Origin and Basics of Laws of Taxation in India
Keywords:
Income, Income Tax, taxation system, Income Tax Act, assessment and dispute resolution, dispute resolution panel, equity, justice, Arthashastra, levy.Abstract
In this article we study the origin and introduction of taxation in India. We start with history of taxation and then reach to the legal framework of taxation system in the country, focussing on the definition of the expression “income”, its assessment, need to pay taxes, sources of taxes etc. Therefore, income includes not only those things which this definition explicitly declares, but also all such things as the word signifies according to its natural import. Then, we explain how these taxes are computed and assessed keeping in focus the principle of equity and justice in taxation. We also learn about the available various dispute resolution mechanisms related with taxation disputes in India.
References
1. Constitutional and Statutory Basis Of Taxation by Sonia Mathur http://nja.nic.in/Concluded_Programmes/2 018-19/SE-01_2018_PPTs/4.CONSTITU TIONAL%20AND%20STATUTORY%2 0BASIS%20OF%20TAXATION.pdf
2. 20 Wall 655,662,664 (1874)
3. 1962 SCR Supl (2) p. 1006
4. Kanga Palkhivala and Vyas, The Law and Practice of Income Tax, Ninth Edition at p. 142
5. Padmaraje R. Kadambande v CIT [1992] 195 ITR 877
6. For example, capital gains under s 45 of the ITA
7. A period of 12 months commencing on the 1st day of April
8. As defined in Explanation to s 6(3) of the Income Tax Act
9. Defined in Section 6 of the Income Tax Act
10. Income is said to have its source in India if it is “income which accrues or arises in India, is deemed to accrue or arise in India or is received in India”. JTRF (2019) 28–33 © Law Journals 2019. All Rights Reserved Page 33
11. “Business connection means something more than business. It presupposes an element of continuity between the business of the non -resident and his activity in the taxable territory, rather than a stray or isolated transaction”. The ITA was amended by the Finance Act, 2003, and an inclusive definition of the expression was inserted with effect from April 1, 2004. As per this definition, a business connection includes “any business activity carried out through a person who, acting on behalf of the non-resident, (a) has and habitually exercises in India, an authority to conclude contracts on behalf of the non -resident, unless his activities are limited to the purchase of goods or merchandise for the non-resident; or (b) has no such authority, but habitually maintains in India a stock of goods or merchandise from which he regularly delivers goods or merchandise on behalf of the non -resident; or (c) habitually secures orders in India, mainly or wholly for the non -resident or for that non-resident and other non -residents controlling, controlled by, or subject to the same common control, as that non - resident.”
12. Refer Explanations 5, 6 and 7 in cl (i) of s 9(1) of the Income Tax Act
13. Indian Income Tax Law - A Brief Guide by Rupesh Jain rupesh@vaishlaw.com Puneeta Kundra puneeta@vaishlaw.com; http://www.mondaq.com/pdf/clients/4573 68.pdf
14. https://economictimes.indiatimes.com/wea lth/tax/latest-income-tax-slabs/article show/62751981.cms?from=mdr
15. Indian Income Tax Law - A Brief Guide by Rupesh Jain rupesh@vaishlaw.com Puneeta Kundra puneeta@vaishlaw.com; http://www.mondaq.com/pdf/clients/4573 68.pdf Cite this Article Niddhi. Taxation in India. Journal of Taxation and Regulatory Framework. 2019; 2(2): 28–33p.
