Q. Define the term “person” and “assessee” under the income tax act.
What is regarded as income under the income tax act?
Ans: Person [Section 2(31)]
Person includes
seven types of persons namely:
a. An individual;
b. An Hindu
undivided family (HUF);
c. A company;
d. A firm;
e. An association
of persons (AOP) or a body of individuals (BOI);
f.
A local authority;
g. Every
artificial juridical person not falling within any of the preceding sub
clauses.
The 2 basic
differences between AOP and BOI are:
a) In BOI there
are only individuals but in AOP there can be any type of persons.
b) BOI is
creation of law whereas AOP can be created by different persons coming together
for doing some income producing activity on the voluntary basis.
Assessee
[Section 2 (7)]
To mean a person by whom any tax or any
other sum of money payable under the Act and include:
i)
Every person in respect of whom any
proceeding has been initiated under the act for the assessment of his income or
the income of any other person.
ii) A person who is deemed to be assessee under any provision of the Act.
iii) A person who is deemed to be an assessee in default in any of the
provision of the Act.
The above explanation divides various types
of assessee into three categories:
(a) Ordinary
assessee
(b) Representative
assessee or deemed assessee
(c) Assessee-in-default
Meaning of Income
According to
Sec. 2(24) of Income tax Act, 1961, “Income” includes:
(i) profits and
gains;
(ii) voluntary
contributions received by a trust created wholly or partly for charitable or
religious purposes or by an institution established wholly or partly for such
purposes.
(iii) the value
of any perquisite or profit in lieu of salary taxable under clauses (2) and (3)
of section 17;
(iv) the value
of any benefit or perquisite, whether convertible into money or not, obtained
from a company either by a director or by a person who has a substantial
interest in the company, or by a relative of the director
(v) any sum
chargeable to income-tax under clauses (ii) and (iii) of section 28 or section
41 or section 59;
(vi) any capital
gains chargeable under section 45;
(vii) the profit
and gains of any business of insurance carried on by a mutual insurance company
or by a co-operative society;
(vii) any
winnings from lotteries, crossword puzzles, races including horse races, card
games and other games of any sort or from gambling or betting of any form or
nature whatsoever;
Explanation: for
the purposes of this sub-clause:
a. “lottery”
includes winnings, from prizes awarded to any person by draw of lots or by
chance or in any other manner whatsoever, under any scheme of arrangement by
whatever name called;
b. “card
game and other game of any sort’ includes any game show, an entertainment
programme on television or electronic made, in which people compete to win
prizes or any other similar game;
(ix) any sum
received by the assessee from his employees as contributions to any provident
fund or superannuation fund or any fund set-up under the provisions of the
Employees’ State Insurance Act, 1948 (34 of 1948); or any other fund for the
welfare of such employees;
(x) any sum
received under a Keyman insurance policy including the sum allocated by way of
bonus on such policy.
(xi) any sum
referred to in clause (vii) of section 28.
(xii) receipts
without consideration – any sum received u/s 56(2) (v) where any sum of money
exceeding Rs. 50,000 is received by an individual or HUF from any person on or
after 1.9.2009. However this clause is not applied if money received from
relative or on occasion of marriage or under will.
