iCalculator™ IN: Other Income
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Other income refers to income, which cannot be classified as salary, business income, capital gains, or as income from house property. For income tax purposes, other income is referred as 'income from other sources.'
Other Income types in Detail
Dividends other than a domestic company: Any dividends received from a domestic company or mutual funds are tax-free. However, if you receive a dividend from a co-operative bank or a foreign company, you need to add this amount to your taxable income.
Pensions received by a legal heir: If an individual dies, but the legal heir continues to receive the individual’s pension, this will be considered as other income for the receiver. Tax on such pension is the lower of the two amounts - 33 1/3% of the pension or ₹15,000.
Income generated from giving plant, machinery or furniture on rent is income from other sources. However, you can deduct any expenses incurred on maintaining such assets, including repairs, insurance premiums, depreciation, and any other expenses, which are essential for earning this income. You need to pay tax on the income left after deducting such expenses.
Winnings from lottery, games, crosswords, horse races, card games, TV shows, etc. is taxable at a flat rate of 30%, irrespective of the winning amount. Also, the entire winning amount is taxable, and you cannot deduct expenses incurred on generating such income, for examples phone calls made to ‘Kaun Banega Crorepati.’
Staff welfare: If you are an employer and you collect money for staff welfare scheme from employees, this will count as income from other sources. However, you need to pay tax only on the unused amounts lying in such funds, after deducting the amount spent on staff welfare activities.
Income from sub-letting: If you are a tenant in a residential or a commercial property, and you sub-let a part of the property to another tenant, such rental income will be considered as other income.
Any other money received as gifts or for any other purposes, where the amount is above ₹50,000 should be shown as income from other sources. The few exceptions to this rule are money received as a gift at the time of marriage, money inherited through a will, or money received from relatives like spouse, brother, sister, parents, etc.
Use our tax calculator to see how other income affects your tax payable.
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