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CS Professional · Advanced Direct Tax Laws and Practice · Income Tax Implication on Specified Transactions

Under section 533(3) of the Income-tax Act, 2025, where income computed under rules for non-residents or for income from both agriculture and business cannot be definitely ascertained, what may the rules do?

The rules may prescribe methods for estimating the income, and an assessment based on that estimate is deemed to be duly made under the Act. This applies where income under section 533(2)(b) cannot be definitely ascertained, or only with unreasonable trouble and expense. It is not an exemption.

  1. AExempt such income from tax entirely
  2. BPrescribe methods of estimating the income, and an assessment on that estimate is deemed duly made under the ActCorrect
  3. CRequire the assessee to wait for a Tribunal order before filing a return
  4. DAllow the Assessing Officer to fix any rate of tax he considers fair

Explanation

Section 533(3) applies to cases under section 533(2)(b) where income cannot be definitely ascertained or only with unreasonable trouble and expense. The rules may prescribe estimation methods, and an assessment on that estimate is deemed duly made. It does not grant an exemption or a power to fix rates.

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