What are Income from Other Sources?
As the name suggests, it includes all income earned by you from other sources. In simple words, if any income does not fall in the first 4 heads of income, it will come under this head. Some Common examples of income from other sources are.
- Interest Received from Fixed Deposits
- Dividends Received
- Amount received as a Family Pension
- Saving Bank Account interest earned
- Interest income on Income Tax Refund amount
- Interest received on securities
- Any other type of Interest Income like interest from Loan given to Relative
- Gift Income [Other than those gifts which are not exempt]
- Winnings from Lotteries, crossword puzzle, race including horse race, card and other games including gambling, betting etc
- Any amount received from employee like PF contribution etc which is not taxable under PGBP (Profit and Gains of Business and Profession).
- Income from subletting of house property etc
Income from Other Sources in ITR 1 Sahaj Form
While filing ITR 1 online, you’ll have to disclose all the income from other sources as a total amount. As shown in the screenshot below, this disclosure has to be made under tab “Computation of Income & Tax” in the field “B3: Income from Other Sources (Ensure to Fill Sch TDS2)”.
Now, we know where to fill the income details, but the big question is
What type of income comes under Other Sources?
Section 56(2) of the Income Tax Act enlist certain incomes which are chargeable under head Income from Other Sources. For your convenience we have compiled the list of some popular income sources as below.
- Dividend Income: It’s the most common & preferred way of earning among investors. Dividend is nothing but a share of profit given to the members (shareholders) of company.
Although dividend given by an Indian company (in which public is interested) is exempt from tax in the hands of shareholders. But if the total income from dividend income exceeds ?10 Lac then excess will be taxable @ 10% u/s 115BBDA & in this you will need to file ITR 2.
Dividend from foreign companies, deemed dividend u/s 2(22)(e) etc are taxable in the hands of shareholder.
- Interest Income: Keeping future in mind, we pool our savings & invest it to earn some income in the form of interest. Some popular methods are savings bank account, fixed deposits etc. Most of the interest incomes are chargeable to tax under head Income from Other Sources. But certain sections like 80TTA & 80TTB provide deduction on interest income from savings bank account etc.
- Family Pension Income: If you are receiving any pension income on behalf of a deceased family member. Then it’ll become taxable under this head. Though you can claim deduction of ?15,000 or 1/3rd of the amount received, whichever is lower.
- Gifts Received: Gifts are fun! I love them & bet you love them to. But what if that gift become taxable in your hands? Bad feeling na? Any gift received, if it becomes taxable then it’ll be included under head “Income from Other Sources”. Taxability of such gifts depend upon the occasion it was given or it’s value. For e.g. if you have received any gifts on your marriage from anyone then they are exempt from tax. On the other hand, if someone (excluding relative) gives you a gift (on occasion other than marriage) & it’s value exceed ?50,000 then it is taxable in your hands.
- Royalty Income: If you own some patents or have authored certain book (other than textbooks). Then any royalty income will be taxable under this head. You can claim deduction against such income u/s 80RRB & 80QQB.
- Winnings from lottery, puzzles, card games, horse races or any other game of betting/ gambling is taxable under this head. But in case of such income, return will be filed using ITR 2 & not ITR 1 Form Sahaj.
The above list shows the most common form of incomes which are taxable under head “Income from Other Sources”. But is not limited to these sources only.
Now, you must have noticed the line “Ensure to Fill “Sch TDS2”. What is this? What detail to be filled in this head? Let’s understand.
Ensure to Fill “Sch TDS2”
You can find this schedule in 4th tab “Tax Details”. Now, as the heading suggests, details of tax deducted under Form 16A are to be filled here.
Form 16A is a certificate which provide details of all the tax deduction made on income other than salary income. Therefore, you need to fill these details in order to claim tax credit while discharging tax liability.
This is how the Income from Other sources is shown in ITR 1 Form Sahaj. Now, the concepts of Income from Other Sources are vast. And the discussions are never ending.
To address concerns further, we have made a list 7 frequently asked questions.