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Income Tax Assessee

Types of Income Tax Assessee

Last Updated 30th Oct 2020

Normal assessee Liable to pay tax on behalf of themself.
Representative assessee Liable to pay tax on behalf of someone else as a legal representative.
Deemed assessee Liable to pay tax on behalf of someone else as mandated by legal authorities.
Assessee in default Failed to pay the taxes on time.
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Who is an Income Tax Assesse?

The Indian Income Tax Act of 1961 contains many regulations and terms that we must know as taxpayers. One such term is ‘assessee’. Section 2(7) of the act describes income tax assessee as any individual, liable to pay taxes for any earned income or incurred loss in a single assessment year. An assessee can be an individual managing his own taxes or representing someone else.

An assessee is basically anyone who is subject to income tax payment. Hence the following taxpayers can be called income tax assessee.

  • Individuals and individual proprietorships
  • Hindu Undivided Family or HUF
  • Association of Person or AOP
  • Local Authority
  • Private Limited Companies
  • Public Limited Companies
  • Body of Individual or BOI
  • Trust
  • Government
  • Partnership
  • Artificial Juridical Person

Various Types of Income Tax Assessee Under Income Tax Act

The act has categorized the assesses in four groups based on the characteristics of the tax liability. Here are discussions on the four categories for a better understanding.

Normal Assessee

Any individual who has earned any income or sustained any loss in a particular financial year is liable to pay tax to the Indian Government. Such individuals who have paid taxes in the proceeding year against their financial transactions are termed as normal assessee. People with ongoing proceedings under the Income Tax Act fall under the normal assessee group. Hence, individuals who are required to pay any interest or penalty under this act or those who are to receive income tax returns, belong to the category of the normal assessee.

Representative Assessee

Many individuals are responsible for taxation against any income earned or loss incurred not by himself but for someone else. An individual who is legally authorized to represent the tax responsibilities of a third party is called a representative assessee. When someone is unable to pay the taxes, he or she can hire a legal representative. Along with paying the taxes, the representative assessee is responsible for filing income tax returns. Representatives are generally agents or legal guardians. The representative assessee meaning an assessee to represent tax assessment is generally required by the following three parties.

  • Non-Resident Indians or NRIs
  • Minors
  • Lunatic

Deemed Assessee

Deemed assessee is someone who is bound to pay taxes on behalf of someone else by the legal authorities. The following come under the category of the deemed assessee.

  • In case someone passes away after writing a will, the legal executor of the will of the deceased is considered as the deemed assessee.
  • In case a person passes away without creating any will, the eldest son or other legal heirs of the deceased are considered as the deemed assessee.
  • The guardians of minors, lunatics or idiots who are subject to taxation under the Income Tax Act belong to the deemed assessee category.
  • Any person representing the tax responsibilities of Non-Resident Indians are deemed assessee as well.

The representative assessee meaning is the same to some extent as the deemed assessee as representative assesses are bound by law to pay taxes on behalf of someone else.

Assessee in Default

When individuals fail to meet their statutory responsibilities of paying tax, then become assessee in default. An employer is expected to deduct a particular amount from the salary of the employees as TDS or Tax Deducted at Sources and submit the amount to the government. By failing to do so, the employer will be considered as an assessee in default. An individual will continue to be an assessee in default until all the dues are cleared.

Roles/Responsibilities and Duties of an Assessee

Paying the taxes and filing the returns of respective financial years on time is the key responsibility of an assessee, irrespective of the assessee group he or she falls into. When an assessee does not file the income tax returns on time, the Income Tax Department sends a notice inquiring about the reason for the delay. Upon receiving the notice from the IT department, an assessee must take the following steps.

  • File the request for income tax returns against the income of the respective assessment year immediately after receiving the notice from the IT department.
  • Once the ITR claim has been filed, ask for a copy clearly stating the reason behind the notice from the assessing officer who has issued the notice. It is not a mandatory step. You can ask for a copy if you require it.
  • If the given reason behind the notice seems invalid or unsatisfying, make an objection to challenge the notice from the assessing officer. There must be some solid reasons beyond the objection.
  • If the objection claims get denied, you can request the assessing officer to provide reasons behind denying the claims.
  • You can challenge the legality of the notice sent by the assessing officer way before the assessment or reassessment scheduled with a writ petition filed at the respective high court.
  • Within 30 days from the issuance of the notice, present details concerning your income for which tax has not been paid.

While challenging the notice, an assessee must make sure that he or she is making the challenge knowingly supported by valid reasons.

FAQs

Who is an income tax assessee?

Any individual who is liable to pay taxes against income earned or loss incurred in a financial year is an income tax assessee. An assessee can pay taxes for himself or on behalf of someone else.

Who is called assessee?

Taxpayers are called assessee under the Indian Income Tax Act of 1961. This includes individuals paying taxes for themselves, representing on behalf of someone else, obligated by any legal authority to pay taxes and individuals who have not paid tax on time.

How do I add representative assessee to my income tax?

You can add representative assessee to your Income Tax on the e-filing website of Indian Income Tax Department. You have to register yourself or log in if you are already registered on the portal. Under the My Account Tab, you can tap on the ‘Add/Register as Representative’ to add a representative.

Who is not an assessee?

Anyone who is not bound to pay taxes under the Indian Income Tax Act of 1961 is not an assessee.

What is exempted income?

Certain incomes are not subject to federal income tax. These are referred to exempted income. Generally, the IRS decides which incomes fall under this category.

What is deemed assessee in income tax?

When individuals are obligated to pay tax on behalf of someone else by the instruction of legal authorities, they come under deemed assessee category.

What is the meaning of deemed income?

Deemed income refers to the income that an individual can use regardless of the actual receipt of the income.

Is representative assessee mandatory?

Representative assessee is mandatory only for the following cases.

  • Minors
  • Lunatics
  • Deceased

Who is representative assessee in income tax?

When an individual is liable to pay taxes on behalf of someone else, he or she is called representative assessee in income tax. Individuals unable to manage their own tax payments can appoint a representative assessee.

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