Any income which does not fall under any other head of income i.e. Income from business/profession, Income from salary, capital gains and house property then it will be called as income from other sources. Following are few examples of income which are treated as income from other sources as per Indian income tax act:-

  1. Any amount received as rent from plant, machinery, furniture let on hire.
  2. Any income from crossword puzzles, horse races, game, card games, television game, shows and other entertainment programmes in which people win prizes and lottery etc.
  3. Rent from sub-letting.
  4. Dividend except which is exempt u/s 10 of Indian income tax act.`
  5. Any contributions received by the employer from his employee and if that amount is not shown as business income then it will be treated as income from other sources.
  6. Interest received from banks on saving bank accounts.
  7. Interest from Post Office Saving Accounts.
  8. Interest from Monthly Income Scheme from Post Office.
  9. Pension received from Life Insurance Corporation under LIC pension scheme.
  10. Interest from recurring deposit accounts from bank or post offices.
  11. Interest received from banks on fixed deposits.
  12. Interest received from banks on accounts other than saving bank accounts and fixed deposit accounts.
  13. Interest received against personal loans.
  14. Interest received from bonds/debentures.
  15. Any amount received under Keyman Insurance Policy, which is not taxable under the head of Income from salaries or Income from business/profession.
  16. Any Cash gift or sum of money, received from any person without consideration exceeding Rs.50000/= during a financial year subject to certain exemption under gift tax act.
  17. Interest received on compensation.
  18. Interest received on refund of any tax amount from tax authorities.
  19. Withdrawal under NSS 1987 including interest.
  20. Interest and premium received on redemption of debentures.
  21. Fees from tuition and examinations fees etc. received by an individual who is not engaged in a profession.
  22. Royalty received.
  23. Any income received by beneficiary of a trust.
  24. Amount of Interest accrued on National Saving Certificate, National Saving Scheme Account, Kisan Vikas Patra etc.
  25. Any income from agricultural land which situated outside India.
  26. Any amount received as Family Pension by a family member of the deceased from the employer will be treated as income from other sources in hand of the member who receives the money.
  27. Any casual income.
  28. Income received as insurance commission.
  29. Rent received from plot of land and ground rent.
  30. Any income received from any undisclosed sources.
  31. Salary received by Members of Parliament.
  32. Income received from letting out the space for display of hoardings.
  33. Income received on share application money.
  34. Interest received on debenture application money.
  35. Interest on tax refunds.

PERMISSIBLE DEDUCTIONS AGAINST INCOME FROM OTHER SOURCES

Following expenditures are allowed as deductions under Indian income tax act against the income from other sources:-

  1. In case of Income from letting out of furniture, machinery and plant etc then the following expenses will be allowed as deduction:-
  • Any amount spent on repair and maintenance of plant, machinery and furniture.
  • Any amount paid as insurance premium against the risk of damages of machine, plant and furniture.
  • Any amount of depreciation allowed as per Indian income tax act.
  1. In case of family pension, a deduction of one third of such income or Rs.15000/=, which ever is less.
  2. Any other expenditure other than capital expenditures, incurred for making such earnings.
  3. Any expenses or allowance in connection with owning or maintaining the race horses.

EXPENSES NOT TO BE DEDUCTED FROM INCOME FROM OTHER SOURCES

Following expenses can not be allowed against income from other sources:-

  1. Any personal expenses of the income tax payee.
  2. Any interest paid outside India if no tax has been deducted at source.
  3. Any amount of salary paid outside India if no tax has been deducted at source against that salary.
  4. Any amount paid as wealth tax.
  5. Any expenditure exceeding Rs.10000/= [Rs.20000/= for F.Y.2016-17] (Rs.35000/= in case transportation) paid in cash. It means any expenditure made exceeding above limit must be paid by account payee cheque or demand draft.
  6. Any expenses in connection with lotteries, crossword puzzles, card games and gambling etc.

Illustration:

Compute the income from other sources of Mr. X as per the details given below for Financial Year 2016-17:-

Interest received on debentures

15000/=

Interest received from taxable bonds

20000/=

Interest received from Public Provident Fund

30000/=

Dividend received from mutual funds

10000/=

Interest received on Fix Deposits With Bank

12000/=

Accrued Interest on Kisan Vikas Patra

8000/=

Accrued Interest on National Saving Certificates

5000/=

Interest received on Income Tax refund

4000/=

Gift received from a friend

60000/=

Winning from Television Shows

100000/=

Solution:

INCOME FROM OTHER SOURCES
Interest received on debentures

15000/=

Interest received from taxable bonds

20000/=

Interest received from Public Provident Fund (Exempted) 30000/=

0

Dividend on Mutual Fund (Exempted) 10000/=

0

Interest received on Fix Deposits with Bank

12000/=

Accrued Interest on Kisan Vikas Patra

8000/=

Accrued Interest on National Saving Certificates

5000/=

Interest on Income Tax Refund

4000/=

Gift received from a friend (exempted if amount is 50000/= or less)

60000/=

Winning from Television shows

100000/=

TAXABLE INCOME FROM OTHER SOURCES

224000/=

Clarification:- Since the gift received during the year is more than Rs.50000/= that is why it will be included in taxable income from other sourced.

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