note tax

Ch.1 BASIC CONCEPTS

Financial  Year : The year starting from April 1 and ending on March 31 of the next year is known as a financial year.  Assessment Year: Year: AY is a financial year in which the income earned during the preious year is taxed. !reious Year Year "sec 3#: The year in which the income is earned is called the preious p reious year. $.g.: 1. %ncome %ncome earned earned &y 'Y( )td in the year *++,-* *++,-*++ ++ will will &e taxed in the year *++-* *++-*++/ ++/.. The same would &e taxa&le irrespectie of the accounting year followed &y the assessee. %n the aforesaid the year *++,-+ is the preious year and the year *++-+/ is the assessment year. *. The income income of ' comprise comprises s of only proper property ty income income till till March March 1+0 *++. *++. 2n March March 1+0 *++ he starts a new &usiness of computer hardware. From the date gien &elow0 find out the taxa&le income of ' or the assessment years *++-+ to *++,-+. !roperty income: 4s. 5*0+++6- eery year. 7usiness income: 4s 1+0+++6- for the period ending 31 March *++ and 4s.+++6-for  the period ending 31 march *++,. 8hat would &e the taxa&le income of ' for the AY +-+0 +-+,0 +,-+9 %ncome earned during the preious year is taxed during the assessment year. Therefore a year is an assessment year and preious year simultaneously. oweer in certain cases the income is taxed in the year in which it is earned. The exceptions to the rule are as under: 1. *. 3. 5.

%ncome %ncome of non-reside non-resident nt from from shipping. shipping. "sec1,*# "sec1,*# %ncome %ncome of persons leai leaing ng %ndia either either permanent permanently ly or for long long period of time time "sec1,5# "sec1,5# %ncome %ncome of &odies formed formed for short duration. duration. "sec1,5A# "sec1,5A# %ncome %ncome of persons persons trying trying to alienate alienate his his assets assets with iew iew to aoidin aoiding g payment payment of his tax. tax. "sec 1,# . income income of disco disconti ntinue nued d &usines &usiness." s."sec sec1, 1,##

;!erson ;sec *"31#: The term persons include: a# an indi ndiiidual dual &# a ind indu u undi undii ided ded fami family ly c# a co company d# a firm e# an associati association on of persons persons and a &ody &ody of indiid indiiduals uals whether whether incorp incorporate orated d or not f# a loc local al auth author oriity g# $ery $ery artificial artificial