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What is the significance of differentiating between Capital and Revenue Receipts in Taxation?

Differentiating capital and revenue receipts is vital in taxation to determine tax liability. While revenue receipts from regular operations are taxable, capital receipts, often from non-recurring sources like asset sales or loans, are generally exempt unless specified.
lex-o-pedia
Brijesh Kumar
What is the significance of differentiating between Capital and Revenue Receipts in Taxation?
Differentiating capital and revenue receipts is vital in taxation to determine tax liability. While revenue receipts from regular operations are taxable, capital receipts, often from non-recurring sources like asset sales or loans, are generally exempt unless specified.
lex-o-pedia
Brijesh Kumar
What is the concept of Income Taxable under the Income Tax Act, 1961?
The Income Tax Act, 1961, taxes income under five heads: salary, house property, business/profession, capital gains, and other sources. Income includes monetary and non-monetary forms, with provisions for deductions, exemptions, and adjustments to compute taxable income.