Income Tax Act 1961, Section 28 Explained

What is Section 28 of the Income Tax Act of 1961?

Section 28 of the Income Tax Act of 1961 is a provision that deals with the taxation of profits and gains from business or profession.

Scope of Section 28

Section 28 applies to income that falls under the head "profits and gains from business or profession". This includes income from any trade, commerce, or professional activity.

Determination of Taxable Income

Under Section 28, the taxable income from business or profession is determined by deducting certain expenses and allowances from the gross income. These expenses and allowances include expenses incurred in the production of income, such as salaries, rent, and depreciation.

Taxation of Business Income

The profits and gains from business or profession are taxed at the applicable income tax rates. The tax rates vary depending on the nature of the business and the income level.

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