Share |

Previous Year [Section 2(34) r.w. Section 3] : Defination under I.Tax

 

The term previous year is very important because it is the income earned during previous year which is to be assessed to tax in the assessment year. As the word ‘Previous’ means ‘coming before’, hence it can be simply said that the previous year is the financial year preceding the assessment year e.g. for assessment year 2014-15 the previous year should be the financial year ending on 31st March 2014.

In simple words, it may be said that the year in which income is earned is called previous year and the next year in which such income is computed and put to tax is known as assessment year: For example, income earned by an assessee in the previous year 2013-14 is taxable in the assessment year relevant to the previous year 2013-14 and so it is taxable in the assessment year 2014-15. The simple rule is that the income of a previous year is taxed in its relevant assessment year subject to certain exceptions.

(a) Previous year in case of a continuing business. It is the financial year preceding the assessment year. As such for the assessment year 2014-15, the previous year for a continuing business is 2013-14 i.e. 1-4-2013 to 31-3-2014.

(b) Newly set up business or profession. The assessee is free to set up a new business or start a new profession on any day and the first previous year in case of a newly set up business/profession or newly created source of income shall be on the day it is set up and end on 31st March next following. So the first previous year may be of 12 months or less than 12 months but all subsequent previous years shall be of 12 months duration and always be starting on 1st April each year.
(c) In case of a Newly created source of Income. In such case the previous year shall be the period between the day on which such source comes into existence and 31st. March next following :.
 
More Topics.. @ Tax Concept
Types of Income under Income Tax Act. 1956.
Income Deemed To Be Received In India under I.Tax Act.
Income Which ‘Accrues’ Or ‘Arises’ In India under I.Tax Act.
[Section 9(1)(i)] - Income Arising From Business Connection In India
Income from any property held in India and assets or sources of income located in India
Income from transfer of capital assets situated in India
[Section 9(1)(ii)] - Salaries earned in India
[Section 9(1 )(iii)] - Salaries For Government Service Outside India
[Section 9(1)(iv)] - Dividend paid abroad by Indian Company
[Section 9(1 )(v)] - Income By Way Of Interest
[Section 9(1)(vi)] - Income By Way Of Royalty
[Section 9(1 )(vii)] - Income By Way Of Fees For Technical Services
Agricultural Income [Section 2(1A)] - Definition under I.Tax
Assessment Year [Section 2(9)] - Definations under I.Tax.
Constitutional Provision Governing Taxation in India
Gross Total Income [Section-80B (5) ] - Definations under I.Tax.
Heads of Income [Section-14 ] - Definations under I.Tax.
Income is Taxed in the same Year in which it is earned
Income [Section 2(24)] - Definations under I.Tax.
Person [Section 2(31)] - Definations under I.Tax.
Previous Year [Section 2(34) r.w. Section 3] - Definations under I.Tax.
Sources Of Law Relating To Income Tax
Taxes to be imposed only by Authority of Law
Get Updated ....
Tally.ERP 9 Book
 
Guide & FAQ on Tax Knowledgebase @ Taxation Income Tax @ Glance HUF - Formation, Planning & Taxation
Charitable & Religious TRUST NRI (Tax Planning,Saving,Investemnt) Budget 2017-2018 GST (FAQ, Law, Act. Rules, Schedule, Enrollment)

Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may click here to visit the web site of Income Tax Department for resolving their doubts or for clarifications