Tag: Bangalore University NEP 2021 Syllabus Notes

Advance tax is a system of staggered payment of income tax by taxpayers on their estimated income during the financial year. It is also known as “pay-as-you-earn” tax.

Advance tax computation is a critical aspect of income tax planning and compliance. Timely and accurate calculation and payment of advance tax help taxpayers avoid penalties and interest charges. It’s important to stay updated with the latest tax laws and consult with tax professionals when needed for proper guidance on advance tax computation and payment.

Estimate Total Income:

• Sources of Income: Identify all sources of income, including salary, business income, capital gains, rental income, and other earnings.
• Deductions and Exemptions: Consider eligible deductions under various sections of the Income Tax Act to arrive at the net taxable income.

Calculate Tax Liability:

• Tax Slabs: Apply the applicable tax slabs to the estimated taxable income.
• Surcharge and Cess: Include surcharge and health and education cess, if applicable.

Compute Advance Tax Liability:

• Divide the estimated tax liability for the financial year into four installments as per the prescribed due dates.

Due Dates for Advance Tax Payments (For Non-Corporate Taxpayers):

• 15th June: 15% of the estimated tax liability.
• 15th September: 45% of the estimated tax liability.
• 15th December: 75% of the estimated tax liability.
• 15th March: 100% of the estimated tax liability.

For Corporate Taxpayers:

• Corporates generally need to pay advance tax in four installments: 15%, 45%, 75%, and 100% of the estimated tax liability by specific due dates.

Payment Modes:

• Online Payment: Use online modes like net banking to deposit the advance tax.
• Challan 280: Physically deposit the tax using Form 280 at designated bank branches.

Self-Assessment Tax:

• If there are any variations in income or deductions during the financial year, pay any additional tax as self-assessment tax.

Interest on Late Payment:

• Non-compliance with advance tax payment timelines may attract interest under Section 234B and Section 234C.

Filing Advance Tax Challan:

• Challan 280 is used for the payment of advance tax. Fill in the required details, such as PAN, assessment year, type of payment, and bank details.

Form 26AS Verification:

• Regularly check Form 26AS to verify the advance tax payments credited against your PAN. It reflects TDS, TCS, and advance tax payments.

Revised Estimates:

• If there are significant changes in income, revise the estimates and adjust subsequent advance tax payments accordingly.

Consult Professionals:

• For complex income scenarios or changes, seek advice from tax professionals to ensure accurate computation and compliance.

Advance tax payments are made by taxpayers on their estimated income for the financial year before the end of the fiscal year. The due dates for advance tax installments are specified by the Income Tax Department.

Complying with the due dates for advance tax payments is essential to avoid interest and penalties. Taxpayers should regularly assess their income, estimate the tax liability, and make timely payments to ensure smooth financial planning and adherence to tax regulations. It’s advisable to seek professional advice for accurate computation and payment of advance tax, especially in complex income scenarios.

For Individuals (Non-Corporate Taxpayers):

1. First Installment (On or before June 15):
   • 15% of the estimated tax liability for the financial year.
2. Second Installment (On or before September 15):
   • 45% of the estimated tax liability.
3. Third Installment (On or before December 15):
   • 75% of the estimated tax liability.
4. Fourth Installment (On or before March 15):
   • 100% of the estimated tax liability.

For Corporate Taxpayers:

1. First Installment (On or before June 15):
   • 15% of the estimated tax liability for the financial year.
2. Second Installment (On or before September 15):
   • 45% of the estimated tax liability.
3. Third Installment (On or before December 15):
   • 75% of the estimated tax liability.
4. Fourth Installment (On or before March 15):
   • 100% of the estimated tax liability.

