What is the period for which a person’s income is taken into account for the purpose of Income-tax?
Monday, 24 August 2015 by admin
Income-tax is levied on the annual income of a person. The year under the Income-tax Law is the period starting from 1st April and ending on 31st March of next calendar year. The Income-tax Law classifies the year as (1) Previous year, and (2) Assessment year.
The year in which income is earned is called as previous year and the year in which the income is charged to tax is called as assessment year.
e.g., Income earned during the period of 1st April, 2015 to 31st March, 2016 is treated as income of the previous year 2015-16. Income of the previous year 2015-16 will be charged to tax in the next year, i.e., in the assessment year 2016-17.