UNIT 4

INCOME FROM H. P.
CAPITAL GAIN
OTHER SOURCES
Presented by
Prof. Mahendra Patel
 INCOME FROM HOUSE
PROPERTY
After studying this unit, you would be able to –
•Comprehend when income is chargeable under the
head “Income from house property”.
•Appreciatethe meaning and tax treatment of
composite rent.
•Determineannual value of different categories of
house property.
•Compute income from house property for different
categories of house property.
•Comprehend and apply the tax treatment on
recovery of unrealized rent and arrears of rent.
•Compute income from co-owned property.
 INCOME FROM HOUSE
PROPERTY
•Income from house Property ( Sec 22 to 27 )
1. Sec 22 & 23 – Income taxable under the
head and how it is calculated.
2. Section 24 – Deductions Allowed
3. Section 25 – Deductions which are not
allowed and taxable
4. Section 26 – Special treatment in case of co
– owners of the house.
5. Section 27 – Various Terms for this head of
income.
 What is Income From House
Property
•Theannual value of a property, consisting of
any buildings or lands appurtenant thereto,
of which the assessee is the owner, is
chargeable to tax under the head ‘Income
from house property’.
•Buildings or lands appurtenant thereto
 CHARGEABILITY [SECTION 22]

(i) The process of computation of income under the

head “Income from house property” starts with
the determination of annual value of the property.
The concept of annual value and the method of
determination is laid down in section23.
(ii) The annual value of any property comprising of
building or land appurtenant thereto, of which the
assessee is the owner, is chargeable to tax under
the head “Income from house property”.
However, where the property is occupied for the
purpose of any business or profession carried on by
him, the profit of which is chargeable to tax as
profits or gains from business or profession, the
annual value of such property would not be
chargeable to tax under the head “Income from
 CONDITIONS FOR
CHARGEABILITY
(i) Property should consist of any building or
land appurtenant thereto.
(ii) Assessee must be the owner of the property
(iii)The property may be used for any purpose,
but it should not be used by the owner for
the purpose of any business or profession
carried on by him, the profit of which is
chargeable to tax.
(iv)Property held as stock-in-trade etc.
 Determination of Annual
Value
Gross Annual Value of the property:
1. Rent payable by the tenant (actual rent)
2. Municipal valuation of the property.
3. Fair rental value (market value of a similar
property in the same area).
4. Standard rent payable under the Rent
Control Act.
The Gross Annual Value is the municipal value, the
actual rent (whether received or receivable) or the
fair rental value, whichever is highest. If, however,
the Rent Control Act applies to the property, the
gross annual value cannot exceed the standard
rent under the Rent Control Act, or the actual rent,
 INCOME FROM HP = RENT
Composite rent: The owner of a property may sometimes
receive rent in respect of building as well as – (1) other assets
like say, furniture, plant and machinery. (2) for different
services provided in the building, for eg. – (a) Lifts; (b)
Security; (c) Power backup; The amount so received is known
as “composite rent”.
Tax treatment of composite rent
• Where composite rent includes rent of building and charges
for different services (lifts, security etc.), the composite rent
is has to be split up in the following manner-
(a) the
sum attributable to use of property is to be assessed
under section 22 as income from house property;
(b) thesum attributable to use of services is to charged to tax
under the head “Profits and gains of business or profession”
or under the head “Income from other sources”, as the case
may be.
(iii) Manner of splitting up
DETERMINATION OF ANNUAL
VALUE
 DETERMINATION OF ANNUAL
VALUE
Determination of annual value for different
types of house properties
(1)Where the property is let out throughout
the previous year [Section 23(1)(a)/(b)]
(2)Where let out property is vacant for part of
the year [Section 23(1)(c)]
(3)In case of self-occupied property or
unoccupied property [Section 23(2)]
(4)Where a house property is let-out for part of
the year and self-occupied for part of the
year [Section 23(3)]
(5)Incase of deemed to be let out property
[Section 23(4)]
 DETERMINATION OF ANNUAL
VALUE
(i) Determination of annual value for different
types of house properties
(1)Where the property
(2)Where let out
In case of Where In
(3)In case of a house property held as stock-in-
trade [Section 23(5)]
(4)In case of a house property, a portion let
out and a portion self-occupied
 DETERMINATION OF ANNUAL
VALUE
(i) Determination of annual value for different
types of house properties
(ii) Treatment of unrealised rent
(iii)Property taxes (Municipal taxes)
 DEDUCTIONS FROM ANNUAL
VALUE [SECTION24]
There are two deductions from annual value. They are –
(1) 30% of NAV; and
(2) Interest on borrowed capital
(1) 30% of NAV is allowed as deduction under section
24(a)
(a) This is a flat deduction and is allowed irrespective of
the actual expenditure incurred.
(b) The assessee will not be entitled to deduction of
30%, in the following cases, as the annual value itself is nil.
(2) Interest on borrowed capital is allowed as deduction
under section 24(b)
• Interest for pre-construction period:
• Interest
for the year in which construction is
completed:
• (ii) Deduction in respect of one self-occupied property
 DEDUCTIONS FROM ANNUAL
VALUE [SECTION24]
Important points:
(1)The ceiling limit would not apply to
let-out/deemed let-out property
(2)Interest allowable on accrual basis
(3)Unpaid purchase price would be considered
as capital borrowed
(4)Interest
on unpaid interest is not
deductible.
 COMPUTATION OF “INCOME
FROM HOUSE PROPERTY
PROPERTY LET OUT THROUGHOUT THE PREVIOUS YEAR
 INADMISSIBLE DEDUCTIONS

