INCOME FROM OTHER SOURCES

BY: Yesha Mehta

PES1201800966
 INTRODUCTION
The Income Tax Department classifies income into five categories for
streamlining the process of income tax reporting. They are:

 Income from Salary

 Income from House Property
 Income from Capital Gains/Loss
 Income from Business and Profession
 Income from Other Sources

Therefore, ‘Income from Other Sources’ can be defined as income that is

not included in any of the other listed categories. Besides, there are
certain other incomes that are always taxed under this category.
Income chargeable under this head

Dividends:
The dividend income received from the company which pays dividend distribution tax is
normally exempt. However, if the aggregate amount of dividend received exceeds Rs 10
lakh, then it is chargeable to tax at the rate of 10 per cent. If you have invested in the
shares of a foreign company, the dividend will be taxable under other sources. If taxes have
been paid by you in the country where the company is based, then you can claim relief
under Double Taxation Avoidance Agreement (DTAA). The Income Tax Act gives a relief
under section 91 in case the countries do not have DTAA

Casual income e.g:

 Lottery
 Game Show or any entertainment program on television or electronic mode
 Crossword Puzzle
 From race horse
 TDS Applicability
If the Prize money exceeds Rs 10, 000, in the above four cases then
the winner will receive the prize money after the deduction of TDS
@31.2%. It does not matter whether the income of the winner is taxable
or not. If payment of less than Rs.10000 is made, tax will not be
deducted. The prize distributor is liable to deduct tax at the time of
payment.

No Deduction/Expenditure is allowed from such Income

The Benefit of basic exemption limit and income tax slab rate is also not
applicable to this income. The entire amount received will be taxable at
the flat rate of 31.2%.
 Gifts
Any gift received in excess of Rs 50,000 in cash, demand draft, cheque or
specified assets by an individual or HUF is taxable. If the value exceeds
Rs 50,000, the entire amount is taxable. Specified assets include gifts
received in kinds, such as immovable assets like land and building and
properties such as jewellery, paintings, shares, debentures, bullion and
archaeological collections.
The gift is taxable in the hands of the recipient.
The gift received is not taxable if it is received from specified relatives, at
the time of marriage, through will and inheritance, among others

 Income from sub-letting of a house property.

 Interest Income from savings bank account

Interest Income from savings bank account. For a residential

individual (age of 60 years or less) or HUF, interest earned upto Rs
10,000 in a financial year is exempt from tax. The deduction is
allowed on interest income earned from:
 savings account with a bank;
 savings account with a co-operative society carrying on the
business of banking; or
 savings account with a post office
Interest Income from Fixed Deposit
Interest Income from Fixed Deposit: Fixed deposit interest that you receive is added along with
other income that you have such as salary or professional income, and you’ll have to pay tax on that
income at a tax rate that’s applicable to you.
Senior citizens, with effect from 1 April 2018, will enjoy an income tax exemption upto Rs 50,000 on
the interest income they receive from savings bank account, fixed deposits with banks, post offices.

 Remuneration received from a person other than his employer for evaluation of answer scripts.
However, if such remuneration is received from employer, then the same will be taxable under
the head “Salaries”.
 Rent from a vacant land.
 Insurance commission.
 Income from undisclosed sources
 Income from private tuition.
 Interest on income tax refund.(Taxpoint: Income tax refund itself is not an income)
 Family pension received by the family members of a deceased employee ( uncommuted is
taxable at
 33.33% or 15000 whichever is lower)
 Dividend received from a co-operative society.
 Directors’ sitting fee for attending Board Meetings.
 Income from activity of owning and maintaining race-horses.
THANK YOU