Section 2(77) of the Income Tax Act, 2025 defines the term "Person"

 

Section 2(77) of the Income Tax Act, 2025 defines the term "Person". [1, 2]

This section serves as the foundational pillar of the new tax framework, identifying exactly who or what can be held liable to pay taxes, file returns, or face legal compliance in India. It is the direct structural replacement for Section 2(31) of the old Income Tax Act, 1961. [1, 2]

Statutory Definition Under Section 2(77)

The definition is inclusive and explicitly states that a "person" includes the following seven distinct categories of taxpayers: [1, 2]

1. (a) An Individual: Every living human being (salaried employees, freelancers, sole proprietors).
2. (b) A Hindu Undivided Family (HUF): Joint families tracking collective ancestral income. [1]
3. (c) A Company: Corporate bodies (Domestic companies, Private Limited companies, Foreign corporations). [1]
4. (d) A Firm: Partnership firms, including newer models like Limited Liability Partnerships (LLPs). [1]
5. (e) An Association of Persons (AOP) or a Body of Individuals (BOI): Grouping of entities or individuals working together, whether legally incorporated or not. [1]
6. (f) A Local Authority: Municipal corporations, panchayats, or port trusts. [1]
7. (g) Every Artificial Juridical Person (AJP): The residuary category for any public entity, university, statutory board, or deity not covered in clauses (a) through (f).

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The Crucial "Object of Profit" Proviso

A vital element carried forward into Section 2(77) is that an entity qualifies as a person "whether or not such an association of persons or a body of individuals or a local authority or an artificial juridical person was formed or established or incorporated with the object of deriving income, profits, or gains." [1]

• Why this matters: This prevents non-profits, religious trusts, public utilities, or governmental bodies from claiming they are exempt from tax assessments or audit reporting simply because they do not have a profit motive.

Why did the section number change?

The Income Tax Act, 2025 was introduced to clean up, streamline, and simplify the old 1961 Act. Decades of patchwork amendments had made Section 2 cluttered. The 2025 layout alphabetized and numbered definitions logically, shifting "Person" to Subsection 77. [1, 2, 3]

What is the relationship between Section 2(77) and Section 2(11)?

While Section 2(77) outlines who exists in the taxable universe, Section 2(11) defines an "Assessee" (the person by whom tax or any other sum of money is actually payable). To be an Assessee, an entity must first fall under the definition of a Person under Section 2(77). [1, 2]