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Backdrop
1. A tax that is levied on income of individuals / corporations / legal entities is known as
Income Tax.
2. The Central Board for Direct Taxes (CBDT) governs the Indian Income Tax department.
3. Income tax is imposed by Govt. of India on taxable income of individuals, Hindu Undivided
Families (HUFs), companies, firms, co-operative societies and trusts (Identified as body of
Individuals and Association of Persons) and any other artificial person.
4. Levy of tax is different for different entities and it is governed by the Indian Income Tax Act,
1961.
Tax Rates FY 2010 – 11 (A.Y 2011 – 12)
The new and revised income tax slabs and rates applicable for the financial year (FY) 2010-11
and assessment year (AY) 2011-12 are mentioned below:
For Individual and HUF (Below 65)
1. Up to 1,60,000 NIL
2. 1,60,001 to 5,00,000 10%
3. 5,00,001 to 8,00,000 20%
4. Above 8,00,000 30%
For Women Resident (Below 65)
1. Up to 1,90,000 NIL
2. 1,90,001 to 5,00,000 10%
3. 5,00,001 to 8,00,000 20%
4. Above 8,00,000 30%
In case of an individual resident who is of the age of 65 years or more at any time during the
previous year:-
1. Up to 2,40,000 NIL
2. 2,40,000 to 5,00,000 10%
3. 5,00,001 to 8,00,000 20%
4. Above 8,00,000 30%
For tax purposes, an individual may be resident, nonresident or not ordinarily resident.
Benefits to NRI’s
Bank Deposits investment in shares, units of Mutual Funds etc. are exempt from wealth tax
in India.
Interest earned on NRE (Non-resident (external) Rupee Account) and FCNR (Non-resident
Foreign Currency Account) accounts is completely tax-free.
Gift tax has been abolished for all types of gifts from the 1st October 1998.
However, gifts received on the occasion of marriage or from relative or under will or
inheritance would not be subject to tax.
Residence Rules
An individual is treated as resident in a year if present in India
for 182 days during the year or
for 60 days during the year and 365 days during the preceding four years. Individuals
fulfilling neither of these conditions are nonresidents. (The rules are slightly more liberal for
Indian citizens residing abroad or leaving India for employment abroad.)
Income from Salary
Under this head, income received as salary under Employer-Employee relationship is taxed. If
income exceeds minimum exemption limit, then Employers must withhold tax compulsorily as Tax
Deducted at Source (TDS). The employees should also be provided with a Form 16 which shows
the tax deductions and net paid income. Form 16 also contains any other deductions provided
from salary as follows:
Medical reimbursement / Medical Insurance Premium up to Rs. 15,000 per year is tax
exempt (u/s 80D) provided bills / Premium Payment receipts are given.
But you get only Rs. 32,000 in-hand every month! Why? Where did the promised money
vanish? Is your company cheating you?
No! It is because the company promised you the salary as Cost to Company, or CTC.
Simply speaking, CTC is the amount that you cost your company. That is, it is the amount
that the company spends – directly or indirectly – because of employing you.
Thus, it is the money given to you (your in-hand component), plus the money spent because
of you.
These are:
Basic
Dearness Allowance (DA)
Incentives or bonuses
Conveyance allowance
House Rent Allowance (HRA)
Medical allowance
Leave Travel Allowance or Concession (LTA / LTC)
Vehicle Allowance
Telephone / Mobile Phone Allowance
Special Allowance
All the above are a part of your in-hand salary, and therefore, are a part of your CTC pay as
well.
Now let‟s look at some of the other components of your CTC pay – the parts that inflate your
CTC package but may not be actually given to you!
It is mandatory for you to contribute 12% of your basic towards provident fund (PF). Your
employer makes an equal contribution (12% of your basic) to your PF account.
(Please read “Provident Fund (PF) and Voluntary Provident Fund (VPF)” to know more
about provident fund)
So, although this amount is not given out to you every month, for your company, it is an
expense that it incurs on you every month! Therefore, this forms a part of your CTC pay.
Example: 12% of your basic is Rs. 1,800 per month. That is, Rs. 21,600 per annum. Your
CTC package becomes Rs. 3,85,200.
Reimbursements
Various reimbursements that you get from your company can also form a part of your CTC
package.
Medical bills
Phone bills
Magazine subscriptions
Book purchases, etc.
Example: Say you get reimbursement of medical bills of upto Rs.15,000. So, your CTC
package becomes Rs. 4, 00,200.
Life Insurance and Health insurance
Most respectable employers provide free health insurance cover to their employees and their
dependents. Some companies also provide life insurance for their employees free of cost.
The premium amounts paid for such insurance on your behalf can be included in your CTC
salary.
Example: Say you get a health insurance cover of Rs. 1 Lakh for yourself and your family.
The premium for this is Rs. 2,000. Thus, your CTC package becomes Rs. 4,02,200.
Many companies have in-house health centers, hospitals or other health care facilities where
medical care is provided free of cost to employees.
Companies work out a per-employee cost for such facilities, and can include that in your
CTC pay package.
Transport Facilities
Many companies provide free transport facility to their employees from their place of work to
the job location.
Subsidized Meals
Many companies run canteens or cafeterias for their employees, which provide subsidized
meals to the employees. Such subsidy can be included in your cost to company package.
Example: Let‟s say your company provides you lunch for Rs. 10, and the actual cost of that
lunch is Rs. 25. Thus, there is a subsidy of Rs.15 per meal.
For 21 working days in a month, this is Rs. 315. Or, Rs. 3,780 per year. Thus, your CTC
package becomes Rs. 4,05,980.
The components of your CTC salary sound reasonable so far, right? After all, this is the
money that you get in one form or the other.
But some companies take the concept of cost-to-company too far! Look at the following:
The bill for the office phone that you use can be included in your CTC salary too.
