Representative Assessee

  • Author :
  • TATA AIG Team
  • Published on :
  • 06/11/2023

Income tax is an essential component of the financial structure of any country. In India, the Income Tax Act, 1961, regulates taxation. The Act covers various aspects of taxation, including provisions for filing returns, assessments and appeals.

However, situations may arise where an individual cannot fulfil their tax obligations due to various reasons, such as being a non-resident, minor, or incapacitated. In such cases, the concept of a "Representative Assessee" comes into play.

In this blog, we will delve into the concept of a Representative Assessee in the income tax of India, exploring its definition, features, responsibilities, rights and the appointment process.

What is a Representative Assessee in Income Tax?

According to Section 160 of the Income Tax Act (ITA), a Representative Assessee is a person or entity legally appointed to act on behalf of another taxpayer in matters related to income tax. This provision is primarily relevant in situations where the actual taxpayer is unable to manage their tax affairs or represent themselves before the income tax authorities.

Representative Assessees are most commonly appointed in the following scenarios:

Non-Resident Assessees: If a taxpayer is a non-resident and earns income in India, they may appoint a Representative Assessee to handle their tax matters within the country.

Minor Assessees: A minor (a person below the age of 18) is not legally competent to handle their own financial matters. In such cases, a guardian or parent can be appointed as the Representative Assessee to fulfil tax obligations on the minor's behalf.

Deceased Assessees: In the unfortunate event of a taxpayer's demise, their legal representative or heir can be designated as the Representative Assessee to conclude pending tax matters.

Insane or Incapacitated Assessees: If a taxpayer is deemed incapacitated or legally insane, a Representative Assessee may be appointed to manage their tax affairs.

Corporate Entities: In the case of corporate entities such as firms or partnerships, a person or entity may be designated as a representative assessee for tax assessment.

Features of a Representative Assessee in Income Tax

Legal Representation: The Representative Assessee is legally authorised to represent the taxpayer in all income tax matters. This includes filing tax returns, responding to notices and appearing before tax authorities on behalf of the taxpayer.

**Limited Authority:**The Representative Assessee's authority is restricted to matters concerning income tax. They do not have control over other financial or legal aspects of the taxpayer's life, except when they are also the taxpayer's legal guardian or representative in other capacities.

Responsibilities: The primary responsibility of the Representative Assessee is to ensure that the taxpayer's income tax obligations are met. This includes filing returns, paying taxes and attending to any inquiries or assessments by the tax authorities.

Accountability: The Representative Assessee is accountable for any actions or decisions taken on behalf of the taxpayer. They must act in the best interest of the taxpayer and follow all legal provisions and requirements.

Responsibilities and Duties of a Representative Assessee in Income Tax

The Representative Assessee shoulders several important responsibilities and duties when appointed to act on behalf of a taxpayer.

Filing Tax Returns: The Representative Assessee is responsible for filing the taxpayer's income tax returns accurately and within the specified deadlines.

Payment of Taxes: They must ensure taxpayers' tax liabilities are paid on time. This includes income tax, as well as any other taxes or penalties that may be applicable.

Responding to Notices: If the tax authorities issue any notices or inquiries, the Representative Assessee must respond promptly and provide the necessary information.

Record Maintenance: Keeping comprehensive records of the taxpayer's financial transactions and tax-related documents is crucial. This documentation may be required in the event of an audit or assessment.

Representing the Taxpayer: The Representative Assessee is authorised to represent the taxpayer before income tax authorities, attend hearings, and provide clarifications on their behalf.

Compliance with Legal Provisions: The Representative Assessee must ensure that all actions comply with the Income Tax Act and other relevant tax laws.

Preservation of Tax Documents: Tax records, including returns, financial statements, and supporting documents, should be maintained for the specified duration to fulfil legal requirements.

Rights of a Representative Assessee

While the primary role of a Representative Assessee is to act on behalf of the taxpayer, they also have certain rights to ensure they can effectively fulfil their responsibilities.

