Page 1 : “1 INTRODUCTION AND, IMPORTANT DEFINITIONS, , t has to pay a ta Such tax charged on, enue to the government., , Introduction, , Every person with an income 1n excess ola preset the lim, excess income 1s called income tax. Income tax ts an smportant SOUre’ Oi FEN, , rogressive rate of income tax also serves as an effective device ol ry ZA the inequalities in, the distribution of income and wealth. It helps in attaining the socialistic pattern of aociety, which, , is the core objective of our economuc planning. Income tax 15 4 direct lar as the incidence of this ’, tax falls directly on tax payer. Hence continuous efforts are being made for rationalizing the tax, structure with a view to minimize the hardships to tax payer, Indian Income Tax Act, 1961 provides the mechanism for the comp, , person. It defines the term ‘Person’ in such a manner that eat hand ¢ brought within, the jurisdiction of the Act. It also defines the various terms that are regularly used 1 the Act. It, specifies the incomes which are wholly or partially exempt from tax 1m the conmputation of total, heme. It provides guidelines for the proper class! kinds of incomes under, different heads. It defines the various deductions that can be made from ', well as from gross total income; S50 as {QO arrive al the net taxable mcoomle, Income Tax Act, 1961 as amended upto date also deal precisely with the tax autores, procedure, of assessment, collections, recoveries and refund of tax, penalties offences and Prgsecutions appeals, and revisions. Thus the act facilitates in the determination of taxable meome of a person. Such, income is taxed at the rates prescribed in the financial act of the yeal ,, fhe Finance Act passed every year during the budget session of the parliamen, rates of income tax applicable on the income ¢ hcoming financial yea, , , , , tation of taxable mocome of a, , very entity i, , fication Of various, ae h head ef Tic OTe “AS, , lotal 29% sections caf, , , , t. preseribes the, , juring the fort, i, , ntial te understand, , Definitions, Before commencing the study of the law of income tax. it is absolutely essential, some of the terms and expressions used undet the Income Tax Act, 1961 These terms have been, , 1961., , defined in section 2 and 3 of the Income Tax Act,, , 1. Person [Section 2 (31)} |, The term ‘person’ includes :, , , , , , , , , , , , , , , , , , , , , , , , , , a natural human beings. Iteven includes minors and insane, , (a) An Individual : It refers to, (b) A Hindu Undivided Family (HUF) : NI refers to a Jommt Hindu Family of persons \, lineally descended from a common ancestor and their wives and unmarried daughters, q, d to claim partition or a share on partition, A joint farmly of ., , who are legally entitle, hristians or Muslims canno, , Firm : It refers to a partnership concern govern, , Company : It means a Company as ¢, , gn Company., , jation of Persons (AOP) : It refers toa body of persons, whether incot, , ho have joined together to serve common interest e.g. 1 rade Unions, Indian, sociation, Trusts and Co-operative Societies ete., , ity : The local self governing bodies like Municipalities, Gram Pat \chayats., , yorations, District Boards, ete. are head., , ridical Person : It 18 a residuary head covering a\\ rem Tine & nutes, , above six categories ¢.g. deity, idol, public corporations tablisl, , t be called HUF., ed by the Partnership Act., , (17) of the Act. Ttmay be an India, , lefined u/s 2, , 1, poratea, , YT} ior (h1<, Rh GAT, , he entities included und, , sco aineeeuaincertctgn ee TES nicer TOOT em