Tax Structure in India Final

TAX STRUCTURE IN INDIA
EMPOWERING INDIA
NAME: NIRAJ BHARAT POONAWALA
ADMISSION NO: HPGD/JA15/2789
SPECIALISATION: FINANCE
PRIN.L.N.WELINGKAR INSTITUTE OF MANGEMENT

DEVELOPMENT & RESEARCH
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TAXES FOR A NATION STRENGTHENS ITS ECONOMY
DOING BUSINESS IN INDIA
STRUCTURE OF BUSINESS
FOREIGN INVESTMENT POLICY
REGULATORY ENVIORNMENT
11% 16%
MNC DOING BUSINESS IN
11% INDIA
16% TAX ENVIORNMENT

10%
INTERNATIONAL
10% ARRANGEMENTS
26% REGULATORY OVERVIEW
TECHNOLOGY
POTENTIAL AREAS OF
CONCERN FOR MNC
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INTRODUCTION0
Taxes are the governments way of earning an income which can then be used for various
projects that the government needs to indulge in to help boost the countrys economy or its
people. Taxes in India are decided on by the central and state governments with local
governments, such as municipalities, also deciding on smaller taxes that can be levied within
their jurisdiction. It must, however, be remembered that the government cannot impose any tax
that it wishes to. All the taxes imposed by the government must be laws.
India being a welfare state follows progressive taxation system. This method has increasing rates
of tax for increasing value or volume on which the tax is being imposed.
In laymans term Tax on people who earns less pays less tax and those who earns more pays
higher tax.
So this system classifies income earners into different slabs.
This tax system has been slated because it is believed that this system discourage more earning
by the individual to support low growth and development unintentionally.
Taxation in India |
Constitutional Provisions
The Constitution of India establishes a partly federal and partly unitary form of governance
in the country.
The right to tax subjects are distributed between Union and State Government.
Tax Legislations
India has a wide gamut of taxing legislations that cover direct, indirect, transaction and
other taxes.
While taxes on income, corporations, services, manufacturing, import, wealth etc are levied
by Central Government, taxes on sale of goods , stamp duties etc are levied by the state
governments.
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Multiple Laws
Given the multiplicity of tax legislations and associated Authorities , there sometimes are
conflicts and overlaps (E.G Taxation of Software, Real Estate transaction etc.)
Moving Towards Simplification
There are recent initiatives on the part of the Government to move towards a simplified tax
regime. The Direct Tax Code Bill 2010 will be tabled in the Indian Parliament and a
Unified Goods and Service Tax is in the anvil.
Every year if the month of March comes then the Companies, Individuals, Central/ State
Government Employees, etc. will be thinking that Should I have to Pay Tax?
Many People may not pay tax by producing a variety of reasons. Every Person or Individual in
India has to pay tax.
First of all lets know What Tax means.
WHAT IS TAX?
Tax is a charge, or it is a specified fee which is levied by the Central Government or State
Government. This Fund or Charge is used to boost or increase the Countrys economy and Welfare.
Types of Tax and Tax Rules in India are constituted by the Ministry of Finances Department of
Revenue, Government of India. Anyway, we must note the point that Government cannot impose
any tax on its own wish.
India has a well-developed tax structure with clearly demarcated authority between Central and
State Governments and local bodies.
Central Government levies taxes on income (except tax on agricultural income, which the State
Governments can levy), customs duties, central excise and service tax.
Value Added Tax (VAT), stamp duty, state excise, land revenue and profession tax are levied by
the State Governments.
Local bodies are empowered to levy tax on properties, octroi and for utilities like water supply,
drainage etc.
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Indian taxation system has undergone tremendous reforms during the last decade. The tax rates
have been rationalized and tax laws have been simplified resulting in better compliance, ease of
tax payment and better enforcement.
The process of rationalization of tax administration is ongoing in India.
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Central Government levies taxes on the following:
Income Tax: Tax on income of a person

Customs duties: Duties on import and export of goods
Central excise: Taxes on Manufacturing of dutiable goods
Service tax: Taxes on provision of services
State Governments can levy the following taxes:
Value Added Tax (VAT): This is tax on sale of goods. While intra-state sale of goods
are covered by the VAT Law of that state, inter-state sale of goods is covered by the
Central Sales Tax Act. Even the revenue collected under Central Sales Tax Act is done so
by the State Governments themselves and actually the Central Government has no role to
play so.
Stamp duties and Land Revenue: Since land is a matter on which only State
Governments can govern, thus the Stamp duties on transfer of immovable properties are
levied by State Governments.
State Excise on Liquor and certain agricultural goods.
Apart from the above, certain powers of taxation have been devolved in the hands of local
bodies. These local governing bodies can levy taxes on water, property, shop and establishment
charges etc.
DIRECT TAXATION
They are called so as the burden of taxation falls directly on the tax payer.
Under the Income Tax Act, 1961 The Central Government levies direct taxes on the income of
individuals and business entities as well as Non business entities also. The taxation level depends
on the residential status of individuals. The thumb rule of residential status is that an individual
becomes resident in India if he has remained in India for more than 182 days in a particular
residential year. If he becomes resident in India, then his global income i.e. income earned even
outside India is taxable in India. This has to be noted very carefully by Expatriates on deputation
to India. They need to plan their stay in such a manner as to avoid becoming a resident in India.
The following para explains this in a slightly more detailed manner:
Tax Resident
An individual is treated as resident in a year if present in India:
1. For 182 days during the year or

2. For 60 days during the year and 365 days during the preceding four years.
So an expatriate has to time his stay in India by taking into account the above.
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So what is taxable for a Resident but Not Ordinarily Resident?
A resident who was not present in India for 730 days during the preceding seven years or who
was nonresident in nine out of ten preceding years is treated as not ordinarily resident. A person
not ordinarily resident is taxed like a non-resident but is also liable to tax on income accruing
abroad if it is from a business controlled in or a profession set up in India.
What is taxable for a Non-Resident?
Non-residents are taxed only on income that is received in India or arises or is deemed to arise in
India. He is entitled to get benefit of any double taxation avoidance agreement that his country of
residence has signed with India. Then he shall be liable for taxes at rates mentioned in the Indian
domestic tax laws or the rates mentioned in the Double Taxation Avoidance Agreement
whichever is lower.
What is taxable for a Resident?
His global income is taxable irrespective of whether earned or related or received in India.
Thus any expatriate needs to plan his stay so that he does not, unwittingly, become a Resident for
tax purposes.
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Taxation slabs for Individuals for the FY 2015-16:
1. Individual resident aged below 60 year.
Income Slabs Tax Rates
Where the taxable income does not NIL

exceed Rs. 2,50,000/-.
Where the taxable income exceeds 10% of amount by which the taxable income
Rs. 2,50,000/- but does not exceed exceeds Rs. 2,50,000/-.
Rs. 5,00,000/-
Less ( in case of Resident Individuals only ) : Tax
Credit u/s 87A 10% of taxable income upto a
maximum of Rs. 2000/-
Where the taxable income exceeds Rs. 25,000/- + 20% of the amount by which the
Rs. 5,00,000/- but does not exceed taxable income exceeds Rs. 5,00,000/-.
Rs. 10,00,000/-.
Where the taxable income exceeds Rs. 125,000/- + 30% of the amount by which the
Rs. 10,00,000/-. taxable income exceeds Rs. 10,00,000/-
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2. Individual resident who is of the age of 60 years or more but below the age of 80
years at any time during the previous year
1. Where the taxable income does NIL

not exceed Rs. 3,00,000/-
2. Where the taxable income 10% of the amount by which the taxable income
exceeds Rs. 3,00,000/- but does exceeds Rs. 300,000/-.Less : Tax Credit u/s 87A
not exceed Rs. 5,00,000/- 10% of taxable income upto a maximum of
Rs. 2000/-.
3. Where the taxable income Rs. 20,000/- + 20% of the amount by which the
exceeds Rs. 5,00,000/- but does taxable income exceeds Rs. 5,00,000/-
exceeds Rs. 10,00,000/- taxable income exceeds Rs. 10,00,000/-.
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3. Individual resident who is of the age of 80 years or more at any time during the previous
year
1. Where the taxable income does NIL

