Head of Income

Head of Income – In the Indian Income Tax system, income is classified under various heads to facilitate accurate computation and taxation. The primary heads of income include: Income from Salary Income from House Property Profits and Gains of Business or Profession Capital Gains Income from Other Sources The Assessment Year (AY) is the year in which income earned during the preceding Financial Year (FY) is evaluated and taxed. Income under each head earned during a FY is reported in the corresponding AY.

Example: Income from salary, rental property, or capital gains earned in FY 2022–23 (1 April 2022 – 31 March 2023) is assessed and taxed in AY 2023–24 under the respective heads of income.