Income from Other Sources [Section 56 to 59]
Any income which is not chargeable to tax under Section 15, 22, 28, or 45, will be chargeable to tax as Income from Other Sources (IFOS) i.e. any income not taxable under the head Income from Salary, House Property, Business/Profession or Capital Gains, is chargeable to tax as Income from Other Sources.
Section 56 (2): Under Section 56 (2), the items that are mentioned as taxable under this head are as follows:-
1. Interest on Securities, provided Securities are held as Investment and not as Stock-in-trade. (If they are held as Stock-in-Trade, then interest therefrom will be chargeable to tax as income from Business or Profession and not as income from Other Sources).
2. Rent from Letting out of Plant & Machinery, Furniture.
3. Composite Rent (Combined Rent) from Letting out of Building, along with Plant & Machinery or other assets. For e.g.: Composite rent from letting out of a Cinema Building together with chairs, projectors and other furniture will be entirely chargeable as income from Other Sources.
4. Dividend from shares of a Foreign Company or from shares of a Co-Operative Society. [Dividend from shares of an Indian Company is exempt from tax by virtue of section 10 (34), if it was not exempt, then it would have been chargeable to tax as income from Other Sources.]
5. Any sum received as contribution by assessee from his employee towards any Staff Welfare Scheme. Initially when an employer receives any contribution from his employees towards any Staff Welfare Scheme, it becomes an income in his hand and later on when he deposits such sum in the respective fund, it is allowed as a deduction to him from his income as an allowable business expenditure, subject to the provisions of section 43B.
6. Any sum received under a ‘Keyman Insurance Policy (KIP)’ including any Bonus therein.
7. Winnings from Lotteries, Puzzles, Crosswords, Card games, any other game of any sort, Races including Horse Races or from Betting or Gambling. (Only Winnings from such
Section 56 (2): Under Section 56 (2), the items that are mentioned as taxable under this head are as follows:-
1. Interest on Securities, provided Securities are held as Investment and not as Stock-in-trade. (If they are held as Stock-in-Trade, then interest therefrom will be chargeable to tax as income from Business or Profession and not as income from Other Sources).
2. Rent from Letting out of Plant & Machinery, Furniture.
3. Composite Rent (Combined Rent) from Letting out of Building, along with Plant & Machinery or other assets. For e.g.: Composite rent from letting out of a Cinema Building together with chairs, projectors and other furniture will be entirely chargeable as income from Other Sources.
4. Dividend from shares of a Foreign Company or from shares of a Co-Operative Society. [Dividend from shares of an Indian Company is exempt from tax by virtue of section 10 (34), if it was not exempt, then it would have been chargeable to tax as income from Other Sources.]
5. Any sum received as contribution by assessee from his employee towards any Staff Welfare Scheme. Initially when an employer receives any contribution from his employees towards any Staff Welfare Scheme, it becomes an income in his hand and later on when he deposits such sum in the respective fund, it is allowed as a deduction to him from his income as an allowable business expenditure, subject to the provisions of section 43B.
6. Any sum received under a ‘Keyman Insurance Policy (KIP)’ including any Bonus therein.
7. Winnings from Lotteries, Puzzles, Crosswords, Card games, any other game of any sort, Races including Horse Races or from Betting or Gambling. (Only Winnings from such