Income Tax Act 1961

Income Tax Act 1961

Income Tax Act, 1961 passed by Parliament in the 1961 after 12th year of the Republic of India.

This Act may be called the Income Tax Act, 1961

It extended to the whole of India

Save as otherwise provided in this Act it shall come into force on the 1st day of April, 1962

Objective of Income Tax Act,1961

Government has certain right and responsibility upon citizen of India. Government need to build better infrastructures across in country so that people can travel easily from one place to others by road, Rail, Airline etc. . . . Government also need to give better administration and defence from enemy to citizen so that social peace can be maintain. These thing need money so government levy a tax on citizen of India.

 Charge of Income Tax (Section-4)

Where any Central Act enacts that income tax shall be charges for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charges for that year in accordance with and in respect of the total income of the previous year of every person.

Scope of total income (Section -5)

Subject to the provision of this act, the total income of nay previous year of a person who is a resident includes all income from whatever source derived which

  1. Is received or is deemed to be received in India in such year by or on behalf of such person, or
  2.  Accrues or arises or is deemed to accrue or arise to him in India during such year; or
  3. Accrues or arises to him outside India during such year.

Heads of income (Section-14)

Save as otherwise provided by this Act, all income shall for the purposes of charge of income tax and computation of total income be classified under the following heads of income-

  1. Salaries
  2. Income from house property
  3. Profit and gains  from business or profession
  4. Capital gains
  5. Income from other source

.

The Income Tax Act contains of total 23 chapters and 298 sections according to Income Tax Act 1961

Chapter-I Preliminary (Section 1 to 3)

Chapter-II Basis of Charge (Section 4 to 9A)

Chapter-III Income which do not form part of total income (Section 10 to13 B)

Chapter-IV Computation of Total Income (Section 14 to 59)

Chapter-V Income of other persons Included in assesses total income (Section 60 to 65)

Chapter-VI Aggregation of income and set off or carry forward of loss (Section 66 to 80)

Chapter-VI-A Deduction to be made in computation total income (section 80A to 80 VV)

Chapter-VI-B Restriction on certain deduction in the case of companies

Chapter-VII Incomes forming part of total income on which no income tax is payable (Section 81 to 86A)

Chapter-VIII Rebates and Reliefs (Section 87 to 89A)

Chapter-IX Double Taxation Relief (Section 90 to 91)

Chapter-X Special provisions Relating to avoidance of Tax (Section 92 to 94B)

Chapter- X a General anti avoidance rule (Section 95 to 102)

Chapter- XI Additional Income Tax on undistributed profits (Section 95 to 109)

Chapter- XII Determination of tax in certain special cases (Section 110 to 115BBF)

Chapter- XII a Special provision relating to certain incomes of non- residents (Section 115C to 115JB)

Chapter-XII-BA Special provision relating to certain                                                                                                                    (persons other than a company) Section 115JC to 115 JH)

Chapter-XII-C Delated

Chapter-XII-D Special provision relating to tax on distributed profits of domestic companies                 (Section 115-O to 115Q)

Chapter-XX-DA Special provision relating to tax on distributed income of domestic companies for pay back of shares                        (Section 115QA to 115 QC)

Chapter-XII-E Special provision relating to tax on distributed income (Section 115R to 115T)

Chapter-XII –EA Special provision relating to tax on distributed income by securitisation trusts                    (Section 115TA to 115TCA)

Chapter-XII-EB Special provision relating to tax on accreted income of certain trust and Institutions                  (Section- 115 TD to 115TF)

Chapter-XII-F Special provision relating to tax on income received from venture capital companies and venture capital funds (Section -115U)

Chapter-XII-FA Special provision relating to business trusts (Section -115UA)

Chapter-XX-FB Special provision relating to tax on income of investment funds and income received from such funds (Section-115UB)

Chapter XII-G Special provision relating to income of shipping companies (Section-115V to 115VZC)

Chapter XII-H Income Tax on fringe benefits (Section 115W to 115WM)

Chapter XIII Income Tax authorities (Section 116 to 138)

Chapter XIV Procedure for assessment (Section 139 to 158)

Chapter XIV-A Special provision for avoiding repetitive Appeals (Section 158A to 158AA)

 Chapter XIV-B Special procedure for assessment of search cases (Section158B to 158 BI)

Chapter XV Liability in special cases (Section 159 to 181)

Chapter XVI Special provision applicable to Firms (Section 182 to189A)

Chapter XVII Collection and recovery of Tax (Section 190 to234 F)

Chapter XVIII Relief respecting Tax on dividends in certain cases (Section 235 to 236A)

Chapter XIX Refunds (Section 237 to 245)

Chapter XIX-A Settlement of cases (Section 245A to 245 M)

Chapter XIX-B Advance Rulings (Section 245 N to 245 V)

Chapter XX Appeals and revision (Section 246 to 269)

Chapter XX –An Acquisition of immovable properties in certain cases of transfer to counteract evasion of tax (Section 269A to 269 S)

Chapter XX-B Requirement as to in certain cases to counteract evasion of tax (Section 269 SS to 269 TT)

Chapter XX-C Purchases by central government of immovable properties in certain cases of transfer          (Section 269 U to 269 UP)

Chapter XXI Penalties imposable (Section 270 to 275)

Chapter XXII Offences and prosecutions (Section 275A to 280D)

Chapter XXII-A Deleted

Chapter XXIII Miscellaneous (Section 281 to 298)

Conclusion: The Central Government has empower to impose tax on citizen by Constitution of India. The Central Government using the power Present ” Budget” every year in the Parliament in the month of February. The Central Government change tax rate time to time through the union budget. Income Tax Act 1961 is a direct Tax. Income Tax impose on total income earned by assessee during the previous year exceeded the maximum amount which is not chargeable to income- tax.

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