Following conditions must be satisfied before an income can be taxed under the head "Income from Other Sources":
(i) there must be an income;
(ii) such income is not exempt under the provisions of this Act;
(iii) such income is not chargeable to tax under any first four heads viz.. "Income from Salary", "Income from House Property", "Profits and Gains of Business or Profession" and "Income from Capital Gain".
Income from other sources is, therefore, a residuary head of income.
Section 56(2) enlists certain Specific Incomes which shall be chargeable to Income-tax under the head 'Income from other sources'. These are:
(i) Dividends Received from a foreign company,
(ii) winnings 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; and
(iii) any sum received by the assessee from his employees as contribution to any provident find, or any other welfare fund for the employees provided it is not taxable under the head 'Profits and Gains of Business or Profession'.
(iv) income by way of interest on securities provided the income is not chargeable to Income-tax under the head profits and gains of business or profession.
(v) income from machinery, plant or furniture belonging to the assessee and let on hire. Provided the income is not chargeable to Income-tax under the head profits and gains of business or profession.
(vi) where the assessee lets on hire, the machinery, plant or furniture belonging to him and also buildings, and letting of 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.
(vii) any sum received under a Keyman Insurance Policy, including the sum allocated by way of bonus on such policy, if such income is not taxable under the head "Salaries" or "Profits and gains of business or profession".
(viii) any sum of money, the aggregate value of which exceeds Rs. 50,000 is received without consideration or property (whether movable or immovable) is received without consideration or property is received for an inadequate consideration by any person on or after 1.4.2017, if the amount of such gift or inadequate consideration exceeds Rs. 50,000 [Section 56(2)(x)].
(ix) where a closely held company receives in any previous year from any resident person, any consideration for issue of shares that exceeds the face value of shares, then the aggregate consideration received for such shares which is in excess of fair market value shall be taxable.
(x) income by way of interest received on compensation or on enhanced compensation to be taxed in the year in which such interest is received.
(xi) Forfeiture of advance received for transfer of a capital asset to be taxed under the head "income from other sources" [Section 56(2)(ix)].
(xii) any compensation received or receivable, whether in the nature of revenue or capital, in connection with the termination or the modification of the terms and conditions of any contract relating to its employment shall be taxable under section 56 of the Act. [Section 56(2)(xi)]
(xiii) Other incomes which are normally included under the head 'Income from Other Sources'
(1) income from sub-letting of a house property by a tenant:
(2) casual income;
(3) insurance commission;
(4) family pension (payments received by the legal heirs of a deceased employees);
(5) director's sitting fee for attending board meetings;
(6) interest on bank deposits/deposits with companies;
(vii) interest on loans;
(viii) income from undisclosed sources;
(ix) remuneration received by Members of Parliament;
(x) interest on securities of foreign govern ments;
(xi) examinership fees received by a teacher from an institution other than his employer;
(xii) total interest till date on employee's contribution to an unrecognised provident fund at the time when the payment of lump sum amount from the unrecognised provident fund is due:
(xiii) rent from a vacant piece of plot of land;
(xiv) agricultural income from agricultural land situated outside India;
(xv) interest received on delayed refund of income-tax;
(xvi) income from royalty, if it is not income from business or profession;
(xvii) Director's commission for standing as a guarantor to bankers;
(xviii) Director's commission for underwriting shares of a new company;
(xix) Gratuity received by a director who, under the relevant contract, is not an employee or servant of the company, is assessable as income from other sources;
(xx) Income from racing establishment:
(xxi) Income from granting of mining rights;
(xxii) Income from markets, fisheries, rights of ferry or moorings;
(xxiii) Income from grant of grazing rights;
(xxiv) Interest paid by the Government on excess payment of advance tax. etc.;
(xv) Income received after discontinuance of business. |
