Question

Assertion (A): Income-tax is levied on the total income of a person for the previous year. Reason (R): Income earned during the previous year is assessed to tax in the immediately succeeding assessment year under the Income-tax Act, 1961.

• A. (A) is false, but (R) is true.
• B. Both (A) and (R) are true, but (R) is not the correct explanation of (A).
• C. Both (A) and (R) are true and (R) is the correct explanation of (A).
• D. (A) is true, but (R) is false.

Hint:

A simple memory trick is: "Earn first, Assess later." Income is earned in the Previous Year and assessed in the immediately succeeding Assessment Year.

Answer 1

The Correct Option is C

Concept: The Income-tax Act, 1961 follows a two-year framework consisting of the

Previous Year and the

Assessment Year. Understanding this distinction is fundamental to income-tax law.

Step 1: Examine Assertion (A).

• Income-tax is charged on the total income earned during the Previous Year.

• Therefore, Assertion (A) is correct.

Step 2: Examine Reason (R).

• Income earned during the Previous Year is assessed and taxed in the immediately succeeding Assessment Year.

• Hence, Reason (R) is also correct.

Step 3: Determine whether the Reason explains the Assertion.

• The reason explains why income of a Previous Year becomes taxable.

• The tax system operates by assessing the income earned in one year during the following Assessment Year.

• Thus, the Reason directly explains the legal basis of the Assertion.

Previous Year = Year of Earning Income
Assessment Year = Year of Tax Assessment

Answer 2

This is an assertion-reason question about the Previous Year and Assessment Year concepts in income tax law. To answer it properly, each of the four possible combinations should be tested directly against the underlying facts rather than assumed.

1. (A) is false, but (R) is true: Income tax is indeed charged on a person's total income of the previous year, which is a basic and settled feature of the Income-tax Act, 1961. Since Assertion (A) is a correct statement of law rather than a false one, this option cannot be right.
2. Both (A) and (R) are true, but (R) is not the correct explanation of (A): Both statements are individually accurate, income is indeed taxed on a previous-year basis, and it is indeed assessed in the following assessment year. But this option would only be correct if the Reason were true yet unrelated to why the Assertion holds. Here the Reason describes exactly the mechanism, the previous year and assessment year cycle, that makes the Assertion operate the way it does, so treating the Reason as unconnected to the Assertion understates the relationship between the two.
3. Both (A) and (R) are true and (R) is the correct explanation of (A): The Assertion states that tax is levied on total income of the previous year. The Reason explains that this previous-year income is what gets assessed in the following assessment year. The Reason is not simply a parallel true fact, it directly accounts for why total income of a particular year becomes taxable in the way described in the Assertion. Both statements are true and the causal link between them holds.
4. (A) is true, but (R) is false: The Reason correctly reflects the assessment-year mechanism under the Income-tax Act, so it cannot be dismissed as false. This option therefore does not fit either.

Testing each combination against the actual working of the previous year and assessment year system shows that both statements are correct and directly connected.

The correct answer is Both (A) and (R) are true and (R) is the correct explanation of (A).