Section 56-59 of the Income Tax Act deals with the taxation on any earnings that fall under the ‘Income from Other Sources’ head. Any income that is not chargeable under any head of income as mentioned in the IT Act, such as ‘Income from House Property’ and ‘Income from Salary’, but which is also not exempted from taxation, will be chargeable under ‘Income from Other Sources’ head.
Here’s a complete rundown of Section 56-59 of the IT Act.
The following list consists of various incomes that are taxable under Section 56 of the Income Tax Act:
Also Read: How To Pay Income Tax Online?
‘Income from Other Sources’ is usually calculated by deducting various expenses that you incur as specified in Section 57 from the income received and then disallowing certain specific expenses that are present in provisions of Section 58 of the IT Act. The allowable and disallowable expenses are as below:
Here are some of the allowable expenses as per Section 57:
As per Section 58 of the Income Tax Act, these are some of the disallowable expenses:
Also Read: Section 80D Of The Income Tax Act
Let’s assume there has been a deduction or allowance during the computation of ‘Income from Other Sources for a particular year regarding losses or expenses that have been recovered subsequently through any kind of benefit. In such a case, the same amount will be taxed under ‘Income from Other Sources.’
If you are a taxpayer with any kind of earnings from sources other than salary, business or profession, capital Gains, or house property, then you should be aware of the different types of other incomes as mentioned in Section 56-59 of the IT Act.
Ans: A gift refers to an amount of money, immovable or movable property that you receive without any consideration.
According to Section 56(2) of the Income Tax Act, you are liable to pay taxes on the gifts that you receive. These gifts are taxable under the ‘Income from Other Sources’ head. The donor, however, does not have to pay any taxes.
Ans: The following qualifies as property under Section 56-59 of the Income Tax Act:
Securities and shares (securities would include debentures, bonds and others)
Building or land
Jewellery (This includes any ornament made of gold, silver, diamond, precious stone, or semi-precious stones. Those precious or semi-precious stones attached to furniture, utensils or apparel would also qualify as jewels)
Bullion of the purest form
Ans: These are some of the gifts that will not qualify for taxation under the IT Act:
Any amount that you receive as a gift that does not exceed Rs. 50,000 in a financial year
Gifts that you receive from your relatives
Any gift you get for marriage, even from non-relatives
Amount you receive through a will
Any amount that you get from a local authority under Section 10(20)
Ans: According to Section 56(1), incomes of all kinds that are not excluded from total income will attract taxation under the ‘Income from Other Sources’ head if they are not subject to taxation under any of the four other heads of income as per Section 14.
Ans: When you receive any amount that is more than Rs. 50,000 from anyone other than particular relatives, the whole amount will be taxable. Moreover, immovable properties that you get without consideration have a stamp duty value exceeding Rs. 50,000, then the stamp duty value will be taxable.
Before you go…