As per policy introduced by the government in 1961 there are several resources that come under income tax act. Income that earn by someone through property, benefits in policies, earning from business or any professional income from various resources, earning through salary and other vital resources come under income tax.
Government impose tax on income that individual earn through above describe resources and calculation of tax will be based on policy and criteria of government. People will only get freedom of paying income tax in the amount that they earn through interest rate and on income earn through donation and gift.
There are some specific facts that come under this policy. Some of them are mentioned below:
1. Earnings from Interest Rate: All the income that someone earns in one financial year comes under tax scrutiny. In some cases person mat get up to 50% deduction in tax.
2. Gifts: If anyone receives non-monetary and monetary gift items will be considered as tax free income. Gift price must less that 50,000 otherwise it will comes under tax criteria.
3. Dividends: Benefits earn by individual from professional income, dividends from companies, policies, or earn through any company that belongs to other country. Benefits can be earn under section 2(22)(e).
4. Wining Amount: If individual earn amount up to 10,000 as reward or wining price from race, lottery, games, car racing, horse racing, poker, online game shows, puzzle and other games will be tax free.
5. Earning from business and Other Profession: This types of income includes the amount that company offers to employee for his/her interest that he earned on safety, for house renting, furniture for house and insurance policies.
As per policy approved by the government on 1st October 2009, if somebody receive gift items worth more than 50,000, if individual receive amount in cash then it will be tax free. In case of below outline condition; user will get complete exemption from paying income tax:
a. Amount received from dying person.
b. Any organization or agency registered under U/S 10 (34) and donate or offer rewards for you or amount you receive from any local authority.
c. As a wedding gift
d. Received as inheritance or Will.
Gifts may be specified property, monetary and non monetary gifts, immovable property and other useful products. Monetary gifts means friends or relative offers cash amount without any specific condition. Immovable gift items refers to gift that you receive in form of property like home. Specific movable property refers to painting, share, jewellery, drawing, painting, sculpture, archeological collection and other artwork.
Gifts from relatives means:
a. Gift receive from sister or brother-in-law.
b. Gift receive from parents, uncles and aunts.
c. Gift received from in-laws, or from brother or sister or predecessor/successor of in-laws.