#2 - Types Of INCOMES For Income Tax Calculation | Income Sources FY 2019-20 AY 2020-21 | FinCalC [VIDEO]

There are usually 5 heads of Income. These include: 

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1. Income from Salaries: 
This is what you receive monthly from your employer if you are working in an organization. The monthly salary that you receive comes under this head and we must consider the sum of monthly salaries in a financial year to calculate our Income Tax. 
A Financial year is considered as the cycle between April to March month of next year. For example, in this year of 2019, Financial year has already started in April 2019, and will end in March 2020. 
Every employer provides us Form 16 that contains information regarding the salaries received by us throughout the year, and the investments made by us in a financial year for Tax Calculation purpose. Form 16 is very useful to file our Income Tax returns which we will see in upcoming videos. 

2. Income from Capital gains: 
This is the income that you receive after the sale of Capital assets such as Equities, bonds, buildings, lands or any other property. Income Tax is levied if such property is sold by you in a Financial Year. 
So this is another type of Income that we must add in our Incomes section while calculating our Income Tax. 

3. Income from House property: 
This is the income that you receive if you have given your House property on rent. 
The rental income that you get from this house property must not be used for commercial or industrial use. We must add the income that we receive from such house property while calculating our Income Tax. 

4. Income from Business: 
Apart from income from salaries, if we have any side business or if we are earning with the help of some professional services that we provide, we must include such income while calculating our Income Tax. 

5. Income from Other Sources: 
This is the last head of Incomes which includes all other incomes that does not fall under above mentioned heads of Income. These include income from lotteries, interest earned from deposits or Savings Accounts, income from dividends, pension received after the pensioner's death, gifts received, interest from government securities, debentures and bonds. 

So these are the heads of Incomes that we must consider while calculating our Income Tax. 
It is very important to know our sources of Incomes in order to help us calculating our Income tax without any help of external agency. 

Do let us know about your queries in the comments section below.

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