Basis of Charges - Section (New) 4 / (Old) 4

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....¢ of every person • as per the provisions of this Act." Sub-section (3) - Inclusion of Additional Tax • Income-tax shall also include • any additional income-tax, by whatever name called, (i.e. any surcharge or cess) • levied under this Act." Sub-section (4) - Tax on Income for Periods Other than Tax Year • If this Act • provides that income-tax is to be charged • in respect of income of a period other than the tax year, • it shall be charged accordingly. • However, in specified circumstances / situations, income tax may be charged in respect of the income of a period other than the tax year. SECTION PARTICULAR....

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.... any financial year, • the tax year shall be the period beginning with- • (a) the date of setting up of such business or profession; or • (b) the date on which such source of income newly comes into existence, • ending with the said financial year. Upto 31.03.2026 BASIS OF CHARGE The provision of Section 4 of the Income Tax Act, 1961 is the brain of the law of Income Tax in India. This is because section 4 gives the authority for charging as well as collection of income tax in India. Section 4(1) of Income Tax Act, 1961 provides that income tax shall be charged on every person specified under section 2(31) for any assessment year in respect of the total income of the previous y....

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....le one - For computing income - Total income is calculated in accordance with the provisions of the Income Tax Act, as they stand on the first day of April of the assessment year (for illustration ~ For calculating taxable income for AY 2022-23, the provisions of Income Tax Act as on the April 1, 2022 are applicable, if an amendments is made with effect from April 2, 2022, it is irrelevant for calculating income for AY 2022-23, Likewise, the law existing during the previous year 2021-22 has no relevance for determining the total income for AY 2022-23.) • Rule two - For other purposes - The above rule is applicable only for the purpose of computing taxable income. To put it differently, it can be said that the provisio....

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.... into existence, in the said financial year, the previous year shall be the period beginning with the date of setting up of the business or profession or, as the case may be, the date on which the source of income newly comes into existence and ending with the said financial year. • Income-earning year is called Previous Year. The year following the previous year is the Assessment Year. "IN AN ASSESSMENT YEAR, YOU FILE YOUR INCOME TAX RETURNS OF THE PREVIOUS YEAR" Let us see some examples. Previous year (PY) Financial Year (FY) Assessment Year (AY) 1^st April 2014 - 31^st March 2015 FY 2014-15 AY 2015-16 1^st April 2015 - 31^st March 2016 FY 2015-16 AY 2016-17 1^st September 2013 - 31^st Marc....