A SUMMER TRAINING PROJECT REPORT

ON

“A STUDY OF TAXATION AND E-FILLING

AT RAIL VIKAS NIGAM LIMITED
SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF

DEGREE OF MASTER IN BUSINESS ADMINISTRATION 2017-19

UNDER THE GUIDANCE OF:

Ms./ Mr./ Dr./ Prof. _HARMINDER SINGH_________

Assistant Professor/ Associate Professor/ Professor, RDIAS

SUBMITTED BY:

Student Name
Enrollment NO.-05080303917 BATCH2017-19

RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES

An ISO 9001:2008 Certified Institute

NAAC Accredited: A+ Grade (2nd Cycle), Category A+ Institution (by SFRC,
Govt of NCT of Delhi)
(Approved by AICTE, HRD Ministry, Govt. of India)
Affiliated to Guru Gobind Singh Indraprastha University, Delhi
2A & 2B, MadhubanChowk, Outer Ring Road, Phase-1, Delhi-110085
 Table of Contents
Student Declaration…………………………………………………………………… ………i
Certificate from Company.…………………...…………………………………....…..............ii

Certificate from Guide…….………………...…………………………………....…...............iii

Acknowledgement............................................................................................................iv

Executive Summary………………………………………………………………..……………..v

 A summary statement designed to provide a quick overview of the full length

report on which it is based.

List of Tables………………………………………………………………………………….vi

List of Graphs…………………………………………………………………………………vii

List of Charts………………………………………………………………………………viii

List of Abbreviations, if any………………………………………………ix

Page no.
CHAPTER- 1: INTRODUCTION
1.1 About the Industry
1.2 About Organization/Company Profile………………………………

CHAPTER – 2: LITERATURE REVIEW

2.1 Literature Review and Research Gap…………………………….. ……………

2. 2 About The Topic………………………………………………… ……………

CHAPTER – 3: RESEARCH METHODOLOGY

3.1 Purpose of the study……………………………………… ..………...…

3.2 Research Objectives of the study…………………………… …………..

3.3 Research Methodology of the study………………………… …… .

3. 3.1 Research Design…………… ……… …………… ……………......

 3.3.2Method of data collection ……………………………… …

3.3.2.1 Drafting of a questionnaire

3.3.3 Sample design…………………………………………………… ………….

3.3.3.1 Population………………………………… …………………………..

3.3.3.2 Sample size……………………………… ……………………………

3.3.3.3 Sampling method…………………… ………………………………...

3.3.4Duration of the Study…………………………………………………… ………….

3.3.5 Limitations…………………………………………………………… ………

CHAPTER – 4: ANALYSIS& INTERPRETATION

4.1Analysis & Interpretation ………………………………………………….

CHAPTER- 5: FINDINGS & SUGGESTIONS

5.1 Findings …………………………………………………………………………..

5.2 Suggestions…………………..…………………..…………………..………………

CHAPTER- 6: CONCLUSION
6.1 Conclusion …………………………………………………………………………..

BIBLIOGRAPHY

Bibliography……..………………..…………………..…………………..……………

ANNEXURES (if any)

Annexures 1

Annexure 2

FEEDBACK FORM FROM THE INDUSTRY

PLAGIARISM REPORT
 STUDENT’s DECLARATION

This to certify that I have completed the project titled “A STUDY ON TAXATION
AND E-FILLING AT RVNL “ under the guidance of “Prof. Harminder Singh “ in
the partial fulfillment of the requirement for the award of the degree of “Master in
Business Administration” from “Rukmini Devi Institute of Advanced Studies, New
Delhi.” This is an original work and I have not submitted it earlier elsewhere.

Name: PRADEEP CHAUDHARY

EnrollmentNo.050080303917
CERTIFICATE FROM COMPANY
 CERTIFICATE (From the Guide)

This is to certify that the summer training project titled “A STUDY OF

TAXATION AND E FILLING AT RVNL” is an academicwork done by
“PRADEEP CHAUDHARY” submitted in the partial fulfillment of
therequirement for the award of the degree of “Masters in Business
Administration” from “Rukmini Devi Institute of Advanced Studies, New Delhi”
under my guidance and direction. To the best of my knowledge and belief the data
and information presented by him in the project has not been submitted earlier
elsewhere.

Dr. /Mr. /Ms HARMINDER SINGH………….

Assistant Professor/Associate Professor/Professor
RDIAS
 ACKNOWLEDGEMENT
I offer my sincere thanks and humble regards to Rukmini Devi Institute Of Advanced
Studies, GGSIP University, New Delhi for imparting me valuable professional
training in MBA.

I pay my gratitude and sincere regards to Prof. /Dr./Ms.…………., my project Guide

for giving me the cream of his knowledge. I am thankful to him/her as he/she has
been a constant source of advice, motivation and inspiration. I am also thankful to
him/her for giving his/her suggestions and encouragement throughout the project
work.

I take the opportunity to express my gratitude and thanks to our computer Lab
staff and library staff for providing me opportunity to utilize their resources for the
completion of the project.

I am also thankful to my family and friends for constantly motivating me to complete

the project and providing me an environment which enhanced my knowledge.

