BASIC

CONCEPTS
INCOME TAX LAW : AN INTRODUCTION
WHAT IS A TAX?
 Let us begin by understanding the meaning of tax. Tax is a fee
charged by a government on a product, income or activity.

 There are two types of taxes . Direct taxes and indirect taxes.

 If tax is levied directly on the income or wealth of a person,

then it is a direct tax e.g. income-tax, wealth tax.

 If tax is levied on the price of a good or service, then it is

called an indirect tax e.g. excise duty, custom duty, service
tax and sales tax or value added tax. In the case of indirect
taxes, the person paying the tax passes on the incidence to
another person.
WHY ARE TAXES LEVIED?

 The reason for levy of taxes is that they constitute the basic
source of revenue to the government. Revenue so raised is
utilised for meeting the expenses of government like defence,
provision of education, health-care, infrastructure facilities
like roads, dams etc.
 Classification of Taxes
Direct Taxes
Meaning It is a tax where incidence
as well as impact of tax is
on one and the same
person. In other words, it
is borne by the assessee
and cannot be passed on
to the customer.
Indirect Taxes
It is a tax where the
incidence is on one person
but the impact is on the
customer. In other words,
the person on whom tax is
levied passes on the tax
burden to the customer.

Example a) Income Tax a) Sales tax

b) Wealth Tax b) VAT
c) Excise duty
d) Customs duty
e) Service tax

Burden Burden not felt by all Burden shouldered by all

persons persons
OVERVIEW OF INCOME-TAX LAW IN
INDIA
 Income-tax is the most significant direct tax. In this material,
we would be introducing the students to the Income-tax law
in India. The income-tax law in India consists of the
following components.

 Income Tax Act

 Annual Finance Acts
 Income Tax Rules
 Circulars/Notifications
 Legal decisions of Courts
Income-tax Act
 The levy of income-tax in India is governed by the Income-tax
Act, 1961. We shall briefly refer to this as the Act.

 This Act came into force on 1st April, 1962.

 These undergo change every year with additions and

deletions brought about by the Finance Act passed by
Parliament.

 In pursuance of the power given by the Income-tax Act, rules

have been framed to facilitate proper administration of the
Income-tax Act.
The Finance Act

 Every year, the Finance Minister of the Government of India

presents the Budget to the Parliament.

 Part A of the budget speech contains the proposed policies of the

Government in fiscal areas.

 Part B of the budget speech contains the detailed tax proposals.

 In order to implement the above proposals, the Finance Bill is

introduced in the Parliament.

 Once the Finance Bill is approved by the Parliament and gets the
assent of the President, it becomes the Finance Act.
Income-tax Rules
 The administration of direct taxes is looked after by the Central
Board of Direct Taxes (CBDT).

 The CBDT is empowered to make rules for carrying out the

purposes of the Act.

 For the proper administration of the Income-tax Act, the CBDT

frames rules from time to time. These rules are collectively called
Income-tax Rules, 1962. It is important to keep in mind that along
with the Income-tax Act, these rules should also be studied.
Circulars and Notifications

 Circulars are issued by the CBDT from time to time to deal with
certain specific problems and to clarify doubts regarding the scope
and meaning of the provisions.

 These circulars are issued for the guidance of the officers and/or
assessees.

 The department is bound by the circulars. While such circulars are

not binding the assessees they can take advantage of beneficial
circulars.
Case Laws

 The study of case laws is an important and unavoidable

part of the study of income-tax law.

 It is not possible for Parliament to conceive and provide

for all possible issues that may arise in the
implementation of any Act. Hence the judiciary will hear
the disputes between the assessees and the department
and give decisions on various issues.

 The Supreme Court is the Apex Court of the country and

the law laid down by the Supreme Court is the law of the
land.

 The decisions given by various High Courts will apply in

the respective states in which such High Courts have
jurisdiction.
Charge of Income Tax [ Section 4 ]

As provided in Section 4, the total

income of the previous year of every
person shall be charged to Income Tax at
the rates prescribed in the annual Finance
Act as applicable to the relevant
assessment year
LEVY OF INCOME-TAX

1. Person u/s 2(31) includes,

a. An Individual,
b. Hindu Undivided Family (HUF),
c. A Company,
d. A Firm,
e. An Association of Persons(AOP) or Body
of Individuals (BOI),
f. A Local Authority,
g. Every other Artificial Juridical Person
 Definitions Contd..

