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Basics of the Income Tax Act

Taxes are government-imposed financial charges levied on earnings, commodities, services, activities, or transactions. Here are the basics that you should know about the Income Tax Act.

The word "tax" is derived from the Latin word "taxo." Taxation is the government's primary source of revenue, and it is used to benefit citizens through government policies, regulations, and practices.

The Indian tax system has evolved to meet the government's increasing financial needs. The system is also intended to assist the government in meeting its socioeconomic objectives. 

Tax reform is an ongoing process that should be carried out regularly to assess the system for revamping and repairs. The Income Tax Act come into force from 1961.

What is income tax?

Tax is a mandatory financial charge imposed by the government on wages, goods, administrations, exercises, or exchanges. Taxes are the primary sources of revenue for the government, and they are used to benefit the country's general population through government strategies, arrangements, and practices.

Taxes are mentioned in ancient texts such as Manusmurti and the Kautilya Arthashastra. It was first implemented in India in 1860 to combat the 1857 financial crisis. As a result, the income tax act come into force from 1961.

Need for income tax in India

Income tax is a tax on an individual's or entity's earnings. The primary source of revenue for the government to carry out its functions is income tax. Government jobs include defence, law and order, and welfare and development in health, education, rural development, etc. 

The government must also pay for its administration. These activities necessitate substantial public funds, which are raised through taxation.

Purpose of taxation

The revenue generated by tax collection is used to fund the development of roads, schools, and hospitals, market regulations, and legal systems, among other things.

Redistribution of resources from the richer to the poorer sections of society

Certain products are taxed to eliminate externalities, such as tobacco taxes to discourage smoking.

Assessment year and previous year as per the Act

According to Section 2(9) of the Income Tax Act of 1961, an assessment year is 12 months beginning on April 1 of each year. 

The assessee must file the previous year's income tax return in the assessment year in the assessment year. According to Section 2(34) of the Income Tax Act of 1961, unless the context requires otherwise, the term "previous year" refers to the previous year as defined in Section 3.

According to Section 3 of the Act of 1961, the term "previous year" refers to the fiscal year immediately preceding the assessment year.

For example, if the assessment year 2018-19 begins on April 1, 2018, and ends on March 31, 2019, the previous year would be 2017-18.

Who is a person as per the Act?

Section 2(31) of the Act defines a person. The term 'person' encompasses –

An individual.

A Hindu Undivided Family.

A Company.

A Firm.

Persons or body of individuals’ association, whether incorporated or not; 

A local authority

Assessee definition in income tax

An assessee definition in Income Tax is any individual who has earned income or incurred losses and must pay taxes on these to the government in a given assessment year.

Normal assessee

Assessee classifications

A person who is the subject of proceedings under the Income Tax Act, whether or not he owes any tax or other amount;

A person who has suffered loss and has filed a loss return under section 139(3);

A person who must pay an amount of interest, tax, or penalty under the Income Tax Act;

Any person who is entitled to a tax refund under this Act

Assessee representative

A person may not be liable for his income or loss, but he may be responsible for the income or loss of others, such as the agent of a non-resident, the guardian of a minor or a lunatic, etc.

Deemed assessee

In the case of a deceased person who died after making a will, the administrators of the deceased's property are considered assessees.

If a person dies intestate (without leaving a will), the deceased person's eldest son or other legal heirs are considered assessees.

If a minor, lunatic, or idiot has taxable income under the Income Tax Act, their guardian is considered an assessee.

If a non-resident has income in India, anyone acting on his behalf is considered an assessee.

Assessee-in-default

If a person fails to fulfil his statutory obligations, he is considered an assessee-in-default. If an employer pays a salary or a person pays interest, it is their responsibility to deduct TDS and deposit the amount of tax collected in the government treasury. 

To conclude:

As discussed, tax is a mandatory charge levied by the government on a person. Income Tax Act provides several provisions for taxpayers based on their needs. The government has provided various forms to pay income tax, depending on whether a person is an individual, HUF, a company, an ordinary resident, a non-ordinary resident, or a non-resident person.

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Seventh Pay Commission—The Changed Scenario of Income of Government Employees

Let’s learn about all the crucial information regarding the 7th pay commission and how it changes everything.

The Pay Commission is an administrative system appointed by the Central Government to study and recommend changes to the structure in salary and other benefits applicable to its public servants.

The Pay Commission, headquartered in Delhi, is chaired by senior chairpersons of senior officials. The central government may accept or reject the recommendations of the Payment Commission, and state governments generally undertake the recommendations of the Payment Commission, with some changes. Since India gained independence, seven leading commissions have been established.

The Seventh Pay Commission was established on February 28, 2014, under the government of the UPA. 7th Pay Commission submitted its final draft on November 19, 2015.

How has the pay matrix changed the payment of the CPC 6th Payment?

At the time of the VI CPC constitution, about 35 standard payment scales existed. Many of these revised ratings were previously compiled by VI CPC to reach 19 degrees distributed in four different Pay bands and four different scales, including: 

one Secretary (fixed) Apex scale/standard 

one Cabinet Secretary/equivalent. 

The concept of pay matrix 7th pay commission was intended to benefit and served as a quality decision within the salary band.

Following the implementation of the VI CPC recommendations, the Civilian setup payment framework consists of four payment bands with fifteen levels of the salary range. 

There are also four independent scales -HAG scale, HAG + scale, Apex (fixed) scale, and Cabinet Secretary's term (fixed).