2. Where the taxable income 20% of the amount by which the taxable income
exceeds Rs. 5,00,000/- but exceeds Rs. 5,00,000/-.
does not exceed Rs.
10,00,000/-
exceeds Rs. 10,00,000/- taxable income exceeds Rs. 10,00,000/-
Amounts invested in certain investments like Employee Provident Fund, Public Provident Fund,
Tax saving Fixed Deposits, are also eligible for deduction under section 80C upto Rs.1,50,000
per year.
Status Indian Income Foreign Income
Resident and ordinarily resident Taxable Taxable
Resident but not ordinary resident Taxable Not taxable
Non-Resident Taxable Not taxable
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INCOME TAX
Income Tax is today an important source of revenue for governments in all the countries.
More than 3000 years ago, the inhabitants of ancient Egypt and Greece used to pay income
Tax, consumption taxes and customs duties.
Income Tax was first introduced in India in 1860 by James Wilson who became Indias first
Finance Minister.
According to Income Tax Act 1961, every person, who is an assessee and whose total income
exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates
prescribed in the Finance Act.
Such income tax shall be paid on the total income of the previous year in the relevant assessment
year.
Assessee means a person by whom (any tax) or any other sum of money is payable under the
Income Tax Act, and includes -
(a) Every person in respect of whom any proceeding under the Income Tax Act has been taken for
the assessment of his income (or assessment of fringe benefits) or of the income of any other
person in respect of which he is assessable, or of the loss sustained by him or by such other person,
or of the amount of refund due to him or to such other person;
(b) Every person who is deemed to be an assessee under any provisions of the Income Tax Act;
(c) Every person who is deemed to be an assessee in default under any provision of the Income
Tax Act.
Where a person includes:
Individual
Hindu Undivided Family (HUF)
Association of persons (AOP)
Body of individuals (BOI)
Company
Firm
A local authority and,
Every artificial judicial person not falling within any of the preceding categories.
Income tax is an annual tax imposed separately for each assessment year (also called the tax year).
Assessment year commences from 1st April and ends on the next 31st March.
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Definitions under the Income Tax Act.
2. In this Act, unless the context otherwise requires,
(1) "advance tax" means the advance tax payable in accordance with the provisions of Chapter
XVII-C;
(1A) 1"agricultural income"2 means
(a) any rent or revenue derived from land which is situated in India and is used for
agricultural purposes;
(b) any income derived from such land by
(i) agriculture; or
(ii) the performance by a cultivator or receiver of rent-in-kind of any process
ordinarily employed by a cultivator or receiver of rent-in-kind to render the
produce raised or received by him fit to be taken to market; or
(iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or
received by him, in respect of which no process has been performed other than
a process of the nature described in paragraph (ii) of this sub-clause ;
(c) any income derived from any building owned and occupied by the receiver of the
rent or revenue of any such land, or occupied by the cultivator or the receiver of
rent-in-kind, of any land with respect to which, or the produce of which, any process
mentioned in paragraphs (ii) and (iii) of sub-clause (b) is carried on :
Provided that
(i) the building is on or in the immediate vicinity of the land, and is a building
which the receiver of the rent or revenue or the cultivator, or the receiver of
rent-in-kind, by reason of his connection with the land, requires as a dwelling
house, or as a store-house, or other out-building, and
(ii) the land is either assessed to land revenue in India or is subject to a local rate
assessed and collected by officers of the Government as such or where the land
is not so assessed to land revenue or subject to a local rate, it is not situated
(A) in any area which is comprised within the jurisdiction of a municipality
(whether known as a municipality, municipal corporation, notified area
committee, town area committee, town committee or by any other name)
or a cantonment board and which has a population of not less than ten
thousand; or
(B) in any area within the distance, measured aerially,
(I) not being more than two kilometres, from the local limits of any
municipality or cantonment board referred to in item (A) and which
has a population of more than ten thousand but not exceeding one
lakh; or
(II) not being more than six kilometres, from the local limits of any
has a population of more than one lakh but not exceeding ten lakh; or
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(III) not being more than eight kilometres, from the local limits of any
has a population of more than ten lakh.
Explanation 1.For the removal of doubts, it is hereby declared that revenue derived from
land shall not include and shall be deemed never to have included any income arising from
the transfer of any land referred to in item (a) or item (b) of sub-clause (iii) of clause (14)
of this section.
Explanation 2.For the removal of doubts, it is hereby declared that income derived from
any building or land referred to in sub-clause (c) arising from the use of such building or
land for any purpose (including letting for residential purpose or for the purpose of any
business or profession) other than agriculture falling under sub-clause (a) or sub-clause
(b) shall not be agricultural income.
Explanation 3.For the purposes of this clause, any income derived from saplings or
seedlings grown in a nursery shall be deemed to be agricultural income.
Explanation 4.For the purposes of clause (ii) of the proviso to sub-clause (c),
"population" means the population according to the last preceding census of which the
relevant figures have been published before the first day of the previous year;
(1B) "amalgamation", in relation to companies, means the merger of one or more companies
with another company or the merger of two or more companies to form one company (the
company or companies which so merge being referred to as the amalgamating company
or companies and the company with which they merge or which is formed as a result of
the merger, as the amalgamated company) in such a manner that
(i) all the property of the amalgamating company or companies immediately before the
amalgamation becomes the property of the amalgamated company by virtue of the
amalgamation ;
(ii) all the liabilities of the amalgamating company or companies immediately before the
amalgamation become the liabilities of the amalgamated company by virtue of the
amalgamation ;
(iii) shareholders holding not less than three-fourths in value of the shares in the
amalgamating company or companies (other than shares already held therein
immediately before the amalgamation by, or by a nominee for, the amalgamated
company or its subsidiary) become shareholders of the amalgamated company by
virtue of the amalgamation,
otherwise than as a result of the acquisition of the property of one company by another
company pursuant to the purchase of such property by the other company or as a result of
the distribution of such property to the other company after the winding up of the first-
mentioned company ;
(1C) "Additional Commissioner" means a person appointed to be an Additional Commissioner
of Income-tax under sub-section (1) of section 117 ;
(1D) "Additional Director" means a person appointed to be an Additional Director of Income-
tax under sub-section (1) of section 117 ;
(2) "annual value", in relation to any property, means its annual value as determined
under section 23 ;
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(3) [* * *]
(4) "Appellate Tribunal" means the Appellate Tribunal constituted under section 252 ;
(5) "approved gratuity fund" means a gratuity fund which has been and continues to be
approved by the 3[Principal Chief Commissioner or] Chief Commissioner or 3[Principal
Commissioner or] Commissioner] in accordance with the rules contained in Part C of the
Fourth Schedule ;
(6) "approved superannuation fund" means a superannuation fund or any part of a
superannuation fund which has been and continues to be approved by the 3[Principal Chief
Commissioner or] Chief Commissioner or 3[Principal Commissioner or] Commissioner in
accordance with the rules contained in Part B of the Fourth Schedule ;
(7) "assessee" means a person by whom any tax or any other sum of money is payable under
this Act, and includes
(a) every person in respect of whom any proceeding under this Act has been taken for
the assessment of his income or assessment of fringe benefits or of the income of
any other person in respect of which he is assessable, or of the loss sustained by him
or by such other person, or of the amount of refund due to him or to such other
person ;
(b) every person who is deemed to be an assessee under any provision of this Act ;
(c) every person who is deemed to be an assessee in default under any provision of this
Act ;
(7A) "Assessing Officer" means the Assistant Commissioner or Deputy Commissioner or
Assistant Director or Deputy Director or the Income-tax Officer who is vested with the
relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-
section (2) of section 120 or any other provision of this Act, and the Additional
Commissioner or Additional Director or Joint Commissioner or Joint Director who is
directed under clause (b) of sub-section (4) of that section to exercise or perform all or any
of the powers and functions conferred on, or assigned to, an Assessing Officer under this
Act ;
(8) "assessment" includes reassessment ;
(9) "assessment year" means the period of twelve months commencing on the 1st day of April
every year ;
(9A) "Assistant Commissioner" means a person appointed to be an Assistant Commissioner of
Income-tax or a Deputy Commissioner of Income-tax under sub-section (1) of section
117 ;
(9B) "Assistant Director" means a person appointed to be an Assistant Director of Income-tax
under sub-section (1) of section 117;
(10) "average rate of income-tax" means the rate arrived at by dividing the amount of income-
tax calculated on the total income, by such total income ;
(11) "block of assets" means a group of assets falling within a class of assets comprising
(a) tangible assets, being buildings, machinery, plant or furniture;
(b) intangible assets, being know-how, patents, copyrights, trade-marks, licences,
franchises or any other business or commercial rights of similar nature,
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in respect of which the same percentage of depreciation is prescribed ;
(12) "Board" means the Central Board of Direct Taxes constituted under the Central Boards of
Revenue Act, 1963 (54 of 1963) ;
(12A) "books or books of account" includes ledgers, day-books, cash books, account-books and
other books, whether kept in the written form or as print-outs of data stored in a floppy,
disc, tape or any other form of electro-magnetic data storage device;
(13) "business" includes any trade, commerce or manufacture or any adventure or concern in
the nature of trade, commerce or manufacture;
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[(13A) "business trust" means a trust registered as,
(i) an Infrastructure Investment Trust under the Securities and Exchange Board of
India (Infrastructure Investment Trusts) Regulations, 2014 made under the
Securities and Exchange Board of India Act, 1992 (15 of 1992); or
(ii) a Real Estate Investment Trust under the Securities and Exchange Board of India
(Real Estate Investment Trusts) Regulations, 2014 made under the Securities and
Exchange Board of India Act, 1992 (15 of 1992), and
the units of which are required to be listed on recognised stock exchange in accordance
with the aforesaid regulations;]
(14) 5["capital asset" means
(a) property of any kind held by an assessee, whether or not connected with his business
or profession;
(b) any securities held by a Foreign Institutional Investor which has invested in such
securities in accordance with the regulations made under the Securities and
Exchange Board of India Act, 1992 (15 of 1992),
but does not include
(i) any stock-in-trade [other than the securities referred to in sub-clause (b)]],
consumable stores or raw materials held for the purposes of his business or
profession ;
(ii) personal effects, that is to say, movable property (including wearing apparel and
furniture) held for personal use by the assessee or any member of his family
dependent on him, but excludes
(a) jewellery;
(b) archaeological collections;
(c) drawings;
(d) paintings;
(e) sculptures; or
(f) any work of art.
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[Explanation 1].For the purposes of this sub-clause, "jewellery" includes
(a) ornaments made of gold, silver, platinum or any other precious metal or any
alloy containing one or more of such precious metals, whether or not containing
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any precious or semi-precious stone, and whether or not worked or sewn into
any wearing apparel;
(b) precious or semi-precious stones, whether or not set in any furniture, utensil or
other article or worked or sewn into any wearing apparel.
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[Explanation 2.For the purposes of this clause
(a) the expression "Foreign Institutional Investor" shall have the meaning assigned
to it in clause (a) of the Explanation to section 115AD;
(b) the expression "securities" shall have the meaning assigned to it in clause (h) of
section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);]
(iii) agricultural land in India, not being land situate
(a) in any area which is comprised within the jurisdiction of a municipality (whether
known as a municipality, municipal corporation, notified area committee, town
area committee, town committee, or by any other name) or a cantonment board
and which has a population of not less than ten thousand; or
(b) in any area within the distance, measured aerially,
(I) not being more than two kilometres, from the local limits of any
municipality or cantonment board referred to in item (a) and which has a
population of more than ten thousand but not exceeding one lakh; or
(II) not being more than six kilometres, from the local limits of any
population of more than one lakh but not exceeding ten lakh; or
(III) not being more than eight kilometres, from the local limits of any
population of more than ten lakh.
Explanation.For the purposes of this sub-clause, "population" means the
population according to the last preceding census of which the relevant figures have
been published before the first day of the previous year;
(iv) 6 per cent Gold Bonds, 1977, or 7 per cent Gold Bonds, 1980, or National Defence
Gold Bonds, 1980, issued by the Central Government;
(v) Special Bearer Bonds, 1991, issued by the Central Government ;
(vi) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 8[or deposit
certificates issued under the Gold Monetisation Scheme, 2015] notified by the
Central Government.
Explanation.For the removal of doubts, it is hereby clarified that "property"
includes and shall be deemed to have always included any rights in or in relation to
an Indian company, including rights of management or control or any other rights
whatsoever;]
(15) "charitable purpose"includes relief of the poor, education, 9[yoga,] medical relief,
preservation of environment (including watersheds, forests and wildlife) and preservation
of monuments or places or objects of artistic or historic interest, and the advancement of
any other object of general public utility:
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[Provided that the advancement of any other object of general public utility shall not be
a charitable purpose, if it involves the carrying on of any activity in the nature of trade,
commerce or business, or any activity of rendering any service in relation to any trade,
commerce or business, for a cess or fee or any other consideration, irrespective of the
nature of use or application, or retention, of the income from such activity, unless
(i) such activity is undertaken in the course of actual carrying out of such advancement
of any other object of general public utility; and
(ii) the aggregate receipts from such activity or activities during the previous year, do
not exceed twenty per cent of the total receipts, of the trust or institution undertaking
such activity or activities, of that previous year;]
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[(15A) "Chief Commissioner" means a person appointed to be a Chief Commissioner of Income-
tax or a Principal Chief Commissioner of Income-tax under sub-section (1) of section
117;]
(15B)] "child", in relation to an individual, includes a step-child and an adopted child of that
individual ;
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[(16) "Commissioner" means a person appointed to be a Commissioner of Income-tax or a
Director of Income-tax or a Principal Commissioner of Income-tax or a Principal Director
of Income-tax under sub-section (1) of section 117;]
(16A) "Commissioner (Appeals)" means a person appointed to be a Commissioner of Income-tax
(Appeals) under sub-section (1) of section 117 ;
(17) "company" means
(i) any Indian company, or
(ii) any body corporate incorporated by or under the laws of a country outside India, or
(iii) any institution, association or body which is or was assessable or was assessed as a
company for any assessment year under the Indian Income-tax Act, 1922 (11 of
1922), or which is or was assessable or was assessed under this Act as a company
for any assessment year commencing on or before the 1st day of April, 1970, or
(iv) any institution, association or body, whether incorporated or not and whether Indian
or non-Indian, which is declared by general or special order of the Board to be a
company :
Provided that such institution, association or body shall be deemed to be a company
only for such assessment year or assessment years (whether commencing before the
1st day of April, 1971, or on or after that date) as may be specified in the declaration
;
(18) "company in which the public are substantially interested"a company is said to be a
company in which the public are substantially interested
(a) if it is a company owned by the Government or the Reserve Bank of India or in
which not less than forty per cent of the shares are held (whether singly or taken
together) by the Government or the Reserve Bank of India or a corporation owned
by that bank ; or
(aa) if it is a company which is registered under section 25 of the Companies Act, 1956
(1 of 1956) ; or
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(ab) if it is a company having no share capital and if, having regard to its objects, the
nature and composition of its membership and other relevant considerations, it is
declared by order of the Board to be a company in which the public are substantially
interested :
Provided that such company shall be deemed to be a company in which the public
are substantially interested only for such assessment year or assessment years
(whether commencing before the 1st day of April, 1971, or on or after that date) as
may be specified in the declaration ; or
(ac) if it is a mutual benefit finance company, that is to say, a company which carries on,
as its principal business, the business of acceptance of deposits from its members
and which is declared by the Central Government under section 620A of the
Companies Act, 1956 (1 of 1956), to be a Nidhi or Mutual Benefit Society ; or
(ad) if it is a company, wherein shares (not being shares entitled to a fixed rate of dividend
whether with or without a further right to participate in profits) carrying not less than
fifty per cent of the voting power have been allotted unconditionally to, or acquired
unconditionally by, and were throughout the relevant previous year beneficially held
by, one or more co-operative societies ;
(b) if it is a company which is not a private company as defined in the Companies Act,
1956 (1 of 1956), and the conditions specified either in item (A) or in item (B) are
fulfilled, namely :
(A) shares in the company (not being shares entitled to a fixed rate of dividend
whether with or without a further right to participate in profits) were, as on the
last day of the relevant previous year, listed in a recognised stock exchange in
India in accordance with the Securities Contracts (Regulation) Act, 1956 (42 of
1956), and any rules made thereunder ;
