The definition of income as per the Income Tax Act, 1961 begins with the word “Income includes”. Therefore, it is an inclusive definition and not an exhaustive one. This definition does not confine the scope of income but leaves room for more inclusions within the ambit of the term.
Section 2 (24) of Income Tax Act, 1961 defines Income as it includes-
- profits and gains;
- voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes or by an association or institution referred to in clause (21) or clause (23), or by a fund or trust or institution referred to in sub-clause (iv) or sub-clause (v) or by any university or other educational institution referred to in sub-clause (iii ad) or sub-clause (vi) or by any hospital or other institution referred to in sub-clause (iii ae) or sub-clause (via) of clause (23 C) of section 10 or by an electoral trust;
- the value of any perquisite or profit in lieu of salary taxable under clauses (2) and (3) of section 17;
- any special allowance or benefit, other than perquisite included under sub-clause (iii), specifically granted to the assessee to meet expenses wholly, necessarily and exclusively for the performance of the duties of an office or employment of profit ;
- any allowance granted to the assessee either to meet his personal expenses at the place where the duties of his office or employment of profit are ordinarily performed by him or at a place where he ordinarily resides or to compensate him for the increased cost of living ;
- the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by a person who has a substantial interest in the company, or by a relative of the director or such person, and any sum paid by any such company in respect of any obligation which, but for such payment, would have been payable by the director or other person aforesaid ;
- he value of any benefit or perquisite, whether convertible into money or not, obtained by any representative assessee mentioned in clause (iii) or clause (iv) of sub-section (1) of section 160 or by any person on whose behalf or for whose benefit any income is receivable by the representative assessee (such person being hereafter in this sub-clause referred to as the “beneficiary”) and any sum paid by the representative assessee in respect of any obligation which, but for such payment, would have been payable by the beneficiary ;
- any sum chargeable to income-tax under clauses (ii) and (iii) of section 28 or section 41 or section 59;
- any sum chargeable to income-tax under clause (iii)(a), (iii )(b), (iii)(c), (iv), (v), (v)(a) of section 28;
- any capital gains chargeable under section 45;
- the profits and gains of any business of insurance carried on by a mutual insurance company or by a co-operative society, computed in accordance with section 44 or any surplus taken to be such profits and gains by virtue of provisions contained in the First Schedule ;
- the profits and gains of any business of banking (including providing credit facilities) carried on by a co-operative society with its members;
- any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever.
- any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees’ State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees ;
- any sum received under a Keyman insurance policy including the sum allocated by way of bonus on such policy;
- any sum referred to in clause (v) and (vi) of sub-section (2) of section 56;
- any sum of money or value of property referred to in clause (vii) or clause (vii)(a) of sub-section (2) of section 56;
- any consideration received for issue of shares as exceeds the fair market value of the shares referred to in clause (vii)(b) of sub-section (2) of section 56;
- any sum of money referred to in clause (ix) of sub-section (2) of section 56.
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