Section 28 of ITA, 1961 : Section 28: Profits And Gains Of Business Or Profession

Explanation using Example

Let's say Ravi runs a software development company, and during the financial year, his company earns a profit from providing software solutions to clients. According to Section 28 of the Income-tax Act, 1961, Ravi's company's profits would be taxable under the head "Profits and gains of business or profession".

Furthermore, imagine that Ravi's company had an agreement with another company to not enter into a particular market segment, and in return, Ravi's company received a lump sum amount. This payment, as per item 11 of Section 28, would also be considered income chargeable to tax under the same head, provided it does not fall under the exceptions mentioned in the provided clauses.