What are the recommendations to the 7th pay  Commission?

Pay scales are to be standardised and reduced. To analyse the current situation and opportunities for development in all their activities, government employees may check their current salary level on the government website. In addition, the pension calculation procedures have been simplified.

The minimum wage will start at Rs 18,000 per month.

The proposed maximum compensation will be Rs 22,50,000.

The Cabinet Secretary and other similar senior positions will have an initial salary of Rs 2,50,000.

The new pay matrix 7th pay commission will replace Pay Band and Grade Pay systems.

When determining current pay scales, a frequency of 2.57 will be equally enforced on all employees to obtain new pay scales.

The annual increase rate will remain at 3%, similar to the Sixth pay  Commission.

7th Pay matrix highlights

Performance-based methodology

Performance metrics are made very strong.

An add-on functionality is recommended.

Pay for military employment

 Only Defense personnel will be eligible for Military Service Pay.

 15,000 serving Officers.

 10,800 Nursing Officers.

 JCO Price: 5,200

 3600 Air Force Registered Non-combatants personnel.

Short-term service

Leave from the military will be allowed between 7 and 10 years after joining.

10.5 months' salary will be compared to the final bonus.

They will be eligible to have a one-year Executive Program or MTech in a reputable institution that will be fully supported.

Pay the parity 

Equal positions will receive equal compensation.

Employee equity between the field and headquarters

Assessment

Make formal changes to review the Cadre for Group A Officers.

7th Pay matrix pension

Pensions for civilian and military personnel, including CAPF, have been reviewed to determine equity.

Suggested method for adjusted pension.

Disability method for slab-based calculation.

In the event of a death at work, the level of compensation for beneficiaries is to be reviewed.

Recommendations for NPS to improve the proposed remedial approach.

 7th Pay matrix gratuity

The optimum gratuity increased to Rs 20 lakh.

If the dearness rate increases by 50%, the maximum gratuity will increase by 25%.

Pay matrix for the defence force personnel

The Pay Matrix designed for defence personnel is more integrated than the civil pay matrix in the context of level, age, and retirement profile. For example, the interaction time of different levels of JCOs / ORs has changed and has a shorter duration.

On the other hand, service officers are offered a promotion on a time scale until they reach the level of Colonel and Equivalent, so that they move from one level to another according to the deadline.

Pay Different Levels for Defense Forces personnel: Payment levels corresponding to existing GP 3400, GP 5700, GP 6100, GP 6600, GP 7600, GP 8000, GP 8400, GP 8700, GP 8900 and GP 8900 are different defense personnel. The minimum payment associated with each payment level considers the average stay time of the various levels of officers.

Conclusion

The Seventh Pay Commission has designed a new pay matrix based on the various opportunities outside government over the past three decades, creating intense labour competition and the need to attract and retain the best talent available in the public service. The

nomenclature used in the new payment matrix assigns rates instead of the previous grade payment.

Before VI CPC, there were Payment Scales. VI CPC recommended using Pay Bands with Grade Pay as a determining factor. The seventh Civil Procedure Code recommends a Pay matrix with different payment levels, and the level from now on will be the determining factor.

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An Overview of Jammu and Kashmir Reorganisation Act 2019?

After the removal of article 370, what changes were brought into the J&K act? The re-organisation of J&K is the major shift in the history of India. Let’s dig deep.

The Kashmir historic dispute is a long-running and consequential disputation between Pakistan and India. Several worldwide and bilateral efforts have failed to resolve this issue. Both countries have experienced a series of hot and cold conflicts that have strained relations between the two countries.

Pakistan, which supports Kashmiris' right to self-determination under the UN Declaration (1948-49), has repeatedly opposed India's efforts to strengthen its control of Kashmir by force.

It grants certain rights and privileges in the real estate sector, public sector employment, bursaries, and other forms of social assistance. Jammu and Kashmir were granted special status within India under Article 370 of the Jammu and Kashmir reorganisation act 2019.

The legal history of Jammu and Kashmir

On August 5, 2019, the Central Government revoked articles 370 & 35A, which grant special status to Jammu & Kashmir, and divided the state into two union territories, namely, Jammu & Kashmir and Ladakh.

In the state of Jammu and Kashmir, Article 370 and Article 35A were important legislation. Article 35A of the Constitution of India is a unique provision that gives the Legislature of Jammu and Kashmir total independence in making provisions for the permanent residents of the state.

The most controversial piece of legislation in the Indian Constitution was Article 370. Article 370 is intended to be a temporary measure, and the President of India has the authority to declare Article 370 and amend it.

Article 35A and 370

Article 370 of the Constitution of India deals with the provisional provisions of Jammu and Kashmir. Article 35A and 370 can get divided into three sections:

Legislation that empowers the Parliament in Jammu and Kashmir state 

In general, the Parliament has the power to legislate in all areas of the middle and corresponding lists. However, Article 370 limits the legislative authority of the Jammu and Kashmir state. 

According to Article 370, the Parliament can only pass the Jammu and Kashmir legislation if it is on the central or concurrent list, which was agreed upon during the signing of the entry instrument.

Defence, Communications, and Foreign Affairs were the three areas where the Parliament could pass Jammu and Kashmir legislation.

These three sections cover 31 central and state government issues. Jammu and Kashmir management agreement is needed if the Parliament wants to expand its scope to more than 31 issues.

Generally, when the Parliament enacts legislation such as the Right to Information Act (RTI), Good and Services Tax  (GST), etc., it applies to all states except Jammu and Kashmir.

