Section 112

Tax on compensation

112. Where the total income of an assessee, not being a company, includes any compensation or other payment which is chargeable as the profits and gains of business or profession in accordance with the provisions of clause (ii) of section 28, the tax payable by him on his total income shall be—

(i) the income-tax payable on the total income as reduced by the amount of such compensation or other payment and of the capital gains, if any;

(ii) the super-tax payable on the total income as reduced by the amount of such compensation or other payment and of capital gains, if any;

(iii) the tax on such compensation or other payment equal to the amount which bears to the income-tax and super-tax which would have been payable on the total income as reduced by the amount of capital gains, if any, and two-thirds of the amount of such inclusion, the same proportion as the whole amount of such compensation or other payment bears to such reduced total income; and

(iv) the tax on capital gains, if any, computed in accordance with the provisions of clause (b) of section 114.

[As amended by the Finance Act, 1962]