11 Aug 2018

WHAT IS INCOME

Finance feed by:

CA Abhishek Sinha
M.com,CA,CS
CA in Practice    •    16 Year 7 Month  experience

It refers to earning by the deployment of asset or by rendering any service. Revenue receipts come under this category, which keep accruing from time to time.

The term incomes of great significance with respect to income tax. For the liability of tax is computed on this “Income”. There are five broad heads under which income has been classified.

Heads of Income:
Income from Salary – includes income from wages, annuity, pension, gratuity, fee, commission, advance salary etc. For income under the head salary, the existence of employer-employee relationship is a must. It is chargeable on due or paid basis, whichever is earlier.

Income from House Property – house property is any building or land appurtenant thereto (courtyard/ compound), of which the person is the owner.

Profits& Gains of Business / Profession – the term Business includes any trade, commerce or manufacture. Profession means any vocation, occupation requiring intellectual or manual skill.

Income from Capital Gains – is any profit or gain arising from the transfer of capital assets during the previous year.
Income from Other Sources – This is the residues head of income. Income that does not fall under any of the above heads of income, are taxed under this head.

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