Assessment procedure 1

Assessment Procedure

1. Presented By BASAVANAGOUDA Research Scholar Department of Commerce, CUK ASSESSMENT PROCEDURE Presentation on

2. Contents of the Presentation Meaning of Basic Terms Tax Rates for Individuals And Corporations Format for Computation of Total Income and liability ITR filing Forms Due Dates for Filing returns Types of Assessments Penalty

3. Meaning of Basic Terms Meaning of Assessee In simple words, Assessee is an individual who is liable to pay taxes for the income earned by him for a particular financial year. Definition of Assessee An Assessee is a person by whom any tax or any other sum is payable under Income Tax Act of 1961, it includes; 1. Every person in respect of whom any proceeding under this act has been taken for assessment of income or any refund due to him or to such other person. 2. Deemed Assessee : A person may be liable not only for his income but also on income of other of other persons. 3.Deemed Assessee in Default: the person who has failed to fulfill his statutory obligation.

4. Assessment Year: [Sec 2(9)] Assessment year defined as “the period of twelve months starting from 1 st of April and ending on 31 st March every year. Previous Year [Sec 3] Previous Year is a financial year immediately preceding the assessment year. In other words, the year in which income is earned is known as previous year.

5. Meaning Of Assessment The process of examining the return of income by income tax department is called “ Assessment”. Assessment also includes re-assessment and best judgment assessment Section 2(8) of the ----- -I ncome tax Act defines assessment as “ assessment includes reassessment ” Meaning of Assessing Officer An Assessing Officer is a person who has the jurisdiction (rights) to make assessment of an Assessee , who is liable under the Income-tax Act.  An Assessing Officer is an individual person appointed by the Income-tax department. He performs all powers and functions as assigned to him under the Income-tax Act.

6. Tax Rates For Individuals For AY 2019-2020 Income Tax Slabs Tax Rate Individual &HUF Below the Age of 60 Years Up to ₹2,50,000 Nil ₹2,50,001 to ₹5,00,000 5% of total income exceeding ₹2,50,000 ₹5,00,001 to ₹10,00,000 ₹12,500 + 20% of total income exceeding ₹5,00,000 Above ₹10,00,000 ₹1,12,500 + 30% of total income exceeding ₹10,00,000 Cess : Is Applicable at 4%

7. Tax Rates For Corporations Type of Company Corporate Tax Rate Surcharge on Net Income Less than  Rs. 1 crore Surcharge on Net Income greater than Rs. 1 Crore and less than Rs. 10 Crore Surcharge on Net Income greater than Rs. 10 Crore Domestic with annual turnover up-to Rs 250 Crore 25%  Nil 7% 12% Domestic Company with turnover more than Rs 250 Crore 30% Nil 7% 12% Foreign Companies 40% Nil 2% 5%

8. Format for Computation of Total Income and liability Assessee :……….. Previous year…………. Status:……………... Assessment Year…….. Particulars Amount Taxable income from salary (sec.15 to 17) Taxable income from House property (sec.22 to 27) Taxable income from Business/ Profession (sec.28 to 44) Taxable income from capital gains (Excluding LTCG and STCG liable for STT) (sec.45 to 55) Taxable income from other sources (excluding casual incomes) (Sec.56 to 59) xxxx xxxx xxxx xxxx xxxx xxxx Gross Total Income Less: Deductions U/S 80C to 80U xxxx xxxx Other Total Income Add: Casual Income Long term capital gain Short term capital gain(liable for STT) Deemed Incomes xxxx xxxx xxxx xxxx Total taxable Income or Net Income xxxxx

9. Due Dates for Filling of Returns Category of Tax payer Due dates for filling returns 2018-2019 Individual / BOI/HUF/AOP 31 st August ,2019 Business (Requiring Audit ) 30 th September, 2019 Business (Requiring TP Report) 30 th November,2019

10. ITR Filling Forms ITR-1 (SAHAJ) Applicable For : Resident Individuals Having Income < 50 lakh From : Salary/Pension Other Sources One House Property ITR-2 Applicable For : Income from: Every Income from ITR-1> 50 lakh From: Capital Gains More Then one house Property Foreign Income/Asset Holding Directorship in a company Holding Unlisted equity Shares

