Question
Legal Studies Question on Tax Law
Which of the following would be the first previous year in case of a business or profession newly set up on 31st March, 2020 as per the Income Tax Act, 1961?
A
Start from 1st April, 2019 and will end on 31st March, 2020.
B
Start from 31st March, 2020 and will end on 31st March, 2020.
C
Start from 1st April, 2020 and will end on 31st December, 2020.
D
Start from 1st January, 2020 and will end on 31st March, 2020.
Answer
Start from 31st March, 2020 and will end on 31st March, 2020.
Explanation
Solution
For a business or profession newly set up on 31st March, 2020, the first previous year, as per the Income Tax Act, 1961, would begin and end on the same date, i.e., 31st March,2020, since this date marks the close of the financial year.