2. Assessee [ Sec 2(7) ] :

Income Tax Act,1961 defines “assessee” as a
person by whom any tax or any other sum of money
is payable under this Act, and includes,
* Every person in respect of whom any
proceeding under this Act has been taken for the
assessment of his income or income of any other
person in respect of which he is assessable, or of the
loss sustained by him or such other person, or the
amount of refund due to him or to such other
person.
* Any Person who is deemed to be an
assessee under any provisions of this Act.
* Any Person who is deemed to be an
assessee in default under any provisions of the
Act.
3. Previous Year [Sec 3] :

“The year in which income is earned is known

as Previous Year. Previous Year is the Financial
Year immediately preceding the Assessment
Year.”

Notes : * All assessees are required to follow

financial year
( i.e. Apr To Mar ) as previous year.
* This uniform previous year has to be
followed for all
sources of income.
4. Assessment Year [Sec 2 (9)] :

“ `Assessment Year’ means the period starting

from April 1 and ending on March 31, next
year.”

Income of Previous Year of the Assessee is

taxed during the next following assessment
year at the rates prescribed by relevant Finance
Act.
5. Income [Sec 2 (24)] :

Under Sec.2(24), the term “income” specifically

include the following :
1. Profit & Gains
2. Dividend`
3. Voluntary Contributions received by Trust
4. Perquisites in the hands of employees.
5. Any Special Allowance or benefit
6. City Compensatory Allowance/Dearness Allowance
7. Any benefit or perquisites to a director
8. Any benefit or perquisites to a representative
assessee.
9. Any sum chargeable under section 28, 41 & 59.
10. Capital Gains
11. Insurance Profit
12.Banking income of a Co-operative Society
13.Winning from Lottery.
14. Employees Contributions towards provident fund
15. Amount received under Keyman Insurance Policy.
16.Amount exceeding Rs.50000/- by way of Gift
received by an individual or HUF.
 Definitions Contd..
Income [Sec 2 (24)] : contd..

The definition of the term “income” u/s 2(24) is

inclusive and not exhaustive. Therefore, the term
“income” not only includes those things which are included
in section 2(24) but also includes such things which the
term signifies according to its general & natural meaning.
Therefore, following points must be kept in mind
while assessing income :

1. Income can be in any form i.e. in Cash or in

kind.
2. Income will also include illegal income, if any.
3. Disputed title to income does not make any
difference.
4. Income must come from Outside. One cannot
earn profit from oneself.
5. Income should be real & not fictional. (E.g. :
H.O. & Branch transactions)
6. Receipt in lump sum or in instalment does not
make any difference.
7. There is difference between Capital Receipts &
Revenue Receipts.
All Revenue receipts are taxable unless
specifically exempt, while all capital receipts are
exempt unless specifically taxed.
8. Income includes loss.
9. Same income cannot be taxed twice.
 Definitions Contd..
7. Gross Total Income [Sec 14] :
As per Section 14 income of a person is
computed under the following heads,
1. Salaries
2. Income from House Properties
3. Profits & Gains of Business or Profession
4. Capital Gains
5. Income from other Sources.

The aggregate income under these heads is

termed as “Gross Total Income”
 Definitions Contd..
8. Total Income [ Sec 2 (45) ] :

“` Total Income ’ means the total amount of

income referred to in Section 5, computed in the
manner laid down in the Act.”

In other words, it is the income after allowing the

deductions u/s 80 C to 80 U.
 CONCEPT OF INCOME

 The definition of income begins with the words

“Income includes”. Thus, it is an inclusive
definition and not an exhaustive one.
Certain important principles relating to
income are enumerated below –
 Periodic monetary return which accrues or is expected to
accrue regularly from definite sources. Exceptions e.g.
Winnings from lotteries, crossword puzzles.

 Income normally refers to revenue receipts. But Capital

gains – gains on sale of a capital asset like land.

 Income means net receipts and not gross receipts.

 Income is taxable either on due basis or receipt basis.

 Income earned in a previous year is chargeable to tax in

the assessment year.
 Definitions Contd..
Computation
Particulars ofAmount
Total
Income
1 Income from Salaries xxx

2 Income from House Properties xxx

3 Profits & Gains of Business & xxx

Prof.
4 Capital Gains xxx

5 Income from other Sources xxx

Less : Set off & carry forward of xxx

Losses
Gross total Income XXX

Less : Deductions u/s 80 C to 80 U xxx

Total Income XXX

TOTAL INCOME AND TAX PAYABLE
 Income-tax is levied on an assessee’s total income. Such total income
has to be computed as per the provisions contained in the Income-tax
Act, 1961. Let us go step by step to understand the procedure of
computation of total income for the purpose of levy of income-tax.

