Section 28 of the Income Tax Act up till Section 44, all cover taxation on profits and gains of business/profession. This post takes you through Section 28 in detail – what is it and the different incomes that are considered under Section 28. Read on!
Section 28 of the Income Tax Act is applicable for incomes that fall under the head of profits or gains from business or profession. The provisions mentioned under this Section state that every individual has to report their income that is not usually considered a business income but holds the potential to be treated as a business income under the Income Tax Act.
The definition of ‘Business’ comes under Section 2(13). It is referred to as any activity of commerce, trade or manufacture along with a transaction (even isolated venture) that contains certain elements of commerce, trade and manufacture. Here the primary motive of an assessee should be making a profit.
Section 2(36) provides the official definition of ‘Profession.’ It includes earning income using one’s skill, talent, and knowledge. However, for earning income from a profession, one must have gathered his/her skill/knowledge from a recognized university. It also includes skills that a person acquires from birth or vocational education.
There are only some income categories that are taxable under Section 28 of the Income Tax Act. It includes:
Here intellectual property includes patent, know-how, licence, trade-mark, copyright, franchise, or business/ commercial rights of similar information, nature or technique.
The clause mentioned here will be non-applicable in the below cases:
This is all the information one needs to know about Section 28 of the Income Tax Act. Refer to the above points to find out what Section 28 is applicable for, the official definition of business and profession, and the income considered. If you have an income that qualifies for taxation as per Section 28, make sure to learn about all the aspects associated with it.
Ans. Keyman insurance policy is the policy under which the employer is the premium payer and the proposer. Such policy covers the life of the employee. However, when the insurance company credits claim benefits, it goes to the employer.
Ans. Duty Entitlement Pass Book or DEPB stands for an export incentive scheme the government provides to exporters. Its objective is to compensate for the effect of custom duty charges on the imported components on the exported products.
Ans. Under Section 35 of the Income Tax Act, the government allows individual deductions for expenses incurred towards scientific research. Moreover, the deduction available for 2020-2021 was 150%. However, now the sum is 100%, i.e., for 2021-2022.
Ans. The government made crucial amendments to Section 28 of the IT Act on April 1 2019. As per this amendment, there would be alternations to Section 28 (ii) as well as some additions to Section 28 (vi).
Ans. There are several individuals and entities that are liable to pay business tax as per the IT Act. These include self-employed individuals, corporations, partnerships, small businesses, and others.
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
|Section 194IB||Section 44AA||Section 80E|
|Section 195||Section 80EEA||Section 80DD|
|Section 80CCC||Section 80GG||Section 80 G|
|Section 54F||Section 1941A||Section 10|
|Section 194Q||Section 192||Section 269SS|
|Section 80DDB||Section 44AD||Section 194C|
|Section 194A||Section 194H||Section 80D|
|Section 80C||Section 80C, 24(b), 80EE & 80EEA||Section 234A|
|Section 50C||Section 80C||Section 80EEA|
|Section 194B||Section 194J||Section 206C|
|Section 80CCG||Section 80 EEB||Section 24Q|
|Section 40b||Section 194C||Section 54EC|
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