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Friday, 8 March 2013

Define the following terms in the income tax ordinance Assessment, Assessee, Assessment Year







ASSESSMENT :-
In simple words assessment means analysis or investigation of one's income to determine the tax ability of that person. When any person whose income is likely to be chargeable to tax, he is asked to file a return of his total income. When he files the return then keeping in view the return it is decided that he should be taxed or not.

Main Point :-
  1. Computation of total income.
  2. Computation of payable tax.
  3. Computation of refund
  4. Adjustment of loss or carry forward loss.


ASSESSEE :-
In simple words we may say that a person who has to pay income tax, super tax, interest, penalty etc, under the income tax act is called assessee.
An assessee may fall under the following categories.

  1. Individual
  2. Company
  3. Firm
  4. Local authority
  5. Association of persons


ASSESSMENT YEAR :-
The year in which the income was earned is called income year. The year in which the income is taxed is called assessment year in the income tax ordinance. The person whose income is being taxed is known “ Assessee ”. While the procedure adopted for charging the income to tax is called “Assessment” 

Definition Of Assessment :- Assessment year means the period of 12 months beginning on the first day of July next following the income year and includes any period that is deemed under the provision of this ordinance to be the assessment year in respect of tax year.

Example :- Suppose Mr. Wax is a professor in Admin college. He will adopt financial year as his income year. His income year started on 1-7-2009 and ended on 30-6-2010. Now assessment year of this income will be of 12 months from 1-7-2010 to 30-6-2011. Because “Assessment year” must start immediately following the income year.

Explanation :-
  1. This is a year in which assessee pays the tax.
  2. It is a period of 12 months.
  3. Period starts from 1st July and end on 3oth June.
  4. Tax is paid on the income of previous year.
  5. Assessment year starts when income year ends.

1 comments:

SOEL KHAN 4 July 2013 at 06:34  

thanks a lot for this information

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