11. ITR-3 Applicable For : Every income from ITR-2: Business/Profession As a Partner in a firm Presumptive income > 50 lakh ITR-4 (SUGAM) Applicable For : Every income from ITR-1: Presumptive Income under Salary / Pension One House Property Total income > 50 lakh

12. ITR-5 Applicable to : Firms LLPs AOPs BOIs ITR-6 Applicable For: Companies not claiming exemption under section-11(exemption for trusts) i.e. Hospitals, Schools, colleges

13. ITR-7 Persons/Companies under: Section 139(4A) (   Every person in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or in part only for such purposes) Section 139(4B) (Required to be filed by a political party if the total income without giving effect to the provisions of section 139A exceeds the maximum amount, not chargeable to income-tax.) Section 139(4C) (Required to be filed by Scientific Research association; News agency) Section 139(4D) ( is required to be filed by every university, college or other institution, which is not required to furnish return of income or loss under any other provision of this section)

14. Types of Assessment Under the Income tax law, there are four major Assessments given below: Assessment Under Section 143(1): Summary Assessment without calling the assessee . Assessment Under Section 143(3): Scrutiny assessment Assessment Under Section 144: Best Judgment Assessment Assessment Under Section 147: Income escaping Assessment

15. Self Assessment u/s 140A This type of Income Tax Assessment is the one in which the assessee calculate the  tax by himself , usually to accompany his calculation with payment of the amount he regards as due. Tax payable is required to be furnished under section 139 or section 142 or section 148 or section 153A, after taking  TDS and deducting  Advance tax  paid. Time limit: There are no specific dates to pay Self Assessment Tax. Payment of Self Assessment Tax and non-filing of the returns should be paid within  31 st  July  of every year. Mode of Payment By using challan INS280. By online payment through website

16. Summary assessment u/s 143(1) Assessment under section 143(1) is like preliminary checking of the return of income. At this stage no detailed scrutiny of income is carried out. At this stage, the total income or loss is computed after making certain adjustments: 1. Any arithmetical error. 2. Incorrect claims 3. Disallowance of losses claimed 4. Disallowance of deductions claimed if any, 5. Addition of incomes which are not previously included. However, no such adjustments shall be made unless an intimation is given to the assessee .

17. Scrutiny assessment Sec. 143(3) Scrutiny assessment is the assessment of the return filed by the assessee by giving an opportunity to the assessing officer to substantiate the declared income and expenses and the claims of deductions, losses, exemptions, etc. in the return with the help of evidence. The assessing officer gets the opportunity to conduct an inquiry and aims at ascertaining whether the income in the return is correctly shown by the assessee or not. The claims for deductions, exemptions etc. are legally and factually. If there is any omission, discrepancies, inaccuracies, etc. Then the assessing officer makes an own assessment for the assessee by taking all facts in mind.

18. Best Judgment Assessment Sec.144 If the assessee does not cooperate in assessment proceedings with taxing authorities and fails to discharge his statutory duty in the matter, the assessing authority is left with no option but to assess him to the best of his judgment. Best Judgment Decision is of two types. Compulsory Assessment : Assessing officer (AO) finds that there is non-cooperation by the assessee or found to be a defaulter in supplying information to the department. Discretionary/optional assessment : When AO is dissatisfied with the authenticity/validity of the accounts given by the assessee or where no regular method of accounting has been followed by the assessee .

19. Income Escaping Assessment or Reassessment Sec 147 Income Escaping Assessment under section 147 is the assessment which is done by the Assessing Officer if there is a reason for him to believe that income chargeable to tax has escaped assessment for any assessment year. It gives power to him to re-assess or re-compute income, turnover etc. which has escaped assessment. Objective  The objective of carrying out assessment u/s 147 is to bring assessees under the tax net, any income which has escaped assessment in the original assessment. Condition -With in 9 Months a notice need to be served to assessee .

20. Notice On Demand Section 156 tax notice: it is the notice of demand issued by income tax department when any tax, interest, penalty, fine, or any other sum is payable in consequence of any order passed. The section 156 tax notice of demand will specify the sum which is payable. Penalty If the person to whom the section 156 tax notice demand notice has been issued fails to pay the amount demanded within the time limit provided under the section 156 tax notice, then the assessee is liable for following penalties. Interest u/s 220: @1% per month and thereof after expiry of 30 days. Penalty u/s 221: a penalty may be imposed by the AO on assessee but it should not be more than the amount demanded in the demand notice.

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