 Step 1 Determination of residential status

 Step 2 Classification of income under different heads
 Step 3 Exclusion of income not chargeable to tax
 Step 4 Computation of income under each head
 Step 5 Clubbing of income of spouse, minor child etc.
 Step 6 Set-off or carry forward and set-off of losses
 Step 7 Computation of Gross Total Income.
 Step 8 Deductions from Gross Total Income
 Step 9 Total income
 Step 10 Application of the rates of tax on the total income
 Step 11 Surcharge
 Step 12 Education cess and secondary and higher education cess
 Step 13 Advance tax and tax deducted at source
RESIDENTIAL STATUS AND
SCOPE OF TOTAL INCOME
Tax Liability = Total Income * Rate of Tax
Residential Status ≠ Citizenship

Residential Status

Section
6(1) Non -
Resident
Resident

Section
6(6)
Ordinarily Not Ordinarily
Resident Resident
Section 6(1) – [Satisfy any one]
Basic Condition (a):
182 days or more during the previous year.
OR
Basic Condition (b):

60 days or more during previous year

&
365 days or more during 4 years
immediately preceding the relevant previous years.
e.g. : F.Y. 2013-14, relevant previous years are:
I 2012-13 I
I 2011-12 I
I 2010-11 I
I 2009-10 I
Exception to Basic Condition (b)
As per this Exception, In the following cases, an
individual will be resident in India only if he is
in India during relevant previous year for at
least 182 days; and Basic Condition (b) will
not be applicable.

1. Indian Citizen, who being in India, leaving India,

for employment (includes self employed)

2. Indian Citizen, who being in India, leaving India,

Indian ship as a crew member.
3. Indian Citizen, who stays outside India,
comes to . . India during relevant
previous year, for visit.

4. Person of Indian origin, who being

outside India, . . . comes to India during
relevant previous year, for visit.

(Note : A person is deemed to be an Indian Origin

if he or either of his parents or any of his grand
parents, was born in Undivided India.)
i. He has been resident in India in at least 2
years out of the 10 years immediately
preceding the relevant previous year.
AND
ii. He has been in India for a period of 730
days or more during 7 years immediately
preceding the relevant previous year.

Section 6(6) – [Satisfy both]

 Residential Status
Individual

Stay in India

Section 6 (1): [Any One]

a) 182 days or more during P.Y.
OR
b) 60 days or more during P.Y.
AND
365 days or more during four PY.
[Remember 4 exceptions]

Section 6 (6): [Both]

1) Resident for 2 out of 10 years
AND
2) 730 days or more during 7 years
 Hindu Undivided Family

Control and
Management

Partly in India &

Wholly in Wholly
Partly outside
India outside India
India

Resident Non - Resident

Section 6(6)

If Karta satisfy If Karta does not

Section 6(1) satisfy Section 6(6)

HUF = “R & OR” HUF = “R & NOR”

 Company

Registration

In India Outside India

Indian Company Foreign Company

Always Resident Control &

Management

Partly in India &

Wholly Outside
Wholly in India Partly Outside
India
India

Resident Non-Resident Non-Resident

 Firm / Association of Persons & Body of
Individuals / Local Authority / Artificial
Juridical Person

Control and Management

Partly in India & Wholly outside

Wholly in India
Partly outside India India

Resident Resident Non-Resident

Important NOTE : There is no further classification into Resident &

Ordinarily Resident, Resident & Not Ordinarily Resident,
in case of Company, Firm, Association of Persons & Body of
Individuals, Local Authority, Artificial Juridical Person
Scope of Total Income [ Sec 5 ]
Particulars Resident Not Non-
Ordinary Resident
Resident
Taxability Taxability Taxability

INDIAN INCOME
1. Income received or
deemed to be received Yes Yes Yes
in India, whether
earned in India or
elsewhere.
Yes Yes Yes
2. Income which accrues
or arises or is deemed
to accrue or arises in
India during the
previous year, whether
received in India or
elsewhere.
Scope of Total Income [ Sec 5 ] contd..
Particulars Resident Not Non-
Ordinary Resident
Resident
Taxability Taxability Taxability

