Generally speaking, the word 'income' covers receipts in the shape of money or money's worth which arise with certain regularity or expected regularity from a definite source. It is not all receipt that form the basis of taxation under the Act. Broadly, an analogy is drawn of a tree and the fruits of that tree. The tree symbolises the source from which one gets fruits which symbolise 'income'. The receipt arising from the sale of tree itself is, therefore, considered a capital receipt which is not income; but the receipts flowing from this source viz., fruits is income. On application of this analogy, it can be said that while the receipt arising from the sale of a house is not income, the receipt arising from the realisation of rent is income. In the same way, receipt from the sale of a machine is not income but from the sale of product brought out from the machine is income. In these cases, however, if a person deals in purchase and sale of house properties or machines, these assets do not remain a source and the profit derived from activities of purchase and sale become income. The source need not necessarily be tangible as the return for human exertion is also income.

The above is abroad generalisation. While a distinction is generally made between the capital receipt and revenue receipts, as illustrated above, the Act has widened the scope of income by expressly including within the meaning of 'income' the receipts which do not fall under the broad concept explained above. For instance, the Act specifically makes the profit arising from the sale of certain capital assets also subject to tax under certain circumstance. The winnings from lotteries, cross-word puzzles, races, card games etc. which do not arise from any definite source and do not have the element of regularity have also been specifically clarified to be 'income' under the Act.

It is not the gross receipts but only the net receipts arrived at after deducting the related expenses incurred in connection with earning such receipts that are made the basis of taxation.

The tax is charged in respect of the income of the previous year and the same is chargeable in the assessment year. "Previous year" means the financial year i.e. the period beginning on April 1 and ending on March 31. The return of income for this period is due in the next financial year called the Assessment Year in which the proceedings for assessment commence either by filing of return voluntarily by the income earner or by the Income Tax Department initiating action for calling the return. The income earned in the period beginning on 1st April 1995 and ending on 31st March 1996 will, for instance, be assessable earliest in the next financial year i.e. the year 1996-97.

The Act categorises the income of a person under different heads and provides for the manner of computation of taxable income of each head. These heads of income are:

i) Salaries
ii) Income from house property,
iii) Profits and gains of business or profession,
iv) Capital gains, and
v) Income from other sources

All receipts having the character of income are taxable unless they are specifically exempted from taxation.

The total of the income under each head as worked out in accordance with the provisions of the Act is termed as 'gross total income'. The act provides for certain deduction from such gross total income. These deductions are not referable to any particular head of income, but are allowed from the aggregate of income under all the heads and are in the nature of incentive provisions of different kinds. For example, deductions are allowed for promotion of charitable activities, promoting exports and other activities resulting in the inflow of foreign exchange, for development of industries and for other socio-economic objectives. Incentives for promotion of savings are provided in the form of deduction in tax liability by grant of rebate at certain percentage on certain savings made out of taxable income.

After reducing the 'gross total income' by the amount of incentives deductions mentioned in the preceding paragraph. What is left is the amount on which tax is to be calculated at the rates prescribed by the relevant Finance Act. This amount is termed as 'Total income' and is the base for taxation. For certain categories of tax payers, a basic exemption limit is provided and tax is calculated only on that part of the total income which is in excess of such exemption limit. If such 'Total income' is below the basic exemption limit, no tax is chargeable. For instance, under the Finance Act, 2000, no tax is payable by an individual if his total income is below Rs. 50,000/-. The rates of taxation and the exemption limit applicable to different categories of Assessees are given in Chapter XIII.

Clubbing of Income

The total income of an individual also includes certain income of other persons. These are:-

(a) income of spouse

(i) remuneration derived from the concern in which the individual is substantially interested unless the remuneration is by virtue of the application of technical or professional skill possessed by him or her.

(ii) assets transferred by the individual to the spouse or to any other person for the benefit of the spouse unless the transfer is for adequate consideration or in consideration of an agreement to live apart.

(b) income of son's wife from assets transferred by the individual to her or to any other person for her benefit unless the transfer is for adequate consideration.

(c) income of his minor child -other than the minor child suffering from disability except when such income arises to the child on account of any manual work done by him or on account of any activity which involves application of any skill, talent or specialised knowledge and experience.

