Income from other sources.

Vaibhav N Banjan

Basis of Charge- U/s 56

General Provision- Section 56 (1)
Income of every kind which is not to be excluded
from the total income under this Act shall be
chargeable to income-tax under the head Income
from other sources, if it is not chargeable to
income-tax under any other of the heads such as
1) Salaries
2) House Property
3) Profit/ Gains from Business
4) Capital Gains

Basis of Charge- U/s 56

Special Provision- Section 56 (2)
i) Dividends
ii) Winning of Lotteries, crossword puzzles, races or card
games or any sort of gambling & betting
iii) Sum Received by Assessee from his employees as
contribution to Staff welfare scheme
iv) income by way of interest on securities (Debentures,
Bonds & Government Securities)
v) Rental Income of Machinery or furniture let on hire

Basis of Charge- U/s 56

vi) Rental Income of Letting out of Plant, Machinery or
furniture along with letting out of building and the tow
lettings are not separable.
vii) Any sum received under a Keyman Insurance Policy
including bonus if not taxable as Salary or Business
Income
viii) Gifts (Receipts without/unadequate consideration/)
i) Any sum of money total exceeding Rs 50,000 is
received by Individual/ HUF. Then Entire Amount
ii) Any immovable property exceeding Rs 50,000
iii) Any Movable property exceeding Rs 50,000

Deduction u/s 57
i) In the case of dividends, [other than dividends referred to
in section 115-O,] [or interest on securities], any reasonable
sum paid by way of commission or remuneration to a
banker or any other person for the purpose of realising such
dividend
ii) Deduction in respect of Employees contribution towards
Staff welfare scheme towards any welfare fund of such
employees is allowable only if such sum is credited to the
tax payer account before the due date
iii) Repairs Depreciation in case of Letting of plant
machinery & furniture

Deduction u/s 57
iv) In the case of income in the nature of family
pension, a deduction of a sum equal to 33 1/3 % of
such income or Rs 15,000 whichever is less
v) 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.

Amount not Deductible u/s 58

(a)in the case of any assessee,
(i) any personal expenses of the assessee ;
ii) any interest which is payable outside India on which
tax has not been paid or deducted
(iii) any Salaries, if it is payable outside India, unless tax
has been paid thereon or deducted
iv) The provisions of section 40A shall, so far as may be,
apply in computing the income chargeable under the head
Income from other sources as they apply in computing the
income chargeable under the head Profits and gains of
business or profession.

Amount not Deductible u/s 58

v) In the case of an assessee, being a foreign company, the
provisions of section 44D shall, so far as may be, apply in
computing the income chargeable under the head Income
from other sources as they apply in computing the income
chargeable under the head Profits and gains of business or
profession.]
vi) no deduction in respect of any expenditure or allowance
in connection with such income shall be allowed under any
provision of this Act in computing the income by way of any
winnings from lotteries, crossword puzzles, races including
horse races, card games and other games of any sort or from
gambling or betting of any form or nature, whatsoever :

Gifts- Exceptions

i) Gifts from Relatives

ii) Gifts on the occasion of marriage of the individual
iii) Gifts under a will or by way of inheritance,
iv) Gifts in contemplation of death of the payer
v) Amount received from any local authority
vi) Amount received from any fund or foundation or university
or other educational institution or hospital or other medical
institution or any trust or institution referred to in clause (23C) of
section 10
vii) Any amount received from any trust or institution registered
u/s 12AA.

Relatives

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 either of the parents of the
individual,
v)any lineal ascendant or descendants of the individual,
vi)any lineal ascendants or descendants of the spouse of the
individual,
vii) and spouse of the persons referred to ii) to vi) above

 CLUBBING OF INCOME

SECTION 60 :Transfer of Income

without transfer of Assets.
CLUBBED IN THE HANDS OF
Transferor who transfers the income.

SECTION 61:Revocable transfer of

Assets.

CLUBBED IN THE HANDS OF

Transferor who transfers the Asset.

SECTION 64 1 (ii):Salary, Commission, Fees or

remuneration paid to spouse from a concern in which an

CLUBBED
IN THE
HANDS OF
individual
has a substantial*
interest.

Spouse whose total income (excluding income

to be clubbed) is greater.
Clubbing not applicable if:
Spouse possesses technical or professional
qualification and remuneration is solely
attributable to application of that
knowledge/qualification.

SECTION 64 1 (iv):Income from assets transferred

directly or indirectly to the spouse without

CLUBBED
IN
THE
HANDS
OF
adequate consideration
Individual transferring the asset.
Clubbing not applicable if:
The assets are transferred;
1. With an agreement to live apart.
2. Before marriage.
3. Income earned when relation does not exist.

SECTION 64 1 (vi):Income from the assets

transferred
to IN
sons
wife.

CLUBBED
THE
HANDS OF
Individual transferring the asset.
Clubbing applicable if:
The assets are transferred without adequate
consideration.

SECTION 64 1 : Transfer of assets by an individual to a

person or AOP for the immediate or deferred benefit of his:

IN THE HANDS OF
(vii)CLUBBED
- Spouse.
(viii) - Sons wife.

Individual transferring the asset.

Clubbing applicable if:

The assets are transferred without adequate
consideration.

SECTION 64 1A : Income of a minor child

CLUBBED IN THE HANDS OF

1. If the marriage subsists, in the hands of the parent
whose total income is greater; or;
2. If the marriage does not subsist, in the hands of the
person who maintains the minor child.
3. Income once included in the total income of either of
parents, it shall continue to be included in the hands of
some parent in the subsequent year unless AO is
satisfied that it is necessary to do so (after giving that
parent opportunity of being heard)

Clubbing not applicable for:

1. Income of a minor child suffering any disability
specified u/s. 80U.
2. Income on account of manual work done by
the minor child.
3. Income on account of any activity involving
application of skills, talent or specialized
knowledge and experience.
The parent in whose hands the minors income is
clubbed is entitled to an exemption up to Rs.
1,500 per child.

Section : 64 (2) Income of HUF from

property converted by the individual into
HUF property

CLUBBED IN THE HANDS OF

Income is included in the hands of
individual & not in the hands of HUF.
Clubbing applicable even if:

The converted property is subsequently

partitioned; income derived by the
spouse from such converted property
will be taxable in the hands of individual.

THANK YOU