Page 257 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes Self Assessment

Fill in the blanks:
1. The meaning of the expression ‘Business has been defined in ………………………… of the
Income-tax Act.

2. The concept of business presupposes the carrying on of any activity for
………………………….
3. The expression ‘Profession’ has been defined in ……………………… of the Act to include
any vocation.
4. Receipts arising from the exercise of a business or profession would still be chargeable to
tax under head although they may be both ……………………..in nature.

9.2 Basis of Charge

Under section 28, the following income is chargeable to tax under the head “Profits and gains of
business or profession”:
1. Profits and gains of any business or profession;
2. Any compensation or other payments due to or received by any person specified in
section 28(ii);
3. Any income derived by a trade or professional or other similar association from the
specific services performed by it for its members;

Did u know? Trade association means an association of businessmen for the protection and
advancement of their common interest for instance a Chamber of Commerce.
4. The value of any benefit or perquisite, whether convertible into money or not, arising
from business or the exercise of a profession;
5. Export incentive available to exporters;
6. Any interest, salary, bonus, commission or remuneration received by a partner from firm;
7. Any sum received for not carrying out any activity in relation to any business or not to
share any know-how, patent, copyright, trademark, etc.;
8. Any sum received under a Key man insurance policy including bonus;

Notes For the purpose of this clause, the expression “Keyman Insurance Policy” shall
have the following meaning: “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.

9. Profits and gains of managing agency; and
10. Income from speculative transaction.
Income from the aforesaid activities is computed in accordance with the provisions laid down in
sections 29 to 44D.

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