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Microlesson · 5-min read

Definition of 'Person' under Section 2(31)

# Definition of 'Person' — Section 2(31)

Income tax is charged on a 'person'. The Act gives this word a much wider meaning than ordinary English. Section 2(31) lists seven categories:

## The Seven Categories

#CategoryMeaning / Examples
1IndividualA natural person — man, woman, minor, lunatic.
2Hindu Undivided Family (HUF)A family entity comprising the Karta and other members.
3FirmPartnership firm (under the Partnership Act, 1932) and LLP.
4CompanyIndian or foreign company.
5Association of Persons (AOP) / Body of Individuals (BOI)Persons joining together for a common purpose without forming a firm or company.
6Local AuthorityMunicipality, Nagar Nigam, Cantonment Board, etc.
7Artificial Juridical PersonCourts, temples, universities, idols, etc. — entities not falling in any other category.

## Deep dive: HUF

  • HUF consists of all males lineally descended from a common ancestor, together with their wives and daughters.
  • Some members are called co-parceners — they have a right in HUF property.

### Two schools of Hindu law

Dayabaga SchoolMitakshara School
Prevalent in West Bengal and AssamPrevalent in the rest of India
No one acquires a right in property by birth as long as the head of the family is alive. So children get no right while father is alive.One acquires a right to family property by birth itself.
Father and his brothers are co-parceners (children are not co-parceners while father is alive).All members of the HUF are co-parceners from birth.

## Deep dive: AOP vs BOI

AOPBOI
Any person (individual, company, firm, etc.) can be a memberOnly individuals can be members
Persons come together for a common purpose (e.g., joint venture)A body of individuals, e.g., an unregistered trust created by individuals

## Key drilling points

  • 'Person' is inclusive — the list covers practically every legal entity.
  • A minor is an individual — he/she is a 'person'.
  • A partnership firm and an LLP are both 'firm' for the Act.
  • A temple / deity is an artificial juridical person, taxable separately.

Worked example

### Example 1

Example 1 — Classify each as 'person':

EntityCategory u/s 2(31)
Mr. Ramesh (age 30)Individual
Joint family of Mr. Karta, his wife & sonsHUF
ABC Partnership FirmFirm
Tata Consultancy Services Ltd.Company
Joint venture between Mr. A (individual) and XYZ Ltd. for a single projectAOP
Five individuals forming an unregistered trust for charityBOI
Municipal Corporation of JaipurLocal Authority
Banke Bihari Temple TrustArtificial Juridical Person

### Example 2

Example 2 — Co-parcenership:

Mr. X resides in West Bengal. His father is alive. Is Mr. X a co-parcener of the HUF?

Answer: No. In West Bengal, the Dayabaga School applies. No one gets a right in property by birth while the head of family (father) is alive. Hence Mr. X is not a co-parcener as long as his father lives. (Had he been in Maharashtra — Mitakshara School — he would be a co-parcener from birth.)

⚠️ Common exam mistakes

  • Treating individual and HUF as the same — they are two separate persons under the Act.
  • Saying a firm means only a partnership firm — an LLP is also a firm for income tax purposes.
  • Thinking AOP and BOI are interchangeable — only individuals can form a BOI; in an AOP, the members can be any persons.
  • Mixing up the schools — Dayabaga (W. Bengal & Assam): right not by birth; Mitakshara (rest of India): right by birth.
  • Forgetting that a minor, idol, or temple is a person and can be assessed.
Bare-Act text Section 2(31) · Income-tax Act, 1961 · click to expand
Section 2(31): 'person' includes — (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses.
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