Prof.

Uday Prabhupatkar

Income from Other Sources
This is a residuary head of Income. The income which does not fall in any of the previous
heads of income (namely salary, income from house property, profits & gains of business or
profession, capital gains) is held taxable under this last head of income. ec. !"(#) deals with
the general taxation provisions for bringing the income under tax under this head.
ec. !"($) however creates specific charge for certain income and brings it to tax under this
head. In other words, the items listed u%s !"($) will be always held taxable under the head
income from other sources.
a) &ividend
b) 'ny winning from lotteries, crossword pu((les, races including horse races, card
games and other games of any sort or form, gambling or betting of any form or
nature whatsoever
c) 'ny sum received from received from employees as contribution to a fund for the
welfare of employees
d) Interest on securities
e) Income from machinery, plant or furniture let on hire
f) Income from letting of plant, machinery or furniture along with building and letting out
of building is an inseparable activity i.e. plant, machinery or furniture can not be
separated from building.
g) 'ny sum received under )ey*man insurance policy including bonus accrued on such
policy
h) 'ny sum of money received by an individual or an +,- exceeding .s.!/,///%* from
any person other than specified persons after 0#./1.$//2, the whole of such money
(i.e. without allowing any thresh*hold of .s.!/,///%*) is held taxable under this head.
pecified persons in case an individual for the purpose of this subsection are (i)
spouse (ii) brother (iii) sister (iv) lineal ascendants%descendents of the individual (v)
brother3 sister3 lineal ascendants%descendents of the spouse of the individual (vi)
brother3 sister of the either of the parents of the individual and spouse of the persons
mentioned herein.
-urther, the monitory limit of .s.!/,///%* and taxability under the aforesaid sub*
clause is not applicable in case of gifts received by an individual on the occasion of
the marriage, under a will or by way of inheritance or in contemplation of the death of
the payer.
It may also be noted that the gifts received only by an individual & +,- are covered
by the aforesaid provisions and gifts received by any other entities are not covered
by the aforesaid provisions.
-urther, 4ifts received in 5ind by an individual & +,- are also out side the purview
of taxation under the aforesaid provisons.
1
Prof. Uday Prabhupatkar

6ut of the aforesaid list items falling under d, e & f will be held taxable under this head
provided they are not already offered for tax under the head 78rofits & gains of business or
profession9.
'ccordingly, to bring the income as taxable under this residuary head all the following
conditions must be satisfied :
#. The sum received by the assessee should be income
$. The income so received should not be exempt from tax u%s #/ to ec #0'
0. The income should be such that it can not categorically be taxed under any of the other
heads available under the 'ct.
'part from the list made out u%s !"($), under the general provisions u%s !"(#) variety of items
can be brought to tax under this head. There can not be an exhaustive list of such items but on
representative basis following items will be held liable to tax under this head:
Income received by a Tenant from underta)ing sub*letting activity
Interest on -ixed deposits with companies, loans granted etc.
itting fees received by the &irector to attend ;oard <eetings
+onorarium received by visiting faculty, who is not in the employment of
college%university%institute
.emuneration received by the professors, examiners & moderators from ,niversity for
setting up of manuscript for examination papers, correction of answer sheets etc.
=ommission received by the 'gents appointed by >ife Insurance & 4eneral Insurance
companies
<oney received by brand 'mbassadors for letting out their name & fame for the
6rganisation % products.
.ent received from letting out of vacant plot of land for marriages, parties, events etc.
'nnuity payable to the beneficiary under the Trust, ?ill
-amily pension received by the widow%widower of the deceased employee from the
respective employer
'ny .oyalty or compensation received by the person having mining rights
'ny income received by the 'uthor of the ;oo) who has copy right in his favour.
'ssessee can claim deduction from income under this head. The eligible deductions are listed
out u%s !@.
#. =ommission or remuneration towards reali(ing dividend or interest from securities. If the
assessee incurs certain expenditure towards reali(ing the income then such expenses
are deductible on due basis.
$. .epairs, depreciation, insurance with respect to the plant, machinery or furniture let*out
on hire.
0. tandard deduction of .s.#!,///%* or #%0
rd
of -amily pension which ever is less is
allowed as deductible in case of -amily pension received by the assessee.
2. 'ny other expenditure for earning such income provided the following conditions are
satisfied :
2
Prof. Uday Prabhupatkar

The expenditure incurred should be such which is incurred wholly & exclusively
for the purpose of earning such income. In other words expenditure should be
such without which the income so earned could not have been earned.
The expenditure should not be capital in nature
The expenditure should not be of personal in nature
The expenditure must have been incurred during the relevant previous year & not
beyond.
The expenditure incurred in respect of income which is held exempt u%s #/ is not
allowed as deductible against any other income held liable under this head.
=ertain expenditure listed u%s !1 are specifically held as not allowable under this head:
'ny personal expenses of assesssee are not allowed as deductible
Interest payable out side India in respect of which Ao T& is effected before the
remittance of such amount out side India.
alary payable out side India in respect of which Ao T& is effected by the
person responsible for remittance
?ealth Tax paid
Ao deduction is allowed when income is in the nature of winning from lotteries,
crossword pu((les, card games, gambling or betting in any form.

3