Income from other sources is a head of income which includes the entire income of the individual which isn’t connected to the tax net. Here, we will be discussing only the income from the three different heads of income i.e. Income from Salary, House property, and Profit & F&O.
Salary of any individual mostly includes the income of the individual from the three named heads. It also includes the income from the option of an additional voluntary job or business. The individual can avail exemption for up to Rs.1.5 lakh from this head.
Here are some of the heads of salary income which are included in the salary income section:
1. Profit and Gain Account: This can be exercised only on the part of a final or final product. So, if an individual makes profits from a business that produces profits, it can be included in the profit and loss account. 2. Dividend Income: This refers to the income which an individual earns from passive income. It must be from capital gain or income from another source. 3. Capital Gains and Losses: The third column refers to the profit or loss account which includes the profit or loss account. It must be from a source which is not connected to the tax net. 4. Income from Other Sources: This includes income from a source which is not connected to the tax net. We have segregated profit and loss from these two sources.
Mr. Raj earns Rs. 5,000 monthly from a business that produces profits.
His net taxable income is Rs. 50,000. Income from Other Sources:
Income from other sources is that income that you earn from:
* Bank Fixed Deposits * Non Resident Indians. * Foreign Institutional or Permanent Residents.
That’s why they are also referred as Non Resident Indians or NRIs. NRI has also gained a bad image in public. But, still they don’t have the money to set up their own homes or firms or agreements. And, they don’t have the experience or qualifications to set up their own homes. So, they feel that their savings are not enough to invest in any good business. And, that is really wrong.
So, understanding the meaning of “Other sources” means differentiating different types of income. Different kinds of income are:
* Interest income. * Working capital. * Fixed income. * Real estate.