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Income Tax Laws – I Gopika Juneja, Lovely Professional University

Notes Unit 13: Income from Other Sources

CONTENTS
Objectives
Introduction
13.1 Income Chargeable under the Head “Income from Other Sources”

13.2 Tax Treatment for Dividends
13.2.1 Meaning of the term ‘Dividend’ [Section 2(22)]
13.3 Deductions in Calculating Income from Other Sources
13.3.1 Conditions to be Satisfied for Claiming Deductions

13.3.2 Amounts not Deductible (Section 58)
13.4 Tax Concessions
13.5 Assessee External to the Range of Tax Liability in Respect of Interest on Securities
13.6 Summary
13.7 Keywords
13.8 Review Questions

13.9 Further Readings

Objectives

After studying this unit, you will be able to:
Define the concept of Income chargeable under the head "Income from other sources"
Discuss the Tax treatment for Dividends

Describe the Deductions in calculating income from other sources
Explain the concept of Tax concessions
Trace the Assessee external to the range of tax liability in respect of Interest on Securities

Introduction

Income chargeable under Income-tax Act, which does not specifically fall for assessment under
any of the heads discussed earlier, must be charged to tax as “income from other sources”. This
head is thus a residuary head of income under which income can be computed only after deciding
whether the particular item of income is otherwise assessable under any of the first four heads.
In addition to the taxation of income not covered by the other heads, Section 56(2) specifically
provides certain items of incomes as being chargeable to tax under the head in every case. The
provisions for computation of income from other sources are covered under Sections 56 to 59.
While section 56 defines the scope of income chargeable under this head, Sections 57 and 58
specify the basis of computation of such income.
At the end of this unit, you will learn (i) which are the income chargeable under the head income
from other sources, (ii) which are the incomes specifically taxable under this head, (iii) what are
admissible deductions, (iv) which are the inadmissible deductions and (v) what are the provisions
of taxability of gift in kind or in cash from relative or unrelated persons.

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