PPT: Heads of Income | Taxation for CA Intermediate PDF Download

 Page 1


INTRODUCTION 
As per the Section 14 Income Tax Act,1961, there are five main income 
tax heads for an individual. The computation of income tax is an 
important part and has to be calculated according to the income of a 
person.  The government has classified the sources of income under 
separate heads and then the income tax is computed accordingly. The 
provisions and rules are according to the details mentioned in the 
Income Tax Act 1961. 
Page 2


INTRODUCTION 
As per the Section 14 Income Tax Act,1961, there are five main income 
tax heads for an individual. The computation of income tax is an 
important part and has to be calculated according to the income of a 
person.  The government has classified the sources of income under 
separate heads and then the income tax is computed accordingly. The 
provisions and rules are according to the details mentioned in the 
Income Tax Act 1961. 
FIVE MAIN HEADS OF 
INCOME 
• Income from Salary
• Income from House Property
• Income from Business
• Income from Capital Gains
• Income from Other Sources
Page 3


INTRODUCTION 
As per the Section 14 Income Tax Act,1961, there are five main income 
tax heads for an individual. The computation of income tax is an 
important part and has to be calculated according to the income of a 
person.  The government has classified the sources of income under 
separate heads and then the income tax is computed accordingly. The 
provisions and rules are according to the details mentioned in the 
Income Tax Act 1961. 
FIVE MAIN HEADS OF 
INCOME 
• Income from Salary
• Income from House Property
• Income from Business
• Income from Capital Gains
• Income from Other Sources
INCOME FROM SALARY 
• The first head of Income Tax heads is 
income from salary .This clause 
essentially assimilates any 
remuneration, which is received by an 
individual in terms of services provided 
by him based on a contract of 
employment. This amount qualifies to be 
considered for income tax only if there is 
an employer-employee relationship 
between the payer and the payee 
respectively. Salary also should include 
the basic wages or salary, advance 
salary, pension, commission, gratuity, 
perquisites as well as the annual bonus.
Page 4


INTRODUCTION 
As per the Section 14 Income Tax Act,1961, there are five main income 
tax heads for an individual. The computation of income tax is an 
important part and has to be calculated according to the income of a 
person.  The government has classified the sources of income under 
separate heads and then the income tax is computed accordingly. The 
provisions and rules are according to the details mentioned in the 
Income Tax Act 1961. 
FIVE MAIN HEADS OF 
INCOME 
• Income from Salary
• Income from House Property
• Income from Business
• Income from Capital Gains
• Income from Other Sources
INCOME FROM SALARY 
• The first head of Income Tax heads is 
income from salary .This clause 
essentially assimilates any 
remuneration, which is received by an 
individual in terms of services provided 
by him based on a contract of 
employment. This amount qualifies to be 
considered for income tax only if there is 
an employer-employee relationship 
between the payer and the payee 
respectively. Salary also should include 
the basic wages or salary, advance 
salary, pension, commission, gratuity, 
perquisites as well as the annual bonus.
INCOME FROM HOUSE PRORERTY
The second head of Income Tax heads is Income from house 
property, According to the Income Tax Act 1961, Sections 22 to 
27 is dedicated to the provisions for the computation of the total 
standard income of a person from the house property or land 
that he or she owns. An interesting aspect is that the charge is 
derived out of the property or land and not on the amount of 
rent received.
Page 5


INTRODUCTION 
As per the Section 14 Income Tax Act,1961, there are five main income 
tax heads for an individual. The computation of income tax is an 
important part and has to be calculated according to the income of a 
person.  The government has classified the sources of income under 
separate heads and then the income tax is computed accordingly. The 
provisions and rules are according to the details mentioned in the 
Income Tax Act 1961. 
FIVE MAIN HEADS OF 
INCOME 
• Income from Salary
• Income from House Property
• Income from Business
• Income from Capital Gains
• Income from Other Sources
INCOME FROM SALARY 
• The first head of Income Tax heads is 
income from salary .This clause 
essentially assimilates any 
remuneration, which is received by an 
individual in terms of services provided 
by him based on a contract of 
employment. This amount qualifies to be 
considered for income tax only if there is 
an employer-employee relationship 
between the payer and the payee 
respectively. Salary also should include 
the basic wages or salary, advance 
salary, pension, commission, gratuity, 
perquisites as well as the annual bonus.
INCOME FROM HOUSE PRORERTY
The second head of Income Tax heads is Income from house 
property, According to the Income Tax Act 1961, Sections 22 to 
27 is dedicated to the provisions for the computation of the total 
standard income of a person from the house property or land 
that he or she owns. An interesting aspect is that the charge is 
derived out of the property or land and not on the amount of 
rent received.
INCOME FROM BUSINESS AND PROFESSION
• “Profit and gains of business or profession” 
is one of the heads of income under the 
Income Tax Act.  Business profits is the 
third head of income under the Act, after 
salaries and house property income. This 
head is used to classify or aggregate 
income which the taxpayer generates 
through business or professional activities. 
While filing an income tax return, the 
taxpayer must declare the amount of 
profits and gains of business or profession 
in case the assessee is having any such 
income.