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Other Income FAQs

A comprehensive list of frequently asked questions on Other Income.

1What is mean by other incomes ?

Any income which does not fall under the heads of Salary, House Property, Business Profession and Capital Gain will fall under the head Income from Other Source.

2What are the different types of other incomes ?
Dividends:

Dividend received from any entity other than domestic company. This is becausedividend received from a domestic company has been made exempt in the hands of the receiver. Accordingly dividend received from a cooperative bank or dividend received from a foreign company will be taxable as income from other sources.

Winnings:

This includes winnings over Rs.10000 from lotteries, puzzles, races, games and all forms of gambling and betting. E.g. card games, horse races, game shows etc.

Interest received:

All interest income earned in the previous year (oncompensation/enhanced compensation) is taxable. However, up to 10000 of this income can be claimed as deduction.

Gifts received by an individual or HUF (which are chargeable to tax) are also taxed under this head.

In addition to above, following incomes are charged to tax under this head, if not taxed under the head “Profits and gains of business or profession”

  1. Any contribution to a fund for welfare of employees received by the employer
  2. Income by way of interest on securities.
  3. Income from letting out or hiring of plant, machinery or furniture.
  4. Income from letting out of plant, machinery or furniture along with building; both the lettings are inseparable.
  5. Any sum received under a Key man Insurance Policy including bonus.
3What is the taxability on family pension ?

Family pension is taxable as income from other sources and a standard deduction of 1/3rd of pension or Rs 15,000 whichever is less is allowed.

4Any expenses allowed as deductions while computing income ?
  1. Commission or remuneration for realising dividends (if not covered under section 115-O which is exempt) or interest on securities
  2. Any sum received by an employer from employees as contribution towards any welfare fund of such employees is first included as income of the employee, and if the employer credits such sum to the employee’s account under the relevant fund on or before the due date (of such fund), then such amount (i.e., employee’s contribution) is deductible from the income of the employer
  3. Current (not capital) repairs, insurance premium and depreciation in respect of plant, machinery, furniture and buildings are deductible from rent income earned by letting out of plant, machinery, furniture and building
  4. Current (not capital) repairs, insurance premium and depreciation in respect of plant, machinery, furniture and buildings are deductible from rent income earned by letting out of plant, machinery, furniture and building
  5. A deduction of lower of Rs. 15,000 or 33 1/3% of such income is available in case of income in the nature of family pension.
  6. Deduction is available in respect of any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income during the relevant previous year
5Any expenses not allowed as deductions while computing income ?
  1. Personal expenses of the assesse.
  2. Any interest which is payable outside India on which income tax has not been paid or deducted at source.
  3. Any sum paid on account of wealth tax in India or abroad.
  4. Any amount not allowable by virtue of it being unreasonable.
  5. Any expenditure in connection with income from winning from lotteries, crosswords, cross puzzles, races including race horses, car race and other games of races, gambling, betting of any form.
6Are arrears of salary taxable ?

Yes. However, the benefit of spread over of income to the years to which it relates to can be availed for lower incidence of tax. This is called as relief u/s 89​ of the Income-tax Act.​​

7Are monetary gifts received by an individual or Hindu Undivided Family (HUF) taxable ?
  • Sum of money received without consideration.
  • The aggregate value of such sum of money received during the year exceeds Rs. 50,000.
8When the monetary gifts, money received without consideration, immovable property received without consideration, immovable property received less than its stamp duty value by individual and HUF are not charged to tax ?

Relative for this purpose means in case of individual:

  1. Spouse of the individual
  2. Brother or sister of the individual
  3. Brother or sister of the spouse of the individual
  4. Brother or sister of either of the parents of the individual
  5. Any lineal ascendant or descendent of the individual
  6. Any lineal ascendant or descendent of the spouse of the individual;
  7. Spouse of the persons referred to in (b) to (f).
9When the monetary gifts, money received without consideration, immovable property received without consideration, immovable property received less than its stamp duty value by HUF are not charged to tax ?

In case of HUF, any member thereof.

  1. Property received on the occasion of the marriage of the individual.
  2. Property received under will/ by way of inheritance.
  3. Property received in contemplation of death of the donor.
  4. Property received from a local authority
  5. Property received from any fund, foundation, university, other educational institution, hospital or other medical institution, any trust or institution
10Are monetary gifts received from friends liable to tax ?

Friend is not a relative as defined in the relative list and hence, gift received from friends will be charged to tax (if other criteria of taxing gift are satisfied).​