India Tax Firm

             A non-resident who is carrying on a shipping business and earns income from carrying passengers/ livestock/ goods from a port in India, will be charged income-tax before the ship is allowed to leave the Indian port. Therefore, before the ship leaves the Indian port, the master of the ship is under an obligation to furnish a return of the full amount earned on account of fare and frieght and pay the tax accordingly. In the case 7.5% of the amount of fare/frieght/charge,etc. shall be deemed to be income of such assessee on which the income-tax will be charged. Therefore, in this case the tax is chargeable on the income in the same year in which it is earned.

                Where any amount is borrowed on a hundi from, or any amount due thereon is rapid to, any person otherwise than through an account payee cheque drawn on a bank, the amount so borrowed or rapid shall be deemed to be the income of the person borrowing or repaying the amount aforesaid for the prefvious year in which the amount was borrowed or rapid, as the case may be.

          Where in a financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation,if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year.

             Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the Assessing Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory , the excess amount may be deemed to be the income of the assessee for such financial year.

         Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or valuable articles is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewllery or other valuable articles , or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.

         Where in the financial year immediately proceding the assessment year, the assessee has made investments which are not recorded in the books of account, if any, maintained by him for any source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year.

          Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfacactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year in which such sum is found credited.

    1. An AOP may consist of non-individuals but a BOI has to consist of individuals only. If two or more persons join together, it is called an AOP. But if only individuals join together then it is called a BOI. For example, where X,ABC Ltd. and PQ&Co. (A Firm) join together for a particular venture then they may be reffered to as an AOP. If X,Y and Z join together for a particular venture, but do not constitute a firm then they may be referred to as a body of individuals.

      2. An AOP implies a voluntary getting together for a common design or combined will to engage in an income producing activities , whereas a BOI may or may not have such common design or will.

Person (Section 2(31) ): Person includes:

1. An Individual ;

2. A Hindu University Family (HUF);

3. A Company;

4. A Firm;

5. An Association of Person (AOP) or a Body of Individuals (BOI), whether incorporated or not;

6. A local authority;

7. Every artificial judicial person not falling within any of the preceding subclauses.

        Every person, whose total income of the previous year exceeds the maximum amount which is not chargeable to income tax, is an assessee and chargeable to income-tax at the rate or rates prescribed in the Finance Act for the relevant assessment year. However, his total income shall be determined on the basis of his residential status in India.

           In the words, Income-tax is levied in India in the following manner:

1. Income earned by every person is chargeable to income-tax if it exceeds the maximum exemption limit.

2. It is charged on the total income of the previous year but it taxable in  the next following assessment year at the rates applicable to such assessment year. However, there are certain exceptions to this rule.

3. Income-tax is charged at two rates, viz. normal rates and special rates.

4. Tax is charged on the total income computed in accordance with the provisions the Act.

5. Total income of a person is determined on the basis of his residential status in India.