Name: PRADEEP CHAUDHARY

EnrollmentNo.05080303917
 EXECUTIVE SUMMARY

Need for Study

In last some years of my career and education, I have seen my colleagues and faculties

grappling with the taxation issue and complaining against the tax deducted by their

employers from monthly remuneration. Not equipped with proper knowledge of taxation

and tax saving avenues available to them, they were at mercy of the HR/Admin

departments which never bothered to do even as little as take advise from some good tax

consultant.

This prodded me to study this aspect leading to this project during my MBA course with

the university, hoping this concise yet comprehensive write up will help this salaried

individual assesse class to save whatever extra rupee they can from their hard-earned

monies.
 Objectives

 To study taxation provisions of The Income Tax Act, 1961 as amended by Finance

Act, 2007.

 To explore and simplify the tax planning procedure from a layman’s perspective.

 To present the tax saving avenues under prevailing statures.

Scope & Limitations

 This project studies the tax planning for individuals assessed to Income Tax.

 The study relates to non-specific and generalized tax planning, eliminating the need

of sample/population analysis.

 Basic methodology implemented in this study is subjected to various pros & cons,

and diverse insurance plans at different income levels of individual assesses.

 This study may include comparative and analytical study of more than one tax saving

plans and instruments.

 This study covers individual income tax assesses only and does not hold good for

corporate taxpayers.

 The tax rates, insurance plans, and premium are all subject to AY 2013-14 only.
 ABOUT THE INDUSTRY

Indian Railways (IR) is India's national railway system operated by the Ministry of Railways. It
manages the fourth-largest railway network in the world by size, with 121,407 kilometres
(75,439 mi) of total track over a 67,368-kilometre (41,861 mi) route. Forty nine percent of
the.routes are electrified with 25 KV AC electric traction while thirty three percent of them are
double or multi-tracked.
IR runs more than 13,000 passenger trains daily, on both long-distance and suburban routes,
from 7,349 stations across India. The trains have a five-digit numbering system. Mail or express
trains, the most common types, run at an average speed of 50.6 kilometres per hour (31.4 mph)
In the freight segment, IR runs more than 9,200 trains daily. The average speed of freight trains
is around 24 KM per hour (15 mph)
As of March 2017, IR's rolling stock consisted of 277,987 freight wagons, 70,937 passenger
coaches and 11,452 locomotives. IR owns locomotive and coach-production facilities at several
locations in India. The world's eighth-largest employer, it had 1.308 million employees as of
March 2017
In the year ending March 2018, IR carried 8.26 billion passengers and transport 1.16 billion
tonnes of freight. In the fiscal year 2017-18, IR is projected to have earnings of ₹1.874
trillion (US$27 billion), consisting of ₹1.175 trillion (US$17 billion) in freight revenue
and ₹501.25 billion (US$7.3 billion) in passenger revenue, with an operating ratioof 96.0 percent
Structure[edit]
Main articles: Indian Railways organisational structure and Zones and divisions of Indian
Railways
Indian Railways is headed by a seven-member Railway Board whose chairman reports to

the Ministry of Railways. IR is divided into 17 zones, headed by general managers who report to

the Railway Board.[24][25] The zones are further subdivided into 68 operating divisions, headed

by divisional railway managers (DRM). The divisional officers of the engineering, mechanical,

electrical, signal and telecommunication, stores, accounts, personnel, operating, commercial,

security and safety branches report to their respective DRMs and are tasked with the operation

and maintenance of assets. Station masters control individual stations and train movements

through their stations' territory. In addition, there are a number of production units, training

establishments, public sector enterprises and other offices working under the control of the

Railway Board
Subsidiaries and undertakings

IR is a major shareholder in 16 public sector undertakings (PSU) and other organizations that are

related to rail transport in India. Notable among this list include:

Financing, construction an project implementation: IRFC, RITES, IRCON, MRVC, RVNL Land

and station development: RLDA, IRSDCRail infrastructure: DFCCIL, PRCL

Passenger and freight train operations: KRCL, CONCORIT and

communications: CRIS, RCILCatering and tourism:

IRCTCHuman resources

Main article: Centralised Training Institutes of the Indian Railways

Staff are classified into gazetted (Groups A and B) and non-gazetted (Groups C and D)

employees. Gazetted employees carry out executive / managerial / supervisorial level tasks. As

of March 2017, the number of personnel (Groups A & B) constitutes 1.2% of the total strength,

while Group C & D account for 92.6% and 6.2% respectively.

Recruitment of Group A employees is carried out by the Union Public Service Commission by

examination. Group B employees are recruited by way of promotion among the Group C

employees, by way of both seniority cum eligibility through a selection process. Recruitment of

Group C section and junior engineers and depot material superintendents is conducted by the

Railway Recruitment Board. Group C and D employees are recruited by 21 railway recruitment

boards and cells, which are controlled by the Railway Recruitment Control Board (RRCB). IR

recruits for Group C posts through its RRB NTPC GP (Railway Recruitment Board Non-

Technical Graduate Post) examination.

The training of all groups is shared among seven centralised zonal training institutes and 295

training centers located all over India.

IR offers housing and runs its own hospitals, schools and sports facilities for the welfare of its

staff.

