Income Tax Act

The Income Tax Act 1961 (the Act) is the principal legislation with respect to taxation of income, profits, gains etc. (collectively the ‘total income’ as determined thereunder) and which are considered to fall within the legal jurisdiction of the Central Government of India. Generally the relevant Finance Act through its Schedule(s) states or amends the rate(s) of income tax to be levied on the total income of various types of assessees for any assessment year.


Tax Residency and International Taxation

The Act seeks to levy jurisdiction and charge income tax on the total income of any previous year of a person based on his/her/its (tax) residency as determined under the relevant provision of the Act, subject to any applicable international tax treaty or Double Taxation Avoidance Agreement (DTAA).

If a person (assessee) is determined as a tax resident of India for a relevant previous year under the relevant provision of the Income Tax Act 1961 (the Act) in respect of any source of income, then such person shall also be deemed to be a tax resident in respect of each of (any) other source(s) of income for the same said year.


Company

A Company is said to be an income tax resident in India in any previous year, if —

  • It is an Indian Company ; or
  • During that year, the control and management of its affairs is situated wholly in India.

Following shall be substituted for the above with effect from 1 April 2017

A Company is said to be a resident in India in any previous year, if—

  • It is an Indian company; or
  • Its place of effective management, in that year, is in India.

Explanation.—For the purposes of this clause “place of effective management” means a place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance made.

> Read more on ‘Place of Effective Management’ (POEM)


Individuals

Under section 6 of the Income Tax Act 1961 (the Act), an individual* is said to be an income tax resident in India in any previous year, if he/she —

  • Is in India in that year for a period or periods amounting in all to 182 days or more; or
  • Having within the 4 years preceding that year been in India for a period or periods amounting in all to 365 days or more, is in India for a period or periods amounting in all to 60 days or more in that year.

However, an individual person is said to be a (tax) resident but “not ordinarily resident in India in any previous year if such person is —

  • An individual who has been a non-resident in India in 9 out of the 10 previous years preceding that year, or
  • Has during the 7 previous years preceding that year been in India for a period of, or periods amounting in all to, 729 days or less.

*In the case of an individual —

(a) being a citizen of India, who leaves India in any previous year as a member of the crew of an Indian ship as defined in clause (18) of section 3 of the Merchant Shipping Act, 1958 (44 of 1958), or for the purposes of employment outside India, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and eighty-two days” had been substituted ;

(b) being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words “sixty days”, occurring therein, the words “one hundred and eighty-two days” had been substituted.

For the purposes of this clause, in the case of an individual, being a citizen of India and a member of the crew of a foreign bound ship leaving India, the period or periods of stay in India shall, in respect of such voyage, be determined in the manner and subject to such conditions as may be prescribed.


Other Tax Assessees (excluding HUFs)

Every other person is said to be an income tax resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India.

Through section 90 of the Act (the Act), the Indian Government has entered into a number of Tax Treaties with many countries and tax jurisdictions in the form of Comprehensive Double Taxation Avoidance Agreements (DTAAs), Tax Information Exchange Agreements (TIEAs), Limited Agreements etc., generally for the the avoidance of double taxation on income, prevention of fiscal evasion with respect to taxes on income and capital gains and exchange of information on taxes and tax entities within the relevant contracting party’s jurisdiction, relevant to the determination, assessment and collection of such taxes, the recovery and enforcement of tax claims, or the investigation or prosecution of tax matters.

DTAA takes precedence over Indian domestic taxation laws such as the Act on subjects and issues that a DTAA expressly provides for and the provisions of the Act applies to the extent they are more beneficial to that assessee concerned. DTAAs generally provide a detailed and comprehensive mechanism for determining the methodology of taxation and apportionment (if any) of taxation revenue with respect to various sources and types of income.

 

MinusTax Professionals

MinusTax network of independent professionals* specialise in Taxation, Company Law and Revenue matters, undertake ethical, transparent and professional practices and provide the complete spectrum of services therein. Some of the services provided under the Income Tax Act 1961 and related laws have been briefly mentioned below.

MinusTax’ Taxation, Revenue and Company law professionals provide the complete spectrum of services (including via the e-medium i.e. email, skype, whatsapp etc) which include —

  • Strategic and prompt legal advisory services and compliance assistance
  • Expert legal assessment and analysis of the order/notice etc. to be appealed/replied/objected to
  • Legal representation before the relevant Appellate/Writ/Adjudicatory Authority (option)
  • Drafting and filing various legal documents and Miscellaneous Applications before the relevant Appellate/Writ and Adjudicatory Authority
  • Professionally drafting and filing an Appeal before the relevant Appellate Authority
  • Drafting and filing Writ Petition (where appropriate) and legal representation before the jurisdictional High Court etc.


Access e-Help services

(click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form)

Need Tax Help?

Notice(s) under the Income Tax Act 1961 (the Act), which in some matters is also referred to as a ‘show cause notice’ (SCN), is usually issued to an assessee/concerned person (the assessee) by an income tax authority/officer (the officer), whilst such officer is contemplating taking adverse action or passing adjudicatory orders against the said assessee, whilst in some other circumstances it may first seek an explanation/clarification from the concerned assessee along with supporting documents before deciding on a possible course of action against the said assessee.

