Basic Concepts Taxation Notes | EduRev

Fast Track Quick Revision Income Tax

Taxation : Basic Concepts Taxation Notes | EduRev

The document Basic Concepts Taxation Notes | EduRev is a part of the Taxation Course Fast Track Quick Revision Income Tax.
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Concept of Income
Revenue receipt Every revenue receipt is derived from source of income. Source of income can be a tangible asset or intangible assets Capital receipt 1. Receipt for which there do not exist a source of income is a capital receipt.
2. Sale of source of income.
Tax treatment Every revenue receipt is taxable, unless otherwise expressly exempted under the Act. Tax treatment Every capital receipt is not taxable unless otherwise expressly taxable.
Revenue expenditure Expenditure incurred for maintenance of source of income. Capital expenditure Expenditure incurred for acquisition of source of income.

 

Definitions
S 2(9) Assessment Year means the period of 12 months commencing on the 1st day of April every year. (AY = FY in which tax is paid)
S 3 Previous year means the financial year immediately preceding the assessment year. (PY = FY in which income is earned)
Exceptions to PY Income of the PY taxable in the PY itself instead of AY S 172 Income of a Non-Resident shipping companies.
S 174 Income of persons leaving India with no intention of returning to India.
S 174 A Assessment of AOP / BOI / AJP formed for a particular purpose likely to be dissolved in the same year of formation.
S 175 The assessee is likely to transfer his assets with a view to avoid payment of tax.
S 176 Income of a discontinued business or profession. 
S 2(31) Person includes Individual; HUF; Company; Firm; AOP (Society); Local Authority; AJP (University)
S 2(7) Assessee Person who pays tax, interest or penalty, Any proceeding undertaken; a deemed assessee; a person who is in default.
S 2(24) Income includes salary, rent, profit, dividend, gifts, donations, capital gain.

 

Assessment year Previous year
Assessment year is the financial year in which tax is paid. Previous year is the financial year in which income is earned.
Assessment year succeeds previous year. Previous year precedes assessment year.
Assessment year always starts from 1st of April and ends on 31st of March. All previous year whether first or subsequent shall always end on 31st of March. However start of first previous year shall depend upon the existence of source of income.
The period of assessment year is fixed 12 months. The period of previous year is of maximum of 12 months. It can exist even for a day if the source of income newly coming into existence, in the said financial year, i.e. on 31st March.

 

 

 

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