Section 317: assessment of persons leaving India

Introduction

Where it appears that an individual may leave India during or shortly after a tax year without intending to return, section 317 permits an accelerated assessment of income up to the departure date.

The provision uses a notice-and-return procedure and does not displace tax otherwise chargeable under the Act.

Key takeaways

When this section is triggered

Irrespective of section 4, where it appears to the Assessing Officer that an individual may leave India during the current tax year, or shortly after it ends, with no present intention of returning, that individual's total income for the period from the first day of the current tax year up to the probable date of departure (the "specified period") is chargeable to tax in that current tax year.

How the tax is worked out

The total income of each completed tax year, or part of a tax year, within the specified period is chargeable to tax at the rate(s) in force for that tax year, with separate assessments for each such completed year or part-year.

Where income for the specified period (or part of it) cannot be readily determined under the Act's usual rules, the Assessing Officer may estimate it.

Notice requiring a return

For making an assessment under this section, the Assessing Officer may serve a notice on the individual requiring, within a period of not less than seven days as specified in the notice, a return (in the same form and verified in the same manner as a section 268(1) return) setting out: total income for each completed tax year within the specified period; and estimated total income for any part-year within the specified period. Such a notice is treated, so far as may be and subject to Section 317, as if it were a notice under section 268(1).

Irrespective of section 268(1) or 280, where Section 317(1) applies, the Assessing Officer may also issue a notice under section 268(1) or 280 requiring a return for tax chargeable under any other provision of the Act, within a period of not less than seven days as the Assessing Officer thinks proper.

This is additional tax, not a substitute

Tax chargeable under Section 317 is in addition to any tax chargeable under the Act's other provisions.

Step-by-step flow for assessing an individual leaving India under Section 317

1. 1

   Does it appear to the Assessing Officer that the individual may leave India during the current tax year or shortly after it, with no present intention of returning?

   • No: Section 317 does not apply; the normal timing under Section 4 continues.
   • Yes: Go to the next step.
2. 2

   Fix the specified period

   It runs from the first day of the current tax year to the probable date of departure. Income of that period is chargeable to tax in the current tax year (Section 317(1)).

3. 3

   Split the period into tax years

   Each completed tax year, or part of one, in the specified period is assessed separately at the rates in force in that tax year (Section 317(2)).

4. 4

   Call for a return or estimate income

   The Assessing Officer may serve a notice requiring a return, in the form and verification of a return under Section 268(1), within a time of not less than seven days (Section 317(4)). Where income cannot be readily determined, it may be estimated (Section 317(3)). Notices under Section 268(1) or 280 for other tax may also be issued with not less than seven days (Section 317(5)).

5. 5

   Add to other tax

   Tax under Section 317 is in addition to any tax chargeable under other provisions (Section 317(6)).

Practical checklist

Frequently asked questions