Shocked? Its true! There are many companies – especially large investment banks – that
include your office space rent in your CTC package!! Yes, it defies logic, but it is true!
Example: Let‟s say your office is in Churchgate in Mumbai. Your have a small cubicle, say 6
feet by 8 feet (48 square feet). Let‟s say the going rate for rent for office space in that area
is Rs. 200 per sq. ft. per month.
What is the cost of your cubicle in that case? Its Rs. 200 * 48 = Rs.9,600 per month,
or Rs. 1,15,200 per year.
When this is included in your CTC, your overall CTC package becomes Rs. 5,21,180!
We often hear people say that the salary of government employees is quite low.
Although there is truth in this, government salaries wouldn't seem too less if we look at it
from a “CTC” point of view.
When we talk about government salaries, we only talk about the “in-hand” component. But
we forget that on a cost-to-company basis, it can be quite substantial.
The 12% of basic that the government deposits in their PF accounts, just like private companies
Membership of government clubs or gymkhanas
Free stay at various circuit houses and government guest houses
Free telephone connection at home
Free car with driver
Reimbursement of newspaper bills
Free use of many libraries
In case of defense personnel (Army / Navy / Air Force), a huge subsidy on items bought from
their “canteens” (like groceries, appliances, etc.)
When these things are taken into account and salaries of government employees is
considered on a cost to company (CTC) basis, it won't seem too less compared to the
private sector!
115E a. income from foreign exchange asset [*not applicable in the case
20.00%
of dividends referred to in section 115-O]
Dr. Manmohan Singh, the then Union Finance Minister, in his Budget speech for the year
1994-95 introduced the new concept of Service Tax and stated that '' There is no sound
reason for exempting services from taxation, therefore, I propose to make a modest effort in
this direction by imposing a tax on services of telephones, non-life insurance
and stock brokers.''
Applicability
1. The Service Tax assessee is the person/firm who provides the service. Hence,
the Service Tax must be paid by the person/firm providing the service.
2. Chapter V of the Finance Act, 1994 (32 of 1994) (Sections 64 to 96) deals with
imposition of Service Tax interalia on-
The Finance Acts of 1996, 1997, 1998, 2001, 2002 and 2003 added more services to tax
net by way of amendments to Finance Act, 1994.
At present total number of services on which Service Tax is levied has gone up to 58
despite withdrawal of certain Services from the tax net or grant of exemptions (Goods
Transport Operators, Outdoor Caterers, Pandal and Shamiana Contractors, and
Mechanized Slaughter Houses).
Chronology of event
The services, brought under the tax net in the year 1994-95, are as below:
Telephone
Stockbroker
General Insurance
The Finance Act (2) 1996 enlarged the scope of levy of Service Tax covering three more
services, viz.,
Advertising agencies,
Courier agencies
Radio pager services.
But tax on these services was made applicable from 1st November, 1996.
The Finance Acts of 1997 and 1998 further extended the scope of service tax to cover a
larger number of services rendered by the following service providers, from the dates
indicated against each of them.
Government of India has notified imposition of service Tax on twelve new services in 1998-
99 union Budget. These services listed below were notified on 7th October, 1998 and were
subjected to levy of Service Tax w.e.f. 16th October, 1998.
16. Architects
17. Interior Decorators
18. Management Consultants
19. Practicing Chartered Accountants
20. Practicing Company Secretaries
21. Practicing Cost Accountants
22. Real Estates Agents/Consultants
23. Credit Rating Agencies
24. Private Security Agencies
25. Market Research Agencies
26. Underwriters Agencies
In the Finance Act 2001, the levy of service tax has been extended to 14 more services,
which are listed below. This levy is effective from 16.07.2001.
In the Budget 2003-2004, more services have been added to the tax net, which are listed
below. This levy is with respect to the below stated services was effective from July 1, 2003.
In the budget 2004-2005 13 more services are proposed to be added, to the list of taxable
services. The services are:
VAT is a sales tax collected by the government (of the state in which the final consumer is
located) – which is the government of destination state on consumer expenditure.
Over 120 countries worldwide have introduced VAT over the past three decades and India
is amongst the last few to introduce it.
India already has a system of sales tax collection wherein the tax is collected at one point
(first/last) from the transactions involving the sale of goods. VAT would, however, be
collected in stages (installments) from one stage to another.
The mechanism of VAT is such that, for goods that are imported and consumed in a
particular state, the first seller pays the first point tax, and the next seller pays tax only on
the value-addition done – leading to a total tax burden exactly equal to the last point tax.
CENVAT is the new name for MODVAT. Basically they are the same. These are related to
central excise.
CENVAT means, Tax on Value Addition on the goods manufactured according to Central
Excise & Customs Act Definition. Here the value addition means the Additional
Services/Activities etc. which converts the Input in to Output, and the output is newly
recognized as per the this act as Excisable goods.
VAT - in India
VAT will replace the present sales tax in India. Under the current single-point system of tax levy,
the manufacturer or importer of goods into a State is liable to sales tax. There is no sales tax on
the further distribution channel. VAT, in simple terms, is a multi-point levy on each of the entities in
the supply chain with the facility of set-off of input tax - that is, the tax paid at the stage of
purchase of goods by a trader and on purchase of raw materials by a manufacturer. Only the
value addition in the hands of each of the entities is subject to tax. For instance, if a dealer
purchases goods for Rs 100 from another dealer and a tax of Rs 10 has been charged in the bill,
and he sells the goods for Rs 120 on which the dealer will charge a tax of Rs 12 at 10 per cent,
the tax payable by the dealer will be only Rs 2, being the difference between the tax collected of
Rs 12 and tax already paid on purchases of Rs 10. Thus, the dealer has paid tax at 10 per cent on
Rs 20 being the value addition in his hands.
VAT can be computed by using either of the three methods detailed below
The Subtraction method:- The tax rate is applied to the difference between the value of
output and the cost of input.
