Introduction

In India, Income tax was introduced for the first time in 1860, by Sir James Wilson in order to
meet the losses sustained by the Government on account of the Military Mutiny of 1857.
Thereafter; several amendments were made in it from time to time. In 1886, a separate
Income tax act was passed. This act remained in force up to, with various amendments from
time to time. In 1918, a new income tax was passed and again it was replaced by another new
act which was passed in 1922.This Act remained in force up to the assessment year 1961-62
with numerous amendments. The Income Tax Act of 1922 had become very complicated on
account of innumerable amendments. The Government of India therefore referred it to the
law commission in1956 with a view to simplify and prevent the evasion of tax. The law
commission submitted its report-in September 1958, but in the meantime the Government of
India had appointed the Direct Taxes Administration Enquiry Committee submitted its report
in 1956.In consultation with the Ministry of Law finally the Income Tax Act, 1961 was
passed. The Income Tax Act 1961 has been brought into force with 1 April 1962. It applies to
the whole of India including Jammu and Kashmir.1
Income tax is generally a composite tax on the aggregate of incomes from various sources.2
However, income is first computed under different heads of income and then aggregate from
the aggregated amount, certain deductions are made is arrive at taxable income. Various
heads of income are generally mutually exclusive. If any income falls under one head, it
cannot be considered under any other head. The method of computing income and the
permissible deductions differ with each head of income. The scope of income charged under
the Income from house property is defined by Section 22 and the computation of income
under this head is explained by Section 23 to 27.
The income tax law in India consists of the following components:
1. Income tax Acts
2. Income tax rules
3. Finance Act
4. Circulars, notifications etc.
5. Legal decision of courts

1
http://creditaid.co.za/personal-finance/history-taxation
2
DATEY V.S, TAXMANN’S INDIRECT TAXES: LAW AND PRACTICE (1st ed., Taxman Publication Pvt
Ltd. 1997).

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 Meaning of Income from House Property

A tax (from the Latin taxo; "rate") is a financial charge or other levy imposed upon a
taxpayer (an individual or legal entity) by a state or the functional equivalent of a state to
fund various public expenditures.
A tax is legally compulsory payment levied by the government on the persons or companies
to meet the expenditure incurred on conferring common benefits upon the people of a
country. In other words a tax can also be describe as a compulsory levy where those who are
taxed have to pay the sums irrespective of any corresponding return of services or goods by
the government.3
A tax is a compulsory financial charge or other levy imposed on an individual or a legal
entity by a state or a function equivalent of a state. A tax is an enforced contribution for the
payment of public expenses1 for the support of Government.
‘A tax’, according to the Chief Justice, “is a compulsory exaction of money by a public
authority for public purposes enforceable by law and is not payment for services rendered”.

Meaning of House Property:-

House property consists of any building or land appurtenant thereto of which the assesse is
the owner. The appurtenant lands may be in the form of a courtyard or compound forming
part of the building. But such land is to be distinguished from an open plot of land, which is
not charged under this head but under the head „Income from Other sources‟ or „Business
Income‟, as the case may be. Besides, „house property‟ includes flats, shops, office space,
factory sheds, agricultural land and farm houses.

Income from house property is defined as the income earned from a property by the assessee.
House property includes the building itself and any land attached to the building. Property
refers to any building (house, office building, warehouse, factory, hall, shop, auditorium, etc.)
and/or any land attached to the building (compound, garage, garden, car parking space,
playground, gymkhana, etc.).

3
AHUJA ,GIRISH AND RAVI GUPTA, BHARAT’S SYSTEMATIC APPROACH TO INCOME TAX,
SERVICE TAX & VAT (23rd edition., Bharat Law House Pvt. Ltd. 2010).

2|Page
Further, house property includes all type of house properties, i.e., residential houses, go
downs, cinema building, workshop building, hotel building, etc.4

Example: - Mr. X has one big house. It includes vast open area within its boundaries. The
house has been let out at a rent of Rs. 1, 00,000 p.m., out of which rent of Rs. 25,000 p.m. is
attributable to the open land. In this case, entire rental income is taxable under the head house
property.

Essential conditions for taxing income under this head

Income from house property is taxable in the hands of its legal owner in whose name the
property stands. „Owner‟ for this purpose means a person who can exercise the rights of the
owner not on behalf of the owner but in his own right. A person entitled to receive income
from a property in his own right is to be treated as its owner, even if no registered document
is executed in his name.

