Project Report IT
Project Report IT
Project Report IT
With reference to
ADMINISTRATION
MASTER OF COMMERCE
submitted by
MUDDANA DEEPIKA
M.COM [ IV SEMESTER ]
Y23CO20027
under the guidance of
Dr. GOLI NAGARAJU
2024
DECLARATION
I hereby declared that this project report entitled "INDIAN TAX
SYSTEM PROBLEMS AND ISSUES WITH REFERENCE TO INCOME TAX IN INDIA" is a
bonified work done by me for the award of degree of " Master of Commerce " from
Acharya Nagarjuna University,
done under the esteemed guidance of Dr. GOLI NAGARAJU, faculty of Department
of Commerce and Business Administration, during the acadamic years 2022-2024
I also declare that this project is a result of my own efforts and that it
has not been submitted to any other university or institution for the award of any
degree or diploma
I also thankful to Dr. NAGARAJU BATTU, Dean & head of the Dpartment
of Commerce & Business Administration for giving me the opportunity to take up
the project work and helping me throughout.
Finally, I express my sincere thanks nto all those who helped me directly or
indirectly through my project work.
MUDDANA DEEPIKA
[Regd No: Y23C020027]
TOPIC
INDEX
Definition
“A direct tax is really paid by a person on whom it is legally imposed.” So, a direct tax is one
whose impact and incidence are on the same person, i.e. the tax payer is also the tax-bearer. The tax
burden cannot be shifted on others and these taxes are to be paid directly to the government.
According to Dalton
After understanding what is income tax in India, it is also important to be aware of the
history of income tax, i.e., when and by whom was it first introduced and more.
Initially, levying taxes was one way of making up for the losses incurred by the Government due to the
Military Mutiny of 1857. Sir James Wilson introduced taxes in 1860. Several modifications have been made
to the concept ever since.
In 1886, a special act, i.e., the Income Tax Act, was passed. This act remained for several years, with
amendments from time to time. A fresh Income Tax Act was passed in 1981, which was then replaced by
another act in 1922. This continued until a new act was passed yet again in the financial year 1960-61.
The Income Tax Act 1961 was implemented from the 1st of April 1962. This act applied to the entire
country, including Sikkim, Jammu, and Kashmir. However, the Union Budget has made several amendments
to the Income Tax Act 1961, though it remains relevant to date.
Income tax is significant in a country's financial landscape. Now, what is income tax in India?
Income tax is the tax paid on the income earned in a financial year by individuals or businesses. The Income
Tax Act 1961governs the income tax system in India.
Every individual and business is expected to file income tax within the stipulated period wherein they
report their income and claim refunds wherever applicable. Tax filing has been made simple with the online
tax filing provision. You can visit the official website of the Income Tax Department or any verified third-
party websites and file the return from the comfort of your home.
The set of rules and regulations stipulated by the Government according to which the Income Tax
Department levies, collects, and recovers taxes. The Income Tax Act 1961,which came into force on 1st
April 1962, continues to date.
There are 298 Sections, 23 chapters, and several provisions that cover the various aspects of taxation in
India and define what is income tax in India.
History of Income Tax
After understanding what is income tax in India, it is also important to be aware of the history
of income tax, i.e., when and by whom was it first introduced and more.
Initially, levying taxes was one way of making up for the losses incurred by the Government
due to the Military Mutiny of 1857. Sir James Wilson introduced taxes in 1860. Several modifications have
been made to the concept ever since.
In 1886, a special act, i.e., the Income Tax Act, was passed. This act remained for several
years, with amendments from time to time. A fresh Income Tax Act was passed in 1981, which was then
replaced by another act in 1922. This continued until a new act was passed yet again in the financial year
1960-61.
The Income Tax Act 1961 was implemented from the 1st of April 1962. This act applied to the
entire country, including Sikkim, Jammu, and Kashmir. However, the Union Budget has made several
amendments to the Income Tax Act1961, though it remains relevant to date.
Besides knowing the income tax meaning, it is important to also understand who can pay income
tax in India. Income-tax is to be paid by every person. The term ‘person’ as defined under the Income-tax
Act includes natural as well as artificial person.
•Individuals
•Firms
•Companies
•Association of Persons
•Body of Individuals
•Companies
1. Individual
3. Firm:
A firm is an association of persons who carry on a business together with a view to making a
profit. The income of a firm is taxed as a separate entity, and the partners are taxed on their share
of the profits.
4. Company:
A company is a legal entity that is separate from its shareholders. The income of a company is
taxed separately from the income of its shareholders
A BOI is a group of individuals who come together for a common purpose, such as to receive
income from a property. The income of a BOI is taxed separately from the income of its members.
7. Local Authority:
A local authority is a legally constituted body that is responsible for the administration of a particular
area or locality. The income of a local authority is taxed separately from the income of its members.
An AJP is an entity that is not a person in the ordinary sense, but is treated as a person for the
purposes of taxation. This includes entities such as trusts, funds, and other similar entities.
In conclusion, the Income Tax Act provides for different types of person who are subject to tax
in India. The tax liability of each type of assessee varies depending on their status, nature of income and
other factors. It is important for taxpayers to be aware of their status and their tax obligations under the
Act to ensure compliance with the law.