Introduction

Returns from property computation

Income Tax Assessee classification

Residential status

Income from salary

Exemptions available on salary

Income from house property

Tax exemption

Income and taxation

Long term/Short term capital gains

Income from other sources

Capital gains

 
For the purpose of computing total income and charging tax thereon, income from various sources has been classified under five heads.

Salary

• Income from house property
• Income from business/profession
• Capital gains
• Income from other sources

The aggregate of income received under all these five heads is known as "Gross Total Income". The assessee or the person liable to be assessed under the Income Tax Act is entitled for deductions which are mentioned in Sections 80-CCC to 80- U. The balance income is known as "Net Taxable Income". Income tax is charged for an assessment year at the rates of tax prescribed in the Annual Finance Act on the taxable income. Here "assessment year" means the year in which the income of the previous year is taxable. For example, income derived during the financial year 2000-2001 from April 1, 2000 to March 31, 2001 is taxable in the assessment year 2001-2002.