The following three conditions must be satisfied before the income of the property can
be taxed under the head “Income from House Property”:

1. The property must consist of buildings and lands appurtenant thereto;

2. The assesse must be the owner of such house property;
3. The property may be used for any purpose, but it should not be used by the owner for
the purpose of any business or profession carried on by him, the profit of which is
chargeable to tax. If the property is used for own business or profession, it shall not be
chargeable to tax. Ownership includes both free-hold and lease-hold rights and also
includes deemed ownership.5

4
Ibid
5
http://business.mapsofindia.com/india-tax/double-taxation-india.html

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 A. Chargeability (Section 22)

The annual value of property consisting of any buildings or lands appurtenant thereto of
which the assesse is the owner shall be subject to Income-tax under the head 'Income from
house property' after claiming deduction under section 24 provided such property, or any
portion of such property is not used by the assessee for the purposes of any business or
profession, carried on by him, the profits of which are chargeable to Income-tax.6

Basis of Charge:-

The basis of calculating income from house property is the annual value. This is the inherent
capacity of the property to earn income. Income from house property is perhaps the only
income that is charged to tax on a notional basis. The charge in not because of the receipt of
any income but is on the inherent potential of house property to generate income. The annual
value is the amount for which the property might reasonably be expected to let from year to
year.7

Essential conditions for taxing income under this head:-

The following three conditional must be satisfied before the income of the property can be
taxed under the head "Income from House Property":
1. The property must consist of buildings and lands appurtenant thereto,
2. The assessee must be the owner of such house property,
3. The property may be used for any purpose, but it should not be used by the owner for
the Purpose of any business or profession carried on him, the profits of which are
chargeable to tax.

6
http://www.bemoneyaware.com/blog/tax-income-from-house-property/
7
SINGHANIA, VINOD K. AND MONICA SINGHANIA, TAXMANN STUDENTS’ GUIDE TO INCOME
TAX (14th edition, Taxmann Publishing Pvt. Ltd. 2008).

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Section 22 of the Act provides as follows:

“The annual value of property consisting of any buildings or lands appurtenant thereto of
which the assessee is the owner, other than such portions of such property as he may occupy
for the purposes of any business or profession carried on by him, the profits of which are
chargeable to income-tax, shall be chargeable to income tax under the head Income from
House Property".

The following points emerge from the above charging section:

(a) Tax is charged on income from the buildings or lands appurtenant thereto:

The buildings include residential buildings, buildings let out for business or profession or
auditoriums for entertainment programmers. The location of the building is immaterial. It
may be situated in India or abroad.

(b) Tax is charged on income from lands appurtenant to buildings :

Where the land is not appurtenant to a building the income from land can be charged as
business income or “income from other sources”, as the case may be. The lands appurtenant
to buildings include approach roads to and from public streets, courtyards, motor garage,
compound, play-ground and kitchen garden. In case of nonresidential buildings, car-parking
spaces, drying grounds or play-grounds shall be the lands appurtenant to buildings.

(c) Tax is charged from the owner of the buildings and land appurtenant thereto:

Where the recipient of the income from house property is not the owner of the building, the
income is not chargeable under this head but under the head ‘Income from Business or Other
Sources’. For example, the income to a lessee from sub-letting a house or income to a
mortgagee from house property mortgaged to him is not chargeable under the head ‘Income
from House Property’.
The owner of the buildings may be the legal owner or beneficial owner. In ownership, the
ownership of building is considered and not the ownership of income. In certain cases the

5|Page
income may not be received by the owner of the building, still he shall be liable to tax
because he is the owner of the building.8

 C.W.T v Ellis Bridge Gymkhana9

Facts of the Case

The assessment years involved are 1970-71 to 1977-78. The assessee is a club. It filed its
return of wealth being called upon to do so for the aforesaid assessment years but contended
that it was not liable to be assessed under the Wealth Tax Act, 1957 at all. The Wealth Tax
Officer rejected the claim of the assessee. The Appellate Assistant Commissioner was of the
view that the assessee could not be brought to tax under the Act because of the earlier
decision of the Gujarat High Court in the case of Orient Club v. WTO,MANU/GJ/0015/1979
: [1980]123ITR395(Guj) . The Tribunal dismissed the appeal upholding the order of the
Appellate Assistant Commissioner.

