SRM INSTITUTE OF SCIENCE
SCIENCE &
&TECHNOLOGY
TECHNOLOGY
COLLEGE OF SCIENCE & HUMANITIES, VADAPALANI
DEPARTMENT OF COMMERCE
UCM20302J - INCOME TAX LAW AND PRACTICE
ASSIGNMENT – NOV 2022
UNIT -1
PART –A
1. Define the term Person as per IT Act.
For the purpose of charging Income-tax, the term ‘person’, under Section 2(31) of
Income Tax, includes Individual, Hindu Undivided Families [HUFs], Association of
Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority
and any artificial juridical person.
The term ‘person’ as defined under the Income-tax Act covers in its ambit natural as
well as artificial persons, i.e. apart from a natural person/ individual, any sort of
artificial entity will also be liable to pay Income-tax.
2. Who is a Resident?
An individual stays in India for 182 days or more in a year, he is treated as resident in that
year irrespective of his citizenship. If the stay is less than 182 days he is a non-resident.
3. What is Previous Year?
Previous year [Section 3] :– It means the financial year immediately preceding the assessment
year. The income earned during the previous year is taxed in the assessment year.
4. Define Income.
Section 2(24) “income” includes
(i) profits and gains;
(ii) dividend;
(iii) Value of perquisite or profit in lieu ofsalary taxable u/s 17;
(iv) Special allowance or benefitspecifically granted either to meet
personal;
(v) expenses or for performance of duties of an office or an
employment of profit;
(vi) Export incentives, like Duty Drawback, Cash Compensatory
Support, Sale of licenses etc.;
(vii) Interest, salary, bonus, commission or remuneration earned by
a partner of a Firm from such Firm;
(viii) Capital Gains chargeable u/s 45;
(ix) Profits and gains from the business of banking carried on by a
cooperative society with its members;
(x) Winnings from lotteries, crossword puzzles, races including
horse races, card games and other games of any sort or from
gambling or betting of any form or nature whatsoever.
5. Write a short note on Incidence of Tax.
, Incidence of tax refers to the final resting place of tax payment. It is
concerned with the analysis to determine on whom the money
burden falls or rests. The person who directly pays the tax to the
government, feels the impact of tax.
PART – B
1. Explain any 16 exempted income u/s 10.
1. Agriculture Income [Section 10(1)]
As per section 10(1), agricultural income earned by the taxpayer in India is exempt
from tax. Agricultural income is defined under section 2(1A) of the Income-tax Act.
As per section 2(1A), agricultural income generally means:
a. Any rent or revenue derived from land which is situated in India and is used
for agricultural purposes.
b. Any income derived from such land by agriculture operations including
processing of agricultural produce so as to render it fit for the market or sale
of such produce.
c. Any income attributable to a farm house subject to satisfaction of certain
conditions specified in this regard in section 2(1A). Any income derived from
saplings or seedlings grown in a nursery shall be deemed to be agricultural
income.
2. Any sum received by a Co-parcener from Hindu
Undivided Family (H.U.F.) [Section 10(2)]
As per section 10(2), amount received out of family income, or in case of impartible
estate, amount received out of income of family estate by any member of such HUF
is exempt from tax.
3. Share of Income from the Firm [Section 10(2A)]
As per section 10(2A), share of profit received by a partner from a firm is exempt from
tax in the hands of the partner. Further, share of profit received by a partner of LLP
from the LLP will be exempt from tax in the hands of such partner. This exemption is
limited only to share of profit and does not apply to interest on capital and
remuneration received by the partner from the firm/LLP.
4. Interest paid to Non-Resident [Section 10(4)(i)]
As per section 10(4)(i), in the case of a non-resident any income by way of interest on
certain notified securities or bonds (including income by way of premium on the
redemption of such bonds) is exempt from tax.
, As per section 10(4)(ii), in the case of an individual, any income by way of interest on
money standing to his credit in a Non-Resident (External) Account in any bank in
India in accordance with the Foreign Exchange Management Act, 1999, and the rules
made thereunder is exempt from tax.
Exemption under section 10(4)(ii) is available only if such individual is a person
resident outside India as defined in clause (q) of section 2 of the said Act or is a
person who has been permitted by the Reserve Bank of India to maintain the
aforesaid Account.
5. Interest to Non-Resident on Non-Resident
(External) Account [Section 10(4)(ii)]
Any income by way of interest on moneys standing to his credit in a Non-Resident
(External) Account in any bank in India shall be exempt from tax in case of an
individual who is a person resident outside India or is a person who has been
permitted by the RBI to maintain the aforesaid account. The person residing outside
India shall have the same meaning as defined under Foreign Exchange Regulation
Act, 1973, FEMA, 1999. This exemption shall not be available on any income by way
of interest paid or credited on or after 1-4-2005.
6. Interest paid to a person of Indian Origin and
who is Non-Resident [Section 10(4 B)]
In case of an individual, being a citizen of India or a person of Indian origin, who is
nonresident, any income from interest on such savings certificates issued by the
Central Government, as Government may specify in this behalf by notification in the
Official Gazette, shall be fully exempt. The exemption under this section shall not be
allowed on bonds or securities issued on or after 1-6-2002.
This exemption shall be allowed only if the individual has subscribed to such
certificates in Foreign Currency or other foreign exchange remitted from a country
outside India in accordance with the provisions of the Foreign Exchange Act, 1973,
FEMA, 1999 and any rules made there under.
For this purpose, a person shall be deemed to be of Indian origin if he or either of
parents or any of his grandparents, was born in India or in undivided India.
