BASIC TERMS USED IN INCOME TAX

Hello Friends,

My this blog is related to tell you all about basic terms used in Income Tax. Let's start:

• Assessee: A person who has to pay tax, or whose income or loss has to be assessed and tax refund given, either for himself or for someone else in respect of whose income he is assessable. The word 'taxpayer' refers to an assessee.

• Financial Year (FY): A period of one year starting from 1st April till 31st March of the next calendar year and represents the 12 months during which income has been earned and has to assessed and taxed. It is also called Previous year (PY).

• Assessment Year (AY):A period of one year starting from 1st April till 31st March of the next calendar year immediately following the previous year. AY 2021-22 refers to the year in which the tax return must be filed and the assessment is made for the income earned in FY 2020-21.

• Income: Income includes almost all cash receipts as well as non cash receipts in the hands of the taxpayer.

• Exempted Income: That part of the income on which no income tax is chargeable.

• Person: This includes Individual, Hindu Undivided Family (HUF), Firm, Company, cooperative society and any other association of persons or artificial judicial person. 

• Assessing officer (AO) or Income Tax officer (ITO): The person appointed to examine tax returns filed and conclude the assessments.

• Board: It refers to Central Board of Direct Taxes (CBDT), the apex Government body for making and administrating direct tax laws.

• Income Tax Return (ITR): It is the form in which assessee files information about his income and tax thereon to Income Tax Department. It is a valid proof of income.

• Deductions : An amount that is or may be deducted from Gross Total Income or tax to be paid. It will be from 80C to 80U or any other deduction.

I hope it will be helpful to you.

Thanks and Regards

Kulvinder Kaur

B.Com(H), MBA(Finance)

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