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Income Tax Assessee under the Income Tax Act

Updated on: May 24th, 2024

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2 min read

An income tax assessee is a person who pays tax or any sum of money under the provisions of the Income Tax Act, 1961.

Furthermore, Section 2(7) of the act defines an income tax assessee as anyone who is required to pay taxes on any earned income or incurred loss in a single assessment year. They can also be referred to as each and every person for whom:

1. Is there any action being taken under the act to evaluate his income?
2. The income of another person for which he is taxed
3. Any loss incurred by him or any other person or persons entitled to a tax refund

Who is a ‘Person’ under the Income Tax Act?

The 7 categories of “persons” mentioned under the Income Tax Act:

  • Individual
  • Hindu Undivided Family
  • Partnership Firm
  • Company
  • Association of Persons (AOP) or Body of Individuals (BOI)
  • Local Authority
  • Artificial Judicial Body (not covered under any of the above-mentioned categories)

Normal Assessee

An individual who is liable to pay taxes for the income earned during a financial year is known as a normal assessee. Every individual who has earned any income earned or losses incurred during the previous financial years is liable to pay taxes to the government in the current financial year.

All individuals who pay interest/penalty or who are supposed to get a refund from the government are categorised as normal assessees. Say, Mr A is a salaried individual who has been paying taxes on time over the past 5 years. Then, Mr A can be considered as a normal assessee under the Income Tax Act, 1961.

Representative Assessee

There may be a case in which a person is liable to pay taxes for the income or losses incurred by a third party. Such a person is known as a representative assessee.

Representatives come into the picture when the person liable for taxes is a non-resident, minor, or lunatic. Such people will not be able to file taxes by themselves. The people representing them can either be an agent or guardian.

Consider the case of Mr. X. He has been residing abroad for the past 7 years. However, he receives rent for two house properties he owns in India. He takes the help of a relative, Mr. Y, to file taxes in India. In this case, Mr. Y acts as a representative assessee. If the assessing officer plans to investigate the tax filing, Mr. Y will be asked to provide the necessary documents as he is the guardian of the property and represents Mr. X.

Deemed Assessee

An individual might be assigned the responsibility of paying taxes by the legal authorities and such individuals are called deemed assessees. Deemed assessees can be:

  • The eldest son or a legal heir of a deceased person who has expired without writing a will.
  • The executor or a legal heir of the property of a deceased person who has passed on his property to the executor in writing.
  • The guardian of a lunatic, an idiot, or a minor.
  • The agent of a non-resident Indian receiving income from India.

For example, Mr P owns a commercial building from which he earns rent income. He has prepared and signed a will stating the property should be handed over to his niece after his death. Upon his death, his niece will be considered as the executor of the property, i.e. deemed assessee. She will be responsible for paying tax on the rental income thereon.

Assessee-in-default

Assessee-in-default is a person who has failed to fulfil his statutory obligations as per the income tax act such as not paying taxes to the government or not filing his income tax return. For example, an employer is supposed to deduct taxes from the salary of his employees before disbursing the salary. He is, then, required to pay the deducted taxes to the government by the specified due date. If the employer fails to deposit the tax deducted, he will be considered as an assessee-in-default.

Roles/Responsibilities and Duties of an Assessee

Assesses must file their returns on time and pay their taxes when they are due. However, an assessee may frequently fail to file their return on time. In this situation, they may receive a notice from the IT department or the relevant Assessing Officer requesting information about why the return was not filed for that particular fiscal year. In this scenario, the assessee must provide a response to the Assessing Officer explaining why they did not file his returns on time, and he must also file the returns as soon as he receives the notification.

Let us take a quick look at the various roles and responsibilities of an Assessee upon receiving a notice:

  • As soon as the Assessee receives the notice from the department, they must file their tax returns for the avoided income for the specific assessment year.
  • After filing the returns, they may obtain a copy from the assessing officer that clearly states the grounds for which the officer issued the notice to them.
  • If the Assessee believes that the grounds given in the copy are not valid, and they are not satisfied with the reasons, they may file an objection and question the legality of the notice.
  • The Assessee must also ensure that they have valid reasons for filing the objection and that they have properly decided to query the government's notification.
  • If the officer rejects the Assessee's allegations, the Assessee may submit a request to the concerned Assessing Officer, asking him to provide additional explanations.
  • The Assessee may choose to contest the legitimacy of the notification much before the planned assessment or re-assessment is completed by filing a writ petition with the relevant High Court.
  • The Assessee may also choose to challenge the legitimacy of the notice even after the planned assessment is completed by filing a writ petition with the respective High Court.
  • The Assessee must provide details relevant to their income returns within 30 days of the date of issuance of the notice, not the date on which the notification was received by the Assessee. To avoid complications later on, the details relevant to the income for which tax payment has been avoided, as well as other associated income details, must be clearly given and filed with the concerned authorities.
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Frequently Asked Questions

How do I add a representative assessee to my income tax?

Login to your account on the income tax website. Go to the ‘My Account’ tab, and click on ‘Add/Register as Representative’ to add a representative.

What is deemed assessee in income tax?

When individuals are obligated to pay tax on behalf of someone else by the instruction of legal authorities, they come under deemed assessee category.

What is the difference between AOP and BOI?

A person in AOP could be a company or an individual person. The term person could include any association, body of individuals or company, However, in a BOI, only individuals can join. Hence we can say, BOI only comprises individuals, whereas an AOP could include legal entities.

Who is eligible to pay tax?

Every Indian citizen who earns income are eligible to file taxes.

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