Tax on Income from Other Sources

sources

Income from Other Sources

Income from other sources is the residual head of income. Hence, this head includes income which cannot be accounted for under any other head of income viz. Income from Salary, Income from House Property, Profits and Gains from Business or Profession and Income from Capital Gains.

Dividends

Income by way of dividend is shown under this head. Deemed dividend as under section 2(22)(e) is fully taxable as is dividends from co-operative societies and foreign companies. Dividends from the domestic company are exempt from tax under section 10(34).

Winnings

Winnings over Rs. 10,000 from lotteries, crossword puzzles, races including horse races, card game and other game of any sort, gambling or betting of any form whatsoever are included under ‘Income from Other Sources’.

Interest Received

Income by way of interest received on compensation or on enhanced compensation is taxable under this head. However, 50% of this income can be claimed as the deduction.

Recommended Read : Form 15G and 15H to Save TDS on Interest Income

Gifts

Taxable gifts are taxed under this head by individuals and HUFs. This includes monetary or non-monetary items received without any consideration or without adequate consideration. Non-monetary gifts include all immovable property and certain movable property.

Gifts are taxed only if the total amount received during the previous year is more than Rs. 50,000 and applies only to those gifts are individuals or HUFs received after 01-10-2009. This doesn’t apply if the assessee receives money

  • from relatives or a local authority or a trust, fund, educational/medical institution, body or any such institution outlined under section 10(23C) and section 12AA.
  • as a wedding gift
  • by way of being named in a Will or as inheritance
  • from a dying donor.

 

Recommended Read:

Income tax slab and tax rate

Income Tax Forms

Income not taxed under the head ‘Profits and Gains of Business or Profession’

Following incomes are charged to tax under this head, if not taxed under the head ‘ Profits and Gains from Business or Profession’.

  • Any contribution to a fund for the welfare of employees received by the employer.
  • Income by way of interest on securities.
  • Income from letting out or hiring of plant, machinery or furniture
  • Income from letting out of plant, machinery or furniture along with building; both the lettings are inseparable.
  • Any sum received under a Keyman Insurance policy including bonus.

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