Income Tax Basic Concepts
Income Tax Act 1961
Assessment Year: The period of twelve months starting from April 1 of every year and ending on March 31 of the next year.
Previous Year: Income earned in a year (Previous year) is taxable in the next year (Assessment Year).
Income earned during the previous year (PY) 2011-12 is taxable in the Assessment year (AY) 2012-13. From the AY 1989-90 onwards, all assesses are required to follow the financial year April 1 to March 31 as previous year for all sources of income. PY in case of Newly set-up Business/Profession:
• From the date of setting up/ new source of income comes into existence to March 31 which is 12 months or less.
• In the subsequent previous year it is April 1 to March 31. i.e.; 12 months. Exceptions: To ensure smooth collection of Income Tax from these tax payers who many not be traceable if the tax assessment procedure is postponed till the commencement of the normal assessment.
• Shipping Business of Non residents (Section 172):
Condition 1 There is a non-resident
Condition 2 He owns a ship or ship is chartered by the non-resident
Condition 3 The ship carries passengers, livestock, mail or goods at a port in India.
Condition 4 The non-resident may (or may not) have an agent/representative in India.
If all the aforesaid conditions are satisfied, 7.5 percent of amount paid or payable on account of such carriage (including demurrage charge or handling charge or similar amount) to the non-resident shall be deemed to the income of the non-resident.
The master of a ship shall submit a return of income before the departure of the ship.
Return may be submitted within 30 days of the ship, if the Assessing officer is satisfied that submitting a return before departure and if the satisfactory arrangements for payment of tax has been made.
Unless the tax has been paid (or satisfactory arrangements have been made for payment thereof), a port clearance shall not be granted by the collector of Customs.
Tax
Assessment Year: The period of twelve months starting from April 1 of every year and ending on March 31 of the next year.
Previous Year: Income earned in a year (Previous year) is taxable in the next year (Assessment Year).
Income earned during the previous year (PY) 2011-12 is taxable in the Assessment year (AY) 2012-13. From the AY 1989-90 onwards, all assesses are required to follow the financial year April 1 to March 31 as previous year for all sources of income. PY in case of Newly set-up Business/Profession:
• From the date of setting up/ new source of income comes into existence to March 31 which is 12 months or less.
• In the subsequent previous year it is April 1 to March 31. i.e.; 12 months. Exceptions: To ensure smooth collection of Income Tax from these tax payers who many not be traceable if the tax assessment procedure is postponed till the commencement of the normal assessment.
• Shipping Business of Non residents (Section 172):
Condition 1 There is a non-resident
Condition 2 He owns a ship or ship is chartered by the non-resident
Condition 3 The ship carries passengers, livestock, mail or goods at a port in India.
Condition 4 The non-resident may (or may not) have an agent/representative in India.
If all the aforesaid conditions are satisfied, 7.5 percent of amount paid or payable on account of such carriage (including demurrage charge or handling charge or similar amount) to the non-resident shall be deemed to the income of the non-resident.
The master of a ship shall submit a return of income before the departure of the ship.
Return may be submitted within 30 days of the ship, if the Assessing officer is satisfied that submitting a return before departure and if the satisfactory arrangements for payment of tax has been made.
Unless the tax has been paid (or satisfactory arrangements have been made for payment thereof), a port clearance shall not be granted by the collector of Customs.
Tax