(B) shares in the company (not being shares entitled to a fixed rate of dividend
whether with or without a further right to participate in profits) carrying not less
than fifty per cent of the voting power have been allotted unconditionally to, or
acquired unconditionally by, and were throughout the relevant previous year
beneficially held by
(a) the Government, or
(b) a corporation established by a Central, State or Provincial Act, or
(c) any company to which this clause applies or any subsidiary company of
such company if the whole of the share capital of such subsidiary company
has been held by the parent company or by its nominees throughout the
previous year.
Explanation.In its application to an Indian company whose business consists
mainly in the construction of ships or in the manufacture or processing of goods or
in mining or in the generation or distribution of electricity or any other form of
power, item (B) shall have effect as if for the words "not less than fifty per cent", the
words "not less than forty per cent" had been substituted ;
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(19) "co-operative society" means a co-operative society registered under the Co-operative
Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any
State for the registration of co-operative societies ;
(19A) "Deputy Commissioner" means a person appointed to be a Deputy Commissioner of
Income-tax under sub-section (1) of section 117 ;
(19AA) "demerger", in relation to companies, means the transfer, pursuant to a scheme of
arrangement under sections 391 to 394 of the Companies Act, 1956 (1 of 1956), by a
demerged company of its one or more undertakings to any resulting company in such a
manner that
(i) all the property of the undertaking, being transferred by the demerged company,
immediately before the demerger, becomes the property of the resulting company
by virtue of the demerger;
(ii) all the liabilities relatable to the undertaking, being transferred by the demerged
company, immediately before the demerger, become the liabilities of the resulting
company by virtue of the demerger;
(iii) the property and the liabilities of the undertaking or undertakings being transferred
by the demerged company are transferred at values appearing in its books of account
immediately before the demerger;
(iv) the resulting company issues, in consideration of the demerger, its shares to the
shareholders of the demerged company on a proportionate basis except where the
resulting company itself is a shareholder of the demerged company;
(v) the shareholders holding not less than three-fourths in value of the shares in the
demerged company (other than shares already held therein immediately before the
demerger, or by a nominee for, the resulting company or, its subsidiary) become
share-holders of the resulting company or companies by virtue of the demerger,
otherwise than as a result of the acquisition of the property or assets of the demerged
company or any undertaking thereof by the resulting company;
(vi) the transfer of the undertaking is on a going concern basis;
(vii) the demerger is in accordance with the conditions, if any, notified under sub-section
(5) of section 72A by the Central Government in this behalf.
Explanation 1.For the purposes of this clause, "undertaking" shall include any part of
an undertaking, or a unit or division of an undertaking or a business activity taken as a
whole, but does not include individual assets or liabilities or any combination thereof not
constituting a business activity.
Explanation 2.For the purposes of this clause, the liabilities referred to in sub-clause
(ii), shall include
(a) the liabilities which arise out of the activities or operations of the undertaking;
(b) the specific loans or borrowings (including debentures) raised, incurred and utilised
solely for the activities or operations of the undertaking; and
(c) in cases, other than those referred to in clause (a) or clause (b), so much of the
amounts of general or multipurpose borrowings, if any, of the demerged company
as stand in the same proportion which the value of the assets transferred in a
20
demerger bears to the total value of the assets of such demerged company
immediately before the demerger.
Explanation 3.For determining the value of the property referred to in sub-clause (iii),
any change in the value of assets consequent to their revaluation shall be ignored.
Explanation 4.For the purposes of this clause, the splitting up or the reconstruction of
any authority or a body constituted or established under a Central, State or Provincial Act,
or a local authority or a public sector company, into separate authorities or bodies or local
authorities or companies, as the case may be, shall be deemed to be a demerger if such
split up or reconstruction fulfils such conditions as may be notified in the Official Gazette,
by the Central Government;
Following Explanation 5 shall be inserted after Explanation 4 in clause (19AA) of
section 2 by the Taxation Laws (Amendment) Act, 2016, w.e.f. 1-4-2017 :
Explanation 5.For the purposes of this clause, the reconstruction or splitting up of a
company, which ceased to be a public sector company as a result of transfer of its shares
by the Central Government, into separate companies, shall be deemed to be a demerger,
if such reconstruction or splitting up has been made to give effect to any condition
attached to the said transfer of shares and also fulfils such other conditions as may be
notified by the Central Government in the Official Gazette.
(19AAA) "demerged company" means the company whose undertaking is transferred, pursuant to
a demerger, to a resulting company;
(19B) "Deputy Commissioner (Appeals)" means a person appointed to be a Deputy
Commissioner of Income-tax (Appeals) or an Additional Commissioner of Income-tax
(Appeals) under sub-section (1) of section 117 ;
(19C) "Deputy Director" means a person appointed to be a Deputy Director of Income-tax under
sub-section (1) of section 117 ;
(20) "director", "manager" and "managing agent", in relation to a company, have the meanings
respectively assigned to them in the Companies Act, 1956 (1 of 1956) ;
13
[(21) "Director General or Director" means a person appointed to be a Director General of
Income-tax or a Principal Director General of Income-tax or, as the case may be, a Director
of Income-tax or a Principal Director of Income-tax, under sub-section (1) of section 117,
and includes a person appointed under that sub-section to be an Additional Director of
Income-tax or a Joint Director of Income-tax or an Assistant Director or Deputy Director
of Income-tax;]
(22) "dividend" includes
(a) any distribution by a company of accumulated profits, whether capitalised or not, if
such distribution entails the release by the company to its shareholders of all or any
part of the assets of the company ;
(b) any distribution to its shareholders by a company of debentures, debenture-stock, or
deposit certificates in any form, whether with or without interest, and any
distribution to its preference shareholders of shares by way of bonus, to the extent
to which the company possesses accumulated profits, whether capitalised or not ;
21
(c) any distribution made to the shareholders of a company on its liquidation, to the
extent to which the distribution is attributable to the accumulated profits of the
company immediately before its liquidation, whether capitalised or not ;
(d) any distribution to its shareholders by a company on the reduction of its capital, to
the extent to which the company possesses accumulated profits which arose after
the end of the previous year ending next before the 1st day of April, 1933, whether
such accumulated profits have been capitalised or not ;
(e) any payment by a company, not being a company in which the public are
substantially interested, of any sum (whether as representing a part of the assets of
the company or otherwise) made after the 31st day of May, 1987, by way of advance
or loan to a shareholder, being 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) holding not less than ten per cent of the voting power, or to
any concern in which such shareholder is a member or a partner and in which he has
a substantial interest (hereafter in this clause referred to as the said concern) or any
payment by any such company on behalf, or for the individual benefit, of any such
shareholder, to the extent to which the company in either case possesses
accumulated profits ;
but "dividend" does not include
(i) a distribution made in accordance with sub-clause (c) or sub-clause (d) in respect of
any share issued for full cash consideration, where the holder of the share is not
entitled in the event of liquidation to participate in the surplus assets ;
(ia) a distribution made in accordance with sub-clause (c) or sub-clause (d) in so far as
such distribution is attributable to the capitalised profits of the company representing
bonus shares allotted to its equity shareholders after the 31st day of March, 1964,
and before the 1st day of April, 1965 ;
(ii) any advance or loan made to a shareholder or the said concern by a company in the
ordinary course of its business, where the lending of money is a substantial part of
the business of the company ;
(iii) any dividend paid by a company which is set off by the company against the whole
or any part of any sum previously paid by it and treated as a dividend within the
meaning of sub-clause (e), to the extent to which it is so set off;
(iv) any payment made by a company on purchase of its own shares from a shareholder
in accordance with the provisions of section 77A of the Companies Act, 1956 (1 of
1956);
(v) any distribution of shares pursuant to a demerger by the resulting company to the
shareholders of the demerged company (whether or not there is a reduction of capital
in the demerged company).
Explanation 1.The expression "accumulated profits", wherever it occurs in this
clause, shall not include capital gains arising before the 1st day of April, 1946, or
after the 31st day of March, 1948, and before the 1st day of April, 1956.
Explanation 2.The expression "accumulated profits" in sub-clauses (a), (b), (d)
and (e), shall include all profits of the company up to the date of distribution or
22
payment referred to in those sub-clauses, and in sub-clause (c) shall include all
profits of the company up to the date of liquidation, but shall not, where the
liquidation is consequent on the compulsory acquisition of its undertaking by the
Government or a corporation owned or controlled by the Government under any law
for the time being in force, include any profits of the company prior to three
successive previous years immediately preceding the previous year in which such
acquisition took place.
Explanation 3.For the purposes of this clause,
(a) "concern" means a Hindu undivided family, or a firm or an association of
persons or a body of individuals or a company ;
(b) a person shall be deemed to have a substantial interest in a concern, other than
a company, if he is, at any time during the previous year, beneficially entitled
to not less than twenty per cent of the income of such concern ;
(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 ;
(22AA) "document" includes an electronic record as defined in clause (t)of sub-section (1) of
section 2 of the Information Technology Act, 2000 (21 of 2000);
(22AAA) "electoral trust" means a trust so approved by the Board in accordance with the scheme
made in this regard by the Central Government;
(22B) "fair market value", in relation to a capital asset, means
(i) the price that the capital asset would ordinarily fetch on sale in the open market on
the relevant date ; and
(ii) where the price referred to in sub-clause (i) is not ascertainable, such price as may
be determined in accordance with the rules made under this Act ;
(23) (i) "firm" shall have the meaning assigned to it in the Indian Partnership Act, 1932 (9 of
1932), and shall include a limited liability partnership as defined in the Limited Liability
Partnership Act, 2008 (6 of 2009);
(ii) "partner" shall have the meaning assigned to it in the Indian Partnership Act, 1932 (9
of 1932), and shall include,
(a) any person who, being a minor, has been admitted to the benefits of partnership; and
(b) a partner of a limited liability partnership as defined in the Limited Liability
Partnership Act, 2008 (6 of 2009);
(iii) "partnership" shall have the meaning assigned to it in the Indian Partnership Act, 1932
(9 of 1932), and shall include a limited liability partnership as defined in the Limited
Liability Partnership Act, 2008 (6 of 2009);
(23A) "foreign company" means a company which is not a domestic company ;
(23B) "fringe benefits" means any fringe benefits referred to in section 115WB;
14
[(23C) "hearing" includes communication of data and documents through electronic mode;]
(24) "income" includes
23
(i) profits and gains ;
(ii) dividend ;
(iia) voluntary contributions received by a trust created wholly or partly for charitable
or religious purposes or by an institution established wholly or partly for such
purposes or by an association or institution referred to in clause (21) or clause (23),
or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v) or
by any university or other educational institution referred to in sub-clause (iiiad) or
sub-clause (vi) or by any hospital or other institution referred to in sub-clause (iiiae)
or sub-clause (via) of clause (23C) ofsection 10 or by an electoral trust.
Explanation.For the purposes of this sub-clause, "trust" includes any other legal
obligation ;
(iii) the value of any perquisite or profit in lieu of salary taxable under clauses (2) and
(3) of section 17 ;
(iiia) any special allowance or benefit, other than perquisite included under sub-clause
(iii), specifically granted to the assessee to meet expenses wholly, necessarily and
exclusively for the performance of the duties of an office or employment of profit ;
(iiib) any allowance granted to the assessee either to meet his personal expenses at the
place where the duties of his office or employment of profit are ordinarily performed
by him or at a place where he ordinarily resides or to compensate him for the
increased cost of living ;
(iv) the value of any benefit or perquisite, whether convertible into money or not,
obtained from a company either by a director or by a person who has a substantial
interest in the company, or by a relative of the director or such person, and any sum
paid by any such company in respect of any obligation which, but for such payment,
would have been payable by the director or other person aforesaid ;
(iva) the value of any benefit or perquisite, whether convertible into money or not,
obtained by any representative assessee mentioned in clause (iii) or clause (iv) of
sub-section (1) ofsection 160 or by any person on whose behalf or for whose benefit
any income is receivable by the representative assessee (such person being hereafter
in this sub-clause referred to as the "beneficiary") and any sum paid by the
representative assessee in respect of any obligation which, but for such payment,
would have been payable by the beneficiary ;
(v) any sum chargeable to income-tax under clauses (ii) and (iii) of section 28 or section
41 or section 59 ;
(va) any sum chargeable to income-tax under clause (iiia) of section 28 ;
(vb) any sum chargeable to income-tax under clause (iiib) of section 28 ;
(vc) any sum chargeable to income-tax under clause (iiic) of section 28 ;
(vd) the value of any benefit or perquisite taxable under clause (iv) of section 28 ;
(ve) any sum chargeable to income-tax under clause (v) of section 28 ;
(vi) any capital gains chargeable under section 45 ;
(vii) the profits and gains of any business of insurance carried on by a mutual insurance
company or by a co-operative society, computed in accordance with section 44 or
24
any surplus taken to be such profits and gains by virtue of provisions contained in
the First Schedule ;
(viia) the profits and gains of any business of banking (including providing credit facilities)
carried on by a co-operative society with its members;
(viii) [Omitted by the Finance Act, 1988, w.e.f. 1-4-1988. Original sub-clause (viii) was
inserted by the Finance Act, 1964, w.e.f. 1-4-1964;]
(ix) any winnings from lotteries, crossword puzzles, races including horse races, card
games and other games of any sort or from gambling or betting of any form or nature
whatsoever.
Explanation.For the purposes of this sub-clause,
(i) "lottery" includes winnings from prizes awarded to any person by draw of lots
or by chance or in any other manner whatsoever, under any scheme or
arrangement by whatever name called;
(ii) "card game and other game of any sort" includes any game show, an
entertainment programme on television or electronic mode, in which people
compete to win prizes or any other similar game;
(x) any sum received by the assessee from his employees as contributions to any
provident fund or superannuation fund or any fund set up under the provisions of
the Employees' State Insurance Act, 1948 (34 of 1948), or any other fund for the
welfare of such employees ;
(xi) any sum received under a Keyman insurance policy including the sum allocated by
way of bonus on such policy.
Explanation.For the purposes of this clause*, the expression "Keyman insurance
policy" shall have the meaning assigned to it in the Explanation to clause (10D)
of section 10 ;
(xii) any sum referred to in clause (va) of section 28;
(xiii) any sum referred to in clause (v) of sub-section (2) of section 56;
(xiv) any sum referred to in clause (vi) of sub-section (2) of section 56;
(xv) any sum of money or value of property referred to in clause (vii) or clause (viia) of
sub-section (2) of section 56;
(xvi) any consideration received for issue of shares as exceeds the fair market value of the
shares referred to in clause (viib) of sub-section (2) of section 56;
15
[(xvii) any sum of money referred to in clause (ix) of sub-section (2) of section 56;]
16
[(xviii) assistance in the form of a subsidy or grant or cash incentive or duty drawback or
waiver or concession or reimbursement (by whatever name called) by the Central
Government or a State Government or any authority or body or agency in cash or
kind to the assessee 17[other than the subsidy or grant or reimbursement which is
taken into account for determination of the actual cost of the asset in accordance
with the provisions of Explanation 10 to clause (1) of section 43];]
(25) "Income-tax Officer" means a person appointed to be an Income-tax Officer under section
117 ;
25
(25A) "India" means the territory of India as referred to in article 1 of the Constitution, its
territorial waters, seabed and subsoil underlying such waters, continental shelf, exclusive
economic zone or any other maritime zone as referred to in the Territorial Waters,
Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of
1976), and the air space above its territory and territorial waters;
(26) "Indian company" means a company formed and registered under the Companies Act,
1956 (1 of 1956), and includes
(i) a company formed and registered under any law relating to companies formerly in
force in any part of India (other than the State of Jammu and Kashmir and the Union
territories specified in sub-clause (iii) of this clause) ;
(ia) a corporation established by or under a Central, State or Provincial Act ;
(ib) any institution, association or body which is declared by the Board to be a company
under clause (17) ;
(ii) in the case of the State of Jammu and Kashmir, a company formed and registered
under any law for the time being in force in that State ;
(iii) in the case of any of the Union territories of Dadra and Nagar Haveli, Goa, Daman
and Diu, and Pondicherry, a company formed and registered under any law for the
time being in force in that Union territory :
Provided that the registered or, as the case may be, principal office of the company,
corporation, institution, association or body in all cases is in India ;
(26A) "infrastructure capital company" means such company which makes investments by way
of acquiring shares or providing long-term finance to any enterprise or undertaking wholly
engaged in the business referred to in sub-section (4) of section 80-IA or sub-section (1)
of section 80-IAB or an undertaking developing and building a housing project referred
to in sub-section (10) of section 80-IB or a project for constructing a hotel of not less than
three-star category as classified by the Central Government or a project for constructing a
hospital with at least one hundred beds for patients;
(26B) "infrastructure capital fund" means such fund operating under a trust deed registered under