Important Points to Note:

• If the assessed tax liability is less than ₹10,000, no advance tax is required to be paid.
• Senior citizens (aged 60 years or more and not having income from business or profession) who do not have income from business or profession are exempt from paying advance tax.
• Taxpayers opting for the presumptive taxation scheme under Section 44AD are not required to pay advance tax in installments. They can pay the entire tax liability by March 15.
• Any shortfall in payment or non-payment of advance tax may attract interest under Sections 234B and 234C.

How to Pay Advance Tax:

1. Online Payment:

   • Taxpayers can pay advance tax online through the official website of the Income Tax Department using the e-payment facility.

2. Challan 280:

   • Physical payment can be made by depositing the tax using Form 280 at designated bank branches. The challan should be filled with relevant details like PAN, assessment year, type of payment, and bank details.

Tax Deducted at Source (TDS) under Section 192 of the Income Tax Act, 1961, is a provision that mandates employers to deduct tax at the source from the salary income of employees. This section specifically deals with the TDS on income from salaries. The primary objective is to ensure the timely deduction and payment of income tax by individuals who earn salaries.

Section 192 plays a vital role in ensuring the systematic deduction and payment of income tax on salary income. Employers are entrusted with the responsibility of deducting TDS accurately and depositing it with the government. On the other hand, employees benefit from the convenience of having tax deducted at the source, making compliance with tax regulations more efficient. Understanding the provisions of Section 192 is crucial for both employers and employees to ensure proper adherence to tax laws and regulations.

Points under Section 192:

• Applicability:

Section 192 applies to employers who are responsible for paying salaries or pensions to employees or pensioners.

• Tax Deduction Responsibility:

Employers are obligated to deduct TDS from the salary payments made to employees based on the applicable income tax slabs.

• Calculation of TDS:

TDS under Section 192 is calculated based on the individual’s estimated total income for the financial year and the applicable income tax slabs.

• Filing of TDS Returns:

Employers are required to file TDS returns, providing details of the TDS deducted and deposited on behalf of employees. This is done through Form 24Q.

• Frequency of TDS Deduction:

TDS is deducted at the time of making each salary payment. This may be on a monthly or quarterly basis, depending on the employer’s policies.

• Exemptions and Deductions:

The employer considers exemptions, deductions, and declarations submitted by employees (like HRA exemption, standard deduction, investments, etc.) while calculating TDS.

• Form 16:

Employers issue Form 16 to employees, summarizing details of salary income, TDS deducted, and other exemptions. It serves as a proof of TDS for the employee.

• Quarterly TDS Statements:

Employers are required to file quarterly TDS statements in Form 24Q, providing a comprehensive summary of TDS deductions during the quarter.

• Adjustments at the Time of Filing Income Tax Returns:

Employees can claim adjustments and refunds at the time of filing their income tax returns based on the TDS details reflected in Form 26AS.

• Penalties for Non-Compliance:

Employers failing to deduct TDS or depositing it late can face penalties. Late filing of TDS returns also attracts penalties.

“Composite rent” is a term commonly used in the context of property leasing and rental agreements. It refers to a combined or total rent that includes not only the base or basic rent but also additional charges for various amenities or services provided along with the rented property. Composite rent is often used when the lessor (property owner or landlord) offers additional facilities or services as part of the overall rental package.

Composite rent is a comprehensive approach to renting property that offers tenants a bundled package of services and amenities along with the basic rent. While it provides convenience and predictability, both landlords and tenants should ensure clarity in the agreement and comply with legal requirements to avoid potential disputes. Seeking legal advice and having a well-drafted lease agreement are important steps in establishing a transparent and mutually beneficial arrangement.

Components of Composite Rent:

1. Basic Rent:

This is the primary or base rent amount paid by the tenant for the use of the property.

2. Service Charges:

Additional charges may be included for services provided by the landlord, such as maintenance of common areas, security services, or utilities.

3. Amenities:

If the property comes with amenities like parking spaces, access to a gym, swimming pool, or other facilities, the cost for these amenities may be part of the composite rent.

4. Utilities:

Some composite rent agreements include charges for utilities like water, electricity, and gas.

