Section 2(24) — Definition of 'Income'

Section 2(24) of the Income-tax Act, 1961 provides a comprehensive definition of 'income' for the purposes of taxation. This section is significant as it outlines the various forms of receipts that are considered income and thus subject to tax. It includes not only the traditional forms of income such as profits and gains from business or profession, salaries, and capital gains, but also other receipts like dividends, voluntary contributions received by charitable trusts, and winnings from lotteries, races, and games. The section is crucial because it sets the foundation for what constitutes taxable income, thereby impacting the computation of tax liability. The burden of proof typically lies with the taxpayer to demonstrate that a particular receipt does not fall within the ambit of 'income' as defined under this section. In practice, this section is significant as it influences the scope of taxable income and can affect tax planning strategies.

Common Litigation Flashpoints

1. Interpretation of voluntary contributions as income
2. Classification of capital receipts as income
3. Inclusion of illegal income under taxable income
4. Taxability of gifts and windfall gains

Judgments on Section 2(24) — Definition of 'Income'

• Sumati Dayal vs Commissioner of Income-Tax, Bangalore — SC,
  The apparent must be considered real until it is shown that there are reasons to believe that the apparent is not the real, and the taxing authorities are entitled to look into the surrounding circums
• Checkmate Services P. Ltd. vs Commissioner of Income Tax-1 — SC,
  The non-obstante clause in Section 43B does not absolve the assessee from the liability to deposit employees' contributions on or before the due date as a condition for deduction.
• Union of India & Anr. vs M/s. Ganpati Dealcom Pvt. Ltd. — SC,
  The 2016 Amendment Act cannot be applied retrospectively as it creates new offences and substantive changes, which cannot be applied to past transactions.