FOREIGN INCOME
1. Income which accrues
or arises outside India Yes Yes No
and received outside
India from a business
controlled from India or
Profession set up in
India.
Yes No No.
2. Income which accrues
or arises outside India
and received outside
India in the previous
year from any other
source.
 39
9/6/2018
Difference between citizenship
and residential status
 Types of Residential Status
The different types of residential status are:-

Resident(R)

Not Ordinarily Resident (NOR)

Non-Resident (NR)

41
9/6/2018
 Residential Status of Individual
The residential status of individual will be determined as
under-
Assessee Basic Condition Additional Condition

He must satisfy at one of the basic

Resident Not required.
conditions.

He must satisfy either one or both

He must satisfy at least one of the
Not Ordinarily Resident the additional conditions given u/s
basic conditions.
6(6).

Should not satisfy any of the basic

Non-Resident Not required.
conditions.

42
9/6/2018
 Contd…
Basic Conditions u/s 6(1):
i. He must be in India for a period of 182 days or more
during the previous year; or
ii. He must be in India for a period of 60 days or more
during the previous year and 365 days or more during
the four years immediately preceding the previous
year.
Additional Conditions u/s 6(6):
i. He must be a non-resident in India in nine out of the
ten previous years preceding that
year; or
ii. He must be outside India during 7 preceding previous
years for aggregate period of 729 days or less.
43
9/6/2018
 Residential Status of HUF
The residential status of HUF depends upon the control
and management of its affairs.
 Resident HUF: If the control and management of the
affairs of HUF is situated wholly or partly in India then
HUF is said to be Resident in India.
 Non- Resident HUF: If the control and management of
the affairs of HUF is situated wholly outside India then
HUF is said to be Non- Resident in India.
 Not Ordinarily Resident HUF: A resident HUF is said to
be ‘Not Ordinarily Resident’ in India
if Karta or manager thereof, satisfies
any of the additional
conditions u/s 6(6).
44
9/6/2018
 Residential Status
According to section 6(3) an Indian Company is always
Resident in India. A foreign Company will be resident in
India if Control or Management of its affairs is wholly
situated in India.
Residential Status of a firm or AOP or other person
depends upon control and management of its affairs.
 Resident: If the control and management of the affairs of a firm
or AOP or other person is situated wholly or partly in India then
such a firm or AOP or other person is said to be resident in
India.
 Non-Resident: If the control and
management of the affairs of a firm or AOP
or other person is situated outside India then
such a firm or AOP or other person is said to
be non-resident in India.

45
9/6/2018
Residential status -
Mr,A a British citizen, comes to India for the first time during 2004-5 .his s
India for 2005-6, 2006-7 .2007-8, 2008- 9,& 2009 -10 are as follows
a)55 days; 60 days ;80 days ,160 days & 70 days respectively .
Determine his residential status for AY 2010-11

ANS :HIS STAY IN INDIA

For 2009-10 is 70 days ; (b) stay in the
preceeding 4 years355. days.he fails in both conditionsd
therefore he is a NONRESIDENT

46
 Residential Status continued
Mr. B a Malaysian , leaves India after a period of 10 years
stay on 01/06/2007.During FY 2008-9 HE COMES TO INDIA
FOR 46 DAYS .Later he returns to India for good on
10/10/2009.Determine his residential status for the AY
2010-11.Will your answer be different if his date of departure
was15/05/2007?

B stays from 10/10/2009 for 173.days.he does not satisfy

the 1st condition.but he has stayed for more than 365 days
in the preceding 4 yrs. Hence he is resident.he was
resident in 9 out of 10 yrs & has been in India for more
than 729 days in the preceding 7 yrs Therfore BisR.O.R.