Judgment

It was held that charging section to be constructed strictly and person to be taxed must be
brought within its ambit by clear words and not by implications. In the instant case, here was
no way that a club could be assessed as an association of persons in these assessment years.

B. Determination of Annual Value

What is Annual Value?

Income from house property is taxable on the basis of annual value. Even if the property is
not let out, notional rent receivable is taxable as its annual value.

As per Sec. 23(1) (a) the annual value of any property shall be the sum for which the property
might reasonably be expected to be let out from year-to-year. In determining the annual value

8
Ibid
9
(1998) 1 SCC 384.

6|Page
there are four factors which are normally taken into consideration. These are: i) Actual rent
received or receivable, ii) Municipal value, iii) Fair rent of the property, iv) Standard rent.10

Computation of annual value of a property [Sec. 23(1)]

As per the Act the annual value is the value after deduction of Municipal taxes, if any, paid by
the owner. But for the sake of convenience, the annual value may be determined in the
following steps:

Step I: Determine the gross annual value.

Step II: From the gross annual value compared in Step I, deduct Municipal tax actually paid
by the owner during the previous year.

The balance shall be the net annual value which, as per the Income-tax Act is the annual
value.

How to calculate expected rent: The higher of the following two is taken to be the
expected rent:

i) Municipal Valuation;

ii) Fair Rental Value.

Step 2: Taxes levied by any local authority in respect of the property, i.e., Municipal taxes
(including taxes levied for services) to be deducted. Municipal taxes, etc., levied by local
authority are to be deducted from the gross annual value calculated as above, if the following
conditions are fulfilled:

a) The Municipal taxes have been borne by the owner, and

b) These have been actually paid during the previous year.

Therefore, deduction for Municipal taxes, etc., levied by any local authority is allowed if they
are borne and actually paid by the owner. It must be noted that the taxes are allowed as

10
http://www.incometaxindia.gov.in/tutorials/12.%20income-from-house-property.pdf

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deduction only in the previous year in which these are paid. Municipal taxes, etc., due but not
paid shall not be allowed as deduction. However, Municipal taxes, etc., paid during the
previous year are allowable even if they relate to past years or future years.

Gross Annual value

The Gross Annual Value is the municipal value, the actual rent (whether received or
receivable) or the fair rental value, whichever is highest. If, however, the Rent Control Act
applies to the property, the gross annual value Fair rental value or municipal value whichever
is higher or standard rental value whichever is less. If the property is let out but remains
vacant during any part or whole of the year and due to such vacancy, the rent received is less
than the reasonable expected rent, such lesser amount shall be the Annual value.11

The principle of determining GAV is:

Expected Rental Value OR

Actual Rent received for full year, whichever is more.
Here, Expected Rental Value is calculated as follows:
If the let out property is not subject to Rent Control Act ERV is:
FRV or MRV whichever is higher. If the let out property is subject to Rent Control Act ERV
is:
FRV or MRV whichever is higher
OR
Standard Rental Value Whichever is less.

Illustration
The following information is available in respect of two houses of owned by Neeraj.
He let out the first house for a yearly rent of Rs: 11,000. He paid Rs: 1,000 as interest on
borrowings. He paid Rs: 100 as insurance premium. He let out his second house at a monthly

11
DATEY V.S, TAXMANN’S INDIRECT TAXES: LAW AND PRACTICE (1st ed., Taxman Publication Pvt
Ltd. 1997).

8|Page
rent of Rs: 1,200. It is not rented out for 3 months. The unreaqlised rent for the past 5 years
was Rs: 13,000. Compute the income from house property of Mr. Neeraj for the AY 2013-14.

Solution:
Computation of Income from house property for AY 2013-14
First House:
Annual Value: 11,000
Less: Deductions:
Standard deduction (30%): 3,300
Interest on loan: 1,000: 4,300 6,700
Second House:
Annual Value: 14,400
Less: Loss for vacancy period: 3,600
Unrealised rent: 13,000 16,600 --2,200
Income from House Property = 4,500.

 New India Industries Ltd. and another v Union of India and another12

Facts of the Case

The levy and collection of excise duty by the respondents upon the photographic printing
manufactured by the petitioner No. 1 New India Industries Ltd. according to the price
charged by its sole distributor Agfa Gevaert (India) Ltd. was illegal and unauthorised. The
respondents had opposed the petitioners' claim for refund of excise duty, inter alia, on the
ground that the petitioner No. 1 had already passed on the burden of the said duty.

