The incomes falling under the above heads are to be computed in different manners as prescribed under the law.  The salary received from an employer is taxable under the head "salaries".  The income from house property owned is taxed in a different manner.  When a property is sold we have to pay capital gains tax which takes into account the original cost which is increased as provided in the law.  If you carry on business then the business income is taxed and any other income, which does not fall under the above four heads, is taxed as income from "other sources". The sum of all these incomes is  your total income  on which tax is to be calculated at the prescribed rates.