Here is all about what is person in income tax? In income tax law, the term "person" encompasses a broad range of entities beyond just individual human beings. This definition is critical for determining who is subject to tax and how income is assessed and taxed.
Who is a Person in Income Tax?
The "person" in income tax includes individuals, Hindu Undivided Families (HUFs), companies, firms, associations of persons (AOPs), bodies of individuals (BOIs), local authorities, and any other artificial juridical person not falling under any of the preceding categories.
Individuals: The most straightforward category, referring to natural persons or human beings. Each individual taxpayer is assessed based on their total income, taking into account applicable deductions and exemptions.
Hindu Undivided Family (HUF): A unique entity recognized in India, consisting of all persons lineally descended from a common ancestor, including their wives and unmarried daughters. An HUF is assessed separately from its members for tax purposes.
Companies: Corporate entities, whether domestic or foreign, fall under this category. Companies are taxed on their net income after accounting for allowable expenses and deductions.
Firms: This includes partnerships and limited liability partnerships (LLPs). The firm's income is assessed separately, and partners are taxed on their share of the profits.
Association of Persons (AOP) and Body of Individuals (BOI): These are groups of individuals or entities who come together for a common purpose, usually to earn income. They are taxed as a single entity.
Local Authorities: This category includes municipal bodies and other local government institutions that are recognized by law.
Artificial Juridical Persons: These are entities created by law, such as trusts, cooperatives, and societies, which are treated as separate entities for tax purposes.
The classification of different entities as "persons" under income tax laws is essential for applying the correct tax treatment and ensuring compliance..
This is all about who is person in income tax.
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What is Person in Income Tax?
Shristi
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6 months
2024-06-26T11:25:43+00:00 2024-07-01T17:25:17+00:00Comment
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