47
State with reasons whether the following receipts are
income u/s 2(24) of the IT.ACT
1)INCOME EARNED BY SMUGGLING GOLD INTO INDIA
2)Gift received by a doctor from a patient
3)Gift received by son from father on his marriage
ANS:1)YES MAY BEby
4)Award received LEGAL OR ILLEGAL(2)YES
a sports person
3)NO (4)YES (5) NO. (6) NO.
5)Award received by a nonprofessional sport person
6)Reimbursement of travelling expenses by a sales person

48
Determine the legal status of the following persons:

1)Chaitali coop H.S.ltd (6)XYZ & CO unregd firm

2)Mr.janakinandan (7)Jt.family of Rajesh,his wife &children
3)Mukund Iron Ltd. (8)Shramik sena
4)Mr.Badri prasad (9)mumbai municipal corporation
5)Union Bank of Allahabad (10)mumbai university

Ans :1)AOP (2)An Individual (3) co. (4 )individual

(5) Co (6) AOP/BOI (7)HUF (8)boi (9)local authority
(10)Artificial judicial person

49
 Incidence of Tax
Tax Incidence
Particulars
R NOR NR

Income received in India by or on behalf of assessee Yes Yes Yes

Income deemed to received in India by or on behalf of assessee Yes Yes Yes

Income accruing or arising in India Yes Yes Yes

Income deemed to accrue or arise in India Yes Yes Yes

Income which accrues or arise outside India Yes No No

50
From the following details calculate total income of Mr. S for the financial y
2012 -13 (a) as resident (b) not ordinarily resident ( c ) non resident

No Details of income Rs
1 Income from property remitted 210,000
from lanka to the assessee in
india
2 Profit from business in india 100,000
3 Loss from business in lanka 80,000
,managed from india
4 Dividend from foreign cos recd. 60,000
o/s India
5 Interest on deposits from 120,000
Indian cos
6 Total 5,17,000

51
Total income of Mr. S for the financial year 2012 -13
(a) as resident (b) not ordinarily resident ( c ) non resident

N Details of income R NoR Non R

o
1 Income from 210,00 210,00 210,00
property remitted 0 0 0
from lanka to the
assessee in india
2 Profit from business 100,00 100,00 100,00
in india 0 0 0
3 Loss from business (80000 NT
in lanka ,managed (80000 )
from india )
4 Dividend from Not Not
foreign cos recd. 60,000 taxable taxable
o/s India
5 Interest on deposits 120,00 120,00 120,00
from Indian cos 0 0 0
6 Total 410,00 350,00 430,00 52

0 0 0
Step 1 . Determination of residential status
 The residential status of a person has to be determined to ascertain which income is to be
included in computing the total income. The residential statuses as per the Income-tax Act
are shown below .

Residential status under Income Tax Act !961

Resident Non-resident

Resident And Resident but not-

ordinary ordinary resident
resident
 Step 2 . Classification of income under different heads
HEADS OF INCOME:
The Act prescribes five heads of income.

SALARIES INCOME FROM PROFITS AND GAINS OF CAPITAL INCOME FROM

HOUSE PROPERTY BUSINESS OR PROFESSION GAINS OTHER SOURCES

• These heads of income exhaust all possible types of income that can accrue to or be
received by the tax payer.

• Salary, pension earned is taxable under the head ‘Salaries’.

• Rental income is taxable under the head ‘Income from house property’.

• Income derived from carrying on any business or profession is taxable under the head
‘Profits and gains from business or profession’.

• Profit from sale of a capital asset (like land) is taxable under the head ‘Capital Gains’.

• The fifth head of income is the residuary head under which income taxable under the
Act, but not falling under the first four heads, will be taxed.

• The tax payer has to classify the income earned under the relevant head of income.
Step 3 - Exclusion of income not chargeable to tax

 There are certain income which are wholly exempt from income-tax
e.g. Agricultural income. These income have to be excluded and will
not form part of Gross Total Income.

 Also, some incomes are partially exempt from income-tax e.g. House
Rent Allowance, Education Allowance. These incomes are excluded
only to the extent of the limits specified in the Act.

 The balance income over and above the prescribed exemption limits
would enter computation of total income and have to be classified
under the relevant head of income.
Step 4 - Computation of income under each head

 Income is to be computed in accordance with the provisions governing a particular

head of income.

 Under each head of income, there is a charging section which defines the scope of
income chargeable under that head.

 There are deductions and allowances prescribed under each head of income. For
example, while calculating income from house property, municipal taxes and interest
on loan are allowed as deduction. Similarly, deductions and allowances are
prescribed under other heads of income. These deductions etc. have to be
considered before arriving at the net income chargeable under each head.
Step 5 . Clubbing of income of spouse, minor child etc.

 In case of individuals, income-tax is levied on a slab system on the total income. The
tax system is progressive i.e. as the income increases, the applicable rate of tax
increases.

