FAQs on Income from other source

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FAQs on Income from other source

INCOME FROM OTHER SOURCES

Q.1) What is Casual Income?

Casual income means any receipts which are of a casual and non-recurring nature. For example, income earned by way of winnings from lotteries, races including horse races, crossword puzzles, etc.

Q.2) Under which head pension received from employee provident fund organization under Employee Pension scheme 1995 (EPS 95) scheme is taxable?

Income is chargeable to tax under the head “salaries” if employer-employee relationship exists. However, in case pension is received from employee’s provident fund organization there does not exist employer-employee relationship. Therefore, such pension is taxable under the head “Income from other sources”.

Q.3) ​Is dividend received in excess of Rs. 10,00,000 taxable in the hands of shareholders?

As per section 115BBDA, dividend received in excess of Rs. 10,00,000 is taxable in the hands of shareholders in case following conditions are fulfilled –

  • Person receiving dividend is a resident Individual or HUF or firm
  • Dividend received from a domestic company is in excess of Rs. 10,00,000

In case above mentioned conditions are fulfilled, dividend in excess of Rs. 10,00,000 is taxable at the rate of 10% .

  • Section 115BBDA is applicable from AY 2017-2018.
  • Section 115BBDA is not applicable on dividend specified in section 2(22)(e). [loan/advance paid to shareholder holding more than 10% voting rights OR to a business entity in which such shareholder has substantial interest]

W.e.f AY 2018-2019, Section 115BBDA would be applicable to all persons except following –

  • Domestic company
  • Charitable Trust or institution registered under Income Tax Act
  • Fund, Instituition, Trust, University, Educational Institution, Hospital, Other medical institution referred to in Section 10(23C) of the Income Tax Act.
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