> Read more about Income Tax Notices


Timely and Appropriate Reply

The Act similarly places an obligation on the concerned assessee to respond appropriately to the relevant notice in the time prescribed along with the information and documents and/or physical appearance before the concerned officer/authority. Failure to appropriately respond may result in the concerned party being subject to further adverse action such as penalties, fines, penal prosecution, ex parte proceedings etc. along with the adverse action/order otherwise contemplated by the notice.


Reply/Object to Income Tax Notice

To receive professional help and appropriately respond/object to an Income Tax Notice received —

  • Click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form
  • Upload the Income Tax Notice(s) and other relevant documents etc. (if any)
  • Pay professional fees and charges (as quoted)
  • Receive (including via email) and file professionally drafted Notice Reply/Objections/Writ Petition
  • Legal representation by MinusTax Professionals before Appellate/Writ authority (option)
Need Tax Help?

The right to appeal an adverse or erroneous order or adjudication passed by Taxation or Revenue authorities is extremely important and provided for under the relevant laws and rules framed thereunder. Furthermore, this right can also be used to defend/cross-appeal/cross-object (as the case maybe) to orders and adjudications which are subject to ‘Departmental appeals’.

Chapter XX of the Income Tax Act 1961 (the Act) contains the necessary provisions with respect to tax appeals and revision before the fact-finding and adjudicating quasi-judicial income tax appellate authorities i.e. the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal (ITAT), as well as the Constitutional Courts (made up of jurisdictional State High Courts and the Supreme Court of India) as the final and apex courts of appeal in taxation law related matters.

> Read more about Income Tax Appeals


Draft and file an Income Tax Appeal/Writ Petition

  • Click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form
  • Upload (if any) relevant documents etc.
  • Pay professional fees and charges (as quoted)
  • Receive (including via email) and file professionally drafted Appeal/Writ Petition
  • Legal representation by MinusTax Professionals before Appellate/Writ authority (option)
Need Tax Help?

As an alternative to pursuing income tax appeals as above mentioned or where such an avenue for appeal may not be available under the Act, an application for ‘Revision of Other Orders’ under section 264 of the Act and/or ‘Rectification of Mistake’ under section 154 of the Act may be made (if grounds satisfied under the Act) to obtain relief from adverse orders or circumstances.

> Read more about Revision and Rectification


Draft and e-File an Application for Revision of Order/Rectification of Mistake

  • Click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form
  • Upload the adverse order(s)/rectification notice(s) and relevant documents etc. (if any)
  • Pay professional fees and charges (as quoted)
  • Receive (including via email) and/or get e-filed professionally drafted/advised Application/Notice Reply
  • Legal representation by MinusTax Professionals before Adjudicatory/Appellate/Writ authority (option)
Need Tax Help?

Taxation and Revenue laws in India are highly regulated, complex and require strict compliance of various provisions thereunder. Failure to so comply or infringement thereof can result in significant monetary fines/penalties, administrative action (eg. search, seizures and surveys under the Income Tax Act 1961) and prosecution for serious offences.

> Read more about Income Tax Penalties and Prosecution


Penalty Notice

The Income Tax Act 1961 (the Act) contains various provisions, the infringement of which may result in the imposition of different types of penalties. However, in accordance with the principles of natural justice and as a measure of protection against potential arbitrary action, a Penalty Notice is generally required to be sent/communicated to the concerned person/assessee before the imposition/demand of penalty under Income Tax Act 1961 (the Act) for the following purposes —

  • Quotes the relevant penalty provision(s) of the Act alleged to have been infringed
  • Details the grounds/reasons/facts/evidence relied upon by the concerned income tax authority for the purpose of imposing penalty
  • Provides a fair hearing/reasonable opportunity to the concerned person/assessee, to prove or establish to the contrary as otherwise alleged by the concerned income tax authority

Prosecution

Prosecution action may be undertaken for the alleged infringement of certain prescribed provisions of the Income Tax Act 1961 (the Act) which are considered relatively more serious violations or offences. Furthermore, the same set of alleged facts and evidence relied upon from prosecution under the Act may also provide the grounds to justify concurrent prosecution against the concerned person/assessee under other penal and economic offence laws.


Draft and file a Penalty Notice Reply/Objections/Writ  and/or Legal Defence against Prosecution

  • Click the “MinusTax Professionals” red banner below and fill-up/submit the pop-up form
  • Upload the Income Tax Penalty Notice(s)/Prosecution order and other relevant documents (eg. Criminal Complaint, Chargesheet/Challan etc.) (if any)
  • Pay professional fees and charges (as quoted)
  • Receive (including via email) and file professionally drafted Notice Reply/Objections/Appeal petition/Writ Petition
  • Legal representation by MinusTax Professionals before Income Tax (assessing) officer/Criminal (MM/Special) Court/Appellate or Writ authority (option)
Need Tax Help?


Administrative Help

For administrative assistance and general queries, please feel free to contact via —
Telephone: +91 8800 38 1950
Email: contact@minustax.com

Alternatively, please contact for an appointment and visit our representational office in DLF Phase IV, Gurgaon (click for Google Map directions).

Follow us @MinusTax

Need Tax Help?
Need Tax Help?