![INCOME CHARGEABLE UNDER THIS HEAD [SECTION 28]](https://sabinmadenca.in/wp-content/uploads/2022/06/sec.jpg "INCOME CHARGEABLE UNDER THIS HEAD [SECTION 28]")
The various items of income chargeable to tax as income under the head ‘profits and gains of business or profession’ are as under:
(1) Income from business, profession, or vocation: Income arising to any person by way of profits and gains from the business or profession carried on by him at any time during the previous year.
(2) Any compensation or other payment due to or received by:
(i) Any person, by whatever name called, managing the whole or substantially the whole of –
(a) the affairs of an Indian company or
(b) the affairs in India of any other company
(ii) at or in connection with the termination of his management or office or the modification of any of the terms and conditions relating thereto.
(iii) any person, by whatever name called, holding an agency in India for any part of the activities relating to the business of any other person, at or in connection with the termination of the agency or the modification of any of the terms and conditions relating thereto.
(iv) any person, for or in connection with the vesting in the Government or in any corporation owned or controlled by the Government under any law for the time being in force, of the management of any property or business.
(v) any person, by whatever name called, at or in connection with the termination or modification of the terms and conditions, of any contract relating to his business.
(3) Income from specific services performed for its members by a trade, professional or business:
Income is derived by any trade, professional or similar associations from specific services rendered by them to their members. It may be noted that this forms an exception to the general principle of mutuality governing the assessment of income of mutual associations such as chambers of commerce, stockbrokers’ associations etc.
As a result, a trade, professional or similar association performing specific services for its members is to be deemed as carrying on business in respect of these services and on that assumption the income arising therefrom is to be subjected to tax. For this purpose, it is not necessary that the income received by the association should definitely or directly be related to these services.
(4) Incentives received or receivable by assessee carrying on an export business:
(i) Profit on sale of import entitlements: Profits on sale of a licence granted under the Imports (Control) Order, 19551 made under the Imports and Exports (Control) Act, 19472.
(ii) Cash assistance against exports under any scheme of GoI: Cash assistance (by whatever name is called) received or receivable by any person against exports under any scheme of the Government of India.
(iii) Customs duty or excise duty re-paid or repayable as a drawback: Any Customs duty or Excise duty drawback repaid or repayable to any person against export under the Customs and Central Excise Duties Drawback Rules, 19713.
(iv) Profit on transfer of Duty Entitlement Pass Book Scheme or Duty-Free Replenishment Certificate: Any profit on the transfer of the Duty Entitlement Pass Book Scheme4 or Duty-Free Replenishment Certificate, being Duty Remission Scheme, under the export and import policy formulated and announced under section 5 of the Foreign Trade (Development and Regulation) Act, 1992.
5 Value of any benefit or perquisite: The value of any benefit or perquisite whether convertible into money or not, arising from business or the exercise of any profession.
6 Sum due to, or received by, a partner of a firm: Any interest, salary, bonus, commission or remuneration, by whatever name called, due to or received by a partner of a firm from such firm will be deemed to be income from the business. However, where any interest, salary, bonus, commission or remuneration by whatever name called, or any part thereof has not been allowed to be deducted under section 40(b), in the computation of the income of the firm the income to be taxed shall be adjusted to the extent of the amount disallowed.
7 Any sum whether received or receivable, in cash or kind, under an agreement
(i) for not carrying out any activity in relation to any business or profession; or
However, the following sums received, or receivable would not be chargeable to tax under the head “profits and gains from business or profession”:
(a) any sum, whether received or receivable, in cash or kind, on account of transfer of the right to manufacture, produce or process any article or thing or right to carry on any business or profession, which is chargeable under the head “Capital gains”.
(b) any sum received as compensation, from the multilateral fund of the Montreal Protocol on Substances that Deplete the Ozone layer under the United Nations Environment Programme, in accordance with the terms of the agreement entered with the Government of India.
(ii) for not sharing any know-how, patent, copyright, trademark, licence, franchise or any other business or commercial right of similar nature or information or technique likely to assist in the manufacture or processing of goods or provision for services.
(8) Any sum received under a Keyman insurance policy: Any sum received by the assessee, as an employer, under a Keyman insurance policy including the sum allocated by way of bonus on such policy will be taxable as income from the business.
(9) Fair market value of inventory on its conversion as a capital asset: Fair market value of inventory on the date of its conversion or treatment as a capital asset, determined in the prescribed manner, would be chargeable to tax as business income.
(10)Sum received on account of capital asset referred under section 35AD: Any sum received or receivable, in cash or kind, on account of any capital asset (in respect of which whole of the expenditure on such capital asset has been allowed as a deduction under section 35AD) being demolished, destroyed, discarded or transferred.