5. Property Tax and Maintenance:

The cost of property taxes and maintenance of the property can also be included in composite rent.

Advantages of Composite Rent:

1. Convenience:

Tenants find it convenient to have a single, consolidated payment that covers various services and amenities.

2. Predictability:

Composite rent provides tenants with a predictable and fixed cost structure, making it easier for budgeting.

3. Access to Facilities:

Tenants may have access to additional facilities without having to manage separate payments for each service.

Challenges with Composite Rent:

1. Lack of Transparency:

In some cases, the breakdown of individual charges within the composite rent may not be transparent, leading to questions about the fairness of the overall cost.

2. Legal Clarity:

Legal frameworks regarding composite rent can vary, and it’s essential for both landlords and tenants to clearly understand the terms and conditions of the agreement.

3. Dispute Resolution:

Disputes may arise if there is ambiguity in the composite rent agreement regarding the specific services and amenities covered and the corresponding charges.

Legal Considerations:

1. Lease Agreement:

The terms of the composite rent should be clearly defined in the lease or rental agreement, including the breakdown of charges and the duration of the agreement.

2. Compliance with Laws:

Landlords and tenants should ensure that the composite rent agreement complies with local laws and regulations related to tenancy and leasing.

3. Documentation:

Proper documentation of the terms and conditions, as well as the agreed-upon rent components, is crucial for avoiding disputes.

Unrealized Rent

“Unrealized rent” typically refers to rental income that a property owner or landlord has not received, either partially or in full, due to various reasons. The term is commonly used in accounting and property management contexts.

Unrealized rent represents a financial challenge for landlords, impacting their cash flow and overall financial performance. Landlords need to adopt proactive measures, including clear lease agreements, effective communication with tenants, and, when necessary, legal actions, to minimize the impact of unrealized rent. Proper accounting practices, including recognizing and reporting unrealized rent, are essential for accurate financial management.

Unrealized rent represents the portion of rent that is due but has not been collected by the landlord. This can happen for several reasons, such as non-payment by the tenant, disputes, or other factors.

Causes of Unrealized Rent:

• Tenant Non-Payment: The most common reason for unrealized rent is when the tenant fails to make the required rental payments on time.
• Disputes or Legal Issues: Rent may remain unrealized if there are disputes between the landlord and tenant or if legal proceedings are underway.
• Property Vacancy: In the case of vacant properties, the landlord may not be able to realize rent until a new tenant is secured.

Treatment in Accounting:

In financial accounting, unrealized rent is typically considered as an accrued income or accounts receivable. It represents income that is expected but not yet received.

Accounting Entries:

• When recognizing unrealized rent in accounting, the landlord may make the following journal entry:
  • Debit: Accounts Receivable (or Rent Receivable)
  • Credit: Rental Income

Reporting:

• Unrealized rent is usually reported as an asset on the landlord’s financial statements until it is received. It reflects the amount of rent that the landlord expects to collect in the future.

Management Strategies:

• Communication: Landlords should maintain open communication with tenants to understand the reasons for non-payment and work towards a resolution.
• Legal Actions: In cases of persistent non-payment, landlords may resort to legal actions to recover unpaid rent or terminate the lease.

Provisions for Doubtful Debts:

In some cases, landlords may create provisions for doubtful debts or bad debts to account for the possibility that some unrealized rent may never be collected.

Lease Agreement Terms:

The terms and conditions related to rent payments, late fees, and consequences for non-payment should be clearly outlined in the lease agreement to provide a legal basis for pursuing unpaid rent.

Rent Recovery:

Landlords may employ various methods to recover unrealized rent, such as negotiation, mediation, or legal proceedings, depending on the circumstances.

Mitigating Vacancy:

To avoid unrealized rent due to property vacancy, landlords may focus on effective marketing, tenant retention, and lease renewal strategies.