the provisions of the Registration Act, 1908 (16 of 1908) established to raise monies by
the trustees for investment by way of acquiring shares or providing long-term finance to
any enterprise or undertaking wholly engaged in the business referred to in sub-section (4)
of section 80-IA or sub-section (1) of section 80-IAB or an undertaking developing and
building a housing project referred to in sub-section (10) of section 80-IB or a project for
constructing a hotel of not less than three-star category as classified by the Central
Government or a project for constructing a hospital with at least one hundred beds for
patients;
(27) [* * *]
(28) "Inspector of Income-tax" means a person appointed to be an Inspector of Income-tax
under sub-section (1) of section 117 ;
(28A) "interest" means interest payable in any manner in respect of any moneys borrowed or
debt incurred (including a deposit, claim or other similar right or obligation) and includes
any service fee or other charge in respect of the moneys borrowed or debt incurred or in
respect of any credit facility which has not been utilised ;
26
(28B) "interest on securities" means,
(i) interest on any security of the Central Government or a State Government ;
(ii) interest on debentures or other securities for money issued by or on behalf of a local
authority or a company or a corporation established by a Central, State or Provincial
Act ;
(28BB) "insurer" means an insurer, being an Indian insurance company, as defined under clause
(7A) of section 2 of the Insurance Act, 1938 (4 of 1938), which has been granted a
certificate of registration under section 3 of that Act;
(28C) "Joint Commissioner" means a person appointed to be a Joint Commissioner of Income-
tax or an Additional Commissioner of Income-tax under sub-section (1) of section 117;
(28D) "Joint Director" means a person appointed to be a Joint Director of Income-tax or an
Additional Director of Income-tax under sub-section (1) of section 117;
(29) "legal representative" has the meaning assigned to it in clause (11) of section 2 of the Code
of Civil Procedure, 1908 (5 of 1908) ;
(29A) "long-term capital asset" means a capital asset which is not a short-term capital asset ;
(29B) "long-term capital gain" means capital gain arising from the transfer of a long-term capital
asset ;
(29BA) "manufacture", with its grammatical variations, means a change in a non-living physical
object or article or thing,
(a) resulting in transformation of the object or article or thing into a new and distinct
object or article or thing having a different name, character and use; or
(b) bringing into existence of a new and distinct object or article or thing with a different
chemical composition or integral structure;
(29C) "maximum marginal rate" means the rate of income-tax (including surcharge on income-
tax, if any) applicable in relation to the highest slab of income in the case of an individual
, association of persons or, as the case may be, body of individuals as specified in the
Finance Act of the relevant year ;
(29D) "National Tax Tribunal" means the National Tax Tribunal established under section 3 of
the National Tax Tribunal Act, 2005;
(30) "non-resident" means a person who is not a "resident" , and for the purposes of sections
9218, 93 and 168, includes a person who is not ordinarily resident within the meaning of
clause (6) ofsection 6 ;
(31) "person" includes
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling within any of the preceding sub-clauses.
27
Explanation.For the purposes of this clause, an association of persons or a body of
individuals or a local authority or an artificial juridical person shall be deemed to be a
person, whether or not such person or body or authority or juridical person was formed or
established or incorporated with the object of deriving income, profits or gains;
(32) "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 ;
(33) "prescribed" means prescribed by rules made under this Act ;
(34) "previous year" means the previous year as defined in section 3 ;
19
[(34A) "Principal Chief Commissioner of Income-tax" means a person appointed to be a
Principal Chief Commissioner of Income-tax under sub-section (1) of section 117;
(34B) "Principal Commissioner of Income-tax" means a person appointed to be a Principal
Commissioner of Income-tax under sub-section (1) of section 117;
(34C) "Principal Director of Income-tax" means a person appointed to be a Principal Director of
Income-tax under sub-section (1) of section 117;
(34D) "Principal Director General of Income-tax" means a person appointed to be a Principal
Director General of Income-tax under sub-section (1) of section 117;]
(35) "principal officer", used with reference to a local authority or a company or any other
public body or any association of persons or any body of individuals, means
(a) the secretary, treasurer, manager or agent of the authority, company, association or
body, or
(b) any person connected with the management or administration of the local authority,
company, association or body upon whom the Assessing Officer has served a notice
of his intention of treating him as the principal officer thereof ;
(36) "profession" includes vocation ;
(36A) "public sector company" means any corporation established by or under any Central, State
or Provincial Act or a Government company as defined in section 617 of the Companies
Act, 1956 (1 of 1956) ;
(37) "public servant" has the same meaning as in section 21 of the Indian Penal Code (45 of
1860) ;
(37A) "rate or rates in force" or "rates in force", in relation to an assessment year or financial
year, means
(i) for the purposes of calculating income-tax under the first proviso to sub-section (5)
of section 132, or computing the income-tax chargeable under sub-section (4)
of section 172 or sub-section (2) of section 174 or section 175 or sub-section (2)
of section 176 or deducting income-tax under section 192 from income chargeable
under the head "Salaries" or computation of the "advance tax" payable under
Chapter XVII-C in a case not falling under section 115A or section
115B or section 115BB or section 115BBB or section 115E or section
164 or section 164A or section 167B, the rate or rates of income-tax specified in
this behalf in the Finance Act of the relevant year, and for the purposes of
28
computation of the "advance tax" payable under Chapter XVII-C in a case falling
under section 115A or section 115B or section 115BB or section
115BBB or section 115E or section 164 or section 164A or section 167B, the rate
or rates specified in section 115A or section 115B or section 115BB or section
115BBB or section 115E or section 164 or section 164A or section 167B, as the
case may be, or the rate or rates of income-tax specified in this behalf in the
Finance Act of the relevant year, whichever is applicable ;
(ii) for the purposes of deduction of tax under sections
193, 194, 194A, 194B, 194BB and 194D, the rate or rates of income-tax specified
in this behalf in the Finance Act of the relevant year ;
(iii) for the purposes of deduction of tax under 20[section 194LBA or] 21[section
194LBB or section 194LBC or] section 195, the rate or rates of income-tax specified
in this behalf in the Finance Act of the relevant year or the rate or rates of income-
tax specified in an agreement entered into by the Central Government under section
90, or an agreement notified by the Central Government under section 90A,
whichever is applicable by virtue of the provisions of section 90, or section 90A, as
the case may be;
(38) "recognised provident fund" means a provident fund which has been and continues to be
recognised by the 22[Principal Chief Commissioner or] Chief Commissioner
or 22[Principal Commissioner or] Commissioner in accordance with the rules contained in
Part A of the Fourth Schedule, and includes a provident fund established under a scheme
framed under the Employees' Provident Funds Act, 1952 (19 of 1952) ;
(39) [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993;]
(40) "regular assessment" means the assessment made under sub-section (3) of section
143 or section 144 ;
(41) "relative", in relation to an individual, means the husband, wife, brother or sister or any
lineal ascendant or descendant of that individual ;
(41A) "resulting company" means one or more companies (including a wholly owned subsidiary
thereof) to which the undertaking of the demerged company is transferred in a demerger
and, the resulting company in consideration of such transfer of undertaking, issues shares
to the shareholders of the demerged company and includes any authority or body or local
authority or public sector company or a company established, constituted or formed as a
result of demerger;]
(42) "resident" means a person who is resident in India within the meaning of section 6 ;
(42A) "short-term capital asset" means a capital asset held by an assessee for not more than
thirty-six months immediately preceding the date of its transfer :
Provided that in the case of 23[a security (other than a unit) listed in a recognized stock
exchange in India] or a unit of the Unit Trust of India established under the Unit Trust of
India Act, 1963 (52 of 1963) or 24[a unit of an equity oriented fund] or a zero coupon bond,
the provisions of this clause shall have effect as if for the words "thirty-six months", the
words "twelve months" had been substituted:
25
[Provided further that in case of a share of a company (not being a share listed in a
recognised stock exchange) or a unit of a Mutual Fund specified under clause (23D)
29
of section 10, which is transferred during the period beginning on the 1st day of April,
2014 and ending on the 10th day of July, 2014, the provisions of this clause shall have
effect as if for the words "thirty-six months", the words "twelve months" had been
substituted.]
Following proviso shall be inserted after the second proviso to clause (42A) of section
2 by the Finance Act, 2016, w.e.f. 1-4-2017 :
Provided also that in the case of a share of a company (not being a share listed in a
recognised stock exchange in India), the provisions of this clause shall have effect as if
for the words "thirty-six months", the words "twenty-four months" had been substituted.
Explanation 1.(i) In determining the period for which any capital asset is held by the
assessee
(a) in the case of a share held in a company in liquidation, there shall be excluded the
period subsequent to the date on which the company goes into liquidation ;
(b) in the case of a capital asset which becomes the property of the assessee in the
circumstances mentioned in sub-section (1) of section 49, there shall be included the
period for which the asset was held by the previous owner referred to in the said
section ;
(c) in the case of a capital asset being a share or shares in an Indian company, which
becomes the property of the assessee in consideration of a transfer referred to in
clause (vii) of section 47, there shall be included the period for which the share or
shares in the amalgamating company were held by the assessee ;
(d) in the case of a capital asset, being a share or any other security (hereafter in this
clause referred to as the financial asset) subscribed to by the assessee on the basis of
his right to subscribe to such financial asset or subscribed to by the person in whose
favour the assessee has renounced his right to subscribe to such financial asset, the
period shall be reckoned from the date of allotment of such financial asset ;
(e) in the case of a capital asset, being the right to subscribe to any financial asset, which
is renounced in favour of any other person, the period shall be reckoned from the
date of the offer of such right by the company or institution, as the case may be,
making such offer ;
(f) in the case of a capital asset, being a financial asset, allotted without any payment
and on the basis of holding of any other financial asset, the period shall be reckoned
from the date of the allotment of such financial asset ;
(g) in the case of a capital asset, being a share or shares in an Indian company, which
becomes the property of the assessee in consideration of a demerger, there shall be
included the period for which the share or shares held in the demerged company
were held by the assessee ;
(h) in the case of a capital asset, being trading or clearing rights of a recognised stock
exchange in India acquired by a person pursuant to demutualisation or
corporatisation of the recognised stock exchange in India as referred to in clause
(xiii) of section 47, there shall be included the period for which the person was a
member of the recognised stock exchange in India immediately prior to such
demutualisation or corporatisation;
30
(ha) in the case of a capital asset, being equity share or shares in a company allotted
pursuant to demutualisation or corporatisation of a recognised stock exchange in
India as referred to in clause (xiii) of section 47, there shall be included the period
for which the person was a member of the recognised stock exchange in India
immediately prior to such demutualisation or corporatisation;]
(hb) in the case of a capital asset, being any specified security or sweat equity shares
allotted or transferred, directly or indirectly, by the employer free of cost or at
concessional rate to his employees (including former employee or employees), the
period shall be reckoned from the date of allotment or transfer of such specified
security or sweat equity shares;
26
[(hc) in the case of a capital asset, being a unit of a business trust, allotted pursuant to
transfer of share or shares as referred to in clause (xvii) of section 47, there shall be
included the period for which the share or shares were held by the assessee;]
27
[(hd) in the case of a capital asset, being a unit or units, which becomes the property of
the assessee in consideration of a transfer referred to in clause (xviii) of section 47,
there shall be included the period for which the unit or units in the consolidating
scheme of the mutual fund were held by the assessee;
(he) in the case of a capital asset, being share or shares of a company, which is acquired
by the non-resident assessee on redemption of Global Depository Receipts referred
to in clause (b) of sub-section (1) of section 115AC held by such assessee, the period
shall be reckoned from the date on which a request for such redemption was made;]
(ii) In respect of capital assets other than those mentioned in clause (i), the period for
which any capital asset is held by the assessee shall be determined subject to any
rules28 which the Board may make in this behalf.
Explanation 2.For the purposes of this clause, the expression "security" shall have the
meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation)
Act, 1956 (42 of 1956).
Explanation 3.For the purposes of this clause, the expressions "specified security" and
"sweat equity shares" shall have the meanings respectively assigned to them in
the Explanation to clause (d) of sub-section (1) of section 115WB.
29
[Explanation 4.For the purposes of this clause, the expression "equity oriented fund"
shall have the meaning assigned to it in the Explanation to clause (38) of section 10;]
(42B) "short-term capital gain" means capital gain arising from the transfer of a short-term capital
asset ;
(42C) "slump sale" means the transfer of one or more undertakings as a result of the sale for a
lump sum consideration without values being assigned to the individual assets and
liabilities in such sales.
Explanation 1.For the purposes of this clause, "undertaking" shall have the meaning
assigned to it in Explanation 1 to clause (19AA).
Explanation 2.For the removal of doubts, it is hereby declared that the determination of
the value of an asset or liability for the sole purpose of payment of stamp duty, registration
fees or other similar taxes or fees shall not be regarded as assignment of values to
individual assets or liabilities ;
31
(43) "tax" in relation to the assessment year commencing on the 1st day of April, 1965, and
any subsequent assessment year means income-tax chargeable under the provisions of this
Act, and in relation to any other assessment year income-tax and super-tax chargeable
under the provisions of this Act prior to the aforesaid date and in relation to the assessment
year commencing on the 1st day of April, 2006, and any subsequent assessment year
includes the fringe benefit tax payable under section 115WA ;
(43A) "tax credit certificate" means a tax credit certificate granted to any person in accordance
with the provisions of Chapter XXII-B and any scheme made thereunder ;
(43B) [* * *]
(44) "Tax Recovery Officer" means any Income-tax Officer who may be authorised by
the 30[Principal Chief Commissioner or] Chief Commissioner or 30[Principal
Commissioner or] Commissioner, by general or special order in writing, to exercise the
powers of a Tax Recovery Officer and also to exercise or perform such powers and
functions which are conferred on, or assigned to, an Assessing Officer under this Act and
which may be prescribed;
(45) "total income" means the total amount of income referred to in section 5, computed in the
manner laid down in this Act ;
(46) [* * *]
(47) "transfer", in relation to a capital asset, includes,
(i) the sale, exchange or relinquishment of the asset ; or
(ii) the extinguishment of any rights therein ; or
(iii) the compulsory acquisition thereof under any law ; or
(iv) in a case where the asset is converted by the owner thereof into, or is treated by him
as, stock-in-trade of a business carried on by him, such conversion or treatment ; or
(iva) the maturity or redemption of a zero coupon bond; or
(v) any transaction involving the allowing of the possession of any immovable property
to be taken or retained in part performance of a contract of the nature referred to in
section 53A of the Transfer of Property Act, 1882 (4 of 1882) ; or
(vi) any transaction (whether by way of becoming a member of, or acquiring shares in,
a co-operative society, company or other association of persons or by way of any
agreement or any arrangement or in any other manner whatsoever) which has the
effect of transferring, or enabling the enjoyment of, any immovable property.
Explanation 1.For the purposes of sub-clauses (v) and (vi), "immovable property" shall
have the same meaning as in clause (d) of section 269UA.
Explanation 2.For the removal of doubts, it is hereby clarified that "transfer" includes
and shall be deemed to have always included disposing of or parting with an asset or any
interest therein, or creating any interest in any asset in any manner whatsoever, directly or
indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an
agreement (whether entered into in India or outside India) or otherwise, notwithstanding
that such transfer of rights has been characterised as being effected or dependent upon or
flowing from the transfer of a share or shares of a company registered or incorporated
outside India;
32
(48) "zero coupon bond" means a bond
(a) issued by any infrastructure capital company or infrastructure capital fund or public
sector company or scheduled bank on or after the 1st day of June, 2005;
(b) in respect of which no payment and benefit is received or receivable before maturity
or redemption from infrastructure capital company or infrastructure capital fund or
public sector company or scheduled bank; and
(c) which the Central Government may, by notification in the Official Gazette, specify
in this behalf.
Explanation.For the purposes of this clause, the expression "scheduled bank" shall have
the meaning assigned to it in clause (ii) of the Explanation to sub-clause (c) of clause (viia)
of sub-section (1) of section 36
CORPORATE TAXES
Definition of a company
A company has been defined as a juristic person having an independent and separate legal entity
from its shareholders. Income of the company is computed and assessed separately in the hands of
the company.
However the income of the company, which is distributed to its shareholders as dividend, is
assessed in their individual hands. Such distribution of income is not treated as expenditure in the
hands of company; the income so distributed is an appropriation of the profits of the company.
Residence of a company
A company is said to be a resident in India during the relevant previous year if:
o It is an Indian company
o If it is not an Indian company but, the control and the management of its affairs is situated
wholly in India
A company is said to be non-resident in India if it is not an Indian company and some part of the
control and management of its affairs is situated outside India.
Corporate sector tax

