{"id":157,"date":"2018-12-22T07:04:09","date_gmt":"2018-12-22T07:04:09","guid":{"rendered":"http:\/\/corpbiz.io\/learning\/?p=157"},"modified":"2021-03-12T12:37:10","modified_gmt":"2021-03-12T07:07:10","slug":"income-from-other-sources-ifos","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/income-from-other-sources-ifos\/","title":{"rendered":"Income From Other Sources- Do You Also Have?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Understanding the head of Income from Other Sources is residuary in nature. It includes incomes which are not taxable in other heads of income. Income from Other Sources is one of the heads of income chargeable to tax under the Income tax Act. 1961. Any income that is not covered in the other four heads of income is taxable under income from other sources, because of this, it is known as residuary head of income. All the incomes excluded from salary, capital gains, house property or business &amp; profession (PGBP) are included in IFOS, except those which are exempt under the Income Tax Act.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/income-from-other-sources-ifos\/#What_are_the_Heads_of_Income_under_Income_tax\" >What are the Heads of Income under Income tax?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/income-from-other-sources-ifos\/#What_Income_Tax_Act_says_about_%E2%80%9CIncome_from_other_sources%E2%80%9D\" >What Income Tax Act says about \u201cIncome from other sources\u201d?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/income-from-other-sources-ifos\/#Section_56-_Incomes_taxable_only_in_Income_from_Other_Sources\" >Section 56- Incomes taxable only in Income from Other Sources<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/income-from-other-sources-ifos\/#Section_57-_Expenditures_allowed_as_deductions\" >Section 57- Expenditures allowed as deductions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/income-from-other-sources-ifos\/#Section_58-_Sum_not_allowed_as_deductions_while_computing_taxable_income\" >Section 58- Sum not allowed as deductions while computing taxable income<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/income-from-other-sources-ifos\/#What_are_the_items_which_are_generally_classified_under_%E2%80%9CIncome_from_other_sources%E2%80%9D\" >What are the items which are generally classified under \u201cIncome from other sources\u201d?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/income-from-other-sources-ifos\/#Income_classified_under_Income_from_Other_Sources_if_not_taxable_under_the_head_%E2%80%9CProfits_and_gains_of_business_or_profession%E2%80%9D\" >Income classified under Income from Other Sources if not taxable under the head \u201cProfits and gains of business or profession\u201d?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/income-from-other-sources-ifos\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Heads_of_Income_under_Income_tax\"><\/span>What are the Heads of Income under Income tax?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Income Tax Department of India classifies income into five categories for streamlining the process of&nbsp;<a href=\"https:\/\/corpbiz.io\/income-tax-return-filing\"><strong>income tax<\/strong><\/a>&nbsp;reporting.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" width=\"655\" height=\"447\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-182.png\" alt=\"Heads of Income under Income tax\" class=\"wp-image-11724\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-182.png 655w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-182-300x205.png 300w\" sizes=\"(max-width: 655px) 100vw, 655px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Income_Tax_Act_says_about_%E2%80%9CIncome_from_other_sources%E2%80%9D\"><\/span>What Income Tax Act says about \u201cIncome from other sources\u201d?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>According to the&nbsp;<strong><em>Income Tax Act<\/em><\/strong><a href=\"https:\/\/www.incometaxindia.gov.in\/pages\/acts\/index.aspx\"><strong><sup><em>[1]<\/em><\/sup><\/strong><\/a>, the income of every kind which should not be excluded from the total income shall be chargeable to income tax under the head \u2018Income from other sources\u2019, if it cannot be chargeable to income tax under any of the other heads of income. As a result, income from other sources is a residuary head of income i.e. income which cannot be chargeable under any other head is chargeable to tax under this head. All income other than income from salary, house property, business, and profession or capital gains, etc. is covered under \u2018Income from other sources\u2019. Given below is the list of \u201cIncome from other sources\u2019:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"603\" height=\"503\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/03\/image-6.png\" alt=\"Income from other sources\" class=\"wp-image-27096\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/03\/image-6.png 603w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/03\/image-6-300x250.png 300w\" sizes=\"(max-width: 603px) 100vw, 603px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Section_56-_Incomes_taxable_only_in_Income_from_Other_Sources\"><\/span>Section 56- Incomes taxable only in Income from Other Sources<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Dividend Income;<\/li><li>Income earned from winning lotteries, crossword puzzles, races (including horse race), gambling or betting of any kind;<\/li><li>Money or movable\/immovable property received without consideration or inadequate consideration during previous year;<\/li><li>Interest on compensation or enhanced compensation received;<\/li><li>Advance money received or money received in negotiation for transfer of a capital asset (only if the money is forfeited and it doesn\u2019t result in the transfer of such asset).<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Incomes taxable under IFOS, only if not taxable under Profits and Gains of Business or Profession (PGBP)<\/h3>\n\n\n\n<ul><li>Any sum contributed towards provident funds, ESI, etc. by employee to the employer, only if not deposited in the relevant fund;<\/li><li>Interest earned on Securities;<\/li><li>Income received from the letting of a plant, machinery or furniture, with or without building.