Section 24 of the Income Tax Act in India provides deductions that can be claimed from the income chargeable under the head “Income from House Property.” These deductions are related to the Annual Value of a property.

Deductions under Section 24 play a crucial role in reducing the taxable income arising from house property. Taxpayers should be aware of the specific conditions and limits associated with each deduction. Keeping proper documentation related to property ownership, home loans, and interest payments is essential for accurate tax filing. Additionally, it’s advisable to consult with a tax professional or refer to the latest tax laws for the most up-to-date information.

Standard Deduction:

• Deduction Amount: A standard deduction of 30% of the Net Annual Value is allowed under Section 24(a).
• Calculation: Standard Deduction is calculated as 30% of the Net Annual Value (NAV), which is the Annual Value minus municipal taxes paid.

Interest on Borrowed Capital (Home Loan):

• Deduction Amount:
  • For a self-occupied property, the maximum deduction allowed is ₹2,00,000.
  • For a property that is not self-occupied (let-out or deemed to be let-out), there is no upper limit on the deduction.
• Conditions:
  • The loan must be taken for the purpose of purchase or construction of a residential property.
  • The construction or purchase must be completed within five years from the end of the financial year in which the loan was taken.

Conditions for Claiming Deductions:

• Possession of Property: Deductions under Section 24 are available when the taxpayer is in possession of the property.
• Completion of Construction: Deductions related to interest on borrowed capital are available once the construction is completed or the property is acquired.

Pre-Construction Interest:

• Deduction Amount: Interest paid during the pre-construction period can be claimed in five equal installments, starting from the year in which the construction is completed.
• Conditions: The total deduction for pre-construction interest is subject to a maximum limit of ₹30,000 per year.

Joint Ownership:

• Deduction for Co-owners: If the property is jointly owned, each co-owner can claim deductions in proportion to their ownership share.
• Interest Deduction for Joint Loan: If a loan is taken jointly, each borrower can individually claim the interest deduction.

Recent Changes:

• It’s essential to check for any amendments or changes in tax laws, as the provisions related to deductions under Section 24 may be subject to updates.

Computation of income from house property in India involves several components and considerations.

Accurate computation of income from house property is essential for complying with tax regulations and optimizing tax liabilities. Individuals should be aware of the rules and conditions related to property ownership, occupancy, and deductions. Seeking professional advice and utilizing tax preparation tools can help ensure accurate income computation and proper utilization of available deductions. Regularly reviewing and updating knowledge on tax laws is crucial, as tax regulations may undergo changes.

Determination of Self-Occupied or Let-Out Property:

• Problem: Incorrect classification of the property as self-occupied or let-out can impact the computation of income.
• Solution: Understand the criteria for determining self-occupied property and let-out property. Only one property can be considered as self-occupied for tax purposes.

Determination of Annual Value:

• Problem: Calculating the annual value of the property accurately is crucial for income computation.
• Solution: Follow the prescribed methods for determining the annual value, such as the Fair Rental Value, Municipal Value, or Standard Rent, depending on the situation.

Standard Deduction:

• Problem: Forgetting to claim the standard deduction of 30% of the Net Annual Value.
• Solution: Ensure that the standard deduction is applied to the Net Annual Value after deducting municipal taxes.

Interest on Borrowed Capital:

• Problem: Incorrect calculation of interest on borrowed capital for self-occupied and let-out properties.
• Solution: Understand the conditions and limits for interest deductions based on the occupancy status of the property.

Treatment of Pre-Construction Interest:

• Problem: Failure to account for the deduction of pre-construction interest in equal installments.
• Solution: Include pre-construction interest in the annual computation, considering the five-year installment period.

Joint Ownership:

• Problem: Determining the share of income and deductions for each co-owner in the case of joint ownership.
• Solution: Each co-owner can claim a share of the income and deductions based on their ownership percentage. Proper documentation is crucial.