The taxability of a company's income depends on its domicile. Indian companies are taxable in
India on their worldwide income.
Foreign companies are taxable on income that arises out of their Indian operations, or, in certain
cases, income that is deemed to arise in India. Royalty, interest, gains from sale of capital assets
located in India (including gains from sale of shares in an Indian company), dividends from Indian
companies and fees for technical services are all treated as income arising in India. Current rates
of corporate tax.
33
Different kinds of taxes relating to a company
Minimum Alternative Tax (MAT)
Normally, a company is liable to pay tax on the income computed in accordance with the
provisions of the income tax Act, but the profit and loss account of the company is prepared as per
provisions of the Companies Act.
There were large number of companies who had book profits as per their profit and loss account
but were not paying any tax because income computed as per provisions of the income tax act was
either nil or negative or insignificant. In such case, although the companies were showing book
profits and declaring dividends to the shareholders, they were not paying any income tax.
These companies are popularly known as Zero Tax companies. In order to bring such companies
under the income tax act net, section 115JA was introduced w.e.f assessment year 1997-98.
A new tax credit scheme is introduced by which MAT paid can be carried forward for set-off
against regular tax payable during the subsequent five year period subject to certain conditions, as
under:-
When a company pays tax under MAT, the tax credit earned by it shall be an amount, which is
the difference between the amount payable under MAT and the regular tax. Regular tax in this
case means the tax payable on the basis of normal computation of total income of the company.
MAT credit will be allowed carry forward facility for a period of five assessment years
immediately succeeding the assessment year in which MAT is paid. Unabsorbed MAT credit
will be allowed to be accumulated subject to the five-year carry forward limit.
In the assessment year when regular tax becomes payable, the difference between the regular tax
and the tax computed under MAT for that year will be set off against the MAT credit available.
The credit allowed will not bear any interest.
CURRENT MAT RATE IS 18.5% FOR F.Y 2015-16.
Fringe Benefit Tax (FBT)
The Finance Act, 2005 introduced a new levy, namely Fringe Benefit Tax (FBT) contained in
Chapter XIIH (Sections 115W to 115WL) of the Income Tax Act, 1961.
Fringe Benefit Tax (FBT) is an additional income tax payable by the employers on value of fringe
benefits provided or deemed to have been provided to the employees.
The FBT is payable by an employer who is a company; a firm; an association of persons excluding
trusts/a body of individuals; a local authority; a sole trader, or an artificial juridical person. This
tax is payable even where employer does not otherwise have taxable income. Fringe Benefits are
defined as any privilege, service, facility or amenity directly or indirectly provided by an employer
to his employees (including former employees) by reason of their employment and includes
expenses or payments on certain specified heads.
The benefit does not have to be provided directly in order to attract FBT. It may still be applied if
the benefit is provided by a third party or an associate of employer or by under an agreement with
the employer.
The value of fringe benefits is computed as per provisions under Section 115WC. FBT is payable
at prescribed percentage on the taxable value of fringe benefits. Besides, surcharge in case of both
domestic and foreign companies shall be leviable on the amount of FBT. On these amounts,
education cess shall also be payable.
34
Every company shall file return of fringe benefits to the Assessing Officer in the prescribed form
by 31st October of the assessment year as per provisions of Section 115WD. If the employer fails
to file return within specified time limit specified under the said section, he will have to bear
penalty as per Section 271FB.
The scope of Fringe Benefit Tax is being widened by including the employees stock option as
fringe benefit liable for tax. The fair market value of the share on the date of the vesting of the
option by the employee as reduced by the amount actually paid by him or recovered from him shall
be considered to be the fringe benefit. The fair market value shall be determined in accordance
with the method to be prescribed by the CBDT.
However this tax is being scrapped by Union Budget 2015.
Dividend Distribution Tax (DDT)
Under Section 115-O of the Income Tax Act, any amount declared, distributed or paid by a
domestic company by way of dividend shall be chargeable to dividend tax. Only a domestic
company (not a foreign company) is liable for the tax. Tax on distributed profit is in addition to
income tax chargeable in respect of total income.
It is applicable whether the dividend is interim or otherwise. Also, it is applicable whether such
dividend is paid out of current profits or accumulated profits.
The tax shall be deposited within 14 days from the date of declaration, distribution or payment of
dividend, whichever is earliest. Failing to this deposition will require payment of stipulated interest
for every month of delay under Section115-P of the Act.
Rate of dividend distribution tax to be raised from 12.5 per cent to 15 per cent on dividends
distributed by companies; and to 25 per cent on dividends paid by money market mutual funds and
liquid mutual funds to all investors.
Banking Cash Transaction Tax (BCTT)
The Finance Act 2005 introduced the Banking Cash Transaction Tax (BCTT) w.e.f. June 1, 2005
and applies to the whole of India except in the state of Jammu and Kashmir.BCTT continues to be
an extremely useful tool to track unaccounted monies and trace their source and destination.
It has led the Income Tax Department to many money laundering and hawala transactions.
BCTT is levied at the rate of 0.1 per cent of the value of following "taxable banking transactions"
entered with any scheduled bank on any single day:
Withdrawal of cash from any bank account other than a saving bank account; and
Receipt of cash on encashment of term deposit(s).
However,Banking Cash Transaction Tax (BCTT) has been withdrawn with effect from April 1,
2009.
Securities Transaction Tax (STT)
Securities Transaction Tax or turnover tax, as is generally known, is a tax that is leviable on taxable
securities transaction. STT is leviable on the taxable securities transactions with effect from 1st
October, 2004 as per the notification issued by the Central Government. The surcharge is not
leviable on the STT.
35
Wealth Tax
Wealth tax, in India, is levied under Wealth-tax Act, 1957. Wealth tax is a tax on the benefits
derived from property ownership. The tax is to be paid year after year on the same property on its
market value, whether or not such property yields any income.
Under the Act, the tax is charged in respect of the wealth held during the assessment year by the
following persons: -
Individual
Hindu Undivided Family (HUF)
Company
Chargeability to tax also depends upon the residential status of the assessee same as the residential
status for the purpose of the Income Tax Act.
Wealth tax is not levied on productive assets, hence investments in shares, debentures, UTI, mutual
funds, etc are exempt from it. The assets chargeable to wealth tax are Guest house, residential
house, commercial building, Motor car, Jewellery, bullion, utensils of gold, silver, Yachts, boats
and aircrafts, Urban land and Cash in hand (in excess of Rs 50,000 for Individual & HUF only).
The following will not be included in Assets: -
Assets held as Stock in trade.
A house held for business or profession.
Any property in nature of commercial complex.
A house let out for more than 300 days in a year.
Gold deposit bond.
A residential house allotted by a Company to an employee, or an Officer, or a Whole
Time Director (Gross salary i.e. excluding perquisites and before Standard Deduction of such
Employee, Officer, Director should be less than Rs 5,00,000).
The assets exempt from Wealth tax are "Property held under a trust", Interest of the assessee in the
coparcenary property of a HUF of which he is a member, "Residential building of a former ruler",
"Assets belonging to Indian repatriates", one house or a part of house or a plot of land not
exceeding 500sq.mts(for individual & HUF assessee)
Wealth tax is chargeable in respect of Net wealth corresponding to Valuation date where Net
wealth is all assets less loans taken to acquire those assets and valuation date is 31st March of
immediately preceding the assessment year. In other words, the value of the taxable assets on the
valuation date is clubbed together and is reduced by the amount of debt owed by the assessee. The
net wealth so arrived at is charged to tax at the specified rates. Wealth tax is charged @ 1 per cent
of the amount by which the net wealth exceeds Rs 15 Lakhs.
Recently Wealth tax Act has been abolished and incorporated in Income tax Act.
Tax Rebates for Corporate Tax
The classical system of corporate taxation is followed in India

