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What are the five heads of income under Income Tax Act?

Incomes earned by you during the year are divided into five heads under the I-Tax Act. Here's a look at how these incomes are classified.

ET CONTRIBUTORS|
Updated: Jul 19, 2019, 12.37 PM IST
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1. Income for salary include wages, pension, annuity, gratuity, fees, commission, profits, leave encashment, annual accretion and transferred balance in recognised Provident Fund (PF) and contribution to employees pension account.

2. Rental Income from properties owned by a person other than those which are occupied by him are charged as income from house property. If property is vacant then a notional income is included under this head.

3. Income from business or profession includes profit/loss from a business entity or a profession, any interest, salary or bonus to a partner of a firm.

4. Income from capital gains includes long term capital gains (LTCG) and short term capital gains (STCG) on sale of any capital assets.

5. Income from other sources includes interest on bank deposits and securities, dividend, royalty income, winning on lotteries and races and gifts received among others.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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