Income from other sources
1.8 All income other than income from salary, house property, business and profession or capital gains is covered under ‘Income from other sources’. Provisions in respect of some important sources of ‘other income’ are summarised below.
Dividends – Dividends on shares of domestic companies or units of UTI or mutual fund received from a company on or after 1-4-2003 will not be taxable at the hands of the assessee [section 10(34) and 10(35)]. [The dividend distribution tax will be payable by company/mutual fund u/s 115-O] However, deemed dividend as defined in section 2(22) of Income Tax Act will be considered as ‘income from other sources’.
Winning from lotteries, races etc. – Winning from lotteries, card games, horse races are taxable as other income. This is taxable @ 30.3% without claiming any allowance or expenditure.
Interest on securities, bank deposits and loans – Interest on bank deposits and loans is treated as ‘other income’, if not taxable u/s 28.
Gifts – Gifts in a year exceeding Rs 50,000, except gifts from certain relatives and gifts on certain specified occasions will be taxable [section 56(2)(vi) of Income Tax Act]
Income from letting – Income from letting of furniture, machinery, plant and building which is not separable fro, composite letting with machineries is taxable as other income. Current repairs, insurance and depreciation are allowed as deductions [section 56(2)(ii) and (iii) of Income Tax Act]