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Costing and Taxation · Class 11 Commerce

Ch 3Introduction to Taxation — Class 11 Costing and Taxation, concept-first.

Taxation is one of the oldest tools a government uses to raise revenue for public expenditure, and India's income tax system has evolved considerably over nearly two centuries before taking the shape it has today.

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Key concepts

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Incomes Not Forming Part of Total Income

Section 10 of the Income Tax Act, 1961 lists categories of income that are wholly excluded from Total Income — not merely deducted after being included, but left out of the computation from the start.

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Chapter contents

The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.

3.A

A Brief History of Income Tax in India and the Tax Structure

Taxation is one of the oldest tools a government uses to raise revenue for public expenditure, and India's income tax system has evolved considerably over nearly two centuries before taking the shape…

3.B

Basic Concepts and Definitions under the Income Tax Act

Before any income can be taxed, the Income Tax Act, 1961 first needs a precise vocabulary — WHO is being taxed, WHEN the income is earned versus WHEN it is taxed, and HOW the many different kinds of i…

3.C

Incomes Not Forming Part of Total Income

Not every rupee a person receives is chargeable to tax. Section 10 of the Income Tax Act, 1961 lists several categories of income that are wholly exempt and never enter Total Income at all — they are…

Terms Introduced in the Chapter

This section collects, in one place, every term and exempt-income category introduced in this chapter, for quick reference and revision.

More questions

16 Q
+Show 2 questions2 questions
  1. Q15List any four incomes that do not form part of the Total Income of an assessee, along with the exact Section number under which each is exem…Free
  2. Q16'The Income Tax Act, 1961 recognises five Heads of Income.' Do you agree? List the five heads and state one example of income falling under…Preview
+Show 14 questions14 questions
  1. Q1Trace briefly the history of Income Tax in India. In your answer, state the year in which the Act currently in force was passed, the date fr…Free
  2. Q2Distinguish between Direct Tax and Indirect Tax. State two examples of each.Free
  3. Q3State, with reasons, whether Goods and Services Tax (GST) is a Direct Tax or an Indirect Tax.Free
  4. Q4Distinguish between 'Previous Year' and 'Assessment Year' under the Income Tax Act, 1961. Illustrate with the Previous Year and the correspo…Preview
  5. Q5Define 'Assessee' under the Income Tax Act, 1961. Is every 'Person' under Section 2(31) automatically an 'Assessee'? Explain with reasons.Preview
  6. Q6What is meant by 'Heads of Income' under Section 14 of the Income Tax Act, 1961? Name the five heads.Preview
  7. Q7Distinguish between 'Sources of Income' and 'Heads of Income', with an example.Preview
  8. Q8Distinguish between 'Gross Total Income' and 'Total Income'. Which of the two figures is used to determine the tax actually payable by an as…Preview
  9. Q9Mr. Sen, a member of a Hindu Undivided Family (HUF), received a sum of money during the year out of the income of the HUF. Is this receipt t…Preview
  10. Q10Ms. Roy is a partner in a partnership firm. During the year she received her agreed share of the firm's profit. The firm has already paid ta…Preview
  11. Q11Mr. Ghosh received a sum of money on the maturity of a life insurance policy taken on his own life. State, with reasons, whether this receip…Preview
  12. Q12Shri Banerjee is a Member of the State Legislative Assembly. During the year he received a daily allowance while attending the sittings of t…Preview
  13. Q13A private company organised a marketing contest and gave a cash prize to the winning customer, describing it as an 'award'. Separately, the…Preview
  14. Q14A Municipality earned income during the year from house property it owns within its own jurisdiction. Discuss whether this income is chargea…Preview