3Years LL.B, Taxation.
Taxation Law Syllabus for 3-Year LLB: Chapter-
Wise Sections and Meanings
The Taxation Law course for a 3-year LLB program typically covers direct taxes (e.g., Income Tax Act, 1961)
and indirect taxes (e.g., GST laws). Below is a chapter-wise breakdown of the syllabus, including all relevant
sections and their meanings, with important sections underlined as per their significance in academic and
practical contexts.
Chapter 1: Introduction to Taxation Law
Objective
To introduce students to the concept, history, and constitutional framework of taxation in India, including the
distinction between direct and indirect taxes.
Sections and Meanings
Constitutional Provisions (Constitution of India, 1949):
Article 265: No tax shall be levied or collected except by the authority of law. Ensures taxation is legally
enacted.
Article 269: Taxes levied and collected by the Union but assigned to States (e.g., GST on inter-state
trade).
Seventh Schedule (Union, State, and Concurrent Lists): Defines the division of taxing powers between
Union and State governments.
Key Definitions (Income Tax Act, 1961):
Section 2(24): Defines "income" to include profits, dividends, voluntary contributions, and other specified
receipts.
Section 2(31): Defines "person" to include individuals, Hindu Undivided Family (HUF), companies,
firms, etc.
Section 2(1A): Defines "agricultural income" as rent or revenue from land used for agriculture in India.
Exempt under Section 10(1).
Types of Taxes:
Direct Taxes: Levied on income or wealth (e.g., income tax, wealth tax).
Indirect Taxes: Levied on goods and services (e.g., GST, customs duty).
Previous Year and Assessment Year (Income Tax Act, 1961):
Section 2(34): Previous year is the financial year in which income is earned.
Section 2(9): Assessment year is the year in which income is assessed for tax.
Notes
This chapter provides the foundational framework for understanding taxation laws, emphasizing
constitutional mandates and key definitions.
Section 2(24) and Section 10(1) are critical for defining taxable income and exemptions.
Chapter 2: Residential Status and Scope of Total Income
Objective
To understand how an assessee's residential status determines the taxability of their income.
Sections and Meanings
Section 6: Determines residential status of individuals, HUFs, companies, etc.
Section 6(1): An individual is resident in India if present for 182 days or more in the previous year, or 60
days in the previous year plus 365 days in the preceding 4 years. Exceptions for Indian citizens or persons
of Indian origin apply.
Section 6(2): HUF is resident unless control and management are wholly outside India.
Section 6(6): Defines Resident and Ordinarily Resident (ROR) vs. Resident but Not Ordinarily Resident
(RNOR).
Section 5: Scope of total income based on residential status.
Resident: Global income is taxable.
RNOR: Income earned or accrued in India, or received in India, is taxable.
Non-Resident: Only income earned or received in India is taxable.
Section 9: Income deemed to accrue or arise in India (e.g., income from business connections in India).
Notes
Section 6 and Section 5 are pivotal for determining tax liability based on residency and income source.
Understanding RNOR status is crucial for international taxation scenarios.
Chapter 3: Heads of Income
Objective
To study the five heads of income under which all taxable income is classified.
Sections and Meanings
Section 14: Classifies income under five heads: Salaries, House Property, Business or Profession, Capital
Gains, and Other Sources.
Income from Salaries:
Section 15: Charges salary income earned by an employee.
Section 17: Defines "salary" to include wages, annuity, gratuity, perquisites, and employer contributions
to provident funds.
Section 10(10): Exemptions for gratuity, pension, and leave encashment.
Income from House Property:
Section 22: Charges income from house property owned by the assessee.
Section 24: Allows deductions for 30% of Net Annual Value (NAV) and interest on borrowed capital (up
to ?1.5 lakh or ?30,000).
Section 23: Determines Annual Value of house property.
Profits and Gains of Business or Profession:
Section 28: Charges income from business or profession.
Section 32: Allows depreciation on assets used for business.
Section 36: Other deductions (e.g., interest on loans, bad debts).
Section 43B: Certain expenses deductible only on actual payment.
Capital Gains:
Section 45: Charges profits from the transfer of capital assets.
Section 47: Transactions not regarded as transfers (e.g., gifts).
Section 48: Computation of capital gains (sale consideration minus cost of acquisition and improvement).
Section 54, Section 54B, Section 54D, Section 54EC, Section 54F: Exemptions for capital gains (e.g.,
reinvestment in residential property, agricultural land).
Income from Other Sources:
Section 56: Charges residual income not covered under other heads (e.g., interest, dividends).
Section 57: Deductions for expenses incurred to earn such income.
Section 58: Amounts not deductible (e.g., personal expenses).
Notes
Sections 15, 22, 28, 45, 56 are core charging sections for each head of income.
Sections 54, 54B, 54EC, 54F are critical for tax planning due to exemption benefits.
Understanding deductions under Section 24 and Section 32 is essential for computing taxable income.
Chapter 4: Exemptions and Deductions
Objective
To explore incomes exempt from tax and deductions available to reduce taxable income.
Sections and Meanings
Section 10: Exempted incomes.
Section 10(1): Agricultural income.
Section 10(10): Gratuity, pension, leave encashment.
