Section 14 of ITA, 1961 : Section 14: Heads Of Income

Explanation using Example

Imagine Mr. Sharma is an IT professional earning a monthly salary, owns a rental property, actively trades in the stock market, and occasionally freelances as a consultant. For filing his income tax return, he needs to categorize his income based on Section 14 of The Income-tax Act, 1961:

• His monthly salary from his employer will be classified under A - Salaries.
• The rent he receives from his property will fall under C - Income from house property.
• The profit he makes from buying and selling stocks will be considered under E - Capital gains.
• His earnings from freelance consulting will be categorized as D - Profits and gains of business or profession.
• If he has any other income, such as interest from savings accounts, it would be classified under F - Income from other sources.

Mr. Sharma must report these incomes under the respective heads when filing his taxes to comply with the Income-tax Act.