Access to Tax Information: The Representative Assessee has the right to access all relevant financial and tax-related information of the taxpayer to fulfil their duties.

Communication with Tax Authorities: They can communicate directly with tax authorities on behalf of the taxpayer, including filing returns, responding to notices and representing the taxpayer in assessments or appeals.

**Appeal Rights: If the taxpayer disagrees with a tax assessment or decision, the Representative Assessee has the right to file an appeal and represent the taxpayer during the appeal process.

Protection of Confidential Information: Taxpayers' information must be kept confidential and not disclosed without the taxpayer's consent, except as required by law.

How is a Representative Assessee Appointed?

Appointing a Representative Assessee involves a formal process to ensure compliance with income tax laws. These stringent legal prerequisites ensure the integrity of representative assessees and safeguard the interests of all parties involved.

Appointee Selection: The taxpayer selects an individual or entity to act as their Representative Assessee. This selection should be based on trust and the appointee's ability to manage tax matters effectively.

Authorisation: The taxpayer must provide written authorisation to the selected individual or entity, explicitly naming them as their Representative Assessee.

Filing of Form: The Representative Assessee needs to file the relevant forms with the income tax authorities to formalise their appointment. The required form may vary depending on the taxpayer's circumstances, such as being a non-resident, minor, or incapacitated.

Documentation: Along with the authorisation and filing of forms, the Representative Assessee should provide all necessary documentation, including proof of their legal authority to act on behalf of the taxpayer (e.g., guardianship orders, power of attorney, etc.).

Acknowledgement: Upon receiving the required forms and documents, the income tax authorities will acknowledge the appointment of the Representative Assessee.

Commencement of Duties: Once the Representative Assessee's appointment is acknowledged, they can begin managing the taxpayer's tax affairs.

Procedure to Add a Representative Assessee on the Income Tax Portal

  • Following is the step-by-step process for adding/appointing a representative assessee.

  • Log on to the Income Tax Portal

  • Enter the User ID, Password, Date of Birth and the Captcha code

  • Click Login

  • Go to My Account > Add/Register as Representative

  • Click New Request

  • Select ‘Add another person to represent on your behalf.’

  • Click Proceed

  • Click Reason

  • Select one of the three reasons

  • Enter the representative details

  • Click Submit

  • Enter the PIN sent to your email and through an SMS

  • Click Validate

  • The representative will be notified via email and SMS. They can log in to the Income Tax Website and check the notification in the For your Action section of their Worklist.

Procedure to Register as a Representative Assessee

  • Representative Assessees must complete the following process for representing another taxpayer:

  • Log on to the Income Tax Portal

  • Enter the User ID, Password, Date of Birth and the Captcha code

  • Click Login

  • Go to My Account > Add/ register

  • Under Request Type, click New Request

  • Select ‘Add another person to represent on your behalf.’

  • Click Proceed

  • Attach all relevant documents

  • Click Submit

Verification Process for Representative Assessees

After the representative assessees submit a request on the Income Tax Portal, a notification will be sent to the E-filing team. The Income Tax Department reserves the right to accept or reject the request.

Significance of a Representative Assessee in Income Tax

A representative assessee plays a crucial role in ensuring that the income tax matters of the taxpayer they represent are handled efficiently and in compliance with the law. They are responsible for filing returns, paying taxes, and responding to any inquiries from the income tax department on behalf of the taxpayer and help in minimising the taxpayer's liabilities.

Is a Representative Assessee Similar to an Authorised Assessee in Insurance?

The term "Authorised Assessee" in insurance refers to a person or entity authorised by the policyholder to receive insurance claims and other benefits on their behalf.

For instance, a senior citizen with no caretaker can appoint an Authorised Assessee to manage their health insurance plans. The Assessee will look after the claim filing, claim processing and other aspects of the medical insurance policy.

