Revenue Audit Dd2

7/30/2019 Revenue Audit Dd2

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INTRODUCTION TO INCOME TAX ACT,1961.

BASIC CONCEPTS

BY S.RAJA. M.com. `MBA BL, PGDPM.

DD-RADT.


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Categories of Assessess

Category-1.Any person-individual, Hindu undivided

family (HUF), a company, a firm, anassociation of persons (AOP) or body of

individuals (BOI)whether incorporated or not,

a local authority and even artificial

person.


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Category-2.A person who is deemed to be an

assessee under the provisions ofthe Income Tax Act; 1961.


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Category-3.

A person who is deemed to

be an assessee in default.


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a) ASSESSMENT YEAR

The year in which income of the previousyear is to be assessed.

b) Previous Year.

Income of the previous year is taxed in theimmediately, following assessment year is

known as previous year.

It means the income earned during the previous

year i.e. for example year 2011-12 will be taxed

in the immediately following year of.2012-13.


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Assessment years will be followed

uniformly from 1989-1990 onwards.

a. All the assessess are required to

follow the uniform financial year i.e.1stApril to 31st March.

b.For all sources of Income also, the

same procedure to be followed.


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RESIDENTIAL STATUS

Why residential status isimportant?

It is important to determine the taxliability which arise or accrue due

to change of residence from India

to foreign countries & from foreign

countries to India.


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Kinds of Residential status.

a) Resident in India.

b) Non-Resident India.Resident Individual & HUF are further

divided in to:

i) Resident and Ordinarily resident.Ii) Resident but not ordinarily resident.


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Others.i) a firm

ii) a Company,iii) an association of persons.

Iv) any person.


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Different residential status in respect ofdifferent previous Year of the same

assessment year is not possible,Sec.6 (5). If

a person is a resident in a PY relevant to an

AY in respect of any source of income, he

shall be deemed to be a resident in India.


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Who will be a resident in India? Sec.6(1).

i) He should be in India in the PY for the period

of 182 days or more OR

ii) Should be in India for a period of 60 days or

more during the PY and 365 days or more

during 4 years immediately preceding the PY.

A) Exception from the 60 days to 182 days in

case an Indian citizen leaves India in the PY for

employment purpose.

B) Member of a crew in a Ship.


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Not ordinarily resident in India.a) If he has not been a resident in nine

out of ten PY orb) if he has not been in India for 730

days or more during the preceding 7

years.


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Income Chargeable i.r.o.NRI.

i) Income received in India or deemed to have beenso received.

ii) Income accruing or arising or deemed to have soarisen or occurred.

iii) Income accruing or arose out side India, if derived

from a business controlled in or a profession set up in

India (Resident but not ordinarily resident)


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Charge of Income Tax-Sec.4

*Income tax is an annual tax on income.

*Tax will be levied on the total income and

the rates are fixed by Annual Finance Act.*Tax is charged on every person

*The Finance (No.2) Act.2009 prescribes (in

Sch.I,Part.I), the rates at which IT andSurcharge are to be levied.


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Deduction of Tax.

1) Advance Tax2)Tax deducted at SourceTDS/TCS

3)Interest on belated payment of

tax. (Sec.234A).


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Scope of Total Income.The total income of any PY of any

person who is a resident includes allincome from whatever source

derived.


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The source of Income is:

i) received or is deemed to be receivedin India.

ii) accrues or arises or is deemed to

accrue or arise in India.Provided a person is not ordinarily residing in India

unless income derived for a business controlled in or a

profession set up in India.


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Subject to the provisions of the IT

Act, the total income of any PY of a

person who is a non-residentincludes all income from whatever

sources..


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i) received or is deemed to be received

in India in such year on behalf of suchperson.

ii) accrues or arises or is deemed to

accrue or arise in India during suchyear.Income which has been included in the total income

of a person on the basis that it has accrued or arisenor is deemed to have occurred or arisen to him shall

not again be included in India.


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Income deemed to be received.

i. PY balance at credit of an employeeof a recg.PF.(R.6).

ii) Transferred bal. in a recg.PF (R.4).iii) Pension contribution

u/s.80CCD.(Employer/Govt.)


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Dividend IncomeAny dividend or interim dividend

declared by a company or paid shall bedeemed to be the income of the PY

whether declared or paid.(Sec,22.2(a toe).


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Income deemed to accrue or arise in India.

All income accruing or arising whetherdirectly or indirectly, through or from

any business connection in India, orfrom any property, assets or source of

income in India or through transfer of

capital assets situated in India.


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HEADS OF INCOME

1.Income from Salaries.

2.Income from House Properties3. Profits and gains of business or

Profession.

4.Capital Gains.

5. Income from other sources.


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SCRUTINY ASSESSMENT (143(3)

After started the processing of theAssessment, the assessing officer will

by an order in writing, make an

assessment of the total income orloss and determine the sum payable

or to be refunded. It should be

completed within 21 months.


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ASSESSMENT u/s.144 Sec.144-BEST JUDGMENT ASSESSMENT.

When a person fails to file the return

u/s.139(1) or revised return u/s.139(4) (5) or

fails to comply the notices issued u/s.142 (1),

142 (2A) or 143(2), he can after taking into

account all relevant material which the AO

has gathered shall make the assessment of

the total income or loss to the best of hisjudgments and determine the sum payable.


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ASSESSMENT u/s.147.

Income escaping Assessment. The A.O can assess the total income or

loss and determine the sum payable or

refund to be made when the assesseefailed to furnish the return or necessary

documents. It can be made on best judge

assessment on exparte. After issuingnotice u/s.148, it should be completed

within 9 months from the end of the FY.


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THANK YOU.

Revenue Audit Dd2

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