The Income-tax Act, 1961 is the charging statute of

Income Tax in India Income tax in India is governed by Entry 82 of the Union List of the Seventh Schedule to the Constitution of India, empowering the central government to tax non-agricultural income; agricultural income is defined in Section 10(1) of the Inco ...

. It provides for levy, administration, collection and recovery of Income Tax. The

Government of India The Government of India (ISO: ; often abbreviated as GoI), known as the Union Government or Central Government but often simply as the Centre, is the national government of the Republic of India, a federal democracy located in South Asia, c ...

brought a draft statute called the "

Direct Taxes Code Income tax in India is governed by Entry 82 of the Union List of the Seventh Schedule to the Constitution of India, empowering the central government to tax non-agricultural income; agricultural income is defined in Section 10(1) of the Inco ...

" intended to replace the Income Tax Act, 1961 and the

Wealth Tax Act, 1957 The Wealth Tax Act, 1957 was an Act of the Parliament of India that provides for the levying of wealth tax on an individual, Hindu Undivided Family or company. The wealth tax was levied on the net wealth owned by a person on a valuation date, i. ...

. However the bill was later scrapped.

Amendments

The Government of India presents finance bill (budget) every year in the month of February. The finance budget brings various amendments in Income-tax Act, 1961 including tax slabs rates. The amendments are generally applicable to the next following financial year beginning from 1 April unless otherwise specified. Such amendments become part of th
income tax act
after the approval of the president of India. The partial budget which is presented for Non Full financial year (generally in the year of General Election in India) is called VOTE ON ACCOUNT. This is presented for the sake of continuation of those compulsory expenditures of Government which are necessary for the smooth functioning of Country and a full fledged budget is presented after a new government is formed.

Scope of total income

The scope of Total Income depends on the category of a

taxpayer A taxpayer is a person or organization (such as a company) subject to pay a tax. Modern taxpayers may have an Taxpayer Identification Number, identification number, a reference number issued by a government to Citizenship, citizens or Company, f ...

and his residential status in India. For example, a person resident in India is liable to pay income tax in India on his total world income. On the other hand, a person non-resident in India is liable to pay tax in India only on his Indian income. Under Income-tax Act, there are five heads of income - Salary, House Property, Business or Profession, Capital Gains and Other Sources. Total income consists of income computed under these heads. The tax on total income is computed as per the tax rates specified for the year in which income is earned..

Simplification

Union Government sets up Arbind Modi-led panel to overhaul, simplify income tax laws. On 22 November 2017, the government formed a task force to draft a new direct tax law to replace the existing Income Tax Act, which has been in force since 1961. Arbind Modi, Member, Central Board of Direct Taxes (CBDT), will lead a six-member panel. Chief Economic Advisor Arvind Subramanian will be apermanent special invitee on the panel.

Notable cases

Cairn Energy and Government of India dispute The Cairn Energy and Government of India dispute is mainly an ongoing tax and investment dispute which has its origins in 2005–2006. The case is closely linked to Cairn's partner in India, ''Vedanta'', and to concepts such ''Ex post facto'' law i ...

Vodafone International Holdings B.V. vs. Union of India & Anr.

Notes

External links

{{DEFAULTSORT:Income-tax Act, 1961, The Acts of the Parliament of India 1961 1961 in law Income tax in India Indian tax legislation 1961 in India Indian legislation History of taxation in India