ASSESSMENT YEAR S.

2(9)
Section 2(9) defines an Assessment year as the period of twelve months starting from the first day of April every year An assessment year begins on 1st April every year and ends on 31st March of the next year. For example, Assessment year 2012-13 means the period of one year beginning on 1st April, 2011 and ending on 31st March, 2012. In an assessment year, income of the assessee during the previous year is taxed at the rates prescribed by the relevant Finance Act. It is therefore, also called as the Tax Year

PREVIOUS YEAR- S. 2(34) & S. 3

3.1. Defintion: Section 3 defines Previous year as the financial year immediately preceding the assessment year. Income earned in one financial year is taxed in the next financial year. The year in which income is earned is called the previous year and the year in which it is taxed is called the assessment year.

PERSON S. 2(31) 4.1 Definition:

Section 2(31) gives an inclusive definition of person Person includes: a) an individual; b) a Hindu undivided family (HUF); c) a company; d) a firm; e) an Association of Persons(AOP) or a Body of Individuals,(BoI) whether incorporated or not; f) a local authority; and g) every artificial juridical person not falling within any of the preceding categories 4.2 Inclusive definition: Since the above definition of person is inclusive one and not exhaustive, there may be cases, when an entity not falling in the above seven categories may still be treated as person inviting the provisions of the Act. description of these seven categories is as follows: a. Individuals are all living persons of blood and flesh e.g. .Ram, Shyam, Gopal, Albert, Ibrahim etc. b. Hindu Undivided Families (HUF) or Hindu joint families are regarded as separate tax entities in view of the specific law of succession prevalent among the Hindus. c. Company as per section 2(31) includes Indian as well as

foreign companies and public as well as private Companies. Besides, the CBDT has the power to declare any institution as a Company. Section 25 companies (charitable companies) are also included under the purview but have separate exemptions under the Act. d. Partnership firms including Limited Liability Partnerships (LLPs) are regarded as distinct taxable units separate from their partners. Therefore, under the Act, firms are taxed as the firms and individual partners are taxed separately in their personal capacity. e. BOI and AOP are the group of persons carrying on some activities to earn income such as joint venture. Normally AOPs are contractual in nature like a joint venture agreement if such venture not formed as a partnership or a company. On the other hand, BOI may be due to circumstances such as joint owner of a estate. Clubs, Societies, Charitable Trusts etc are covered under this head. f. Municipal corporations, Panchayats, Cantonment Board, Zila Parishads etc are the examples of Local authorities. g. Final category is residual category and covers all such persons which are not covered in any of the above six categories.

ASSESSEES. 2(7)
5.1 Definition : U/s 2(7) Assessee means a person by whom income tax or any other sum of money is payable under the Act and it includes: a. every person in respect of whom any proceeding under the Act has been taken for the assessment of his income or loss or the amount of refund due to him b. a person who is assessable in respect of income or loss of another person or who is deemed to be an assessee, or c. an assessee in default under any provision of the Act

ASSESSMENT - S 2(8)
An assessment is the procedure to determine the taxable income of an assessee and the tax payable by him. S. 2(8) of the Income Tax Act, 1961 gives an inclusive definition of assessment an assessment includes reassessment U/s 139 of the Act, every assessee is required to file a self declaration of his income and tax payable by him called return of income. The Income Tax officer may accept the return summarily without making any enquiry into its contents. This is called as the summary assessment-S (143(1). Alternatively, the assessing officer may call upon the

assessee to explain his return of income and thereafter the assessing officer after making necessary enquiry frames a reasoned order determining the total income and the tax payable by the assessee This is called the regular assessment-S 143(3).

INCOME- S 2(24)
Definition; Although, income tax is a tax on income, the Act does not provide any exhaustive definition of the term Income. Instead, the term income has been defined in its widest sense by giving an inclusive definition. It includes not only the income in its natural and general sense but also incomes specified in section 2 (24). Broadly the term Income includes the following: i. profits and gains ; ii. dividend; iii. voluntary contributions received by certain institutions viz. a. a trust or an institution created or established wholly or partly for charitable or religious purposes( including a legal obligation), b. a scientific research association U/s 10(21), c. a fund or trust or institution for promotion of sports-S 10(23), d. any university or other educational institution- S 10(23), e. any hospital or other institution S 10(23C) f. an electoral trust

GROSS TOTAL INCOME- S -14:

Section 14 of the Act defines the Gross Total Income as the aggregate of the incomes computed under the five heads after making adjustments for set-off and carry forward of losses. The five heads of income are as follows namely: 1. Income from Salaries 2. Income from House Property 3. Profits and Gains from Business & Profession 4. Capital Gains 5. Income from Other Sources