Market Size
Indian Railways’ revenues increased at a CAGR of 9.66 per cent during FY07-FY18 to US$

27.71 billion in FY18. Earnings from the passenger business grew at a CAGR of 9.90 per cent

during FY07-FY18 to reach US$ 7.55 billion in 2017-18P. Freight revenue rose at a CAGR of

9.83 per cent during FY07-FY18 to reach US$ 18.16 billion in 2017-18.
 COMPANY PROFILE
The Company was incorporated in New Delhi as a public limited company on January 24, 2003
as "Rail Vikas Nigam Limited" with the RoC under the Companies Act, 1956. The Company
was issued its certificate of commencement of business on February 18, 2003. Further, the
Company has been conferred the status of 'Schedule A-Public Sector Enterprise'.

The MoR vide letter dated September 19, 2013 bearing reference no. 2010/PL/52/1, conveyed
the approval of the DPE granting the Company the status of 'Category I Miniratna Company'.

About Rail Vikas Nigam Limited (RVNL)

Government of India has conceived a massive investment plan for rail sector to eliminate
capacity bottlenecks on Golden Quadrilateral and Diagonals to provide strategic rail
communication links to ports, construction of mega bridges for improving communication to the
hinterland and development of multi-modal transport corridors.

Rail Vikas Nigam Limited (RVNL), is a Special Purpose Vehicle created to undertake project
development, mobilization of financial resources and implement projects pertaining to
strengthening of Golden Quadrilateral and Port Connectivity. It is the first major non-budgetary
initiative for creating rail transport capacity ahead of demand and on a commercial format.
RVNL has been registered as a company under Companies Act 1956 on 24.1.2003. It is a wholly
owned Government company under the provisions of Section 617 of Companies Act. Certificate
of Incorporation was obtained on 24.1.2003. .
 Role of RVNL

RVNL is assigned the following functions:

 Arranging financial resources for the Projects. For this

purpose, the RVNL would be authorized to approach the
Financial Institutions, Banks, Domestic Market and the
Bilateral and Multilateral Funding Agencies.

 Undertaking project development and execution of works.

 Creating Project specific SPVs for individual works, if required.

 Commercialization of projects wherever considered necessary and feasible.

 The concerned Zonal Railways will undertake the operation and maintenance of the
Railway Projects on completion of their execution by the RVNL under a specific financial
arrangement.

 For providing a revenue stream to RVNL, the projects may be done by RVNL on BOT
concept, where Ministry of Railways is to pay Access Charge/User Charge.
 Corporate Mission

 Creating state of Art rail transport capacity to meet growing demand.

 Executing projects on fast track basis by adopting international project execution,
construction, management practices and standards.
 To make the Project implementation process, efficient both in terms of cost and time.
 Adhering to sound business principles and prudent commercial practices to emerge India’s
top rail infrastructure PSU.
 To implement Rail Infrastructure Project on commercial format through various Public
Private Partnership models.
 To achieve International Quality Standards through innovations.
 To implement Rail Infrastructure Projects on commercial format through various Public
Private Partnership Models.
 To achieve project completions in target time and with best quality.
 Involving private sector in financing the construction of projects and development of
efficient models of Public Private Partnerships with joint venture SPVs with equity
participation by Strategic & Financial Investors including funding options from external
multilateral agencies like the Asian Development Bank.
Board Of Directors
Mr. S. C. Chairman and cmdrvnl@rvnl.org 011-
Agnihotri Managing Director 26183874
Ms. Gita Director/Personnel gitamishra@rvnl.org 011-
Mishra 26192819
Mr. Arun Director/Operations arun.kumar@rvnl.org 011-
Kumar 26738400
Mr. Vijay Director/Projects vijayanand@rvnl.org 011-
Anand 26169637
Mr. S.C. Part Time (Official) edw@rb.railnet.gov.in 011-
Jain Director and ED 23382102
(Works) Railway
Board
Mr. A.P. Part Time (Official) edpsu@rb.railnet.gov.in 011-
Dwivedi Director and ED (PSU) 23386091
Railway Board
Mr. Part Time (Non- deepak.karanjikar@gmail.com
Vinayak B. Official) Director
Karanjikar
Mr. Shiv Part Time (Non- caguptashiv@gmail.com
Kumar Official) Director
Gupta
Mr. R.H. Part Time (Non- rh.khwaja1976@gmail.com
Khwaja Official) Director
Mrs. Sabita Part Time (Non- sabitapradhan157@gmail.com
Pradhan Official) Director
Mr. L.V.M. Part Time (Non- mlingireddy@yahoo.com
Reddy Official) Director
 Main objects of Rail Vikas Nigam Limited
The main objects contained in the Memorandum of Association of the Company are as follows:

 1. "To enter into and carry on business relating to creation and augmentation of capacity of
rail infrastructure including the Golden Quadrilateral and its Diagonals connecting the four
metros and any other project(s) under National Rail Vikas Yojana and any or all activities
connected thereto, such as:
i) plan, design, develop, build, upgrade, convert, modernize, operate and maintain any or all
types of rail infrastructure;
ii) construction of new railway lines, doubling, laying of multiple lines, strengthening of
conversion of existing railway lines;
iii) construction of new railway bridges, strengthening or rebuilding of existing railway
bridges;
iv) electrification, grade separation of level crossings, construction of freight bye pass,
creation and augmentation of passenger/freight terminals;
v) construction of workshops, repair shops, running sheds, and maintenance facilities;
vi) provision of modern signalling and telecommunication systems, train control systems,
safety and disaster management systems; and
vii) upgrading of track, rolling stock and terminals for running high speed freight and
passenger trains.

