The classification rule for the whole computation machinery. All incomes, for the purposes of charge of income-tax and computation of total income, are to be classified under five heads: Salaries; Income from house property; Profits and gains of business or profession; Capital gains; and Income from other sources. The opening words "Save as otherwise provided in this Act" make the classification yield to any contrary provision elsewhere, and clause (e) is the residuary head, so nothing chargeable falls outside the five.
Why it is there
The rules that decide what is deductible and how a figure is arrived at are written head by head, so every receipt needs a place before those rules can operate. The residuary head in clause (e) closes the list so nothing chargeable falls through.
Who it applies to
Every assessee whose income is charged to income-tax
The Assessing Officer classifying an item of income while computing total income
What this means in practice
The head is not cosmetic: it selects the computation regime, so the same receipt placed under a different head can produce a different figure. Because clause (e) is residuary, an argument that a receipt fits none of the four specific heads does not take it out of charge — it puts it into Income from other sources. And the opening words mean the natural head can be displaced: where a provision elsewhere in the Act directs otherwise, that direction governs, so classification has to be tested against the specific provisions rather than settled on first impression.
An example
Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.
An individual receives salary, rent from a let-out house, gain on a share sale and bank interest. Each stream goes to its own head under clauses (a), (b), (d) and (e), is computed under the provisions written for that head, and only the results are brought together into total income. Which head an item lands in decides what deductions are available to it.
Where you meet this section
On the face of the return and of any assessment order, where income is set out head by head. In dispute, the head an item has been placed under is often the whole argument, because deductions differ between heads.
The words themselves
all incomes shall, for the purposes of charge of income-tax and computation of total income, be classified under the following heads of income
Section 13, Income-tax Act, 2025.
What people get wrong
Treating the heads as descriptive labels. Income "shall" be classified, and the head chosen controls which computation provisions apply.
Ignoring the opening words. "Save as otherwise provided in this Act" lets a specific provision send a receipt to a different head.
Assuming an item fitting none of the four specific heads escapes charge. Clause (e) is residuary.
Reading section 13 as a charging provision. It classifies for the purposes of charge and computation; the charge is elsewhere.
What this replaced
The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.
A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.
Circular No. 453 — Clarifications on issues relating to effect of filing higher estimates of income for advance tax purposes on assessments for earl 1986-04-04
A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance.
Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 13. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.
CIT v D.P. Sandu Bros. Chembur (P) LtdSupreme CourtHelps taxpayertagged s.14 The landlord paid my company to give up its tenancy. Is that taxable, and if it cannot be computed as a capital gain can the officer tax it as a…
Read with
Section 16
Section 20
Section 26
Section 67
Section 92
What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.