Q3. 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.
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Answers
Incomes Which Are Charged To Tax In The Previous Year Itself
Income of a person leaving India [Section 174]
Income of a person likely to transfer property to avoid tax [Section 175]
Income of discontinued business or profession [Section 176]
Income from shipping business of non-residents [Section 172]
Income of bodies formed for short duration [Section 174A]
General comment
Incomes which are charged to tax in the previous year itself viz:
o Income of a person leaving India [Section 174]
o Income of a person likely to transfer property to avoid tax [Section 175]
o Income of discontinued business or profession [Section 176]
o Income from shipping business of non-residents [Section 172]
o Income of bodies formed for short duration [Section 174A]
Generally, income of previous year is taxed (i.e., assessable) in the immediately following assessment year. However, in following cases, income of previous year is taxed in the previous year itself :
(1) Income of a person leaving India [Section 174]
If following conditions are satisfied, then income of a person leaving India is charged to tax in the previous year itself:
It appears to the Assessing Officer that any individual may leave India during the current assessment year or shortly after its expiry.
Such a person has no present intention of returning to India.
In above cases, the total income of such an individual upto the probable date of his departure from India shall be charged to tax in that assessment year.
Example
Mr. Francis is a foreign citizen. He has been residing in India since January, 2000. At the time of making his assessment for the assessment year 2012-13 (in January 2013), the Assessing Officer came to know that Mr. Francis is going to leave India on 8-4-2013. In this case, at the time of completing assessment for the previous year 2011-12 (i.e., assessment year 2012-13), the Assessing Officer will make following three assessments :
The assessment of the income of the previous year 2011-12.
The assessment of the income of the previous year 2012-13.
The assessment of the income of the period 1-4-2013 to 8-4-2013.
(2) Income of a person likely to transfer property to avoid tax [Section 175]
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.
The intention of such sale, transfer, etc, is with a view to avoid payment of any liability under the provisions of the Act.
In above cases, the total income of such person for the period from the expiry of the previous year for that assessment year to the date when the Assessing Officer commences proceedings under section 175 shall be chargeable to tax in that assessment year.
Example
In November 2012, while making the assessment of income of Mr. Kumar for the assessment year 2012-13, i.e., previous year 2011-12, the Assessing Officer came to know that Mr. Kumar is transferring his building with an intention to avoid payment of Income-tax liability. Considering the intention of Mr. Kumar, the Assessing Officer issued notice (in November, 2012) to Mr. Kumar to furnish his return of income for the period April, 2012 to November, 2012.
Explanation:
1.1) No. of logs in first row, second row, third row,...
(b) follow a pattern forming an A.P. with common difference -1.
Reason:- The first term is 20 and the second term is 19. So, the common difference (d) = 19 - 20 = -1
(1.2) The no. of rows in which 200 logs are stacked is
(c) 16
Reason:- a = 20, d = -1
\sf S_{n}=200Sn=200
\sf S_{n}=\dfrac{n}{2}(2a+(n-1)d)Sn=2n(2a+(n−1)d)
\sf 200=\dfrac{n}{2}(2(20)+(n-1)(-1))200=2n(2(20)+(n−1)(−1))
\sf 400=n(40+1-n)400=n(40+1−n)
400 = 41n - n²
n² - 41 + 400 = 0
n² - 25n - 16n + 400 = 0
(n - 25)(n - 16) = 0
n = 25
or n = 16
\sf T_{25}=a+24d=20-24=-4T25=a+24d=20−24=−4
\sf T_{16}=a+15d=20-15=5T16=a+15d=20−15=5
Rejecting the negative term, we get the answer.
(1.3) The no. of logs in the top row is
(a) 5
Reason:- \sf T_{16}=a+15d=20-15=5T16=a+15d=20−15=5
(1.4) The no. of logs in the middle rows are
(d) 13, 12
Reason:- 20, 19, 18, 17, 16, 15, 14, 13, 12, 11, 10, 9, 8, 7, 6, 5
Number of observations = 16
Median = ((n/2)th term + ((n/2) + 1)th term) ÷ 2
Median = ((16/2)th term + ((16/2) + 1)th term) ÷ 2
Median = (8th term + 9th term) ÷ 2
The 8th and the 9th term is 13 and 12, respectively. The rows cannot be in points so we won't solve the median further.
(1.5) The no. of logs in the top two rows is
(b) 11
Reason:- The bottom rows are 20, 19,....6 and 5. So, the logs in the top two rows are 6 + 5 = 11.