Income Tax – Individual

Tax is fee that is charged by government which is on income, activity or product Income tax is imposed on various groups of persons. Some are mentioned here below: -

The term individual is meant as natural human-being. The discretionary-trust’s trustees are assessed as individual’s status instead of AOP. From their salary, business, rent from house, interest, profession, etc. individual pays the income-tax upon the income. On the dividend-income he is not obliged for paying the income-tax. For income-tax’s purpose the proprietary business firm’s income is being added with his total income. If an individual gets his salary out of partnership-firms in which he act as a partner then that income of his is taken as a business income.

Under no laws of tax HUF is defined. According to Hindu-Law, however, it is meant as family consisting of every person descended lineally from common grandparents and also includes wives of their and daughters who are unmarried. Profits that are made through HUF are to the tax chargeable as HUF’s income as distinct unit or entity of the assessment.

AOP i.e. Association of Person under IT Act as considered is unit or entity of the assessment. AOP means 2 or persons in more number who unite together for common intention for earning income. The Person term includes company / body-of-individual / association, whether unified / not unified. It is not compulsory that association be wholly or partly on contract basis.

BOI i.e. Body of Individuals which means individual’s conglomeration and by those persons some sort of activity is carried on having an objective for earning the income. It comprises of only individuals. Business entity or unit like firms or companies does not have the right to become BOI’s member. Assessee is not liable to pay any income-tax in relation to share’s receipt of the income from the BOI through him and upon which BOI has paid the taxes already.

Questions:

• What is income tax?
• Define income tax for individual, HUF, AOP, BOI.