Therefore, the petitioners ought not to be allowed to unjustly enrich themselves by obtaining
an order for refund.

Judgment
It was held that according to Art. 265 of the Constitution is that there must always be a valid
law for making an assessment and recovery of the tax – An assessment of the tax would be

12
AIR1990 Bom 239.

9|Page
illegal when there is the relevant legislation transgresses the constitutional limitation or it is
contrary to the provisions of the taxing law in question - Since no tax can be levied or
collected except by the authority of the law, the Government has a duty to refund the sum
collected without authority to the person who paid the said tax.

C. Treatment of Unrealized Rent (Section 23(I)

The amount of the rent which the owner does not receive but was supposed to be paid by the
tenant of the assessee.
Unrealized Rent means the rent not paid by the tenant to the owner and the same shall be
deducted from the Actual Rent Receivable from the property before computing income from
that property, provided the following conditions are satisfied:

1. The tenancy is bonafide

2. The defaulting tenant should have vacated the property
3. The assessee has taken steps to compel the defaulting tenant to vacate the property
4. The defaulting tenant is not in occupation of any other property owned by the assesse
5. The assessee has taken all reasonable steps for recovery of unrealized rent or satisfies the
Assessing Officer that such steps would be useless.13

Subsequent recovery of unrealised rent – Sec 25 AA:-

Where the assessee cannot realise rent from a property let to a tenant and subsequently the
assessee has realised any amount in respect of such rent, the amount so realised shall be
deemed to be income chargeable under the head "Income from house property" and
accordingly charged to income-tax as the income of that previous year in which such rent is
realised whether or not the assessee is the owner of that property in that previous year.14

13
AHUJA ,GIRISH AND RAVI GUPTA, BHARAT’S SYSTEMATIC APPROACH TO INCOME TAX,
SERVICE TAX & VAT (23rd edition., Bharat Law House Pvt. Ltd. 2010).
14
Ibid

10 | P a g e
Arrears of rent received – Sec 25 B:-

Where the assessee is the owner of any property which has been let to a tenant and he
receives any amount by way of arrears of rent from such property which was not charged to
tax earlier, the amount so received shall be chargeable to tax under the head "Income from
house property". It shall be charged to tax as the income of the previous year in which such
rent is received even if the assessee is no longer the owner of such property. In computing the
income chargeable to tax in respect of the arrears so received, 30% shall be allowed and
consequently 70% alone shall be chargeable to tax. The deduction of 30% is irrespective of
the actual expenditure incurred.

The basic difference between sec 25 AA which deals with unrealised rent received
subsequently and sec 25 B which deals with arrears of rent received is that 30% of the
amount is not available as deduction u/s 25 AA whereas it is allowed as deduction u/s 25 B.

D. Deduction from Income from house Property (Section 24)

Section 24 allows two deductions from Net Annual Value.

[A] Statutory Deduction – 30% of Net Annual Value.

[B] Interest on borrowed capital –

Where the property has been acquired, constructed, repaired, renewed or reconstructed with
borrowed capital, the amount of any interest payable on such capital is allowed as a
deduction; the amount of interest payable yearly should be calculated separately and claimed
as a deduction every year. It is immaterial whether the interest has been actually paid of not
paid during the year.
Standard Deduction u/s 24(a): Standard deduction of 30% of NAV (Net Annual Value) shall
be allowed to the assessee.
Deductions: To arrive at the income taxable under Income from House Property two
deductions are allowed which come under Section 24 of Income Tax Act.

11 | P a g e
Statutory deduction: 30 per cent of the net annual value will be allowed as a deduction
towards repairs and collection of rent for the property, irrespective of the actual expenditure
incurred. But if Annual value is Nil (zero) or negative then the deduction is not allowed.

Interest on borrowed capital: The interest on borrowed capital will be allowable as a

deduction on an accrual basis if the money has been borrowed to buy or construct the house.
Amount of interest payable for the relevant year should be calculated and claimed as
deduction.15
If Loan is borrowed on or after 1-Apr-1999 , construction is completed within three years
from the financial year in which the loan was taken then actual interest amount or
Rs 2,00,000 (1,50,000 for A.y 2014-15 and before )whichever is less. In other cases Rs
30,000 or actual interest which is less.

