Costing and Taxation · Ch 3 — Income from Other Sources
Incomes Commonly Taxable under this Head
3.2
Incomes Commonly Taxable under this Head
Beyond the two Section 56(2)-named categories studied in detail later in this chapter, a wide range of everyday receipts are routinely assessed under Income from Other Sources. This section lists the ones a student is expected to recognise.
Note
Common items taxable as Income from Other Sources
- Dividend income from shares of a company — taxable in the shareholder's own hands. Since the Dividend Distribution Tax that companies used to pay was abolished by the Finance Act, 2020, the ENTIRE dividend received is now the shareholder's taxable income, not a tax-free receipt.
- Interest income on savings bank accounts, fixed deposits, and company deposits — EXCEPT interest specifically falling under 'Interest on Securities' (Section 3.4 below), which is a distinct, separately-named category.
- Family pension — the pension received by the legal heirs/family of a deceased employee or pensioner, as distinct from the pension the employee himself received during his lifetime (which is taxed as Salary, not here). Family pension carries its own standard deduction under Section 57(iia), covered in Section 3.5's computation.
- Income from letting out machinery, plant, or furniture, where this activity is not part of the assessee's regular business. …
Definition 1Family Pension
Pension received by the family/legal heirs of a deceased employee, taxable under Income from Other Sources (unlike the employee's own pension in his lifeti …
Definition 2Dividend Income
Income from shares of a company, fully taxable in the shareholder's own hands under Income from Other Sources since the Dividend Distribution Tax was abo …