Interest chargeable under this Act which is

payable outside India shall not be deducted
if –
(a) tax has not been paid or deducted from
such interest and
(b) there is no person in India who may be
treated as an agent3.
 Ownership of House Property
•It is only the owner (or deemed owner) of
house property who is liable to tax on
income under this head.
•Owner may be an individual, firm, company,
cooperative society or association of
persons.
•The property may be let out to a third party
either for residential purposes or for
business purposes.
•Annual value of property is assessed to tax
in the hands of the owner even if he is not
in receipt of the income.
 DEEMED OWNERSHIP
As per section 27, the following persons, though not
legal owners of a property, are deemed to be the
owners for the purposes of section 22 to 26.
(i) Transfer to a spouse
(ii) Transfer to a minor child
(iii)Holder of an impartible estate
(iv)Member of a co-operative society etc.
(v) Person in possession of a property
(vi)Person having right in a property for a
period not less than 12 years
Exception – In case the person acquiring any rights
by way of lease from month to month or for a period
not exceeding one year, such person will not be
deemed to be the owner.
 Property Income Exempted
From Tax
Income from a farm house [section 2(1A) (c)
and section 10(1)].
2. Annual value of one palace in the
occupation of an ex-ruler [section 10(19A)].
3. Property income of a local authority
[section 10(20)].
4. Property income of an approved scientific
research association [section 10(21)].
5. Property income of an educational
institution and hospital [section 10(23C)].
 Property Income Exempted
From Tax
6. Property income of a registered trade
union [section 10(24)].
7. Income from property held for charitable
purposes [section 11].
8. Property income of a political party
[section 13A].
9. Income from property used for own
business or profession [section 22].
10. Annual value of one self occupied
property [section 23(2)].
 UNIT 4
CAPITAL GAIN

Presented by
Prof. Mahendra Patel
 OBJECTIVE
Objective of this lesson is to understand the
meaning of capital asset, types of capital
asset, what is not capital asset,
computation of capital gain, types of
capital gains etc.
 CAPITAL ASSET
Any income profit or gains arising from the
transfer of a capital asset is chargeable as
capital gains. Now let us understand the
meaning of capital asset.

Capital Asset means property of any kind,

whether fixed or circulating, movable or
immovable, tangible or intangible, like
House, Gold, Share and Securities, Land,
Land and Building etc.
 CAPITAL ASSET
Capital Asset includes property of any kind, whether
fixed or circulating, movable or immovable,
tangible or intangible, held by the assesses,
whether or not connected with his business or
profession, but does not include, i.e., Capital
Assets exclude:
1. Stock in trade held for business
2. Agricultural land in India not in urban area i.e., an
area with population more than 10,000.
3. Items of personal effects, i.e., personal use
excluding jewellery, costly stones, silver, gold
4. Special bearer bonds 1991
5. 6.5%, 7% Gold bonds & National Defence Bonds
1980.
 TYPES OF CAPITAL ASSET
There are two types of Capital Assets:
Short Term Capital Assets (STCA): An asset,
which is held by an assessee for less than 36
months, immediately before its transfer, is called
Short Term Capital Assets. In other words, an
asset, which is transferred within 36 months of its
acquisition by assessee, is called Short Term
Capital Assets.
Long Term Capital Assets (LTCA): An asset,
which is held by an assessee for 36 months or
more, immediately before its transfer, is called
Long Term Capital Assets. In other words, an
asset, which is transferred on or after 36 months
of its acquisition by assessee, is called Long Term
 TYPES OF CAPITAL ASSET
There are two types of Capital Assets:
Short Term Capital Assets (STCA):
Long Term Capital Assets (LTCA):
The period of 36 months is taken as 12 months
under following cases:
1. Equity or Preference shares,
2. Securities like debentures, government securities,
which are listed in recognized stock exchange,
3. Units of UTI
4. Units of Mutual Funds
5. Zero Coupon Bonds
## Holding period determined from the date of
acquired to date of transfer
 CAPITAL GAIN
The profit arises on transfer of capital assets after
deducting specific expenditure is Capital Gains

