Business Taxation Notes

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Business Taxation
Agriculture Income
Sec 2 (1A) of income tax 1961 act agriculture income means
1) Any rent or revenue derived from the land which is situated in India and used for agriculture activities. 2) Any income derived from such land by the agriculture person or by the process employed to make agriculture produce which can be fit for sale in the market. 3) Or any other income derived from any building provided that the: a) Building is on or on the immediate next to the agriculture land. b) It is occupied by cultivator or receiver of rent of revenue. c) It is used as dwelling place or share house or out house. d) Or land taken as rental income source

Agriculture Land
Any agriculture land which is situated out of India and a person is getting income from that land then it is not agriculture income. It is not called agriculture income under income tax act 1961 but will be chargeable from income or profession or business. Assesses

Section 2 (7) of IT of India 1961 provided expenditure about assesses which means: a) Every person in respect of whom income tax proceeding are performed. b) A person who is default under any income tax provision Person _ the person is explained by Indian income tax act 1961 which includes 1) A individual

2) A Hindu undivided family
3) A company
4) A firm
5) An association of person or body or individuals
6) Local authority
7) Every artificial judicial person

PERSON
Individual means a natural person includes male or female major minor as well as lunatic person. Their incomes are filed separately but at the same time the income of minor and united person is always with legal guardian HUF (hindu united family). It’s a family joint venture performed by lineate ascendance or desendence where the main person is called as KARTA and they will file their own income tax return for the income tax purposes not only religion of Hindus are included but also Jain and Sikh communities are also included. Company

Company is defined under companies act 1956 and this company will file income tax return where this company can be 100% Indian company. Company established by central government or state government or any other foreign company having its location in India as branch or a subsidiary. Firm

Means a partnership firm established under partnership act 1932 AOP (association of person)
AOP are nothing but two or more person coming together for any join activity or common purpose of earning profit and they need not continue this activity over the long period of time. Body of Individuals

The Body of Individual is different from AOP because it includes only individuals who are coming together for particular common goal or operation of earning money. Local Authority
Local authority means Municipal Corporation or district board interested by Government. Artificial juridical person
It means a legal person which can be a company or a charitable organization or any university or any religious trust. Assessment Year
Section 2 (9), it means the total period of 12 months commencing from 1st April to 31st march of next year the tax has to be paid in accordance with this assessment year for the related previous year. Previous Year

Total period of 12 months commencing on 1st April of particular year upto 31st march of next year the tax for previous year is always calculated as per assessment year.

Capital and Revenue Receipt
The income tax department does not make big difference between capital and revenue receipt but at the same time these receipt have different meaning. The receipt which occurs only some times over the period of time is called as capital receipt Ex: a sale of any investment or any land by any proportion 1 or 2 times over the period of time and revenue receipt which occurs each and every time on the day to day basis. Ex: Rent, interest, dividend, commission received etc....
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