Question

Directions: The following question consists of two statements, one labelled as Assertion (A) and the other labelled as Reason (R). You are to examine these two statements carefully and decide if the Assertion (A) and the Reason (R) are individually true and if so, whether the Reason (R) is a correct explanation of the Assertion (A). 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. Both (A) and (R) are true, but (R) is not the correct explanation of (A).
• B. (A) is false, but (R) is true.
• C. (A) is true, but (R) is false.
• D. Both (A) and (R) are true and (R) is the correct explanation of (A).

Hint:

Previous Year = The Year of Earning. Assessment Year = The Year of Taxing. This relationship is the bedrock of India's taxation system!

Answer 1

The Correct Option is D

Assertion-Reason questions are best handled by testing each statement separately before asking whether one explains the other.

1. Is Assertion (A) true? Yes. The Income-tax Act charges tax on the total income a person earns during the previous year, which is the foundational rule of how the tax base is computed.
2. Is Reason (R) true? Yes. The Act's machinery assesses and collects tax on that previous year's income only in the year that follows it, called the assessment year, rather than in the same year the income is earned.
3. Does R explain A? The Assertion tells us what is taxed, income of the previous year, while the Reason tells us why that structure exists, because assessment of that income is deferred to the next year under the Act's scheme. This is a genuine cause-and-effect link rather than two unrelated true facts, so R does correctly explain A.
4. Options that deny the link (both true but not explanatory) or deny either statement's truth all fail here, since both statements are independently accurate and are directly connected by the same statutory scheme.

Because the "previous year, assessed in the next year" scheme is the very reason the Assertion is true, R qualifies as the correct explanation of A.

\[ \boxed{\text{Both (A) and (R) are true and (R) is the correct explanation of (A).}} \]

Answer 2

Another way to approach this Assertion-Reason pair is to ask what would happen if the Reason were removed, would the Assertion still make sense on its own, or does it depend on the Reason to be understood.

1. Assertion (A) alone: Read by itself, A simply states that tax is levied on total income of the previous year. It is true, but it does not say why the previous year is the relevant base period.
2. Reason (R) alone: R explains that previous year income is taxed only in the following assessment year. This, too, is true on its own as a description of the Act's timing mechanism.
3. Combining them: Once R is read alongside A, it becomes clear that R is not a random second fact but the very justification for why the previous year's income is what gets taxed and assessed the way A describes, the assessment simply happens with a one-year lag. This dependency is what marks R as a correct explanation rather than a merely true but unconnected statement.
4. Options suggesting either statement is false, or that they are both true but unconnected, do not survive this test, since both are demonstrably true and clearly linked through the Act's previous year/assessment year framework.

The dependency between the two statements confirms that R correctly explains A.

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