Page 9 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes

Notes Entry 82 of List I to the Seventh Schedule of the Constitution of India confers power
on Parliament to levy taxes on income other than agricultural income.
As per section 2(24), the term ‘income’ means and includes:
1. Profits and gains;

2. Dividend;
3. Voluntary contributions: Voluntary contributions received by:
a trust created wholly or partly for charitable or religious purposes
a scientific research association; or

a fund or trust or institution established for charitable purposes and notified under
section 10(23C)(iv) or (v) or
any university or other educational institution or by any hospital referred to in
Section 10(23C)(iiad)(vi)(iiiae)(iva); or
an electoral trust.
4. The value of any perquisite or profit in lieu of salary taxable.
5. Any special allowance or benefit 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.
6. City Compensatory Allowance or Dearness allowance: 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.
7. Benefit or Perquisite to a Director: The value of any benefit or perquisite, whether
convertible into money or not, obtained from a company by: (a) a director, or (b) a person
having substantial interest in the company, or (c) a relative of the director or of the person
having substantial interest, 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.
8. Any Benefit or perquisite to a Representative Assessee: The value of any benefit or perquisite
(whether convertible into money or not) obtained by any representative assessee under
Section 160(1)(iii)/(iv) or beneficiary, or any amount paid by the representative assessee
in respect of any obligation which, but for such payment, would have been payable by the
beneficiary.
9. Any sum chargeable under section 28, 41 and 59 like:

any sum chargeable to tax as business income under Section 28(ii), any amount
taxable in the hands of a trade, professional or similar association (for specific
services performed for its members) as its income from business under Section
28(iii), and deemed profits which are taxable under Sections 41 and 59 of the Act;

any sum chargeable to income-tax under clause (iiia) of Section 28, i.e. profits on sale
of a licence granted under the Imports (Control) Order, 1955, made under the Imports
and Exports (Control) Act, 1947 [inserted by the Finance Act, 1990, with retrospective
effect from 1.4.1962];

4 LOVELY PROFESSIONAL UNIVERSITY