The income tax department is formed under the Income Tax Act of 1961. The Income Tax act is governed by the Finance Act of India. The Central Board of Direct Taxes control derives its power from the Central Board of Revenue Tax of 1963 to give necessary input for policy making and planning of the income tax department.
All basic policy inputs for the functioning of the income tax department the setting up of the office of the in various parts of the country for ease in collection of the taxes comes under CBDT. All trainings of the people working for the income tax Department also are in the purview of CBDT.
The acts which form the basis and working of the income tax department and come under its purview are
1. Income Tax Act
2. Wealth Tax Act
3. Expenditure Tax Act
4. Gift Tax Act
5. Interest Tax Act
The department would check adherence to the following rules during their work.
1. Income tax rules
2. Wealth tax rules
3. Expenditure tax rules
4. Gift tax rules
5. Interest tax rules
International taxation is also a part of their job and duties to be performed.
Under this NRI taxes, Taxes for foreign companies, advance ruling and transfer pricing falls under their jurisdiction.