What is Previous Year? What is Charge of Income tax? Section
3 and 4 of Income Tax Act 1961
Previous Year and Charge of Income Tax
are defined under section 3 and 4 of Income Tax Act 1961.
Provisions under these sections are:
of Income Tax Act "Previous year defined"
For the purposes of this Act, "previous year" means
the financial year immediately preceding the assessment year
of Income Tax Act "Charge of income-tax"
Provided that, in the case of a business or profession newly
set up, or a source of income newly coming into existence,
in the said financial year, the previous year shall be the
period beginning with the date of setting up of the business
or profession or, as the case may be, the date on which the
source of income newly comes into existence and ending with
the said financial year.
Where any Central Act enacts that income-tax shall be
charged for any assessment year at any rate or rates,
income-tax at that rate or those rates shall be charged for
that year in accordance with, and subject to the provisions
(including provisions for the levy of additional income-tax)
of, this Act in respect of the total income of the previous
year of every person :
Provided that where by virtue of any provision of this
Act income-tax is to be charged in respect of the income of
a period other than the previous year, income-tax shall be
(2) In respect of income chargeable under sub-section
(1), income-tax shall be deducted at the source or paid in
advance, where it is so deductible or payable under any
provision of this Act.