Income Tax
PERSONAL COPY/ NOT FOR SALE OR CIRCULATION (Session 2012-13)
INTRODUCTION HISTORY OF INCOME-TAX: 1. India’ trust with income tax dates back to 1859 when James Wilson, Finance member in the Council of India, came to the country to establish the tax structure, a new paper currency and to remodel the finance system. 2. A bill imposing tax on profits from property, professions, trades and offices was passed by the Legislative Council of India. It received the assent of the Governor General on July 24, 1860. Lord Canning was the Governor General during 1856-58 and became Viceroy in 1858 till 1862. 3. Direct tax revenue of ` 1.35 crore was raised in 1860-61. The government’s direct tax revenue was around ` 4,50,000 crore in 2010-11. 4. The contribution of direct taxes to the GDP increased from 1.9% in 1860-61 to 6.1% in 2009-10. 5. The current tax law was passed in 1961. It is amended every year through the Finance Acts. A series of amendments had rendered the Act almost incomprehensible. 6. The exercise to simplify the Act began in 1986 when the then Prime Minister, Shri Rajiv Gandhi tasked senior Supreme Court lawyer, Dinesh Vyas to work on a new law. 7. The exercise of redrafting the law was initiated only in 1996 when a group was formed by the then Finance Minister, Shri P Chidambaram. 8. The group submitted its report in 1997, but the process got stalled again due to change in government. 9. The idea was revived again when Mr. Chidambaram returned as the finance minister of UPA government’s first innings in 2004. 10. In August 2009, Finance Minister, Mr. Mukherjee put out a discussion paper. 11. The current bill is an outcome of the discussion initiated through that paper. TAX BUOYANCY: It is defined as the percentage change in tax revenues divided by the percentage change in GDP. ASSESSMENT YEAR [Sec. 2(9)]: “Assessment year” means the period starting from April 1 and ending on March 31 of the next year. For instance, the assessment year 2012-13 which commenced
INTRODUCTION HISTORY OF INCOME-TAX: 1. India’ trust with income tax dates back to 1859 when James Wilson, Finance member in the Council of India, came to the country to establish the tax structure, a new paper currency and to remodel the finance system. 2. A bill imposing tax on profits from property, professions, trades and offices was passed by the Legislative Council of India. It received the assent of the Governor General on July 24, 1860. Lord Canning was the Governor General during 1856-58 and became Viceroy in 1858 till 1862. 3. Direct tax revenue of ` 1.35 crore was raised in 1860-61. The government’s direct tax revenue was around ` 4,50,000 crore in 2010-11. 4. The contribution of direct taxes to the GDP increased from 1.9% in 1860-61 to 6.1% in 2009-10. 5. The current tax law was passed in 1961. It is amended every year through the Finance Acts. A series of amendments had rendered the Act almost incomprehensible. 6. The exercise to simplify the Act began in 1986 when the then Prime Minister, Shri Rajiv Gandhi tasked senior Supreme Court lawyer, Dinesh Vyas to work on a new law. 7. The exercise of redrafting the law was initiated only in 1996 when a group was formed by the then Finance Minister, Shri P Chidambaram. 8. The group submitted its report in 1997, but the process got stalled again due to change in government. 9. The idea was revived again when Mr. Chidambaram returned as the finance minister of UPA government’s first innings in 2004. 10. In August 2009, Finance Minister, Mr. Mukherjee put out a discussion paper. 11. The current bill is an outcome of the discussion initiated through that paper. TAX BUOYANCY: It is defined as the percentage change in tax revenues divided by the percentage change in GDP. ASSESSMENT YEAR [Sec. 2(9)]: “Assessment year” means the period starting from April 1 and ending on March 31 of the next year. For instance, the assessment year 2012-13 which commenced