LLB · Semester 2 · Paper K-2006
Chaudhary Charan Singh University
“Introduction to Taxation”, the complete chapter, exactly as it appears in the full notes.
| Basis | Direct Tax | Indirect Tax |
|---|---|---|
| Meaning | Taxes directly imposed on a person's income, profits, or wealth | Taxes imposed on goods and services; collected at different stages of supply |
| Person Liable to Pay | The same person on whom the tax is levied pays the tax | Tax collected by sellers; final burden falls on the consumer |
| Transfer of Tax Burden | Cannot be shifted to another person | Can be shifted from seller to consumer through price |
| Nature | Generally progressive (higher income → higher tax) | Generally regressive (same tax on goods for all consumers) |
| Basis of Levy | Based on ability to pay, such as income or profits | Based on consumption of goods or services |
| Impact on Prices | Does not directly affect prices of goods and services | Increases the price of goods and services |
| Examples in India | Income Tax paid by salaried individuals; Corporate Tax by companies; Capital Gains Tax on sale of property or shares | GST paid on purchase of goods and services; Customs Duty on imported goods |
| Governing Laws | Income-tax Act, 1961 | CGST Act, IGST Act, SGST Act, Customs Act 1962 |
| Tax | Fee |
|---|---|
| A tax is a compulsory contribution made by a taxpayer | A fee is a voluntary payment, usually a one-time charge |
| Tax is paid in order to fund various public expenditures; not tied to any specific service or benefit | A fee is a payment made for a specific service or privilege |
| Tax money is used in running the government, development and maintenance of public infrastructure | Fee money is used towards the expenditure incurred in providing the said service |
| The money a person earns over the course of a year is subject to taxation. Taxes are frequently levied on sale of goods; GST is levied on goods and services | A government might impose admission charges for parks. Examples include stamp fees, licence fees for driving, government registration fees, etc. |
| Revenue goes to Consolidated Fund of India; no direct benefit to taxpayer | Payer receives specific, identifiable benefit; fee not merged in general revenue |
| Tax | Cess |
|---|---|
| A regular levy on income, goods, or services | An additional levy imposed ON existing tax (tax on tax) |
| Revenue goes to CFI; can be used for any purpose | Revenue first credited to CFI, then appropriated ONLY for the specified purpose after parliamentary approval |
| Proceeds must be shared with state governments | Proceeds may or may not be shared with state governments |
| Levied on a permanent basis unless specifically repealed | Levied only until the government raises enough money for the specific social cause |
Chapter by chapter, mapped to the LLB Semester 2 syllabus.
About the Law of Taxation paper and these notes.
The notes cover the meaning of tax, direct vs indirect taxes, tax vs fee and cess, important definitions and agricultural income, residential status (Sec 6), and each head of income: salary, house property, business or profession (including depreciation under Sec 32 and Sec 37), capital gains and income from other sources.
Sec 14 classifies total income under five heads: Salaries (Sec 15-17), Income from House Property (Sec 22-27), Profits and Gains of Business or Profession (Sec 28-44), Capital Gains (Sec 45-55A) and Income from Other Sources (Sec 56-59).
The notes explain agricultural income under Sec 2(1A) in three categories, starting with rent or revenue derived from land situated in India and used for agricultural purposes. They also cover the exemption of agricultural income, its conditions and the scheme of partial integration.
Under Sec 6(1), an individual is resident if present in India for 182 days or more in the previous year, or for 60 days in the previous year and 365 days in the four preceding years. The notes then explain the additional conditions that separate a Resident and Ordinarily Resident from an RNOR, with illustrations, and the rules for HUFs and companies.
In the notes, important definitions and agricultural income, and income from salary are tagged with the most past exam years. Capital gains, house property, residential status, business income and depreciation also appear regularly.
Yes. LLB Hub has Law of Taxation previous year question papers for 2022, 2024 and 2025, alongside the chapter-wise notes.
Still have a question? Ask us
