE FILED[ SECTION 139(3)]

If any person who has sustained a loss in anyprevious year under the head

1. "Profits and gains of business orprofession" or



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2. under the head "Capital gains" and

claims that the loss or any part thereof should becarried forward , he may furnish, within the timeallowed , a return of loss in the prescribed formand verified in the prescribed manner andcontaining such other particulars as may beprescribed, and all the provisions of this Actshall apply as if it were a return under sub-

section (1).

Can Return Be Filied Beyond Time[Section 139(4)]

4.4. CAN RETURN BE FILIED BEYOND TIME[ SECTION 139(4)]

Any person who has not furnished a returnwithin the time allowed to him, or within the timeallowed under a notice issued , may furnish thereturn for any previous year at any time beforethe expiry of one year from the end of therelevant assessment year or before thecompletion of the assessment, whichever isearlier:

Can Revised Return Be Filed[ Section 139(5)]

4.5. CAN REVISED RETURN BE FILED [ SECTION139(5)]If any person, having furnished a return undersub-section (1), or in pursuance of a noticeissued, discovers any omission or any wrongstatement therein, he may furnish a revisedreturn at any time before the expiry of one yearfrom the end of the relevant assessment year or

before the completion of the assessment,whichever is earlier:

What Is A Defective Or Incomplete Return[Section 139(9)]

4.6. WHAT IS A DEFECTIVE OR INCOMPLETERETURN [ SECTION 139(9)]

Where the Assessing Officer considers that thereturn of income furnished by the assessee isdefective, he may intimate the defect to theassessee and give him an opportunity to rectifythe defect within a period of 15 days from thedate of such intimation or within such furtherperiod which, on an application made in thisbehalf, the Assessing Officer may allow; and ifthe defect is not rectified within the said periodof 15 days, the return shall be treated as aninvalid return and the provisions of this Act shallapply as if the assessee had failed to furnish thereturn:

Provided that where the assessee rectifies the



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defect after the expiry of the said period of 15days or the further period allowed, but before theassessment is made, the Assessing Officer maycondone the delay and treat the return as a validreturn.


4.3. WHEN RETURN OF LOSS SHOULD BE FILED

[ SECTION 139(3)]




claims that the loss or any part thereof should becarried forward , he may furnish, within the timeallowed , a return of loss in the prescribed form

and verified in the prescribed manner andcontaining such other particulars as may beprescribed, and all the provisions of this Actshall apply as if it were a return under sub-section (1).



Any person who has not furnished a returnwithin the time allowed to him, or within the time

allowed under a notice issued , may furnish thereturn for any previous year at any time beforethe expiry of one year from the end of therelevant assessment year or before thecompletion of the assessment, whichever isearlier:


4.5. CAN REVISED RETURN BE FILED [ SECTION139(5)]If any person, having furnished a return undersub-section (1), or in pursuance of a notice

issued, discovers any omission or any wrongstatement therein, he may furnish a revisedreturn at any time before the expiry of one yearfrom the end of the relevant assessment year orbefore the completion of the assessment,whichever is earlier:




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Where the Assessing Officer considers that thereturn of income furnished by the assessee isdefective, he may intimate the defect to theassessee and give him an opportunity to rectifythe defect within a period of 15 days from thedate of such intimation or within such further

period which, on an application made in thisbehalf, the Assessing Officer may allow; and ifthe defect is not rectified within the said periodof 15 days, the return shall be treated as aninvalid return and the provisions of this Act shallapply as if the assessee had failed to furnish thereturn:

Provided that where the assessee rectifies thedefect after the expiry of the said period of 15days or the further period allowed, but before theassessment is made, the Assessing Officer maycondone the delay and treat the return as a validreturn.


4.3. WHEN RETURN OF LOSS SHOULD BE FILED[ SECTION 139(3)]




claims that the loss or any part thereof should becarried forward , he may furnish, within the timeallowed , a return of loss in the prescribed formand verified in the prescribed manner andcontaining such other particulars as may beprescribed, and all the provisions of this Actshall apply as if it were a return under sub-section (1).



Any person who has not furnished a returnwithin the time allowed to him, or within the timeallowed under a notice issued , may furnish thereturn for any previous year at any time beforethe expiry of one year from the end of therelevant assessment year or before thecompletion of the assessment, whichever isearlier:



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4.5. CAN REVISED RETURN BE FILED [ SECTION139(5)]If any person, having furnished a return undersub-section (1), or in pursuance of a noticeissued, discovers any omission or any wrong

statement therein, he may furnish a revisedreturn at any time before the expiry of one yearfrom the end of the relevant assessment year orbefore the completion of the assessment,whichever is earlier:



Where the Assessing Officer considers that thereturn of income furnished by the assessee isdefective, he may intimate the defect to theassessee and give him an opportunity to rectifythe defect within a period of 15 days from thedate of such intimation or within such furtherperiod which, on an application made in thisbehalf, the Assessing Officer may allow; and ifthe defect is not rectified within the said periodof 15 days, the return shall be treated as aninvalid return and the provisions of this Act shallapply as if the assessee had failed to furnish thereturn:

Provided that where the assessee rectifies thedefect after the expiry of the said period of 15

days or the further period allowed, but before theassessment is made, the Assessing Officer maycondone the delay and treat the return as a validreturn.