The individual in whose income the income of other spouse as mentioned in (a) (i) above is to be included will be the husband or wife whose total income - before including such remuneration income - is greater. Similarly the income of minor child is to be included in the income of the parent having greater income. If the marriage of the parents does not subsist, it will be parent who maintains the child.

Assessees

The persons who are liable to pay income tax and against whom proceeding for assessment are taken under the Act, are known as' Assessees ' .These persons can be natural persons or artificial juridical persons like, corporations, local authorities etc. For the purpose of assessment, two or more persons earning income jointly also form a separate entity 'firm' or 'association' or persons'. The persons forming an assessable entity can be

i) an individual,
ii) a Hindu Undivided Family,
iii) a corporation,
iv) a firm,
v) an 'association or persons' or 'body of individuals',
vi) a local authority,
vii) any other artificial juridical person not falling in any of the above categories.
Different rules for computation of income and tax exist for different types of persons.

All the people, are further categorised on the basis of their residence in the taxable territory i.e. India: The residential status of a person is necessary to be known, as the tax liability is dependent on such status. Based on residence, a person can be:

i) resident; or
ii) non-resident

In order to be a resident, an individual should have been present in India in the previous year for at least 182 days. This period of 182 days need not be continuous. Special rules exist for the person who left India in any earlier year and has been visiting India so that his total stay in the preceding four years has been at least 365 days. Such a person is considered resident even if in the previous year under consideration, he stays in India for 60 days only. This rule, however, does not apply to a member of the crew of an Indian ship and to a citizen of India or a person of an Indian origin (known as Non-resident Indian). The residence of such persons is under all circumstances governed by the general condition i.e., they become residents only if their stay in any particular year is 182 days or more.

2.3.1 We may take a few instances to make the position clear :-

a) A person leaves India for the first time on 1st August, 1996 and remains out of India in the remaining part of the financial year. His period of stay in India in the previous year 1996-97, being less than 182 days, he is not a resident for that year.

b) A person leaves India in December 1996 and continues to remain abroad in the remaining part of the financial year. His period of stay in India being more than 182 days, he will be a 'resident' in the previous year 1996 -97.

c) A person leaves India in 1993. In the financial year 1993-94 to 1996-97 he visited India several times and the total period of stay during these four years was 400 days. During the financial year 1997-98, he came to India for total period of 180 days. Although his stay in India in the financial year 1997-98 is less than 182 days, he becomes a 'resident' by virtue of the fact that his stay in the preceding four years was more than 365 days and he was in India for more than 60 days in the year under consideration.

d) In the above examples, if the person was a member of the crew of an Indian ship or a citizen of India or a person of Indian origin, he would not have become a 'resident' for the year 1997-98 since his period of stay in India in that year was less than 182 days.

A 'firm' or 'an association of persons', is generally 'resident.' The only exception is a firm whose control and management during the year is wholly from outside India.

A company is 'resident' if it is an Indian Company. All the companies formed and registered in India under the Indian Companies Act and the Government corporations are 'Indian companies'. Even the company registered outside India can be resident if the control and management of its affair during that year is wholly from India.

All those persons who are not 'residents' are called 'non-residents'.

There is a special Category of 'resident' persons, known as 'not ordinarily residents' in India. This category is carved out of the category of residents for those who have for a long time remained out of India and for reason of the prescribed period of stay in any particular year acquire the status of resident in that year. This is to ensure that they are not saddled with higher tax liability of a resident by casual change in status. In order to fall in this category, one must satisfy either of the following two conditions:

a) he should not have had the status of 'resident' in nine out of ten preceding previous years; or

b) he should not have stayed in India for an aggregate period of 732 days or more in the preceding seven previous years. ,

A person, for example, who went out of India in April, 1984 and was non resident for 84-85 to 92-93 will, even if he remains in India for 182 days in 93-94 and becomes resident in that year, get this special category of 'not ordinarily resident' because he was not 'resident' in nine out of preceding ten years.

Based on the residential status of a tax payer and the place where the income is earned, the income that is included in the total income is as under:-

Residential status Nature of income
1. Resident
All income whether earned in India or
outside India.
2. Not ordinarily resident All income:
i) earned in India; and
ii) all income earned outside India if the same is derived from a business which is controlled in India or from a profession which is set up in India.

3. Non-resident All income earned in India.

Since a 'resident' is liable to pay tax in India on his 'total world income', it is possible that he may have to pay tax on his foreign income in that country also, where it is earned. Such situation leads to double taxation of the same income -in India and again in the country where it is earned. To avoid such a situation, the Government of India has entered into agreements for avoidance of double taxation with different countries.

