Indian income-tax computations classify receipts under five heads. The classification matters because each head has its own inclusion, deduction, loss and timing rules.
The five heads
- Salary covers employment remuneration and applicable allowances or perquisites.
- House property covers the statutory computation associated with ownership of property.
- Business or profession covers receipts and permitted expenses from a business or professional activity.
- Capital gains covers transfers of capital assets under the rules for the relevant asset and period.
- Other sources is the residual head for items such as applicable interest, dividends and other receipts not classified elsewhere.
Computation sequence
Compute each head under its own rules, apply permitted loss adjustments, aggregate the results, subtract only deductions available under the selected regime and current law, calculate tax under the applicable rates, and then account for rebate, surcharge, cess and tax credits where relevant.
Withholding shown in Form 26AS or AIS is a credit and does not by itself establish whether the underlying receipt is taxable or whether the final liability has been paid.
Period matters
The Income Tax Act, 2025 applies from 1 April 2026. Earlier periods retain the provisions and section labels that applied to those periods. For current or future filing, verify the financial year, assessment year, regime, return form and official instructions instead of carrying an old section number forward.
NiyamFin's tax calculators are labelled with the period they implement. They do not classify every possible receipt or replace the filing portal's current rules.