 2. Acquire, purchase, licence, concession, or assign rail infrastructure assets including

contractual rights and obligations.
 3. a) To carry on business relating to railway related and other construction and to enter into
contracts in India or abroad on a turnkey basis or otherwise either individually or jointly with
other undertakings and companies or persons abroad or in India, including supply, erection
and commissioning of equipment and all services ancillary thereto. b) To carry on the
business/activity/scheme like Build Own Transfer (BOT), Build Own Operate Transfer
(BOOT), Build Lease Transfer (BLT) or any other scheme or project found suitable in and
related to the field of construction and operation or Railway network.
 4. To provide consultancy services for undertaking line capacity, freight marketing,
engineering and traffic surveys, geo-technical investigations, conceptual planning and
feasibility studies, detailed design and engineering, environment impact assessment,
construction supervision and project management, operation and maintenance, quality
assurance, procurement services, training, investment planning, organizational restructuring,
privatization, planning and estimation of fleet requirements, rehabilitation and improvement
of rolling stock repair and servicing facilities, operation and maintenance services, quality
assurance, human resource development, project consultancy and management services,
computer services, energy management, environment engineering, industrial engineering and
other infrastructural facilities in connection with the business as referred to in sub-clause (1)
to (3) above
CHAPTER -2
LITERATURE REVIEW

Taxation Policy has been a widely debated topic all over the world. A large number of research have

been conducted covering different aspects of income tax structure ie. personal income tax, agricultural

taxation, efficiency of income tax administration etc. over the years. In this study, the literature was

studied to get an insight into the objectives of the study. The review of literature is confined to India

only as income tax legal frame work is different from country to country. Many reports of important

committees constituted by Government of India have also been reviewed. A review of relevant studies

is given below

 Indian Taxation Enquiry Committee (1924) was appointed by Government of India to examine

the burden of taxation on different classes of people, equity of taxation and to suggest various

alternative sources of taxation under the chairmanship of Charles Todhunter. The committee

recommendes following measures for improvement in taxation of income:  Loss sustained in

one year should be allowed to carry forward and setoff in the subsequent year.  The income of

married couples should be taxed at the rates applicable to their aggregate income.  In case

private companies are formed just for tax avoidance by with holding dividends, then such

company should be treated as firm

 Taxation Enquiry Commission (TEC) (1953-54) headed by John Matthai was set to review the tax

structure in India. It carried out a depth study of the central taxes and their administration. It

recommended widening the tax structure at the Centre and the State level for the purpose of

financing development outlay and reducing large inequalities of income. It also recommended

for providing tax incentives for production and investment and periodic appraisal of same.

Further, the commission also recommended the financing of small research sections in selected

research institutions by the government

 Kaldor (1956) was invited by the government of India in 1955 to review personal and business

tax in the Indian tax system with a view to augmenting resources for the second five year plan.

He found that prevailing taxation system in India at that time was inefficient . He recommended

the introduction of an annual tax on wealth, taxation of capital gains, a general gift tax and a

personal expenditure tax for broadening the tax base structure

 Aggarwal (1971) analysed the impact of corporate taxes on retained profits of a concern and

performance of corporate sector in India. He also studied its impact on public policy. The study

he covered the period from 1960-61 to 1967-68 and was based on data collected from Reserve

bank of india Bulletins. He highlighted that tax structure was not conductive for growth of

corporate sector. Lack of internally generated funds had shown adverse effect on investment in

corporate sector. He suggested a number of measures for rationalizing corporate tax policy such

as exemption to small companies from distribution dividend tax, revival of development rebate,

removal of taxes on inter corporate dividends and bonus share

 Jhaveri (1972) tried to analyse the impact of income tax concessions on post tax income from

different financial assets eligible for such concession. For this purpose, hypothetical examples

were worked out by taking certain assumed tax rates, rate of interest before tax, different levels

of income and saving period. The results showed that qualifying financial assets were more

useful for those taxpayers who had to pay high marginal rate of tax
 ABOUT THE TOPIC

INTRODUCTION OF INCOME TAX

Income tax in India is levied by the Government of India on taxable income of

individuals, companies, Hindu Undivided Families (HUFs), co-operative
societies, firms, and trusts (recognized as association of persons and body of
individuals) and any other artificial person. Imposition of tax is different for
every individual. Income tax imposition is regulated by the Indian Income Tax
Act, 1961. The Central Board of Direct Taxes (CBDT) has the overall
responsibility of regulating the Income Tax Department in India. It is a division
of the Department of Revenue under the Ministry of Finance, Government of
India. Income tax is a tax payable, at the rate enacted by the Union Budget
(Finance Act) for every Assessment Year, on the Total Income earned in the
Previous Year by every Person.
 MEANING AND DEFINITION

In Income Tax in India are divided in to two types they are:

1. Direct Taxes
2. Indirect Taxes.

Income Tax, Wealth Tax, etc., where the entire burden falls in the taxpayer
directly is called as Direct Taxes, whereas like Service Tax, VAT, etc., are
called as indirect taxes as these will be passed on through a third party.

Income tax can be defined as all sources of income other than agricultural
income which Central Government collects levies on that and shares the same
with the states.

