Income tax

QUESTION

Income tax is a on income and not on receipt? Discuss this statement and keep the main feature of the income.
Income Tax is a tax imposed by the Government on any body who earns income. All Income receipts are not considered as income. Receipts can be classified into two kinds: (A) Revenue receipts (B) Capital receipts. The general rule under the income tax act is that, all revenue receipts are taxable unless a receipts is specifically exempted and all capital receipts are exempt from taxation unless there is a provision to tax it. Gifts and loans etc are in the nature of capital receipts not attracting tax Income tax

is lievied on Individual Income and Business Income. For example; in case of a salaried person, all that is received from an employer in cash, kind or as a facility is considered as income. For a business man, his net profits will constitute income. Income may also flow from investments in the form of interest, Dividend, and commission etc.

ANSWER:

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