Liability in Special Cases - Sections 174 to 176 | Income Tax India | Chartered Accountant | Uplatz

Sections 174 to 176 of the Income Tax Act, 1961, deal with the liability of a person in special cases. These sections are explained below:

Section 174 - Liability in case of discontinuance of business or profession

If an individual or a firm discontinues its business or profession, then the liability to pay tax shall be for the previous year in which the business or profession was discontinued. The tax liability shall be paid in the same manner as if the business or profession had not been discontinued.

Section 175 - Liability of a person in respect of income included in the income of another person

If any income is included in the total income of a person other than the person who has earned it, then such other person shall be liable to pay tax on such income. However, if the person who has earned the income pays tax on such income, then the other person shall not be liable to pay tax on it.

Section 176 - Liability of a person for whom income is held in trust

If any income is held in trust for the benefit of any person, then the trustee or any other person who is in receipt of such income on behalf of such person shall be liable to pay tax on the income. However, if the trust is a specific type of trust, such as a charitable or religious trust, then the trustee may claim exemption from tax on the income of the trust.

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