As per Income Tax Act of 1961, all persons who are considered as an assessee
determined on the basis of the person’s residential status in India and their
when their income exceeds the maximum exemption in the prescribed limit and
the income tax will be levied at the prescribed rates according to finance act,
such type of income tax has to be paid on the total income in the previous year
to be paid in relevant assessment year.
 HISTORY

The history of taxation system shows that taxes were levied on either on the
sale and purchase of merchandise or livestock. Further it suggests that the
process of levying and the manner of tax collection were unorganized. But it
suggests that all historical leaders and head countrymen collected taxes to run
its authority. In other words taxes on income, sale, purchase and properties
were collected to run the ruling Government machineries. Further, these
taxes were collected to meet their military and civil expenditure and also to
meet the common needs of the subjects like maintenance of roads, drainage
system, government buildings, administration of justice and other functions of
the region.

Although, there were no homogeneous tax rate structures but it depended on

the production capacity and commodity of that particular country and/or
region. These taxes were collected in cash or in kind and it entirely depended
on the type of commodity or service on which it was levied upon. The history
of taxation suggests these were done to store government buffer stocks to
meet emergencies. Taxes were levied on all classes of citizens. Taxes were
paid in the form of gold-coins, cattle, grains, raw-materials and even by
rendering personal service.

In India, the tradition of taxation has been in force from ancient times. There
was a perfect admixture of direct taxes with indirect taxes and they were
varied in nature. India's history of taxation suggests existence of a large and
composite taxable population. With the advent of the moguls in India the
country witnessed a sea of change in the taxation system of India. Although,
they also practiced the same norm of taxation but it was more homogeneous
in structure and collection.

The period of British rule in India witnessed some remarkable change in the
whole taxation system of India. Although, it was highly in favor of the British
government and its exchequer but it incorporated modern and scientific
method of taxation tools and systems. In 1922, the country witnessed a
paradigm shift in the overall Indian taxation system. Setting up of
administrative system and taxation system was first done in the history of
taxation system in India. The period thereafter witnessed rapid growth and
modernization of the Indian taxation system and the present.
 OBJECTIVES OF TAXES

 Raising revenue: The primary purpose of taxes is to raise the revenue

for the government. The modern government has to perform several functions
for the welfare of the public. The performance of these functions involves
substantial amount of public expenditure.
 Regulation of consumption and production: Taxes are sometimes used
to discourage the consumption and production of unnecessary or harmful goods
like liquor, tobacco etc. This also results in the diversion of production form
luxury goods to necessities.
 Encouraging domestic industries: Taxes in the form of custom duties
are used to reduce the import of certain goods that are domestically available
and thereby the domestic industries for the production of these goods. For
example, high customs duties on goods like TV, AC etc switch over the
demand for the foreign brands.
 Stimulating investments: The instrument of taxation can also be used in
the stimulating investment of the private sector. This can be done by providing
various tax-incentives in the form of tax-holidays, investment allowance and
lower profits.
 Reducing income inequalities: Taxation policy of the government is
often used in reducing the income inequalities of incomes and assets.
Inequality of income can be reduced by the system of progressive taxation
under which the rich people are required to pay much more taxes than poor.
The taxes collected from the rich can further be utilized for providing social
services which benefit the low income groups.
 Promoting economic growth: Taxation policy can also be used for
promoting economic development of the country. The revenue collected by the
government can be used in promoting development of industries and
agriculture. The government can also use these funds in building a better
infrastructure like transport and communication, power etc.
 Development of backward regions: Tax system can be used in ensuring
the development of backward regions. Entrepreneurs can be motivated to set up
their industries in the backward regions by providing tax concessions to them.
 Ensuring price stability: Direct taxes like income tax can be used to
ensure price stability. These taxes reduce the disposable income of individuals
and thereby reduce their purchasing power. This results in the fall in aggregate
demand in the economy and thereby reducing demand-pull inflation.
 CHARACTERISTICS OF GOOD TAX SYSTEM

A good tax system should adhere to certain principle that becomes

the characteristics of good tax system. These principles are called canons of
taxation.

 Canons of equality: Canon of equality states that persons should be

allowed to pay their taxes as per their ability to pay. The burden of tax should
be fair and just. Equality of tax burden can be achieved if the rich people are
taxed more than the poor people not only in terms of tax but also in the terms
of tax rate. This canon tries to achieve the objectives of economic justice.
 Canon of certainty: The canon of certainty implies that the tax-payer
should be informed about every detail relating to the payment of each and
every kind of taxes.
 Canon of economy: Every tax has a system of cost of collection which is
the administrative cost of collection. The canon of economy should be such
that the cost of collection should be minimum . It will be useless to impose a
tax that involves huge expenditure in its collection.
 Canon of productivity: All taxes should be productive. The canon of
productivity implies two things. In the first place, the tax system should be
able to generate enough revenue to meet the required expenditure. Secondly,
taxes should be imposed in such a way as not to obstruct and discourage
production.
 Canon of elasticity: The canon of elasticity implies that the taxes should
be levied that the yields of the taxes can be easily increased or decreased as
per the need of the government.

 Canon of diversity: The canon of diversity requires that the tax system
should be such that the government depends on the number of the taxes so
that every class of citizen may be called upon to contribute something
towards the state revenue.
 Canon of simplicity: The tax system should be easy and simple so that
the tax payer can easily understand its implication, the basis and the method
of calculation etc. without the costly help of the expert

WHO IS LIABLE TO PAY INCOME TAX?

