The scheme of advance tax requires every assessee to estimate his current income, and if tax liability on such estimated income exceeds the specified limit, the assessee is required to pay the estimated tax in instalments during the financial year itself
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'.
A deemed assessee is a person who is assessable in respect of income or loss or refund of any other person. It includes a representative assessee, a legal representative, an agent of a non-resident, etc.
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.
Assessment Year means the period of twelve months commencing on the 1st day of April every year.
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.
Return of income is the format in which the assessee furnishes information related to his total income and tax payable. It is a declaration of income by the assessee in the prescribed format.
The process of examining the return of income by the Income-tax department is called assessment.
Penalty is a punitive action imposed by the tax authorities for non-compliance with the provisions of the Income-tax Act. The penalty may be levied for various reasons, including failure to pay taxes, failure to maintain books of account, etc.
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.
Agricultural income refers to income earned by a person from agricultural land situated in India.
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.
Best Judgment Assessment means estimation of taxable income of an assessee by the Assessing Officer based on available information and resources. This assessment takes place if assessee does not cooperate in assessment proceedings or if correct profit cannot be calculated based on books of accounts maintained by the assessee.
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.
"Assessing Officer" means the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer who is vested with the relevant jurisdiction by virtue of directions or orders issued under section 120(1)/(2) or any other provision of the Income-tax Act.
AO also includes the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director who is directed under section 120(4)(b) to exercise or perform all or any of the powers and functions conferred on, or assigned to, an Assessing Officer under the Income-tax Act.
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.
Summary Assessment refers to processing of return by the Centralized Processing Centre (CPC). A return is processed automatically to verify the correctness of arithmetical calculations, deductions claimed, etc.
"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.
Form 26AS is a tax passbook of an assessee which contains a complete record of tax deducted at source (TDS), tax collected at source (TCS), advance tax paid, self-assessment tax paid, and any other tax payment made by the taxpayer. It also contains details of tax refunds received by the taxpayer during the financial year.
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.
Tax Collected at Source is the amount of tax collected by specified person in specified transactions from the buyer or licensee or lessee, etc.
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.
'Self-Assessment' means calculation of total income and tax liability thereon by the assessee himself. It is after 31st March but before filing of return of income.
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.
TDS certificate is certificate issued by the person who is required to deduct tax at source. TDS certificate specifies the rate of TDS, TDS amount and such other particulars as may be prescribed related to taxpayer.
An eligible start up is a company or a limited liability partnership which fulfils the conditions prescribed under section 80-IAC.
A TDS statement (TDS return) is statement of TDS filed by a person responsible for deduction of tax source. It contains particulars related to all deduction of tax made by person during a quarter.
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.
The Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued for the purpose of identification of a taxpayer. PAN has to be mentioned in all communications with the Income-tax Dept. and in specified financial transactions which exceed the threshold limit.
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.