The segregation of income in these 5 headings can simplify the filing of RTI
Income tax calculator: When filing the income tax return (RTI), it is important that the taxpayer knows the different categories of income separated by the income tax department. According to the Income Tax Act 1961, income is divided into 5 categories: salary income, income from real estate, income from business profits, income from investments / fixed assets and income from other sources. According to tax and investment experts, a salaried person can earn in various ways, but Article 14 of the Income Tax Act 1961 stipulates such income in these 5 categories. Thus, a taxpayer is advised to divide his income into these 5 categories to simplify his work when filing the RTI.
Speaking about how the income tax department categorizes a taxpayer’s income, SEBI-registered tax and investment expert Jitendra Solanki said: from salary, income from home ownership, income from corporate profits, income from investments or fixed assets and income from other sources. “
The SEBI-registered tax and investment expert added that it is not necessary for every employee to have income from all of these 5 categories, but dividing their income on the basis of these 5 categories would make it easier to file the RTI because calculating income tax for various heads would become a little easier compared to finding all income at once and calculating the amount of income tax that will accumulate on them .
1]Income from wages
On what the income of the salary means; Manikaran Singhal, Founder of goodmoneying.com, said: âIncome from fees, advances, allowances, pensions, gratuities and retirement benefits all fall under the category of salary income. “
2]Income from home ownership
Regarding income from owning the house, Singhal said: âArticles 22 to 27 of the Income Tax Act 1961 state that income from owning the house or the land or both falls within the scope of the home ownership income category â.
3]Income from profit in the business
If someone is engaged in business, the income of that business will be calculated in this category.
4]Income from investments / fixed assets
A person who earns also makes investments. Thus, the income from its investment or fixed assets will fall into this category.
5]Income from other sources
Any income that does not fall into more than four categories will fall under this category. Income from gambling, cryptocurrency investments, etc. will fall into this category of income from another source.
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