Income Tax Other Sources

INCOME FROM OTHER SOURCES

AY 2009-2010CA VIVEK GOELTHE TAX HUB

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INTRODUCTION

Basis of charge [Sec – 56(1)]

A source of income which does not

specifically fall under any one of the other

four heads of income is to be computed under the head “Income from

other source”.

Analysis of section

Income neither covered under Salary House property PGBP Capital Gains

Nor exempt under Income Tax Act

Shall be taxable under this head


FEW EXAMPLES

Following incomes are taxable under this head only [Section 56(2)]

1 Dividends [if not exempt under section 10(34)]

2 Winnings from lotteries, crossword puzzles, races, card games, gambling or betting of any form

3 Family pension

4 Interest on loan

5 Remuneration received by MP / MLA

6 Interest from URPF on employee’s contribution

7 Interest on income tax refund

8 Any sum of money exceeding Rs.50,000 received without consideration by an individual or a Hindu undivided family then the whole of such sum shall be taxable

9 Rent received on subletting of house property

10 Composite rent, if rent of house & other facilities are not separable ……….etc.


TAXABILITY OF GIFT

Applicability

Individual & HUF

Taxability

Any sum of money, the aggregate value of which exceeds Rs.50,000, is received without consideration then the whole of such sum shall be taxable.

Exceptions

Gift received from the following shall not be taxable: from any relative ; or on the occasion of the marriage of the individual ; or under a will or by way of inheritance; or In contemplation of death of the payer. From any local authority, trust or university etc.

Relative means: spouse of the individual; brother or sister of the individual; brother or sister of the spouse of the individual; brother or sister of either of the parents of the individual; any lineal ascendant or descendant of the individual any lineal ascendant or descendant of the spouse of the individual; spouse of the person referred to in clauses (ii) to (vi).


DECUCTIONS ALLOWED U/S 57

Any reasonable sum paid by way of Commission or remuneration for purpose of realizing dividends (other than dividend u/s 115-O) or interest on securities.

Contributions to ESI, EPF, and Superannuation Fund, those recovered from the employees, paid before due dates under relevant Acts.

Repairs, insurance and depreciation of Building, Plant and Machinery and Furniture. 33.33% of Family Pension or Rs.15,000 whichever is less Any other expenditure (not being capital expenditure) expended to earn such income.

However following expenses shall not be allowed

(a) Personal expenses

(b) Interest, Salary paid outside India without deduction of tax.

(c) Wealth Tax

(d) Expenses of the nature disallowed in Section 40A

(e) Expenses in connection with winning from lotteries, crossword puzzles, races, gambling or betting.


CASUAL INCOME

Lottery included winning from prizes awarded to any person by draw of lots or by chance or in any other manner whatsoever, under any scheme or arrangement by whatever name called

Card game and other game of any sort’ includes any game show, an entertainment programme on television or electronic mode; in which people complete to win prizes or any other similar game.

Grossing up of Income net of TDS:

casual Income will be grossed up as under:

Net Income x 100

100% - TDS Rate

TDS Rates Tax rate 30% Surcharge 10% of tax, if winning exceeds 10,00,000 Education cess 3% of tax & surcharge

No TDS, if winning from horse race dose not exceed Rs.2,500 & other casual income does not exceed Rs.5,000


DEEMED INCOME U/S 59

Loss or expenditure already allowed in computation of income from other sources and subsequently recovered shall be treated as the income of the previous year in which it is recovered


Income Tax Other Sources

Education

Transcript of Income Tax Other Sources