HEADS OF INCOME
Under the Income Tax Act, there are five main heads of income under which income
of a taxpayer is categorized for the purpose of computing income tax:
Income from Salary: This includes all forms of compensation received by an
employee from an employer, such as wages, pension, gratuity, and other
benefits.
Income from House Property: This head includes rental income from
properties owned by the taxpayer. It is applicable to any residential or
commercial property, except properties used for the taxpayer's own business
or profession.
Profits and Gains of Business or Profession: This includes income earned
from any trade, commerce, manufacturing, or other professional activities. It
also includes any incidental income arising from the business.
Admissible Expenses Inadmissible Expenses
Admissible Expenses under PGBP
Admissible expenses are those that can be claimed as deductions while computing
income from business or profession.
Ex:
· Salaries and Wages: Payments to employees for their services.
· Rent: Rent paid for business premises.
· Utilities: Expenses for electricity, water, and other utilities used for business
purposes.
· Office Supplies: Cost of stationery, software, and other supplies used in business
operations.
· Professional Fees
· Depreciation
Under the Income Tax Act, there are five main heads of income under which income
of a taxpayer is categorized for the purpose of computing income tax:
Income from Salary: This includes all forms of compensation received by an
employee from an employer, such as wages, pension, gratuity, and other
benefits.
Income from House Property: This head includes rental income from
properties owned by the taxpayer. It is applicable to any residential or
commercial property, except properties used for the taxpayer's own business
or profession.
Profits and Gains of Business or Profession: This includes income earned
from any trade, commerce, manufacturing, or other professional activities. It
also includes any incidental income arising from the business.
Admissible Expenses Inadmissible Expenses
Admissible Expenses under PGBP
Admissible expenses are those that can be claimed as deductions while computing
income from business or profession.
Ex:
· Salaries and Wages: Payments to employees for their services.
· Rent: Rent paid for business premises.
· Utilities: Expenses for electricity, water, and other utilities used for business
purposes.
· Office Supplies: Cost of stationery, software, and other supplies used in business
operations.
· Professional Fees
· Depreciation