The Addition method: The value added is computed by adding all the payments that is
payable to the factors of production (viz., wages, salaries, interest payments etc).
Tax credit method: This entails set-off of the tax paid on inputs from tax collected on sales.
India opted for tax credit method, which is similar to CENVAT.
States such as Andhrapradesh, Kerala, Maharashtra, Madhyapradesh, Delhi and Haryana have
experimented with VAT albeit in a limited manner, covering only limited goods. The experiments
never had the full-fledged features of VAT and were only concoctions. These states have even
called off their experiments owing to different reasons. If one analyses why VAT or its variant
failed in Maharashtra, which was the only state to come closer to a true VAT regime, the following
reasons emerge:
1. Dual methodologies of computation of VAT credit Error! Hyperlink reference not valid. , one for
the Manufacturing stage and the other for the trading stage, thus breaking the audit trail. It may be
noted that one of the advantages of VAT system, as we would be dealing later on, is the audit trail
that is created in the VAT chain.
2. Presence of a large number of tax deferral and holiday schemes, which resulted in a narrow
base. It may again be noted that under VAT, which is multi-point, the tax rates have to be
reasonably low, and lower tax rates presupposes that the tax base is wide. These two features
were not present in the Maharashtra tax regime.
3. Low level of awareness among traders, and even administrators, giving rise to fears and
apprehensions. Owing to this, there was considerable consternation among the trade, which gave
rise to open revolt against the system.
4. Partial implementation of the ideal VAT with the existing system coexisting even under this
regime.
7. Drop in revenue for the State Government, though there are no studies attributing such
reduction to the system of taxation.
Thus States had indeed tried some variations of VAT, but eventually gave up due to a variety of
reasons.
2. Destination Principle
Cenvat is based on destination principle i.e. excise duty/service tax is paid only when goods
are consumed. Till then, burden of duty gets passed on to the next buyer/customer [In case of
sales tax, as per this principle, sales tax is payable in the State in which goods are consumed
and not in the State in which goods are produced]
Input may be used directly or indirectly in manufacture. Any input integrally connected with
manufacturing process is eligible. Process loss is eligible.
8. Consumables eligible
Consumables are eligible for Cenvat credit.
Central Sales tax is generally payable on the sale of all goods by a dealer in the course of inter-
state Trade or commerce or, outside a State or, in the course of import into or, export from India.
According to S3, a sale or purchase shall be deemed to take place in the course of interstate trade
or commerce in the following cases:
when the sale or purchase occasions the movement of goods from one State to another;
when the sale is effected by a transfer of documents of title to the goods during their
movement from one State to another.
QUICK LOOK
Taxes in India are of two types, Direct Tax and Indirect Tax.
Direct Tax, like income tax, wealth tax, etc. are those whose burden falls directly on the
taxpayer.
The burden of indirect taxes, like service tax, VAT, etc. can be passed on to a third party.
According to Income Tax Act 1961, every person, who is an assessee and whose total income
exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates
prescribed in the finance act. Such income tax shall be paid on the total income of the previous
year in the relevant assessment year.
The total income of an individual is determined on the basis of his residential status in India.
Residence Rules
II. for 60 days during the year and 365 days during the preceding four years. Individuals
fulfilling neither of these conditions are nonresidents. (The rules are slightly more liberal for
Indian citizens residing abroad or leaving India for employment abroad.)
A resident who was not present in India for 730 days during the preceding seven years or who
was nonresident in nine out of ten preceding yeas I treated as not ordinarily resident. In effect, a
newcomer to India remains not ordinarily resident.
For tax purposes, an individual may be resident, nonresident or not ordinarily resident.
Residents are on worldwide income. Nonresidents are taxed only on income that is received in
India or arises or is deemed to arise in India. A person not ordinarily resident is taxed like a
nonresident but is also liable to tax on income accruing abroad if it is from a business controlled in
or a profession set up in India.
Capital gains on transfer of assets acquired in foreign exchange is not taxable in certain cases.
Non-resident Indians are not required to file a tax return if their income consists of only interest
and dividends, provided taxes due on such income are deducted at source.
It is possible for non-resident Indians to avail of these special provisions even after becoming
residents by following certain procedures laid down by the Income Tax act.
B. CEMENT
Consequent to enhancement of the standard rate of duty from 8% to 10%, the specific rates of
duty on cement and cement clinker is also being revised upwards as follows:
8% or Rs. 230
10% or Rs.290 per
per tonne,
2. Cleared other than in packaged form tonne, whichever is
whichever is
higher
higher
D. PETROLEUM PRODUCTS
The rates of excise duty on Motor Spirit (petrol) and HSD (diesel) are being increased by Re.1 per
litre. The revised rates of duty on these items are as under:
E. TOBACCO PRODUCTS
1) The existing slab of filter cigarettes of length not exceeding 70 mm is being broken up into two
slabs: filter cigarettes of length not exceeding 60 mm; and filter cigarettes of length exceeding 60
mm but not exceeding 70 mm. Suitable rates are being prescribed for these slabs. The basic
excise duty (BED) on other cigarettes is being revised. The revised rates of excise duty including
basic excise, additional excise and NCCD on cigarettes are as under:
Present
S.No. Description Proposed rate
rate
Non-filter length in mm
Filter length in mm
4 Exceeding 60 but not exceeding 70 819 969 (809 BED+70 AED +90 NCCD)
5 Exceeding 70 but not exceeding 75 1323 1473 (1218 BED+1 10 HC+145 NCCD)
2) At present, cigars, cheroots and cigarillos of tobacco attract ad valorem rate of basic excise
duty (BED) of 8% plus Additional Excise Duty (Health Cess) of 1.6%. These rates are now being
replaced with a composite rate of “10% or Rs.1227 per thousand, whichever is higher” (BED) and
“1.6% or Rs.246 per thousand whichever is higher” (AED). Cigars, cheroots and cigarillos of
tobacco substitutes will now attract BED of “10% or Rs.1473/1 000” whichever is higher.