There are seven categories of persons chargeable to tax under the Act.

a) an individual
b) a Hindu undivided family
c) a company
d) a firm
e) an association of person or body of individuals ,whether incorporated or
not
f) a local authority
g) every artificial juridical person not falling within any of the preceding
categories.

Therefore any person not falling in the above mentioned categories, may still
fall in the four corners of the term “person” and accordingly may be liable to
tax under section 4.

The person by whom income tax or other sum of money is payable under the
Act is the ASSESSEE

RESIDENTIAL STATUS

Residential Status

Resident but not Ordinarily

Resident Ordinarily Residents Non Residents
Residents

The three residential status, viz.,

 Resident Ordinarily  Under this category, person
Residents must be living in India at least 182
days during previous year Or
must have been in India 365 days
during 4 years preceding previous
 year and 60 days in previous year.
Ordinary residents are always
taxable on their income earned
both in India and Abroad.

 Resident but not  Must have been a non-

Ordinarily Residents resident in India 9 out of 10 years
preceding previous year or have
been in India in total 729 or less
days out of last 7 years preceding
the previous year. Not residents
are taxable in relation to income
received in India or income
accrued or deemed to be accrue
or arise in India and income from
business or profession controlled
from India.
 Non Residents  Non Residents are exempt
from tax if accrue or arise or
deemed to be accrue or arise
outside India. Taxable if income is
earned from business or
profession setting in India or
having their head office in India.
 INDIVIDUAL HEADS OF INCOME

Income from
Salary

Income from Income from

Other House
Sources Heads property
of
income

Income from
Income from
Business or
Capital Gains
Profession
 Income from Salary
All income received as salary under Employer-Employee relationship is taxed
under this head. Employers must withhold tax compulsorily, if income exceeds
minimum exemption limit, as Tax Deducted at Source (TDS), and provide their
employees with a Form 16 which shows the tax deductions and net paid
income. In addition, the Form 16 will contain any other deductions provided
from salary such as:
1. Medical reimbursement: Up to 15,000 per year is tax free if supported
by bills.
2. Transport allowance: Up to 800 per month (9,600 per year) is tax
free if provided as transport allowance. No bills are required for this
amount.
3. Conveyance allowance: is tax exempt.
4. Professional taxes: Most states tax employment on a per-professional
basis, usually a slabbed amount based on gross income. Such taxes paid are
deductible from income tax.
5. House rent allowance: the least of the following is available as
exemption
Actual HRA received
 50%/40%(metro/non-metro) of basic salary
 Rent paid minus 10% of 'salary'. basic Salary for this purpose is
basic+DA forming part + commission on sale on fixed rate.
The exemption for HRA u/s 10(13A) is the least of all the above three factors.
Perquisites and Exemptions u/s 10
The term "Perquisite" includes value of any benefit or amenity/value of any
concession provided by the employer to the employees. Perquisite Valuation
does not include certain medical benefits. Section 10 exemptions are available
for the following perquisites:
1. Leave Travel Concession u/s 10(5)
2. Perquisites paid to Indian Citizens Employed Abroad 10(7) no
3. Tax Paid on Behalf of Any Employee by the Employer 10(10CC)
4. Any sum received under Life Insurance Company
 Income from House property
Income from House property is computed by taking into account what is
called Gross Annual Value of the property. The annual value in case of a self
occupied house is to be taken as NIL. (However if there is more than one self
occupied house then the annual value of the other house/s is taxable.) From
this, deduct Municipal Tax paid and you get the Net Annual Value. From this
Net Annual Value, deduct:
 30% of Net value as repair cost (This is a mandatory deduction)
 No other deduction available
 Interest paid or payable on a housing loan against this house
In the case of a self occupied house interest paid or payable is subject to a
maximum limit of Rs.1,50,000 (if loan is taken on or after 1 April 1999 and
construction is completed within 3 years) and Rs.30,000 (if the loan is taken
before 1 April 1999). For l non self-occupied homes, all interest is deductible,
with no upper limits.
The balance is added to taxable income.
 Income from Business or Profession
Income arising from profits and gains of any Business or Profession; income
derived by a Trade/ Professional/ similar Association by performing specific
services for its members; any benefit from business whether convertible into
money or not, incentives for exporters; any salary, interest, bonus, commission
or remuneration received by Partner of a firm; any amount received under a
Key man Insurance Policy which also covers Bonus; income from managing
agency and speculative transactions; is taxable.
 Income from Capital Gains
Under section 2(14) of the I.T. Act, 1961, Capital asset is defined as property
of any kind held by an assesse such as real estate, equity shares, bonds,
jewellery, paintings, art etc. but does not consist of items like stock-in-trade
for businesses or for personal effects. Capital gains arise by transfer of such
capital assets.
Long term and short term capital assets are considered for tax purposes. Long
term assets are those assets which are held by a person for three years except
in case of shares or mutual funds which becomes long term just after one year
of holding. Sale of long term assets give rise to long term capital gains which
are taxable as below:
 As per Section 10(38) of Income Tax Act, 1961 long term capital gains
on shares/securities/ mutual funds on which Securities Transaction Tax (STT)
has been deducted and paid, no tax is payable. Higher capital gains taxes will
apply only on those transactions where STT is not paid.
 For other shares & securities, person has an option to either index costs
to inflation and pay 20% of indexed gains, or pay 10% of non indexed gains.
 For all other long term capital gains, indexation benefit is available and
tax rate is 20%
 Income from Other Sources
This is a residual head , under this head income which does not meet criteria to
go to other heads is taxed. There are also some specific incomes which are to
be taxed under this head.
1. Income by way of Dividends
2. Income from horse races
3. Income from winning bull races
4. Any amount received from key man insurance policy as donation.
5. Income from shares (dividend other than Indian company)
Income Tax Slabs for Individual Tax Payers & HUF (Less Than 60 Years Old) for FY

