Assessees under income tax Act. 1961
Who is an assessee
An assessee is a person who is liable to pay income tax or any other tax under the provisions of the Income Tax Act, 1961. In simple terms, an assessee is any individual, Hindu Undivided Family (HUF), company, firm, association of persons (AOP), body of individuals (BOI), local authority, or any other artificial juridical person who is required to file an income tax return and pay tax on the income earned during the financial year. An assessee may be a resident or a non-resident of India, depending on their duration of stay in the country during the financial year. The Income Tax Act defines various types of assesses based on their nature of income, residential status, and other criteria, and prescribes different tax rates and exemptions for each category.
Meaning of Assesses
An assesses, in the context of the Income Tax Act, 1961, is a person who is liable to pay tax under the Act. The term 'person' in the Income Tax Act includes individuals, Hindu Undivided Families (HUFs), firms, companies, and other entities.
There are various types of assesses under the Income Tax Act, 1961. They are:
- Individual: An individual is a natural person who is assessed to tax on his/her income.
- Hindu Undivided Family (HUF): An HUF is a separate legal entity that consists of members of a Hindu family who are lineally descended from a common ancestor.
- Company: A company is a separate legal entity that is incorporated under the Companies Act, 2013. A company is assessed to tax on its income and profits.
- Firm: A firm is an association of two or more persons who come together to carry out a business or profession with a view to making a profit.
- Association of Persons (AOP): An AOP is a group of two or more persons who come together for a common purpose or to carry on a business or profession with a view to making a profit.
- Body of Individuals (BOI): A BOI is a group of individuals who come together for a common purpose or to carry on a business or profession with a view to making a profit but are not a company or a firm.
- Local Authority: Local authorities include municipalities, panchayats, and other bodies that are responsible for the administration of a particular area.
- Artificial Juridical Person: An artificial juridical person refers to any entity that is not a natural person or a company but is recognized by law as having a separate legal entity, such as a trust or an association.
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