Income from house property

Income from house property from premarhea

Residential Status of an Individual - Problems

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House Property

House property from premarhea

Scope of Total Income

Scope of total income from premarhea

Introduction to Investment Management

Introduction to investment mangement from premarhea

Introduction to Tax

Introduction to tax from premarhea

Basic Concepts of Income Tax

Basic concepts of income tax from premarhea

Assessment Year and Previous Year

ASSESSMENT YEAR (Section 2(9))

The term has been defined under section 2(9). This means a period of 12 months commencing on 1st April every year. The year in which income is earned is the previous year and such income is taxable in the immediately following year which  is the assessment year. Income earned in the previous year 2019-20 is taxable  in the assessment year 2020-21.

Assessment year means the period starting from April 1 and ending on March 31 of the next year.

Previous year

 The financial year immediately preceding the assessment year. As mentioned earlier, the income earned during the previous year is taxable in the assessment year.

Different types of Assessee

Assessee

“Assessee” means a person by whom any tax or any other sum of money  is payable under this Act.

1.      Normal Assessee:

A normal Assessee is an individual who is liable to pay taxes for the income earned by him for a particular financial year. Each and every Individual who has paid taxes in preceding years against the income earned or losses incurred by him is liable to make payments to the government in the form of tax. Any individual who is supposed to make payments to the government in the form of interest or penalty or anybody who is entitled to tax refund under the IT Act is an Assessee. All such individuals are grouped under the category of Normal Assessee.

2.      Representative Assessee:

Many times, it so happens that an individual is liable to pay taxes for income or losses incurred not only by him, but also for income or losses incurred by a third party. Such an individual is known as Representative Assessee. Basically, he acts as a representative for people who themselves are not in a position to file and pay their taxes themselves. Generally, the people who need representatives are non-residents, minors or lunatics. And the people representing them are either their agents or guardians. Such people are deemed to be Representative Assesses

3.      Deemed Assessee:

Deemed Assessee is an individual who is put in a position to pay taxes for some other person by the legal authorities. Generally, the individuals who are treated as Deemed Assesses are:

• The executors or the legal heir of the property of a deceased person, who in written has passed on his property to the executor, is treated as a Deemed Assessee.
• The eldest son or any other legal heir of a deceased individual (who has expired without writing his will) is treated as a Deemed Assessee.
• The guardian of a minor, a lunatic or an idiot is treated as a Deemed Assessee.
• The agent of a Non-Resident Indian (having Income Sources in India) is treated as a deemed Assessee.

4.      Assessee-in-default:

An Assessee-in-default is an individual who has failed to fulfill his legal duty of paying tax to the government. An employer is deemed to be an Assessee in default if he fails to submit the TDS deducted by him to the government. An employer is supposed to disburse salary to his employees after deducting TDS from their salary and submit the same to the government. However, if he fails to do so then he is treated as an Assessee-in-default.

Types of Taxes

Let us begin by understanding the meaning of tax. Taxes are considered to be the “cost of living in a society”. Taxes are levied by the Governments to meet the common welfare expenditure of the society. There are two types of taxes - direct taxes and indirect taxes.

Direct Taxes: If tax is  levied directly on the income or wealth of a person, then, it  is a direct tax. The person who pays the tax to the Government cannot recover it from somebody else i.e. the burden of a direct tax cannot be shifted. e.g. Income- tax.

Indirect Taxes: If tax is levied on the price of a good or service, then, it is an indirect tax e.g. Goods and Services Tax (GST) or Custom Duty. In the case of indirect taxes, the person paying the tax passes on the incidence to  another person.