2018-19 – Part I

Income Tax Slabs Tax Rate

Income up to Rs 2,50,000* No tax

Income from Rs 2,50,000 – Rs 5,00,000 5%

Income from Rs 5,00,000 – 10,00,000 20%

Income more than Rs 10,00,000 30%

 More but Less than 80 Years Old) for FY 2018-19 – Part II

Income Tax Slabs Tax Rate

Income up to Rs 3,00,000* No tax

Income from Rs 3,00,000 – Rs 5,00,000 5%

Income from Rs 5,00,000 – 10,00,000 20%

Income more than Rs 10,00,000 30%

 (80 Years Old Or More) for FY 2018-19

Income Tax Slabs Tax Rate

Income up to Rs 5,00,000* No tax

Income from Rs 5,00,000 – 10,00,000 20%

Income more than Rs 10,00,000 30%

 ONLINE TAX IN INDIA

In India, online tax filing has become an integral part of the process of registering tax
returns. With the increasing penetration of internet and rising levels of web awareness and
work pressure among tax payers, many people now prefer to fill the tax according to their
convenience and avoid the cues.

HOW TO FILE ONLINE TAX IN INDIA

The basic steps for filing tax returns online in India can be mentioned as below:

 Customers need to sign up with the service provider to be able to avail their services
 After signing up, customers need to enter their financial details. The returns will be
generated on the basis of the entries.
 Once the data is entered the software reviews it.
 After the computation is done, the clients need to give the payment on the basis of
the filing plan chosen by them.
 Next, the user needs to authorize the service provider to file the tax returns on their
behalf.
 The acknowledgment will be provided via e-mail once the process is completed and
the document is signed digitally. The customer receives an ITR-V if the document is
not signed digitally.

Following are the major benefits for tax payers who use the tax filing portals:

 These companies provide the users in depth knowledge of tax laws

 The technology used by these companies is comparable to the best banks across the
world
 Tax computation services are provided free of cost. Tax payers only need to pay
when they are filing the tax returns
 They do not put the users off with unnecessary pop-ups or advertisements
 Majority of these sites are backed by the Income Tax Department. This means that
these companies are authorized to file tax returns with the IT department on behalf of
their customers
 Tax returns can be prepared and filed by customers from any income class.
 E-FILLING

A. Select appropriate type of Return.

B. Download Return Preparation Software for selected Return Form.
C. Fill your return offline and generate a XML file.
D. Register and create a user id/password AT Incomtaxindiaefiling.gov.in
E. Login and select relevant Assessment year on left panel under "Submit Return"
F. In Next screen ,select the form Name (whichever is applicable in your case)
(i) Select digital signature NO
(ii) In next screen Browse and select XML file prepared by you and click on "Upload"
button
G. On successful upload acknowledgement details would be displayed. Click on "Print"
to generate printout of acknowledgement/ITR-V Form.
H. In case the return is digitally signed, on generation of "Acknowledgement" the
Return Filing process gets completed.
I. In case the return is not digitally signed, on successful uploading of e-Return, the
ITR-V Form would be generated which needs to be printed by the tax payers. This is an
acknowledgement cum verification form.
A duly signed ITR-V form should be mailed to
“Income Tax Department – CPC, Post Bag No - 1, Electronic City Post Office, Bengaluru -
560100, Karnataka, ” BY ORDINARY POST OR SPEED POST ONLY within 120 days of
transmitting the data electronically.
ITR-V sent by Registered Post or Courier will not be accepted.
No Form ITR-V shall be received in any other office of the Income-tax Department or in
any other manner. In case, Form ITR-V, is furnished after the above mentioned period, it
will be deemed that the return in respect of which the Form ITR-V has been filed was never
furnished and it shall be incumbent on the assessee to electronically re-transmit the data and
follow it up by submitting the new Form ITR-V within 120 days. This completes the Return
filing process for non-digitally signed Returns.
 THE PROCESS OF TAX FILLING IN INDIA

Many people are, naturally, unhappy to see the tax deducted at source (TDS) eroding their
salaried income. They are a bit happy too, in a way, as they feel the major task of paying tax
is finished with & they need not worry about anything. Well, they are so wrong! Anybody
who pays tax has to also file income tax returns.

Every single person who pays tax in India has to file his/her income tax. Do not assume that
just because you do not have your own business and are getting a salary working for
somebody, that you don’t need to file the tax returns. Yes, even a salaried individual in India
has to file income tax returns.