7. Leave Travel Concession or Assistance (LTC/LTA)
to an Indian Citizen Employee [Section 10(5)]
SCIENCE &
&TECHNOLOGY
TECHNOLOGY
COLLEGE OF SCIENCE & HUMANITIES, VADAPALANI
DEPARTMENT OF COMMERCE
UCM20302J - INCOME TAX LAW AND PRACTICE
ASSIGNMENT – NOV 2022
UNIT -1
PART –A
1. Define the term Person as per IT Act.
For the purpose of charging Income-tax, the term ‘person’, under Section 2(31) of
Income Tax, includes Individual, Hindu Undivided Families [HUFs], Association of
Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority
and any artificial juridical person.
The term ‘person’ as defined under the Income-tax Act covers in its ambit natural as
well as artificial persons, i.e. apart from a natural person/ individual, any sort of
artificial entity will also be liable to pay Income-tax.
2. Who is a Resident?
An individual stays in India for 182 days or more in a year, he is treated as resident in that
year irrespective of his citizenship. If the stay is less than 182 days he is a non-resident.
3. What is Previous Year?
Previous year [Section 3] :– It means the financial year immediately preceding the assessment
year. The income earned during the previous year is taxed in the assessment year.
4. Define Income.
Section 2(24) “income” includes
(i) profits and gains;
(ii) dividend;
(iii) Value of perquisite or profit in lieu ofsalary taxable u/s 17;
(iv) Special allowance or benefitspecifically granted either to meet
personal;
(v) expenses or for performance of duties of an office or an
employment of profit;
(vi) Export incentives, like Duty Drawback, Cash Compensatory
Support, Sale of licenses etc.;
(vii) Interest, salary, bonus, commission or remuneration earned by
a partner of a Firm from such Firm;
(viii) Capital Gains chargeable u/s 45;
(ix) Profits and gains from the business of banking carried on by a
cooperative society with its members;
(x) Winnings from lotteries, crossword puzzles, races including
horse races, card games and other games of any sort or from
gambling or betting of any form or nature whatsoever.
5. Write a short note on Incidence of Tax.
, Incidence of tax refers to the final resting place of tax payment. It is
concerned with the analysis to determine on whom the money
burden falls or rests. The person who directly pays the tax to the
government, feels the impact of tax.
PART – B
1. Explain any 16 exempted income u/s 10.
1. Agriculture Income [Section 10(1)]
As per section 10(1), agricultural income earned by the taxpayer in India is exempt
from tax. Agricultural income is defined under section 2(1A) of the Income-tax Act.
As per section 2(1A), agricultural income generally means:
a. Any rent or revenue derived from land which is situated in India and is used
for agricultural purposes.
b. Any income derived from such land by agriculture operations including
processing of agricultural produce so as to render it fit for the market or sale
of such produce.
c. Any income attributable to a farm house subject to satisfaction of certain
conditions specified in this regard in section 2(1A). Any income derived from
saplings or seedlings grown in a nursery shall be deemed to be agricultural
income.
2. Any sum received by a Co-parcener from Hindu
Undivided Family (H.U.F.) [Section 10(2)]
As per section 10(2), amount received out of family income, or in case of impartible
estate, amount received out of income of family estate by any member of such HUF
is exempt from tax.
3. Share of Income from the Firm [Section 10(2A)]
As per section 10(2A), share of profit received by a partner from a firm is exempt from
tax in the hands of the partner. Further, share of profit received by a partner of LLP
from the LLP will be exempt from tax in the hands of such partner. This exemption is
limited only to share of profit and does not apply to interest on capital and
remuneration received by the partner from the firm/LLP.
4. Interest paid to Non-Resident [Section 10(4)(i)]
As per section 10(4)(i), in the case of a non-resident any income by way of interest on
certain notified securities or bonds (including income by way of premium on the
redemption of such bonds) is exempt from tax.
, As per section 10(4)(ii), in the case of an individual, any income by way of interest on
money standing to his credit in a Non-Resident (External) Account in any bank in
India in accordance with the Foreign Exchange Management Act, 1999, and the rules
made thereunder is exempt from tax.
Exemption under section 10(4)(ii) is available only if such individual is a person
resident outside India as defined in clause (q) of section 2 of the said Act or is a
person who has been permitted by the Reserve Bank of India to maintain the
aforesaid Account.
5. Interest to Non-Resident on Non-Resident
(External) Account [Section 10(4)(ii)]
Any income by way of interest on moneys standing to his credit in a Non-Resident
(External) Account in any bank in India shall be exempt from tax in case of an
individual who is a person resident outside India or is a person who has been
permitted by the RBI to maintain the aforesaid account. The person residing outside
India shall have the same meaning as defined under Foreign Exchange Regulation
Act, 1973, FEMA, 1999. This exemption shall not be available on any income by way
of interest paid or credited on or after 1-4-2005.
6. Interest paid to a person of Indian Origin and
who is Non-Resident [Section 10(4 B)]
In case of an individual, being a citizen of India or a person of Indian origin, who is
nonresident, any income from interest on such savings certificates issued by the
Central Government, as Government may specify in this behalf by notification in the
Official Gazette, shall be fully exempt. The exemption under this section shall not be
allowed on bonds or securities issued on or after 1-6-2002.
This exemption shall be allowed only if the individual has subscribed to such
certificates in Foreign Currency or other foreign exchange remitted from a country
outside India in accordance with the provisions of the Foreign Exchange Act, 1973,
FEMA, 1999 and any rules made there under.
For this purpose, a person shall be deemed to be of Indian origin if he or either of
parents or any of his grandparents, was born in India or in undivided India.
7. Leave Travel Concession or Assistance (LTC/LTA)
to an Indian Citizen Employee [Section 10(5)]
