What is the meaning of assessment?

Ans. Every taxpayer has to furnish the details of his income to the Income-tax Department. These details are to be furnished by filing his return of income. Once the return of income is filed by the taxpayer, the next step is the processing of the return of income by the Income-tax Department. The Income-tax Department examines the return of income for confirming its correctness. The process of examining the return of income by the Income-tax Department is called “Assessment”. Assessment also includes re-assessment or best judgment assessment under section 144.

Note: The Finance Act, 2018 has inserted section 143(3A) to implement e-assessment scheme for the regular assessment carried out by the Assessing Officer under section 143(3).

Now, the Finance Act 2020 has expanded the scope of e-assessment to cover the best judgment assessments under section 144. The Central Government may issue necessary directions in this regard by 31-03-2022.