# Income of a Previous Year Assessed in the Previous Year Itself
General rule: income of a previous year is taxed in the following assessment year. Exception: in five situations the income is taxed in the previous year itself — these exist to protect the interest of revenue (where there is a risk the assessee or income may not be available later).
## 1. Shipping business of non-residents [Section 172]
- A non-resident shipping company's income is taxed immediately, before the ship leaves the Indian port.
- 7.5% of the freight (and related amounts) for goods/passengers shipped from a port in India is deemed income chargeable to tax.
## 2. Individuals leaving India [Section 174]
- Where it appears an individual may leave India with no intention of returning, income earned is assessed in the same previous year.
- Applies only if the Assessing Officer so decides.
## 3. AOP/BOI formed for a particular event or purpose [Section 174A]
- Where an AOP/BOI is formed for a specific event/purpose and is likely to be dissolved in the same or next year, income up to the date of dissolution is taxed immediately.
- Triggered at the inception by the AO.
## 4. Persons likely to transfer property to avoid tax [Section 175]
- Where it appears to the AO that a person may transfer property to avoid tax, income from the beginning of the year up to the date the AO commences proceedings is taxed in the current year.
## 5. Discontinued business [Section 176]
- Where a business/profession is discontinued during the previous year, income up to the date of discontinuance may be assessed in that year — at the discretion of the AO.
## Memory aid
| Section | Situation | Trigger |
|---|---|---|
| 172 | NR shipping business | Automatic (7.5% of freight) |
| 174 | Individual leaving India | If AO decides |
| 174A | AOP/BOI for a specific event | At inception, by AO |
| 175 | Likely transfer to avoid tax | When AO begins proceedings |
| 176 | Discontinued business | AO's discretion |