3) Basic excise duty on branded unmanufactured tobacco and tobacco refuse is being increased
from 42% to 50%.
4) Basic excise duty on branded „hookah‟ or „gudaku‟ tobacco is being increased from 8% to 10%
while that on chewing tobacco, preparations containing chewing tobacco, jarda scented tobacco,
snuff and its preparations, tobacco extracts and essences etc. has been increased from 50% to
60%.
5) Basic excise duty on branded homogenised or reconstituted tobacco is also being increased
from 50% to 60%.
6) Basic excise duty on items of other smoking tobacco (branded) is being increased from 34% to
40% while the duty on such unbranded tobacco is being increased from 8% to 10%.
7) Basic excise duty on smoking mixtures of pipes and cigarettes is being increased from 300% to
360%.
8) Basic excise duty on cut tobacco is being increased from Rs.50 per kg. to Rs.60 per kg.
a) full Cenvat credit on capital goods in one installment in the year of receipt of such
goods.
b) Facility of payment of excise duty on quarterly basis.
The above changes come into effect from 1st April, 2010 and will be applicable even if an eligible
unit opts not to avail of the SSI exemption.
2) While retaining the system of filing quarterly returns, the due date for filing of Central Excise
returns by SSI units is being advanced to the 10th of the month following the quarter.
3) The relaxation from brand name restriction under the general SSI exemption scheme is being
extended to plastic bottles and plastic containers used as packing material.
(i) Rs.500 per 10 gram to Rs.750 per 10 gram for gold jewellery; and
a) Replaceable kits for all household type water filters (except those operating on RO
technology)
b) Corrugated boxes/ cartons manufactured by stand- alone manufacturers
c) Latex rubber thread.
3) Excise duty on goods covered under the Medicinal and Toilet Preparations Act is being reduced
from 16% to 10% to bring it at par with standard Cenvat rate.
I. RATIONALIZATION MEASURES
1. At present, maize starch and tapioca starch are exempt from excise duty while potato
starch attracts 8% duty. Excise duty on all these starches is now being unified at 4%.
2. In the last budget, concessional rate of 4% excise duty applicable to the ceramic tiles
manufactured in kilns not using electricity was enhanced to 8% without Cenvat credit
facility. Since, ceramic tiles in general also attracted 8% excise duty (standard rate) with
Cenvat credit, this entry had become redundant. The rate of duty on all ceramic tiles,
regardless of the fuel used for firing the kiln, is now being unified at 10% with Cenvat credit
facility.
3. Umbrellas currently attract 4% excise duty while umbrella parts attract 8% excise duty and
umbrella cloth panels are fully exempt. The rate of excise duty on umbrellas and all
umbrella parts is being unified at 4%.
4. Currently, two different rates of excise duty (NIL and 4%) for rough ophthalmic blanks have
been prescribed under two different notifications. Redundant entry prescribing 4% is being
omitted.
J. WITHDRAWAL OF EXEMPTIONS/CONCESSIONS
1) Full exemption from excise duty on following items is being withdrawn. They will now attract
excise duty of 4%.
2) Full exemption from excise duty on baby & clinical diapers and sanitary napkins is being
withdrawn. These items will now attract duty at 10%.
3) Concessional rate of excise duty on open tin sanitary (OTS) cans is being withdrawn. OTS
cans will now attract duty at 10%.
4) Concessional rate of excise duty on goggles is being withdrawn except those used for
correcting vision. These items will now attract duty at 10%.
The above changes will come into effect on enactment of the Finance Bill.
1. Rule 11 (5) of the Central Excise Rules, 2002 is being deleted so as to dispense with the
requirement of pre-authentication of the invoice.
2. The Central Excise Rules, 1944, the Cenvat Credit Rules, 2000, the Cenvat Credit Rules
2001, the Cenvat Credit Rules 2002 and the Cenvat Credit Rules, 2004 are being amended
retrospectively w.e.f. 01.09.1996 to 31.03.2008 (for periods as applicable to respective rules)
to provide that where a manufacturer avails Modvat/Cenvat credit in respect of any inputs,
other than fuel, to manufacture both dutiable and exempted goods, he can opt to reverse
credit or pay an amount equivalent to credit attributable to inputs used for manufacture of
exempted goods. It is being further provided that such manufacturer shall pay interest @
24% p.a. from the date of clearance till date of reversal of the said credit or payment of
equivalent amount. Such option will, however, be available only in such cases where disputes
in this regard are pending on the date of enactment. This change will come into effect on the
enactment of Finance Bill, 2010.
3. Rule 3(5) of the Cenvat Credit Rules, 2004 is being amended to provide accelerated
depreciation in the case of computers and computer peripherals cleared after use at the
same rates as applicable for similar capital goods of EOU/EHTP/STP units under Notification
No. 52/2003-Customs.
4. Rule 4(5) (b) of the Cenvat Credit Rules, 2004 is being amended to permit sending of jigs,
fixtures, moulds and dies to a vendor for production of goods according to the specifications
of the principal manufacturer without reversal of credit.
Section 3 of the M&TP Act is being amended to exclude goods manufactured or produced by units
in SEZ from excise duty leviable under that Act. This change will come into effect on enactment of
the Finance Bill.
i. reassessment by the assessing authority on the basis of new facts discovered or revision by a
higher authority.
ii. Filing of appeals to the highest authority of every State against the orders made by assessing
authorities on issues involving stock transfer or interstate sale including incidental issues
relating to rate of tax, computation of assessable turnover, penalty and procedure.
iii. filing of appeal against any order passed by the highest appellate authority of a State on
disputes of interstate nature relating to stock transfer or consignments of goods to the CST
Appellate Authority.
