What are Heads of income? What is Expenditure incurred in relation to income not includible in total income? Section 14 and 14A of Income Tax Act 1961

Heads of income and Expenditure incurred in relation to income not includible in total income are defined under section 14 and 14A of Income Tax Act 1961. Provision under these sections are:

Section 14 of Income Tax Act "Heads of income"

14. Save as otherwise provided by this Act, all income shall, for the purposes of charge of income-tax and computation of total income, be classified under the following heads of income :-

A. -
Salaries.
B. -
[***]
C. -
Income from house property.
D. -
Profits and gains of business or profession.
E. -
Capital gains.
F. -
Income from other sources.

Section 14A of Income Tax Act "Expenditure incurred in relation to income not includible in total income"

14A. (1) For the purposes of computing the total income under this Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act.

 

(2) The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with such method as may be prescribed1, if the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income under this Act.

(3) The provisions of sub-section (2) shall also apply in relation to a case where an assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under this Act :

Provided that nothing contained in this section shall empower the Assessing Officer either to reassess under section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154, for any assessment year beginning on or before the 1st day of April, 2001.

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