Domestic companies are permitted to deduct dividends received from other domestic companies
in certain cases.
Inter Company transactions are honored if negotiated at arm's length.
Special provisions apply to venture funds and venture capital companies.
36
Long-term capital gains have lower tax incidence.
There is no concept of thin capitalization.
Liberal deductions are allowed for exports and the setting up on new industrial undertakings
under certain circumstances.
There are liberal deductions for setting up enterprises engaged in developing, maintaining and
operating new infrastructure facilities and power-generating units.
Business losses can be carried forward for eight years, and unabsorbed depreciation can be
carried indefinitely. No carry back is allowed.
Dividends, interest and long-term capital gain income earned by an infrastructure fund or
company from investments in shares or long-term finance in enterprises carrying on the business
of developing, monitoring and operating specified infrastructure facilities or in units of mutual
funds involved with the infrastructure of power sector is proposed to be tax exempt.
Capital Gains Tax
A capital gain is income derived from the sale of an investment.

A capital investment can be a home, a farm, a ranch, a family business, work of art etc. In most
years slightly less than half of taxable capital gains are realized on the sale of corporate stock. The
capital gain is the difference between the money received from selling the asset and the price paid
for it.
Capital gain also includes gain that arises on "transfer" (includes sale, exchange) of a capital asset
and is categorized into short-term gains and long-term gains.
The capital gains tax is different from almost all other forms of taxation in that it is a voluntary
tax. Since the tax is paid only when an asset is sold, taxpayers can legally avoid payment by holding
on to their assets--a phenomenon known as the "lock-in effect."
The scope of capital asset is being widened by including certain items held as personal effects such
as archaeological collections, drawings, paintings, sculptures or any work of art. Presently no
capital gain tax is payable in respect of transfer of personal effects as it does not fall in the
definition of the capital asset.
To restrict the misuse of this provision, the definition of capital asset is being widened to include
those personal effects such as archaeological collections, drawings, paintings, sculptures or any
work of art. Transfer of above items shall now attract capital gain tax the way jewellery attracts
despite being personal effect as on date.
Short Term and Long Term capital Gains
Gains arising on transfer of a capital asset held for not more than 36 months (12 months in the case
of a share held in a company or other security listed on recognised stock exchange in India or a
unit of a mutual fund) prior to its transfer are "short-term".
Capital gains arising on transfer of capital asset held for a period exceeding the aforesaid period
are "long-term".
Section 112 of the Income-Tax Act, provides for the tax on long-term capital gains, at 20 per cent
of the gain computed with the benefit of indexation and 10 per cent of the gain computed (in case
of listed securities or units) without the benefit of indexation.
37
Perquisite Tax:
Perquisites are all the perks or privileges that employers may extend to employees. These
privileges may include a house provided by the company or a car for your use, given to you by
the company. These perks are not just limited to big compensation like cars and houses, they can
even include things like compensation for fuel or phone bills. How this tax is levied is by
figuring out how that perk has been acquired by the company or used by the employee. In the
case of cars, it may be so that a car provided by the company and used for both personal and
official purposes is eligible for tax whereas a car used only for official purposes is not.
Double Taxation Relief
Double Taxation means taxation of the same income of a person in more than one country.
This results due to countries following different rules for income taxation. There are two main
rules of income taxation i.e. (a) Source of income rule and (b) residence rule.
As per source of income rule, the income may be subject to tax in the country where the source of
such income exists (i.e. where the business establishment is situated or where the asset / property
is located) whether the income earner is a resident in that country or not.
On the other hand, the income earner may be taxed on the basis of the residential status in that
country. For example, if a person is resident of a country, he may have to pay tax on any income
earned outside that country as well.
Further,some countries may follow a mixture of the above two rules. Thus, problem of double
taxation arises if a person is taxed in respect of any income on the basis of source of income rule
in one country and on the basis of residence in another country or on the basis of mixture of above
two rules.
In India, the liability under the Income Tax Act arises on the basis of the residential status of the
assessee during the previous year. In case the assessee is resident in India, he also has to pay tax
on the income, which accrues or arises outside India, and also received outside India.
The position in many other countries being also broadly similar, it frequently happens that a person
may be found to be a resident in more than one country or that the same item of his income may
be treated as accruing, arising or received in more than one country with the result that the same
item becomes liable to tax in more than one country.
Relief against such hardship can be provided mainly in two ways: (a) Bilateral relief, (b) Unilateral
relief.
Bilateral Relief
The Governments of two countries can enter into Double Taxation Avoidance Agreement (DTAA)
to provide relief against such Double Taxation, worked out on the basis of mutual agreement
between the two concerned sovereign states.
This may be called a scheme of 'bilateral relief' as both concerned powers agree as to the basis of
the relief to be granted by either of them.
38
Unilateral relief
The above procedure for granting relief will not be sufficient to meet all cases.
No country will be in a position to arrive at such agreement with all the countries of the world for
all time.
The hardship of the taxpayer however is a crippling one in all such cases.
Some relief can be provided even in such cases by home country irrespective of whether the other
country concerned has any agreement with India or has otherwise provided for any relief at all in
respect of such double taxation.
This relief is known as unilateral relief.
Another aspect which must be looked into is the concept of Witholding Taxes; also called as
Tax Deduction at Source (TDS).
Tax Deduction at Source (TDS)
This point is being specifically mentioned because the penalties of non-compliance are very
stringent. As per the provisions of the Indian tax laws, certain payments are covered under tax
withholding norms. Under this, the person responsible for making any payment is required to
withhold a certain specified percentage of the payment amount as taxes and deposit it with the
Government treasury. In addition, the person is required to prepare a certificate of tax deduction
and provide it to the person on whose behalf the deductions are made. Every quarter i.e. 3
months, returns have to be filed by the deductor and credit must be given to the deducted in the
returns.
The following are the areas where tax withholding is most common in the Indian scenario:
Salaries
The salaried employees of the drawing beyond the minimum taxable salary would be covered
under the tax withholding requirements and annual tax withholding returns are to be submitted
with the Revenue authorities.
Contractors
Payments made to a contractor for carrying out any work would require withholding of tax at
source from such payments, if certain threshold limits are crossed. Typical examples of such
payments will include:
Advertising payments
39
Broadcasting and telecasting payments
Office renovation payments
Vehicle hire payments
Catering payments.
Job Work
Courier
Professional Services
Payments made for professional and technical fees to Doctors, Chartered Accountants, Lawyers,
Management Consultants, Engineers, Architects and other professionals would fall under this
section and tax would be required to be withheld from their payments. Such withheld tax shall be
deposited with the Government.
Rentals
Payments for rentals would attract tax deduction at source.
INDIRECT TAX
Indirect Taxes are such type of taxes where incidence and impact fall on two different persons.
Indirect Taxes are regressive in Nature. Purchase/ Sale/ Manufacture of goods and/ or rendering
services. This is levied and collected from the consumer but paid/ deposited to the exchequer by
the Dealer/ Assessee. Indirect Tax is collected at the time of sale or purchases or rendering of
Services. These are types of Indirect Taxes.
Excise Duty.
Customs Duty.
Service Tax.
Sales Tax.
Central Sales Tax (CST).
Value Added Tax (VAT).
Goods and Services Tax (GST).
Excise Duty
Excise duty is a type of indirect tax levied on production or manufacture of excisable goods in
India. The Excise Duty is collected by Central Board of Excise and Customs (CBEC). In Union
Budget of India 2016, an excise duty of 1% without input tax credit and 12.5% with input tax
credit has been imposed on the articles of jewellery except silver jewellery. Excise Duty on
alcoholic preparations, alcohol, and narcotic substances is collected by the State Govt and is called
40
State Excise Duty. The Excise Duty on rest of goods is called Central Excise Duty and is
collected in terms of Section 3 of the CEA (Central Excise Act), 1944.
Customs Duty
Customs duty in India is defined under the Customs Act, 1962. All matters related to Customs
Duty fall under the CBEC (Central Board of Excise & Customs). Central Board of Excise &
Customs has various divisions that take care of the field work including Customs,
Commissionerate of Customs, etc. Some of the definitions under Customs Act, 1962 is given in
this Customs Duty Overview.
Service Tax
Service Tax is a tax in the provision of services. Service Tax is a tax on the economic activity
which results in value addition. The service tax has been enforced on all services other than those
specified in the negative list. It is a tax imposed on the transaction of certain services specified by
the Central Government under the Finance Act, 1994. Service Tax is a destination based
consumption tax leviable in services provided within the country. Click here for more information
on Service Tax in India.
Sales Tax
Sales tax is a Consumption Tax levied by the government on the sale of goods and Services. In
other words, Sales Tax is an additional amount of money paid based on the percentage (%) of the
selling price of goods that are purchased from a good or services. Sales Tax is an indirect tax
charged at the point of sale of certain taxable goods and services. A conventional sales tax is
charged at the point of sale, collected by the retailer and passed on to the government.
Central Sales Tax

