Heads of Income Under The Income Tax Act
A person may earn income from different sources. Under the Income Tax Act, 1961 for computation of total income (else it will difficult to compute tax if it is not classified under different heads ), incomes are classified into five different heads.
|Heads of Income||Example ( Source of Income)|
|Income From Salaries||Salary (on Payroll), pension earned comes under this head.|
|Income From House Property||Rental income from house comes under income from house property.|
|Profits and Gains of Business or Profession [PGBP]||Income earned from business or profession comes under [PGBP]|
|Income From Capital Gains||Income earned from sale of capital assets ( like land, shares etc. )|
|Income from Other Sources||Income which does not fall in above category comes under this category. It is known as residual head. For e.g. bank interest, Dividend etc.|
I AM AN AGRICULTURIST. IS MY INCOME TAXABLE?
Agricultural income is not taxable. However, if you have non-agricultural income too, then while calculating tax on non-agricultural income, your agricultural income will be taken into account for rate purpose. For meaning of Agricultural Income refer section 2(IA) of the Income-tax Act.
WHAT IS INCOME-TAX?
It is a tax levied by the Government of India on the income of every person. The provisions governing the Income-tax are covered in the Income-tax Act, 1961.