Definition of ‘Person’ – Income Tax
As per S.2(31) of Income Tax Act, 1961, unless the context otherwise requires, the term “person” includes:
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling within any of the preceding sub-clauses.
Explanation:
For the purposes of this clause, an association of persons or a body of individuals or a local authority or an artificial juridical person shall be deemed to be a person, whether or not such person or body or authority or juridical person was formed or established or incorporated with the object of deriving income, profits or gains.
Income-tax is to be paid by every person. The term ‘person’ as defined under the Income-tax Act covers in its ambit natural as well as artificial persons. For the purpose of charging Income-tax, the term ‘person’ includes Individual, Hindu Undivided Families [HUFs], Association of Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority and any artificial juridical person not covered under any of the above.
Thus, from the definition of the term ‘person’ it can be observed that, apart from a natural person, i.e., an individual, any sort of artificial entity will also be liable to pay Income-tax.
What is the meaning of ‘an individual’ and ‘every artificial juridical person, not falling within any of the preceding sub-clauses’? Can you tell me who and all fall in these categories?
Individual is a unit of assessment covered under definition of person as per Income Tax Act and it refers to a natural person, i.e. a human being (male or female). Same way each class of persons has its own scope of coverage under Income Tax Act. Artificial Juridical Person is basically a residuary class and it may cover assessees which are not covered in any of the other specified classes of person. For example, a co-operative society may be treated as an AJP.
So does a jewellers association fall under a AJP?
Whether person includes a ‘person with unsound mind’?
yes, and unsound mind person is an individual, represented by a guardian who pays income tax on income of the unsound person and that representative assessee is called DEEMED ASSESSEE.
No… it doesn’t include a person of unsound mind…
Of course the term Individual includes all individual human beings – the state of mind or medical fitness is NOT the issue here.
Unsound mind doesn’t be a person because he is person disqualified to be a person in the eyes of law.
whether court is covered under AJP?
Which assessees are included in person under income tax act 1961?