2. Companies act
Banking laws
3. Interest act
Employee laws
Tax laws
3. Service tax
Consumer laws
Environment laws
2. Forest act
Dispute laws
1. SOVEREIGN 4. DEMOCRATIC
2. SOCIALIST 5. REPUBLIC and to secure
3. SECULAR
6. to all its citizens:
Fundamental rights are individual rights, while the directive principles are social rights.
As long as there is no conflict between the two, no problem arises.
When conflict between the fundamental rights and directive principle takes place, the question
is – which will prevail over the other?
To answer this question, there are three views as detailed below:
Subordination of Courts
For the purposes of the Civil Procedure Code, the District Court is subordinate to the High
court. The following Courts are subordinate both to the High Court and the District Court:
(a) Every Civil Court of a grade inferior to that of a District Court, and
(b) Every Court of Small Causes
DEFINITIONS
1. Offence
an evil intention or a knowledge of the wrongfulness of act, which means an act does not
constitute guilt unless it is done with a guilty intent, is the fundamental principal of penal
liability.
2. Bailable and non-bailable offences
Bailable offences
In bailable offences bail is granted as a mater of course.
The bail may be granted either by the police officer in charge of the accused person or by the
Court.
Non-bailable offences
In case of non-bailable offences bail is not granted as a matter of course, but it does not mean
that an accused person cannot be granted bail under any circumstances.
the Court or a police officer unfettered discretion to grant bail in case of non-bailable offences,
except where there appear reasonable grounds for believing that the accused person is guilty
of an offence punishable with death or imprisonment for life.
But a person under the age of 16 years or any women or any sick or infirm person may be
released on bail even if the offence be punishable with imprisonment for life or with death.
Anticipatory bail
It is a bail which is granted to a person who apprehends arrest but has not yet been arrested.
When any person has reason to believe that he may be arrested on an accusation of having
committed a non-bailable offence, he may apply to the High Court or the Court of Session.
The Court may, if it thinks fit, direct that in the event of such arrest, he shall be released on
bail subject to the following conditions, namely, that the person shall –
make himself available for interrogation by a police office as and when required;
not, directly or indirectly, make any inducement, threat or promise to any person
acquainted with the facts of the case so as to dissuade him from disclosing such facts to
the Court or to any police officer;
not leave India without the previous permission of the Court.
5. Inquiry means every inquiry, other than a trial, conducted under the Code by a Magistrate or
Court.
6. Investigation includes all the proceedings under this Code for the collection of evidence
conducted by a police officer or by any person (other than a Magistrate) who is authorised by a
Magistrate in this behalf.
7.Judicial proceedings includes any proceeding in the course of which evidence is or may be
legally taken on oath. It includes inquiry and trial but not investigation.
Locus Standi
Locus standi means ‗ right to move the court‘
Generally a person whose legal right is infringed alone has a right to move the court.
However, there are certain circumstances, in which any member of the public can have a right
to move the court
Public Interest Litigation
It is also known as Social Interest litigation
It means any public spirited citizen can move/approach the court for the public cause in the
interest of public welfare.
Today it has great significance and drew attention of all concerned
Constitutional Remedies
Constitution confers a fundamental right to an individual to move the court for enforcement of
fundamental right.
Also confers power on supreme court to issue various writs for enforcement of the fundamental
rights.
The Supreme Court can provide relief to Bonded Labour, under trial prisoners, victims of police
torture etc.
WRITS
Writ means an instrument or order of the court by which the court directs an individual
or official of an authority to do an act or abstinence.
Writs classified under the following heads.
1. - Habeas Corpus
2. - Mandamus
3. - Certiorari
4. - Prohibition
5. - Quo Warranto
2. Mandamus
It means ― we command‖
It is a Judicial Order issued in the form of a command to any Constitutional, Statutory or Non-
statutory authority asking to carry out of a public duty imposed by law or to refrain from doing
a particular act, which the authority is not entitled to do under law.
It is an important writ to check arbitrariness of an administrative action.
4. WRIT OF PROHIBITION
The writ of prohibition is issued to prevent the decision or administrative action in the process
so that it can not proceed further.
7 Rights
1. Right to Equality: This provides for equality before law and equal protection of laws
Equality before law means that among equals the law should be equal and should equally
administrate
In simple words all are equal before law and no one is above law
FUNDAMENTAL DUTIES
Rights and duties are correlative
Rights and duties exist side by side
No rights can exist without a correlative duty
The right of one may be the duty of other
To abide by the Constitution and respect its ideals and institutions, the National Flag and the
National Anthem;
To cherish and follow the noble ideals which inspired our national struggle for freedom;
To uphold and protect the sovereignty, unity and integrity of India;
To defend the country and render national service when called upon to do so;
To promote harmony and the spirit of common brotherhood amongst all the people of India
transcending religious, linguistic and regional or sectional diversities; to renounce practices
derogatory to the dignity of women;
To value and preserve the rich heritage of our composite culture;
To protect and improve the natural environment including forests, lakes, rivers and wild life, and
to have compassion for living creatures;
To develop the scientific temper, humanism and the spirit of inquiry and reform;
To safeguard public property and to abjure violence;
To strive towards excellence in all spheres of individual and collective activity so that the nation
constantly rises to higher levels of endeavour and achievement.
OBJECTIVE
The main objective of the fundamental duties is to remind/enlighten every citizen that, while
enforcing fundamental rights, he must also be conscious of his fundamental duties.
One can not enforce his fundamental rights without adhering to the fundamental duties.
Enforcement of Fundamental Duties
o The fundamental duties are statutory duties and are enforceable by a law passed by the
parliament.
They are imposed on the citizens and not upon the State, and hence, a legislation is necessary
to implement them.
For successful implementation of the fundamental duties, every effort should be made to make
the public know/realize the importance of the fundamental duties.
