BASIC PRINCIPLES OF INCOME TAX LAW
BASIC PRINCIPLES OF INCOME-TAX LAW
By: Justice R.K. Abichandani
1. Constitutional Provisions :
The Constitution of India vests the Parliament with plenary legislative powers to impose taxes on matters specifically enumerated in the Union List and all the power of making any law imposing a tax not mentioned in Concurrent or State Lists, as provided by Article 248(2). “Tax on income” is defined in an inclusive manner by Article 366(29) under which the expression includes a tax in the nature of an excess profits tax. “Corporation tax” is defined by Article 366(6) to mean any tax on income, so far as it is payable by Companies and is a tax in case of which the three conditions mentioned therein are fulfilled, namely, (a) that it is not chargeable in respect of agricultural income; (b) that no deduction in respect of tax paid by Companies is, by any enactments which may apply to the tax, authorised to be made from dividends payable by the Companies to individuals; and ( c) that no provision exists for taking the tax so paid into account in computing for the purposes of Indian income-tax, the total income of individuals receiving such dividends, or in computing the Indian income-tax payable by, or refundable to such individuals. Under entry 82 of the Union List, the Parliament has exclusive power to make laws with respect to “Taxes on income other than agricultural income”. The expression “agricultural income” as defined under clause (1) of Article 366 means agricultural income as defined for the purposes of the enactments relating to Indian income-tax. 2. Tax Law : The tax law of a nation is usually unique to it, although there may be similarities and common features in the laws of various countries. Tax law is,in general, concerned only with the legal aspects of taxation, and not with its financial, economic, or other aspects. The decisions to impose various
By: Justice R.K. Abichandani
1. Constitutional Provisions :
The Constitution of India vests the Parliament with plenary legislative powers to impose taxes on matters specifically enumerated in the Union List and all the power of making any law imposing a tax not mentioned in Concurrent or State Lists, as provided by Article 248(2). “Tax on income” is defined in an inclusive manner by Article 366(29) under which the expression includes a tax in the nature of an excess profits tax. “Corporation tax” is defined by Article 366(6) to mean any tax on income, so far as it is payable by Companies and is a tax in case of which the three conditions mentioned therein are fulfilled, namely, (a) that it is not chargeable in respect of agricultural income; (b) that no deduction in respect of tax paid by Companies is, by any enactments which may apply to the tax, authorised to be made from dividends payable by the Companies to individuals; and ( c) that no provision exists for taking the tax so paid into account in computing for the purposes of Indian income-tax, the total income of individuals receiving such dividends, or in computing the Indian income-tax payable by, or refundable to such individuals. Under entry 82 of the Union List, the Parliament has exclusive power to make laws with respect to “Taxes on income other than agricultural income”. The expression “agricultural income” as defined under clause (1) of Article 366 means agricultural income as defined for the purposes of the enactments relating to Indian income-tax. 2. Tax Law : The tax law of a nation is usually unique to it, although there may be similarities and common features in the laws of various countries. Tax law is,in general, concerned only with the legal aspects of taxation, and not with its financial, economic, or other aspects. The decisions to impose various