Overview of Income Under the head of Other Sources

 There are various sources of income but Income Tax Act,1961  classify all income in 5Head of income unless Act provide any specific exemption therefore. Name of every head describe their nature of classification. Thus, an income which do not fall in any other head of income shall be chargeable" under the head of other sources".[Sec56(1)]



There are some specific income which is chargeable "under the head of other sources".[Sec56(2)]
  • Dividend Income other the dividend refer u/s 115-O*
  • Gift including acquisition of property for inadequate consideration 
  • Casual Income
  • Forfeiture of Advance on failed negotiation for capital assets
  • Sub letting of house property
  • Rent from vacant land
  • Agriculture income from land situated outside India
  • Family Pension
  • Director Sitting Fees
  • Income From undisclosed Income
  • Remuneration received by MP/MLA
  • Royalty Income
  • Issue of share of Pvt Company at premium
  • Interest on compensation or enhance compensation
  • Interest on loan, deposits, security
  • Interest on income tax refund
  • Compensation or other payment received by any person in relation to termination/modification of employment terms & conditions.
  • Sum received under Keyman insurance scheme, if not taxable any other head of income.
  • Following income shall taxable under IFOS if not taxable under PGBP
    1. Income by way of Interest on securities
    2. Income from let on hire of P&M, furniture.
    3. Composit Rent
    4. Any sum received by employee assessee from his employees as contribution to any PF or Superannuation fund or any other fund.
*Sec115 -O shall not be applicable from FY2020-21.
*Some income has certain exception.
 

Deduction Allowable[Sec57]

Following deduction allow under the head of Other source

Nature of Deduction

Description

Dividend or interest of security

Any reasonable sum paid by way of commission or remuneration to any person for the purpose of realising such dividend or interest on behalf of assessee.

Employee’s contribution towards relevant fund

Deduction will be allowed u/s 36(1)(va) to the extent such sum remitted to relevant fund on or before due date of fund under respective act.

Deduction on interest on compensation

Amount equal to 50% of the amount of interest received.

Standard deduction in case of family pension

A deduction of a sum equal to 1/3rd of such pension or 15,000, whichever is less, is allowed. [Sub to sec 10(18)(ii), sec10(19)]

Letting of hire of P&M, Furniture with or without building

Following expenses are allow:

·        Current repair & insurance of building

·        Current repair & insurance of P&M, Furniture

·        Depreciation

This is sub to Sec38.

Other Deduction

Any other expenditure not being capital expenditure incurred wholly & exclusively for earning such income

Deduction not Allowable [Sec58]

  1. Any personal expenses of assessee
  2. Any interest or salary payable outside India on which TDS has not deducted or paid,
  3. No Expenditure allow in respect of casual income,
  4. 30% disallow in respect of  which payable to resident and no TDS deducted or paid before due date,
  5. Any Expenditure in respect of which;
    1. Payment made to relative in excess of FMV of consideration for that work
    2. Payment made in cash in excess of Rs 10,000

Comments

Post a Comment

Popular posts from this blog

MAXIMUM MARGINAL RATE (MMR)

Image
 Finance Act 2019 revised Surcharge rate for Individual, HUF, AOP/BOI. The rate is 10%, 15%, 25%, 37% depending on income and their sources. Further Finance Act 2020 provide optional new tax scheme for individual , HUF, AOP, BOI which provide new tax slab. This will also introduce confusion about now what is Maximum Marginal Rate.  WHAT IS MMR Maximum marginal rate is income tax rate including applicable surcharge and cess in relation to highest slab of income for Individual, AOP, BOI specified in Finance Act of relevant year. USE OF MMR Taxation of AOP/BOI Taxation of Business trust being REIT & INVIT Taxation of Investment Fund Taxation on Accreted Income MMR rate for FY 2019-20 & 2020-21 Highest tax slab for Both FY    :  30% Highest applicable Surcharge    :  37% Health & Education Cess          :   4% So MMR will be                      ...
Read more

Income Tax Benefit available to Senior or Super Senior Citizens for FY 2019-20 (A.Y.2020-21)

 Income Tax Act,1961 offer several tax benefit and compliance relaxation to senior citizen and super senior citizen. Here we are providing a list of benefits available to them. First of all, we have to know who is consider as SENIOR or  SUPER SENIOR CITIZENS . SENIOR CITIZEN Senior Citizen means a resident individual, who is of the age of 60 years or more, but less than 80 years, at any time during the relevant previous year. SUPER SENIOR CITIZEN Super Senior Citizen means a resident individual, who is of the age of 80 years or more at any time during the relevant previous year. As per  CBDT Clarification Circular No 28/2016 dated 27th July 2016     an individual born on 1st April would complete each year of his age on 31st March, i.e. for FY 2019-20 (AY 2020-21), the date of birth (DOB) of individual should be on or before 1 April, 1960/ 1940 to complete 60/ 80 years of age on or before 31 March 2020, for getting income tax benefits/ status as a senior/ ve...
Read more

WHO IS REQUIRED TO MAINTAIN BOOKS AND ACCOUNTS UNDER INCOME TAX

 Every newly started business think about when they need to maintain proper books and accounts including records as require under income tax act,1961. Further in today complex market scenario it is difficult to detect any transaction therefore government prescribe businesses including professions to maintain proper books. Following personal require to maintain proper books and accounts that enable assessing officer to determine his total income [Sec 44AA ,Income tax act1961] Personal who carry l egal, medical, engineering, architectural, accountancy, technical advisory, interior decoration, profession of authorized representation, profession of film artist, company secretary, IT profession   are compulsory require to maintain proper accounts.       2.     In case of individual or HUF Existing business or profession where income exceed Rs 250,000 or revenue exceed Rs 25,00,000 in any one of three immediately preceding FY, OR New business...
Read more