In the case of Jammu and Kashmir, however, any legislation passed by Parliament must be approved by the state assembly. Only Jammu and Kashmir will be affected if the State Assembly approves the law.

Provisions of the Indian Constitution applicable to Jammu and Kashmir state 

In Jammu and Kashmir state, Article 1 and Article 370 of the Constitution of India shall apply. In addition to these two articles of the Indian Constitution, the sections defined by President Eisenhower's decree in 1954 shall apply to Jammu and Kashmir provinces.

The President's order has changed over time. Some sections and clauses of the Indian Constitution do not apply to Jammu and Kashmir provinces.

Procedure to cease Article 370 of the Constitution of India

Article 370 will only get abolished if the Constituent Assembly of Jammu and Kashmir agrees and the President of India announces that by public notice. However, the Jammu and Kashmir Constituent Assembly were dissolved in 1957.

Indian citizenship has been granted to the people of Jammu and Kashmir by the passage of Article 370 in the Indian Constitution through the leaders and the constituent assembly in Jammu and Kashmir demanded that the existing laws and the heads of the Jammu and Kashmir provinces be treated differently.

President Dr Rajendra Prasad then used the presidential proclamation in 1954  under the Delhi Convention to add Article 35A to the Indian Constitution, fulfilling the aspirations of the leaders and the Jammu and Kashmir members' assembly.

Article 35A describes the Rights of the Permanent Residents of Jammu and Kashmir. These residents then have certain rights and privileges granted by the legislature.

Conclusion

When British India separated into two separate territories in 1947, the India-Pakistan deadly conflict broke out. Both India and Pakistan sought the princely rule of Jammu and Kashmir at that time.

Territorial disputes between the two countries culminated in three major wars and many other disputations. Despite efforts to restore peace, the situation is far from stable. While the abolition of Art 370 is a good idea, it will not guarantee progress or positive development in the region. The Jammu and Kashmir reorganisation act 2019 is new hope for the citizens of Jammu and Kashmir.

Kashmir is a very controversial region, especially since the time of the abolishment of Art 370. As a result, the Indian government must be careful when enacting new legislation or amending existing laws, and the people of Kashmir must take precedence.

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A Brief on Jammu and Kashmir Reorganisation Act 2019

On August 5, 2019, the Rajya Sabha approved the Centre's resolution to reorganise Jammu and Kashmir. Here's an overview of the Jammu and Kashmir reorganisation Act 2019.

The Act re-establishes the State of Jammu and Kashmir. The disputed area is divided into two union territories (UTs), Jammu and Kashmir and Ladakh. 

The Act includes 103 clauses and repeals 153 existing laws and the Jammu and Kashmir Legislative Council. Furthermore, the UT is now subject to 106 Central Laws.

Let's get in-depth and know more about the act.

The abolition of articles 370 and 35A

You must have heard on TV, in the newspaper, or through other forms of social media that the government has repealed Articles 370 and 35A of the Indian Constitution. But have you ever considered how and by what bill this abolition is accomplished? The bill was titled "The Jammu and Kashmir Reorganisation Bill, 2019" and was introduced in Rajya Sabha on August 5, 2019, by Minister of Home Affairs Amit Shah. 

The bill was passed in Rajya Sabha the same day and in Lok Sabha on August 6, 2019. This bill also received the President's assent on August 9, 2019.

Article 370

Article 370 of the Indian Constitution discusses the State of Jammu and Kashmir's temporary provisions. Article 370 broadly addresses three issues:

Parliamentary legislation power for the State of Jammu and Kashmir: 

In general, Parliament has the authority to enact legislation on all matters on the central and concurrent lists. However, Article 370 limited Parliament's legislative authority over the State of Jammu and Kashmir. 

According to Article 370, Parliament can only make laws for Jammu and Kashmir from the concurrent and central list established when the instrument of accession was signed.

Provisions of the Indian Constitution apply in the State of Jammu and Kashmir:

The Indian Constitution's Articles 1 and 370 will apply in the State of Jammu and Kashmir. In addition to these two articles of the Indian constitution, provisions of the constitution specified by the President's order in 1954 will be applicable in the State of Jammu and Kashmir. This President's order is subject to change. The remaining parts and provisions of the Indian Constitution will not apply to the State of Jammu and Kashmir.

The procedure for repealing Article 370 of the Indian Constitution:

When does Article 370 come to an end? Article 370 of the Indian Constitution also provides an answer to this question. If the Jammu and Kashmir Constituent Assembly agrees to repeal Article 370 and the President of India issues a public notification, only Article 370 will cease to exist. However, the Jammu and Kashmir Constituent Assembly was dissolved in 1957.

Article 35A

Article 35A defines the rights of Jammu and Kashmir's permanent residents. These residents are then eligible for special rights and privileges granted by the legislature. According to the following article:

Even if such a provision is made in the Indian Constitution regarding this or any other existing law in force in the State of Jammu and Kashmir, or any law enacted by the State legislature, the definition of a permanent resident of Jammu and Kashmir will not change.

Nothing in Article 35A will be null and void even if other Indian citizens are violated in their rights to employment in the State of Jammu and Kashmir, acquisition of immovable property in the State, settlement in the State, or the right to scholarships and other forms of aid as the State Government may provide.

The Reorganization Act

The State is divided into two union territories due to the Reorganization Act.

