[Debit] Net income account

[Credit] General Reserves

No, Capital reserves cannot be part of free reserves under S372A of Companies Act 1956.

Yes reserve is part of equity as it is created from net income and net income is part of equity as well.

Type your answer here... Free reserves are those reserve which are not made for particular reason.it is freely available for distribution of the dividends.

Reserves are similar in this sence that these are also created from net income and retained earnings are as well but the difference is that both are created and limited for different uses in business.