Special Provisions Applicable To Non-Residents

A person who is non-resident is liable to tax on that income only which is earned by him in India. Income is earned in India if:

i) It is directly or indirectly received in India; or
ii) It accrues in India or the law construes it as having accrued in India.

The following are some of the instances when the law construes and income to have accrued in India:

i) Income from business arising through any business connection in India (refer Chapter X);

ii) Income from property if such property is situated in India;

iii) Income from any asset or source if such asset or source is in India;

iv) Income from salaries if the services are rendered in India. In such cases salary for rest period or leave period will be regarded as earned in India if it forms part of service contract;

v) Income from salaries payable by the Government to a citizen of India even though the services are rendered outside India;

vi) Income from dividend paid by an Indian company even if the same is paid outside India;

vii) Income by way of interest payable by the Government or by any other person in certain circumstances

viii) Income by way of Royalty if payable by the Government or by any other person in certain circumstances

ix) Income by way of fees for technical services if such fees is payable by the Government or by any other person in certain circumstances

The following income, even though appearing to be arising in India, are construed as not arising in lndia:

i) If a non-resident running a news agency or publishing newspapers, magazines etc earns income from activities confined to the collection of news and views in India for transmission outside India, such income is not considered to have arisen in India.
ii) In the case of a non-resident, no income shall be considered to have arisen in India if it arises from operations which are confined to the shooting of any cinematography film. This applies to the following types of non-residents:

a) Individual who is not a citizen of India; or

b) Firm which does not have any partner who is a citizen of India or who is resident in India; or

c) Company which does not have any shareholder who is resident in India.

To avoid difficulties in working out the net income of a non-resident from his gross receipts in India, the law provides for taxation or most of the income of non-resident on 'Gross income basis', which means that the tax liability is determined on the basis of gross receipts without going into the question of expenses incurred in earning those receipts. Such 'Gross receipt basis' taxation operates in two ways.

a) By laying down the rate of tax to be applied on gross receipts. The rates are determined at a figure lower than the general rate of tax applicable to total income as it takes account of the possible expenses in earning the income. Such provisions are:

(i) Tax on dividend (other than dividend from domestic companies), interest, royalty, fee for technical services and income from Units (Sec 115A).

(ii) Tax on income and capital gain in respect thereto from units purchased in foreign currency by off shore funds (Sec 115AB).

(iii) Income and capital gain in respect thereto from bonds and shares purchased in foreign currency or acquired in resulting or amalgamated company as a result of demerger or amalgamation (Sec 115AD).

(iv) Tax on income other than dividend of Foreign Institutional Investors from Securities & Capital gains arising from their transfer (Sec 115AC).

(v) Income of sportsman or Sports association (Sec 115BBA).

b) By laying down a percentage to be applied on gross receipts to determine the net income. The tax is then calculated at the normal rate of tax on such presumptive income. Such provisions are:

i) Profits of shipping business (Sec 44B).
ii) Profits of business of providing services etc to be used in the business of prospecting, exploration or production of mineral oils (Sec 44BB).
iii) Profits from operation of aircraft (Sec 44BBA).
iv) Profit from business of civil construction etc in certain turnkey power projects (Sec 44BBB).

Non-Resident Indians

With a view to attract investment by Non-resident Indians and Indian Nationals living abroad, special provisions exist providing incentives in the form of reliefs and concessional tax rate as also simplifying the tax assessment procedure for such persons. Non-resident Indian has been defined as an individual, being a citizen of India or a person of Indian origin, who is not a resident. A person is of Indian origin if he or his parents or any of his grand parents was born in undivided India.

Provisions for tax avoidance

When in a business carried on between a resident and non-resident, the course of business is arranged in a manner that the business produced to the resident either no profits or less than the ordinary profits, the Assessing Officer would determine the profits which may reasonably be deemed to have been derived there from. This problem arises where the dealings between the two are not at arms length and arrangement through transfer pricing is resorted to reduce the profit taxable in India. In such situations, the assessing officer can take recourse to estimation of income of any rational basis. Rules 10 and 11 of Income Tax Rules govern the estimation of income on any rational basis. Rules 10 and 11 of Income Tax Rules govern the estimation of such income.