While both Representative Assessee in income tax and Authorised Assessee in insurance involve appointing someone to act on behalf of the principal party, they are distinct concepts with different purposes and legal implications:

Aspect Representative Assessee in Income Tax Authorised Assessee in Insurance
Purpose Manages income tax matters on behalf of the taxpayer, ensuring compliance with tax laws, filing returns and representing the taxpayer before tax authorities. Designated to receive insurance payouts, claims or benefits on behalf of the policyholder in the event of a claim.
Legal Implications Governed by income tax laws and regulations. Legal responsibilities are related to income tax matters. Governed by insurance contract terms and conditions. Legal responsibilities are specific to the insurance policy and its benefits.
Scope of Authority Limited to income tax matters. No control over the taxpayer's finances or insurance-related decisions. Limited to the insurance policy and its benefits.
Appointment Process Involves filing specific forms and following the procedures under the Income Tax Act to formalise the appointment. Typically requires a formal endorsement or beneficiary designation in the insurance policy.

To further clarify the same, an Authoritative Assessee in insurance designates individuals or entities authorised to receive insurance claims and benefits. If you buy a health insurance plan, an Authoritative Assessee will manage the policy. Having a trusted representative can prove invaluable when managing and customising your medical insurance policies, ensuring that your health and financial security remain a top priority.

However, when it comes to your health insurance tax benefits and filing the necessary tax deductions under Section 80D, you can seek the help of a Representative Assessee.

Thus, each serves a distinct purpose and operates within its respective legal framework. Therefore, it is important to differentiate between the two to ensure clarity and compliance in income tax and insurance matters.

Conclusion

The concept of a Representative Assessee plays a crucial role in the Indian income tax system, allowing individuals or entities to legally represent taxpayers who are unable to manage their own tax affairs. This provision is particularly significant for non-resident taxpayers, minors, incapacitated individuals and the heirs of deceased taxpayers.

Understanding the roles, responsibilities and rights of a Representative Assessee is essential for ensuring compliance with income tax laws and managing tax matters effectively.

FAQS

Can a Representative Assessee be appointed for any taxpayer, or are there specific criteria for eligibility?**

A Representative Assessee can be appointed for specific categories of taxpayers, including non-resident taxpayers, minors, incapacitated individuals and heirs of deceased taxpayers. Each category has unique eligibility criteria based on the taxpayer's circumstances.

How long does the appointment of a Representative Assessee remain valid, and can the taxpayer revoke it?

The appointment remains valid until revoked by the taxpayer or until the situation changes. Revocation requires a written notice to tax authorities to ensure a legal and proper process.

Can parents be representative assessees?**

Yes, parents or legal guardians can act as representative assessees for minor children. This allows them to manage tax affairs and responsibilities on behalf of their children.

What are the responsibilities of a Representative Assessee when filing tax returns for the taxpayer they represent?

The responsibilities include accurate and timely filing of returns, payment of taxes, maintenance of financial records, and compliance with tax laws. These records are essential for potential audits or assessments. Complying with legal provisions is crucial in fulfilling these duties.

What is the liability of a representative assessee for income tax?

For detailed information on the legal obligations and responsibilities of representative assessees, refer to the Liability of a Representative Assessee page.

Who is a Representative Assessee in a PAN Card?

A Representative Assessee on a PAN Card is the same as a Representative Assessess in income tax. It pertains to an individual authorised to file income tax returns on behalf of the primary assessee.

What is the difference between an assessee and a representative assessee?

An assessee is the primary policyholder or taxpayer who authorises the representative assessee to discharge duties on their behalf. The representative acts as their legal representative in tax matters.

Who are the different types of assessees?

Following are the different types of assesses in India:

  • Individuals

  • Hindu Undivided Family

  • Partnership Firms

  • Association of Persons and Body of Individuals

  • Trusts

  • Cooperative Societies

  • Non-Resident Indians (NRIs)

  • Companies

  • Foreign Companies and Non-Resident Entities

  • Registered Societies and Clubs

  • Representative Assesses

  • Deemed Assesses

  • Assessee in Default

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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