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Report No. 12

5. Previous year.-

(1) For the purposes of this Act, "previous year" means-

(a) the financial year immediately preceding the assessment year; or

[Section 2(11)(i)(a), main para., earlier part]

(b) if the accounts of the assessee have been made up to a date within the said financial year,.......then, at the option of the assessee, the twelve months ending on such date; or

[Section 2(11)(i)(a) main para, latter part]

(c) in the case of any person, business or company or class of person, business or company, such period as may be determined by the Central Board of Revenue or by any authority authorised by the Board in this behalf; or

[Section 2(11)(i)(b)]

(d) in the case of a business, profession or vocation newly set up in the said financial year, the period beginning with the date of the setting up of the business, profession or vocation and-

(i) ending with the said financial year, or

(ii) if the accounts of the assessee have been made up to a date within the said financial year, then, at the option of the assessee, ending on that date, or

(iii) ending with the period, if any, determined under clause (c), As the case may be; or

[Section 2(11)(i)(c) main para,]

(e) in the case of a business, profession or vocation newly set up in the twelve months immediately preceding the said financial year-

(i) if the accounts of the assessee have been made up to a date within the said financial year and the period from the date of the setting up of the business, profession or vocation to such date does not exceed twelve months, then, at the option of the assessee, such period, or

(ii) if any period has been determined under clause (c), then the period beginning with the date of the setting up of the business, profession or vocation and ending with that period.

As the case may be;

[Section 2(11)(i)(c), Proviso latter part]

(f) where the assessee is a partner in a firm and the firm has been assessed as such, then, in respect of the assessee's share of the income of the firm, the period determined as previous year for the assessment of the income of the firm;

[Section 2(11)(ii)]

(g) in respect of profits and gains from life insurance business, the year for which annual accounts are required to be prepared under the Insurance Act, 1938 (4 of 1938), or under that Act as read with section 43 of the Life Insurance Corporation Act, 1956 (31 of 1956), immediately preceding the assessment year.

[Schedule, Rule 5(i)]

(2) Where an assessee has newly set up a business, profession or vocation in the said financial year and his accounts are made up to a date in the assessment year in respect of period not exceeding twelve months from the date of such setting up, then the assessee shall, in respect of that business, profession or vocation, at his option, be deemed to have no previous year for the said assessment year under sub-clause (i) of clause (d) of sub-section (1); and such option shall, in relation to the immediately succeeding assessment year, have effect as an option exercised under sub-clause (i) of clause (e) of sub-section (1).

[Section 2(11)(i)(c), Proviso, earlier part]

(3) Subject to the other provisions of this section, an assessee may have different previous years in respect of separate sources of his income.

[Section 2(11)(i) opening lines]

(4) Where in respect of a particular source of income or in respect of a business, profession or vocation newly set up, an assessee has once exercised the option under clause (b) or sub-clause (ii) clause (d) or sub-clause (i) of clause (e) of sub-section (1) or has once been assessed, then he shall not, in respect of that source, or, as the case may be, business, profession or vocation, be entitled to vary the meaning of the expression 'previous year' as then applicable to him, except with the consent of the Income-tax Officer and upon such conditions as the Income-tax Officer may think fit to impose.

[Section 2(11)(0(a) Proviso]



Income-Tax Act, 1922 Back




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