Union territory of Jammu and Kashmir

Union territory of Ladakh

The Act requires forming a legislative assembly in Jammu and Kashmir, a union territory. On the other hand, Ladakh would be overseen solely by a lieutenant governor. Ladakh's union territory will include the districts of Leh and Kargil, and the remaining districts will be included in Jammu and Kashmir.

One Lok Sabha seat will get assigned to Ladakh, and five will be given to the Jammu and Kashmir union territory. The Jammu and Kashmir High Court will be operational for both union territories. Furthermore, the administration of Jammu and Kashmir would be per the Indian Constitution Article 239A.

The reformation resulted in a significant reduction in Jammu and Kashmir's competence field, and the State had lost control of the state police. Even in financial devolution, the State now heavily relies on the Center and is no longer a financially self-sufficient state. 

The Assembly could only enact legislation on State, and Concurrent Lists issues, and the State had no authority over public order, police, or trade and commerce.

It could be a welcome change for Ladakh, which has suffered greatly for the past seventy years. The region's development and employment rates would benefit from the region's new status as a Union territory.

To Conclude:

The issues raised in India regarding Article 370 and Article 35A were extremely sensitive and complex. Article 370 has been a source of contention between India, Pakistan, and China since 1947. 

The Indian government cancelled the special status granted to Jammu and Kashmir under Article 370 with the introduction of the Jammu and Kashmir reorganisation Act 2019.

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Section 10 of Income Tax Act: An Overview

To Conclude:Section 10 of the Income Tax Act provides relief in exemptions, even though everyone must pay tax to the Indian government each fiscal year. Neglecting vital components and wasting hard-earned money on taxes can irritate, stress and impede personal and financial development. To reap the maximum benefits of this Section, it is advisable to familiarise oneself with all of its provisions.Section 10 of the Income Tax Act permits the computation of certain tax-exempt incomes. Here's an overview of the Income Tax Act, section 10.

According to the Income Tax Act of 1961, all Indian citizens who earn more than a specific threshold amount must pay taxes. Consequently, taxpayers aim to minimise their tax obligations as each fiscal year draws close.

Certain incomes have been exempted from taxation to alleviate the burden on taxpayers and encourage them to save, invest, and pay taxes.

Let's get in-depth and learn more about the Income-tax Act and section 10 of income tax act.

What is income tax?

Tax is the obligatory monetary charge imposed by the government on income, goods, services, and transactions. Taxes are the government's primary source of revenue—used for the general welfare of the populace through government policies, arrangements, and practices.

Taxes were initially implemented in India in 1860 to combat the financial crisis of 1857. Consequently, the Income Tax Act of 1961 is currently in effect in India.

What is section 10 in the Income Tax Act?

Section 10 of the Act includes a variety of allowances for salaried employees, ranging from house rent and leave travel allowance to research/academic allowance and uniform allowance.

In addition to their income, salaried employees receive a defined amount of money or other allowances for their unique needs. Most allowances are included in the total income unless they qualify for a special exemption under the Income Tax Act. Employees receive allowances in exchange for their services or compensation for working in unique conditions.

Section 10 of the Act addresses numerous allowances, including the Leave Travel Allowance, the Uniform Allowance, the Travel Allowance, and the Housing Rent Allowance. However, specific exempt special allowances fall under Section 10 (14).

Exemptions under Section 10 of the Income Tax Act

Section 10(1) – Exemption of agricultural income

According to Section 10, agricultural revenue is free from taxation. Agricultural land must be in India in this case. The income could come from the following sources:

Rent or income derived from agricultural land in India.

Basic agricultural processes such as cultivation, tilling and planting.

Additional procedures for the growth and maintenance of the product, such as weeding, cutting, and pruning, among others

Sale of agricultural produce

Earnings from farm structures essential to agricultural operations

Section 10(2) – Exemption of Income Received from a HUF

Section 10(2) exempts revenue received by a taxpayer in their role as a HUF member. Therefore, any income received by a member of the HUF is exempt from taxation. Here,

The individual's payment must get deducted from the family's total revenue.

In the case of an inheritable estate, the income must be paid from the income of the family's estate.

Section 10(2A) – Exemption of Income Received from a Partnership Firm

According to Section 10, partnership income is exempt from taxation (2A). Under the Income Tax Act, the partnership must get taxed as a partnership in this instance. The taxpayer's share of profit or revenue must correspond to the proportion specified in the partnership agreement.

Section 10(5) Leave Travel Concession In the event of an individual taxpayer, section 10 exempts from tax the leave travel concession received (5). The concession or aid must come from the following sources:

The current employer for travel expenses incurred by the employee and their family during the fiscal year

Existing or former employers regarding their forthcoming travel. This next trip is post-retirement or post-termination of his military service.

Here, the exemption amount cannot exceed the amount spent on travel by the individual.

For purposes of this Section, the following are considered family:

The spouse and offspring of the subject

The individual's parents, brothers, sisters, or any of them. Moreover, they are entirely or largely reliant on the individual.

Salary under section 17(1) of the Income Tax Act

According to Section 17(1) of the Income Tax Act, salary includes wages, any advance of salary, any fee, commission, perquisites, and profits instead of or in addition to the salary/wage, etc., received in the prior year. In addition, an employer-employee relationship is required to tax a particular receipt under the heading "Salaries." For example, your compensation as a partner in a partnership firm will not be considered a salary.

