I receive a certain income from someone regularly at certain intervals. How do I determine whether it is income from Salary, other sources or business income?
An income can be taxed as income from Salary only
when there is an employer-employee relationship. Your relation with the person
paying income to you may be tested on the parameters:-
1. Whether the payer is
in complete control of your activity
2. Whether he controls how you carry it
out,
3. Whether the payer has unquestioned right to control the manners and
method of your activity and you have to obey him.
If the answers to these
questions are ‘YES’ then the income may be taxed as income from 'Salary', and
if answer to any of these or all of these is’ NO’ then the income may not be
taxed as income from 'Salary'.