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There are generally three methods which are employed for the collection of tax by the Government. They are:—

Generally assessee pays tax in the assessment year (A.Y.) for the income earned in the previous year (P.Y.).Due to this practice, tax collectionis delayed till the time of filing Return of Income and payment of self assessment tax, which happens after the completion of the previous year.Further, it was also found that, some people conceal their actual income and no tax was being paid at all. In order to reduce these delays, Government wants the payer to deduct some amount of tax from the amount which is receivable by the assessee. The amount so deducted is called Tax Deducted at Source or TDS. It can also be termed as “Pay tax as you earn scheme” or “Withholding Tax”. However, this method of tax collection is not meant for allpayments made to the assessee. Presently, TDS covers payments made by thepayer to the assessee or payee. The payer who is responsible to deduct tax is calledas a deductor and the payee from whom tax is deducted is called the deductee.Where, under any circumstances, the deductor had failed to deduct the tax, and the deductee had paid the same, the deductor cannot be further enforced to pay the tax. The system of Tax Deduction/ Collection at Source on applicable payments facilitates the revenue collection at an earlier stage without any delay

 

PROHIBITION OF BENAMI PROPERTY TRANSACTIONS ACT, 1988

The piece of legislation ‘The Prohibition of Benami property Transactions Act, 1988’ is an improved and strengthened version of the Act 1988. The amended statute gives enormous powers and sharpened weapons to its regulatory authority, though it may be invoked only sparingly. This statute assumes significance at times as the benami transactions and money laundering transactions are showing an increasing trend in our country and the government was in need of an effective tool to curb those transactions. The effectiveness of this statute will be more demonstratively visible in the years to come when the regulators start using it in more and the years to come when the regulators start using it in more and more applicable cases.
The intuition to write a book on this topic is emanated from my understanding of its future importance. This law has taken enough precautions to protect the genuine transactions in joint names which are part of the Indian societal system that any person takes care of his/her siblings, parents, children and spouse. Unlike other tax statutes, the judicial precedents are comparatively lesser on this Act. I have taken almost two years to structure my thought process and conceptualise the contents of this book.

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