Since most of the people in our country are illiterates, wide publicity should be given by a
systematic and intensive education to the people.
The legislative, executive and financial authority is divided between the Centre and the states.
Therefore, the centre – State relations may be explained with reference to the following heads.
1) Legislative relations
2) Administrative relations
3) Financial relations
LEGISLATIVE RELATIONS
The distribution of powers between the Union and the states is contained in three list
1) the union list,
2) the state list
3) the concurrent list
The union list consists of 97 subjects the state list consists of 66 subjects and the concurrent
list consists of 47 subjects.
The union parliament is empowered to make laws in respect of the subjects of national
important viz, defence, foreign affairs etc, contained in the union list
The state list contains the subjects of local importance viz. public order and police, agriculture,
forest etc. and the legislature of the state concerned is empowered to make laws.
The concurrent list consists of 47 subjects in respect of which both the centre and state can
make laws.
In the event of conflict between the two, central laws prevails over the state law.
ADMINISTRATIVE RELATIONS
The constitution lay down the provisions relating to ‗ Administrative relations‘ between the union and
states, as stated hereunder.
1. Direction by the union to states
2. Delegation of authority
3. All-India services
4. Grants-in-aid
5. Disputes relating to Water
FINANCIAL RELATIONS
The constitution deal with financial relations of the union and the states.
For smooth and successful conduct of the legislative and executive relations, there must exist
financial authority.
In India, the scheme of distribution of sources of revenue between the central and the state is
based on the scheme laid down in the Government of India Act, 1935
profits of the property till the ownership thereof passes to the buyer
1. Delivery of possession
Sellers Right : Where the ownership of the property has passed to the buyer before payment of the
whole of the purchase money, the seller is entitled to the lien or charge upon the property in the
hands of the buyer. This right of the seller is known as sellers lien.
Buyers liability
Buyers rights: Where the ownership of the property has passed to the buyer, he is entitled to the
benefit of any improvement in , or increase in value of the property. He is also entitled to the rents
Types Of Mortgage
1. Simple mortgage
2. Mortgage by conditional sale
3. Usufructuary mortgage (mortgage with possession)
4. English mortgage
5. Mortgage by deposit of title deeds
6. anomalous mortgage
1. Simple Mortgage
The mortgagor, without delivering possession of the mortgaged property, gives a personal
understanding to the mortgagee to repay the amount due under the mortgage.
The personal understanding to pay may be either express or implied.
4. English Mortgage
In case of an English mortgage, the mortgagor binds himself to repay the mortgage-money on a
certain date.
He transfers the mortgaged property absolutely to the mortgagee on the condition that the
mortgagee will transfer the property to the mortgagor upon payment of the mortgage-money.
6. Anomalous Mortgage
A mortgage which does not belong to any on the above categories is called an anomalous mortgage.
Right of Redemption : The mortgagor may redeem every transaction in the nature of a mortgage at
any time after the mortgage money becomes due.
1. This right of the mortgagor to call back the property ( or interest therein which he had parted
with at the time of mortgage) by paying of the mortgage-money is called the Right of
Redemption.
2. Right of assigning the mortgage instead of a retransfer
3. Right of inspection and production of documents
4. Right to redeem separately or simultaneously
5. Right of usufructuary to recover possession
6. Right to accession to mortgaged property
7. Right to improvement to mortgaged property
Liabilities of mortgagor
1) Covenant for title
2) Covenant for defense to title
3) Covenant for payment of public charges
4) Covenant where the mortgaged property is a lease
5) Covenant for payment of prior incumbrances.
Right of Mortgagee
Liabilities of Mortgagee
1. Only one suit for several mortgages
2.Liabilities of mortgagee in possession
a) Management
b) Collection of rents and profits
c) Payment of revenue
d) Repairs
e) Destructive acts
f) Insurance
g) Accounts
Charge
Means the immovable property which serves as a security for a monitory or other benefit.
The essentials of a charge are
1. It must be a immovable property
2. It must be a security for payment of money or other favour/benefit
3. The charge may be created by act of parties or it may come into existence by operation of law.
Mortgage
1. 1.It is transfer of an interest in specific immovable property made by a mortgagor as a security
for the loan
2. It is created by act of the parties
3. It can be enforced against any transferee whether he takes it with or without notice of the
mortgage
4. In a mortgage by conditional sale or in an anomalous mortgage, the mortgagee can foreclose
the mortgaged property.
5. In a mortgage, there can be security as well as personal liability
Charge
1. It does not involve transfer of any interest in the property although it serves as a security for
the payment of the loan
2. It may be created by act of the parties of by operation of law
3. It cannot be enforced against bonafide transferee for consideration having no notice of charge
4. A charge-holder cannot foreclose the property on which he has a charge. He can however get
the property sold as in a simple mortgage
5. In a charge created by act of the parties when a particular property is specified, the remedy of
the charge-holder is against the property only.
Exchanges
When two persons mutually transfer the ownership of one thing for the ownership of another, the
transaction is called an exchange.
Exchange is thus a transfer of one thing for another. The things exchanged may be movable or
immovable, tangible or intangible. On the execution of the exchange, each party acquires a
good little to the thing or property exchanged.
Gift :A gift can be made only of a property which is in existence at the time and date of the gift.
Transfer of property must be made voluntarily
The gift must be accepted by the done otherwise it is not valid
Gift how effected
Movable property – Transfer is effected by delivery
Immovable property – Transfer must be effected by a registered instrument
1. Based on prevailing market price as on day of declaration of acquisition, and registered with
registrar of surrounding area.
2. Based on 20 times the rental/ annum being obtained.
3. Based on assessment existing assets, property, plantation potential with/with out irrigation etc
and revenue returns in 20 years.