In case the property is let out, the entire amount of interest accrued during the year is
deductible.
In cases where the house is owned by more than one person and is also self-occupied by each
co-owner, each co-owner shall be entitled to the deduction individually on account of interest
on borrowed money up to a maximum amount of Rs 2 lakh(1.5 lakh was till AY 2014-15) or
30,000. If the house is given on rent, there is no restriction on this amount. Both co-owners
can claim deductions in the ratio of ownership.

A fresh loan may be raised exclusively to repay the original loan taken for purchase/
construction etc., of the property. In such a case also, the interest on the fresh loan will be
allowable. Interest payable on interest will not be allowed. For example if one had not paid
loan EMI on time and interest was charged for late payment. Such interest will not be allowed
as deduction u/s 24 of Income Tax Act 1961

B. Interest on Loan u/s 24(b):

1. Purpose of loan: The loan shall be borrowed for the purpose of acquisition, construction,
repairs, renewal or reconstruction of the house property.

15
http://www.incometaxindia.gov.in/tutorials/12.%20income-from-house-property.pdf

12 | P a g e
2. Accrual basis: The interest will be allowed as a deduction on accrual basis, even though it
is not paid during the financial year.
3. Interest on interest: Interest on unpaid interest shall not be allowed as a deduction.
4. Brokerage: Any brokerage or commission paid for acquiring the loan will not be allowed
as a deduction.
5. Prior period interest: Prior Period Interest shall be allowed in five equal installments
commencing from the financial year in which the property was acquired or construction was
completed.
6. Interest on fresh loan to repay existing loan: Interest on any fresh loan taken to repay the
existing loan shall be allowed as a deduction.
7. Inadmissible interest: Interest payable outside India without deduction of tax at source and
in respect of which no person in India is treated as an agent u/s 163 shall not be an allowable
expenditure.
8. Certificate: The assessee should furnish a certificate from the person from whom the
amount is borrowed.16

E. Deemed Ownership (Section 27)

Meaning of deemed owner

Rental income from property is charged to tax under the head “Income from house property
in the hands of the owner of the property”. If a person receiving the rent is not the owner of
the property, then rental income is not charged to tax under the head “Income from house
property” (E.g. Rent received by tenant from sub-letting).17

Deemed Owner [Section 27]

1. Owner: An Individual shall be considered as owner of a property when the document of

title to the property is registered in his name.
2. Deemed Owner: Under the following circumstances, Income from House Property is
taxable in the hands of the Individual, even if the property is not registered in his name —

16
http://www.karvydistribution.com/files/HUMTUM15thAug.pdf

SINGHANIA, VINOD K. AND MONICA SINGHANIA, TAXMANN STUDENTS’ GUIDE TO INCOME

17

TAX (14th edition, Taxmann Publishing Pvt. Ltd. 2008).

13 | P a g e
(a) Where the Property has been transferred to spouse for inadequate consideration other than
in pursuance of an agreement to live apart.
(b) Where the Property is transferred to a minor child for inadequate consideration (except a
transfer to minor married daughter)
(c) Where the Individual holds an impartible estate.
(d) Where the Individual is a member of Co-operative Society, Company, or other
Association and has been allotted a house property by virtue of his being a member, even
though the property is registered in the name of the Society / Company / Association.
(e) Where the property has been transferred to the individual’s name as part-performance of a
contract u/s 53A of the Transfer of Property Act, 1882. (i.e. Possession of the Property has
been transferred to Individual, but the Title Deeds have not yet been transferred).
(f) Where the Individual is a holder of a Power of Attorney enabling the right of possession or
enjoyment of the property.
(g) Where the property has been constructed on a leasehold land.
(h) Where the ownership of the Property is under dispute.
(i) )Where the property is taken on a lease for a period of not less than 12 years, then the
lessee shall be deemed as the owner of the property.

As per Sec. 27, though the following persons are not the legal owners of the property, yet
deemed to be the owners for the purpose of Sec. 22 to 26:

I. Transfer to a spouse/child [Sec. 27(i)]:

If an individual transfers any house property to his or her spouse/ minor child otherwise than
for adequate consideration, the transferor in that case is deemed to be the owner of the house
property so transferred. This would, however, not cover cases where property is transferred to
a spouse (or minor married daughter) in connection with an agreement to live apart.
Note:- Where the individual transfers cash to his/her spouse or minor child and the transferee
acquires a house property out of such cash, the transferor shall not be treated as deemed
owner of the house property. Such transaction will, however, attract clubbing provisions.

