The Procedure for Assessments Under the Income-tax Act, 1961 and the Income-tax Act, 2025 Is the Same; Only the Section Numbers Have Changed
Summary: Article states that the assessment procedure under the Income-tax Act, 1961 and the Income Tax Act, 2025 remains the same, with the principal change being the renumbering of sections and changes in the effect of certain provisions. It compares self-assessment, regular assessment, and best judgment assessment under both Acts by mapping the corresponding section numbers. For self-assessment, it lists the items to be considered while computing tax, including taxes paid, TDS/TCS, reliefs, tax credits, and interest. For regular assessment, it explains the processing of returns, permissible adjustments, computation of tax, interest and fee, determination of refund or tax payable, issue of intimation, grant of refund, and the requirement to communicate proposed adjustments and consider the assessee’s response within thirty days. It also notes that Section 270 contains fifteen sub-sections. For best judgment assessment, it outlines the circumstances in which such assessment may be made, including failure to furnish returns or comply with notices, and states that the Assessing Officer may assess income or loss after considering relevant material and providing an opportunity of being heard.
Self-assessment: Section (140A & 234F) 286 and 428:
When, assesses are submitted their return of income under section (139) 263 or section (143)268 or section (148)280 as the case may be, after taking in to account the following details:
- The amount of tax already paid under any provisions of the Income tax Act;
- Any tax deducted or collected at source;
- Any relief of tax claimed u/s (89) u/s 157;
- Any relief of tax or deduction of tax claimed u/s (90) u/s 159 or u/s (91) u/s 160 on account of tax paid in a country outside India;
- Any relief of claimed u/s (90A) u/s 159 on account of tax paid in any specified territory outside referred to in that section;
- Any tax credit claimed to be setoff in accordance with the provisions of section (115JA) OR section (115JD) u/s 206;
- Any tax or interest payable according to the provisions of section (191(2) section 391(2).
Regular Assessment: (Section 143)/Section 270:
This section provides that where a return has been filed u/s 139 (Section 263) or in response to notice u/s 142(1) (Section 268(1), such return shall be processed in the following manner:
(a) the total income or loss shall be computed after making the adjustments towards the following:-
-
- Any arithmetical error in the return;
- An incorrect claim, if such incorrect claim is apparent from any information in the return; or
- Any such inconsistency in the return, with respect to the information in the return of any preceding tax year, as may be prescribed; or
- Disallowance of loss claimed, if return of the tax year for which setoff of loss is claimed was furnished beyond the due date specified under section 139, (Section 263(1);or
- Disallowance of expenditure or increase in income indicated in the audit report but not taken in to account to computing the total income in the return; or
- Disallowance of deduction claimed under any of the provisions of Chapter VIII-C, if return is furnished beyond the due date specified under section 139,(Section 263(1).
- the tax, interest and fee, if any, shall be computed on the basis of the total income computed under clause(a);
- the sum payable by , or the amount of refund due to, the assessee shall be determined after adjustment of tax, interest and fee , if any, computed under clause (b) by-
- Any tax deducted at source;
- Any tax collected at source;
- Any advance tax paid;
- Any rebate or relief allowable under Chapter IX;
- Any tax paid on self-assessment; and
- Any amount paid otherwise by way of tax, interest or fee
(d) an intimation shall be sent to the assesse specifying sum determined to be payable by, or refund due to, the assesse under clause (c); and
(e) the amount of refund due to the assesse in pursuance of the determination under clause (c) shall be granted to the assesse
(2) Before making any adjustment under sub section (1)(a),-
(a) a communication is to be given to the assesse of such adjustments either in writing or in electric mode;
(b) the response received from the assesse in this regard, if any, shall be considered; and in a case where no response is received within thirty days of the issue of communication, such adjustments shall be made and there after the intimation under sub section (1)(d) shall be sent.
For this type of assessment under this section 270 there are total 15 sub sections are given.
Best Judgment Assessment: (Section 144)/ Section 271:
Best Judgment Assessment, we may call it Ex Party Assessment is made under the following circumstances:
(a) failure to furnish the return required under section 139(1) or 139(4) or 139(5) or 139(8A) Section 263(1) or (4) or (5) or (6); or
(b) failure to comply with all the terms of the notice issued under section 142(1) Section 268(1);or fail to comply with direction issued under section 142(2A), Section 268(5); or
(c) having filed return, but fails to comply with all the terms of a notice issued under section 143(2) Section 270(8).
The Assessing Officer, after taking in to the account all relevant materials which he has gathered, shall, after giving the assesse an opportunity of being heard make the assessment of the total income or loss to the best of his judgment and determined the sum payable by the assesse on the basis of such assessment.
(2) The Assessing Officer before making an assessment, serve a notice on the assesse to show cause, on a date and time to be specified in the notice, as to why assessment shall not be completed to the best of his judgment.
(3) It shall not be necessary to give an opportunity under section 268(1) has been issued prior to the making an assessment under this section.
From the above discussion we can see that now it will be difficult for us to remember the new sections, it will take time, but will be able to accommodate the new Act- 2025.
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