20 March 2008
As per Income Tax Act, the definition of income is an Inclusive Definition. That is they have given a list of items which fall within the meaning of the term Definition. They are as follows: income includes
(i) profits and gains ;
(ii) dividend ;
[(iia) voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes 9[or by an association or institution referred to in clause (21) or clause (23), or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v) 10[or by any university or other educational institution referred to in sub-clause (iiiad) or sub-clause (vi) or by any hospital or other institution referred to in sub-clause (iiiae) or sub-clause (via)] of clause (23C) of section 10].
Explanation.For the purposes of this sub-clause, trust includes any other legal obligation ;]
(iii) the value of any perquisite or profit in lieu of salary taxable under clauses (2) and (3) of section 17 ;
11[(iiia) any special allowance or benefit, other than perquisite included under sub-clause (iii), specifically granted to the assessee to meet expenses wholly, necessarily and exclusively for the performance of the duties of an office or employment of profit ;
(iiib) any allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit are ordinarily performed by him or at a place where he ordinarily resides or to compensate him for the increased cost of living ;]
(iv) the value of any benefit or perquisite12, whether convertible into money or not, obtained from a company either by a director or by a person who has a substantial interest in the company, or by a relative of the director or such person, and any sum paid by any such company in respect of any obligation which, but for such payment, would have been payable by the director or other person aforesaid ;
13[(iva) the value of any benefit or perquisite12, whether convertible into money or not, obtained by any representative assessee mentioned in clause (iii) or clause (iv) of sub-section (1) of section 160 or by any person on whose behalf or for whose benefit any income is receivable by the representative assessee (such person being hereafter in this sub-clause referred to as the beneficiary) and any sum paid by the representative assessee in respect of any obligation which, but for such payment, would have been payable by the beneficiary ;]
(v) any sum chargeable to income-tax under clauses (ii) and (iii) of section 28 or section 41 or section 59 ;
14[(va) any sum chargeable to income-tax under clause (iiia) of section 28 ;]
15[(vb) any sum chargeable to income-tax under clause (iiib) of section 28 ;]
16[(vc) any sum chargeable to income-tax under clause (iiic) of section 28 ;]
17[(vd)] the value of any benefit or perquisite taxable under clause (iv) of section 28 ;
18[(ve) any sum chargeable to income-tax under clause (v) of section 28 ;]
(vi) any capital gains chargeable under section 45 ;
(vii) the profits and gains of any business of insurance carried on by a mutual insurance company or by a co-operative society, computed in accordance with section 44 or any surplus taken to be such profits and gains by virtue of provisions contained in the First Schedule ;
19[(viia) the profits and gains of any business of banking (including providing credit facilities) carried on by a co-operative society with its members;]
(viii) [Omitted by the Finance Act, 1988, w.e.f. 1-4-1988. Original sub-clause (viii) was inserted by the Finance Act, 1964, w.e.f. 1-4-1964;]
20[(ix) any winnings from lotteries21, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever.]
22[Explanation.For the purposes of this sub-clause,
(i) lottery includes winnings from prizes awarded to any person by draw of lots or by chance or in any other manner whatsoever, under any scheme or arrangement by whatever name called;
(ii) card game and other game of any sort includes any game show, an entertainment programme on television or electronic mode, in which people compete to win prizes or any other similar game ;]
23[(x) any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees ;]
24[(xi) any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy.
Explanation.For the purposes of this clause*, the expression Keyman insurance policy shall have the meaning assigned to it in the Explanation to clause (10D) of section 10 ;]
25[(xii) any sum referred to in 26[clause (va)] of section 28;]
27[(xiii) any sum referred to in clause (v) of sub-section (2) of section 56;]
27a[(xiv) any sum referred to in clause (vi) of sub-section (2) of section 56;]
20 March 2008
The definition of income under the Income Tax Act is of an inclusive nature. ie apart from the items listed in the definition, any receipt which satisfies the basic condition of being income is also to be treated as income and charged to income tax accordingly. Income includes:-
*Profits or Gains from business or profession including any benefit, amenity, perquisite obtained in the course of such business or profession *Salary Income including any benefit, allowance, amenity or perquisite obtained in addition to or in lieu of salary. *Dividend Income *Winnings from lotteries, crossword puzzles, races, games, gambling or betting *Capital Gains on sale of capital assets *Amounts received under a KeyMan Insurance Policy i.e a life insurance policy taken by a person on the life of another person who is or was the employee of the first mentioned person or is or was connected in any manner whatsoever with the business of the first mentioned person. *Voluntary contributions received by a religious or charitable trust or scientific research association or a sports promotion association
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