Remuneration for work done in India is taxable irrespective of the
place of receipt.
Remuneration includes:
Others:
Besides remuneration for work, individuals may be taxed on the
following income:
Tax upon Income from house
property
The annual value of property, consisting of any buildings or lands
appurtenant thereto of which the assessee is the owner, other than such
portions of such property as he may occupy for the purposes of any
business or profession carried on by him, the profits of which are
chargeable to income tax, shall be chargeable to income tax under the
head "Income from House Property".
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Tax upon Income from
business or professions
For charging the income under the head "Profits and Gains of
business," the following conditions should be satisfied:
- There should be a business or profession
- The business or profession should be carried on by the assessee.
- The business or profession should have been carried on by the
assessee at any time during the previous year.
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Tax upon Income from
capital gains
Capital asset means property of any kind held by an assessee whether or
not connected with his business or profession.
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Tax upon Income from other
sources
Income of every kind, which is
not
chargeable to income tax under the heads
- salary
- income from house property,
- profits and gains of business and profession,
- capital gains can be taxed under the head "income from other
sources".
However such income should also not fall under income not forming
part of total income under the IT Act.
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Tax upon Clubbing of Income
The total income of an individual also includes certain income of other
persons. These are:-
- income of spouse from,
- remuneration derived from the concern in which the individual
is substantially interested unless the remuneration is by virtue
of the application of technical or professional skill possessed
by him or her;
- assets transferred by the individual to the spouse or to any
other person for the benefit of the spouse unless the transfer
is for adequate consideration or in consideration of an
agreement to live apart.
- income of son's wife from assets transferred by the individual to
her or to any other person for her benefit unless the transfer is
for adequate consideration.
- income of his minor child - other than the minor child suffering
from disability specified in section 80-U, referred to in para 5.3.9
except when such income arises to the child on account of any manual
work done by him or on account of any activity which involves
application of any skill, talent or specialised knowledge and
experience.
The individual in whose income the income of other spouse as
mentioned in (a) (i) above is to be included will be the husband or wife
whose total income - before including such remuneration income - is
greater. Similarly the income of minor child is to be included in the
income of the parent having greater income. If the marriage of the
parents does not subsist, it will be parent who maintains the child.
Avoidation of double taxation
Since a 'resident' is liable to pay tax in India on his 'total world
income', it is possible that he may have to pay tax on his foreign
income in that country also, where it is earned. Such situation leads to
double taxation of the same income -in India and again in the country
where it is earned. To avoid such a situation, the Government of India
has entered into agreements for avoidance of double taxation with
different countries, a discussion about which is made in Chapter XII.
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Filing of Return - compulsory
Earlier the one-by-six scheme that prescribed the return was to be
filed compulsorily, if any of the following six items were present and
whether the person had taxable income or not:
- Occupation of a House
- Ownership of a motor car
- Expenditure on foreign travel
- Holder of credit card
- Electricity payments in excess of Rs 50,000/annum.
- Member of a club - where the entrance fee is more than Rs
25,000/-.
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