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

Step 1: Read the Assertion and Reason.
Assertion (A) says income tax is charged on the total income of a person for the previous year. Reason (R) says income earned in the previous year is taxed in the immediately following assessment year under the Income-tax Act, 1961. We must judge both and their link.

Step 2: Understand the two key years.
Income tax law works on two years. The Previous Year is the year in which income is earned. The Assessment Year is the next year in which that income is assessed and taxed.

Step 3: Check the Assertion.
Tax is indeed charged on the total income earned during the Previous Year. So Assertion (A) is correct.

Step 4: Check the Reason.
Income earned in the Previous Year is assessed and taxed in the immediately following Assessment Year. So Reason (R) is also correct.

Step 5: See if R explains A.
The Reason explains exactly how the system works. Income of the Previous Year becomes taxable, and it is assessed in the following year. This is the very mechanism behind the Assertion, so R is the correct explanation of A.

Step 6: Conclude.
Both A and R are true, and R correctly explains A.
\[ \boxed{\text{Both (A) and (R) are true and (R) is the correct explanation of (A).}} \]