Meaning of Person in Income tax Act
Person in income tax act 1961 u/s 2(31) is defined as an individual, firm, company, local authority, AOP/BOI, HUF etc who are liable to pay tax.
Individual means a Natural Human Being that may be Male, Female, Minor, Unsound Mind etc.
· Income of Minor & Person of unsound Mind → Assessed in hands of Manager/Guardian u/s 161(1).
· In the case of Deceased person, the representative assessment would be made on the legal representative.
HINDU UNDIVIDED FAMILY
Hindu undivided family has been created with the hindu law where the heads of HUF is called as KARTA and the members are called as CO-PARCENERS.
· HUF is not defined under IT Act. However, it is treated as separate entity under IT Act.
· As per Hindu Law, it consists of all males lineally descended from a common ancestor & includes their wives & unmarried daughters.
· The Status in HUF is received by birth & not by operation of law.
· A single male member can be HUF (w.e.f 6/9/2005).
· The Jain & Sikh undivided families would also be assessed as a HUF under IT Act.
COMPANY :- SECTION 2(17)
· It means: Company which is registered under the company act 2013 or any previous company act.
▪ Any institution, association or body (incorporated/not) whether Indian or non-Indian, which is declared by general or special order of CBDT to be a company.
A FIRM:- SECTION 2(23)
· A firm includes a partnership firm (registered or not) & shall include a LLP.
· “Partnership firm” has same meanings as assigned to them in Indian Partnership Act.
· However, for Income tax Purpose the minor who admitted for benefit would be treated as partner u/s 2(23) of the Act.
ASSOCIATION OF PERSONS (AOP)
When two or more persons combine together to carry a joint enterprise, they are assessable as an AOP when they do not constitute a partnership legally.
Ex- cooperative society, MARKFED,NAFED
· Conditions to form AOP: Persons must join in a common purpose, common action & their object must be to produce Income, but they should not form a partnership.
BODY OF INDIVIDUALS (BOI)
Persons who merely receive the income jointly & who may be assessable in like manner & to the same extent as the beneficiaries individually. Ex: Executors/trustees.
· Co-Executors/Co-trustees are assessable as BOI since their title & interest are indivisible.
Note: Tax is not payable by the assessee on share of Income received by him from BOI on which the tax has already been paid by such BOI. [To avoid Double Taxation]
Municipal committee, district board, Municipality, body of port commissioners etc. legally entitled/entrusted by Government with control & management of Municipal/local fund.
Note: Income of Local Authority is taxable only if it is derived from the business of supply of commodity/service (other than water & electricity) outside its own jurisdictional area.
ARTIFICIAL JURIDICAL PERSON
Public corporation established under the special act of legislature who have juristic personality are known as artificial juridical person. Ex- university
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