Applicability of the provisions of Income tax Act as on the first day of April of the AY for computation of income?, Income Tax

[swapna kendre]

i have this basic query from the Book income tax: law & practice by VK Singhania

 

Para 5.6

 

Rule 1: for computing income: Total Income is calculated in accordance with the provisions of the Income Tax Act, as they stand on the First day of April of the assessment year.

For eg: For calculating taxable income for the AY 2012-13, the provisions of the Income Tax Act as on April 1, 2012 are applicable. If an amendment is made w.e.f. April 2, 2012 it is irrelevant for calculating income for the AY 2012-13. Likewise, the law existing during the PY 2011-12 has no relevance for determining the total income for the AY 2012-13.

 

My doubt is whether the provisions of the Income Tax Act as on the First day of April of the Assessment yr or Previous yr are applicable?

Posts / Replies

[MOHAN S]

Swapna,

It is not necessarily that the law as on the first day of April of Assessment year apply in all cases. The Finance Act which normally amends the Income Tax Law stated when a particular amendment comes into force. In many cases retrospective amendments are made. In some csaes amendments comes into force in the middle like 1st day of June etc. So the Amending provisions prescibe the applicable as far as Income Tax Act is concerned.