PERSON [SECTION 2(31)]

Income-tax is charged in respect of the total income of the previous year of every person. Hence, it is
important to know the definition of the word person. As per section 2(31), Person includes:

– an individual:

– a Hindu undivided family:

– a company

– a firm

– an association of persons or a body of individuals whether incorporated or not:

– a local authority: every artificial, juridical person, not falling within any of the above categories

Scope of Total income has been defined on the basis of Residential status Section5
(A) Resident and Ordinarily Resident Assessee According to Sub-section (1) of Section 5 of the Act
the total income of a resident and ordinarily resident assessee would consist of:

(i) income received or deemed to be received in India during the accounting year by or on behalf of
such person;

(ii) income which accrues or arises or is deemed to accrue or arise to him in India during the
accounting year;

(iii) income which accrues or arises to him outside India during the accounting year. It is important to
note that under clause (iii) only income accruing or arising outside India is included. Income deemed
to accrue or arise outside India is not includible

(B) Resident but Not Ordinarily Resident In India Proviso to section (1) of section 5 the total income
in case of resident but not ordinarily resident in India

(i) income received or deemed to be received in India during the accounting year by or on behalf of
such person;

(ii) income which accrues or arises or is deemed to accrue or arise to him in India during the
accounting year;

(iii) income which accrues or arises to him outside India during the previous year if it is derived from
a business controlled in or a profession set up in India.

(C) Non-Resident Sub-section (2) of Section 5 provides that the total income of a non-resident would
comprise of:

(i) income received or deemed to be received in India in the accounting year by or on behalf of such
person;

(ii) income which accrues or arises or is deemed to accrue or arise to him in India during the previous
year