Tax Assessment and Rates A.Y. 2023-24

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Questions and Answers

What is the basic exemption limit for individual taxpayers in the Assessment Year 2023-24?

₹ 2,50,000 (correct)

₹ 5,00,000

₹ 3,00,000

₹ 10,00,000

What is the tax rate applicable on total income exceeding ₹ 10,00,000 for individual taxpayers?

30% (correct)

20%

35%

10%

For Senior Citizens aged 60 or more in the Previous Year, what is the basic exemption limit?

₹ 2,50,000

₹ 4,00,000

₹ 5,00,000

₹ 3,00,000 (correct)

Which category of taxpayers has a basic exemption limit of ₹ 5,00,000?

Super Senior Citizens Signup and view all the answers

In what category does an assessment include reassessment?

Income Assessment Signup and view all the answers

Which of the following statements is true regarding the age treatment of Senior and Super Senior Citizens for the AY 2023-24?

Age is considered completed as of 31st March of the previous year. Signup and view all the answers

What percentage tax applies to income between ₹ 5,00,000 to ₹ 10,00,000 for individuals?

20% Signup and view all the answers

Who is considered a representative assessee?

A trustee of a trust Signup and view all the answers

When is income tax charged for an assessment year?

For every assessment year on total income earned in the previous year Signup and view all the answers

What is meant by the term 'Assessment Year'?

A period of twelve months starting from 1st April each year Signup and view all the answers

Which of the following correctly defines 'Previous Year'?

The financial year preceding the assessment year Signup and view all the answers

For A.Y. 2023-24, what is the duration of the corresponding Previous Year period?

1st April 2022 to 31st March 2023 Signup and view all the answers

Which exception allows for income of a previous year to be assessed in the previous year itself?

Income from shipping business of non-residents Signup and view all the answers

Which of the following qualifies as a 'Person' under income tax law?

An artificial juridical person and a firm Signup and view all the answers

Who is NOT considered a 'Person' as per the definitions in income tax law?

A head of a household Signup and view all the answers

What determines the income tax rate that is levied?

Rates prescribed by the Finance Act Signup and view all the answers

What is the surcharge percentage on total income for an individual with income between ₹ 50 Lakhs and ₹ 1 Crore?

10% Signup and view all the answers

For which total income range does the surcharge on dividend capital gains like u/s 111A, 112A & 112 not exceed 15%?

Upto ₹ 2 Crores Signup and view all the answers

An assessee with a remaining total income of ₹ 1.5 Crores but total income exceeding ₹ 2 Crores will have which surcharge percentage applied?

25% Signup and view all the answers

What is the surcharge percentage applicable if an assessee's remaining total income exceeds ₹ 5 Crores?

37% Signup and view all the answers

Which of the following correctly states a situation when an individual will never incur a 37% surcharge?

If the total income is ₹ 10 Crores, but remaining total income is ₹ 4 Crores Signup and view all the answers

At what total income level does a surcharge of 15% start to apply to the remaining total income?

₹ 2 Crores Signup and view all the answers

If an individual’s total income exceeds ₹ 25 Crores but has a remaining total income of ₹ 10 Crores, what surcharge do they face?

25% Signup and view all the answers

Which of the following correctly describes the surcharge for an assessee with a remaining total income of ₹ 6 Crores but total income that exceeds ₹ 25 Crores?

37% Signup and view all the answers

Study Notes

Trustee and Assessment

Trustees of a trust are considered representative assessees in tax matters.
Assessment refers to the process of determining the amount of income and tax due from a person.
It includes reassessment as per Section 2(8) of Income Tax, indicating a broad definition.
Assessment year refers to the year in which income earned in the previous year is taxed.

General Tax Rates for A.Y. 2023-24

Individuals, HUF, AOP, BOI, AJP (Residents):
- Income up to ₹2,50,000: Nil tax
- Income from ₹2,50,001 to ₹5,00,000: 5%
- Income from ₹5,00,001 to ₹10,00,000: 20%
- Income above ₹10,00,000: 30%
Senior Citizens (60 years or older):
- Income up to ₹3,00,000: Nil tax
- Income from ₹3,00,001 to ₹5,00,000: 5%
- Income from ₹5,00,001 to ₹10,00,000: 20%
- Income above ₹10,00,000: 30%
Super Senior Citizens (80 years or older):
- Income up to ₹5,00,000: Nil tax
- Income from ₹5,00,001 to ₹10,00,000: 20%
- Income above ₹10,00,000: 30%
Circular No. 28/2016, dated July 27, 2016:
- Residents celebrating their 60th or 80th birthday on April 1, 2023, are treated as already having turned 60 or 80, enabling them to benefit from higher exemption limits.

Charge of Income Tax

Income tax is charged for each assessment year on total income earned during the previous year.
Defined in Section 4, it is applicable to individuals as defined under Section 2(31).

Assessment Year and Previous Year

Assessment Year (AY):
- A 12-month period starting April 1 each year; AY 2023-24 is from April 1, 2023, to March 31, 2024.
Previous Year (PY):
- Financial year preceding the assessment year; PY for AY 2023-24 is April 1, 2022, to March 31, 2023.
- Income of PY is assessed in the corresponding AY, except in certain situations like newly established businesses.

Exceptions for Assessing Previous Year Income

Income can be assessed in the previous year itself in specific cases like:
- Shipping business of non-residents (Section 172)
- Individuals leaving India with no intention to return (Section 174)
- Entities formed for particular events or purposes (Section 174A)
- Individuals likely to transfer property to avoid tax (Section 175)
- Discontinued businesses (Section 176)

Definition of Person

Under Section 2(31), a person includes:
- Individuals
- Hindu Undivided Families (HUF)
- Companies
- Firms (including LLPs)
- Associations of Persons (AOP) or Bodies of Individuals (BOI)
- Local Authorities
- Artificial Juridical Persons

Surcharge for Individuals and Others

Surcharge Rates:
- Total income up to ₹50 lakhs: Nil
- Income from ₹50 lakhs to ₹1 crore: 10%
- Income from ₹1 crore to ₹2 crore: 15%
- Dividend and capital gains above ₹2 crore: 15%
Additional surcharge on remaining total income as follows:
- Income from ₹2 crore to ₹5 crore: 25%
- Income exceeding ₹5 crore: 37%
Surcharge Implications:
- Surcharges on dividend and capital gains (Sections 111A, 112A, & 112) capped at 15%.
- Remaining total income can be subject to higher surcharges only if it exceeds given thresholds, independent of dividend and capital gains.

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Description

This quiz delves into the concepts of tax assessment and the general tax rates applicable for the assessment year 2023-24. It covers the classification of trustees as representative assessees and provides details on income tax rates for individuals, senior citizens, and super senior citizens. Test your understanding of these crucial tax regulations and their implications.