Under the Income-tax Act, 2025, the income of a tax year is ordinarily assessed after the end of that…
The Income-tax Act, 2025 replaces 'previous year' and 'assessment year' with a single 'tax year' (section 3), and income of a tax year is normally assessed after the year…
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Under the Income-tax Act, 2025, the income of a tax year is ordinarily assessed after the end of that tax year. In which combination of the following cases can the income be charged to tax and assessed during the current tax year itself ?
I. Income of a non-resident from occasional shipping business
II. Income of casual nature
III. Income of an association of persons or body of individuals formed for a particular event or purpose and likely to be dissolved
IV. Income of a person likely to transfer his assets to avoid payment of tax
Answer and explanation
Correct answer D
The Income-tax Act, 2025 replaces 'previous year' and 'assessment year' with a single 'tax year' (section 3), and income of a tax year is normally assessed after the year ends, on the return furnished under section 263. Chapter XVII provides exceptions where the income is charged and assessed in the current tax year itself (formerly ss.172 to 176 of the Income-tax Act, 1961): section 316 (shipping business of non-residents, where the master of the ship furnishes a return before departure and 7.5% of the freight is deemed income) (I); section 317 (persons leaving India); section 318 (association of persons, body of individuals or artificial juridical person formed for a particular event or purpose and likely to be dissolved) (III); section 319 (persons likely to transfer property to avoid tax) (IV); and section 320 (discontinued business). Casual income such as lottery winnings (II) forms part of the total income of the tax year (taxed at 30% under section 194) and is assessed in the normal course after the year ends. Hence I, III and IV; every other combination includes II.
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