For the purpose of charging Income-tax, the term ‘person’, under Section 2(31) of Income Tax, includes Individual, Hindu Undivided Families [HUFs], Association of Persons [AOPs], Body of individuals [BOIs], Firms, LLPs, Companies, Local authority and any artificial juridical person.
The term ‘person’ as defined under the Income-tax Act covers in its ambit natural as well as artificial persons, i.e. apart from a natural person/ individual, any sort of artificial entity will also be liable to pay Income-tax.
It may be noted that “assessee” under the Income Tax Act, 1961 is a person by whom any tax/ other dues are payable under that Act, i.e. income-tax is to be paid by a ‘person’. Therefore deciding the status of ‘person’ under the Income Tax Act is all the more important, as there are different set of tax rules/ rates which are applicable to different type of persons.
As per Section 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.