Assessment year refers to twelve month starting from 1st day of every April of a particular year and ending on 31st day of every march of the next year. The current assessment year is 2017-2018.
2.What is Previous Year? [Sec 3]
Previous year refers to twelve month immediately preceding the assessment year is 2017-2018, then previous year will be 2016-2017 starting from 1st April 2016 and ending on 31st March of 2017.
3.Who is Assessee? [Sec 2(7)]
Assessee refers to the any person who is liable to pay tax or who is liable to pay interest or penalty under income tax act 1961.
4.Who is Deemed Assessee?
Deemed assessee is also known as representative assessee. This type of assessee is not only responsible for his income but also responsible for the income of the other person to whom he acts as a representative.
5.Who is Person? [Sec 2(31)]
Individual An hindu undivided family A firm A company A local authority of municipal corporation Any artificial juridical person.
1 6.What is Income? [Sec 2(24)]
Profit and gain
Dividend Voluntary contribution Value of any benefit Profit in lieu of salary Any allowances.
7.What is status of individual? [Sec 6 (1) ]
Individual will have any one of the following status in the previous year.
1.Resident or Ordinary Resident
2.Not Ordinary Resident
3.Non-Resident.
8.Who is Ordinary Resident?
Ordinary resident means who satisfied any one basis condition and both additional condition. He is a ordinary resident.
9.Define Salary.
Salaries include the following,
Wages Any annuity or pension Any gratuity Any fees commission Any advance salary
10.What is mean by House Rent Allowances ( HRA )?
It is a allowances given to an assessee by his employer to meet the expenditure on payment
of rent in respect of residential accommodation occupied by him.
2 11.What is mean by Perquisites?
The term of “perquisites”[termed as “perks”] means any benefit attached to an
officer or position in additional to salary or wages. Perquisites denote personal advantages. Perquisites may be in cash or in kind.
13.Who is Specified employee?
The following persons are specified employees
A director-Employee[full time or part time]
Employee who is having a substantial interest in the company [i.e.20% of paid-up capital or more / 20% of voting power or more] Employees who’s Monetary Salary exceed Rs.50.000 per annum.
14. What is meant by Gratuity? [Section 10 (10)]
Gratuity is a retirement benefit. It is paid at the time retirement / cessation of
employment based on the service.
15. What is Pension?
It is periodical payment received by an employee after his retirement. An
employee cannot receive pension while he is service. Any pension received is taxable as salary. There are two types of pension.
1.Commuted Pension
2.Uncommuted pension
16. What is Provident fund?
It is scheme where the employee contributes a sum of money from his
monthly salary towards savings. Similarly the employer will also contribute some amount to the account of employee. The interest earned out of this contribution is also credited to his account itself.
3 17.What is meant by Fair Rental Value ( FRV ) ?
Fair rental value refers to the rent which a similar property will fetch the same or nearby similar locality.
18.What is mean by Municipal Rental Value ( MRV)?
Municipal value refers to the Rental value fixed by the municipal or local authority. In metropolitan city like Chennai, Mumbai, delhi and kolkatta the authorities will determine “NET MUNICIPAL VALUE”.
19.What is mean by Standard Rental Value ( SRV )?
Standard rent refers to the rent fixed by the rent contract act. It is maximum rent an owner can claim from his tenant as rent.
20.What is mean by Actual Rental Value ( ARV )?
Actual rent to the rent for which the property has been actually let out by the owner. Amount in excess of period of vacancy and unrealized rent should be taken as actual rent.
21.What is mean by Gross Annual Value [GAV] ?
Gross annual value refers to the value, which is calculated after considering the following:
*Expected rent and
*Actual rent
It is the gross amount which the owner receives before allowing any deduction.
22.What is mean by Net Annual Value (NAV)?
It is the amount available after deduction municipal tax or local tax paid by the owner from the gross annual value.
4 23. What is mean by Unrealized Rent (URR)?
Unrealized rent refers to the rent, which has not been realized by the owner from the tenant, for the let out period.
24. What is mean by vacancy?
Vacancy refers to the period for which the property is not occupied by any one. The period of vacancy may be at the beginning of the current previous year or at the end of the current previous year or in the middle of the current previous year.
25. What is mean by unrealized rent recovered?
It refers to the unrealized rent allowed in the earlier years preceding the current previous year but the realized the current previous year 2016-2017. It will be deemed as income of the year in which it as received.
26.What is mean by Composite Rent?
Composite rent refers to the total amount received by the owner towards rent of the property and charges for the different services provided, such as lift securities furniture air- conditioner.
27. Define Business.
Business refers to purchase and sale of commodity with a view to earn profit. It include any trade commerce or manufacture or any adventure or any concern in the nature of trade commerce or manufacture.
28. Define Profession.
Profession refers to the activities of earning using intellectual skills. For
example doctors, lawyers, engineers and auditors come under the category.
