Profits and gains of business or profession

One of the income categories included in the Income Tax Act is "Profit and Gains of Business or Profession." The Income Tax Act separates a taxpayer's taxable income into five categories or "heads of income" for the purpose of calculating their tax due. Get benefits on section 80g of income tax act.

After wages and rental property revenue, business profits are the third kind of income under the Act. This category is used to categorise or tally the money that the taxpayer brings in from their professional or commercial activity. If the assessee receives money from a business or profession, the taxpayer must disclose that income while submitting an income tax return. In this article, we discuss how to determine a business's or profession's profits and gains.

Best way to know about 12a.

Income falling under the category of "Profits and profits of business or profession" will be subject to income tax on the following incomes:-

  (a) Profits and earnings from any business that the assessee conducted throughout the financial year.

  (b) Any payment or other recompense that is owed to or received by:-

      (i) anyone in connection with the cancellation or modification of a contract for the management of the entire or almost the entire business of an Indian company or any other firm;

      (ii) any person who holds an agency in India for a portion of the operations pertaining to the business of another person, whether at the time of the agency's termination or modification or in conjunction therewith;

     (iii) any individual for or connected with the administration of any property or company being vested in the government, or in any corporation owned by or managed by the government, under any legislation now in force;

  (c) A trade, professional, or other similar association's income from certain services provided to its members. This is an exception to the usual rule that states that a surplus generated by a mutual association cannot be considered taxable income;

  (d) Export incentives consist of:-

       (i) Revenues from the sale of import permits issued according to Imports (Control)

       (ii) Order based on exports

       (iii) Cash aid, referred to by whatever term, received or owed in relation to export

       (iv) Customs and Central Excise duty disadvantages

       (v) Any gains from the sale of the Duty Entitlement Pass Book Program

       (vi) Any gain from selling the Duty-Free Replenishment Certificate.

There is article available on 80 g.