So many people have a question that What is Central Sales Tax. To those Assessees here we are
providing Central Sales Tax in India is a form of Indirect Tax Imposed on the Sale of Goods by
Central Government of India. The CST Tax is applicable only in the case of Inter-State
Salesmade within the state or import/ export of sales. Click here to know who is liable to
pay Central Sales Tax.
Value Added Tax

VAT is a kind of tax which levied on the sale of goods and services when these goods are ultimately
sold to the consumer. VAT Tax is an integral part of the GDP (Gross Domestic Product) of any
country. VAT is imposed on intrastate sale that is the sale of goods within the state. VAT is a tax
on value addition on the goods. Click here for more about Value Added Tax.
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Goods and Service Tax
GST is an Indirect Tax that is charged on Sale, Consumption, and manufacture of Goods and
Services at the National Level. Goods and Service Tax was amended by the Constitution of India
and was introduced in Lok Sabha in December 2014, by the Constitution (122nd Amendment)
Bill, 2014. GST Tax was introduced to boost the economic growth and to reduce the overall tax
burden on goods in the country. It is estimated that GST will almost reduce a tax burden of 25%
to 30%. Goods and Service Tax is a single tax chargeable at every point of sale or provision of
service. By introduction of GST into tax system no need of paying VAT, Service Tax on the same
product. If the law is passed by the parliament GST Tax may come into force from April 2016.
Nature of Applicable Law Governed By

Activity
No.
1 Provision of Service Tax.Generally uniform rate of As Governed by

services 12.36% (proposed to be 14% from 01- the Finance Act,
04-2015) is charged by Service tax 1994 and other
Provider from recipient except in subsequent
certain cases where liability is split Finance Acts
between the provider of servicer and together read with
the recipient of service.Also in some notifications,
cases, where there is mixed component circulars.Service
of provision of service and provision of tax is payable to
materials, there is some abatment given the Central
and service tax charged on the Government.
remaining part.
E.g. For restaurants, the service tax is

charged only on 40% of the bill as it is
assumed by Govt that the total bill
consists of 60% materials and 40%
service.
There is an exemption on payment of

Service tax if the total turnover did not
cross Rs. 1 million in the previous
Financial Year.
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2 Manufacture Central Excise duties are leviable on Central Excise
of Excisable the manufacture of goods. However, Act, 1944 read
Goods the incidence of duty is postponed to with Central
the clearance of goods from factory or Excise Tariff Act,
approved warehouse. It means the duty 1985 along with
is payable once the manufactured goods Rules prescribed
leave the Warehouse/ Factory. Below and Circulars/
are some of Excise duties leviable Notifications
Basic Basic Excise Duty is the most issued by the
common Excise duty on manufacture of Central Board of
Goods. It is imposed under section 3 of Excise and
the Central Excise Act of 1944 on all Customs.It is
excisable goods other than salt payable to the
produced or manufactured in India, at Central
the rates set forth in the schedule to the Government.
Central Excise tariff Act, 1985, falls
under the category of basic excise duty
in India.
it is mandatory to pay duty on all goods

manufactured, unless exempted. For
example, duty is not payable on the
goods exported out of India or if the
turnover does not reach Rs. 15 million
in a year or based on certain process of
production.
Excise duty rates are different for each

product and based on harmonized
system of classification.
The rates can be found in the following

link
http://www.cbec.gov.in/excise/cxt2013-
14/cxt-1314-idx.htm
Apart from the basic excise duty, the

other types of Excise duties are as
follows but they are not of much
relevance to the vast majority of goods
as they are very specifically levied.
Special Excise Duty : This is

the duty leviable under Second
43
Schedule to the Central Excise
Tariff Act, 1985 at the rates
mentioned in the said Schedule.
At present this is leviable on
very few items.
Additional Duties of Excise

(Textiles and textile Articles) :
his duty is leviable under
section 3 of the Additional
Duties of Excise (Textiles and
Textile Articles ) Act, 1978.
This is leviable at the rate of
fifteen percent of Basic Excise
Duty payable on specified
textile articles.
Additional Duties of Excise

(Goods of Special
Importance) : duty is leviable
under the Additional Duties of
Excise (Goods of Special
Importance) Act, 1957. on the
specified goods mentioned in its
First Schedule.
National Calamity Contingent

Duty (NCCD): This duty is
levied as per section 136 of the
Finance Act, 2001, as a
surcharge on specified goods
like like pan masala, branded
chewing tobaco, cigarettes,
domestic crude oil and mobile
phone.
It should be noted that the excise duty

is not on sale but on removal or
clearance of goods which may or may
coincide with sale.
3. Import of Customs duty is required to be paid Customs Act,

Goods whenever goods are imported from 1962 read with
other countries in India. Normally on Customs Tariff
44
Exports, there is no Customs Duty Act,
except for export of a few items. Thus 1975.Collected by
the taxable event is the import/ export Central
of goods.There are mainly two ways in Government
which Customs is calculated and
collected:
1. Specific Duties: Specific

custom duty is a duty imposed
on each and every unit of a
commodity imported or
exported. For example, Rs.5 on
each meter of cloth imported or
Rs.500 on each T.V. set
imported. In this case, the value
of commodity is not taken into
consideration.
2. Advalorem Duties: Advalorem

custom duty is a duty imposed
on the total value of a
commodity imported or
exported. For example, 5% of
F.O.B. value of cloth imported
or 10% of C.LF. value of T.V.
sets imported. In case of
Advalorem custom duty, the
physical units of commodity are
not taken into consideration. Ad
valorem duty is the predominant
mode of levy of customs. Thus
the value of goods has to be
determined as per customs law
before the Goods are released
from Customs control.
The rates of taxation in Customs can be

found here:
Apart from the basic Custom duties,

there are some other custom duties
levied in certain circumstances like:
45
Countervailing Duty of Customs
(CVD)
To give Indian manufacturing a level

playing field, CVD is imposed. It is
equal to the excise duty on like articles
produced in India. The base of this
additional duty is c.i.f. value of imports
plus the duty levied earlier. If the rate
of this duty is on ad-valorem basis, the
value for this purpose will be the total
of the value of the imported article and
the customs duty on it (both basic and
auxiliary).
Anti Dumping duties
These custom duties are basically

intended to provide domestic
manufacture against dumping of goods
by foreign countries in India at dirt
cheap ; even below cost prices. Mainly
targeted against cheap Chinese imports.
These are allowed after following WTO
norms in this regard.
4 Sale of Value Added Taxes (VAT) for intra- Each state has a
Goods state Sales and Central Sales Tax (CST) specific
for inter-state sales.VAT is actually Act.Central Sales
state specific since the states and not Tax Act deals
Central Government is empowered to with inter-state
collect Taxes on Sale of Goods. Thus sale of goods.
each state has its own VAT specific Act However even
and Rules. In Maharashtra, it is the CST is actually
Maharashtra Value Added Tax Act collected only by
(MVAT) which governs the sale of states.
goods.The usual rate of taxes are 5%
and 12.5%. Goods which are specified
are covered under 5% and others are
covered in 12.5%. Further there are
some high value transactions like trade
in bullion which attracts 1% tax. Input
credit is available on the goods
46
purchased and can be set off against the
MVAT payable.
Under MVAT Act, if trader has a

turnover of below Rs. 1 million in
previous financial year, then MVAT is
not applicable in present year upto Rs.
1 million. Please note that it is optional
and if the dealer. Trader does collect
MVAT from the purchaser then the
same will have to be deposited with the
Government.
Also MVAT is not applicable if the

Goods are exported under H Form i.e.
for exports.
In India, indirect taxes is a vast ocean as there are number of taxes to be paid on manufacture,
import, sale and even purchase in certain cases. Further the law is governed less by the Acts and
more by day to day notifications, circulars and orders by the Governing bodies.
So an explicit understanding is very much essential. A simplistic way to understand Indirect

taxes is as follows:
Please note that the above are not mutually exclusive. For example, if the goods are
manufactured and sold by manufacturer , then both Central Excise and MVAT are applicable.
Further there are some local indirect taxes levied like Local Body Taxes (LBT) or Octroi.
These are expected to be abolished some time in future after introduction of Goods and Service
Taxes (GST).
Going forward, to avoid the cascading effect of different types of duties and also to avoid the
specific problem of non-availability of input credit for one type of tax against another, the
Government intends to create one single tax everywhere which shall be called as the Goods and
Service Taxes (GST). This is major tax reform intending to create one major market. It is
expected to come by April 2016.
OTHER TAXES
Other types of Taxes India are
Professional Tax.
Municipal Tax.
47
Entertainment Tax.
Stamp Duty, Registration Fees, Transfer Tax.
Education Cess.
Gift Tax.
Swachh Bharat Cess.
Krishi Kalyan Cess.
Entry Tax.
Infrastructure Cess.
Property Tax.
Luxury Tax
Professional Tax
The State Government levies the Professional Tax on income from profession or employment.
Individual earning an income from salary or anyone carrying out a profession such as a lawyer,
doctor chartered accountant, etc. are required to pay this professional tax. Different states in India
have different rates and methods to collect Professional Tax. Click here for Slab Rates of
Professional Tax.
Gift Tax
Gift tax in India is supervised by the Gift Tax Act, which comes into force on 1st April 1958. This
Tax Act extends to all parts of India except the State of Jammu & Kashmir. Gift Tax is the tax on
property or money that one living person gives to another. Most of the gifts received are not subject
to taxation because of exemptions are provided in Indian Income tax laws.
Swachh Bharat Cess

Swachh Bharat Cess shall be levied on all the taxable services at the rate of 0.5% in accordance
with the provisions of Chapter VI of the Finance Act, 2015. Swachh Bharat Cess is a new levy,
which was not in existence earlier. Hence, as per the Rule 5 of the Point of Taxation Rules, 2011
would be applicable in this case. Therefore, in cases where payment has been received, and invoice
is raised before the service becomes taxable, i.e. before 15th November 2015, there is no liability
of Swachh Bharat Cess.
Krishi Kalyan Cess

In the Union Budget 2016, Arun Jaitley has proposed a new cess which will come into effect on
1st June 2016, @ 0.5% on all services, which are presently accountable to service tax. It will
translate into a service tax of 50 paise only on every one hundred rupees worth of taxable
services. Krishi Kalyan Cess of 0.5% to be levied over on Service Tax and the Swachh Bharat
Cess.
48
Entertainment Tax
In India, Entertainment tax is levied on every financial transaction that is related to feature films
getting a wide release. This tax may incur on Movie tickets, large private festival celebrations, and
large commercial shows. These are reduced from gross collections. The amount after deducting
the Entertainment Tax is known as a net value. Entertainment is included in the List 2 of the 7th
Schedule of the Constitution of India. It is entirely reserved as a revenue source for the state
governments.
Stamp Duty, Registration Fees, Transfer Tax

Stamp Duty is a kind of Tax levied by the government on the legal recognition of certain
documents. This Stamp Duty should be paid in full amount on stipulated time. The Stamp Duty is
payable/ Collected under Section 3 of Indian Stamp Act, 1899. Stamp duty is also a kind of
property tax on which a home buyer needs to pay this on the sale of the agreement. After paying
the Stamp Duty, the documents needs to be registered under the Registration Act, 1908 within 4
months from the date of execution. The Registration charges are over and above the stamp duty.
The Registration charges are levied at the rate of 1% of Total Property value/ Market value/
Agreement value whichever is higher.
Entry Tax
Entry Tax is a tax charged or levied or imposed on goods purchased or brought within the State or
from outside the State. Entry Tax is charged separately by the State Governments of India. This
Entry Tax Act was introduced on 01/09/2000. Entry Tax Rates are applicable as per State
Government Rules. This Tax is charged on the items which are notified by the State and these
items notified may vary for State to State. Click here for more about Entry Tax.
Education Cess
Education Cess is divided into 2 parts the first one is Primary Education Cess and the Second is
Secondary and Higher Education Cess. This Education Cess is levied or charged by Government
of India for the improving the standards of Education in Public Schools. This Education Cess is
levied as a part of Income Tax by the Income Tax Department. Education Cess was implemented
in the year 2004. In order to provide the financial support to the Higher Education, the government
introduced higher education cess in 2007.
Property Tax
A property tax is a charge on property that the owner is needed to pay. The Property tax is imposed
by the governing authority of the jurisdiction in which the property is situated. For income tax
basis in India, property is considered as a source of revenue. Hence, the tax is levied on that
49
property. The Properties include flat, shop, building, etc. as well as the land belonging to the
building. Under the Income Tax Act India, incomes from the properties are counted as one of the
heads of income. The amount of tax imposed is calculated on the value of the property being taxed.
Click here for more about Property Tax.
Municipal Tax
The Tax which is levied or charged by the local authority named as municipality of the Country is
known as Municipal Tax. This local taxes should be paid to the Municipal Corporation by the
assessee if he owes a house property. Municipal Taxes are usually levied in India in the form of
Property Taxes. This Tax is collected for sewer maintenance, civic services, etc. So, every
Individual who is having his own house property has to pay this municipal to the local Municipal
bodies.
Infrastructure Cess
Union Government imposed Infrastructure Cess on the production of vehicles. Infrastructure
Cess is defined as a duty of excise by Finance Bill which is levied and collected by the Union
Government for financing infrastructure projects. It is levied at the rate of 1% on small petrol,
LPG, CNG cars, 2.5% on diesel cars of certain capacity (i.e. not exceeding 4 metres in length and
engine capacity of up to 1500cc) and 4% on other higher engine capacity vehicles and SUVs
(Sports Utility Vehicles). Through this Infrastructure Cess, the government has projected that it
would collect an aggregate of Rs. 3,000 crore in the FY (financial year) 2016-17. This
Infrastructure Cess has come into effect from 1st March 2016.
RECENT TAX PROPOSALS

