HISTORY ABOUT tax and every one term AND CASES WHEN INCOME OF PREVIOUS YEAR IS ASSESSED within the SAME YEAR
HISTORY ABOUT tax
“In this world, nothing is often said to make certain, except death and taxes”
-Tax is mandatory liability for each citizen of the country. There are two sorts of taxes in India.
(i)Direct tax and,
-In India tax was established first time in 1860 through Wilson to unravel the losses problems of the govt.
WHAT GOVERNMENT DO FROM OUR TAXES?
-Provide Health care through government hospitals.
-Provide cooking gas on subsidy and concessional rate.
-Used for completing various welfare schemes including employment programs.
2.ASSESSMENT YEAR (CURRENT YEAR)
3.PREVIOUS YEAR (THAT YEAR WHICH WAS BEFORE CURRENT YEAR)
-As per tax Act 1961 section 2(7), an Assessee could also be a 1 that’s vulnerable to pay the taxes under any provisions of tax act 1961.
-Assessee may be a person which proceeding income has been initiated or next year’s income has been assessed under the tax act 1961.
-Assessee is a person who is deemed assessee under any of the provisions of this act.
-An Assessee is a default under any provisions of this act because he was liable.
i). a private.
ii). A Hindu Undivided Family(HUF).
iii). A Company.
iv). A Firm.
v). An Association of Person.
vi). A Body of people.
vii). an area Authority
viii). Artificial Juridical Person:-Which isn’t included in any sub-clause mentioned above.
-It means the amount of 12 months commencing on 1st April per annum in India till 31st March. As such it’s referred to as fiscal year.
-This tax department always takes selected same year for its assessment procedure.
-Tax is paid by the assessee of the previous year in the current assessment year.
3.PREVIOUS YEAR (Section 2(34) r.w.Section 3):-
The term previous year is extremely important. As the word “previous” means “coming before” hence it is often simply said that the previous year is that the fiscal year preceding the assessment year.
For example-for assessment year 2020-2021, the previous year should be the fiscal year ending on 31st March 2021.
In simple words, it may be said that the year during which income is earned is named the previous year and therefore the next year during which such income is computed and put to tax is understood as the Assessment Year.
For Example- Income earned by an Assessee within the previous year 2020-2021. the straightforward rule is that the income of a previous year is Taxed in its relevant Assessment year subject to certain Exceptions.
EXCEPTIONS: Each fiscal year both Assessment year and former year.
(I) NEWLY found out BUSINESS OR PROFESSION:
The Assessee is free to establish any new business or to start any Profession on any day and therefore the first previous year just in case of a newly found out Business/Profession or newly created source of income shall get on the day it’s found out and endways 31st March next following. So, the primary previous year could also be of 12 months or but 12 months but all subsequent previous years shall be of 12 months duration and always be starting on 1st April annually.
(II) IN CASE OF A NEWLY CREATED SOURCE OF INCOME:
In such case, the previous year shall be the amount between the day on which such sources come into existence and 31st March next following.
SOME CASES WHEN INCOME OF PREVIOUS YEAR IS ASSESSED within the SAME YEAR(ASSESSMENT YEAR).
1.SHIPPING BUSINESS OF NON-RESIDENTS:
Before the ship leaves the Indian port, the master of the ship is under obligation to furnish a return of the full amount of fare. during this case, 7.5% of the quantity of fare shall be deemed to be income on which tax is charged.
2.ASSESSMENT OF PERSONS LEAVING INDIA:
Any individual may leave India during the present assessment year, the total income of such individual shall be chargeable to tax within the same Assessment year.
3.ASSESSMENT OF ASSOCIATION OF PERSON (AOP), BODY of people (BOI) OR ARTIFICAL JURIDICAL PERSON FORMED FOR PARTICULAR EVENT OR PURPOSE:
The year at which AOP, BOI, or Artificial Juridical person dissolved within the Assessment year in such situation that year shall be chargeable to tax therein assessment year.
4.ASSESSMENT OF PERSONS LIKELY TO TRANSFER PROPERTY TO AVOID TAX:
If a person is probably going to sell any of his assets to avoid tax then the entire income of such persons is chargeable to tax within the same previous year.
Where any business is discontinued in any Assessment year the income of that year is chargeable to tax within the same Assessment year.
-Citizenship and Residential status are two different concepts.
-Residential status is decided for the previous year.
-A person could also be a Resident of quite two countries for any Previous year.
An individual may either be a:-
RESIDENT IN INDIA
NON-RESIDENT IN INDIA