The scope of total income is determined on the basis of residential status of the assessee. For the purposes of this Act, there can be three residential status. Residential status is determined on the basis Basic conditions and Additional conditions Resident and ordinarily resident Resident but not ordinarily resident Non resident. RESIDENTIAL STATUS OF AN INDIVIDUAL Resident and Ordinarily Resident [ROR]                 An individual is said to be resident in India if he satisfies anyone of the basic conditions and both of the additional conditions. Resident but Not Ordinarily Resident [RNR]                 An individual is said to be resident but not ordinarily resident in India if he satisfies anyone of the basic conditions but does not satisfies both of the additional conditions. Non Resident [NR]                 If an individual does not satisfies any of the basic conditions he is said to be non resident in India Basic conditions Additional conditions A stay of 182 days or more during the current previous year 2008-09 OR A stay of 60 days or more in the current PY 2008-09 and a total ...

The word tax was derived from the Latin word ‘taxore’ meaning to estimate, appreciate or value. Tax is a price which each citizen pays to the state to cover his share of the cost of the general public services which he will consume. It indirectly provides employment opportunities. Taxes are compulsory contributions imposed by the government on its citizens to meet its general expenses incurred for the common good, without any corresponding benefit to the tax payer. In 1860, the British government firstly introduced tax in India. The present law of income tax is contained in the income tax Act,1961 as amended up to date; the income tax rules 1962 as amended up to date and finance Act passed by the parliament every year. Income Tax Act came into force with effect from 1-4-1962 and extends to the whole of India. Assessee [Sec 2(7)]                   Assessee means a person by whom any tax or any other sum of money is payable under this Act, and includes; Any person who is liable to pay tax, interest or penalty Any person who is deemed to be assessee as per the Act Any person who is considered as default assessee by the Act Any person who is ...

There are two types of double taxation: economical and juridical (international). Double economical taxation is related to the taxation of two and more taxes from one tax basis. As an example can be presented the situation when the profit of the corporation first is taxed and after being distributed among the stockholders and it is taxed again as dividend tax. Also the double taxation can occur when indirect taxes are levied, for instance, when the goods are levied excise tax, and after this VAT is imposed on the price of the goods, including excise. International double taxation is levying on one taxpayer in one or more countries for one object in the same period of time, which results in identical tax payment, and brings to coincidence of tax object, of tax subject and the period of tax payment. Countries can levy income taxes using the principal of residence, or territorial principal. Double taxation is possible when one country is using residence principal in levying taxes, and the other country is using territorial principal. The double taxation can also occur in the situation when both countries affirm that the taxpayer is their resident, or when each of the countries ...

There are three tax collection methods: cadastral, at the source (before the receipt of the income) and through self-assessment (at the declaration of the income). The cadastre method implies the use of the cadastre. The cadastre is a register of all the typical objects (land, real estate) classified according to physical features and where the average profitability of the object is determined. Physical features include: for the land tax—the size of the land area, the distance from transportation ways and markets; for the house tax—the number of windows, pipes, doors, the type of the building; for industry tax—the number of employees and machines. The average profitability of the object, which is based on physical features, may differ significantly from actual profitability; this constitutes the main disadvantage of this method. Taxation at the source is calculated and deducted at the accounting unit of the company, which pays the income of the taxation subject. In this way is deducted the tax from wages and salaries. The tax is subtracted by an intermediary—the collector (tax agent) before the receipt of the tax by the subject, which excludes the possibility of tax ...

The analysis of classical theories allows the formulation of principles that represent the qualities and tendencies of the modern taxation system. They are: The rational combination of direct and indirect taxes, which implies the utilization of various types of taxes, taking into consideration both the wealth and the income of the taxpayer. In periods of economic crisis it is better to have many sources of budget revenue with a relatively low rate and a large taxation basis then to have 1-2 types of income with high deduction rates. The universalization of taxation which implies equivalent efficiency requirements to all payers and an equivalent approach to the deduction of the tax amount irrespective of the income source, type of activity, or economic sector. It is not acceptable to introduce additional taxes, increased and differentiated rates, or tax allowances for different types of ownership, organizational or juridical structure of the entity, citizenship of natural persons or other factors. In addition, taxes should not be established or applied on basis of political, economic, and ethnic factors, or other criteria of this type. One-time taxation implies that one ...

A number of principles that characterize taxation in general and the taxation system more specifically were set forth by Adam Smith. These are: The principle of justice, which promotes the universality of taxation and the evenness of tax distribution among citizens in correspondence with their revenues (“the subjects of the state must participate in the maintenance of the government in correspondence with the income that they make use of under the protection and with the help of the state”). This principle means that taxes must be deducted in conformity with the capacity of the payer, who is obligated to take part in financing a corresponding share of the state’s expenditures. In the international practice, there are two methods of implementing the justice and equality principle. The first method entails insuring the benefit of the taxpayer. According to this approach, taxes paid must correspond to the benefits received by the taxpayer from the services of the state, i.e. the taxpayer receives back a part of the tax paid through various transfers from the state budget covering compensations, the financing of education, health protection, etc. Hence, in this case the ...