Assessment of non-residents through 'Agents' (Sec 163)

A non-resident may be assessed to tax in India either directly or through agents. Persons in India who may be treated as 'agent' of a non-resident are:

i) Employee or trustee of the non-resident:

ii) Any person who has any business connection with the non-resident;

iii) Any person from or through whom the non-resident is in receipt of any income;

iv) Any person who has acquired a capital asset in India from the non-resident.

A broker in India who has independent dealings with a non-resident broker acting on behalf of a non-resident principal is, however, not treated as an 'agent' of the non-resident, if the transactions between the two brokers are carried on in the ordinary course of their business. Before any person is treated as an 'agent' of non- resident, he is given an opportunity of being heard and any representation from him in the matter is considered.

6.7 Tax clearance certificate before departure from India

The following categories of persons are required to produce a tax clearance certificate from the concerned assessing officer prior to their departure:

a) Persons who are not domiciled in India, and in whose case the stay in India has exceeded 120 days;

b) Persons of Indian or non-Indian domicile whose names have been communicated to the airlines, shipping companies by the Income Tax authorities;

c) Persons who are domiciled in India at the time of their departure; but

i) Intend to leave India as emigrants; or

ii) Intend to proceed to another country on a work permit with the object of taking any employment or other occupation in that country; or

iii) In respect of whom circumstances exist, which in the opinion of the income tax authorities render it necessary for him to obtain the Tax Clearance Certificate.

Such certificates are granted where there are no outstanding taxes under the Income Tax Act, the Excess Profits Tax Act, the Business Profits Tax Act, the Wealth Tax Act, the Expenditure Tax Act or the Gift Tax Act against him or where satisfactory arrangements have been made for the payment of any such taxes. Obtaining guarantee from the employer of the person leaving the country is one of the methods of ensuring satisfactory arrangement for payment of taxes. For those who have to go abroad frequently for employer's work, facility of one-time Clearance Certificate has been provided to the foreign employee who has a fixed tenure of service in India or upto five years on furnishing an employer's guarantee in the prescribed form for payment of any tax that may be found due against him during the entire period of contract plus two years.

Advance Rulings

With a view to avoiding dispute in respect of assessment of income tax liability in relation to the transaction undertaken by or with a non-resident, a scheme of Advance Ruling has been introduced in the Income Tax Act, 1961. The Scheme now enables the parties to obtain, in advance, a binding ruling from the Authority for Advance Rulings on issues which could arise in determining their tax liabilities.

Such Advance ruling:

i) Helps non-residents in planning their income tax affairs well in advance.

ii) Brings certainty in determining tax liability.

iii) Helps avoiding long drawn and expensive litigation.

The advance ruling can be sought on any question of law or fact specified in the applications in relation to the concerned transaction. Advance ruling cannot, however, be sought where the question:

i) Is already pending in the case of the applicant before any income tax authority, the Appellate Tribunal or any court; or

ii) Involves determination of fair market value of any property; or

iii) Relates to a transaction which is designed prima facie for avoidance of income tax.

The applicant may seek advance ruling by making an application to the Authority in quadruplicate in the prescribed Form No 34C either in the person or by an authorised representative or by registered post. The applicant is entitled to represent his case before the Authority either personally or through an authorised representative. If the applicant desires to be represented by an authorised representative, a duly authenticated document authorising him to appear for the applicant should be enclosed. The applicant may withdraw his application within 30 days from the date of filing the application.

The application should be accompanied by a fee of Rs2,500 (two thousand five hundred Indian rupees) through a bank draft drawn in favour of the Authority for Advance Ruling payable at New Delhi.

The advance ruling is required to be pronounced by the Authority within six months of the receipt of the application.

Advance ruling pronounced by the Authority would be binding in respect of the transaction(s) in relation to which ruling has been sought:

i) On the Commissioner and the income tax authorities subordinate to him in respect of the applicant; and ,

ii) On the applicant who had sought it.

Deduction of Tax at Source from payments to Non-residents

Any person responsible for making any payment (except dividend declared after 1.6.97) to a non-resident individual or a foreign company is required to deduct tax at source at the prescribed rate at the time of credit of such income to the account of the payee or at the time of payment thereof. If, however, person responsible for making the payment is the government, public sector bank or public financial institutions, deduction is to be made at the time of payment only.

