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[ Sec. 58 ] : Amounts Expressly Disallowed from 'Income from Other Sources'

The following expenses are not deductible by virtue of section 58 in computing the income chargeable under the head 'Income from Other Sources' :

PERSONAL EXPENSES [Section 58(1)(a)(i)] - Any personal expenses of the assessee is not deductible.

INTEREST [Section 58(1)(a)(ii)] - Any interest (which is chargeable under the Act in the hands of recipient) which is payable outside India on which tax has not been paid or deducted at source, is not deductible.

SALARY [Section 58(1)(a)(iii)] - Any payment (which is chargeable under the head “Salaries” in the hands of recipient and payable outside India), is not deductible if tax has not been paid or deducted therefrom .

WEALTH TAX [Section 58(1)] - Any sum paid on account of wealth-tax is not deductible.

TDS DEFAULT [Section 58(1A)] - Disallowance provisions pertaining to TDS defaults covered by section 40(a)(ia) are applicable .

AMOUNT SPECIFIED BY SECTION 40A [Section 58(2)] - Any expenditure referred to in section 40A like excessive or unreasonable payments to certain specified persons [Section 40A(2)] and payments exceeding Rs. 20,000 otherwise than by way of account payee cheque [Section 40A(3)];

EXPENDITURE IN RESPECT OF ROYALTY AND TECHNICAL FEES RECEIVED BY A FOREIGN COMPANY [Section 58(3)] - In the case of foreign companies, expenditure in respect of royalties and technical service fees as specified by section 44D is not deductible.

EXPENDITURE IN RESPECT OF WINNINGS FROM LOTTERY [Section 58(4)] - No deduction shall be allowed under any provision of the Act in computing the income by way of any winnings from lotteries, crossword puzzles, races.

However, expenditure incurred by the assessee for the activity of owning and maintaining race horses shall be allowed as a deduction while computing the income from this activity.

CONTENT - 'Income from Other Sources' and Its Computation (Section 56)

Related Topics....'Income from Other Sources'

Scope of Income Chargeable under the head 'Income from Other Sources' (Section 56)
Taxable Incomes under the head 'Income from Other Sources' [Section 56(2)]
Taxability of Dividend Income [Section 56(2)(i)]
Winnings from Lotteries, Crossword Puzzles, Horse Races and Card Games [Section 56(2)(ib)]
Interest on Securities under the head 'Income from Other Sources' [Section 56(2)(id)]
Income from Letting Out of Machinery , Plant or Furniture [Section 56(2)(ii)]
Income from Composite Letting of Machinery, Plant or Furniture and Buildings [Section 56(2)(iii)]
Share Premium in excess of the Fair Market Value to be treated as Income [Section 56(2)(viib)]
Interest on Compensation or Enhanced Compensation [Section 56(2)(viii)]
Forfeiture of Advance Received for Transfer of a Capital Asset to be Taxed under the head "Income from Other Sources" [Section 56(2)(ix)]
Income of any person to include not only gift of money from any person(s) but also the gift of property (whether movable or immovable) or property acquired for inadequate consideration [Section 56(2)(x), w.e.f. A.Y. 2018-19]
Amount Expressly Disallowed in computing the 'Income from Other Sources' (Section 58)
Deductions Allowed in computing the 'Income from Other Sources'(Section 57)

5.3.      AMOUNT EXPRESSLY DISALLOWED :

The following expenses are not allowed to be deducted form such income :

1. Personal Expenses :           Any persona expenses of the assessee is not deductible.

2. Interest :     Any Interest chargeable under this Act which is payable outside India on which tax has not been paid or deducted at source.

3.  Salary :       Any payment chargeable under head “Salaries” and payable outside India not deductible if tax has not been paid or deducted therefrom.

4.  Wealth Tax :          Any sum paid on account of Wealth tax is not deductible.

  1. Expenditure in respect of Royalty and Technical Fees received by a foreign company :           
  1. Expenditure in respect of winning from Lotteries etc. :           In case an assess has income from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever, such assessee shall not be allowed any deduction in respect of any expenditure or allowance in connection with such incomes.
 

Related Topics....'Income from Other Sources'

Scope of Income Chargeable under the head 'Income from Other Sources' (Section 56)
Taxable Incomes under the head 'Income from Other Sources' [Section 56(2)]
Taxability of Dividend Income [Section 56(2)(i)]
Winnings from Lotteries, Crossword Puzzles, Horse Races and Card Games [Section 56(2)(ib)]
Interest on Securities under the head 'Income from Other Sources' [Section 56(2)(id)]
Income from Letting Out of Machinery , Plant or Furniture [Section 56(2)(ii)]
Income from Composite Letting of Machinery, Plant or Furniture and Buildings [Section 56(2)(iii)]
Share Premium in excess of the Fair Market Value to be treated as Income [Section 56(2)(viib)]
Interest on Compensation or Enhanced Compensation [Section 56(2)(viii)]
Forfeiture of Advance Received for Transfer of a Capital Asset to be Taxed under the head "Income from Other Sources" [Section 56(2)(ix)]
Income of any person to include not only gift of money from any person(s) but also the gift of property (whether movable or immovable) or property acquired for inadequate consideration [Section 56(2)(x), w.e.f. A.Y. 2018-19]
Amount Expressly Disallowed in computing the 'Income from Other Sources' (Section 58)
Deductions Allowed in computing the 'Income from Other Sources'(Section 57)
 
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