Definition of the Term Income

Definition of the Term Income

Definition of the Term Income Ans. According to Sec. 2 (24) the term income includes: 

1. Profit and gains. 

2. Dividend.

 3.- Voluntary contribution received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly such religious purposes. 

4. The value of any perquisite or profit in lieu of salary taxable under Sec. 17(2) and (3). 

5. Any special allowance granted to the assessee either to meet the personal expense at the place where the duties of his office or employment of profit are ordinarily performed by him or at a place where he ordinarily resides or to compensate him for the increased cost of 

6. Any allowance or benefit specifically granted to the assessee to meet expenses wholly, necessary and exclusively for the performance of his duties.

 7. The value of any benefit or perquisite obtained from a company by a director or by a person who has a substantial interest in the company or by a relative of the director or of such person.

 8. Any sum paid by company in respect of any obligation which, if the company would not have paid, would have been payable by the director or the person having substantial interest in the company.

 9. The value of any benefit or perquisite obtained by any representative assessee. 10. Any sum paid by representative assessee in respect of any obligation which, if the representative assessee would not have paid would have been payable by the beneficiary. 

11. Profit or gains from business or profession. 12. Compensation received for past losses, expenses or obligation already allowed as deductions. 13. Balancing charge. 14. Recovery of bad debts already allowed as deduction in previous years. 15. Any benefit or perquisite received during the operation of any business or profession. 16. Any salary, bonus, commission or remuneration, by whatever name called, received or receivable by a partner from the firm.

17. Capital gains taxable under Sec. 45. 

18. The profit and gain of any business of banking carried on by a cooperative society with its members.

 19. Any winning from lotterries, crossword puzzles, races including horse races, card game and other games of any sort or from gambling or betting the expression lottery includes winining from prizes awarded to any person by draw of lots or by chance or in any other manner whatsoever under any scheme or arangement. 

20. Any sum received by the assessee form his employees as contribution to any provident fund or superannuation fund or any fund. Set-up under employees. State Insurance Act, 1948 or any other fund for the welfare of employee. 

Gross Total Income An income is placed under any of the following five heads of income:

 1. Salaries. 

2. Income from house property

. 3. Profits and gains of business or profession. 

4. Capital gains. 

5. Income from other sources. 

Taxable income of each head is computed by aggregating the incomes falling under the head; as per provision of the Act and deducting there form the deduction of the head allowed under the Act. Taxable income of one head is called as net taxable income of the head. Net taxable incomes of all the head are aggregated. The aggregated amount of the net taxable incomes of all the head are called as gross total income. 

Total Income Total Income' as per Sec. 2 (45) of the Income Tax Act, 1961 means the total income as referred to in Sec. 5, computed in the manner laid down in this Act. Total income of an assessee is computed head, wise keeping in view his residential status and allowing all deduction he is entitled to under Sec. 80. This is the income on which income tax liability is determined. 

Numerically, total income will be Total 

income = Total of the taxable incomes from all the head of income -Deduction under Sec. 80  = Gross total income - Deduction under Sec. 80. mean by tax Explain its characteristics.