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How to Save Tax on Income from "Other Sources"

 
Under this residuary head of income, tax is payable by an assessee in respect of income, profits and gains of every kind which do not fall under any of the other heads of income. In particular, and without prejudice to the generality of the above statement, income chargeable to tax under this head includes, among others, dividends; annuity, winnings from lotteries, crossword puzzles and races including horse races, card games and other games of any sort or from gambling or betting, income from government securities, income from machinery, plant or furniture and also belonging to the assessee let on hire, and any sum received under a Keyman Insurance Policy (from AY 1997-98, if not assessable as salary),
if the income is not chargeable to tax under the head “Profits and gains of business or profession” and where an assessee lets on hire machinery, plant or furniture belonging to him and also buildings, and the letting of the buildings is inseparable from the letting of the said machinery, plant or furniture, the income from such letting if it is not chargeable to income tax under the head “Profits and gains of business or profession.”
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The income chargeable to tax under this head is computed after making the following deductions, namely:
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Income from dividends and income from mutual funds is fully exempted from income tax.

A dividend received by a shareholder is deemed to be his income for the previous year in which it is declared, distributed or paid.
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Section 2(24) (ix) provides that any winnings from lotteries, crossword puzzles, races, including horse races, card games and other games of any sort, including TV games, or from gambling or betting or any form or nature whatsoever will be included in the definition of “income from other sources”.

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Till FY 2003-04, gifts were not subject to tax. The Finance (No. 2) Act, 2004 amended the definition of income so that for FY 2006-07, that any sum above `50,000 received by an individual or a Hindu undivided family from any unrelated person

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As per the Finance Bill, 2012 on and from the financial year 2012- 2013 the unexplained amounts relating to cash credits or unexplained money and investments as also the unexplained expenses would now be

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While computing income from other sources, one of the most important deductions which you can claim is the deduction for payment of interest on loan. There is no upper limit of the rate of interest.

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The provisions relating to search and seizure are contained in section 132 of the Income Tax Act, 1961.
 
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Scrutiny assessment refers to the examination of a return of income by giving an opportunity to the assessee to substantiate the income declared and the expenses, deductions, losses, exemptions, etc. claimed in the return with the help of evidence..
 
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Section-139(1) : Provision for Voluntary Income Tax Return
Every person,— (a) being a company or a firm; (whether having income or loss) or (b) being a person other than a company or a firm if his total income or the total ncome of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall file a return of his income in the prescribed form.
 
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We have heard many a times that every individual whose total income exceeds the maximum exemption limit is obligated to furnish his/her Income Tax Return or ITR.
 
Section-139(9): Defective Tax Return
Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of 15 days from the date of intimation.
 
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If any person, having furnished a return u/s 139(1), or in pursuance of a notice issued under section 142(1), discovers any omission or any wrong statement therein, he may furnish a revised return at any time.
 
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Every person in receipt of income derived from property held under trust or other legal obligation wholly or partly for charitable or religious purposes or of income being voluntary contributions referred to in section 2(24)(iia) shall.
 
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If an assessee has not furnished a return of his income within the time allowed to him under section 139(1) or within the time allowed under a notice issued under section 142(1).
 
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