List of Earnings Classified as Wages

The following incomes get classified as salaries under Section 17(1) of the Income Tax Act:

Wages

Pension or annuity

Gratuity

Instead of or in addition to any compensation or pay, fees, commissions, perquisites, or profits

Any pay in advance

Accumulation of unused leaves

Contributions made by the federal government or other employers to the National Pension Scheme

The annual increase in the balance at the credit of an employee who chooses a recognised provident fund subject to tax

To Conclude:

Section 10 of the Income Tax Act provides relief in exemptions, even though everyone must pay tax to the Indian government each fiscal year. Neglecting vital components and wasting hard-earned money on taxes can irritate, stress and impede personal and financial development. To reap the maximum benefits of this Section, it is advisable to familiarise oneself with all of its provisions.

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Income Tax Act: An Overview

The Income Tax Act of 1961 is a comprehensive statute governing all India's tax regulations. Here's an overview of the act.

The Income Tax Act has several rules for taxing both incomes earned in advance and income concerning amounts that have not yet been received.

In addition to paying your income tax on time, as a taxpayer, you must also keep track of the TDS deducted when calculating your ultimate tax liability at the end of the financial year.

Whether you are paid or self-employed, it is your responsibility as a citizen to pay income tax on time each year. And to help you understand income tax better, we've outlined all you need to know about the Tax Act of 1961 in this article.

What is income tax?

Income Tax is a tax on earnings. According to the Indian Constitution, income tax is a central subject, and the Central Government assesses and collects income tax on all forms of income other than agricultural income. 

The Income Tax Act come into force from April 1, 1962, and pertains to India's entirety (including Jammu and Kashmir). Since then, each year's Finance Acts have introduced several substantial revisions to the Act. 

What is the income tax act?

In India, the concept of income tax has persisted for many years. In 1860, James Wilson, the first British finance representative, introduced the modern Act of Income Tax. Although numerous tax laws have been enacted since then, the Act of 1961 has withstood the best test of time.

The current act is a comprehensive set of laws that governs the country's different tax regulations. Implemented in 1961, it assures that taxes are levied, collected, handled, and recovered on schedule and correctly for the Indian government each year.

The 1961 Act contains 23 chapters and 298 sections, according to the official website of the Income Tax Department. These several sections address various elements of taxation in the country.

The amount of income tax a person must pay depends on their annual income. The numerous tax categories for which one must pay taxes include:

Salary

House property income.

Capital gains.

Profits from profession or business.

Income gains from other sources.

Every February, the Indian government announces revisions to the Act of 1961 to make it relevant to the current day and incorporates modifications to tax brackets wherever applicable.

After the revisions to the act, the Indian President approved them and announced them to the general public within the same fiscal year.

Objectives of the act

As with every other Act, the Act was enacted to achieve specific goals. The objectives of the Act are as follows:

Economic Development

The nation's economic growth or development is one of the Act's primary goals. A nation's economic growth or economic development is directly related to its rate of capital formation growth. 

To alleviate the capital shortage, the government enacted the Act in 1961, which mobilised the nation's resources to facilitate the rapid accumulation of capital. Implementing new taxes or increasing existing taxes aids the smooth formation of money.

Full Employment

Employment is the second goal of the Act. The demand for competent experts and the availability of well-paying jobs determine the nation's employment rate. And the tax rates must be reduced to reach the goal of full employment. In exchange, the need for products and services will increase, resulting in capital formation in the economy due to the multiplier effect on employment and income.

Stability of Cost

The significance of steady prices is significant. Despite being a short-term objective of taxes, ensuring price stability became more accessible with the introduction of the Income Tax Act of 1961

Under this Act, the government may easily regulate price inflation. With the increase in direct taxation, private expenditure has been restrained, and consequently, the pressure on the commodity market is eased. 

However, decreasing prices during deflation may have the opposite effect on the market and economic growth.

Management of Cyclical Fluctuations

Controlling cyclical economic volatility is another aim of this legislation. During a country's economic depression, taxes are reduced and are increased to break cyclical oscillations in monetary value during an economic expansion.

Reduction of the Difficulties of the BOP

The Act also imposes taxes such as customs tariffs to regulate the import of specific commodities. It is also done to lessen the intensity of payment problems and encourage the home manufacturing of import alternatives.

Non-Profit Objective

The non-revenue goal of the Act increases wealth and income disparities among residents. It is accomplished by taxing the wealthy at a higher rate than the poor and instituting a progressive taxation system.

To Conclude:

The income tax act come into force from the 1st day of April in 1962. The Income Tax Act aims to encourage economic progress, create a society with full employment, limit economic volatility, establish price stability, and regulate tax differentiation. The primary purpose is to reform and consolidate the country's tax laws.

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Clinical Establishment Act: Registration

How to get registered under the clinical establishment act? Let’s find the right way to do it.

The clinical establishment act makes it compulsory to register all establishments of clinical, including diagnostic centres and single-doctor clinics, across all acknowledged approaches of medicine, both in the public and private sector, except those run by the armed forces. 

The registering officer enables policy formulation and resource allocation and decides treatment norms. It can levy fines for non-compliance with the provision of the Act. The Act applies Standard Treatment Guidelines for common disease conditions, for which a main panel of specialists has been formed.

The law applies to all clinic facilities, from public and private companies to recognised pharmaceutical programs, to single physician clinics. The only exception is that military-operated institutions will not be regulated under this Act. 

Classification of clinical establishments.- 

The establishments of clinical of different systems shall be classified into such categories, as prescribed by the Central Government, from time to time.