Loan Utilization:

• Problem: Incorrect utilization of the loan amount for the purpose of the property.
• Solution: Ensure that the loan is utilized for the acquisition or construction of the property. The interest deduction is available only for loans used for these specific purposes.

Non-availability of Municipal Value or Standard Rent:

• Problem: In some cases, the municipal value or standard rent may not be available or relevant.
• Solution: Use the Fair Rental Value as the basis for computing the annual value in such cases.

Changes in Ownership or Usage:

• Problem: Changes in ownership or usage of the property during the financial year.
• Solution: Ensure that the computation considers any changes in ownership or usage and applies the relevant rules for each scenario.

Documentation and Record-keeping:

• Problem: Insufficient documentation and record-keeping.
• Solution: Maintain proper records, including loan statements, property ownership documents, rental agreements, and details of municipal taxes paid.

Pension and leave salary are crucial components of an employee’s financial package, contributing to financial security during retirement. Employers need to ensure compliance with relevant regulations, and employees should be aware of the tax implications associated with these benefits. Additionally, the specific rules and regulations governing pensions and leave salary can vary based on the country and industry, so it’s essential to consider the applicable legal framework in each case.

Pension:

A pension is a financial benefit provided to employees upon their retirement. It serves as a source of income for individuals who have completed their years of service with an employer.

Features:

• Accumulation: Employees contribute a portion of their salary towards a pension fund during their active service.
• Employer Contribution: In many cases, employers also contribute to the pension fund, enhancing the retirement corpus.
• Annuity or Lump Sum: At the time of retirement, the accumulated amount is paid out to the employee either as a monthly annuity or as a lump sum.

Types of Pensions:

• Defined Benefit Plan: The pension amount is predefined based on factors like salary and years of service.
• Defined Contribution Plan: The pension depends on the amount accumulated in the employee’s pension account, influenced by both employee and employer contributions and investment returns.

Government Pensions:

• Government employees often receive pensions based on a predefined formula, ensuring a fixed amount post-retirement.

Tax Implications:

• Pension income is taxable as per the individual’s income tax slab.

Leave Salary:

Leave salary refers to the payment made to an employee for the leave not availed during their service. This can include accrued but unused vacation or earned leave.

Features:

• Accrual: Employees typically earn leave during their service, and if they don’t utilize this leave, it accumulates.
• Encashment: Leave salary can be encashed either partially or entirely at the time of retirement or resignation.

Calculation:

• Leave salary is often calculated based on the employee’s last drawn salary and the number of accumulated leave days.

Tax Implications:

• The tax treatment of leave salary varies based on whether the leave encashment is received during service or at the time of retirement.
• Leave encashment during service is taxable as salary income.
• Leave encashment at the time of retirement is exempt up to a certain limit under Section 10(10AA) of the Income Tax Act. Any amount beyond this limit is taxable.

Comparison:

Purpose:

• Pension: Primarily serves as a retirement income.
• Leave Salary: Compensates employees for accrued but unused leave.

Accumulation:

• Pension: Accumulates over the years with regular contributions.
• Leave Salary: Accrues as employees earn and do not utilize leave.

Payment Structure:

• Pension: Paid as a regular stream of income (annuity) or as a lump sum.
• Leave Salary: Paid as a one-time payment upon retirement or resignation.

Tax Treatment:

• Pension: Taxable as per income tax slabs.
• Leave Salary: Tax treatment varies based on when it is received (during service or at retirement) and the applicable exemptions.

• Problem: Employees may face difficulty in distinguishing between different components of salary like basic salary, allowances, and perquisites.
• Solution: It’s important to understand the definition and tax treatment of each component. Basic salary is generally fully taxable, allowances have specific tax rules, and perquisites need to be valued appropriately.

Tax Treatment of Allowances:

• Problem: Incorrect tax treatment of allowances can lead to errors in computation.
• Solution: Different allowances have different tax implications. For example, House Rent Allowance (HRA) is taxable to the extent it exceeds certain limits, while special allowances may be fully or partially taxable.

