An income tax assessee is a person who pays tax or any sum of money under the provisions of the Income Tax Act, 1961. Moreover, Section 2(7) of the act describes income tax assessee as everyone, liable to pay taxes for any earned income or incurred loss in a single assessment year. Also they can be termed as each and every person for whom:
Since an assessee is a person who pays a certain amount to the government it is important to understand the definition of a person.
Definition of “Person” is given u/s 2(31) of the Income Tax Act 1961. The term ‘person’ under the Income-tax Act includes natural as well as artificial persons. Also, It can be an association of persons or a body of individuals or a local authority or an artificial juridical person.
The 7 categories of “persons” mentioned under the Income Tax Act:
As per the Income Tax Act, they can be classified into different categories as follows:
For better understanding, Description about the same is as below:
An individual who pays tax for the total income earned during a financial year or the loss incurred by him. Also, if any person is liable to pay any interest or penalty to the government or entitled to get any refund under the act is considered normal assessee.
Moreover, any person against whom proceedings under Income Tax Act are going on, irrespective of the fact whether any tax or other amount is payable by him or not is also a normal assessee.
A person who is responsible to pay tax for the income or loss caused by a third party. It generally happens in case person liable for tax payment is a non-resident, minor, or lunatic. They can not file tax by themselves. Therefore, It can either be an agent or guardian who need to comply with the rules on their behalf.
An individual who is responsible to pay the tax by the legal authorities. It can be:
Moreover, This category covers a person to pay taxes on behalf of any other person in specified circumstances.
When individuals fail to meet their statutory responsibilities of paying tax, then they become assessee in default. For example, an employer should deduct tax from the salary of his employees before giving the salary. Moreover, employer has to pay deducted taxes to the government as per the due date. However, If the employer fails to deposit this tax he is an assessee-in-default.
Login to your account on the income tax website. Go to My Account Tab, and click on ‘Add/Register as Representative’ to add a representative.
When individuals are obligated to pay tax on behalf of someone else by the instruction of legal authorities, they come under deemed assessee category.
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 of individuals, whereas an AOP could include legal entities.