Who is Considered as Income Tax Assessee Under the Income Tax Act?

An income tax assessee is someone who needs to pay taxes or any sum of money to the government, as per the provisions of the Income Tax Act. Any person who has generated income or sustained losses becomes an income tax assessee. 

Let us know this in detail.

About Income Tax Assessee

As per Section 2(7) of the Income Tax Act, an assessee is any person liable to pay taxes for income earned or losses sustained in a particular Assessment Year (AY). Additionally, you can define assessee in income tax through these pointers:

• Proceedings running under the act of assessment for his/her income
• Income of another individual for which he/she is accessible
• Individuals who have to pay tax refund
• Any loss that he/she has sustained

An assessee can also be an individual who is liable to pay the taxes of another person. That said, the Income Tax Act divides the assessee into different types. 

Types of Assessee in Income Tax

The Income Tax Act categorises an assessee into four different types. Find details about it below:

1. Normal Assessee

A normal assessee is an individual who pays tax for his/her total income during a particular financial year or the loss that he/she has sustained. Additionally, if a person has to pay any penalty or interest to the government or wants to receive tax refunds, he/she is also considered an assessee.

Furthermore, an individual who has income tax procedures pending against him/her is a regular assessee, regardless of whether he/she owes any tax or not.

Also Read: A Step-By-Step Guide To e-Filing Of Income Tax Return On New Tax Portal

2. Representative Assessee

In some circumstances, a person may be required to pay taxes on income or losses incurred by a third party. Those people are referred to as representative assesses.

Typically, a representative assessee comes into play when the person liable to pay tax is a child, minor or medically handicapped. Such individuals will not be able to file their taxes on their own. They may have an agent or a guardian acting on their behalf.

For instance, let us consider the situation of Mr Roy. He has spent the last seven years living overseas and receives rent from two houses he owns in India. In order to file taxes in India, he takes the help of a relative named Mr Sharma. Thus, Mr Sharma serves as a representative assessee in this situation. 

As Mr Sharma is the property’s guardian and stands in for Mr Roy, he will be required to furnish the relevant paperwork if the Assessing Officer intends to look into the tax filing.

3. Deemed Assessee

Sometimes, the concerned authorities might assign a certain individual the responsibility of tax filing. Such individuals are called deemed assessees. It can be:

• Every individual deemed to be an assessee under the IT Act
• Any individual against whom proceedings under this act are undergoing for gains or losses of another individual

Moreover, as per this categorisation, a person can pay taxes on behalf of another if he/she falls into any of the following categories:

• A deceased person’s legal representative
• A non-resident’s individual’s agent
• Trustee of a trust
• A minor’s guardian

4. Assessee-in-Default

A person who fails to carry out his statutory duties under the Income Tax Act, such as not paying taxes to the government or filing an income tax return, is called an assessee-in-default. 

For instance, before paying wages to an employee, a company is required to deduct tax. Following this, the employer must deposit the deducted amount to the government within a specified due date. If he/she fails to do so, he/she will become an assessee-in-default.

Roles and Duties of an Income Tax Assessee

As a rule of thumb, an income tax assessee must file his/her tax returns in due time. Apart from that, such individuals have to fulfil a few other roles and duties, such as:

• Make sure to file evaded tax returns for a particular Assessment Year soon after receiving a notice from his/her department.

• If an assessee finds that the reasons in the copy are not valid, he/she can file an objection to challenge the particular notice.
• An assessee must ensure that the reasons for which he/she is filing an objection are valid.
• If the AO rejects his/her claims, an assessee has the right to ask for the possible reasons in detail.
• Upon filing the returns, the assessee can choose to ask the Assessing Officer (AO) for a copy indicating the reasons for notice generation.
• Assessees can object to a notice’s legality by filing a writ petition with the High Court. He/she can do so much before completing a re-assessment or scheduled assessment.

Final Word

An income tax assessee is anyone who is liable to pay taxes or needs to undergo tax procedures. Such persons can represent individuals, companies, partnership firms, associations or local authorities. 

An assessee is responsible for filing tax returns, paying taxes and responding to notices from the Income Tax Department. 

Also Read: Income Tax Calculator FY 22-23: Usage, Tax Regimes, Tax Benefits And Exemptions

Frequently Asked Questions

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