Definition of INCOME
under Income Tax
[Section 2(24)]-- The
definition given u/s
2(24) is inclusive and not
exhaustive. According to
English dictionary, the
term income means
“periodical receipts from
one ‘s business, land,
work, investments etc.
The term income simply
means something which
comes in. It is a
periodical return with
regularity or expected
regularity. It’s nowhere
mentioned that income
refers to only monetary
return. It includes value
of benefits and
perquisites. Any thing
which can reasonably
and properly be
described as income is
taxable under this Act
unless specifically
Section 2(7) in The
Income- Tax Act, 1995--
(7) " assessee" means a
person by whom 3 any
tax] or any other sum of
money is payable under
this Act, and includes-
(a) every person in
respect of whom any
proceeding under this
Act has been taken for
the assessment of his
income or of the income
of any other person in
respect of which he is
assessable, or of the loss
sustained by him or by
such other person, or of
the amount of refund
due to him or to such
other person;
(b) every person who is
deemed to be an
assessee under any
provision of this Act;
(c) every person who is
deemed to be an
exempted under the assessee in default
various provisions of this under any provision of
Act.”Income includes :1 this Act
Profits and gains 2 What is Section 2 22
Dividend 3Voluntary of income tax?Income
Contributions received Tax Act's Section 2(22)e.
by a trust. 4 Any sum As per Section 2(22)e,
chargeable to tax u/s 28 when a closely held
(iiia) 5 Any sum company, gives a loan
chargeable to tax u/s or extends an advance
28(iiib) 6 Any sum to the respective
chargeable to tax u/s 28 personnel: A
(iiic) 7 The value of any shareholder who holds a
benefit or perquisite minimum of 10 per cent
taxable under section 28 of the voting rights, and
(iv) 8 Any capital gain is the beneficial owner
taxable under section 45 of shares. Sec (22) "
dividend" includes-
(a) any distribution by a
company of
accumulated profits,
(b) any distribution to its
shareholders by a
company of
debentures(c) any
distribution made to the
shareholders of a
company on its
 liquidation(d) any
distribution to its
shareholders by a
company on the
reduction of its
capital(e) any payment
by a company
under S.2(23) of the Section 56 in The
Income Tax Act: Income- Tax Act, 1995
Meaning of the terms 56. Income from other
‘Partner’, ‘Partnership’ & sources 1
‘Firm’ a) Definition of (1) Income of every kind
‘Firm’ – S.2(23)(i) Income which is not to be
Tax--As per S.2(23)(i) of excluded from the total
the Income Tax Act, income under this Act
1961, unless the context shall be chargeable to
otherwise requires, the income- tax under the
term “firm” shall have head" Income from
the meaning assigned to other sources", if it is
it in the Indian not chargeable to
Partnership Act, 1932 (9 income- tax under any
of 1932), and shall of the heads specified in
include a limited liability section 14, items A to E.
partnership as defined in (2) In particular, and
the Limited Liability without prejudice to the
Partnership Act, 2008 (6 generality of the
of 2009). provisions of sub-
b) Definition of ‘Partner’
– S.2(23)(ii) Income Tax
As per S.2(23)(ii) of
Income Tax Act, 1961,
unless the context
otherwise requires, the
term “partner” c)
Definition of Partnership
– S.2(23)(iii) Income Tax
As per S.2(23)(iii) of
Income Tax Act, 1961,
unless the context
otherwise requires, the
term “partnership
Section 6- Residence in
India – Income Tax Act,
1961 6. [1] An individual
is said to be resident in
India in any previous
year, if he— [a] is in
India in that year for a
period or periods
amounting in all to one
hundred and eighty-two
days or more ; or [b]
having within the four
years preceding that
section (1), the
following income shall
be chargeable to
income- tax under the
head" Income from
other sources", namely:-
(i) dividends; (ii) income
from machinery, plant
or furniture belonging
to the assessee and let
on hire
Section 5- Scope of
income – Income Tax
Act, 1961 5. [1] the total
income of any previous
year of a person who is
a resident includes all
income from whatever
source derived which—
[a] is received or is
deemed to be received
in India in such year by
or on behalf of such
person ; or [b] accrues
year been in India for a or arises or is deemed to
period or periods accrue or arise to him in
amounting in all to three India during such year ;
hundred and sixty-five or [c] accrues or arises
days or more, AND is in to him outside India
India for a period or during such year :
periods amounting in all Provided that, in the
to sixty days or more in case of a person not
that year. ordinarily resident in
India within the
Refunds Person entitled meaning of sub-section
to claim refund in [6] of section 6, the
certain special cases and income which accrues or
Form of claim for refund arises to him outside
and limitation are India shall not be so
defined under section included unless it is
237, 238 and 239 of derived from a business
Income Tax Act 1961. controlled in or a
Provisions under these profession set up in
Sections are :Section 237 India
of Income Tax Act
"Refunds"--- 237. If any
person satisfies the 240 "Refund on appeal,
Assessing Officer that etc" Where, as a result
the amount of tax paid of any order passed in
by him or on his behalf appeal or other
or treated as paid by him proceeding under this
or on his behalf for any Act, refund of any
assessment year exceeds amount becomes due to
the amount with which the assessee
he is properly 242 "Correctness of
chargeable under this assessment not to be
Act for that year, he questioned"
shall be entitled to a 243 of Income Tax Act
refund of the excess. "Interest on delayed
238. "Person entitled to refunds"--243. (1) If the
claim refund in certain Assessing Officer does
special cases (1) Where not grant the refund,-
the income of one 244A(1)(a), an assessee
person is included under is entitled to receive
any provision of this Act interest on refund out of
in the total income of any tax collected at
any other person, the source, t ax deducted at
latter alone shall be source or advance tax
entitled to a refund paid from the 1st day of
under this Chapter in April of the assessment
respect of such income year to the date on
239. Form of claim for which the refund is
refund and limitation granted
(1) Every claim for 245 of the Income Tax
refund under this Act empowers the
Chapter shall be assessing officer (AO) to
made 3[by adjust the refund (or a
furnishing return in part of the refund)
against any tax demand
accordance with the
provisions of
section 139]
13A: SPECIAL PROVISION
RELATING TO INCOMES
OF POLITICAL PARTIES
Any income of a political
party which is
chargeable under the
head “Income from
house property” or
“Income from other
sources” or “Capital
Gains” or “any income
by way of voluntary
contributions” received
by a political party from
any person shall
that is outstanding from
the taxpayer. In simple
words, the IT
department wants to
adjust the refund due
against a demand due
from you.
Section 10 of Income
Tax Act, 1961 includes
such income that does
not form part of the
total income while
calculating the total tax
liability of any person
The agricultural
income is exempt from
tax under section 10(1)
'10A. Special provision
in respect of newly
established industrial
undertakings in free
trade zones