Definition and Applicability

• Income from other sources is a residual head of income under Section 56 of the Income Tax Act.
  
• It covers income that does not fall under salary, house property, business, or capital gains.
  
• It ensures that all taxable income is reported, even if irregular or occasional.
  
• Tax is levied as per applicable slab rates unless a specific rate is prescribed.
  
• Both recurring and one-time incomes are included under this head.
  

Common Types of Income Covered

• Interest earned on savings accounts, fixed deposits, and bonds.
  
• Dividends received from Indian or foreign companies.
  
• Winnings from lotteries, game shows, horse races, and betting.
  
• Family pension received by legal heirs after the death of a pensioner.
  
• Income from renting out machinery, furniture, or plant not forming part of business.
  

Taxability of Gifts and Casual Income

• Gifts exceeding ₹50,000 in value in a year (in cash or kind) are taxable.
  
• Gifts from relatives, on marriage, or through inheritance are exempt.
  
• Casual income like lottery or game winnings is taxed at a flat rate of 30%.
  
• No deductions are allowed for expenses against casual income.
  
• TDS is applicable on certain casual incomes before payment.
  

Deductions Allowed Under This Head

• Deduction for family pension up to ₹15,000 or 1/3rd of pension, whichever is less.
  
• Expenses incurred to earn income, such as commission or collection charges, are deductible.
  
• Interest on borrowed capital used to earn interest income may be allowed.
  
• No deduction is allowed for income like lottery winnings or betting.
  
• Proper records and proof are needed to support any deductions claimed.
  

Special Provisions and Conditions

• Clubbing provisions may apply if income is received by a spouse or minor child.
  
• Income from composite sources may need to be split between heads.
  
• Taxpayer must include such income in the return even if TDS is deducted.
  
• Income from foreign sources is also taxable for residents under this head.
  
• Income from other sources must be disclosed clearly to avoid penalties.