Section 28 Detailed

Apart from normal business or profession income,Certain Other incomes are also taxed under PGBP as given below

Section 28

The following income shall be chargeable to income-tax under the head "Profits and gains of business or profession",—

Profits and gains of any business or profession

which was carried on by the assessee at any time during the previous year ;

Income of Association from Members

(Example:Trade Association,Members Asssociation0

If association provide some service to members and charge money from its members, then the amount received by the Associaiton will be PGBP Income

Interest/Salary of Partners from Partnership firm

Upto the amount of deduction in Section 40(b)

Refer Section 40(b)

Non Compete Fees

Sometimes, Money is received from competitors

for not doing business  or profession

or

not sharing know-how, patent, copyright, trade-mark, licence, franchise etc

which is required to manufacture article or thing

Exceptions:-

 Non Compete fees does not include

1. Amount Received on Transfer of Right to M anufacture , produce or process any article or thing or right to carry on any business or profession .This is taxable under Capital Gains. Example:-Sale of license
2. Compensation Received from the multilateral fund of the Montreal Protocol on Substances that Deplete the Ozone layer under the United Nations Environment Programme, in accordance with the terms of agreement entered into with the Government of India 

Effect of Amendment

Export Incentives

1. Profits on sale of a licence

(granted under the Imports (Control) Order, 1955, made under the  Imports and Exports (Control) Act, 1947 )

2. Cash Assistance

Received or receivable by any person against exports under any scheme of the Government of India 

3. Drawback

A ny duty of customs or excise re-paid or re-payable as drawback to any person against exports under the Customs and Central Excise Duties Drawback Rules, 1971 ;]

4. Profit on the transfer of the Duty Entitlement Pass Book Scheme ,
5. Duty Remission Scheme

under the export and import policy formulated and announced under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992);]

6. Profit on the transfer of the Duty Free Replenishment Certificate,

being the Duty Remission Scheme under the export and import policy formulated and announced under section 5 of the Foreign Trade (Development and Regulation) Act, 1992

Any perquisite or benefit

This may be monetary or non monetary or connected with business or not

Any amount received from Keyman Insurance Policy

It is a insurance policy undertaken for key management personnels of companies. In this case, if the insured person (key management personnel) dies or is not able to work, the company receives certain amount form insurance company.This amount if received is taxable under PGBP

Compensation on Termination of Service

It may be received in following cases

Section 35AD Assets Sold/Discarded/Demolished (Section 28)

In this case, Sale Proceeds if any will be taxable as PGBP as per Section 28

(This does not cover case, where Asset used for some other business )

(Refer Section 35AD)