7 Streams of Income You Can Explore
- Earned Income. This one is easy enough to understand – this is your regular job and most people's primary source of income.
- Business Income.
- Interest Income.
- Dividend Income.
- Rental Income.
- Capital Gains.
- Royalties or Licensing Income.
How to Calculate Annual Income. To calculate an annual salary, multiply the gross pay (before tax deductions) by the number of pay periods per year. For example, if an employee is paid $1,500 per week, his or her annual income would be 1,500 x 52 = $78,000.
Different Streams of Income
- Earned Income – This is your day job and most people's primary source of income.
- Business Income – You own a business.
- Interest Income – This is income you make from lending your money out.
- Dividend Income – This is money that's distributed as a result of owning shares of a company.
Income is how much money you bring in on a regular basis, usually either monthly or annually. For example, if you make $1000 per week, you would have a monthly income of about $4,333 and a yearly income of $52,000.
But that's not the only kind of income. There are actually three types of income you can earn. They are earned, or active, income, Portfolio, or capital gains, income, and passive income.
Income is commonly referred to as “Gross Revenue.” On the other hand, profit is the amount that is left over after the expenses have been paid. To calculate this number, figure out your gross revenue and subtract the cost of goods that were sold as well as the expenses. Profit is also often called “Net Revenue.”
They told us a job with a regular income is as important as level of pay. This is more important to their feelings of security than the issues which can dominate political discussion, such as police presence on the streets, a thriving local high street or rising interest rates.
Synonyms & Antonyms of income
- earnings,
- gain(s),
- incoming(s),
- proceeds,
- profit,
- return,
- revenue,
- yield.
What is the Existing / Old tax regime?
| Income Range | Tax rate | Tax to be paid |
|---|
| Up to Rs.2,50,000 | 0 | No tax |
| Between Rs 2.5 lakhs and Rs 5 lakhs | 5% | 5% of your taxable income |
| Between Rs 5 lakhs and Rs 10 lakhs | 20% | Rs 12,500+ 20% of income above Rs 5 lakhs |
| Above 10 lakhs | 30% | Rs 1,12,500+ 30% of income above Rs 10 lakhs |
As per interim budget 2019, Individual taxpayers having taxable annual income up to Rs. 5 lakh will get full tax rebate u/s 87A and therefore will not be required to pay any income tax.
Income Exempt From Tax As Per Section 10
| Section 10(1) | Income earned through agricultural means |
|---|
| Section 10(6) | Any income earned or received by a nonIndian citizen |
| Section 10(6A), (6B), (6BB), (6C) | Government tax paid on the income of a foreign firm |
| Section 10(7) | Allowances received by government employees stationed abroad |
LTC scheme: The central government in Budget 2021 has proposed to provide tax exemption to cash allowance in lieu of Leave Travel Concession (LTC). The scheme was announced by the government last year for individuals who were unable to claim their LTC tax benefit due to covid-related restrictions on travelling.
Applicable for all individual tax payers:Rebate of up to Rs 12,500 is available under section 87A under both tax regimes. Thus, no income tax is payable for total taxable income up to Rs 5 lakh in both regimes.
Who Are The Tax Payers? Any Indian citizen aged below 60 years is liable to pay income tax if their income exceeds 2.5 lakhs. If the individual is above 60 years of age and earns more than Rs. 3 lakhs, he/she will have to pay taxes to the government of India.
The income tax expense is reported as a line item in the corporate income statement, while any liability for unpaid income taxes is reported in the income tax payable line item on the balance sheet.
But while Americans who earn too little don't pay income taxes, those who hold a job are still subject to payroll taxes, which support Social Security, Medicare, and unemployment insurance. And some taxes are certain for everyone, regardless of income, including sales taxes, excise taxes, and property taxes.
Following are common sources of incomes recognized in the financial statements:
- Sale revenue generated from the sale of a commodity.
- Interest received on a bank deposit.
- Dividend earned on entity's investments.
- Rentals received on property leased by the entity.
- Gain on re-valuation of company assets.
Revenue accountsRevenue, or income, is money your business earns. Your income accounts track incoming money, both from operations and non-operations. Examples of income sub-accounts include: Product Sales.
Your total income is your gross income from all sources less certain deductions, such as expenses, allowances and reliefs. For dividends, this is the amount before the deduction of Dividend Withholding Tax (DWT).
Gross income includes all income you receive that isn't explicitly exempt from taxation under the Internal Revenue Code (IRC). Taxable income is the portion of your gross income that's actually subject to taxation. Deductions are subtracted from gross income to arrive at your amount of taxable income.
EXEMPTIONS UNDER SECTION 10The incomes which are exempt under section 10 will not be included for computing total income.
Gross income is a person's total income earned before taxes and other deductions. Earned income includes salaries, wages, bonuses, tips, and self-employment income.
Exempt Incomes are the incomes that are not chargeable to tax as per Income Tax law i.e. they are not included in the total income for the purpose of tax calculation while taxable Incomes are chargeable to tax under the Income Tax law. Exempt income are those on which tax is not likely to be paid.
Income from salary includes wages, pension, annuity, gratuity, fees, commission, profits, leave encashment, annual accretion and transferred balance in recognised Provident Fund (PF) and contribution to employees pension account.
To calculate taxable income, you begin by making certain adjustments from gross income to arrive at adjusted gross income (AGI). Once you have calculated adjusted gross income, you can subtract any deductions for which you qualify (either itemized or standard) to arrive at taxable income.