Where the person responsible for making such payments considers that the whole of such sum would not be income chargeable in the case of recipient, he may make an application to the assessing officer to determine the appropriate proportion of such sum which will be chargeable to tax and upon such determination tax is required to be deducted only on the chargeable proportion.

The rate at which tax is to be deducted at the source will be the rates as specified in the Finance Act of the relevant year (refer para 13.3) or the rate specified in any agreement for avoidance of double tax whichever is beneficial to the assessee.

In respect of income of the nature arising to Offshore Funds, tax is deductible at the rates at which such income is taxable.

For certain remittances, the Reserve Bank of India Exchange Control Manual requires production of a no objection certificate from the Income-tax authorities. The Central Board of Direct Taxes, vide circular No.759 and 767, has simplified the procedure by dispensing with such requirement.

The person making the remittance has only to furnish an undertaking (in duplicate) addressed to the Assessing Officer which should be accompanied by a certificate from a Chartered Accountant in the prescribed form. The undertaking should be submitted to the Reserve Bank of India or the authorised dealer in foreign exchange who will forward a copy to the assessing officer.

Any tax deducted in excess of the required amount is normally refundable to the non-resident on making a proper claim for it. Sometimes the non-resident returns the amount in respect of which tax was deducted or, circumstances occur in which tax is found to be non-deductible or, in which tax is found to have been deducted in excess and the non-resident is either not able to claim refund or does not show initiative in claiming such refund. In such cases, the CBDT has by circular No.790 dated 20.4.2000 permitted refund of excess tax to the person making the deduction.

Tax Procedures

Filing of Returns

Under the provisions of the Income Tax Act, tax payers are required to file their returns of income for the assessment year 1994-95 and subsequent years on or before the dates mentioned below:-

a) Where the assessee is a company, the 30th day of November of the assessment year;

b) Where the assessee is a person, other than a company

i) in a case where the accounts of the assessee are required under the I. T. Act or any other law to be audited or where the report of an accountant is required to be furnished under section 8OHHC or section 80HHD or where the prescribed certificate is required to be furnished under section 80R, 80RR or section 80RRA or in the case of a cooperative society, the 31st day of October of the assessment year;

ii) in a case where the total income includes any income from business or profession, and there is no requirement of getting the accounts compulsorily audited or of furnishing a report or certificate as mentioned in (i) above, the 31st day of August of the assessment year;

iii) in any other case, the 30th day of June of the assessment year.

Consequence of Default of Delay

Delay in furnishing the return attracts charge of interest at the rate of 1.5 per cent, for every month or part of a month for the period of delay on the amount of tax found due on the processing of return or on regular assessment after giving credit for advance tax and tax deducted at source. In case of failure to file the return such interest is to be calculated upto the date of best judgement assessment under sec. 144.

A person liable to tax is required to file a return of income with the Assessing Officer having jurisdiction over his case. The return forms for the purpose can be obtained from any Income Tax Office or from a specified Post Office. The assessee before filing the return is expected to compute the tax on his returned income by way of self-assessment and if there is any additional liability of tax, the assessee is required to pay the same. The unpaid tax if any is recovered according to the procedure specified in the Act.

For the convenience of non-residents liable to Indian Income Tax, Non- residents Circles have been created in big cities namely, Mumbai, Delhi, Calcutta, Chennai, Cochin and Ahmedabad. Any person who is a non-resident and has not yet been assessed to tax any where in India, may file his income tax return in any of the above mentioned Non-resident Circles. However, once he files return in any of these Circles, Jurisdiction over his case will continue to be with circle unless it is changed under orders of the appropriate authority.

Payment of Tax prior to filing of return

Advance Tax

Tax payers whose total income is likely to be chargeable to tax for the assessment year are required to pay tax in advance during the financial year (April I to March 31) on their estimated current income, which will be assessable to tax during the next following financial year called assessment year. The current income for this purpose means the total income which will be chargeable to tax in the relevant assessment year. The advance tax is payable in installments as follows:-

Due date of installment Amount payable

A. For companies
i) On or before June 15 Not less than fifteen per cent of total advance tax.
ii) On or before Sept 15 Not less than forty five percent of total advance tax as reduced by the amount, if any, paid in the earlier installment.
iii) On or before Dec 15 Not less than seventy five per cent of total advance tax as reduced by the amount, if any, paid in the earlier installments.
iv) On or before March 15 The whole amount of such advance tax as reduced by the amount or amounts, if any, paid in the earlier installment or installments.
B. For Non-Corporate Assessees
i) On or before the Sept 15 Not less than thirty percent of such advance tax.
ii) On or before Dec 15 Not less than sixty per cent of such advance tax as reduced by the amount, if any, paid in the earlier installment.
iii) On or before March 15 The whole amount of advance tax as reduced by the amount or amounts, if any, paid in the earlier installment or installments.