14 | P a g e
 II. Holder of an impartible estate [Sec. 27(ii)]

The holder of an impartible estate shall be deemed to be the individual owner of all properties
comprised in the estate. The impartible estate, as the word itself suggests, is a property which
is not legally divisible.

III. Member of a Co-operative Society, etc. [Sec. 27(iii)]

A member of a co-operative society, company or other association of person to whom a

building or part thereof is allotted or leased under a House Building Scheme of a
society/company/association, shall be deemed to be owner of that building or part thereof
allotted to him, although the co-operative society/company association is the legal owner of
that building.18

 All India Federation of Tax Practitioners and Ors. v Union of India (UOI) &
Ors19

Facts of the Case:

On 1.6.1998 Finance Bill, 1998 was introduced in Parliament. Clause 119 of the Notes sought
to substitute Sections 65, 66 and 68 and amend Section 67 of the Finance Act, 1994 relating
to service tax so as to levy a tax on services rendered by a practising chartered accountant,
cost accountant and architect to a client in professional capacity at the rate of five per cent of
the amount charged to the client. On 3.6.1998, Bombay Chartered Accountants Association
made a representation to the Central Government objecting to the aforestated Bill. On
1.8.1998 the Finance Bill was however passed and the Finance (No. 2) Act, 1998 received the
assent of the President of India. The Act came into force with effect from 1.4.1998. On
7.10.1998, Union of India issued Notification No. 57/98 inter alia exempting taxable services
other than accounting and auditing. On 16.10.1998, Union of India issued another
Notification No. 59/98 inter alia reducing the scope of the exemption. On 20.1.1999, Writ
18
http://www.bemoneyaware.com/blog/tax-income-from-house-property/
19
AIR 2007 SC 2990

15 | P a g e
Petition No. 142/99 was filed by the Federation in the Bombay High Court challenging the
validity of the levy of service tax. By the impugned judgment dated 22.2.2001 the Bombay
High Court rejected the writ petition and upheld the legislative competence of Parliament to
levy service tax.

Judgment

Entry 60 List II refers to taxes on professions etc. and service tax is the tax on the individual
person/firm or company and status. A chartered accountant or a cost accountant obtains a
licence or a privilege from the competent body to practise and on that privilege the State is
competent to levy tax under Entry 60. Entry 60 List II of constitution however not a general
entry and cannot be read to include every activity undertaken by a chartered accountant/cost
accountant/architect for consideration. Service tax is a tax on each activity undertaken by a
chartered accountant/cost accountant or an architect. For each transaction or contract, the
chartered accountant/cost accountant renders professional based services. Activity undertaken
from the point of view of the chartered accountant/cost accountant is an activity based on his
performance and skill, but from the client’s point of view, the chartered accountant/cost
accountant is his service-provider. It is a tax on ‘services’ and as long as a person/firm
remains in the profession, he/it has to pay professional tax and service tax has nothing to do
with the commercial activities which is undertaken for client. Even if the chartered
accountant has no work throughout the accounting year, still professional tax has to be paid
till he remains in the profession.

16 | P a g e
 Conclusion

Taxation system was important source of revenue in Ancient system. In the present era, its
importance remained same. Tax is considered to be the base of development for nay country.
Importance of Tax can be stated in the following words:

“From the treasury, comes the power of the government, and the Earth whose
ornament is the treasury, is acquired by means of the Treasury and Army.”20

As taxation is important for every country, its mode of levying, mode of collection should be
proper. In India, the law is very clear in this regard. It clearly stated that no tax can be levied
without authority of law. Any tax levied without authority of law is ultra-virus and in
contravention of law. Indian Constitution specially deals with this matter. Under
Constitutional provisions power has been given to Centre and State Governments to levy
taxes on the subjects given under the list I, list II and list III of First Schedule. Indian
provisions also restrict double taxation which means no imposition of two taxes on the same
income.

Although there is nowhere in our laws where the word ‘tax’ is defined, yet we were able
to look through some other surrounding materials to bring out a succinct definition for the
concept. The definitions supplied in this material ranged from literal to legal and it was
concluded that whatever definition is chosen by the learner, he must bear in mind the idea
of compulsion in the payment of tax and the fact that the tax must be imposed by
legislation.21

20
DATEY V.S, TAXMANN’S INDIRECT TAXES: LAW AND PRACTICE (1st ed., Taxman Publication Pvt
Ltd. 1997).
21
http://business.mapsofindia.com/india-tax/double-taxation-india.html

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