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Income Tax Assessee under the Income Tax Act

by | May 10, 2024 | Income Tax, Income Tax filing | 0 comments

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Income Tax Assessee under the Income Tax Act

An income tax assessee refers to an individual or entity obligated to pay taxes as per the Income Tax Act, 1961. Section 2(7) of the act broadly defines an income tax assessee as any person liable to pay taxes on earned income or incurred losses within a single assessment year. This encompasses individuals involved in various scenarios:

  1. Individuals undergoing assessment proceedings for their income.
  2. Those responsible for the income of another person, making them assessable.
  3. Individuals or entities experiencing losses, whether personally or on behalf of another.
  4. Individuals entitled to tax refunds.

Understanding the concept of an assesses is pivotal as it delineates the individuals or entities subject to tax obligations and procedures.

Who is a Person under Income Tax Act?

Under the Income Tax Act of 1961, the definition of “Person” is provided under section 2(31). This term encompasses both natural and artificial entities, including associations of persons, bodies of individuals, local authorities, and artificial juridical persons.

There are seven primary categories of “persons” outlined in the Income Tax Act:

  1. Individual
  2. Hindu Undivided Family
  3. Partnership Firm
  4. Company
  5. Association of Persons (AOP) or Body of Individuals (BOI)
  6. Local Authority
  7. Artificial Juridical Body (not covered under any of the above-mentioned categories)

Regarding the types of assessees under the Income Tax Act, they can be classified into the following categories:

  1. Normal Assessee
  2. Representative Assessee
  3. Deemed Assessee
  4. Assessee-in-default

Here’s a breakdown of each type of assessee for better understanding

Normal Assessee

A normal assessee refers to an individual who is obligated to pay taxes on the total income earned during a financial year or on any losses incurred. Additionally, if an individual is liable to pay any interest or penalty to the government or is entitled to receive any refund under the provisions of the Income Tax Act, they are also considered a normal assessee. Furthermore, any individual against whom proceedings under the Income Tax Act are ongoing, regardless of whether any tax or other amount is payable by them, is categorized as a normal assessee.

Representative Assessee

A representative assessee is a person entrusted with the responsibility of paying taxes on behalf of a third party, typically in cases where the taxpayer is a non-resident, minor, or mentally incapacitated individual who is unable to file taxes independently. In such instances, an agent or guardian is appointed to fulfill the tax obligations on behalf of the taxpayer, ensuring compliance with the relevant tax regulations.

Deemed Assessee

A deemed assessee is an individual who is legally obligated to pay taxes under the provisions of the Income Tax Act. This category includes:

Every person who is deemed to be an assessee under the Act. Every person in respect of whom any proceeding under this Act has been initiated for the assessment of income or loss, either for themselves or for another person for whom they are assessable, or for the refund due to them or to such other person. Furthermore, this category encompasses individuals responsible for paying taxes on behalf of others in specific circumstances.

Examples include:
  • The legal representative of a deceased person, such as the eldest son or other legal heirs in cases of intestacy, or the executor of a will.
  • Agents acting on behalf of non-residents.
  • Trustees of trusts.
  • Guardians of minors.

An assessee-in-default refers to individuals who fail to fulfill their statutory tax payment obligations, resulting in default. For instance, an employer is required to deduct taxes from the salaries of employees before disbursing payment and remit the deducted taxes to the government by the due date. If the employer fails to deposit these taxes, they are categorized as an assessee-in-default.

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Official Income Tax Return filing website: https://incometaxindia.gov.in/


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