Section 317 — Assessment of persons leaving India. Successor to s.174 of the 1961 Act.
Section 317 is in Chapter XVII — Special Provisions Relating to Certain Persons, which runs from section 302 to section 355.
Sub-section (1) overrides section 4. Where it appears to the Assessing Officer that an individual may leave India during the current tax year or shortly after its expiry, with no present intention of returning, the individual's total income for the period from the first day of that current tax year up to the probable date of departure — the specified period — is chargeable to tax in that current tax year. Sub-section (2) requires the total income of each completed tax year, and of any part of a tax year, included in the specified period to be charged at the rate or rates in force in that tax year, with separate assessments for each. Sub-section (3) lets the Assessing Officer estimate the income for the specified period or any part of it where it cannot readily be determined in the manner the Act provides.
Sub-section (4) supplies the machinery: the Assessing Officer may serve a notice requiring the individual to furnish, within a time specified that is not less than seven days, a return in the same form and verified in the same manner as a return under section 268(1), setting forth his total income for each completed tax year in the specified period and his estimated total income for any part of a tax year in it — and the Act then applies as if that notice were a notice under section 268(1). Sub-section (5) adds that, irrespective of section 268(1) or 280, the Assessing Officer may issue a notice under either of those sections requiring a return in respect of tax chargeable under any other provision, again within a period not less than seven days. Sub-section (6) makes the tax under this section additional to any tax chargeable under any other provision.
Ordinarily income is assessed after the tax year ends, which is no use against a person who will have left the country by then. The section brings the assessment forward to the probable date of departure and compresses the usual notice periods to seven days, so that a liability can be quantified and collected while the individual is still within reach. Sub-section (3) allows an estimate because a departing taxpayer's part-year income often cannot be worked out on the ordinary basis in the time available.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Minimum time to furnish the return of income for the specified period | Not less than seven days | Time specified in the Assessing Officer's notice under sub-section (4); the return is in the section 268(1) form and verification | Sub-section (4) |
| Minimum time under a notice for tax chargeable otherwise | Not less than seven days | Notice under section 268(1) or 280 issued while sub-section (1) applies, irrespective of the periods those sections would otherwise allow | Sub-section (5) |
Two features make this harsher than an ordinary assessment. First, the trigger is the Assessing Officer's view that the individual may leave with no present intention of returning — it does not depend on the individual actually leaving, and the section gives no answer if he stays. Second, sub-section (2) requires separate assessments for each completed tax year and each part-year in the specified period, each at the rates in force in that year, so a single notice can produce several assessments rather than one. The seven days in sub-sections (4) and (5) is a floor and not a fixed period, so the Assessing Officer may allow more but never less. And the charge is cumulative — sub-section (6) makes it additional to tax chargeable under any other provision, so an assessment here does not displace the regular assessment for the year.
In January the Assessing Officer forms the view that an individual will leave India permanently in March. The specified period runs from the first day of the current tax year to the probable date of departure, and the Assessing Officer serves a notice giving ten days — more than the seven-day floor — to file a return in the section 268(1) form for that period. Where the individual's part-year business income cannot readily be determined, sub-section (3) allows the Assessing Officer to estimate it, and sub-section (2) requires the part-year to be charged at the rates in force in that tax year.
The individual meets this section through a notice from the Assessing Officer requiring a return within as little as seven days for a period ending on his probable date of departure, followed by one or more assessment orders made before the tax year has even closed.
the total income of such individual for the period beginning from the first day of that current tax year up to the probable date of departure from India (referred to as specified period in this section) shall be chargeable to tax in that current tax year
The tax chargeable under this section shall be in addition to the tax, if any, chargeable under any other provisions of this Act.
See the full 1961 to 2025 concordance.