Amended and updated notes on section 3 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 Previous Year.
Chapter I (Sections 1 to 3) of the Income Tax Act 1961 deals with the provisions related to preliminary. Section 3 of IT Act 1961 provides for Previous Year (PY).
Recently, we have discussed in detail section 2 (Definitions) of IT Act 1961. Today, we learn the provisions of section 3 of Income-tax Act 1961.
The amended provision of section 3 is effective from 1-April-2000. In this article, you will learn detail of the provisions of section 3 of the Income Tax Act 1961-2023 read with the Income-tax Rules, 1962.
Section-3: Previous Year
“Previous year” defined.
For the purposes of this Act, “previous year” means the financial year immediately preceding the assessment year:
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.