Define previous year & assessment year. Explain under what circumstances the income of a previous year is taxable in the previous year itself? Also define person under section 2(31) of the income tax act 1961.
Answers
Answer:
AY is the year following the financial year in which you have to evaluate the previous year's income and pay taxes on it. ... The assessment year for the money earned during this period would begin after the financial year ends – that is from 1 April 2020 to 31 March 2021. Hence, the assessment year would be AY 2020-21.
If following conditions are satisfied, then income of a person transferring his assets is charged to tax in previous year itself: It appears to the Assessing Officer during any current assessment year that any person is likely to charge, sell, transfer, dispose of or otherwise part with any of his assets.
an Individual; ... Association of Persons or Body of Individuals or a Local authority or Artificial Juridical Persons shall be deemed to be a person whether or not, such persons are formed or established or incorporated with the object of deriving profits or gains or income.