Question

'Income' is defined under Section 2(24) of the Income Tax Act, as

• A. Profits and gains
• B. Dividend
• C. Voluntary contribution received by a Trust for charitable Purpose
• D. All of the above

Hint:

The definition of "income" in the Income Tax Act is inclusive, not exhaustive. This means the list in Section 2(24) is not the complete list, and other items that are considered income in the commercial sense can also be taxed. When you see an "All of the above" option for this question, it is very likely to be correct because the definition is so wide.

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
The term 'income' is the very foundation of the Income Tax Act. Section 2(24) of the Act provides a definition of income, which is inclusive and not exhaustive, meaning it covers many types of receipts.

Step 2: Detailed Explanation:
The definition of "income" in Section 2(24) is very broad. It starts with "'income' includes..." and then lists numerous items. Let's check the options against this list:
- (A) Profits and gains: This is explicitly included under Section 2(24)(i). It is the most common form of income.
- (B) Dividend: This is explicitly included under Section 2(24)(ii).
- (C) Voluntary contribution received by a Trust for charitable Purpose: Voluntary contributions received by various entities, including charitable trusts, are specifically included under Section 2(24)(iia).
Since the definition of income in the Act explicitly includes all the items listed in the options, the correct answer is (D).

Step 3: Final Answer:
The definition of 'income' under Section 2(24) of the Income Tax Act is an inclusive one and includes profits and gains, dividends, and voluntary contributions received by a charitable trust.