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"Types of Income" under Income Tax Act. 1956.


Broadly income can be divided into two categories :

  1. Indian Income
  2. Foreign Income

A. Indian Income

Indian income is called by various words and names. These are

(1)        Income earned in India.
(2)        Income accrues and arises in India.
(3)        Income received or deemed to be received in India.
(4)        Income payable in India. Income may have been earned in a foreign country but it is payable in India.
(5)        Income earned (or accrues) in India but is is received or payable outside India.

B. Foreign Income

Following types of incomes are called foreign incomes

(1)        Income earned (or accrues) outside India and also received outside India.
(2)        Any income which is not earned or accrues or arises in India.

1.         Income Received In India

Receipt of a particular income in India attracts tax liability. The essential fact is that a person must receive income in India during the relevant previous year. The income may be received by the assessee himself or by his agent, banker or broker on his behalf in India. It is not essential that a person must receive income either from business or salary. Assessee may receive income from any source.

All persons are assessable on income received in India during the relevant preyious year irrespective of the residential status.

Income received in money or money’s worth is taxable. Only thing essential is that it must be certain that the receipt in the form of money’s worth must be income.
More Topics.. @ Tax Concept
Types of Income under Income Tax Act. 1956.
Income Deemed To Be Received In India under I.Tax Act.
Income Which ‘Accrues’ Or ‘Arises’ In India under I.Tax Act.
[Section 9(1)(i)] - Income Arising From Business Connection In India
Income from any property held in India and assets or sources of income located in India
Income from transfer of capital assets situated in India
[Section 9(1)(ii)] - Salaries earned in India
[Section 9(1 )(iii)] - Salaries For Government Service Outside India
[Section 9(1)(iv)] - Dividend paid abroad by Indian Company
[Section 9(1 )(v)] - Income By Way Of Interest
[Section 9(1)(vi)] - Income By Way Of Royalty
[Section 9(1 )(vii)] - Income By Way Of Fees For Technical Services
Agricultural Income [Section 2(1A)] - Definition under I.Tax
Assessment Year [Section 2(9)] - Definations under I.Tax.
Constitutional Provision Governing Taxation in India
Gross Total Income [Section-80B (5) ] - Definations under I.Tax.
Heads of Income [Section-14 ] - Definations under I.Tax.
Income is Taxed in the same Year in which it is earned
Income [Section 2(24)] - Definations under I.Tax.
Person [Section 2(31)] - Definations under I.Tax.
Previous Year [Section 2(34) r.w. Section 3] - Definations under I.Tax.
Sources Of Law Relating To Income Tax
Taxes to be imposed only by Authority of Law
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