PPT_Tax Law_BBALLB_VII Semester _Unit -1.pdf

Tax law

1. Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi –110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)
Semester: Seventh Semester
(B.A.LL.B-VIIthSemester: A , B & C )
(BB.A.LL.B-VIIIth-A, B &C)
Name of the Subject: TAX LAW
UNIT:I BASIC CONCEPT
FACULTY NAME: Mr. Sunil Kumar
Assistant Professor (Law)

2. Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi –110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)
BASIC CONCEPTS OF TAXATION
❑Tax is the most important source of revenue of the Government.
❑Taxes are generally classified into direct tax and indirect tax.
❑A tax is a compulsory charge or fees imposed by government on
individuals or corporations.
❑The taxes may be imposed on the income and wealth of the persons or
corporations and rate of taxes may vary

3. Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi –110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)
TYPES OF TAXES
❑Iftaxislevieddirectlyontheincomeorwealthofaperson,thenitis
adirecttaxe.g.income-tax,wealthtax.
❑Iftaxisleviedonthepriceofagoodorservice,thenitiscalledan
indirecttaxe.g.exciseduty,customduty,servicetaxandsalestaxor
valueaddedtax.Inthecaseofindirecttaxes,thepersonpayingthetax
passesontheincidencetoanotherperson.

4. Chanderprabhu Jain College of Higher Studies & School
of Law
Plot No. OCF, Sector A-8, Narela, New Delhi –110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar
Council of India)
DIRECT TAX INDIRECT TAX
It is levied on income and activities
conducted.
It is levied on product or services.
The burden of tax cannot be shifted
in case of direct tax.
The burden of tax shifted for
indirect taxes.
It is paid directly by person
concerned.
It is paid by one person but he
recovers the same from another
person i.e. person who actually bear
the tax ultimate consumer.
It is paid after the income reaches in
the hands of the taxpayer
It is paid before goods/service
reaches the taxpayer.
Tax collection is difficult.Tax collection is relatively easier.
Example Income tax, wealth tax etc.Example GST, excise duty custom
duty sale tax service tax

5. Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi –110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)
DEFINITION OF FINANCIAL YEAR
& ASSESSMENT YEAR
oFinancialYear:Thefinancialyear(FY)istheyearinwhichyou
earnanincome.(1stAprilto31stmarch.)
Itisalsocalled“previousyear”.
oAssessmentYear:Meanstheperiodoftwelvemonthscommencing
ontheonthe1stAprileveryyearandendingonthe31stmarchofthe
followingyear.
Itisalsocalledtaxyear.

6. Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi –110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)
DATES FINANCIAL YEAR ASSESSMENT
YEAR
1st April 2013 to 31st
March 2014
2013-14 2014-15
1st April 2014 to 31st
March 2015
2014-15 2015-16
1st April 2015 to 31st
March 2016
2015-16 2016-2017

7. Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi –110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)
DEFINITION OF CERTAIN TERMS
oPERSON{Section:2(31)}
1.Anindividual,
2.Hinduundividedfamily(HUF)
3.ACompany,
4.Afirm,
5.Anassociationofpersonorbodyofindividuals,whether
incorporatedornot.
6.Alegalauthority,and
7.Everyartificialjuridicalperson.
oASSESEE[Section2(7)]
AnASSESEEisapersonbywhomanytaxoranyothersum
ofmoneyispayableundertheincometaxact.

8. Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi –110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar
Council of India)
Difference Between Capital Receipts and
Revenue Receipts
CAPITAL
RECEIPTS
REVENUE RECEIPTS
Capital receipts refer to amounts
received by a business which lead to
increase in the total capital. They
increase liabilities or reduce assets.
These are funds generated from non-
operating activities of a business
hence are not shown inside the
income statement.
Revenue receipts are amounts
received by a business as a result of
its core activities.These are funds
generated from a firm’s operating
activities hence are not shown inside
the balance sheet.
They are shown inside a balance
sheet.
They are shown on the credit side of
Trading and Profit & Loss Account.

9. Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi –110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar
Council of India)
They are non-recurring in nature
which means that they don’t occur
regularly.
They are recurring in nature and can
be seen quite often.
They are not available for
distribution of profits.
They are available for distribution of
profits.
Capital receipts are not obtained by
the normal course of business
operations.
Revenue receipts are obtained by the
normal course of business
operations.
Examples–Issue of shares or
debentures, Sale of fixed assets,
Loans received, Additional capital
introduced by the proprietor(s), etc.
Examples–Sales (inventory), Sales
(services rendered), Discount
received from creditors or suppliers,
Sale of scrap, Interest earned,
Dividends received, Rent received,
etc.

10. Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi –110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)