Income Tax Law and Practice_ Lecture Notes Compiled by CA Dr.
Gurcharan Sachdeva
Income from Other Sources
It is a residual head of income. The income which is not taxable under any other head will be
taxable under this head only. Moreover, there are gifts or other specified incomes like casual
income, interest on securities, dividend incomes etc. would be taxable under this head. It is
advisable to understand this chapter with the help of following questions
Q.1 Pawan whose age is 55 years, submits the following information pertaining to the PY 2023-
24. From the following details, you are required to compute the net income and tax liability of Mr.
Pawan for the AY 2024-25 on the assumption that Mr. Pawan has deposited Rs. 150000 in the PPF
A/c maintained by the SBI and he does not want to opt for alternative tax regime u/s 115BAC.
He has earned income under the PGBP to the tune of Rs. 3500000. During the financial year 2014-
15, his land was compulsorily acquired by the govt of Maharashtra for the purpose of Metro Rail
project. Initial compensation 3000000 was received by Pawan during 2015-16. On the appeal filed
by him, Bombay High court has increased the compensation by Rs 10 lacs. On 15th September,
2023, he has received the additional compensation along with interest of Rs. 100000 as directed
by the court. For the purpose of getting enhanced compensation, he has spent Rs. 50000. Moreover,
on 31st March, 2024, Mr. Pawan purchases a painting from a close friend at price of Rs. 100000
although its FMV was Rs. 350000. On the same day, he purchases a used car at a price of Rs.
75000; although its FMV was not less than Rs. 150000.
Q.2 Rakesh, an individual who is resident in India, submits the following details pertaining to his
income for the PY 2023-24
Name of the payer company Date of declaration of Amount Interest
Dividend paid to paid by
Rakesh Rakesh on
the
borrowed
capital
X Ltd., an Indian Company 15th September, 2023 500000 -
Y Ltd., a foreign Company 31st July, 2023 115000 18000
st
Z Ltd., a foreign Company 1 May, 2023 55000 65000
Moreover, Rakesh received the following gifts during the PY 2023-24
Particulars Amount (Rs.) Date of Gift
Gift from grandmother received under a will 300000 15th October, 2023
Gift from friends at the time of his marriage 290000 31st October, 2023
Gift from elder Brother 200000 31st December, 2023
Gift from a friend Rajesh 225000 31st August, 2023
Gift from a friend Ramesh 100000 20th September, 2023
Gift from friend Ishant 25000 25th September, 2023
Rent from letting of a factory building along with P&M (letting is inseparable): Rs. 65000; Fire
Insurance premium in respect of factory building and P& M: Rs. 1000 and Rs. 1500 respectively.
Repairs 4500, Depreciation of building, P&M is Rs. 35000; collection charges in respect of rent
are Rs. 750.
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Income Tax Law and Practice_ Lecture Notes Compiled by CA Dr. Gurcharan Sachdeva
In addition to this, he won a lottery on 15th December, 2023 and received Rs. 150000 after TDS of
Rs. 65000. Winning from card games Rs. 13500 from which tax was not deducted by the payer.
He has also earned an interest on securities issued by the govt of Australia. Rs. 35000. As a
consultant, you are requested to help Mr. Rakesh to compute the income under the head income
from other sources for the AY 2024-25.
Q.3 From the following pertaining to the gifts received by Swami, you are required to compute
income chargeable to tax under the head income from other sources during the PY 2023-24.
a) On the occasion his marriage, Swami gets Rs. 275000 as gift on 13th April, 2023 out of
which Rs. 200000 is received from the friends of Swami and his wife and rest of the
amount is received from their close relatives.
b) On 25th June, 2023, he received the gift of Rs. 13000 from Banarasi Dass, who is the
younger brother of his grandfather.
c) On 12th August, 2023, he received the gift of Rs. 25000 from Sunder Dass, who is cousin
of his father
d) On 30th September, 2023, he received the gift of Rs. 750000 from his grandmother
e) A laptop received from his employer which was purchased by the employer for Rs. 75000
on 15th May, 2023 and given as gift to swami on 15th October, 2023.4
f) On 15th November, 2023, swami purchased a HP from his close friend Sandeep for Rs.
75000 although, its stamp duty value was Rs. 1200000 on that day.
g) On 25th November, 2023 Swami received a gift of plot of land from his grandfather, stamp
duty value of that plot of land was Rs. 1250000
h) On 15th December, 2023 swami received the gift of a flat from the elder brother of his
father-in-law, stamp duty value of that flat was Rs. 2000000
i) On 31st December, 2023, he received the gift of Rs. 200000 (out of which cash gift was
Rs. 30000 and gift of work of art whose market value is Rs. 170000) from a notified
charitable institution.
j) On 1st January, 2024 he received the HP under a will from a person known to him. The
stamp duty value of HP was Rs. 2500000
k) On 13th January, 2024 (on the occasion of Lohri celebration), he received the smart watch
as a gift from his close friend Sachin. Its FMV is Rs. 50000
l) On 15th January, 2024, he purchased a archeological collection from an exhibition in Dubai
for Rs. 1700000, although its FMV was 1800000
m) On 31st January, 2024, he purchases a property for Rs. 1700000 and its stamp duty value
was Rs. 1800000.
n) On 1st February, 2024 he received the gold jewellery worth Rs. 12500 from his close friend
on the occasion of his birth anniversary.
o) On 20th February, 2024 he received the plot of 100 square yard situated in Mohali as a gift
from partnership firm whose partners are his father and his father-in-law. The stamp duty
value of the plot of land was Rs. 2000000.
p) On 29th February, 2024 he purchased the 500 shares of GAIL Ltd. from his close friend
Sachin at a price of Rs. 100 per share. Although, lowest quoted price of the share was
Rs. 250 at BSE and Rs. 275 per share at NSE.
