Assessment

Assessment is the procedure through which the Income Tax Department reviews and finalizes a taxpayer’s total income, eligible deductions, and tax liability for a specific financial year. This process ensures that the income declared and tax paid by the taxpayer are accurate and comply with the provisions laid down in the Income Tax Act, 1961.

Example: The Centralized Processing Centre (CPC) in Bengaluru evaluates and processes Income Tax Returns (ITRs) and issues an intimation under Section 143(1). This serves as an initial assessment that either confirms the accuracy of the return or identifies any mismatches in income or tax computation.