Chapter - 1 Introduction ( Section 1 to 4 )

Chapter Introduction [Sections I to 4] 1.I Income Tax Law An anderstanding of he ireome-tax aw equires a study of he following (A) The Incoms-tax Act. 1951 iamend:d up-to-date) (B) The Inecome-tax Rules, 1962 amended up-to-date) ( Nadificswora, Crealars arc clacificulions issuec om time to time ny the CRDT Judel deciaimis (A) The Incume-tax Act. 19 (Amended upto date), Tke prcvisiu s ofome-as eIs tona ned i le trconie-tay Act, 1961 waicl exterds to the whele of India a.d beranre elective from 11.1362 (Section l) Scope of Inmu-tax Aer. The Ines nme ax Act contains provisiats foi deteiuiu ation uf taxable ink eane. detcimination t tax hability. provelure for assessrent. appcals, esallies ane presec utions t zlso lays cown the pevers and Jutiesraus Incune tax muhoritics. Since the Incara-tax A-t. 196l is a revenue law, thure sre bound o he amercr ents frem im Therefor:, the Incone-ax Act has urdergene innumcrahlc changes from the tim i- was original y enact:d. T:esa azmcndmeils are generally breught in anmua ly alongwitla lhe ou Hudgei, Bes iales L ese auueadmeuts, whenever it is found Inaual amendments Every vcar a Budyet is nzl before lhe Parlianent by dhe Finative kMuister. Ouc c the rsI irourtant componerzs o the Budyet is ie Firance Bl ich dec ares the finarcial propesals f Cenual Goven nmcut e x financial yenr. Th: Ril corains various &rendments which are seught to b: te i the nrans of direct ind indirct taxcs levind hy the L entral uove iuu2 1. When th: Pirance Bi is upproved by 2oth the Houscs of Tarliamcni anc res ves the ssscnt of he President, it become the Fim nce Acr. The previs on- of suen Finene Aat ue thereater incotpocsted in the Income tox Ac t of the subsequent Linance Act. eg mace Act, 201is Pa t-lll tat gneu the rates ter computacion of adtanse tex tor the Noal ates, ohic a are ginea in th linAy ( 2 ) Spec12 rar which are gwan m he Income txect tiseire g lomr - tur " eelniai gan n wxaule e 10 I 20 % eli s fesaule lia , tri apitr i gam referre section 11i axableand income foeru kottace croesword p (B) Income-tax Rules, 1962 (amended upto datur: Fvery oly yives pow to an authority, rcsponsibl fo implementnion of he Ae, mske ules for carrying out pirposcs of tte Aer Seerion 20% of the Ireome tax Ai hus givea pever tw lh. Cenua. Beard of Direct Taxes (CRDT) to make such rule, subyet u lue cuntre, o Central ovemmert, These rules arc made applisahle by not fication in the Gazette of India sa.ary of employee w value such rent frze accorimodatior is given in rmile 3 of the Income-tax Rules, 1s62 given in rule 2A oi the invom: Tax Kales, .962. or CBDT in the Ofliviai Gazetlee, whe:cas Circulars ae clariticens ae issued by C3D lay down lhe law skg cale u some procedural asnceis of the enuvtric rules. by way of uotificatiens in the Official Gazetc of hcia. See paru (B) above Examples: ) Thc vue of rant. free accemmedalien povidad by the crpleyer o ar enrloyec is inc mied in the gross 19) Sect.on 1OL3A prey ies that house reul allowance is exempt upin a certain linil. How te calculale auchi Init is C) Notifications, Cireulars and Clarifications by CBDT: Notitications are issaed either by the Ceutsal Govemment Notifianminr i ihorinate lugislatien arc is ssuze under powars islegated by the Parl:aeut. Notifications gencrally Further, t arry u purposus uf le lucome as Act, in ernin sectiens, the power us beal give ta Notifivatiens issued by the Ceultal Government as well as C RDT are hinr u everyone. A circnlar or r'arification a counivalion issued by the CBDT which is primarily neeit to serve ea guidelines toe implement the provisis l law, Sal vueulars or clariticntinns tre binding upon tie Income-tex Aitwrides, but the sama