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Income From Other Sources Detail In ITR
It is a very common knowledge that Income Tax Department bifurcates income in 5 parts. These are salary, house property, business/ profession, capital gain & income from other sources.
While filing ITR 1 form 2021-22, many of us face confusion about what comes under income from other sources & this confusion leads to trouble. Trouble comes in the form of penalty & interest notice from the income tax department on non-disclosure of income.
Therefore, we present this blog to solve all your problems while filing ITR 1 form 2021-22.
Important: e-verify your income tax return within 30 days, else your return will be considered as not filed.
What is 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 a company.
Although a dividend given by an Indian company (in which the 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.
Dividends from foreign companies, deemed dividend u/s 2(22)(e) etc are taxable in the hands of shareholders.
- Interest Income: Keeping the 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 accounts 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 a 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 too. But what if that gift becomes 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 depends upon the occasion it was given or its 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 relatives) gives you a gift (on occasion other than marriage) & it’s value exceeds ?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 it is not limited to these sources only.
Now, you must have noticed the line “Ensure to Fill “Sch TDS2”. What is this? What detail should be filled in this head? Let’s understand.
Ensure to Fill “Sch TDS2”
You can find this schedule in the 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 provides details of all the tax deductions 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 of 7 frequently asked questions.
Frequently Asked Questions
Q- Under which head pension income & family pension income are taxable?
Pension income is taxable under head “Income from Salary” while family pension income is taxable under head “Income from other Sources”.
Q- How to save tax on Fixed Deposits?
To save tax, make a fixed deposit with lock-in period of 5 years. Now, claim the amount of investment as deduction u/s 80C up to Rs.1,50,000. But do note that interest received from such FD is taxable as income from other sources.
Q- Do I have to show interest income in ITR 1 if TDS is already deducted on it?
Yes, you should disclose interest income under head Income from Other Sources in ITR 1 irrespective of tax deduction and later claim the tax credit using Form 16A.
Q- Can I claim deduction of expenses incurred to earn Income from Other Sources?
Yes, you can claim deduction of such expenses provided they directly relate to such income.
Q- I received a painting as a gift. Is it taxable?
Asset includes “painting” as per Income Tax Act and If the value of such gift exceeds Rs.50,000 then it will be taxable under head Income from Other Sources.
Q- Do I have to pay tax on gifts received on occasion of marriage?
No, any gifts received (whether in cash or kind) on the occasion of marriage are totally exempt from income tax.
Q- On what amount I have to pay tax, if the value of gift is more than Rs.50,000?
If you have received this gift on any occasion (other than marriage) & its value exceeds Rs.50,000. Then the whole amount will become taxable under head Income from Other Sources.
Q- How can I file income tax returns for my winnings from online betting sites in India? Will the IT department cause some issue if I declare the amount in “income from other sources”?
Winnings will be taxable under the Head of “Income From other Sources” and will be liable to 30% tax
Q- What are casual incomes? What is its tax treatment under the Income Tax Act?
Casual income means income which is not earned in a regular manner such as lottery income, horse races etc. and they are charged @30%
Q- Do I need to fill the “income from other sources” field? TDS has been deducted by a company, as I was on contract. I received Form 16A. If I leave it blank, will it be fine?
It would not be appropriate to leave it blank.
Q- Is it mandatory for declaring his income abroad if he is having income from other sources in india?
It solely depends on the Tax Law of that country.
Q- What is the tax treatment of interest earned from a joint bank account? In whose income returns should such income be reflected?
It is incorporated in that person’s return whose PAN is registered with the bank.
Q- My wife is giving home tuition and I want to show that income in income tax return. Where should I show that? Does she need to pay GST on that amount?
If tuition income is part time, it can be shown under Income from other sources, but the main source of income is Tuition fee then it will be considered as business income and GST will be applicable whenever gross receipt crosses the threshold limit.
Q- What would happen if we don't declare “income from other sources”?
The Income Tax department could issue notice to the taxpayers who fail to include the income from other sources.
Q- I received Form 16A from bank & TDS certificate for amount paid on interest on my Tax Saver FD (80C), while filing IT returns should I again declare this interest amount? Under the “income from other sources”?
Yes, it is liable to include income from other sources.
Q- What are the general incomes under the head income from other sources?
Income from dividend, one time income, Interest from deposit, Income from machinery, plant or furniture, and many more which are not taxed under any other head of income.
Q- Can I deduct expenses from income from other sources?
Yes, if there is any expense incurred for earning income, it can always be deducted.
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