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Income from Other Sources
QUESTION FOR PRACTICE

Q.6. Mr. Anil furnishes the following particulars of his income for the previous year 2014-15. Compute his gross total income.

(i) Dividend on equity shares 600
(ii) Dividend on preference shares (Gross) 3,200
(iv) Income from letting on hire of building and machinery
      under one composite lease

27,000
(iv) Interest on bank deposits 2,500
(v) Director's sitting fees received 1,200
(vi) Ground rent 600
(vii) Income from undisclosed sources 10,000
(viii) Winning from lotteries (Net) received 14,000

The following deductions are claimed by him :
(a) Collection charges of dividend 20
(b) Allowable depreciation on building and machinery 4,000
(c) Fire insurance on building and machinery 100
Q.7. Mr. Shankar Lal's particulars of income are as under :
(a) He took a house on the rent of Rs. 1,000 per month and let it out again for Rs. 1,600 per month. Besides it he received Rs. 5,000 rent from his ownership house.
(b) Dividend from an Indian Company Rs. 4,000. (Gross)
(c) Speculation business profit Rs. 6,000 and Rs. 500 from cricket gambling.
(d) Agricultural income in Pakistan Rs. 10,000 was not brought in India. Rs. 18,000 income from agricultural land situated at Kanpur.
(e) Salary as an M.L.A. Rs. 30,000 and daily allowances Rs. 4,000.
(f) Share in H.U.F. income Rs. 8,500.
(g) Dividend received Rs. 6,000 from Co-operative Society.
Compute Income from Other Sources.
Notes : 
(1) Assumed that the assessee is resident in India.
(2) Rent from own house is assessable under the head 'Income from House Property".
(3) Speculation business profit is assessable under the head 'Profits and Gains of Business or Profession'
(4) Share in H.U.F. income is exempt.

Q.8. Shri Ajay Kumar is resident for Income tax purposes and his estimated total income for the financial year 2013-14 will not exceed the minimum amount liable to income tax (Rs. 1,60,000). He has sent this declaration duly certified by the Assessing Officer in the beginning of the year to each one of the officers responsible for paying interest on the following securities held by him along with the particulars of these securities :
(a) Rs. 1,20,000, 6% Tax-free Debentures of a Textile Company.
(b) Rs. 54,000, 10% Tax-free Debentures issued by Rajasthan Financial Corporation.
(c) Rs. 25,000, 5% U. P. Government Loan.
(d) Rs. 12,000, 5% Debentures of Delhi Development Authority.
(e) Rs. 60,000, 12% Tax-free Debentures of Mahendra and Mahendra Company listed in a recognised Stock Exchange.
Bank charged 2% commission on amount of interest collected.
Calculate his taxable income from interest on securities under the head 'Income from other Sources' for the A. Y. 2014-15. Interest is payable in each case on 30th June and 31st December.


Q.9.

On marriage anniversary of Mr. Ramesh on 8.7.2013, relatives and family friends made the following gifts to the couple :
1. Cousin of Mr. Ramesh gifted a diamond ring to Mrs. Ramesh valued at Rs. 55,000.
2. Cousin of Mrs. Ramesh gifted Rs. 31,000 to her.
3. Maternal uncle of Mr. Ramesh gifted Rs. 51,000 to Mrs. Ramesh.
4. Father-in-law and mother-in-law of Mr. Ramesh gifted Rs. 50,000 each to him.
5. Father and mother of Mr. Ramesh gifted Rs. 1,00,000 each to Mrs. Ramesh.
6. Mr. A, a family friend gifted Mrs. Ramesh Rs. 21,000.
7. Mr. B, a family friend gifted Mr. Ramesh Rs. 31,000.
8. Sister-in-law (sister of Mrs. Ramesh) gifted Rs. 31,000 to Mr. Ramesh.
9. Sister-in-law (Brother's wife of Mr. Ramesh) gifted Rs. 50,000 to Mrs. Ramesh.
10. Son of Mr. Ramesh and Mrs. Ramesh gifted Rs. 31,000 to his mother.
Explain which gifts are liable to be included in the income of Mr. Ramesh and Mrs. Ramesh;

Solution
                                                   Gifts Liable to Tax
1. Gift No. 1 is in kind Rs. 55,000 shall be included in the income of Mrs. Ramesh.
2. Gift No. 2 and Gift No. 6 exceed Rs. 50,000 in the aggregate, hence Rs. 52,000 shall included in the income of Mrs. Ramesh.
3. Gift No. 7 does not exceed Rs. 50,000, hence, not includible in the income of Mr.
4. Gift Nos. 3, 4, 5, 8, 9 and 10 are from relatives, hence, not includible in income.

