In India, the Income Tax Law has divided all types of income into 5 different categories -
- Income from Salary: All income received by an employee from his/her employer is categorized under the head income from salary.
- Income from House Property: Income earned by letting out a house property on rent is treated as income from house property.
- Income from Capital Gains: The revenue and income from the sale of assets held by the assessee are known as income from capital gains. It includes stocks, bonds, debentures, etc.
- Income from Business/Profession: All the income earned from carrying out any business, profession, or freelancing is taxable under this head
- Income from Other Sources: Income from all the other sources not covered in the above heads are taxed under this category, like lottery winnings, dividends, etc.