INCOME FROM BUSINESS NOT TAXABLE
The following incomes are not taxable under section 18 rather treated under section 39 as “income from other sources”:
1. Remuneration received by a professional man as an examiner.
2. Income of non-professional writer to a newspaper for serial rights in a story.
3. Casual income, ie prize on prize bonds or winning from a lottery or cross word puzzle.
4. Professional dues realized after discontinuance of business.
SPECULATION BUSINESS
Where a person carries on a speculation business, the profits and gains arising from such business shall be included under the head ‘income from business’ if it fulfils the following conditions:
1. It is deemed to be distinct and separate from any other business.
2 from such business shall be kept separate from other business.
3. The expenditure of such business shall be apportioned if the profits and gains arising from such business were a separate head of income. raffle,
4. After deducting the expenditure, the remaining profits and gains from such business for a tax year shall be included under the head ‘income from business’ for that year.
5. The loss from such business can be set off only against speculative profit. It cannot be set off against the profits from any other business.
Explanation of Speculation Business
It means any business in which a contract for the purchase and sale of any commodity including stock and share is periodically or ultimately settled otherwise than by the actual delivery or transfer of commodity but does not include a business in which:
(a) A contract in respect of raw materials or merchandise is entered
into by a person in course of a manufacturing or merchandise business to guard against loss through future price fluctuations for the purpose of fulfilling the person’s other contracts for the actual delivery of the goods to be manufactured or merchandise to be sold.
(b). A contract in respect of stocks and shares is Dfa Ho entered into by a dealer or investor to guard against loss in his holding of stocks and shares through price fluctuations.
(c) A contract is entered into by a member of a forward market or stock exchange in course of any transaction in the nature of jobbing or arbitrate to guard against any loss which may arise in the ordinary course of his business.
