Page 203 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Personal Financial Planning

Notes p. With effect from 1-4-99 any transfer in a scheme for lending of any securities under an
agreement or arrangement which the assessee enters into with the borrower of such
securities subject to the guidelines issued by the Securities and Exchange Board of India is
not regarded as a transfer for the purposes of capital gains.
where in the transaction of lending shares of some distinctive numbers and receiving back
shares of some other numbers is the result, the same would not be considered as exchange of
asset within the definition of capital asset since the meaning of the word exchange necessarily
involves exchange of two different assets. Thus where the asset received back is not different
from what was lent in the above scheme of lending, no transfer is there for the purposes of
capital gain as long as the assets received back represent the same fraction of the ownership of
the company.

Income from other Sources

This head of income covers any income which is not chargeable to tax under any of the above
heads of income. Any income including gambling or profit/loss on running of race horses,
camels, interest income , etc are chargeable to tax under this head of income.

This is income that is not chargeable to tax under any other head of income. Such income covers.

Dividend

Under Section 10(33), any amount declared or paid by a Indian company by way of dividend is
tax-exempt in the hands of shareholders. Therefore, any dividend income received from a company
that is not an Indian company will be taxable in the hands of the recipient.
Winnings from lotteries, crossword puzzles, horse races and game shows:
In the case of winnings from lotteries, crossword puzzles, races (including horse races), card
games, game shows and other games of any sort, or from gambling or betting of any form or
nature whatsoever, ` 5,000 is exempt from tax. Tax will be deducted at source on the rest of the
winnings at the rate of 30 per cent (plus surcharge). This means that if you hit a jackpot of, say,
` 50,000, TDS will be calculated as under:

Total earnings ` 50,000
Less: amount exempt ` 5,000
Taxable amount ` 45,000
Tax on ` 45,000 @ 30% ` 10,500
Add: Surcharge @ 2% ` 210
Total TDS applicable ` 10,710

Winnings from game shows like Kaun Banega Crorepati will be covered by this clause from
1 June 2001. Winnings before this date will not be subject to TDS; you will have to pay tax
yourself.
Interest on securities: The income from interest on securities is chargeable to tax if the securities
are held as an investment, and not as stock-in-trade. If the securities are held as stock-in-trade,
the interest income is taxable under the head profits and gains from business or profession.
Although interest income is taxed under the head income from other sources, a deduction is
available in some cases under section 80L.

Others

a. The interest on bank deposits and loans (except in the case of assesses in the money-
lending business).

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