Quadrant I - Notes
Paper Code: COC 109
Module Name: Basic Concept part I
Module No: 01
Income Tax Act.
(1) This Act may be called the Income-tax Act, 1961.
(2) It extends to the whole of India.
(3) Save as otherwise provided in this Act, it shall come into force on the 1st day
of April, 1962.
Charge of income-tax.
4. (1) Where any Central Act enacts that income-tax shall be charged for any
assessment year at any rate or rates, income-tax at that rate or those rates shall be
charged for that year in accordance with, and subject to the provisions (including
provisions for the levy of additional income-tax) of, this Act in respect of the total
income of the previous year of every person:
Provided that where by virtue of any provision of this Act income-tax is to be
charged in respect of the income of a period other than the previous year, income-
tax shall be charged accordingly.
(2) In respect of income chargeable under sub-section (1), income-tax shall be
deducted at the source or paid in advance, where it is so deductible or payable
under any provision of this Act.
a) Basic Concepts:
i. Income u/s 2 (24)
ii. Person u/s 2 (31)
iii. Assessee – u/s 2 (7)
iv. Assessment u/s 2 (8)
v. Assessment Year u/s 2(9)
i. Income u/s 2 (24):
The term “Income” means the periodical monetary return coming in with some
sort of regularity from definite source. Apart from this normal meaning of the term income, the
Act has given the definition of Income u/s 2(24) which includes the various items of receipts
as income.
ii. Person u/s 2 (31)
The term, ‘Person’ includes the following:
a) an individual;
b) A Hindu undivided family;
c) A Company;
d) A Firm;
e) An association of person or body of individuals, whether incorporated or not;
f) A local authority; and
g) Every artificial juridical person not falling in the categories mentioned above.
iii. Assessee – u/s 2 (7)
Assessee has been defined under section 2(7). Assessee means a person by
whom any tax or any other sum of money is payable under this Act.
The term Assessee includes:
a) Every person in respect of whom any proceeding under this Act has been
taken for the assessment of his income or assessment of fringe benefit or
of the income of any other person in respect of which he is assessable, or
of the loss sustained by him or by such other person, or of the amount of
refund due to him or to such other person;
b) Every person who is deemed to be an assessee under any provisions of this
Act.
c) Every person who is deemed to be an assessee in default under any
provision of this act.
iv. Assessment u/s 2 (8)
Assessment is the process of determining the tax payable by an
Assessee. This is done in 2 stages
a) Assessing the taxable Income or Loss, if any, and
b) Finding out the tax payable by the assessee or refundable to the assessee
Section 2 (8) defines assessment as “Assessment includes Reassessment’’,
This is inclusive definition. Apart from the original assessment, the definition
intends to include reassessment in certain cases which are reopened as per the
Income Tax Act.
v. Assessment Year u/s 2(9)
Assessment Year means a period of 12 months commencing from 1st day of
April every year.
For example, the assessment year 2018-19 commences on 1st April, 2018 and
ends on 31st March 2019.
