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

A practical way to check an assertion-reason pair like this is to run through a real example of how the tax year system actually works, and see whether the Reason genuinely explains the Assertion or merely sits beside it.

1. Working through an example: Suppose a person earns income between April 2024 and March 2025. That period is their previous year. The tax on that income is computed and assessed in the year that follows, April 2025 to March 2026, which is called the assessment year. This example shows both that tax is charged on the previous year's income (the Assertion) and that this income is assessed in the year immediately after (the Reason).
2. Why the Reason explains the Assertion: The only reason the Assertion holds, that tax is levied on the previous year's total income, is because the law has structured the process so that income is first earned in one year and only assessed in the next. Remove the assessment-year mechanism and the very idea of taxing previous-year income would not function the way it does. So the Reason is not an unrelated true fact, it is the operative explanation.
3. Ruling out the alternatives: Since the example confirms both statements are factually accurate, any option that calls either one false is incorrect. And since the Reason is shown to be the actual mechanism behind the Assertion, treating it as unconnected to the Assertion would also be inaccurate.

Working through the mechanics this way confirms that both statements hold and that the Reason is precisely why the Assertion is true.

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

Answer 2

Another way to settle this is to go back to how the Income-tax Act, 1961 itself defines the previous year and the assessment year, and then check the Assertion and Reason against those definitions directly.

1. Statutory meaning of previous year: The Act defines the previous year as the financial year immediately preceding the assessment year, and it is this previous year's income that forms the base on which tax liability is computed. This confirms the Assertion, that income tax is levied on the total income of the previous year, is an accurate restatement of the statutory scheme.
2. Statutory meaning of assessment year: The Act defines the assessment year as the twelve-month period following the previous year, during which the income of the previous year is assessed and the corresponding tax liability is determined and collected. This matches the Reason precisely, since it says income earned in the previous year is assessed in the immediately succeeding assessment year.
3. Linking the two definitions: These two statutory definitions are not independent facts, they are two halves of a single mechanism, the previous year identifies whose income is being taxed and the assessment year identifies when that tax liability is worked out and enforced. Because the Reason states the very process that makes the Assertion true, it functions as a genuine explanation rather than a coincidental companion fact.

Reading the Assertion and Reason directly against the Act's own definitions of these two terms shows both are correct and causally connected.

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