Define the term Person for Income Tax? Who is an Assessee in default?

In term of Income Tax, A person carries quite a wide meaning. In a layman’s sense, a person is an individual, a person existing in this world, born as a man, a woman but for Income Tax purposes it includes not just a living individual but other entities as well. For example, a joint stock company is also considered a person. Its income is assessed like that of an individual’s and taxed accordingly. This person ceases to exist only when the company is dissolved. The following is the broad inclusive list of persons according to the income Tax Act Section 2(31):

  • An Individual.
  • A Hindu Undivided Family.
  • A Company.
  • A Firm.
  • An Association of Persons or a body of individuals whether incorporated or not.
  • A Local Authority, and
  • Every artificial judicial person not falling within any of the categories mentioned above.

In the Hindu Undivided family, all daughters and wives can form a part of the tax-paying family. Even minors come under the category of tax-paying persons in some cases.

An assessee in default refers to the defaulter person, a person who was liable to pay tax in some form or the other but has escaped payment of his tax. Any person who is supposed to make tax payment in any form is called an assessee. The following would be considered defaulter assessee:

  • One who is liable to deduct tax at source but does not do so.
  • Who deducts the tax but fails to pay it to the government.
  • Person who does not make timely payment of Advance Income Tax.

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