In accordance with Section 56 of the Income Tax Act, 1961, income falls under this category. Taxes on residuary income are assessed under this head in India.
The following is a list of some assessable incomes.
Income from dividends
Dividends to shareholders are a result of accumulated profits being distributed to them. The dividend income from shares of Indian or foreign companies operating in India is taxable in India. Such a distribution could include profits.
Dividend income is usually subject to a 10% TDS. Dividend income under $5,000 is not subject to TDS. Dividend interest expenses can be deducted up to 20%. Dividend surcharges cannot exceed 15%, however.
Earnings from casual sources
An example of casual income is winnings from card games, lottery tickets, horse races, and gambling. Other sources of income are taxed at 30% without deductions for expenses. In the absence of an interest amount exceeding $10000, a TDS of 30% is deducted from the lottery payer.
Interest on enhanced compensation received
The Indian government usually compensates aggrieved parties when it acquires land, buildings, or other assets for development projects. Disputes involving these acquisitions can result in enhanced compensation and interest being awarded to aggrieved parties. Furthermore, they may receive a portion of their capital gains or business income. The assessment of enhanced compensation, however, is subject to other factors.
Income from interest
Under this heading are debt securities, fixed deposits, and interest-generating deposits. Interest income can also be classified as follows:
Interest on Savings Bank Account Deposits
Interest earned on savings bank accounts is taxable, as well as interest from other sources. A savings account can be opened at a scheduled bank, such as a post office. There may be a tax deduction at source (TDS). Section 80TTA of Chapter 6A allows individuals under the age of 60 to deduct up to INR 10000 from their interest income.
Fixed or recurring deposit interest
Fixed deposits and recurring deposits are assessed as other sources of income. Deposits must be made with a scheduled bank, corporation, or other financial institution. By 10%, deposit income could be reduced.
There is a deduction available to Indian citizens over 60 under Section 80TTB, if they are not claiming one under Section 80TTA. Besides interest earned on savings bank accounts and recurring or fixed deposits, senior citizens are entitled to $5000 in deductions.
To qualify for the deduction under Section 80TTB, an individual must reside in India and be at least 60 years old. It is possible to deduct interest on savings bank account deposits even if a person is ineligible under Section 80TTA.
Deposits in a savings bank account
Interest is not charged on savings deposits up to $3500. There is now a limit of 7000. Section 80TTA and 80TTB also allow these individuals to claim deductions because the exemption is not a deduction.
Other Interest Income
An employee’s Public Provident Fund (PPF) or other statutory fund is exempt from taxation.
Owning and maintaining race horses generates income
A person who owns and maintains race horses may be subject to tax on interest income India at the slab rate if their income is taxable under another law.
In any case, the assessee’s income will be assessed as business income if he owns and maintains any other animal.
Pension payments to families
Upon receiving pension income on behalf of a deceased person, the heir is assessed as income. Legal heirs may take a one-third deduction from their pension up to $15,000.
Other sources of income include:
Meeting fees for directors
Rental income from vacant land
Agriculture income is derived outside of India
Interest on delayed income tax refunds
Forfeiture of advance money for property acquisition
Tax-free rental income from machinery
A person’s income is not assessed under any other heading, including capital gains, salary, and business income.
In addition to other sources of income, other sources of income are also taken into account when determining income. Furthermore, no other provisions of the Income Tax Act exempt the income. In other words, income not deductible under other heads is assessed under “Other Sources.” Some interest income is exempt from interest on post office savings accounts.