Income from other sources

Question 1

Royalty falls under which head of income?

Answer 1

Income from other source

Question 2

Give some examples of income from other sources

Answer 2

1. Dividend income
2. Royalty
3. Interest income
4. Delayed refund of tax
5. Ground rent
6. Rent from sub-lease of building
7. Rent from lease of building together with plant and machinery
8. Rent for provision of amenities and utilities

Question 3

When pension received will be Income from other source?

Answer 3

If the pension is received from a person other than employer employee relationship, then it will fall under the head Income from other source

Question 4

For provision, exploitation, use, grant of property to explore natural resources,
which amount is added in IFOS?
-Actual amount
-Fair market value

Answer 4

Actual amount

Question 5

For provision, exploitation, use, grant of property to explore natural resources,
which amount is added in IFOS?
-Actual benefit
-Fair market value of benefit received

Answer 5

Fair market value of benefit received

Question 6

What is the tax treatment of the amount received for vacating the possession of a building?

Answer 6

The consideration received less the amount which was once paid to vacate the possession will be chargeable to tax in that tax year and in the following 9 tax years in equal proportions

Question 7

Will these be chargeable under the head IFOS:
1. Approved Income Payment Plan
2. Annuity Plan under Voluntary Pension System Rules

Answer 7

Yes

Question 8

Which will be chargeable under the head IFOS for property received without consideration or received as a gift?
-Actual cost of property
-Fair market value of property

Answer 8

Fair market value of property

Question 9

What is the tax treatment for Bonus shares received?

Answer 9

Bonus shares received will be chargeable under the head IFOS as FTR chargeable at the rate of 10%

Question 10

Which amount should not be paid in cash?

Answer 10

1. Loan
2. Advance for sale of goods and rendering of services
3. Gift
4. Deposit for issuance of shares

Question 11

If the person giving loan, gift, advance for sale of goods and rendering of services, and deposit for issuance of shares is an NTN holder, then what is the method for transfer of amount?

Answer 11

If the person is an NTN holder then he can pay through cross cheque or any other banking channel

If the person doesn’t hold an NTN then he can only pay through cross-cheque

Question 12

What is the tax treatment if interest of National Savings Scheme or Defence Savings Scheme is received in arrears?

Answer 12

The tax payer may elect by writing to the Commissioner for interest to be taxed at the rate which was applicable in the tax year in which it relates

Question 13

What are the deductions allowed in Income from Other Sources?

Answer 13

Any expense which is incurred in earning the IFOs
Depreciation of lease of building together with plant and machinery
Initial allowance of lease of building together with plant and machinery

Question 14

When interest income is chargeable at 15% of FTR?

Answer 14

When the interest is earned by individual or AOP through bank, government, national savings scheme or defence savings scheme and
the amount is up to or lower than 5,000,000

Question 15

When interest income is not chargeable under FTR at 15 % rate?

Answer 15

When interest is earned by loan agreement i.e. other than bank, gov, national/defence savings scheme
or
The interest amount exceeds Rs. 5,000,000

Question 16

What is the tax treatment for interest income earned by companies?

Answer 16

It will be chargeable under normal tax regime no matter how much the amount of interest is.

Question 17

What is the tax treatment of bahbood saving certificates/ pensioners benefit account?

Answer 17

It is chargeable under NTR at a maximum of 5% rate.