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Unit 1: Income Tax: Basic Framework
          Gopika Juneja, Lovely Professional University



                         Unit 1: Income Tax: Basic Framework                                    Notes


             CONTENTS

             Objectives
             Introduction
             1.1   Concept of Income
                 1.1.1  Features of “Income”
                 1.1.2  Tax Treatment of “Income”

             1.2   Historical Background of Income Tax
                 1.2.1  Importance of Income Tax
                 1.2.2  Principles of Income Tax
             1.3   Overview of Income Tax Law in India

             1.4   Basic Concepts of Income Tax
             1.5  Agricultural Income
                 1.5.1  Certain Income which is Treated as Agricultural Income
                 1.5.2  Certain Income which is not Treated as Agricultural Income
             1.6   Income Tax Systems in India

             1.7  Summary
             1.8  Keywords
             1.9  Review Questions
             1.10 Further Readings

          Objectives


          After studying this unit, you will be able to:
               Explain the concept of income
               Discuss the historical background of tax
               Elaborate the Income Tax Law in India

               Describe the basic concepts of income tax
               Discuss agricultural income
               Explain an 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




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