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Commentary

IN1.3.1 Income tax


India

IN1.3.1ÌýÌýÌýÌý Income tax

Income in India is taxed under the following heads of income in accordance with section 14 of the Act:

  1. Ìý

    •ÌýÌýÌýÌý salaries

  2. Ìý

    •ÌýÌýÌýÌý house property

  3. Ìý

    •ÌýÌýÌýÌý business or profession

  4. Ìý

    •ÌýÌýÌýÌý capital gains

  5. Ìý

    •ÌýÌýÌýÌý other sources

Income from salaries

Section 15 of the Act is the charging section for income from salaries. Remuneration from an office of employment wherein the terms of engagement involve an employer-employee relationship can be classified under income from salaries under section 17(1). This includes:

  1. Ìý

    •ÌýÌýÌýÌý wages

  2. Ìý

    •ÌýÌýÌýÌý annuity

  3. Ìý

    •ÌýÌýÌýÌý pension

  4. Ìý

    •ÌýÌýÌýÌý contributions to employee welfare schemes

Income from salaries (as defined above) is taxable:

  1. Ìý

    •ÌýÌýÌýÌý in the place where the service is provided and not where the salary is actually received

  2. Ìý

    •ÌýÌýÌýÌý on a due or receipt basis, whichever is earlier

Components of taxable salary and exemptions

The tax treatment of the different components of income from salary is outlined in the table below:

Components of salaryTax treatmentSpecific remarks
Basic

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