The advance tax payable is the tax on the current income minus the tax deductible at source or collectible out of any income included in the current income. The provisions for advance tax are not applicable where the tax payable for the assessment year is less than Rs. 5000/.

If the tax payer does not make payment of advance tax voluntarily, the assessing officer can issue a notice at any time during the financial year, but not later than the last day of February asking him to pay the advance tax in specified installments. Such notice is ordinarily based on the assessed income of the tax payer for the latest year. The assessee in that case has an option to pay advance tax on the basis of his own estimate if he considers that his current income during the relevant accounting period would be less than the income on the basis of which advance tax has been demanded from him. The assessing officer can modify his notice of demand in certain circumstances. Similarly, the assessee can also revise his estimate any number of times and after adjusting the amount already paid, if any, pay the balance in installments falling due after the revised estimate.

Consequence of Deferment/Short Payment

13.2.3 Default in making payment as per the installment plan mentioned in para 13.2 attracts consequence in the form of charge of interest for deferment at the rate of 1.5 per cent per month for 3 months on the amount of shortfall from the required percentage in the installments due on 15th June, 15th September and 15th December. If the advance tax paid upto the last installment. i.e. 15th March falls short of the tax payable as per the return of income, interest @ 1.5 per cent is payable on the amount of shortfall calculated from the date.

13.2.4 In case of failure to pay the advance tax or in case of shortfall in such payment in relation to 90 per cent of the assessed tax, a further interest at the rate of 1.5 per cent per month of part of month is chargeable from First April of the assessment year to the date of processing of return or the regular assessment on the amount falling short of the assessed tax.

13.3 Deduction of Tax At Source

Person responsible for paying any income chargeable to tax under the head 'Salaries' is required to compute the tax liability in respect of such income and deduct tax at source at the time of payment. If the employee has any other income he can inform the employer in which case the employer can take that income into consideration for computing his tax liability. He will not take account of loss except loss from house property.

13.3.1 Those responsible for paying any income by way of interest on securities or any other interest are required to deduct tax at source at the prescribed rates at the time of credit of such income to the account of the payee or at the time of payment thereof by any mode. W.e.f. 01.07.1995 interest on term deposits with banks is also subject to such deduction.

13.3.2 Tax is also deductible at source in respect of following income at the rates noted against each-

(i) Winnings from lottery or crossword puzzle (on amount exceeding Rs. 5,000/-) Rates in force
(ii) Winning from horse race (on amount exceeding Rs.2,500/- ) Rates in force
(iii) Payment to contractors and sub contractors (on amount exceeding Rs. 20,000/- ).
a) Advertising 1 per cent
b) Others 2 per cent to Contractors;
1 per cent to sub-contractors

(iv) Insurance Commission Rates in force.
(v) Payment to non-resident Sportsman or Sports Association 10 per cent
(vi) Payment on repayment of Deposits under N.S.S. (on amount. exceeding Rs. 2,500A) 20 per cent
(vii) Payment on repurchase of Units 20 per cent
(viii) Commission on sale of lottery tickets 10 per cent
(ix) Rent (on amount exceeding Rs. 1,20,000/- ) 15 per cent if payee is individual of HUF;
20 per cent in other cases.
(x) Fees for professional or technical services (on amount exceeding Rs. 20,000/-) 5 per cent

* Deduction is required to be made only if the payer is a person other than individual or HUF

13.4 Tax collection at Source

In certain cases tax is to be collected at source from the buyer, by the seller at the point of sale. Such tax collection is to be made by the seller at the time of debiting the amount payable by the buyer to the account of the buyer at the time of receipt of such amount from the said buyer, whichever is earlier. Such type of cases and the rate of collection of Tax at Source are as follows:-

S. No. Nature of Goods Percentage of collection of tax
(a) Alcoholic liquor for human consumption (other than Indian made foreign liquor) 15 per cent

(b) Timber obtained under a forest lease 15 per cent