Under chapter 4 of income tax Act, 1961 (Section 14), income of someone is calculated below numerous outlined heads of income. The full financial gain is first assessed below these heads so it’s charged for income tax as below rules of taxation Act. Consistent with Section 14 of income tax Act, 1961 there are five heads of income below that total income of someone is calculated. Financial gain is assessed below 5 heads within the Indian income tax Act. Each year, you or your qualified chartered accountant is expected to place all of your earnings or financial gains below these five heads for calculating tax. Here could be a tiny primer of what these five head of income mean and what all they contain.
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Income from Salary
Income below heads of salary is outlined as remuneration received by a private for services rendered by him to undertake a contract whether or not it’s expressed or understood. Typically this head taxes the income earned by a private as salary from any firm or organization.
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Income from House Property
It’s outlined as income earned by someone through his house or land. Annual worth of building or land in hand by assesse is comes below the financial gain kind house property. There’s a charge on the potential of property to get financial gain not on the rent received. However if property is employed for creating profit in business then it’ll be ratable not below this head however are going to be ratable below head of profit in business/ profession.
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Income from Profit or Gain from Business or Profession
Income below this head is outlined as the financial gain earned by assessee as a profit or gain in his business or profession. Profits and gains of assessee from any business or profession throughout assessment year. Any payment or compensation due or received by someone for his services to organization as a region of his business. creating profit in trade financial gain of skilled or organization against services provided by that professional/ organization
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Income from Capital Gain
Heads of capital gain is outlined as gains derived on transfer of capital asset. Capital gain is that the profit or gain of associate assessee coming back from the transfer of a capital asset affected throughout the previous year or assessment year. “Capital Asset” and transfer are predefined in taxation act.
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Income from Other Sources
This head of income covers any financial gain that isn’t chargeable to tax below any of the on top of heads of financial gain. Any financial gain together with gambling or profit/loss on running of race horses, camels, interest income , etc are chargeable to tax below this head of financial gain.
Tax & Investment Consultants 
How do one calculate the increment in propery rate? For ex : If I am having one property in my name and its worth increases in an year and I do not sell my property then also I need to pay its tax?
Apart from this why is property tax paid for?
For income tax purposes in India, property is considered as a source of income and hence, tax is levied on that. Properties are usually meant by real estates which include any building, flat, shop etc. as well as the land appurtenant to the building. Under the Income Tax Act, incomes from the properties are regarded as one of the heads of income. The amount of tax is calculated on the value of the property being taxed.
It is the local municipality authority that levies property tax for the maintenance of basic civic services in the city. Unlike the countries like UK where the occupier is liable to pay the property tax, it is the liability of the property owner to pay the property tax India to the concerned municipalities.
Property tax is state levy which is calculated on the basis of formula decided by local authority like in Indore, Indore municipal corporation decide about this taxes. These taxes are based upon per sq feet and location of the property.
There is no direct connection with the market value of a particular flat …these rates are revised by local authority on the basis of many factors out of which appreciation is also one of the factor.