Who Should Sign The Return Of Income [Section140]

4.7. WHO SHOULD SIGN THE RETURN OFINCOME [ SECTION 140]

The return shall be signed and verified-

1. in the case of an individual,-

(i) by the individual himself;

(ii) where he is absent from India, by theindividual himself or by some person dulyauthorised by him in this behalf;

(iii) where he is mentally incapacitated fromattending to his affairs, by his guardian or anyother person competent to act on his behalf; and



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(iv) where, for any other reason, it is not possiblefor the individual to sign the return, by anyperson duly authorised by him in this behalf:

2. in the case of a Hindu undivided family,

(i) by the karta, and, where the karta is absentfrom India or is mentally incapacitated fromattending to his affairs, by any other adultmember of such family;

3. in the case of a company,

(i) by the managing director thereof, or where forany unavoidable reason such managing directoris not able to sign and verify the return, or wherethere is no managing director, by any directorthereof:

Provided: that where the company is not residentin India, the return may be signed and verified bya person who holds a valid power of attorneyfrom such company to do so, which shall beattached to the return:

a. where the company is being wound up,whether under the orders of a court or otherwise,or where any person has been appointed as thereceiver of any assets of the company, the returnshall signed and verified by the liequidator.

b. where the management of the company hasbeen taken over by the Central Government orany State Government under any law, the returnof the company shall be signed and verified by

the principal officer thereof;

4. in the case of a firm,

(i) by the managing partner thereof, or where forany unavoidable reason such managing partneris not able to sign and verify the return, or wherethere is no managing partner as such, by anypartner thereof, not being a minor;

5. in the case of a local authority,

(i) by the principal officer thereof;

6. in the case of a political party,

(i) by the chief executive officer of such party(whether such chief executive officer is knownas secretary or by any other designation);]

7. in the case of any other association,

(i) by any member of the association or theprincipal officer thereof; and



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8. in the case of any other person,

(i) by that person or by some person competentto act on his behalf.

Permanent Account Number (PAN)

4.8. PERMANENT ACCOUNT NUMBER (PAN)

PAN is a 10 digit code allotted to each essesseeby I.T. Dept.

Following Assessee should own or obtain PAN :

1. Every person whose total Income exceeds theTaxable Limit.

2. Every Business or Profession whose totalSales, Turnover, or Gross receipts exceed Rs. 5Lakhs.

3. Every person shall quote his PAN or GIR in alldocuments pertaining to :

a) Who Sales / Purchases any immovableproperty worth Rs.5 Lakhs or more.

b) Who Sells or Purchases Motor Vehicle orVehicle which require registration.

c) Who opens a Time Deposit Account withBanks / Post Offices exceeding Rs. 50,000

d) Who deposits amount exceeding Rs.50,000 inPost Office Savings Bank.

e) Who Sales or Purchases Securities exceedingRs. 1 Lakh.

f) Who opens a Bank Account * .

g) Who makes payment to Hotels & Restaurantsagainst bills exceeding Rs.25,000 at a time.

h) Who wants to purchase DD/Pay Order/Bankers Cheque by payment of cash aggregateRs. 50,000 or more during any one day from aBank.

i) Payment in cash exceeding Rs.25,000 inconnection with Foreign Travel.

j) Payment of an amount of Rs.50,000 or more to

buy Mutual Fund, Shares, Debentures or Bonds.

* Those not having PAN/GIR No. can submit asimple declaration in Form No. 60/61.

Any person who has not been allotted PAN/GIRNo. and who makes payment in cash otherwisethan by way of A/c payee Cheque or Draft orissued by any Bank in respect of any of theabove listed transaction, should file a simple



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declaration in Form No. 60 giving the particularsof the transaction.

o

Meaning of Tax PlanningINTRODUCTION

The avid goal of every taxpayer is to minimize his Tax Liability. To achieve this objective taxpayer may resortto following Three Methods :

o Tax Planning

o Tax Avoidance

o Tax Evasion

It is well said that Taxpayer is not expected to arrange his affairs in a such manner to pay maximum tax .So, the assessee shall arrange the affairs in a manner to reduce tax. But the question what method he opts

for ? Tax Planning, Tax Avoidance, Tax Evasion !Let us see its meaning and their difference.

5.1. MEANINNG OF TAX PLANNING

Tax Planning involves planning in order to avail all exemptions, deductions and rebates provided in Act. TheIncome Tax law itself provides for various methods for Tax Planning, Generally it is provided underexemptions u/s 10, deductions u/s 80C to 80U and rebates and reliefs. Some of the provisions areenumerated below :

Investment in securities provided u/s 10(15) . Interest on such securities is fully exempt from tax.

Exemptions u/s 10A, 10B, and 10BA

Residential Status of the person

Choice of accounting system

Choice of organization.

For availing benefits, one should resort to bonafide means by complying with the provisions of law in letterand in spirit.

Where a person buys a machinery instead of hiring it, he is availing the benefit of depreciation. If is hisexclusive right either to buy or lease it . In the same manner to choice the form of organization, capitalstructure, buy or make products are the assesses exclusive right. One may look for various tax incentives inthe above said transactions provided in this Act, for reduction of tax liability. All this transaction involves taxplanning.

5.1.1. Why Every Person Needs Tax Planning ?

Tax Planning is resorted to maximize the cash inflow and minimize the cash outflow. Since Tax is kind ofcast, the reduction of cost shall increase the profitability. Every prudence person, to maximize the Return,shall increase the profits by resorting to a tool known as a Tax Planning.

5.1.2. How is Tool of Tax Planning Exercised ?



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