[Sec.56 (1)] a source of Income which does not specifically fall under any one of the other four heads of income is to be computed and brought to charge under section 56 under the head “Income from other sources”.
CHARGEABLE INCOME [SEC. 56(2)]
- Dividend [Sec. 56 (i)] –Under sec.2 (22), the following distributions by a company to his shareholders as dividends to extent profit of the company.
- Any distribution entailing the release of the company’s asset
- Distribution on liquidation or reduction of capital in the company.
- Any payment made in the form of advance or loan.
- Winning from lotteries, crossword puzzles, horse races and card games – Meaning of “lottery” , lottery includes wining from prizes awarded to any person by draw of lots under any scheme and card games includes any game show which people complete to win prize.
- Interest on securities – Interest on securities is taxable under this head. If such income is mentioned in books of accounts on “cash basis”, then the Interest is taxable in receipt basis or if not mentioned then it is “accrual” basis.
Following interest exempted under sec. 10(15) –
- Interest on notified securities, bonds and certificates, etc.
- Interest to Individual or HUF on 7%Capital Investment Bond (Finance Act, 1982).
- NRI Bonds issued by the State Bank of India.
- Interest on securities issued by the Central Bank of Ceylon.
- Interest on 9% Relief Bonds, (Individual and HUF, 1987)
- Interest on notified debentures of public sector companies.
- Interest on deposits made in a notified scheme by a retired government Employee and public sector employee.
- Income from machinery, plant or furniture let on hire [Sec. 56(2) (ii)/ (iii)] – (Machinery, plant or furniture) assets belonging to assessee and lets on hire is taxable as “income from other sources”, the income from the letting of building is taxable under this head.
- Receipt without consideration [Sec. 56(2)] – some provisions are as follows-
When a sum of money/ property is received without consideration or on after October 1, 2009
When a sum of money is after march 31, 2006 but before October 1, 2009.
Gift received on or after September 1, 2004 but before April 1, 2006