The Three Meanings Compared
Chapter Four
Syllabus topic 1, "Meaning and concept of “Person” under Income Tax Law, GST Law, Udyam"
Pages 7 to 8 of 80
The table MU's topic line is asking for
| Income-tax Act 2025 | CGST Act 2017 | Udyam | |
|---|---|---|---|
| Where the rule is | s.2(77) | s.2(84) | No definition of person at all; s.7 MSMED Act lists the forms an enterprise may take, and paragraph 6 of S.O. 2119(E) says whose Aadhaar is used |
| How many limbs | 7 | 14 | 7 forms, open ended |
| Individual | Yes | Yes | Proprietorship, which is not the same idea |
| Hindu undivided family | Yes | Yes | Yes, through the karta |
| Firm | Yes | Yes | Yes |
| Limited liability partnership | Assessed as a firm | Its own limb, (e) | Named separately in paragraph 6(5) |
| Company | Yes | Yes | Yes |
| Society, trust | Through the residual limb | Named, (l) and (m) | Named in paragraph 6(5) |
| Government | Not in the list | Named, (k) | Not applicable |
| Foreign body | Not in the list as such | Named, (h), and (f) says "in India or outside India" | Not applicable |
| Profit motive needed | No, the closing words say so expressly | No | No |
| The unit of identity | The person | The registration: s.25(4) makes each one a distinct person | The PAN: paragraph 3(3) treats every GSTIN under one PAN as one enterprise |
The four differences to write in an answer
1. GST's list is wider because the taxes catch different things. Income tax taxes income, so a body with none is of no interest. GST taxes supply, and a society, a trust, a government department or a foreign company can all make one.
2. The limited liability partnership is treated three ways. Assessed as a firm under the income-tax law, its own limb under GST, and named separately in the Udyam notification. This is the cleanest single illustration that "person" is not one idea across the statute book.
3. Udyam is not asking the same question. It has no definition of person because it does not need one: it registers an enterprise, and it identifies that enterprise by an Aadhaar number belonging to a named office holder and by a PAN.
4. The unit of identity moves. One firm is:
- one person for income tax, wherever its branches are;
- as many distinct persons as it has registrations for GST, so a stock transfer from Pune to Surat is a taxable supply;
- one enterprise for Udyam, because every GSTIN under one PAN is aggregated.
Worked, on one firm
Shirke and Deshpande, a partnership firm with two partners, a head office in Pune and a branch in Surat, turnover Rs. 3.4 crore, investment in plant Rs. 1.9 crore.
| Statute | How many persons or enterprises | Why |
|---|---|---|
| Income-tax Act 2025 | One person, a firm under s.2(77)(d) | The Act knows nothing of branches |
| CGST Act 2017 | Two distinct persons, one registration in Maharashtra and one in Gujarat, s.25(5) | Establishments in two States |
| Udyam | One enterprise | Both GSTINs are against the same PAN, paragraph 3(3) |
The Three Meanings Compared
And the classification of that one enterprise, on the limits in force from 1 April 2025: investment Rs. 1.9 crore is under Rs. 2.5 crore and turnover Rs. 3.4 crore is under Rs. 10 crore, so it is a micro enterprise. The chapter on the MSME classification works the composite criterion through.
The trap in an exam
A question that says "Explain the concept of person under the Income Tax Law, GST Law and Udyam" is not asking for three lists copied out. It is asking what changes, and why. An answer that gives the two lists and then says "there is no definition under Udyam, and here is what Udyam has instead" is a better answer than one that invents a third list to be symmetrical.
The rest of this subject
These notes are cut from the University's printed syllabus. Open the syllabus itself, or the past papers, for the same subject.