The different levels are determined by dividing the categories in subsection (1). Provided that in defining the standards of clinical facilities, the Central Government will take into account local conditions.

Maintenance of State Register of clinical establishments.- 

Every State Government shall maintain in digital and in such form and containing such particulars, as prescribed by the Central Government a register be known as the State Register of establishments of clinical in respect of each clinical establishment of that State.

Every State Government shall provide a copy of the State Register of establishments of clinical in digital format to the Central Government. It shall notify the Central Government of all obtainments and other modifications in such record made for a distinct month by the 15th day of the following month.

Maintenance of National Register of clinical establishments 

The Central Government shall maintain an All India Register in digital format to be called the National Register of clinical establishments. 

It is a combination of the State Register of clinical establishments sustained by the State Governments. It must be published in digital format.

Providing information to National Council

It shall be obligatory for to state council for establishments of clinical to gather and update the State Register of clinical establishments of the State and send monthly recoveries in digital format for revising the National Register.

Authority for registration 

The State Government shall set up authority as the district registering authority for all districts for registration of each clinical establishment by notification with the following members, namely:

District Collector — Chairperson;

District Health Officer — Convenor;

three members with such qualifications and on such requirements as may be specified by the Central Government.

Registration for clinical establishments 

For any person to run an establishment for clinical, it must get duly registered given the provisions of this Act.

Condition for registration

For registration, every establishments of clinical is obliged to fulfil the following requirements, namely:—

(i) the minimum prerequisites of personnel as specified;

(ii) provisions for maintenance of records and reports as may be prescribed;

(iv) such other terms as specified.

2.The establishments of clinical shall undertake to supply within the general staff and establishments such medical examination and treatment as may be needed to stabilise the emergency medical necessity of any individual who comes or got carried to such clinical installation.

Penalty

A person who is liable to violate any of the provisions of this Act, if no penalty is imposed elsewhere, shall be liable to a fine of up to ten thousand rupees. 

In any second case—the fine will be up to fifty thousand rupees. 

There is a fine of up to five lakh rupees for each subsequent case. 

Recovery of fine- 

The Council of the State of the Clinic prepares a certificate of authorised official for anyone who fails to pay the fine. It will specify the fine to be paid to that person and send it directly to the District Collector where that person owns the property or lives or does his business. 

Upon receiving the certificate, the said collector may continue to reimburse the person for the amount given, as if he were in arrears of land revenue.

Conclusion

The Central government enacted the Clinical Establishment Act 2010 to provide for the regulation and registration of all types of clinics across the country to determine the minimum standards for the services and facilities provided by them. 

The application for permanent registration by an establishment of clinical shall be made to the authority in such form as prescribed and accompanied by such fees.

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7th Pay Commission: All You Need to Know

The 7th pay Commission mainly focuses on Central Government employees. Let's find out more about it.

The Government of India has established a pay commission to recommend changes to the central government wage system. To date, seven leading commissions have been set up since India gained independence to review and recommend changes to the salary system of all Indian government and civil servants.

P. Chidambaram, the then Minister of Finance, announced that the Seventh Pay Commission had been approved by the then Prime Minister, Manmohan Singh, and it would get implemented in January 2016. However, the 7th Pay Commission did not implement the recommended starting date due to certain constraints.

What is seventh pay commission?

In July 2016, AK Mathur led the Seventh Pay Commission and sent a report on it to Finance Minister Arun Jaitley. The report recommended a 23.55% increase in salaries and benefits for public servants. With the advent of the seventh pay commission, public servants will benefit from higher pay and other concessions.

The Government of India plans to implement the Seventh Pay Commission's recommendations in January 2017. Uttar Pradesh has already approved the Seventh Pay Commission and announced that it will get implemented in January 2017.

Key features of the Seventh Pay Commission

CPC Seven is mandated in terms of its terms of reference to evaluate, review and recommend changes to the principles governing the wage framework in several employee categories, including

Government Officials,

Those under All India Services,

Workers in the Union's territories,

Officials and staff of the Accounting and Accounting Department,

Members of governing bodies,

officials and personnel of the Supreme Court, as well

Employees under the defence force.

Therefore, a critical aspect of the what is 7th pay commission's work involved obtaining a clear picture of the scope, composition, and profile of Central Government employees.

Highlights of the 7th Pay Commission

Commission has proposed a minimum salary for public servants: The daily minimum wage for a newly appointed civil servant gets hiked from Rs.7,000 to Rs. 18,000 per month.

Recommended Public Service Salary: The Seventh Remuneration Commission also proposes increasing the salaries of public servants to Rs.2.25 lakhs per month by Apex Scale and Rs.2.5 lakhs per month for Cabinet Secretary other staff.

Pay Matrix: Considering the problems in Grade Pay Structure, the Pay Commission recommends a new payment matrix.

New Pay Structure: New Pay Structure covers all existing standards and does not introduce new norms.

Work-Related Illness and Injury Leave (WRIIL): The Compensation Commission recommends the full payment and benefits provided to all hospitalised staff due to WRIIL.

Dearness Allowance (DA): In the wake of the severe release of government employees, Dearness Allowance has seen a 2% increase recently. The move by the Union Cabinet is expected to benefit more than 50 lakh Central Government employees and pensioners and 55 lakh workers.

Annual increase: The Pay Commission has recommended a yearly increase of 3% p.a.

