INCOME TAXDEPARTMENT

OUR VISION

The Department will be recognised as a professional organisation, collecting

resources efficiently, considerate towards its clients, adapting and improving and

promoting voluntary compliance.

OUR MISSION

To promote compliance withour direct tax laws, through

caring taxpayer serviceand strict enforcement

and thus realize maximumresources for the Nation

OUR VALUES

Integrity of conduct,Dedication to our duties and values,

Professionalism in our work,Attitude of service to our clients and

Fosteringmutual confidence.

Organisational structure

Chairman

Vice-Chairman

Members

Secretary

Director of Investigation

Deputy Director of Investigation

Chairman• The Chairman of the Commission is a statutory authority under

the Income Tax and Wealth-tax Acts.

• He is the administrative head of the Commission.

Vice-Chairman

• The Vice-Chairman is the Presiding Officer of the additional bench and decides settlement applications along with other members of the bench.

Members• The Members hear and decide settlement applications

along with the Chairman/Vice-Chairman.

Secretary

• The Secretary is a statutory authority under the Income Tax Settlement Commission (Procedure) Rules, 1987 and Wealth-tax (Procedure) Rules, 1987.

• He performs both technical and administrative functions.

Director of Investigation

• The Director of Investigation is over-all in-charge of the work of Additional/Joint/Deputy directors of Investigation and assists the commission in passing orders under section 245D(4) of the Income Tax Act and 22D(4) of the Wealth-tax Act.

Deputy Director of Investigation• The Deputy Directors of Investigation make enquiries on

behalf of the Commission and verify correctness of the facts stated in the annexures and statements of fact

accompanying settlement applications

• Basic

• HRA

• Conveyance

• Children Education Allowance

• Allowances in any other name

GENERAL GROSS COMPONENTS

Basic : Taxable

HRA :

Taxable. Exemption can be claimed

Required Document – Rent receipt Computation of exemption - Least of the following :

1. Actual amount of HRA received 2. 50% (Metro) / 40% (Non Metro) of Salary (Basic + DA) 3. Actual Rent paid Less 10% of Salary ( Basic + DA)

Conveyance :

Taxable. Exempted upto Rs.800 per month & Upto Rs.1600 per month if the employee is handicapped.

Children Education Allowance :

Taxable. Exempted upto Rs.100 per month per child restricted to 2 children.

Other Allowances :

All other allowances (except LTA) are Taxable.

Charge of Income Tax

Income tax is charged in assessment year at rates specified by the Finance Act applicable on 1st April of the relevant assessment year.

It is charged on the total income of every person for the previous year.

Total Income is to be computed as per the provisions of the Act.

Income tax is to be deducted at source or paid in advance wherever required under the provision of the Act.

1208/07/2009

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TAX RATES

08/07/2009

• Income Tax Rates applicable for Individuals, Hindu Undivided Family (HUF), Association of Persons (AOP) and Body of Individuals (BOI) in India is as under:

•Assessment Year 2014-15, Relevant to Financial Year 2013-14

For Individuals below 60 years age (including Woman Assessees):

Income Tax Rate

Upto 200,000 Nil

200,000 to 500,000 10% of the amount exceeding 200,000

500,000 to 1,000,000 Rs.30,000 + 20% of the amount exceeding 500,000

1,000,000 & above Rs.130,000 + 30% of the amount exceeding 1,000,000

For Individuals aged 60 years and above but below 80 years (Senior Citizen):

Income Tax Rate

Upto 250,000 Nil

250,000 to 500,000 10% of the amount exceeding 250,000

500,000 to 1,000,000 Rs.25,000 + 20% of the amount exceeding 500,000

1,000,000 & above Rs.125,000 + 30% of the amount exceeding 1,000,000

For Individuals aged 80 years and above (Very Senior Citizen):

Income Tax Rate

Upto 500,000 Nil

500,000 to 1,000,000 20% of the amount exceeding 500,000

1,000,000 & above Rs.100,000 + 30% of the amount exceeding 1,000,000

For Firm

• i. Income-tax: 30% of total income. • ii. Surcharge: Nil • iii. Education Cess: 3% of the total of Income-

tax and Surcharge.

For Domestic Company

• i. Income-tax: 30% of total income. • ii. Surcharge: The amount of income tax as

computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 5% of such income tax, provided that the total income exceeds Rs. 1 crore.

• iii. Education Cess: 3% of the total of Income Tax and Surcharge.

For Company other than a Domestic Company

• i. Income-tax: @ 50% of on so much of the total income as consist of (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government. @ 40% of the balanceii. Surcharge: The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 2.5% of such income tax, provided that the total income exceeds Rs. 1 crore. iii. Education Cess: 3% of the total of Income Tax and Surcharge.

How Income Tax Is Related With Business

“Business Connections” - “Under section 9 of Income Tax Act 1961, –Gradual Changes and Development

• The Indian Income-tax Act provides for levy of income-tax on the income of foreign companies and non-residents, but only to the extent of their income sourced from India.

• Under section 5 of the Act, a foreign company or any other non-resident person is liable to tax on income which is received or is deemed to be received in India by or on behalf of such person, or income which accrues or arises or is deemed to accrue or arise to it in India.

• Income tax is payable by a taxpayer, regardless of whether he is a resident taxpayer, a non-resident taxpayer, or a non-resident Indian, on the total income computed by the Assessing Officer under the provisions of the Income Tax Act 1961. Section 9 thereafter specifies certain types of income that are deemed to accrue or arise in India in certain circumstances.

Cntd……

• These two sections embody the source rule of income taxation in the domestic law.

• No income of a non-resident can be taxed in India unless it falls within the four corners of section 5 read with section 9 of the Income-tax Act. Section 9(1) of the I.T. Act specifies that for the income to be taxed in India, it should deemed to accrue or arise in India .

• And one among those incomes are income from “business connection” in India .The basic aim of this paper work is to look into the series of judicial pronouncements related to the term “business connection” and the changes which have been introduced therein after.