This post discusses diverse elements of Earnings Tax Law. Ahead of we talk about elements, it is crucial to know the distinction in between an act and a law. So, let me ask you. What is the distinction in between an act and a law? Are each the identical? The answer is no. An act is just a component of the law. Law is essentially a broader topic that involves different acts. The elements of IT law – The Earnings Tax Act, 1961 – This is the most crucial element of IT law. It consists of the legislations or the provisions of IT law.
The Earnings Tax Guidelines, 1962 – This defines the process to be followed in compliance with the provisions of the act. Note – You have to have to fully grasp the distinction in between Act and Guidelines. An Act will only state the provisions. It will not define the techniques to carry on the provision. Having said that, IT guidelines will state the approach to be followed. Annual Finance Act – This is popularly recognized as price range. It prescribes the prices of revenue tax to be followed for a offered monetary year. It also brings amendments in the IT law. Circulars and Notifications – These are issued by the Ministry of Finance. Circulars are explanatory in nature. They do not add any new section or provisions. They only clarify the current provision. Case Laws – These are the judicial pronouncements of the court.
The judge of the Higher Court is binding in a unique state, i.e., It is territorial jurisdiction. Having said that, the judgement of the supreme court is binding all through the nation and is the law of the land. Discussion about Section 1 and Section two For any Act, Section 1 defines the date of applicability and location of applicability. For instance the IT Act, 1961 was passed in the parliament and not forced.
The date of Applicability of the IT Act, 1961 was 1st April, 1962. Section two consists of definitions. It is usually presented in alphabetical order. Idea of Prior Year and Assessment Year Below Earnings Tax, a year usually begins from 1st April and ends on 31st March. What ever revenue is earned in a single unique year, the taxes are paid in the subsequent year. If revenue is earned in the year 2013-14, tax is paid in 2015-16. The year in which revenue is earned is termed as preceding year. It must be produced clear that preceding year does not refer to the earlier year, but it indicates the existing accounting year.