Income from
other sources ( 56-59)
56(1): Charging Section: Income of any kind which is not to be
included, other than those chargeable under
salary, house property, capital
gains and business or profession
56(2) In general following shall be charged to tax under the head income
from other sources:
(i)
Dividends
– dividends from indian company subject
to section 115-O is exempt u/s 10(34).
Dividends from foreign
company is taxable.
(ii)
Interest
on securities
If the assessee has taken any loan
for investment in securities, interest payable on borrowed sum, will be allowed
as deduction.
(iii)
Winning
from lotteries, cross word puzzle races including horse races, card games,
games of any sort, gambling, betting.
These incomes
are subject to special rate of income-tax @ 30%(Sec. 115BB)
(iv)
Any
sum received under keyman insurance policy including bonus allocated thereon if
it is not chargeable under the head “Salary” or “business or profession”
(v)
Interest
received on loans given, securities, deposits, fixed deposits, bonds,
debentures etc
(vi)
Income
from letting of P&M furniture and furniture and fixtures, if letting out is
not the business of the assessee.
(vii)
Income
from letting of building, P&M furniture and fixture, if letting out of
building is not separable.
(viii)
Interest
received during the previous on compensation or enhanced compensation on
compulsory acquisition of property. ( received on or after 01.04.2009)
50% of interest on compensation is allowed as deduction u/s
57.
(ix)
Family
pension
Deduction u/s 57:
1/3rd of
family pension
Or
Rs. 15,000
Whichever is less
(x)
Gifts
of money exceeding Rs. 50,000/- in aggregate received by an individual, HUF
from any person or persons.
Note this does not
apply if gift is received from :
( a): relative/relatives
(b):
on the occasion of marriage of
individual
(c): under will or by way of inheritance
(d): in contemplation of death
(e): from local authority
(f): from fund or foundation or
University, hospital or trust referred to in sec. 10(23C)
(g): any trust or institution registered
u/s 12AA of the I.T Act
Definition
of relative:
(i)
Spouse
of the individual
(ii)
Brother
or sister of the individual
(iii)
Brother
or sister of the spouse of the individual
(iv)
Brother
or sister of the parents of the individual
(v)
Lineal
ascendant or descendant of the individual
(vi)
Any
Lineal ascendant or descendant of the spouse of the individual
(vii)
Spouse
of a person referred to in (ii) to (iv).
Gift of
Immovable Properties
Gift of
other movable Properties
Sec 57: Deductions
allowable:
(i)
Commission
or collection charges to the bank.
Interest payable on sums borrowed for the purposes of investment in
shares.
(ii)
In
a case of family pension:
1/3rd of family pension
Or
Ceiling amount Rs. 15,000
Whichever is less
(iii)
Out
of interest on compensation or enhanced compensation:
50% of interest
on compensation.
(iv)
Interest
payable on sums borrowed for the purposes of investment in deposits/F.D ,
bonds/debentures etc.
(v)
Where
the assessee has let building, plant and
machinery, he will be allowed following deductions:
(a)
Depreciation
as allowable u/s 32;
(b)
Current
repair of the building, land revenue, local rates or municipal taxes
(c)
Amount
of insurance paid in respect of insurance risk of damage or destruction of the
building.
(d)
Repair
and insurance of machinery, plant and furniture.
(e)
Any
other expenditure incurred wholly and exclusively for the purposes of earning
of income.
Sec 58: Deductions not allowable. Following amounts shall not be deductible in
computing the income under this
head:
(i)
Any
expense of personal nature
(ia) Any expenditure
referred to in section 40A(12)
(ii) interest payable
outside India, on which no tax is paid in India or deducted at source;
(iii) salary
payable outside India if no tax is deducted at source thereon;
(1A) Provisions
of section 40(a)(iia) i.e wealth tax will not be allowed as deduction.
(2) Provisions
of section 40A
(3) In
the case of company provisions of section 44D will apply;
(4) No
deductions will allowed out of income i.e winning from lottery cross word
puzzle etc.
59: profits chargeable to tax: provisions of section 41 will apply.
Apart from
incomes referred to in section 56(2),
following incomes are includible under the head income from other
source:
(i)
Salary
received by M.P, MsLA, Members of Municipal Corp.;
(ii)
Any
remuneration received from a person other than employer;
(iii)
Income
from subletting of building;
(iv)
Income
from vacant land;
(v)
Agricultutal
income from land situated outside India.
(vi)
Gratuity
received by legal heirs of the deceased employee;
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