Q.10. Calculate income from other sources from the information given below :
(a) Winnings from lottery Rs. ,00,000.
(b) Amount received from race winnings, Rs. 35,000.
(c) Gifts received :
     (i) Received Rs. 20,000 as gift from his friend.
     (ii) Received Rs. 1,00,000 as gift from his elder brother,
     (iii) Received Rs. 1,40,000 as gift on his marriage,
     (iv) Received Rs. 80,000 as gift from his NRI friend,
     (v) Another gift of Rs. 18,000 received from his friend.

FILL IN THE BLANK QUESTIONS WITH ANSWER

Q.1. Where a source of Income does not specifically fall under any other head, it falls under

Q.2. It is also called.................head of income.

Q.3. As per sec................incomes are chargeable U/H Income from Other Sources.

Q.4. Interest on Securities held as……………... are charged U/H Income from Other Sources.
(a) Investment
(b) Stock In Trade
(c) None of the above

Q.5. Gifts aggregating to more than Rs................in a year on or after 1st April 2006 is taxable U/H I/F/O/S.

Q.6. Tell whether the following amounts to dividend or not-
(a) Any distribution of debenture stock to shareholders.
(b) Payment made by company for Buy Back of Shares.
(c) Distribution of shares by the Resulting Company to the S/H of the de-merged company.
(d) Any payment by way of advance or loan to a person acting on behalf or for the individual benefit of S/H.

Q.7. Dividend declared or distributed by domestic company is exempt in the hands of………..
(a) Company
(b) Shareholders
(c) Management
(d) None of the above

Q.8. Dividend on units of a Mutual Fund is

Q.9. If the amount of contributions to provident fund is credited to the employee's account in the relevant fund, the tax payer is entitled to deduction of such contribution. (True/ False)

Q.10. If the books of accounts are maintained on cash basis, the Interest on Securities will be chargeable on……………………………basis.
(a) Mercantile
(b) Accrual
(c) Receipt
(d) None of the above

Q.11. Where no method of accounting is regularly employed by the assessee, the Interest will be charged on..................Basis.

Q.12. Interest on Securities held by issue Department of the Central Bank of Ceylon is from tax.

Q.13. Interest to non-resident Indians on notified bonds is taxable U/H Income from Other Sources. (True / False)

Q.14. Give the taxability of the following
Subham let out buildings along with tube-wells, refrigerators, furniture etc. The Cost of facilities is inseparable.

Q.15. Gift on occasion of marriage exceeding Rs. 50,000 is taxable U/H Income from Other Sources. (True / False)

Q.16. 'Relative' does not include brother or sister of the spouse of the Individual. (True / False)

Q.17. State whether the following are taxable U/H Income from Other Sources or not-
(a) Gift from any trust or institution registered U/S 12AA.
(b) Interest earned prior to commencement of Business.
(c) Interest on notified securities issued by Central govt.
(d) Gratuity received by a director who is not an employee of the company

Q.18. Winning from Lotteries accrue or arise outside India is taxable U/H Income from Other Sources. (True / False)

Q.19. Interest on employee's contribution to unrecognised provident fund is taxable U/H Income from salary. (True / False)

Q.20. Income from subletting of a House Property by a tenant is taxable U/H-
(a) Other Sources
(b) PGBP
(c) House Property
(d) None of the above.

Q.21. Examinership fee received by a teacher is taxable U/H
(a) Income from Salary
(b) PGBP
(c) Other Sources
(d) None of the above

Q.22. Interest on Short term deposit received by a cooperative society carrying on Banking Business is taxable U/H Income from Other Sources. (True / False)

Q.23. What is the amount of deduction available in case of Family pension?

Q.24. Personal expenses are deductible while calculating Income from Other Sources. (True / False)

Q.25. Any sum paid on account of wealth tax is not deductible while calculating Income from Other Sources. (True / False)

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