A Comprehensive and Structured Overview of the Fundamental Concepts of Income Tax in India, governed by the Income Tax Act, 1961.
The Income Tax Law in India is a complex and ever-changing set of regulations that govern the taxation of income earned by individuals and businesses. It is important for every taxpayer to have a basic understanding of these laws to ensure compliance and avoid any legal issues. 1. Income Tax Law The Income Tax Law […]
Understanding Income Tax (Section 1 To 4) Read More »
An individual may either be a: (a) Resident in India; or (b) Deemed to be Resident In India [Section 6(1 A)]; or (c) Non-Resident in India. An individual cannot simply be called a resident/deemed to be resident in India. If he is a resident in India, we have to further determine whether he
Residential Status of an Individual [Section 6(1) & 6(1A)] Read More »
1. Scope of Total Income / Incidence of Tax [Section 5] Total income of an assessee cannot be computed unless we know his residential status in India during the previous year. According to the residential status, the assessee can either be: (i) Resident in India; or (ii) Non-resident in India. However, individual and HUF
Residential Status [Sections 5 to 9B] Read More »
Section 9 of the Income Tax Act, 1961 is an important provision that deals with the taxation of income accruing or deemed to accrue or arise in India. This section lays down the rules for determining the tax liability of non-residents and foreign companies on income earned in India. According to Section 9, any income
Agricultural income and its tax treatment in India fall under Section 10(1) of the Income Tax Act, 1961. Section 10(1) deals with the exemption of agricultural income from income tax. Here’s what you need to know about agricultural income and its tax treatment under Section 10(1): (1). Definition of Agricultural Income: Agricultural income is defined
Agricultural Income [Section 10(1)] Read More »
Under Section 10(2) of the Income Tax Act, 1961, the sum received by a member from a Hindu Undivided Family (HUF) out of the family income or out of the income of the impartible estate is exempt from income tax. This exemption is available irrespective of whether the sum is received by way of gift,
Sum received by a Member from HUF [Section 10(2)] Read More »
According to Section 10(2A), any share of profit received by a partner from a firm is exempt from tax. However, this exemption is subject to certain conditions and limitations. Firstly, the exemption is only applicable if the firm is engaged in a business or profession. If the firm is not involved in any business activity,
Share of Profit of a Partner from a Firm [Section 10(2A)] Read More »
Interest on Non-resident (External) Account (NRE) is exempt from income tax in India under Section 10(4)(ii) of the Income Tax Act, 1961. This exemption is available to both individuals and Hindu Undivided Families (HUFs) who are non-residents of India. An NRE account is a type of bank account that can be opened by non-residents of
Interest on Non-resident (External) Account [Section 10(4)] Read More »
Under Section 10(4D) of the Income Tax Act, a specified fund is eligible for certain exemptions on its income. This provision aims to encourage investments in specific funds that contribute to the welfare of society. What is a Specified Fund? A specified fund refers to a fund established by the government or any other entity
A Exemption of certain income received by a Specified Fund [Section 10(4D)] Read More »
Section 10(4E) of the Income Tax Act, 1961 provides an exemption from tax on income arising from the transfer of non-deliverable forward (NDF) contracts entered into by a person with an Offshore Banking Unit (OBU) located in an International Financial Services Centre (IFSC). NDF contracts are financial contracts that are settled in cash, rather than
