Section 174 of Income Tax Act for AY 2023-24

Section 174 of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Assessment of persons leaving India.

Amended and updated notes on section 174 of Income Tax Act 1961 as amended by the Finance Act 2022 and Income-tax Rules, 1962. Detail discussion on provisions and rules related to Assessment of persons leaving India.

Chapter XV (Sections 159 to 180A) of the Income Tax Act 1961 deals with the provisions related to liability in special cases. Section 174 of IT Act 1961 provides for Assessment of persons leaving India.

Recently, we have discussed in detail section 173 (Recovery of tax in respect of non-resident from his assets) of IT Act 1961. Today, we learn the provisions of section 174 of Income-tax Act 1961. The amended provision of section 174 is effective for financial year 2022-23 relevant to the assessment year 2023-24.

In this article, you will learn detail of the provisions of section 174 of the Income Tax Act, 1961 Bare Act read with the Income-tax Rules, 1962 as provided by Ministry of Law and Justice, Government of India.

Section-174: Assessment of persons leaving India

Section 174(1) of Income Tax Act

Notwithstanding anything contained in section 4, when it appears to the Assessing Officer that any individual may leave India during the current assessment year or shortly after its expiry and that he has no present intention of returning to India, the total income of such individual for the period from the expiry of the previous year for that assessment year up to the probable date of his departure from India shall be chargeable to tax in that assessment year.

Section 174(2) of Income Tax Act

The total income of each completed previous year or part of any previous year included in such period shall be chargeable to tax at the rate or rates in force in that assessment year, and separate assessments shall be made in respect of each such completed previous year or part of any previous year.

Section 174(3) of Income Tax Act

The Assessing Officer may estimate the income of such individual for such period or any part thereof, where it cannot be readily determined in the manner provided in this Act.

Section 174(4) of Income Tax Act

For the purpose of making an assessment under sub-section (1), the Assessing Officer may serve a notice upon such individual requiring him to furnish within such time, not being less than seven days, as may be specified in the notice, a return in the same form and verified in the same manner as a return under clause (i) of sub-section (1) of section 142, setting forth his total income for each completed previous year comprised in the period referred to in sub-section (1) and his estimated total income for any part of the previous year comprised in that period; and the provisions of this Act shall, so far as may be, and subject to the provisions of this section, apply as if the notice were a notice issued under clause (i) of sub-section (1) of section 142.

Section 174(5) of Income Tax Act

The tax chargeable under this section shall be in addition to the tax, if any, chargeable under any other provision of this Act.

Section 174(6) of Income Tax Act

Where the provisions of sub-section (1) are applicable, any notice issued by the Assessing Officer under clause (i) of sub-section (1) of section 142 or section 148 in respect of any tax chargeable under any other provision of this Act may, notwithstanding anything contained in clause (i) of sub-section (1) of section 142 or section 148, as the case may be, require the furnishing of the return by such individual within such period, not being less than seven days, as the Assessing Officer may think proper.

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