List of top Legal Studies Questions on Tax Law

Section 2(47) of the Income Tax Act, 1961, which is an inclusive definition, inter alia, provides that relinquishment of an asset or extinguishment of any right therein amounts to a transfer of a capital asset. While the taxpayer continues to remain a shareholder of the company even with the reduction of share capital, it could not be accepted that there was no extinguishment of any part of his right as a shareholder qua the company. A company under Section 66 of the Companies Act, 2013 has a right to reduce the share capital and one of the modes which could be adopted is to reduce the face value of the preference share. When as a result of reducing the face value of the share, the share capital is reduced, the right of the preference shareholder to the dividend or his share capital and the right to share in the distribution of the net assets upon liquidation is extinguished proportion ately to the extent of reduction in the capital. Such a reduction of the right of the capital asset clearly amounts to a transfer within the meaning of section 2(47) of the Income Tax Act, 1961.
(Extracted with edits and revisions from Principal Commissioner of Income Tax v. Jupiter Capital Pvt Ltd., (2025 INSC 38)

In the present case, the levy of IGST on the supply of ocean freight services under the reverse charge mechanism on the importer, when the value of such service is already included in the transaction value of imported goods, amounts to double taxation. The concept of double taxation implies that the same subject matter is taxed twice when it should be taxed only once. The GST law, as framed, does not envisage taxation of a transaction twice, and the fundamental principles of GST do not support such an imposition. Further, the importer, who is not the recipient of the service but is treated as a deemed recipient under the reverse charge mechanism, cannot be made liable to pay tax on a service that they have not directly availed. This stretches the scope of reverse charge mechanism beyond its intended purpose, which is to simplify tax collection by shifting the liability to pay tax from the service provider to the service recipient, particularly in cases where the service provider is located outside India and does not have a presence within the taxable territory. Moreover, the constitutional framework requires that a tax should be levied with legislative competence and should not contravene any fundamental rights guaranteed under the Constitution. The imposition of IGST on ocean freight under the reverse charge mechanism without proper legislative backing undermines the very essence of taxation principles enshrined in the Constitution of India.
(This extract is taken from Mohit Minerals v. Union of India CA No. 1390/2022)

Which type of allowance qualifies for deduction under Section 16(ii) of the Income-tax Act, 1961?

According to Section 44AA(2)(i) of the Income-tax Act, 1961, a person carrying on business must maintain books of account if income from business or profession exceeds:

What is the condition prescribed under Section 6 of the Income Tax Act, 1961 for an individual to be classified as a ‘Resident’ in India for tax purposes?

Under which provision of the Income Tax Act, 1961 is the scope of the resident’s ‘total income’ covered?

While Section 245C of the Income Tax Act, 1961 provides that the disclosures as to income “not disclosed before the Assessing Officer” must accompany the application filed before the Settlement Commission, Section 245H provides that if the assessee has cooperated with the Settlement Commission and has made “full and true disclosure of his income”, the Settlement Commission may grant immunity from prosecution and penalty. It is the case of the Revenue that Section 245H (1) cannot be read in isolation as Section 245C is embedded in 245H(1), and hence, both the Sections must be read harmoniously. That when so read, the requirement under Section 245H would be that disclosure of income “not disclosed before the Assessing Officer” must be made before the Commission
In this regard, it is observed that even if the pre-conditions prescribed under Section 245C are to be read into Section 245H, it cannot be said that in every case, the material “disclosed” by the assessee before the Commission must be something apart from what was discovered by the Assessing Officer. Section 245C read with Section 245H only contemplates full and true disclosure of income to be made before the Settlement Commission, regardless of the disclosures or discoveries made before/by the Assessing Officer. It is to be noted that the Order passed by Assessing Officer based on any discovery made, is not the final word, for, it is appealable. However, the assessee may accept the liability, in whole or in part, as determined in the assessment order. In such a case, the assessee may approach the Settlement Commission making ‘full and true disclosure’ of his income and the way such income has been derived. Such a disclosure may also include the income discovered by the Assessing Officer.
[Extracted with edits from the decision of the Supreme Court in Kotak Mahindra Bank Ltd. v. Commissioner of Income Tax, Bangalore, 2023 LiveLaw (SC) 822, dated September 25, 2023].

GST stands in place of

Rent-Free Accommodation provided by an employer to an employee is:

Read the given statements and choose the correct option:
Statement 1: Agricultural income is exempt from tax under Section 10(1) of the Income Tax Act, 1961.
Statement 2: Tax on Non-Agricultural Income in case of exceeding ₹5000/- is determined by the Scheme of Partial Integration of Non-Agricultural Income with Agricultural Income.

Mr. X deposits ₹65,000 in a term deposit for 5 years with the Post Office to avail tax deduction under Section 80C. Assuming Mr. X does not opt for the concessional tax regime under Section 115BAC. What is the correct option?

The term "Income" is described in the Income Tax Act, 1961, under which section?

The maximum rate of GST in our country is-