The government formulates taxation policy with an aim of performing a variety of functions and fulfilling the financial needs of the country by using the money received in the form of tax on development projects. Tax is nothing but a mandatory contribution, levied by the government, without reference to any benefit to the taxpayer, in return for the tax paid by him. By nature, taxes are classified as a progressive tax, proportional tax, and regressive tax. Progressive tax refers to the tax which … [Read more...]

While talking about negotiable instruments such as cheques, bills of exchange and promissory note, we came across the terms holder and holder in due course, quite commonly. Holder refers to a person; we mean the payee of the negotiable instrument, who is in possession of it. He/She is someone who is entitled to receive or recover the amount due on the instrument from the parties thereto. On the other hand, the holder in due course i.e. HDC implies a person who obtains the instrument bonafide … [Read more...]

Foreign Exchange Management Act, 1999 (FEMA) emerged as a replacement or say an improvement over the old Foreign Exchange Regulation Act, 1973 (FERA). Foreign investors, frequently hear the terms FERA and FEMA, when they deal with India. As their name specifies, FERA lays emphasis on the regulation of currencies, whereas the FEMA manages foreign exchange, i.e. forex. The first and foremost difference between FERA and FEMA is that the former requires previous approval of Reserve Bank of India … [Read more...]

A will can be described as a legal document, that states the manner in which a person's assets, belongings, and personal stuff are distributed among the legal heirs, after his/her demise. On the other hand, a trust is a form of obligation attached to the ownership of the property, that is a result of confidence, accepted by the owner and author, for the benefit of another person or the owner. As both are used to manage and distributes the assets of a person, many people get puzzled between … [Read more...]

In the legal glossary, you might have heard the terms deed and title, quite frequently. As the term, 'deed' represents a legal document duly signed by the and delivered, to transfer the 'title' or ownership/possession of propoerty or legal rights from one person to another. On the other hand, 'title' implies the combination of legal rights with respect to ownership, possession and charge of the property, that facilitates the holder to control or dispose off the property. These two terms are … [Read more...]

The Indian Contract Act, 1872 has made it clear that there is a thin line of difference between void and illegal agreement. A void agreement is one which may not be prohibited under law, while an illegal agreement is strictly prohibited by law and the parties to the agreement can be penalized for entering into such an agreement. A void agreement has no legal consequences, because it is null from the very beginning. Conversely, illegal agreement is devoid of any legal effect, since it is … [Read more...]

A trust is a contract between the settlor and trustee, formed for the benefit of a third party. In this contractual arrangement wherein the trustee holds the property of the settler, for the sake of the one or more beneficiary. There are two types of trust, i.e. revocable trust - a trust which can be terminated anytime till the author survives and irrevocable trust - a trust that cannot be canceled once created. In a trust, the trustee holds the asset, only as a nominal owner. In India, … [Read more...]

In simple terms, the law may be understood as the systematic set of universally accepted rules and regulation created by an appropriate authority such as government, which may be regional, national, international, etc. It is used to govern the action and behavior of the members and can be enforced, by imposing penalties. Many times the term law is juxtaposed with the term ethics, but there is a difference, as ethics are the principles that guide a person or society, created to decide what is … [Read more...]

There are many forms of political systems which are prevalent in different countries of the world for a long time like monarchy, oligarchy, anarchy, democracy and republic. Of these forms of government, democracy and a republic are quite often juxtaposed, but there is a fine line amidst the two. Democracy refers to the system of masses, i.e. a political system dominated by citizens of the country. Under this system, the general public possess a certain degree of power and authority and takes … [Read more...]

Income Tax is a compulsory obligation which is levied on every citizen, based on their paying capacity, age, and gender. In order to provide relief to the assessee from payment of taxes, the tax law has certain provisions for deduction and exemptions, which decreases the overall tax liability. In deduction, the amount is first included in the income of the taxpayer and then the deduction is allowed as per the rules, i.e. in full or part or when certain conditions are satisfied. An exemption, on … [Read more...]