APPLIED DIRECT TAXATION AND E-FILLING - PPT

1. APPLIED DIRECT TAXATION AND E-FILLING UNIT – I DEFINITIONS OF TERMS BY Dr.N.MUTHUSELVI

2. ASSESSMENT YEAR Assessment year means the period of twelve months commencing on the first day of April every year and ending on 31st March of the next year.

3. PREVIOUS YEAR Previous year means the financial year immediately preceding the assessment year. Financial Year begins on 1st April and ends on 31st March

4. INDIVIDUAL An Individual means a natural person or a human being, who may be male, female, minor child or a lunatic

5. HINDU UNDIVIDED FAMILY (HUF) A Hindu Undivided Family means a hindu family which consists of all persons lineally descended from a common ancestor including their wives and unmarried daughters

6. COMPANY A Company may be defined as an artificial person created by law with perpetual succession, a common seal and shares carrying limited liability

7. FIRM A Firm means a partnership firm: which is defined under the Partnership Act

8. AN ASSOCIATION OF PERSONS An Association of Persons means two or more persons joining for a common purpose for the purpose of earning income. The A.O.P may consist two or more individuals or any other person.

9. PUBLIC SECTOR COMPANY public sector company means a company in which 51% or more of the subscribed and paid-up equity is owned and controlled by the Central or a State Government, jointly or severally, and includes any undertaking designated as such by the Department of Public Enterprises and companies in which majority stake is held by Public Sector Companies other than financial institutions.

10. FORIEN COMPANY “foreign company” means any company or body corporate incorporated outside India which,— (a) has a place of business in India whether by itself or through an agent, physically or through   electronic mode; and (b) conducts any business activity in India in any other manner.

11. INSURER An insurer is the company responsible for paying claims under a contract of insurance. An insurer provides insurance policies, while an insured is protected by those insurance policies. Insurance customers often buy their policies directly from insurers, but may also buy from a broker that sells policies on behalf of an insurer.

12. INDIAN COMPANY A Company registered in India is an Indian Company. An Indian Company is the one registered in India under the Companies Act of 1956. Indian Company is treated as resident in India. It has to pay tax in Indian for its global income.

13. DOMESTIC COMPANY Domestic Company 2(22A) domestic company means an Indian company, or any other company which, in respect of its income liable to tax under this Act, has made the prescribed arrangements for the declaration and payment, within India, of the dividends (including dividends on preference shares) payable out of such income.

14. WIDELY-HELD COMPANY This is the popular name of a company in which the public are substaintially interested

15. CLOSELY-HELD COMPANY This is the popular name of a company in which the public are not substaintially interested

16. SUBSTANTIAL INTEREST As per Section 2(32) of Income Tax Act, 1961, unless the context otherwise requires, the term “person who has a substantial interest in the company”, in relation to a company, means a person who is the beneficial owner of shares, not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits, carrying not less than twenty per cent of the voting power.

17. PERSON The term ‘person’ under the Income-tax Act includes natural as well as artificial persons. It can be an association of persons or a body of individuals or a local authority or an artificial juridical person.

18. INCOME Profits and gains Dividend Voluntary Contributions received by a trust. Voluntary contributions received by a trust are included in the definition of income. As such contributions received by following types of trusts, funds, associations, bodies etc. are included in the income of such bodies.

19. GROSS TOTAL INCOME Section 80B(5) of the IT Act defines Gross Total Income Includes income received or receivable by you in the previous year adjusted for clubbing and carry-forward amounts from previous years Deduct the non-taxable parts of your income from this amount to estimate ‘Gross Total Income’

20. TOTAL INCOME Total Income is defined under Section 2(45) with the scope defined by Section 5 of the Income Tax Act, 1961 If you are an Indian resident in the previous year, any income received, accrued or deemed to be received by you will be accounted for If you are not ordinarily resident in the previous year, incomes arising out of India will be included only if they are from a business controlled or performed from India In the case of non-residents (NRI), only incomes arising or accruing in India will be counted Total Income is arrived by deducting all eligible deductions from “Gross Total Income” Your tax liability will be estimated on the Total Income. In simple terms, you pay tax on your Total Income.

21. ASSESSEE An assessee is a person who pays a certain amount to the government as tax in a financial year. This is as per the Income Tax Act of 1961. It contains every individual who has been assessed for his income, the income of another person, or the profit and loss he has sustained.

22. Types of assessees Normal Assessee Representative Assessee Deemed Assessee Assessee-in-default

23. Normal Assessee An individual who pays tax for the total income earned during a financial year is a normal assessee. Every individual who had earned any income or had a loss during the previous financial years is accountable to pay tax to the government in the current financial year. All individuals who pay interest or who are supposed to get a refund from the government are categorised as normal assessees.

24. Representative Assessee A representative assessee is a person who is responsible to pay tax for the income or loss caused by a third party. It happens when the person liable for tax payment is a non-resident, minor, or lunatic. They can not file tax by themselves. Therefore, It can either be an agent or guardian.

25. Deemed Assessee A deemed assessee is an individual who is responsible to pay the tax by the legal authorities. A deemed assessee can be: The eldest son / a legal heir of a deceased person who had died without writing a will. The executor / a legal heir of the property of a deceased person who has passed on his property to the executor in a writing. The guardian of a lunatic, an idiot, or a minor. The representative of a non-resident Indian receiving income from India.

26. Assessee-in-default Assessee-in-default is a person who failed to pay taxes to the government or did not file his income tax return.

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