Valuation of Perquisites:

• Problem: Valuing perquisites accurately can be challenging, especially when they are non-monetary.
• Solution: Employers must follow the prescribed rules for valuing perquisites. For example, the taxable value of a company-provided accommodation is determined based on factors like the population of the city and the salary of the employee.

Deductions under Section 16:

• Problem: Employees might miss out on claiming deductions available under Section 16 of the Income Tax Act.
• Solution: Ensure that deductions like professional tax and entertainment allowance are appropriately considered in the computation of taxable income.

Form 16 Mismatch:

• Problem: Mismatch between the salary details in Form 16 (issued by the employer) and actual income can create confusion.
• Solution: Cross-verify the details in Form 16 with your salary slips and other supporting documents. Any discrepancies should be brought to the employer’s attention for correction.

Exempt Allowances:

• Problem: Employees may forget to include exempt allowances, leading to an inflated taxable income.
• Solution: Be aware of allowances that are fully or partially exempt from tax, such as conveyance allowance, which is exempt up to a certain limit.

Taxable Benefits:

• Problem: Certain benefits provided by the employer, though not directly in the form of salary, might be taxable.
• Solution: Understand the tax implications of non-monetary benefits like stock options, which are taxed at the time of exercise.

Tax on Arrears:

• Problem: Employees receiving arrears might face challenges in calculating the tax liability.
• Solution: Arrears are usually taxed in the year they are received. Utilize the provisions available under Section 89 if applicable.

Voluntary Retirement:

• Problem: Employees opting for voluntary retirement need to calculate the tax implications correctly.
• Solution: Understand the special provisions related to tax on compensation received on voluntary retirement and take professional advice if needed.

Optimizing Taxable Salary:

• Problem: Employees might miss out on opportunities to optimize their taxable salary by utilizing exemptions and deductions.
• Solution: Explore available exemptions and deductions, such as those related to medical expenses and professional development, to minimize taxable income.

Salary Transfers:

In some cases, employees may use the phrase “salary transfer” to refer to the process of their salary being credited or transferred to their bank accounts. This is a routine process in which the employer electronically transfers the agreed-upon salary amount to the employee’s designated bank account.

• Direct Deposit: Many employers use direct deposit systems to transfer salaries directly into employees’ bank accounts, ensuring a secure and efficient way of payment.

Balance in Salary Account:

Employees often maintain a salary account where their monthly salary is credited. The “balance in salary” refers to the amount of money left in this account after deducting any expenses or withdrawals.

• Managing Finances: Individuals often use their salary account for various financial transactions, including bill payments, purchases, and investments.

Salary Advances or Loans:

In some cases, employees might seek a salary advance or loan from their employer. This could be considered a form of transferred balance.

• Advance Repayment: If an employee receives an advance on their salary, the repayment might be deducted from future salary payments until the advance is fully repaid.

Salary Transfer Letter:

When an employee switches jobs, especially in the case of expatriates or individuals working in countries like the UAE, a “salary transfer letter” may be required for opening a new bank account or obtaining a loan.

• Bank Transactions: The letter typically confirms the individual’s employment, salary details, and may be required for certain financial transactions.

Considerations:

• Payroll Processes: Employers typically have well-defined payroll processes for crediting salaries. Employees should be familiar with their organization’s procedures.
• Bank Statements: Employees should regularly review their bank statements to ensure that the correct salary amount has been credited and to track any deductions or transactions.
• Loan Agreements: In the case of salary advances or loans, employees should be aware of the terms and conditions, including the repayment schedule.

The legal framework of taxation in India is a complex system that has evolved over the years to meet the economic and social needs of the country. The Constitution of India provides the basic framework for taxation, and various acts, rules, and regulations have been enacted to govern the levy and collection of taxes.