Military Service Pay (MSP): The Seventh Pay Commission recommends that the MSP be paid to the Defense Forces only. MSP is a compensation paid to people who provide military service in India. MSP will get paid at all ranks, including Brigadier and people at the same level.

Allowance: Cabinet reviewed 196 existing allowances and completed 51 allowances, retaining 37 allowances.

House Rent Allowance (HRA): With aiming to increase the basic salaries of public servants, the Pay Commission has proposed a 24% increase in the Tax.

Advances: Except for Personal Computer Advance and House Building Advance, the Pay Commission has ended all fruitless development. It is very noticeable that House Building Advance has been increased from Rs.7.5 lakhs to Rs.25 lakhs.

Medical reforms: The seventh Pay Commission has proposed Health Insurance Scheme for Central Government employees and pensioners. The report also recommends non-cash benefits for pensioners outside the CGHS area.

Pensions: The Commission proposes to review the current pension plan. They recommend a revised pension structure for public servants, including CAPF and retired security personnel, before 01.01.2016.

Armed Forces Disability Pension: Instead of the current percentage-based disability pension regime, the Commission has recommended using a slab-based disability program.

What is the 7th Pay Commission Matrix?

The Pay Commission met with stakeholders to hear their demands, which included, among other things, the same minimum wage for employees, the new remuneration of the current salary structure, and a transparent wage structure. 

The 7th Pay Commission Matrix has become a simple, easy-to-understand, and predictable table. 

Stakeholders have contacted the Seventh Pay Commission to submit their various requirements ranging from the same management of the same staff, the average pay of incumbent staff, the improvement of the frequency of Modified Assured Career Progression, the formation of public pay, and current evaluation and the development of the grade salary.

Conclusion

The Government of India has established a pay commission to determine the salaries of public servants. After India's independence, seven leading commissions got set up to review and recommend the salaries of all levels of government, civil and military.

The 7th Pay Commission was established under the leadership of Justice Ashok Kumar Mathur. In June 2016, the Cabinet cleared the maximum recommendations made by seventh Pay Commission report, which proposed a 23.55% overall hike in salaries, pensions, and allowances for over one crore government employees.

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Highlights of the 7th Pay Commission

The Pay Commission assures compensation increases, optimum employee benefits, and employee rights protection. Here's an overview of the 7th pay commission.

The Seventh Pay Commission was established on February 28, 2014, by the Manmohan Singh-led United Progressive Alliance government under the chairmanship of Justice Ashok Kumar Mathur.

So, what is 7th pay commission? The Pay Commission was established to recommend realistic economic reforms to the compensation structure for central government employees. Let's have an overview of the highlights and the features of the pay commission.

What is the 7th pay commission?

Pay commissions are an administrative process or institution appointed by the government to evaluate, assess, and recommend possible and desired changes to the remuneration structure of government employees.

The pay structure encompasses all compensation paid to an employee, including base salary, allowance, bonus, and other monetary incentives. It assesses and suggests adjustments to government employees' pay in various departments, agencies, and services.

Each pay commission considers a variety of factors when making its recommendations, including the country's economic situation, the government's financial resources, the likely impact on the finances of state governments, the private sector and state government pay sectors, their adaptability and relevance to Indian conditions, best global practices, and comparison to the public sector.

The country's pay commission has its headquarters in Delhi. The Commission has 18 months from its establishment to provide its recommendations and conclusions in the form of a report. 

Additionally, the commission may consider delivering interim reports on any subject until final recommendations are made.

The Government of India may accept or reject the proposals. Generally, the State Government implements the recommendations with some modifications.

A chairman chairs the pay commission, and the Commission is composed of members who are top officials in several professions. 

Since India's independence, seven commissions have been established to examine and recommend modifications to the compensation structure for civil and defense government employees.

Pay commissions are typically established every ten years, and the seventh pay commission is the most recent one.

New pay commission matrix

Instead of adopting a new Pay Matrix, the  Pay Commission7th suggested abolishing existing Pay Bands and Grade Pay. The Central Government approved this recommendation. 

Previously, authorities defined an employee's status based on grade pay; however, the level will now get evaluated in the 7th Pay Commission Matrix. They created a variety of pay matrixes for various populations, including Defense Personnel, Civilians, and Military Nursing Services. 

The rationale for organising different pay matrices is identical.

Minimum Wages This Pay Commission increased the monthly minimum wage from 7000 to 18000. Now, the minimum beginning salary is 18000. (for newly recruited). 

A newly recruited class 1 officer, on the other hand, will earn 56,100. This wage structure has a compression ratio of 1:3.12, which means that a class 1 officer (on direct recruiting) will make three times as much as an entry-level employee.

Increment Rate

The seventh pay commission has voted to maintain the current rate of increase at 3%. This choice benefits employees in the long run by increasing their basic salary, as they will receive an annual increment 2.57 times greater in the future than they do now.

New Organizational Structure Previously, there were multiple pay levels; a new system incorporated all of these. The Central Government authorized the Index of Rationalization and jointly determined to provide a minimum wage at each 7th Pay Commission Matrix level based on responsibility, accountability, and increasing role as the hierarchy advances.

The Cabinet approved the current Pay Commission's suggestion to increase the cap for house building advances from 7.50 lakh to 25 lakh. Additionally, to lessen the burden, the Cabinet kept four interest-free advances: transfers or tours, TA for the deceased employee's family, and medical treatment advances. 

On the other hand, all other interest-free advances are no longer functional.

