Page 6 - DCOM301_INCOME_TAX_LAWS_I

Pooja, Lovely Professional University
Unit 1: Income Tax: Basic Framework

Unit 1: Income Tax: Basic Framework Notes

CONTENTS
Objectives
Introduction

1.1 Concept of Income Tax
1.2 Concept of Income
1.2.1 Features of Income

1.2.2 Tax Treatment of Income
1.3 Concept of Capital and Revenue Receipts
1.3.1 Capital Receipt vs Revenue Receipts
1.3.2 Capital Expenses vs Revenue Expenses
1.3.3 Capital Losses vs Revenue Losses

1.4 Basic Concepts of Income Tax
1.5 Income Tax Systems in India
1.6 Summary

1.7 Keywords
1.8 Review Questions
1.9 Further Readings

Objectives

After studying this unit, you will be able to:

Define Income tax
Discuss the concept of Income
Explore the concept of Capital and Revenue receipts

List down the basic terminologies used in Income Tax
Assess the overview of Income Tax Systems in India
Introduction

An income tax is a tax levied on the financial income of persons, corporations, or other legal
entities. Various income tax systems exist, with varying degrees of tax incidence. Income taxation
can be progressive, proportional, or regressive. When the tax is levied on the income of companies,
it is often called a corporate tax, corporate income tax, or profit tax. Individual income taxes
often tax the total income of the individual (with some deductions permitted), while corporate
income taxes often tax net income (the difference between gross receipts, expenses, and additional
write-offs). Every country generates income from ‘Income-Tax’ in the form of direct tax levied
by government.

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