COMMERCIAL The Income Tax Act 1961

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????? Income Tax Act, 1961 – Content Overview

The Act is divided into 23 Chapters and includes Schedules. Below is a breakdown of major chapters and their subject matter:

Chapter I – Preliminary (Sections 1 to 4)

• Defines the short title, extent, and commencement of the Act.

• Introduces important definitions like “income,” “person,” “assessee,” and “assessment year.”

Chapter II – Basis of Charge (Sections 5 to 9)

• Explains the scope of total income for residents and non-residents.

• Lays down tax liability based on residence status.

• Includes income deemed to accrue or arise in India.

Chapter III – Incomes Which Do Not Form Part of Total Income (Exemptions) (Sections 10 to 13B)

• Lists exempt incomes, such as:

  • Agricultural income

  • Income of charitable trusts

  • Certain allowances (e.g., HRA, LTA)

Chapter IV – Computation of Total Income (Sections 14 to 59)

• Divides income into five heads:

  1. Salaries

  2. House Property

  3. Business or Profession

  4. Capital Gains

  5. Other Sources

Chapter V – Income of Other Persons Included in Assessee’s Total Income (Clubbing Provisions) (Sections 60 to 65)

• Covers clubbing of income for tax avoidance cases (e.g., income of minor child).

Chapter VI – Aggregation of Income and Set Off/Carry Forward of Losses (Sections 66 to 80)

• Allows adjustment of losses from one head of income against gains from others.

• Carry forward provisions for future years.

Chapter VI-A – Deductions from Total Income (Sections 80A to 80U)

• Contains popular deductions, like:

  • Section 80C – investments (LIC, PPF, etc.)

  • Section 80D – health insurance

  • Section 80G – donations

Chapter VII – Incomes Forming Part of Total Income on which No Tax is Payable (Sections 86 to 89)

• Includes relief and rebate provisions.

Chapter VIII – Rebates and Reliefs (Sections 90 to 91)

• Covers Double Taxation Avoidance Agreements (DTAA) and tax credits.

Chapter X – Special Provisions (Sections 92 to 94B)

• Deals with transfer pricing and international transactions.

• Anti-avoidance rules.

Chapter XI to XXII – Administrative and Procedural Aspects

These chapters cover:

• Assessment procedures

• Advance rulings

• Appeals and revisions

• Penalties and prosecutions

• Collection and recovery

• Refunds

• Survey and search operations (like Section 132)

Schedules

• Provide supporting details like:

  • Rates of tax

  • TDS (Tax Deducted at Source) tables

  • Depreciation rates

???? Important Sections at a Glance