ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Income is not just salary but includes all income that you earn from all other sources. Other sources include house property, profit/loss from selling stocks, interest earned on a savings account/fixed deposits. All the income generated from these sources is your gross income and is taxable.

Detailed explanation-2: -Interest taxed as ordinary income Typically, most interest is taxed at the same federal tax rate as your earned income, including: Interest on deposit accounts, such as checking and savings accounts. Interest on the value of gifts given for opening an account.

Detailed explanation-3: -Examples of earned income are: wages; salaries; tips; and other taxable employee compensation. Earned income also includes net earnings from self-employment.

Detailed explanation-4: -Taxable & Non Taxable Allowance 2021-22. Allowances are the financial benefits that are provided to the employees by the employers over their regular salary. While some allowances are taxable under the head salaries, some are partly taxable or fully non-taxable.

Detailed explanation-5: -° Earned income: Money made from working for someone who pays you or from running a business or farm. This includes all the income, wages, and tips you get from working. ° Unearned income: Income people receive even if they don’t work for pay.