Advanced Tax laws And Practice Income Under Head Other Sources
Income Under Head Other Sources (IFOS)
Income from Other Sources is one of the 5 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 & profession (PGBP) are included in IFOS, except those which are exempt under the Income Tax Act.
- Dividend Income other than the dividend referred under section 10(34).
- Income earned from winning lotteries, crossword puzzles, races (including horse race), gambling or betting of any kind, even if the assessee claims to earn such income from the trade of such activities.
- Money or movable/immovable property received without consideration or inadequate consideration during the previous
- Interest on compensation or enhanced compensation received.
- Money received in Cash or in kind.
a)any sum of money received without consideration and the aggregate value of which exceeds Rs. 50,000 then the whole of the aggregate value of such sum shall be chargeable to tax under this head.
b) (i) any immovable property received without consideration, the stamp duty value of which exceeds Rs. 50,000, the stamp duty value of such property shall be taxable under income from other sources.
b) (ii) any immovable property received for a consideration which is less than the stamp duty value of the property by an amount exceeding Rs. 50,000, the stamp duty value of such property as exceeds such consideration shall be chargeable to tax under income from other sources.
Where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken.
However, this exception shall apply only in a case where the amount of consideration referred to therein, or a part thereof has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property.
5. c) any property, other than immovable property
(i) without consideration, the aggregate fair market value of which exceeds Rs. 50,000, the whole of the aggregate fair market value of such property;
(ii) for a consideration which is less than the aggregate fair market value of the property by an amount exceeding Rs. 50,000, the aggregate fair market value of such property as exceeds such consideration.
Shall be chargeable to tax under Income from other sources.
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Incomes taxable under IFOS, only if not taxable under Profits and Gains of Business or Profession (PGBP):
- Any sum contributed towards provident funds, ESI, etc. by an employee to the employer, only if not deposited in the relevant fund i.e. if the employer deposits such amount on or before the due date of deposit applicable for such deposit, he will be allowed deduction for the same.
- Interest earned on Securities;
- Income received from the letting of a plant, machinery or furniture, with or without a building.
The proper explanation of the income taxable under IFOS is available for CS PREPARATION in CS Executive online classes.
Incomes taxable under IFOS, only if not taxable under PGBP or Salaries:
- Keyman Insurance Policy including bonus on such policy
- Salary of MP/MLA.
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