Direct Taxes
According to the Finance Minister,there is a little room to give away tax revenues or raise tax
rates in a constrained economy.
No case to revise either the slabs or the rates of Personal Income Tax. Even a moderate increase
in the threshold exemption will put hundreds of thousands of Tax Payers outside Tax Net.
However, relief for Tax Payers in the first bracket of USD 0.004 million to USD 0.009 million.
A tax credit of USD 36.78 to every person with total income upto USD 0.009 million.
Surcharge of 10 percent on persons (other than companies) whose taxable income exceed USD
0.18 million to augment revenues.
Increase surcharge from 5 to 10 percent on domestic companies whose taxable income exceed
USD 1.84 million.
In case of foreign companies who pay a higher rate of corporate tax, surcharge to increase from 2
to 5 percent, if the taxabale income exceeds USD 1.84 million.
In all other cases such as dividend distribution tax or tax on distributed income, current surcharge
increased from 5 to 10 percent.
Additional surcharges to be in force for only one year.
50
Education cess to continue at 3 percent.
Permissible premium rate increased from 10 percent to 15 percent of the sum assured by relaxing
eligibility conditions of life insurance policies for persons suffering from disability and certain
ailments.
Contributions made to schemes of Central and State Governments similar to Central Government
Health Scheme, eligible for section 80D of the Income tax Act.
Donations made to National Children Fund eligible for 100 percent deduction.
Investment allowance at the rate of 15 percent to manufacturing companies that invest more than
USD 1.84 million in plant and machinery during the period 1st April 2013 to 31st March 2015.
Eligible date for projects in the power sector to avail benefit under Section 80- IA extended
from 31st March 2013 to 31st March 2014.
Concessional rate of tax of 15 percent on dividend received by an Indian company from its
foreign subsidiary proposed to continue for one more year.
Securitisation Trust to be exempted from Income Tax. Tax to be levied at specified rates only at
the time of distribution of income for companies, individual or HUF etc. No further tax on
income received by investors from the Trust.
Investor Protection Fund of depositories exempt from Income-tax in some cases.
Parity in taxation between IDF-Mutual Fund and IDF-NBFC.
A Category I AIF set up as Venture capital fund allowed pass through status under Income-tax
Act.
TDS at the rate of 1 percent on the value of the transfer of immovable properties where
consideration exceeds USD 0.092 million. Agricultural land to be exempted.
A final withholding tax at the rate of 20 percent on profits distributed by unlisted companies to
shareholders through buyback of shares.
Proposal to increase the rate of tax on payments by way of royalty and fees for technical services
to non-residents from 10 percent to 25 percent.
Reductions made in rates of Securities Transaction Tax in respect of certain transaction.
Proposal to introduce Commodity Transaction Tax (CTT) in a limited way.Agricultural
commodities will be exempted.
Modified provisions of GAAR will come into effect from 1st April 2016.
Rules on Safe Harbour will be issued after examing the reports of the Rangachary Committee
appointed to look into tax matters relating to Development Centres & IT Sector and Safe
Harbour rules for a number of sectors.
Fifth large tax payer unit to open at Kolkata shortly.
A number of administrative measures such as extension of refund banker system to refund more
than USD 918.86, technology based processing, extension of e-payment through more banks and
expansion in the scope of annual information returns by Income-tax Department.
Indirect Taxes
No change in the normal rates of 12 percent for excise duty and service tax.
No change in the peak rate of basic customs duty of 10 perent for non-agricultural products.
Customs
51
Period of concession available for specified part of electric and hybrid vehicles extended upto 31
March 2015.
Duty on specified machinery for manufacture of leather and leather goods including footwear
reduced from 7.5 to 5 percent.
Duty on pre-forms precious and semi-precious stones reduced from 10 to 2 perent.
Export duty on de-oiled rice bran oil cake withdrawn.
Duty of 10 percent on export of unprocessed ilmenite and 5 percent on export on ungraded
ilmenite.
Concessions to air craft maintenaince, repair and overhaul (MRO) industry.
Duty on Set Top Boxes increased from 5 to10 percent.
Duty on raw silk increased from 5 to 15 percent.
Duties on Steam Coal and Bituminous Coal equalised and 2 percent custom duty and 2 percent
CVD levied on both kinds coal.
Duty on imported luxury goods such as high end motor vehicles, motor cycles, yachts and
similar vessels increased.
Duty free gold limit increased to USD 918.86 in case of male passenger and USD 1,837.47 in
case of a female passenger subject to conditions.
Excise duty
Relief to readymade garment industry. In case of cotton, zero excise duty at fibre stage also. In
case of spun yarn made of man made fibre, duty of 12 percent at the fibre stage.
Handmade carpets and textile floor coverings of coir and jute totally exempted from excise duty.
To provide relief to ship building industry, ships and vessels exempted from excise duty. No
CVD on imported ships and vessels.
Specific excise duty on cigarettes increased by about 18 percent. Similar increase on cigars,
cheroots and cigarillos.
Excise duty on SUVs increased from 27 to 30 percent. Not applicable for SUVs registered as
taxies.
Excise duty on marble increased from USD 0.55 per square meter to USD 1.10 per square meter.
Proposals to levy 4 percent excise duty on silver manufactured from smelting zinc or lead.
Duty on mobile phones priced at more than USD 36.78 raised to 6 percent.
MRP based assessment in respect of branded medicaments of Ayurveda, Unani, Siddha,
Homeopathy and bio-chemic systems of medicine to reduce valuation disputes.
Service Tax
Maintain stability in tax regime.

Vocational courses offered by institutes affiliated to the State Council of Vocational Training
and testing activities in relation to agricultural produce also included in the negative list for
service tax.
Exemption of Service Tax on copyright on cinematography limited to films exhibited in cinema
halls.
Proposals to levy Service Tax on all air conditioned restaurant.
52
For homes and flats with a carpet area of 2,000 sq.ft. or more or of a value of USD 0.18 million
or more, which are high-end constructions, where the component of services is greater, rate of
abatement reduced from from 75 to 70 percent.
Out of nearly 1.7 million registered assesses under Service Tax only 0.7 million file returns
regularly. Need to motivate them to file returns and pay tax dues. A onetime scheme called
Voluntary Compliance Encouragement Scheme proposed to be introduced. Defaulter may avail
of the scheme on condition that he files truthful declaration of Service Tax dues since 1st
October 2007.
Tax proposals on Direct Taxes side estimated to yield to USD 2,444.32 million and on the
Indirect Tax side USD 863.68 million.
Good and Services Tax
A sum of USD 1,653.78 million towards the first instalment of the balance of CST compensation
provided in the budget.
Work on draft GST Constitutional amendment bill and GST law expected to be taken forward.
Benefits of Taxes:
Even though most people are always at odds with the idea of taxation, there are some advantages
to taxes, the least of which is that it provides the government the resources it needs for economic
development. Some of the other benefits of taxes are:
It encourages savings and investments because if a person invests in certain instruments, then
the amount invested is reduced from their taxable income thus bringing down the tax they
have to pay. This investment is subject to certain limits that are detailed in the IT Act.
Paying taxes means that you have to file your tax returns which in turn means that when you
apply for a home loan for that home loan, its easier to get it because one of the things many
banks require is proof that you have been filing taxes regularly.
PENALTY FOR NOT PAYING TAXES:

Each type of tax has its own penalties associated with it. These penalties can range from fines to
imprisonment depending on the severity of the crime. In some cases the penalty could be that
you will have to pay what is owed in taxes along with additional sums as fine, which are
decided upon by government officials.
It is always advisable to pay taxes on time and always be aware of the taxes that you, as a
consumer, are liable to pay so that no-one can take you for a ride.
INDIA A STEP TOWARDS EASE DOING BUSINESS IN INDIA
Going Forward we will soon see the impacts of International financial Standards.
53
With the governments objective of simplification and clarity in tax structure we shall soon
see Direct Tax Code being implemented.
GST has already opened its wings for changing the Indirect Tax Structure in India and
making India one of the Best Place for doing business in the world.
BIBLOGRAPHY
1. www.google.com
2. www.incometaxindia.gov.in
3. www.slideshare.net
4. www. indiabusiness.nic.in
5. www.bankbazar.com
6. www.business.mapsofindia.com
Useful Web links
1. Union Budget of India
2. Central Board of Excise and Customs
3. Central Board of Direct Taxes.
54
ANNEXURE
UNDERTAKING BY CANDIDATE
I declare that project work entitled TAX STRUCTURE IN INDIA is my own work
conducted as part of my syllabus . I further declare that project work presented has been prepared
personally by me and it is not sourced from any outside agency. I understand that, any such
malpractice will have very serious consequence and my admission to the program will be
cancelled without any refund of fees. I am also aware that, I may face legal action, if I follow
such malpractice
NIRAJ POONAWALA__: Signature of Candidate
55
THANK YOU
FOR THE OPPORTUNITY
56

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TAX STRUCTURE IN INDIA

NAME: NIRAJ BHARAT POONAWALA

ADMISSION NO: HPGD/JA15/2789

PRIN.L.N.WELINGKAR INSTITUTE OF MANGEMENT

DOING BUSINESS IN INDIA

16% TAX ENVIORNMENT

So this system classifies income earners into different slabs.

Moving Towards Simplification

First of all lets know What Tax means.

The process of rationalization of tax administration is ongoing in India.

Income Tax: Tax on income of a person

State Governments can levy the following taxes:

An individual is treated as resident in a year if present in India:

1. For 182 days during the year or

What is taxable for a Non-Resident?

What is taxable for a Resident?

1. Individual resident aged below 60 year.

Income Slabs Tax Rates

Where the taxable income does not NIL

Income Slabs Tax Rates

1. Where the taxable income does NIL

Income Slabs Tax Rates

1. Where the taxable income does NIL

Status Indian Income Foreign Income

Resident and ordinarily resident Taxable Taxable

Resident but not ordinary resident Taxable Not taxable

Non-Resident Taxable Not taxable

Tax, consumption taxes and customs duties.

Corporate sector tax

Minimum Alternative Tax (MAT)

Fringe Benefit Tax (FBT)

Dividend Distribution Tax (DDT)

Banking Cash Transaction Tax (BCTT)

Securities Transaction Tax (STT)

Tax Rebates for Corporate Tax

The classical system of corporate taxation is followed in India

Capital Gains Tax

A capital gain is income derived from the sale of an investment.

Short Term and Long Term capital Gains

Double Taxation Relief

This relief is known as unilateral relief.

Tax Deduction at Source (TDS)

Payments for rentals would attract tax deduction at source.

Central Sales Tax

Value Added Tax

Nature of Applicable Law Governed By

1 Provision of Service Tax.Generally uniform rate of As Governed by

E.g. For restaurants, the service tax is

There is an exemption on payment of

it is mandatory to pay duty on all goods

Excise duty rates are different for each

The rates can be found in the following

Apart from the basic excise duty, the

Special Excise Duty : This is

Additional Duties of Excise

Additional Duties of Excise

National Calamity Contingent

It should be noted that the excise duty

3. Import of Customs duty is required to be paid Customs Act,

1. Specific Duties: Specific

2. Advalorem Duties: Advalorem

The rates of taxation in Customs can be

Apart from the basic Custom duties,

To give Indian manufacturing a level