4. Acquisition cost + exgratia + solarium 100%+33%+33% to avoid party entering into litigation.
5. Negotiations‘.
Sub- Registrar
Inspector of Registration Offices
Confirmation of registration
REGISTRABLE DOCUMENTS
Instruments of gifts of immovable property
Power-of-attorney
A power of attorney (POA) or letter of attorney in civil law systems is an authorization to act
on someone else's behalf in a legal or business matter.
The person authorizing the other to act is the Principal (granter or donor of the power), and
the one authorized to act is the Agent,
Power of attorney means an instrument empowering a specific person to act for and in the
name of a person executing it.
MRTP COMMISSION
The commission consists of a Chairman and not less than two or not more that eight other
members.
TERMS OF OFFICE
The term of office of a member is fixed at 5 years subject to renewal
OBJECTS
i. to protect against marketing of goods and services, which are hazardous to life and property.
ii. to inform about the quality, quantity, potency, purity, standard and price of goods, or services
so as to protect the consumer against U.T.P.
iii. to assure, wherever possible towards access to the variety of goods and services at
competitive prices.
iv. to hear and to assure that consumers interest will receive due consideration at appropriate
forums
v. to seek redressel against Unfair Trade Practices (U.T.P) or Restrictive Trade Practices (R.T.P)
and unscrupulous exploitation of consumers
vi. to educate consumers
These objectives are based on the basic right of consumers' as defined by the international
organization of consumers namely the right to safety, to information, of choice, to be heard, to
redressal, to consumer education, to healthy environment and to basic needs.
Definition of Important Terms
1. COMPLAINANT
Complainant means a consumer or any voluntary consumer association registered
Having purchased the goods/ hire the s services should have a common cause of action.
2. COMPLIANT
Any allegation in writing made by a complainant that an U.T.P. or a R.T.P. has been adopted
by any trader;
the goods bought by him or agreed to be bought by him suffers from one or more defects.
3. CONSUMER
Any person who
(i) buys any goods for a consideration
(ii) Hires or avails of any services for a consideration which has been paid or promised or
partly paid and partly promised
Consumers Dispute
means dispute, where the person against whom a compliant has been made, denies or disputes the
allegations contained in the complaint.
Restrictive Trade Practice means any trade practice which requires a consumer to buy, hire, of any
goods or, as the case may be, or avail services as a condition precedent for buying, hiring or availing
of other goods or services.
Contract of Sale - A contract of sale of goods is a contract whereby the seller transfers or agrees to
transfer the property in goods to the buyer for a price.
The contract of sale is between one part- seller and another part-buyer.
―Buyer‖ means a person who buys or agrees to buy goods. ―Seller‖ means a person who sells or
agrees to sell goods.
A contract of sale may be absolute or conditional.
In brief
It is of ‗goods‘ * Transfer of property is required * Contract is between buyer and seller * Sale should
be for ‗price‘
How Contract of sale is made
A contract of sale is made by an offer to buy or sell goods for a price and the acceptance of such
offer.
The contract may provide for the immediate delivery of the goods or immediate payment of the
price or both, or for the delivery or payment by instalments, or that the delivery or payment or
both shall be postponed.
POSSESSION AND PROPERTY - Note that ‗property‘ and ‗possession‘ are not synonymous.
Transfer of possession does not mean transfer of property.
e.g. - if goods are handed over to transporter or godown keeper, possession is transferred but
‗property‘ remains with owner.
Similarly, if goods remain in possession of seller after sale transaction is over, the ‗possession‘ is
with seller, but ‗property‘ is with buyer.
Goods - ―Goods‖ means every kind of movable property other than actionable claims and
money; and includes stock and shares, growing crops, grass, and things attached to or forming
part of the land.
Price - ―Price‖ means the money consideration for a sale of goods.
Consideration is required for any contract. However, in case of contract of sale of goods, the
consideration should be ‗price‘ i.e. money consideration.
Ascertainment of price
The price in a contract of sale may be fixed by the contract or may be left to be fixed in manner
thereby agreed or may be determined by the course of dealing between the parties.
Where the price is not determined in accordance with the foregoing provisions, the buyer shall
pay the seller a reasonable price.
Transfer of property as between seller and buyer Transfer of general property is required in a
sale. ‗Property‘ means legal ownership.
It is necessary to decide whether property in goods has transferred to buyer to determine
rights and liabilities of buyer and seller.
Generally, risk accompanies property in goods i.e. when property in goods passes, risk also
passes.
Auction Sale
Auction sale is special mode of sale.
The sale is made in open after making public announcement.
Buyers assemble and make offers on the spot.
Person offering to pay highest price gets the goods.
Higher and higher bids are offered and sale is complete when auctioneer accepts a bid.
In the case of a sale by auction—
1. Where goods are put up for sale in lots, each lot is prima facie deemed to be the subject of a
separate contract of sale;
2. The sale is complete when the auctioneer announces its completion by the fall of the hammer
or in other customary manner; and, until such announcement is made, any bidder may retract
his bid;
3. A right to bid may be reserved expressly by or on behalf of the seller and, where such right is
expressly so reserved, but not otherwise, the seller or any one person on his behalf may,
subject to the provisions hereinafter contained, bid at the auction;
4. Where the sale is not notified to be subject to a right to bid on behalf of the seller, it shall not
be lawful for the seller to bid himself or to employ any person to bid at such sale
5. The sale may be notified to be subject to a reserved or upset price;
6. If the seller makes use of pretended bidding to raise the price, the sale is voidable at the option
of the buyer.
Objective
To regulate certain payments, dealings in foreign exchange and securities, transactions
indirectly affecting foreign exchange and the import and export of currency, for the
conservation of the foreign exchange resources of the country and the proper utilization
thereof in the interests of the economic development of the country.
Applicability
It extends to the whole of India.
It applies to all citizens of India outside India and to branches and agencies outside India of
companies or bodies corporate, registered or incorporated in India.
