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Corporate Tax Planning

Notes Income tax shall not be payable by an assessee in respect of the receipt of share of
income by him from BOI and on which the tax has already been paid by such BOI.
(vi) Local Authority: The term means a municipal committee, district board, body of port
commissioners or other authority legally entitled to or entrusted by the Government
with the control or management of a municipal or local fund.

Notes A local authority is taxable in respect of that part of its income which arises from
any business carried on by it in so far as that income does not arise from the supply of a
commodity or service within its own jurisdictional area. However, income arising from the
supply of water and electricity even outside the local authority’s own jurisdictional areas
is exempt from tax.

(vii) Artifi cial Persons: This category could cover every artificial juridical person not falling
under other heads. An idol or deity would be assessable in the status of an artifi cial
juridical person.

(3) Income [Section 2(24)]: Section 2(24) of the Act gives a statutory definition of income. This

definition is inclusive and not exhaustive. Thus, it gives scope to include more items in the

definition of income as circumstances may warrant. At present, the following items of re-
ceipts are included in income:

Profits and gains.
Dividends.
Voluntary contributions received by a trust/institution created wholly or partly
for charitable or religious purposes or by an association or institution referred to
in section 10(21) or section (23C)(iii ad)/(iii ae)/(iv)/(v)/(vi)/(via) or an electoral
trust –

Source: http://220.227.161.86/18878sm_dtl_fi nalnew_cp1.pdf

The value of any perquisite or profit in lieu of salary taxable under section 17.

Any special allowance or benefit other than the perquisite included above, specifi cally
granted to the assessee to meet expenses wholly, necessarily and exclusively for the

performance of the duties of an office or employment of profi t.
Any allowance granted to the assessee to meet his personal expenses at the place

where the duties of his office or employment of profit are ordinarily performed by

him or at a place where he ordinarily resides or to compensate him for the increased
cost of living.

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