Corporate Tax - Introduction

For the Assessment Year 2007-08

Description	Existing Rate* (%)	Proposed Rate* (%)	Difference + - = (%)
Domestic Company
Regular Tax	33.6	33.9**	+0.33
MAT	11.22(of book profits)	11.33(of book profits)	+0.11
DDT	14.025	16.995	+2.97
Foreign Company
Regular Tax	41.82	42.33#	0.41

*It includes the applicable surcharge and the education cess.**If the income is equal or less than Rs 10 million, it is 30.9%.
#If the income is equal or less than Rs 10 million, it is 41.2%.

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A company has been defined as a juristic person having an independent and separate legal entity from its shareholders.Income of the company is computed and assessed separately in the hands of the company. however the income of the company which is distributed to its shareholders as dividend is assessed in their individual hands. Such distribution of income is not treated as an expenditure in the hands of company, the income so distributed is an appropriation of the profits of the company.Residence of a company :A company is said to be a resident in India during the relevantprevious year if:

1. it is an Indian company
2. if it is not an Indian company then, the control and the management of its affairs is situated wholly in India

A company is said to benon-resident in India if it is not an Indian company and some part of the control and management of its affairs is situated outside India.

Income-Tax Authorities :

There shall be the following classes of income-tax authorities for the purposes of the Act 116, namely:-

(a)	the Central Board of Direct Taxes constituted under the Central Boards of Revenue Act, 1963 (54 of 1963),
(b)	Directors-General of Income-tax or Chief Commissioners of Income-tax,
(c)	Directors of Income-tax or Commissioners of Income-tax or Commissioners of Income-tax (Appeals),
(cc)	Additional Directors of Income-tax or Additional Commissioners of Income-tax or Additional Commissioners of Income-tax (Appeals),
(cca)	Joint Directors of Income-tax orJoint Commissioners of Income-tax.
(d)	Deputy Directors of Income-tax or Deputy Commissioners of Income-tax or Deputy Commissioners of Income-tax (Appeals),
(e)	Assistant Directors of Income-tax or Assistant Commissioners of Income-tax,
(f)	Income-tax Officers,
(g)	Tax Recovery Officers,
(h)	Inspectors of Income-tax.

Powers of the authorities :For all purposes of the Income-tax Act, the IT authorities are vested with the various powers which are vested in a Court of Law under the Code of Civil Procedure while trying a suit in respect of any case. More particularly, the provisions of the Code of Civil procedure and the powers granted to the tax authorities under the code would be in respect of :

1. Discovery and inspection
2. enforcing the attendance, including any officer of a bank and examining him on oath
3. compelling the production of books of account and the documents
4. collection certain information [section 133B-inserted by the finance act, 1986]
5. Issuing commissions and summons

It shall be duty of every person who has been allotted permanent account number to quote such number in all his returns or correspondence with income tax authorities, in all challans for the payment of any sum, in all documents prescribed by the board in the interest of revenue.