{"id":28082,"date":"2020-01-18T14:17:17","date_gmt":"2020-01-18T08:47:17","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=28082"},"modified":"2021-07-13T17:59:33","modified_gmt":"2021-07-13T12:29:33","slug":"several-types-of-assessment-under-the-income-tax-act","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/several-types-of-assessment-under-the-income-tax-act\/","title":{"rendered":"Several Types of Assessment Under The Income Tax Act"},"content":{"rendered":"

All assessees have to file their returns of income with the Income tax department to furnish the complete details of income pertaining to the relevant financial year. Once such a return is filed by the assessee, the next step involves the examination of the return of income by the Income tax department to analyze its correctness. Such a process of appraising and evaluating the return of income by the assessing officer is known as assessment. The term assessment also includes re-assessment and best judgment assessment under Section 144. The scrutiny patterns followed by the Income tax department<\/a> have undergone a radical change over the years. As per the Income tax laws, there are five major types of assessments which are as follows:<\/p>\n\n\n\n

\"Income<\/figure>\n\n\n\n

Self\nassessment under Section 140A<\/strong><\/h2>\n\n\n\n

Various forms for filing an income tax return in India are made accessible by the Income tax department; which are used by the assessee to consolidate his income from different sources. The assessee himself adjusts his income for losses\/deductions\/exemptions, if any, allowable to him during the financial year. From the total income arrived at, he reduces the TDS and advance tax to determine the net income tax payable. Such an assessment of tax is known as self assessment<\/a>.<\/p>\n\n\n\n

Assessment\nunder Section 143(1) or Summary assessment without calling the taxpayer<\/strong><\/h2>\n\n\n\n

Summary assessment is one\nof the major types of assessment which strives to cross-check the information\nsubmitted by the assessee in his return against the details that the Income tax\ndepartment has access to. This is a preliminary appraisal of the return of income\nwherein detailed scrutiny is not executed. Under this assessment, the\ntaxpayer’s total income is computed after adjusting for any arithmetical error\nin the return, an incorrect claim which is apparently clear from the information\nprovided in return, any disallowance of expenditure brought into light in the\naudit report which is not taken into consideration in return, etc. However, no such adjustment will be made\nto an assessee’s total income unless an intimation of the same is given to him either\nin writing or in electronic mode. The summary\nassessment can be made within a period of 1 year from the close of the financial\nyear in which the tax return is filed.<\/p>\n\n\n\n

Assessment\nunder Section 143(3) or Scrutiny assessment<\/strong><\/h2>\n\n\n\n

Scrutiny assessment is a thorough\nassessment wherein an in-depth scrutiny of the income tax return is carried out\nto assert the accuracy and genuineness of all claims, deductions, etc., availed\nby the assessee in his return. The rationale behind this assessment is to\nensure that the assessee has not understated the income or claimed excessive\nlosses or underpaid tax to the revenue department in any manner. <\/p>\n\n\n\n

If the AO considers it\nessential to assure that neither any income has been understated nor any\nexpenditure has been overstated, he shall, for the purposes of conducting a\nscrutiny assessment, serve a notice on the assessee demanding him to attend his\noffice or to render any evidence in support of the income tax return. Such notice\nhas to be served within 6 months from the close of the financial year in which\nthe return is filed. As per\nSection 153, the time-limit for completing a scrutiny assessment under Section 143(3)\nis 12 months from the end of the AY in which the income was first assessable. <\/p>\n\n\n\n

Assessment\nunder Section 144 or Best judgment assessment<\/strong><\/h2>\n\n\n\n

This refers to an\nassessment done in accordance with the best judgment of the AO on the basis<\/a> of\nall requisite information procured. Section 144 obligates the AO to carry out a\nbest judgment assessment in the following circumstances:<\/p>\n\n\n\n