 Some taxpayers in the higher income bracket have a tendency to divert some portion
of their income to their spouse, minor child etc. to minimize their tax burden. In order
to prevent such tax avoidance, clubbing provisions have been incorporated in the
Act, under which income arising to certain persons (like spouse, minor child etc.)
have to be included in the income of the person who has diverted his income for the
purpose of computing tax liability.
Step 6 . Set-off or carry forward and set-off of losses

 An assessee may have different sources of income under the same head of income. He
might have profit from one source and loss from the other. For instance, an assessee may
have profit from his textile business and loss from his printing business. This loss can be
set-off against the profits of textile business to arrive at the net income chargeable under
the head .Profits and gains of business or profession..

 Similarly, an assessee can have loss under one head of income, say, Income from house
property and profits under another head of income, say, Profits and gains of business or
profession. There are provisions in the Income-tax Act for allowing inter-head adjustment
in certain cases.

 Further, losses which cannot be set-off in the current year due to inadequacy of eligible
profits can be carried forward for set-off in the subsequent years as per the provisions
contained in the Act.
Step 7 . Computation of Gross Total Income.

 The final figures of income or loss under each head of income, after allowing the
deductions, allowances and other adjustments, are then aggregated, after giving effect
to the provisions for clubbing of income and set-off and carry forward of losses, to
arrive at the gross total income.
Step 8 . Deductions from Gross Total Income
 There are deductions prescribed from Gross Total Income. These deductions are of three types .

Deduction in respect of certain payments Deduction in respect of certain Other deductions

incomes

1. Life insurance premium paid
2. Contribution to provident fund/
Pension fund
3. Medical insurance premium paid
1. Profit and gains from undertaking Deduction in case of
engaged in infrastructural person with disability
development
2. Profit and gains from undertaking
engaged in development of
SEZ

4. Payment of interest of loan taken for

higher education 3. Certain income of co-operative
societies

5. Rent paid
4. Royalty income etc of authors

6. Certain donations
5. Royalty on patents

7. Contribution to political parties

Step 9 . Total income
 The income arrived at, after claiming the above deductions from the Gross Total Income is
known as the Total Income.
Step 10 . Application of the rates of tax on the
total income

 The rates of tax for the different classes of assesses are prescribed by the Annual Finance
Act. The tax rates have to be applied on the total income to arrive at the income-tax liability.
Step 11 . Surcharge

 Surcharge is an additional tax payable over and above the income-tax. Surcharge is levied
as a percentage of income-tax.
Step 12 . Education cess and secondary and higher education

Cess on income-tax

 The income-tax, as increased by the surcharge, is to be further increased by an

additional surcharge called education cess@2%. The Education cess on
income-tax is for the purpose of providing universalised quality basic
education. This is payable by all assesses who are liable to pay income-tax
irrespective of their level of total income.

 Further, .secondary and higher education cess on income-tax. @1% of income-

tax plus surcharge, if applicable, is leviable from A.Y.2008-09 to fulfill the
commitment of the Government to provide and finance secondary and higher
education.
Step 13 - Advance tax and tax deducted at source

 Although the tax liability of an assessee is determined only at the end of the year, tax is
required to be paid in advance in certain instalments on the basis of estimated income.

 In certain cases, tax is required to be deducted at source from the income by the payer at
the rates prescribed in the Act. Such deduction should be made either at the time of
accrual or at the time of payment, as prescribed by the Act.

 For example, in the case of salary income, the obligation of the employer to deduct tax at
source arises only at the time of payment of salary to the employees. Such tax deducted at
source has to be remitted to the credit of the Central Government through any branch of
the RBI, SBI or any authorized bank. If any tax is still due on the basis of return of income,
after adjusting advance tax and tax deducted at source, the assessee has to pay such tax
(called self-assessment tax) at the time of filing of the return.
RETURN OF INCOME
 The Income-tax Act, contains provisions for filing of return of income.
 Return of income is the format in which the assessee furnishes information as to his total
income and tax payable. The format for filing of returns by different assessees is notified
by the CBDT.

 The particulars of income earned under different heads, gross total income, deductions
from gross total income, total income and tax payable by the assessee are required to be
furnished in a return of income.

 In short, a return of income is the declaration of income by the assessee in the prescribed
format.

 The Act has prescribed due dates for filing return of income in case of different assessees.
All companies and firms have to mandatorily file their return of income before the due date.

 Other persons have to file a return of income if their total income exceeds the basic
exemption limit.