Definitions
1. "foreign exchange" means foreign currency and includes -
2. all deposits, credits and balances payable in any foreign currency, and any drafts, traveller's
cheques, letters of credit and bills of exchange, expressed or drawn in Indian currency but
payable in any foreign currency;
3. any instrument payable, at the option of the drawee or holder thereof or any other party
thereto, either in Indian currency or in foreign currency or partly in one and partly in the other;
Penalty
If any person contravenes any of the provisions of this Act he shall be liable to such penalty not
exceeding five times the amount or value involved in any such contravention or five thousand rupees,
whichever is more, as may be adjudged by the Director of Enforcement or any other officer of
Enforcement ..
Penalty for contravention of direction of Reserve Bank or for failure to file returns
Any authorised dealer contravenes any direction given by the Reserve Bank under this Act or
fails to file any return as directed by the Reserve Bank, the Reserve Bank may, after giving a
reasonable opportunity of being heard impose on the authorised dealer a penalty which may
extend to ten thousand rupees.
Factors to be taken into account by the Central Government and the Reserve Bank while giving
or granting permissions or licences under the Act
The Central Government or the Reserve Bank, as the case may be, shall, while giving or
granting any permission or licence under this Act, have regard to all or any of the following
factors, namely:-
1) conservation of the foreign exchange resources of the country;
2) all foreign exchange accruing to the country is properly accounted for;
3) the foreign exchange resources of the country are utilised as best to subserve the
common good; and
4) such other relevant factors as the circumstances of the case may require.
Objective : To facilitate external trade and payments for promoting the development and
maintenance of Foreign exchange market in India
Applicability : it extends to the whole of India. It also applies to all branches, offices and agencies
outside India owned or controlled by a person resident in India.
Definition
A ‗person‘ includes (i) an individual (ii) a Hindu undivided family (iii) A company (iV) a firm or
(v) an association of persons or a body of individuals, whether incorporated or not. (vi) Every
artificial judicial person.
AUTHORISED PERSON
An authorised person means an authorised dealer, moneychanger, offshore banking unit or
any other person being authorised under the act to deal in foreign exchange or foreign
securities
PENALTIES
A person contravening any provision of the Act, rule, regulation, notification, direction or order
issued by Government/RBI is liable to a penalty up to thrice the amount involved in such
contravention where such amount is quantifiable, or up to 2 lakhs.
FERA
Regulating certain payments, dealings in foreign exchange and securities, transactions affecting
foreign exchange and the import and export of currency for the conservation of the foreign exchange
resources of the country
FEMA
facilitating external trade and payments and for promoting the orderly development and
maintenance of foreign exchange market in India
FERA
prohibit almost all foreign exchanges transactions unless there is general or specific permission to
do so may be subject to certain conditions.
FEMA
all current transactions are permissible by the law and it is a positive law
FERA
criminal nature,
There is presumption of existence of guilty mind
FEMA
civil nature,
The prosecution will have to prove that the person has committed an offence
FERA
Empowers the enforcement officer to arrest a person
FEMA
In case penalty is not paid then only the person will be arrested
PROHIBITED ITEMS
a) Wild animals and their parts
b) Restricted items : This needs licence for items like chemical fertilizers, industrial leather,
minerals etc.
c) Import of Gold and Silver : only government and other authorized agencies are permitted
1
Act & Subject Particulars
Act & Subject Particulars Factories Act. 1948
Factories Act. 1948 14) Working hours Normally 48 hours in a week and 9 hours a day. Form No. 11
11) Latrines & One flush-out for every 25 workers. One urinals for every 50 containing No. of shifts, relays and Timings to be displayed.
Urinals workers. If a worker is engaged more than 9 hours in a day, entitled to
OT wages @ double the ordinary rate of wages. OT not to
exceed 8 hours in a day and 50 hours in a quarter.
12) First Aid One box for every 100 workers. Ambulance room in case of 15) Compensatory number of compensatory holidays within two months.
appliance 500 or more. Qualified doctor & staff to be employed. holiday and work
on weekly holidays
13) Shelters, Rent Rest room with back rest benches and drinking water facility 16) Annual leave An employee worked for 240 days in a calender year is
Rooms and Creche if there are 100 or more workers. Creche if 5 or more women with wages eligible for 12 days leave with wages @ one day for every 20
workers engaged. days of work to be availed in the following calendar year.
Registers to be maintained in Form 25 (Attendance Register)
Canteen If there are 250 or more workers and Form 16 (Leave Register)
17) Returns Half-yearly returns in July and Annual Returns in January in
Form N0.22&21.
Welfare Officer If there are 500 or more workers employed
2
Act & Subject Particulars Act & Subject Particulars
Contract Labour (Regulation & Contract Labour (Regulation &
Abolition Act. 1970 Abolition Act. 1970
1) Object To minimise exploitation of labour engaged 5) Principal employer Ultimately it is principal employer's
through contractors. responsibility responsibility to make sure that each contractor
2) Application To every contractor and principal employer who employed by him takes care of the payment of
engage 5 or more persons as contract labour. minimum wages, ESI and PF coverage and other
welfare amenities similar to that prescribed
3) License to Contractor Every contractor needs license to take up
under factories Act.
Contract works in any establishment and he has
to apply in Form No.4. The Principal employer to 6) Contractor's half yearly* In the month of July & January Form No.24
issue certificate in Form No. 5 to enable the return
contractor to obtain licence from Asst. Labour
Commissioner. Renewed once in a year. 7) Principal Employer To the local Asst. Labour Commissioner by 15th
4) Registration to employer The employer to apply for Registration in Form Annual return February of every year Form No. 2 5.
to engage labour through No. 1 to Asst. Labour Commissioner
the contractor 8) Register of Contractors Principal Employer to maintain a register in
Form XII furnishing details of contractors.