Part 1 of 2 of CoI : Part 1 of 2

Explanation using Example

Example 1:

Scenario: Ramesh owns a farm in Punjab and earns income from selling crops grown on his land. He is unsure whether this income is subject to income tax.

Application: According to Article 366(1) of the Constitution of India, "agricultural income" is defined as per the enactments relating to Indian income-tax. This means that Ramesh's income from selling crops is considered agricultural income and is exempt from income tax under the Income Tax Act, 1961.

Example 2:

Scenario: John is an Anglo-Indian whose father was of European descent but was born and has always lived in India. John is applying for a government job and needs to confirm his status as an Anglo-Indian.

Application: As per Article 366(2) of the Constitution of India, an Anglo-Indian is defined as a person whose father or any male ancestor in the male line is or was of European descent but who is domiciled in India and was born in India to parents who are habitually resident there. John meets these criteria and can confirm his status as an Anglo-Indian for his job application.

Example 3:

Scenario: A company in Mumbai wants to raise funds by issuing annuities and is unsure if this constitutes borrowing under the Constitution.

Application: According to Article 366(4) of the Constitution of India, "borrow" includes the raising of money by the grant of annuities. Therefore, the company's action of issuing annuities to raise funds is considered borrowing under the Constitution.

Example 4:

Scenario: A taxpayer in Delhi receives dividends from a company and wants to know if the corporation tax paid by the company affects his personal income tax.

Application: Article 366(6) of the Constitution of India defines "corporation tax" and specifies that it is not chargeable in respect of agricultural income, and no deduction for the tax paid by companies is authorized from dividends payable to individuals. Therefore, the corporation tax paid by the company does not affect the taxpayer's personal income tax.

Example 5:

Scenario: A person in Karnataka inherits property from a deceased relative and needs to understand if estate duty applies.

Application: As per Article 366(9) of the Constitution of India, "estate duty" is a duty assessed on the principal value of all property passing upon death. If Karnataka has laws relating to estate duty, the person may be liable to pay estate duty on the inherited property based on its principal value.

Example 6:

Scenario: A business in Gujarat is involved in the supply of goods and services and wants to know if it is subject to Goods and Services Tax (GST).

Application: According to Article 366(12A) of the Constitution of India, "goods and services tax" means any tax on the supply of goods, services, or both, except taxes on the supply of alcoholic liquor for human consumption. Therefore, the business in Gujarat is subject to GST for its supply of goods and services.

Example 7:

Scenario: A legal dispute arises in Tamil Nadu, and the parties involved need to know which court has jurisdiction as a High Court.

Application: Article 366(14) of the Constitution of India defines "High Court" and includes any court deemed to be a High Court for any state. The Madras High Court, being the High Court for Tamil Nadu, has jurisdiction over the legal dispute.