Many salaried people think that the tax is deducted at source (called TDS), but are unaware
that it is not only their income from a job that is taxed. Their income from any other source
is also liable for tax, such as if they are earning a part-time income from an online job, are
having fixed deposits in a Bank, etc. So you must file your income tax returns before the end
of the financial year.

The process of tax filing involves submission of tax along with necessary documents
declaring yearly income of the individual or company. In India the process of tax filing is
governed by the Ministry of Finance. The Ministry of Finance of Government of India has
different departments that are involved with the process of tax collection.

The most important department that is associated with the process of tax filing in India is the
Department of Income Tax, Government of India. The corpus accumulated from individuals
and companies as income tax are forwarded to the Ministry of Finance, Government of
India. The revenue so collected is used to run the Government of India machineries. The
whole process of tax filing in India is done in accordance with the Income tax acts and rules
as promulgated by the Department of Income Tax, Government of India. The main purpose
of filing tax returns in India is to have records of structured information. The tax of an
individual or a company is submitted against an account number which is an unique
combination of alpha-numeric character called Permanent Account Number (PAN). This

PAN enables the taxing authority to record each and every relevant details pertaining to tax
declaration of a particular person or company in India. This is a fool proof process and there
is no place for discrepancies.

Over the years the process of tax filing in India has made tremendous progress. Gone are the
days when one had to wait for endless hours to see his yearly tax declaration being verified
and accepted. Today, the department of Income Tax under the government of India has
facilitated its citizens with e-fling process. The procedure involves filing of income tax
returns over Internet. This has in fact simplified the arduous mechanical tax declaration
process in India. Now an individual or company can file his tax according to his
convenience by simply quoting the unique PAN. All the required information regarding
filing process and necessary documents are mentioned therein. The concerned individual or
company should fill-up the relevant electronic form according to the instructions given
therein.

The important declarations that are to be made while undertaking the process of e-filing tax
are as follows -

Information required for individual tax payer -

 A copy of last year's tax return

 Bank Statement
 TDS certificates
 Savings certificates / Deductions
 Interest statement showing interest paid to the individual throughout the year

Information required for corporate tax payer -

 A copy of last year's tax return

 Bank Statement
 TDS certificates
 Savings certificates/Deductions
 Interest statement showing interest paid to the corporate throughout the year
 Profit and Loss Account
 Balance Sheet
Is there a fine for not filing income tax returns in India?

Yes, there definitely is a fine for not filing income tax returns in India. For every month
delayed, you are paying 1.5% per month. If you do not file your income tax returns before
the last date of the assessment year (March 31st), you will have to pay a fine of Rs.5000/-.
What is the last date of filing income tax returns in India?

1. For those with income above INR 40lakhs, the last date for filing income tax returns in
India is September 31st.

2. For those whose income is below INR 40lakhs, the last date for filing income tax returns
in India is July 31st.

3. For both the above groups of tax payers, they can still file their income tax returns before
March 31st; but then each month delayed means more interest to be paid on the delayed tax.

TAX PENALTIES

The major number of penalties initiated every year as a ritual by Income Tax Authorities is
under section 271(1)(c)which is for either concealment of income or for furnishing
inaccurate particulars of income.

"If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course
of any proceedings under this Act, is satisfied that any person-

(a) has failed to comply with a notice under sub-section (1) of section 142 or sub-section (2)
of section 143 or fails to comply with a direction issued under sub-section (2A) of section
142, or

(b) has concealed the particulars of his income or furnished inaccurate particulars of such
income,

he may direct that such person shall pay by way of penalty,-

(ii) in the cases referred to in clause (a), in addition to any tax payable by him, a sum of ten
thousand rupees for each such failure;

(iii) in the cases referred to in clause (b), in addition to any tax payable by him, a sum which
shall not be less than, but which shall not exceed three times, the amount of tax sought to be
evaded by reason of the concealment of particulars of his income or the furnishing of
inaccurate particulars of such income
CHAPTER – 3: RESEARCH METHODOLOGY
 PURPOSE OF STUDY

 To carry out a critical TAX analysis at Rail vikas vigam limited.

 To identify various problems while filling a income tax return.
 To study various documents required in filling ITRs .
 To study different exemptions under Income tax act
 Identifying various ITR forms
 To rectify the errors at the time of filling a return
 To find out various weaknesses in Rail vikas nigam limited.
 Objective of Research Study

Following list of objectives were kept in mind at the time of study----

 To understand the concept and importance of Direct tax.

 To study the types of Direct taxes

1. Income tax
2. corporate tax
3. Wealth tax
4. Gift tax

 To analyzing the net taxable value of the tax payer.

 To calculate and make the plans for the future.
 To providing and recording useful information to the account Department for future use.
 To study taxation provisions of The Income Tax Act, 1961 as amended by Finance Act,
2007.
 To explore and simplify the tax planning procedure from a layman’s perspective.
 To present the tax saving avenues .
 Research Design

Methods of Data Collection

In this report I have used Secondary Method as techniques of data collection i.e.

 Primary
 Secondary

Secondary data- The secondary data is the data which is being published already and is not
collected by the researcher directly. The published data is available on the internet or from some
magazines or journals etc. in my report I have collected the secondary data from different
sources whose links are further given in the bibliography.

For completion of my study only secondary data has been used. The main sources are annual
reports. Besides for framing conceptual framework, various books and published material in
standard books and newspapers, Journals and websites has been made use of.