a.

Business
Business includes any Trade, Commerce or Manufacture or any adventure
in the nature of Trade, Commerce or Manufacture.
b. Capital asset
Capital asset is defined to include property of any kind, whether fixed or
circulating, movable or immovable, tangible or intangible.
Exceptions:
a) Any stock-in-trade, consumable stores or raw material held for the
purposes of business or profession.
b) Movable property of the Assessee including wearing apparel and
furniture held for his personal use or for the use of any member of his
family dependent on him.
The exception to this condition is jewellery, which is treated as a capital
asset, even though it is meant for personal use.
c) Agricultural land in India provided it is not situated in urban area.
d) 6 % Gold Bonds, 7% Gold Bonds or National Defence Gold Bonds,
issued by the central government.
e) Special Bearer Bonds, and
f) Gold Deposit bonds issued under Gold Deposit Scheme of 1999.
g) Short term assets and long term assets
c. Company
A company is said to be resident in India, in any previous year, if
(a) It is an Indian company, or
(b) During that year, the control and management of its affairs is situated
wholly in India.
Thus, an Indian company is always resident in India, whether its affairs
are controlled wholly from India or wholly from outside India or partly
from India and partly from outside India. A foreign company may be a
resident in India, if the control and management of its affairs is situated
wholly in India, during that year. In the case of a company, the control
and management of its affairs is taken to be situated at a place where
the meetings of its board of directors are held. The term control and
management indicates the head and brain which direct the affairs of
the company in respect of its policy, finance, disposal of profit,
management etc.
d. Previous year
Previous Year means the previous year as defined in Section 3
Section 3 states:
Previous Year is the financial year immediately preceding the
assessment year.
For E.g. For A.Y. 2014-15, previous year starts from 1st April 2013 and
ends on 31st March 2014.
e. Assessment year
Assessment year means the period of twelve months commencing on the
1st day of April every year
For Previous Year 2013-14, corresponding Assessment Year is 2014-2015
f. Assessee

Assessee means a person by whom any tax or any other sum of

money is payable under the Act. The term Assessee includes:
Every person in respect of whom any proceeding under this act has been
taken for the assessment of his income or loss or the amount of refund
due to him
Every person who is deemed to be an Assessee under any provisions of
this Act.
Every person who is deemed to be an Assessee in default under the
provisions of this Act.
g. Salary
Salaries mean and include remuneration in any form due for personal
service as per the contract of employment or service.
Essential Element for Taxability of Income as Salaries is Employer
Employee Relationship
Definition of Salary u/s 17 (i)
Wages
Annuity or Pension
Gratuity
Fees, Commission, Perquisite or Profit in lieu of salary
Advance of salary
Leave salary
Employers contribution to RPF in excess of Limits
Transfer Balance of RPF to the extent it is taxable
Contribution made by Central Government to Pension scheme of New
Government Employees.
h. Person
Person includes:
Individual
HUF
Company
Firm
Association of Person or Body of Individuals
Local Authority
Artificial Juridical person (not falling within any of the above category)
i. Profit in lieu of salary
i) Any compensation due or received in connection with the termination of
the employment or due to modification of the terms and conditions of his
employment.
ii) Payments from an employer or former employer from provident fund or
such other funds, excluding the amounts exempt from tax under Section
10 and excluding the amounts of contribution made by the Assessee and
the interest thereon
iii) Any sum received under a Keyman Insurance Policy including the sum
allocated by way of Bonus on such policy.
iv) Amounts due to or received, whether in Lumpsum or otherwise by any
Assessee from any person.
j. Relative

i) spouse of the individual,

ii)brother or sister of the individual,
iii) brother or sister of the spouse of the individual,
iv) brother or sister of either of the parents of the individual,
v)any lineal ascendant or descendants of the individual,
vi)any lineal ascendants or descendants of the spouse of the individual,
vii) and spouse of the persons referred to ii) to vi) above
k. Transfer
Any transaction involving the allowing of the possession of any movable
property to be taken or retained in part of performance of contract of the
nature referred to in the sec53a of the transfer of property act,1982
Transfer Includes :
Sale
Exchange
Relinquishment
Extinguishment
Compulsory Acquisition
Conversion of Capital Asset Into Stock in Trade[sec(47)(iv)]