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Microlesson · 5-min read

Definition of Assessee [Section 2(7)]

## Who is an "Assessee"? — Section 2(7)

An assessee is any person who is liable to pay tax or any other sum (such as interest or penalty) payable under the Income-tax Act. The definition is wider than just "a person who pays tax" — it covers three categories.

### Category 1 — Ordinary Assessee

Every person against whom proceedings for assessment have been initiated in respect of:

  • their own income,
  • another person's income (for which they are assessable),
  • losses sustained, or
  • refunds due.

> Note: A person can be an assessee even if a loss or refund is involved — not only when tax is payable.

### Category 2 — Deemed Assessee

A person who is treated as an assessee under specific provisions of the Act (for example, a representative/agent, legal heir, or guardian assessed on behalf of another).

### Category 3 — Assessee-in-Default

A person who has failed to fulfil a statutory obligation — e.g., failing to deduct or deposit TDS — is deemed to be an assessee-in-default.

### Key Insight

Liability is not limited to tax — it extends to "any other sum" payable (interest, penalty, etc.). And a person filing only to claim a refund or to report a loss is still an assessee.

Worked example

### Example 1

Q: Mr. A has only a business loss this year and pays no tax, but files a return to carry it forward. Is he an assessee?

A: Yes. Under Section 2(7), a person against whom assessment proceedings are taken in respect of losses is an assessee — liability to pay tax is not essential.

### Example 2

Q: A company deducts TDS from employees but fails to deposit it with the government. What is its status?

A: It becomes an assessee-in-default for failing to discharge a statutory obligation, and is treated as an assessee under the Act.

⚠️ Common exam mistakes

  • Believing only those who actually pay tax are assessees — persons assessed for losses or refunds also qualify.
  • Restricting the definition to one's own income — it also covers being assessed for another person's income.
  • Ignoring 'any other sum' — the definition covers liability for interest and penalty, not just tax.
  • Confusing a deemed assessee (assessed on another's behalf) with an assessee-in-default (failed a statutory duty).
Bare-Act text Section 2(7) · Income-tax Act, 1961 · click to expand
"assessee" means a person by whom any tax or any other sum of money is payable under this Act, and includes — (a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person; (b) every person who is deemed to be an assessee under any provision of this Act; (c) every person who is deemed to be an assessee in default under any provision of this Act.
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