The 6 items chargeable under the head “Income from Other Sources” are: 1. Insurance commission: Mr. A, a B. Com. Graduate, is an LIC agent and sells policies. The commission he earns on selling the policies will be taxable under Income from Other Sources. 2. Dividend income: Mr. B an Indian resident and shareholder of XYZ Co. (based in USA) receives dividend on those shares. This dividend income will be charged under the head Income from Other Sources and will be fully taxable U/S. 115O of the Income Tax Act. 3. Winning from horse race: Mr. C. bets in horse racing. The amount he wins in horse racing is classified as Income from Other Sources 4. Tuition fees: Mr. D takes tuitions for M. Com. Students in his spare time. The fees he earns will be classifies as Income from Other Sources since it is not his profession to teach students and he is undertaking it only out of his interest. 5. Royalty: Mr. E is a scientist and has patented many medicines that he has invented in his name. He earns royalty income from medicine manufacturers who use his formula. This will be taxable under Income from Other Sources. 6. Gifts: Mr. F received Rs. 75,000 on occasion of his birthday from his friends. This will be classified as Income from Other Sources.
2) Discuss 5 deductions under chapter VI A?
The 5 deductions under Chap. VI A are:
|Section |Particulars |Conditions |Deductions | |Sec. 80 C |Employee Welfare funds |Provident fund to which |Deduction to the extent of maximum Rs. | | | |Provident Fund, 1925 applies. |1,00,000. | |Sec. 80 D |Medical treatment of dependent handicapped |Amount paid for medical |Lower...