Types of assessment

Assessment
• Computation of total income and tax payable is known as assessment. Assessment may be
of the following types:
1. Self assessment
2. Assessment on the basis of return
3. Regular assessment
4. Summary assessment
5. Scrutiny assessment
6. Best Judgement assessment
7. Faceless assessment
 Self assessment

• In self-assessment, the assessee must compute income tax returns on his

own, calculating the income earned against loss incurred and other
deductions. If the amount computed exceeds the tax deducted at source
(TDS) or the advance tax, he must pay the outstanding amount before
filing the income tax returns which is known as self-assessment tax.
• In simple words, self-assessment tax is the remaining amount the
assessee must pay to the income tax department when the tax arrived at
is exceeding the tax deducted at source TDS and advance tax.
 Assessment on the basis of return
• Assessment on the basis of return of income submitted by the assesse
is called assessment on the basis of return
 Regular assessment
• Regular assessment means the assessment made on the basis of evidence
under Section 143(3) or best judgement assessment under Section 144.
 Summary assessment
Summary assessment is the first stage of tax assessment where overview
scrutiny will be conducted and no detailed scrutiny will be there to
check plausible clerical errors such as mathematical miscalculations or
arithmetical errors in the return, incorrect claim, incorrect disallowance
etc.
 Scrutiny assessment:
• Scrutiny assessment is a type of assessment in which an officer will be
assigned to review the filings carefully and ensure that the computed
tax liability is not under or overstated by the assessee. The objective of
this assessment is to confirm that the taxpayer has not understated
the income or has not computed excessive loss or has not underpaid
the tax in any manner. Detailed scrutiny will be conducted.
 Best Judgement assessment

• Best judgment assessment refers to a situation where the officer computes the tax payable as
the assessee does not comply to provide or maintain necessary source documents or book of
accounts to support the claim when requested to submit.
• In this scenario, the officer computes the tax liability based on his best judgment. The
income tax act specifies certain situations under which the income tax officer can compute
tax liability based on best judgment,
1. When the assessee does not file an income tax return
2. When the assessee does respond to the notice requesting submission of documents
3. The response of the assessee has crossed the limit permitted by the central board of direct
taxes (CBDT)
4. When the officer is not satisfied with the documents provided.
 Faceless assessment
• This is an assessment carried out as per the best judgment of the
Assessing Officer on the basis of all relevant material he has gathered.
This assessment is carried out in cases where the taxpayer fails to
comply with the requirements specified in section 144.