Page 199 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Personal Financial Planning

Notes However if the higher of the above two exceeds the standard rent of the property determined in
accordance with the Rent Control Act applicable at the concerned locality, then the standard rent
will be treated as taxable rental value of such property.
Therefore in respect of self-occupied property, one property will be treated as an exempt property
and in respect of other properties, a notional rental value will be treated as taxable income in the
hands of the owner of the property.

Profits and Gains of Business or Profession

This head of income broadly covers income earned by a person as a result of some business or
professional set-up by him.

For charging the income under the head ‘’Profits and Gains of business,’’ the following conditions
should be satisfied:
1. There should be a business or profession.

2. The business or profession should be carried on by the assessee.
3. The business or profession should have been carried on by the assessee at any time during
the previous year.

Income which is chargeable to income tax under the head Profits and gains of business or
profession
The following income would be chargeable under the head “Profits and gains of business or
profession”:
1. The profits and gains of any business or profession, which was carried on by the assessee
at any time during the previous year;
2. Any compensation or other payment, due or received by the following:-
(i) Any person, by whatever name called, managing the whole or substantially the
whole of the affairs of an Indian company, at or in connection with the termination
of his management or the modification of the terms and conditions relating thereto.
(ii) Any person, by whatever name called, managing the whole or substantially the
whole of the affairs in India of any other company, at or in connection with the
termination of his office or the modification of the terms and conditions relating
thereto.
(iii) Any person, by whatever name called, holding an agency in India for any part of the
activities relating to the business of any other person, at or in connection with the
termination of any agency or the modification of the terms and conditions relating
thereto.
(iv) Any person, for or in connection with the vesting in the Government, or in any
corporation owned or controlled by the Government, under any law for the time
being in force, of the management of any property or business.
3. Income, derived by a trade, professional or similar association from specific services
performed for its members.
4. Profits on sale of a license granted under the Imports (Control) Order, 1955, made under
the Imports and Exports (Control) Act, 1947.

5. Cash assistance (by whatever name called), received or receivable by any person against
exports under any scheme of the Government of India.

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