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Income Tax Law and Practice_ Lecture Notes Compiled by CA Dr. Gurcharan Sachdeva
q) On 5th March, 2024 he received the gold jewellery from the cousin of his mother-in-law,
whose FMV was Rs. 18000.
r) On 25th March 2024, he received the work of art as a gift from the company in which more
than 75% shares are held by his wife. The FMV of the work of art is Rs. 25000.
s) On 31st March, 2024 he received the plot of land as a gift from a cousin of his wife. The
stamp duty value of the property was Rs. 45000.
t) On 31st March, he received the shop located in Rajouri Garden, Delhi as a gift from a
friend whose stamp duty value is Rs. 50000.
Q.4 Ram, Shyam, Ghanshyam and Krishan had taken a life insurance policy on 30th April, 2023.
They intend to understand the amount taxable u/s 56(2)(xiii). They are not having any other policy
and do not want to purchase any other insurance policy in the future period. The following
information is provided with regard to their respective policies.
Ram Shyam Ghanshyam Krishan
Term of the policy (in years) 10 10 10 10
Sum Assured (Rs. In Lakhs) 60 40 70 70
Annual Insurance Premium (out of which 4.9 4.5 7.1 6.9
deduction of Rs. 1.50 lakh has been
claimed annually u/s 80C) (Rs. In Lakhs)
Amount payable at the time of maturity 69 46 80.5 80.5
in the FY 2033-34 (sum assured +15%
Bonus) (Rs. In lakh)
You are required to compute the income taxable u/s 56(2)(xiii) under the head Income from other
Sources for the PY 2033-34, relevant for the AY 2034-35.
Q.5 Atul provides the following information relating to his life insurance policies
Particulars Policy I Policy II Policy III
st st
Date of Commencement of insurance 1 April, 1 April, 1st April,
2020 2023 2027`
Term of the policy (in years) 10 10 10
Sum assured (Rs. In Lakh) 65 40 45
Annual insurance premium (no deduction was 6 3.8 4.4
claimed u/s 80C) (Rs. In Lakh)
Amount payable at the time of maturity in the 71.5 44 49.5
FY 2033-34 (sum assured +10% Bonus) (Rs. In
lakh)
You are required to compute the income taxable u/s 56(2)(xiii) under the head Income from other
Sources for the PY 2033-34, relevant for the AY 2034-35.
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Income Tax Law and Practice_ Lecture Notes Compiled by CA Dr. Gurcharan Sachdeva
Q.6 Rakesh holds the undermentioned securities on 1st April, 2023:
Particulars Amount (Rs.)
7% Punjab Govt loan (Date of payment of interest is 1st January) 1500000
5% non-listed debentures of XYZ Ltd. (dates of payment of interest: (June 60000
30 and December 30 every year)
9% Debentures of MNO Ltd. (dates of payment of interest: (June 10 and 50000
December 10 every year)
On 1st December, 2023 Rakesh sells Rs. 50000, 9% debentures of MNO Ltd. you are required to
compute the taxable income for the AY 2024-25 on the assumption that he has earned a income
from business to the tune of Rs. 575000 and interest on saving bank is Rs. 5000 from Axis bank
and Rs. 10000 from post office saving account. Moreover, he has received a gift of Rs. 125000 in
foreign currency from a close friend on 31st December, 2023 on the occasion of his wedding
anniversary.
Q.7 Parmod (42 years) is resident in India for the PY 2023-24. You are requested to help him to
compute his net income and tax liability for the AY 2024-25 on the basis of following details:
Winning from races Rs. 12000 and expenditure incurred for the same amounting to Rs. 2500.
STCG where STT is applicable: Rs. 370000, interest on fixed deposits Rs. 235000. He has
contributed Rs. 154000 towards the public Provident Fund.
Q.8 Mr. Ram (39 years) and Mr. Anil (63 years) both are resident in India during the PY 2023-24.
As a tax practitioner, you are required to compute the tax liability for both of them for the AY
2024-25 under regular tax regime.
Particulars Ram Shyam
Amount (Rs.)
Long-term capital gain taxable @20% u/s 112 825000 35000
STCG taxable @15% u/s 111A 460000 200000
Winning from lottery/crossword puzzles/KBC u/s 3000 75000
115BB
Other income taxable at normal rates 15000 5000
Net income 1303000 315000
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