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Incomes taxable under IFOS, only if not taxable under PGBP or Salaries<\/h3>\n\n\n\n<ul><li>Key man Insurance Policy;<\/li><li>Salary of MP\/MLA<\/li><\/ul>\n\n\n\n<p>Income Computation and Disclosure Standards: Section 145 states that Income from Other Sources must be computed on the regular accounting methods followed by the assessee. It can be either cash or mercantile system of accounting. The Central Government has notified Income Computation and Disclosure Standards to be followed while computing the income.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Section_57-_Expenditures_allowed_as_deductions\"><\/span>Section 57- Expenditures allowed as deductions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Expenses incurred for realisation of dividend or interest income;<\/li><li>Deductions to the extent amount remitted within due date are authorised in respect to contribution towards funds for the welfare of employees;<\/li><li>Family Pension- deduction is allowed to the extent of 33-1\/3% of pension or Rs. 15000 whichever is less;<\/li><li>Deductions for current repairs, insurance and depreciation, will be allowed for income earned by way of lease rental;<\/li><li>A deduction equal to 50% will be allowed for interest received on      compensation or enhanced compensation.<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/how-to-save-income-tax\/\">\nA Complete Guide on How to Save Income Tax\n<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Section_58-_Sum_not_allowed_as_deductions_while_computing_taxable_income\"><\/span>Section 58- Sum not allowed as deductions while computing taxable income<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Personal expenditure;<\/li><li>Interest or salary payable outside India without TDS deduction;<\/li><li>Wealth tax;<\/li><li>Expenditure concerning winnings from lotteries, crossword puzzles, races, and gambling, etc.; and<\/li><li>Expenses specified in Section 40A.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_items_which_are_generally_classified_under_%E2%80%9CIncome_from_other_sources%E2%80%9D\"><\/span>What are the items which are generally classified under \u201cIncome from other sources\u201d?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The following incomes are chargeable to tax:-<\/em><\/strong><\/p>\n\n\n\n<ul><li>Dividend received from an Indian Company has been made exempt in the hands of the receiver. Accordingly, dividend received from a foreign company or any cooperative bank received from a foreign company will be taxable as income from other sources.<\/li><li>Any pension received by the legal heirs or representatives of an employee.<\/li><li>Any winnings for an amount above Rs. 10,000 from lotteries, crosswords, puzzles, races including horse races, card games or other games of any sort or gambling or betting of any form or nature.<\/li><li>Income from any plant, machinery or furniture let out on hire where it is not the business of the assessee to do so.<\/li><li>Income from securities by way of interest<\/li><li>Any kind of sum received by the assessee from his employees as a contribution to any staff welfare scheme<\/li><li>Income from subletting the premises<\/li><li>Interest on the number of bank deposits<\/li><\/ul>\n\n\n\n<p>However when an assessee makes the payment of such contribution within the time limit under the scheme of welfare, then the payment will be allowed as a deduction and only the balance amount will be taxable.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Income_classified_under_Income_from_Other_Sources_if_not_taxable_under_the_head_%E2%80%9CProfits_and_gains_of_business_or_profession%E2%80%9D\"><\/span>Income classified under Income from Other Sources if not taxable under the head \u201cProfits and gains of business or profession\u201d? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Any kind of contribution to a fund for the welfare of employees received by the employer<\/li><li>Any Income received by way of interest on securities.<\/li><li>An Income earned by letting out or hiring of any plant, machinery or      furniture item.<\/li><li>Income from letting out of a plant, machinery or furniture along with building; both the lettings are inseparable.<\/li><li>Any amount of money received including bonus under a Keyman Insurance Policy.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Income from other sources includes and means all those residual income that cannot be placed in any other heads of income. \u2018Income from Other Sources\u2019 can be defined as an income that is not included in any of the above-listed categories. However, there are certain other incomes that are always taxed under Income from other sources. These generally include interest income from savings bank accounts, post office savings accounts, fixed deposits, recurring deposits, family pension, etc.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/tax-residency-certificate-and-how-to-get\/\">\nWhat Is A Tax Residency Certificate, And How To Get It?\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Understanding the head of Income from Other Sources is residuary in nature. It includes incomes which are not taxable in other heads of income. Income from Other Sources is one of the heads of income chargeable to tax under the Income tax Act. 1961. Any income that is not covered in the other four heads [&hellip;]<\/p>\n","protected":false},"author":20,"featured_media":11736,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[78],"acf":{"service_id":"78"},"authorName":"Archita Bhattacharjee","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/WhatsApp-Image-2020-03-18-at-11.26.19-AM-1.jpeg","authorDescription":"Archita Bhattacharjee is working as Legal Analyst (Team Lead, Research &amp; Development) at Corpbiz and has proving experience about 2 years as Corporate Legal Researcher in law firms as well as Rajya Sabha and authors in diverse publications. She has refined her skills by representing India in Paris, France and the University of Leiden over implications of International Humanitarian and Criminal Law being certified member of many Legal Centers.","postViews":24995,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/157"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=157"}],"version-history":[{"count":22,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/157\/revisions"}],"predecessor-version":[{"id":27326,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/157\/revisions\/27326"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/11736"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}