Monthly Contribution

The Seventh Pay Commission suggested that the monthly contribution to the Central Government Employees Group Insurance Scheme be increased (CGEGIS). Cabinet, however, rejected this request and decided to maintain the current rate. Thus, employees' net salaries will increase by 1470.

Gratuity

The gratuity cap increased from ten lakh to twenty lakh. Additionally, when DA is increased by 50%, the Gratuity ceiling rises by 25%.

Military Service Pay

The Seventh Pay Commission has suggested increasing Military Service Pay from 1,000, 2,000, 4,200, and 6,000 to 3,600, 5,200, 10,800, and 15,500 for individuals serving in various categories of the Defense Forces.

Absorbed Leaves 

Special disability, hospital, and sick leave have been consolidated into a single leave called Work-Related Illness and Injury Leave (WRIIL). 

The Commission suggested paying all allowances and wages in full to hospitalized employees for various reasons relating to WRIIL.

Lump-Sum Amount Compensation

This Commission enhanced the Ex-Gratia Lump Sum Compensation for personnel serving in various civil and defence forces categories from 10-20 lakh to 24-45 lakh. The sum will be paid to the next of kin.

To Conclude:

The seventh pay commission implemented numerous improvements that benefit both the government and central government employees. 

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Significance of the POCSO Act

The POCSO Act, enacted in 2012, is gender-neutral, recognising that boys can also be victims of sexual abuse. Here's what you need to know about the Act.

The parliament passed the Protection Of Children from Sexual Offences Act in 2012 to effectively combat the increasing evil act of sexual exploitation and sexual abuse of children.

Let's get in-depth and understand the POCSO Act in its simplest form.

Why POCSO Act?

Our country has one of the world's largest populations of children, with 472 million children under the age of eighteen, according to census data from 2011. 

The state's protection of children is guaranteed to Indian citizens under an expansive reading of Article 21 of the Indian Constitution and mandated by India's status as a signatory to the UN. 

The following sections of the I.P.C were used to prosecute child sexual abuse earlies:

I.P.C. (1860) 375- Rape

I.P.C. (1860) 354- Outraging the modesty of a woman

I.P.C. (1860) 377- Unnatural offences

However, such a method had problems, as the I.P.C. could not adequately protect the child due to several flaws, including:

Other than "conventional" peno-vaginal intercourse, IPC 375 does not protect male victims or anybody else against sexual acts of penetration.

There is no statutory definition of "modesty" in IPC 354, and it has a light penalty and is a repeatable offence. Furthermore, it does not safeguard a male child's "modesty."

The phrase "unnatural offences" is not defined in IPC 377. It only applies to victims who have been penetrated by their attacker's sex act, and it is not intended to criminalise child sexual assault.

As a result, legislative reform was required, with a specific child protection statute, which gave birth to POSCO.

Significance of the act

The Act, passed in 2012, is gender-neutral, acknowledging that boys can also be sexual assault victims. Hence, everyone under the age of 18 is considered a child. 

Boys can get sexually attacked. However, the Indian Penal Code does not recognise this, which is corrected under the Act.

The Act further broadened the definition of a sexual offence against a kid. It broadened the definition of sexual assault to cover non-penetrative and aggravated penetrative sexual assault (sections 3–10) and penalties for those in positions of trust, such as public workers, educational staff, and police officers.

Notably, the law also recognises both touch-based and non-touch-based sexual harassment of children (parts 11 and 12), such as stalking, forcing a child to expose themselves or exposing oneself to a child, etc.

Under sections 13, 14, and 15, the Act imposes severe penalties for exposing children to or using them to make child sexual abuse material (CSAM, often known as child pornography).

Magistrate's recording of a child's statementSection 25 of the POCSO act 2012 deals with recording a child's statement by a Magistrate.

Section 25 of the Act

So, now the question comes what does Section 25 of the POCSO act 2012 deals with?

If the child's statement is being recorded under section 164 of the Code of Criminal Procedure, 1973, the Magistrate recording the statement shall, notwithstanding anything in the Code, record the child's testimony as spoken.

Provided that the requirements of the first provision to sub-section (1) of section 164 of the Code are as much as it allows the presence of the accused's lawyer.

Upon the police filing a final report under section 173 of the Code, the Magistrate shall provide a document copy prescribed under section 207 of the Code to the kid and his parents or representative.

Judgment disrobing Act

The court case widely discussed when discussing the act is Satish Ragde vs State of Maharashtra. In the said case, the accused was acquitted of sexual assault under sections 7 and 8 of the Act by the Bombay high court. 

Even though the accused groped a kid, the court acquitted him, citing the lack of evidence to determine if the top was removed or whether the hand was inserted inside the top. The court determined that the accused's actions did not meet the definition of sexual assault because there was no proof of physical contact.

As a result, the court found the defendant guilty under sections 342 and 354 of the Indian Penal Code (1860) (outraging a woman's modesty). It sentenced him to a minimum jail time of one year, which might get extended to a five-year harsh sentence. The decision had made such a stir that the Supreme Court had to put it on hold.

To Conclude:

Children are one of society's most disadvantaged groups because of their inability to communicate their ideas and sorrows freely. Because of the victim's innate frailty and the abuser's ability to overcome it, sexual assaults against children are particularly tough. 

The legislature passed the Protection of Children from Sexual Offenses Act in 2012 to the necessity to safeguard and secure these vulnerable victims.

The POCSO Act was established to protect minors and small children in particular. Since it is supposed to be their protector, the act imposes harsher punishments and other precautions.