Name – Akash Tiwari

Rollno-1735
6th Semester
23/04/2020
Subject-Taxation Law
UNIT-1
Q1. How would you determine the residential status of an “individual”. Explain?
Ans1.
INTRODUCTION:
The residential status of the taxpayer plays a key role in determining the scope of taxable income
for a financial year in India. For an individual the residential status is determined solely by the
physical presence.
R v. North Curry: Residential status denotes the place where an individual eats, drinks and sleeps
or where his family or servants eat, drink and sleep.
TYPES OF PERSON DEPENDING UPON RESIDENTIAL STATUS:
Depending upon residential status a person is of two types:
1. Resident in India.
2. Non-Resident in India. (NR)
In some cases, a resident person is again divided into two parts:
1. Resident and Ordinarily Resident. (ROR)
2. Resident and Not Ordinarily Resident. (RNOR)
GENERAL RULES FOR DETERMINING THE RESIDENTIAL STATUS:
 Residential Status with regard to every person: Residential status is to be determined with
respect to every person.
 Residential status during previous year: Residential status is to be determined during
relevant Previous Year.
 Same residential status for different sources of Income: If a person is resident in India in
a relevant Previous Year in respect of any source of income, he shall be deemed to be
resident in India for other sources of income also.
 Burden of Proof: Burden of proving that assesse was not resident in India during
Previous Year lies on assesse.
 Different Residential Status for different previous Years: A person may have different
residential status for different previous years.
RESIDENTIAL STATUS OF AN INDIVIDUAL: Sec. 6(1)
An Individual is said to be resident in India during the Previous Year if two conditions are
fulfilled:
1) He is in India for 182 days or more during the Relevant Previous Year OR
2) He is in India for 60 days or more during the relevant previous year AND
Has been in India for 365 days or more during four Previous Years immediately preceding
the relevant Previous Year.
EXCEPTIONS: EXPLANATION TO SEC.6 (1)
In the following cases 60 days in the condition 2 has been substituted by 182 days:
1. Individual leaving India in any Previous Year as member of crew of Indian ship: If an
Indian citizen being a member of crew of foreign bond ship leaves India, the period of
stay in India shall be in the manner and subject to the conditions prescribed.
2. Leaving India for the purpose of employment outside India: Such Individual should be
employed in India while leaving India.
British India Pvt. Ltd. v. CIT, it was held that if an unemployed person is going abroad for
getting some job then he will not be covered under exception.
3. Person visiting India: Indian citizen or the person of Indian origin who being outside
India comes on a visit to India in any previous year.
RESIDENT AND ORDINARILY RESIDENT AND RESIDENT AND NOT ORDINARILY
RESIDENT: 6(6) (a)
An Individual is said to be RNOR in India in any previous year if:
Is non-resident in India in nine out of ten previous years immediately preceding that year OR
Is in India for a total period of 720 days or less during the 7 previous years immediately
preceding the relevant previous year
An Individual is said to be ROR if:
He is resident in India for at least 2 out of 10 Previous Years immediately preceding the relevant
Previous Year AND
He is in India for a total period of 730 days or more during the 7 previous years immediately
preceding the relevant previous year.
CONCLUSION:
Therefore, Section 6(1) of the Income Tax Act, 1961 lays down the conditions in order to
determine the residential status of an Individual.
 UNIT-2

Q3. Discuss the salient features of Central Goods and Services Tax Act, 2017?

Ans3. Central Goods and Services Tax Act,2017

INTRODUCTION

Goods and Service Tax is the progressive way in taxation policy of India particularly for indirect
taxes. It brings benefits to all the stakeholders of industry, Government and the consumer. It will
lower the cost of goods and services give a boost to the economy and make the products and
services globally competitive. The significant benefits of GST are discussed hereunder:

 Creation of unified national market

CENTRAL GOODS AND SERVICE TAX ACT, 2017

The Central Goods and Services Tax Act, 2017 has been enacted to make a provision for levy
and collection of tax on intra-state supply of goods or services or both by the Central
Government and the matters connected therewith or incidental thereto.

Under erstwhile taxation laws, Central Government levied taxes on, manufacture of certain
goods in the form of Central Excise duty, provision of certain services in the form of service tax,
inter-State sale of goods in the form of Central Sales tax.
SALIENT FEATURES

The Central Goods and Services Tax Act, 2017, inter alia, will provide for the following,
namely: —

a) To levy tax on all intra-State supplies of goods or services or both except supply of alcoholic
liquor for human consumption at a rate to be notified, not exceeding twenty per cent as
recommended by the Goods and Services Tax Council (the Council);

b) To broad base the input tax credit by making it available in respect of taxes paid on any
supply of goods or services or both used or intended to be used in the course or furtherance of
business;

c) To impose obligation on electronic commerce operators to collect tax at source, at such rate
not exceeding one per cent of net value of taxable supplies, out of payments to suppliers
supplying goods or services through their portals;

d) To provide for self-assessment of the taxes payable by the registered person;

e) To provide for conduct of audit of registered persons in order to verify compliance with the
provisions of the Act;

f) To provide for recovery of arrears of tax using various modes including detaining and sale of
goods, movable and immovable property of defaulting taxable person;

g) To provide for powers of inspection, search, seizure and arrest to the officers;

h) To establish the Goods and Services Tax Appellate Tribunal by the Central Government for
hearing appeals against the orders passed by the Appellate Authority or the Revisional Authority;

i) To make provision for penalties for contravention of the provisions of the proposed
Legislation;

j) To provide for an anti-profiteering clause in order to ensure that business passes on the benefit
of reduced tax incidence on goods or services or both to the consumers;
k) To provide for elaborate transitional provisions for smooth transition of existing taxpayers to
goods and services tax regime; and

l) Threshold Limit: There shall be a taxable limit (presently, Rs 10 Lakhs in North Eastern States
& Rs 20 Lakhs in rest of the county).

UNIT-3

Q5. a. Write in brief about “assessee” and its kinds.

1. Regular/Normal Assessee

 A person by whom any tax or any other sum of money (e.g. penalty/ interest) is
payable under Income Tax.

 Every person in respect of whom any proceeding under this Act has been taken for the
assessment of his income/loss; or the amount of refund due to him.

This category covers a person to pay taxes on the income earned by him.

2. Deemed Assessee or Representative Assessee

This category covers a person to pay taxes on behalf of any other person in specified
circumstances.

Examples of Deemed Assessee:

 Legal representative of a deceased person

 Agent of a non-resident

 Trustee of a trust

 Guardian of a minor

3. Assessee in Default:

This category covers a person to pay taxes or other sums (penalty/ interest) in the specified
circumstances when he fails to fulfil his legal duty as per the Income Tax Act. For example, a
person who fails to deduct tax at source (TDS).
Q5.b. Write in brief about “advance payment of tax”?
Ans 5.b. Advance Tax is an exception to the general principle that income earned during
Previous Year is chargeable in the immediately coming Assessment Year. It is a special way
method of collecting tax in the form of pre-paid tax by the Central Government.

Based upon ‘Pay as you Earn’ scheme advance tax is payable during Financial Year
immediately preceding relevant Assessment Year on estimated income.

Section 208 of the IT Act 1961 states Advance Tax shall be payable during any Financial
Year if amount payable as tax by an assessee is during that Financial Year is Rs 10,000 or
more. Further Section 209 provides for the method for computation of Advance Tax.

Section 210(1) further states that every person liable to pay advance tax shall pay such
percentage of advance tax calculated in accordance with Section 209 on or before due date
mentioned under section 211.