Section 10(34): Dividends (subject to conditions).
Chapter VI-A Deductions:
Section 80C: Deductions for investments in PPF, NSC, life insurance, etc. (up to ?1.5 lakh).
Section 80D: Deduction for medical insurance premiums.
Section 80E: Deduction for interest on education loans.
Section 80G: Deduction for donations to charitable institutions.
Section 80TTA: Deduction for interest on savings accounts (up to ?10,000).
Set-Off and Carry Forward of Losses:
Section 70: Set-off of loss within the same head of income.
Section 71: Set-off of loss from one head against another head.
Section 71B: Carry forward of house property loss.
Section 72: Carry forward of business loss (up to 8 years).
Section 74: Carry forward of capital losses.
Notes
Section 80C is widely used for tax-saving investments.
Sections 70 and 71 are critical for loss adjustment, impacting tax liability calculations.
Chapter 5: Assessment and Tax Administration
Objective
To understand the process of assessment, tax collection, and administrative authorities.
Sections and Meanings
Assessment:
Section 139: Filing of income tax returns, including electronic filing.
Section 140A: Self-assessment tax.
Section 143: Types of assessments (summary, scrutiny, best judgment).
Section 144: Best judgment assessment for non-compliance.
Income Tax Authorities:
Section 116: Lists authorities (e.g., CBDT, Commissioners, Assessing Officers).
Section 117: Appointment of authorities.
Section 131: Powers of discovery and production of evidence.
Section 133A: Survey powers.
Collection and Recovery:
Section 156: Notice of demand for tax payment.
Section 220: Time for payment of tax.
Section 221: Penalty for default in tax payment.
Appeals and Revision:
Section 246A: Appeal to Commissioner (Appeals).
Section 253: Appeal to Appellate Tribunal.
Section 264: Revision by Commissioner.
Offences and Penalties:
Section 271: Penalty for concealment of income.
Section 276C: Prosecution for willful tax evasion.
Notes
Section 139 and Section 246A are crucial for compliance and dispute resolution.
The role of authorities under Section 116 ensures effective tax administration.
Chapter 6: Indirect Taxes – Goods and Services Tax (GST)
Objective
To study the framework of GST under the Central Goods and Services Tax Act, 2017 and related laws.
Sections and Meanings
Constitution (122nd Amendment) Act, 2017: Enabled GST implementation.
Central Goods and Services Tax Act, 2017:
Section 2: Definitions (e.g., "goods," "services," "taxable supply").
Section 7: Defines "supply" as the basis for GST levy.
Section 9: Levy and collection of Central GST (CGST).
Section 10: Composition scheme for small taxpayers.
Section 16: Input Tax Credit (ITC) eligibility and conditions.
Section 22: Persons liable for registration.
Section 25: Procedure for registration.
Section 39: Furnishing of GST returns.
GST Council (Article 279A): Recommends GST rates and policies.
Dual GST Model:
CGST: Levied by the Central Government.
SGST: Levied by State Governments.
IGST: Levied on inter-state supplies under the Integrated Goods and Services Tax Act, 2017.
Other Indirect Taxes:
Customs Act, 1962: Governs taxes on imports/exports.
Section 3, 5 of Central Sales Tax Act, 1956: Regulates inter-state sales.
Notes
Sections 7, 9, 22 are foundational for GST compliance.
Understanding ITC under Section 16 is critical for businesses to reduce tax liability.
Chapter 7: Other Taxation Statutes
Objective
To cover additional taxation laws relevant to the Indian legal system.
Sections and Meanings
Wealth Tax Act, 1957 (repealed in 2015, but relevant for historical context):
Levied on net wealth of individuals and HUFs.
Expenditure Tax Act, 1987: Taxes certain expenditures (e.g., luxury spending).
Interest Tax Act, 1974: Taxes interest income of financial institutions.
Prohibition of Benami Property Transactions Act, 1988:
Prohibits benami transactions to curb tax evasion.
Gift Tax Act, 1958 (repealed, but relevant for understanding historical tax laws).
Finance Act, 2021: Annual amendments to tax laws, including new tax regimes.
Notes
These statutes are less emphasized in modern curricula due to GST and income tax dominance but are
included for comprehensive understanding.
The Prohibition of Benami Property Transactions Act remains relevant for anti-evasion measures.
Recommended Books
Income Tax Act, 1961 (Bare Act): For primary reference.
Kailash Rai, Taxation Laws (Allahabad Law Agency): Covers direct and indirect taxes.
Advocate Surbhi Aggarwal, Taxation Law in India: Comprehensive guide for LLB students.
Dr. N.V. Paranjape, Studies in Jurisprudence and Legal Theory: For constitutional aspects of
taxation.
Notes on Important Sections
The underlined sections (Sections 2(24), 5, 6, 10, 14, 15, 17, 22, 24, 28, 45, 48, 54, 56, 70, 71, 80C, 80D,
139, 156, 246A from the Income Tax Act, and Sections 7, 9, 22 from the CGST Act) are critical due to
their frequent application in tax computation, compliance, and litigation.
Students should focus on understanding the practical implications of these sections through case laws and
problem-based questions.