The legal framework of taxation in India is dynamic and multifaceted. It encompasses a range of direct and indirect taxes, each governed by specific acts and regulations. Ongoing reforms and amendments demonstrate the government’s commitment to adapting the tax system to changing economic realities and global best practices. It’s essential for businesses and individuals to stay informed about these regulations to ensure compliance and navigate the complexities of the Indian tax landscape.

• Constitutional Provisions:

The power to levy and collect taxes is distributed between the Union (Central) and State governments in India. Articles 245 to 255 of the Constitution define the distribution of legislative powers between the Union and the States.

• Entry 82 of List I (Union List):

The Union government has the exclusive power to levy taxes on income other than agricultural income, customs and excise duties, corporation tax, service tax, and other specified taxes.

• Entry 84 of List I:

The Union government has the exclusive power to impose taxes on the manufacture of tobacco, other than bidi, and alcoholic liquors for human consumption.

• Entry 54 to 63 of List II (State List):

The State governments have the exclusive power to levy taxes on subjects such as land revenue, taxes on agricultural income, sales tax (now subsumed under the Goods and Services Tax), and other specified taxes.

• Goods and Services Tax (GST):

The GST, introduced in 2017, is a comprehensive indirect tax that replaced multiple indirect taxes levied by the Union and State governments. It is governed by the Goods and Services Tax Act, which provides a unified system of taxation on the supply of goods and services.

• Income Tax Act, 1961:

The Income Tax Act governs the levy and collection of income tax in India. It classifies income into various heads, such as salary, business income, capital gains, and others, and prescribes tax rates accordingly. The Act is regularly amended to align with economic changes and policy objectives.

• Central Goods and Services Tax (CGST) Act and State GST Acts:

These acts, along with the Integrated Goods and Services Tax (IGST) Act, provide the legal framework for the levy and collection of GST in India. They define the scope of GST, classification of goods and services, input tax credit mechanisms, and compliance requirements.

• Customs Act, 1962:

The Customs Act empowers the Central government to levy duties on the import and export of goods. It regulates the movement of goods across the country’s borders and outlines the procedures for customs valuation and clearance.

• Central Excise Act, 1944:

Although the Goods and Services Tax has subsumed the central excise duty, the Central Excise Act was a significant piece of legislation governing the taxation of manufacturing and production activities.

• Wealth Tax Act, 1957 (Abolished):

The Wealth Tax Act, which imposed a tax on the net wealth of individuals, was in force until 2015 when it was abolished. The wealth tax was a direct tax separate from income tax.

• Direct Tax Code (DTC):

The government proposed the Direct Tax Code to replace the Income Tax Act to simplify and streamline direct taxation. As of my last knowledge update in January 2022, the DTC was under consideration.

• Tax Administration:

The administration of taxes involves various authorities, including the Central Board of Direct Taxes (CBDT) for direct taxes and the Central Board of Indirect Taxes and Customs (CBIC) for indirect taxes. Tax authorities conduct assessments, audits, and investigations to ensure compliance.

• Tax Dispute Resolution:

The Income Tax Appellate Tribunal (ITAT), High Courts, and the Supreme Court handle tax-related disputes. Alternative dispute resolution mechanisms, such as the Dispute Resolution Panel (DRP) and the Advance Ruling Authority, provide avenues for resolving disputes.

• Goods and Services Tax Network (GSTN):

The GSTN is a technology platform that facilitates the implementation of GST. It acts as the interface between taxpayers, the government, and other stakeholders for registration, return filing, and compliance under GST.

• International Taxation:

India has tax treaties with various countries to avoid double taxation and prevent tax evasion. The legal framework for international taxation includes transfer pricing regulations and the Equalization Levy on specified digital services.

• Recent Reforms:

The legal framework has undergone significant reforms, including the introduction of the faceless assessment and appeal scheme, aimed at reducing direct interface between taxpayers and tax authorities to promote transparency and efficiency.Top of Form