CA Articles Income When Taxable and Exceptions

Income earned in a year is taxable in the next year. The year in which income is earned is known as Previous Year(P.Y.) and the next year in which income is taxable is known as Assessment Year(A.Y.).

Previous Year defined in section 3 of Income Tax Act,1962 "Previous Year is the financial year immediately preceeding the assessment year."

The rule that the income of the Previous Year is accessable as the income of the immediately following assessment year has certain exceptions. These are :

(1) income of non-resident from shipping;

(2) income of persons leaving India either permanently or for a long period of time;

(3) income of bodies formed for short duration;

(4) income of a person trying to alienate his assets with a view to avoiding payment of tax.

(5) income of discontinued business.

Thanks all....