Business and Profession income defines those income which has been occurred day day activity of business and is related to general practice of accountancy but income and expenditure shall be such as are given under Income Tax Act. However there are certain income shall be taxable under the head Business/Profession.
- Income from Speculation Business :-Speculation Business shall be taxable under the head Business/Profession
- Gift related to Business/Profession:- If any Person received any gift in connection with business/profession it will be considered as Income from Business and Profession.
- Payment for not pursuing any business any business activity or Profession non-compete fees:- If any person has received any payment for letting close down of Business or Profession it will also be considered as Income under the head business/profession.
- Keyman Insurance Policy:- Kevman policy is taken by employer in name of that employee he considered as important person to the entity, Sometime employer take a life policy of employee and all expenses related to policy are debited to profit and loss account and after the maturity of policy all the amount received shall be considered to be Income of employer. If any amount is received by employee for insurance policy that amount is considered to be income under the head salary.
- Export Incentives :- some Govt may provide some Incentives to Export manufacture which is called Export Incentives, those incentives received by the govt will be considered as Income of the assessee under the head business/profession. (i) Gst paid by the assessee on input or other goods shall be refunded to assessee as an incentive and it will be called duty drawback i.e drawing back the duty paid by the assessee. (ii) The exporters are issued special licenses for importing good without payment of custom duty and such licence are called import entitlement licenses and an exported is allowed to sell it in the market and profit on sale of import entitle licence shall be considered to be income under the head business/profession.
- Any income Received in connection with termination or modification of term and conditions of any contracts relating to his business,amount so received shall be considered to be income under the head business/profession.
- Any inventory or stock in trade converted in to a capital asset and any income arises from such conversion shall be considered as business income and consideration shall be fair market value or inventory on the date on conversion whichever is higher.