Mar 286 min read

Representative Assessee: Definition, Rights, & Liabilities

Updated: Aug 2

A Representative Assessee is appointed as a representative for a person who is unable to manage his or her tax affair: either because he is a minor, or due to incapacity, or absence from the country. This is essential in compliance with tax laws where the primary taxpayer cannot himself ensure compliance. Knowing the extent of this and the legal implications can actually help in managing the tax affairs better.

Join us in a detailed understanding of this important function in the tax regime: how Representative Assessees are picked, what their roles are, and the legal consequences they have in tax administration. Whether you are a prospective Representative Assessee, a taxpayer intending to appoint one, or simply interested in the inner workings of tax law; this article shall prove helpful in both enlightenment and information.

Table of Content

Who is a Representative Assessee?
What does a Representative Assessee do?
Rights of a Representative Assessee
Liabilities of a Representative Assessee
Appointment of a Representative Assessee
Representative Assessee in PAN Card
Conclusion
Frequently Asked Questions

Who is a Representative Assessee?

Typically, a person's tax liability is limited to his income. Even though he has no beneficial stake in the money, there are circumstances in which someone is forced to pay taxes and adhere to all other Act requirements on behalf of another person. The idea of a representative assessee now emerges. Under the Income Tax Act, a person who represents another person legally is known as a Representative Assessee. When someone who owes taxes is not a resident, is underage, insane, or for any other reason, Representative Assessees come into play. These individuals are unable to submit income taxes on their own and designate a guardian or agent to act as their representative.

We will now give an example to explain this concept in detail. For the last ten years, Mr. A (Principal Assessee) has been living overseas. He does, however, get rent for the two Indian homes he owns. To file taxes in India, he enlists the assistance of a relative, Mr. B (Representative Assessee). Mr. B serves as a representative assessee in this instance. As the property's guardian and Mr. A's representative, Mr. B will be required to produce the required paperwork if the assessing officer decides to look into the tax filing. The following table elucidates their relationship:

What does a Representative Assessee do?

The primary duty of an Assessee is to pay taxes and file income tax returns for each financial year within the allotted period. The Income Tax Department sends a notification to an assessee asking why their income tax returns were not filed on time or were filed after the deadline. After getting a notification from the Income Tax department, the assessee ought to promptly file the returns and do the subsequent actions:

As soon as the IT Department notifies an assessee, they must file income tax returns against the income of the relevant assessment year.
The Assessee must provide information on his income returns in mandatory circumstances within 30 days of the notice's issue date, not the day the Assessee receives the notice. The fundamental duties of a representative assessee are as follows.

Rights of a Representative Assessee

The right to collect taxes paid entails the ability to withhold the amount that is anticipated to be paid in the future on behalf of the principal assessee and to recover the amounts that have already been paid.
Representative Assessee has the right to obtain a Certificate from the Assessing Officer allowing the amount to be held until the responsibility is settled in full if Principal and Representative Assessee cannot agree on the withholding of amounts.
An appeal against any order made by the Assessing Officer may be filed by a representative assessee.

Liabilities of a Representative Assessee

The Income Tax Act stipulates that each representative assessee is subject to an assessment in his name for the income that qualifies him for representative assessee status.
The Representative Assessee's liability is personal and contingent upon possessing any cash, as per the agreement.
Tax will be imposed upon him in the same way and to the same amount that it would be imposed upon and recoverable from the principal assessee.
As if the pertinent income had been obtained in his beneficial interest, the Representative Assessee shall be responsible for all debts, responsibilities, and duties.
Since the representative assessee is subject to the same duties, responsibilities, and liabilities as the principal assessee, the representative assessee shall be responsible for other miscellaneous obligations like maintaining the books of accounts, having the books of accounts audited, etc.
By getting a Certificate about his projected responsibility from the Assessing Officer, a representative assessee may be able to minimise his liability.

Appointment of a Representative Assessee

An assessee may designate another individual to do an income tax self-assessment on his behalf if he is unable to do so or chooses not to. An assessee must log in to the Income Tax Department's e-filing website and add or register a person as a representative assessee in order to add or appoint one. The process for adding a representative assessee is described below:

Access and log in to the Income Tax Department's e-filing website.
Click the "My Account" Tab and choose "Add / Register as Representative."
Click "New Request" under "Request Type" and choose "Add another person to represent on your behalf." Next, select "Proceed."
Choose a reason from the three provided by clicking on Reason.
A PIN will be given to the registered email address and mobile number after the representative assessee's data are entered and submitted. After entering your PIN, confirm.
A mobile number and email will be used to notify the representative. The representative can verify this by clicking "For your action" under Worklist after logging in.

The addition of a Representative Assessee is accomplished.

Representative Assessee in PAN Card

The PAN card bears the same meaning for the representative assessee. It describes a person who is permitted to file income tax returns on the principal assessee's behalf. The representative taxpayer may, for instance, be an agent of an NRI or the father or legal guardian of a minor or insane.

Conclusion

Every financial year, a representative assessee is required to pay income tax on behalf of the principal assessee. When a person is not a resident, is a minor, or is insane, a representative taxpayer is usually appointed. However, their agent, legal guardian, or parents comply with the income tax laws and submit tax returns on their behalf if they are unable to file on their own due to unavoidable circumstances.

Frequently Asked Questions

Q1. Who can be a principal assessee?

The following individuals/entities can be a principal assessee:

A minor or lunatic
A non-resident person
A non-resident firm, LLP, AOP, BOI
A non-resident company
A deceased person

Q2. What is the difference between principal and representative assessee?

A principal assessee is an actual assessee, representing whomever the representative assessee represents in the course of his work. The representative taxpayer pays income tax on behalf of the principal assessee after the principal assessee gives his representative permission to file an income tax return.

Q3. Who can authorize whom as representative assessee?

A non-resident may appoint a resident agent
A person absent from India may authorize a resident person
An individual may authorize a resident person for any other reason
A non-resident company may authorize a resident person
A non-resident firm, AOP (Association of Persons), or BOI (Body of Individuals) may authorize a resident agent under section 163 of the Income Tax Act of India

Q4. What are the required documents to become a representative assessee?

The following sets of documents are required for these individuals to become a representative assessee:

A legal heir or a deceased assessee must provide a death certificate of the deceased, a certificate or surviving membership of the legal heir, and PAN of the deceased person and legal heir.
A guardian of a lunatic or disabled person must furnish a medical certificate for a person suffering from a disability or mental incapacitation and the PAN of the principal assessee and representative taxpayer.
A guardian of a minor must give proof of guardianship (such as a court order) and the PAN of the minor and guardian.

Q5. Can any taxpayer appoint a representative assessee?

For some taxpayer categories, such as non-resident taxpayers, minors, the incompetent, and heirs of deceased taxpayers, a Representative Assessee may be appointed. Different qualifying requirements apply to each category depending on the circumstances of the taxpayer.

Q6. How long does the appointment of a Representative Assessee stay valid?

The appointment is in effect until the taxpayer revokes it or until circumstances alter. To ensure a legal and proper process, revocation necessitates a written notice to tax authorities.

Q7. Can parents be representative assessees?

Guardians or parents may serve as minors' representative assessees. This enables them to take care of their children's tax obligations and affairs

Q8. What is the difference between an assessee and a representative assessee?

The principal taxpayer who gives the representative assessee permission to carry out tasks on their behalf is known as an assessee. In matters pertaining to taxes, the representative represents them legally.