Finance Act: Every year a Budget is presented before the parliament by the Finance Minister. One of the important components of the Budget is the Finance Bill. The Bill contains various amendments such as the rates of income tax and other taxes. When the Finance Bill is approved by both the houses of parliament and receives the assent of President, it becomes the Finance Act.
Notifications: The CBDT issue 7notifications from time to time for proper administration of the Income Tax Act. Thses notifications become rules and collectively called Income Tax Rules, 1962.
Circulars: Circulars also issued by the CBDT to clarify the doubts regarding the scope and meaning of the provisions. These provisions are issued for the guidance of the Income Tax officers and assessees. These circulars are binding on the department, not on the assessee but assessee can take benefit of these circulars.
Judicial Decisions: Decisions pronounced by Supreme Court becomes law and they are binding on all the courts, Appellate Tribunal, Income Tax Authorities and on assessees while High Court decisions are binding on assessees and Income Tax Authorities which come under its jurisdiction unless it is overruled by a higher authority. The decision of a High Court can not bind other High Court.