Tax Glossary

 

​​Assessee means a person liable for payment of taxes or any other sum of money under the Income-tax Act. It also includes the person for whom any proceeding has been initiated under the Income-tax Act. The term 'assessee' also includes 'deemed assessee' and 'assessee-in-default'.

​​The term assessee-in-default refers to a person who fails to discharge his obligations prescribed under the Income-tax Act such as failure to furnish return of income, failure in payment or deposit of tax, etc.

​Previous Year means the financial year immediately preceding the assessment year.

In the case of a business or profession newly set up or a source of income newly coming into existence in a financial year, the previous year shall be the period beginning with the date of setting up of the business or profession or the date on which the source of income newly comes into existence and ending with the said financial year.​

​The process of examining the return of income by the Income-tax department is called assessment.​

​​Prosecution is legal action against a taxpayer who has committed an offence under the Income-tax Act. The Income-tax Act specifies various offences, such as failure to file tax returns, pay taxes, provide false information, etc.

​The Income Tax Appellate Tribunal (ITAT) is a quasi-judicial body established under the Income Tax Act 1961. It is an independent body that hears appeals against the orders passed by the lower authorities, such as the Assessing Officer, Commissioner of Income Tax (Appeals), and Dispute Resolution Panel.​

​Income escaping assessment or reassessment is a process by which tax authorities re-examine the income tax returns of the taxpayers in order to verify whether any income has been understated or not reported.​

​Scrutiny Assessment is a thorough examination of the income-tax return submitted by the assessee. It is done to ensure that the assessee has not understated the income or under-paid the tax. An opportunity is provided to the assessee to produce evidences and prove the correctness of particulars disclosed by him.​

"books or books of account" includes ledgers, day-books, cash books, account-books and other books, whether kept in the written form or in electronic form or in digital form or as print-outs of data stored in such electronic form or in digital form or in a floppy, disc, tape or any other form of electro-magnetic data storage device.​​

​The concept of "Tax Deducted at Source", commonly known as TDS ensures regular flow of revenue to the Government. The payer of income is required to deduct tax from certain payments at the prescribed rates and deposit it to the credit of the Central Government within the prescribed time.​

​Annual Information Statement (AIS) is a statement that provides complete information about a taxpayer for a particular financial year. It contains information about taxpayers' incomes, financial transactions, tax details, income-tax proceedings, etc.​

​Statement of Financial Transaction (SFT) is a reporting mechanism wherein specified entities are required to provide information about material financial transactions entered into by certain person to the Income-tax Dept.​

​An eligible start up is a company or a limited liability partnership which fulfils the conditions prescribed under section 80-IAC.​

​Tax Deduction & Collection Account Number (TAN) is a 10 digit alpha numeric number to be obtained by all persons who are responsible for deducting or collecting tax.​

​Appeal is a process by which a person (assessee or revenue) aggrieved by an order passed by the tax authority or judicial authority, as the case may be, can challenge it before the higher judicial authorities.​