TYPES OF CAPITAL GAIN

The profit on transfer of STCA is treated as Short
Term Capital Gains (STCG) while that on LTCA is
known as Long Term Capital Gains (LTCG)

While calculating tax the STCG is included in Total

Income and taxed as per normal rates while LTCG is
taxable at a flat rate @ 20%.
 BASIS OF CHARGE
(Conditions)
The capital gain is chargeable to income tax if the
following conditions are satisfied:
1. There is a capital asset.
2. Assessee should transfer the capital asset.
3. Transfer of capital assets should take place
during the previous year.
4. There should be gain or loss on account of such
transfer of capital asset.
 TRANSFER
The word transfer under income tax act is defined
under section 2(47). As per section 2 (47) Transfer
of capital asset, includes sale, exchange or
relinquishment of the asset or extinguishments of
any right therein or the compulsory acquisition
thereof under any law
In simple words Transfer includes:
1. Sale of asset
2. Exchange of asset
3. Relinquishment of asset (means surrender of
asset)
4. Extinguishments of any right on asset (means
reducing any right on asset)
5. Compulsory acquisition of asset.
 TRANSFER
The word transfer under income tax act is defined
under section 2(47). As per section 2 (47) Transfer
of capital asset, includes sale, exchange or
relinquishment of the asset or extinguishments of
any right therein or the compulsory acquisition
thereof under any law

The definition of transfer is inclusive, thus transfer

includes only above said five ways. In other words,
transfer can take place only on these five ways. If
there is any other way where an asset is given to
other such as by way of gift, inheritance etc. it will
not be termed as transfer
 TRANSFER (Not Considered)
The following event not treated as Transfer:
1. Transfer of asset by holding company to
subsidiary company
2. Transfer of asset by Subsidiary company to
holding company
3. Transfer of assets under the scheme of
amalgamation
4. Transfer of assets under the scheme of demerger
5. Transfer of agriculture land before 01-03-1970
6. Transfer any art, menu script, painting to
government, university, museum
7. Conversion of bond and securities into share
8. Transfer of assets in conversion of company
 COMPUTATION OF CAPITAL
GAINS
Statement of Capital Gains
Particulars Amount
Full Value of Consideration ---
(Transfer price or The sale
price)
Less: Cost of Acquisition*(COA) ---
Cost of Improvement*(COI) ---
Expenditure on transfer ---
= Capital Gains ---
Less: Exemption U/S 54 ---
Taxable Capital Gains ---

* To be indexed in case of LTCA

 FULL VALUE OF
CONSIDERATION
Full value of consideration means & includes the
whole/complete sale price or exchange value or
compensation including enhanced compensation
received in respect of capital asset in transfer. The
following points are important to note in relation to
full value of consideration.
• It may be in cash or kind.
• It received at its fair market value.
• It may be received or receivable.
• It must be actual irrespective of its adequacy.
 COST OF ACQUISITION
cost of acquisition of an asset is the value for which
it was acquired by the assessee

Cost of Acquisition (COA) means any capital

expense at the time of acquiring capital asset
under transfer, i.e., to include the purchase price,
expenses incurred up to acquiring date in the form
of registration, storage etc. expenses incurred on
completing transfer.

Indexed Cost of Acquisition (for Long Term Assets)

 COST OF ACQUISITION
If capital assets were acquired before 1.4.81, the
assesses has the option to have either actual cost
of acquisition or fair market value as on 1.4.81 as
the cost of acquisition. If assesses chooses the
value as on 1.4.81 then the indexation will also be
done as per the CII of 1981 and not as per the year
of acquisition.
In the following case the indexation is not available
1. Sales of Bond and Debenture
2. Share and Debenture
3. Depreciable assets
4. Unit purchased in foreign currency
5. GDR
 COST OF IMPROVEMENT
Cost of improvement is the capital expenditure
incurred by an assessee for making any addition or
improvement in the capital asset. It also includes
any expenditure incurred in protecting or curing the
title. In other words, cost of improvement includes
all those expenditures, which are incurred to
increase the value of the capital asset.

Indexed Cost of Improvement (for Long Term Assets)

 EXPEDITURE ON TRANSFER
Expenditure incurred wholly and exclusively for
transfer of capital asset is called expenditure on
transfer.
It is fully deductible from the full value of
consideration while calculating the capital gain.
The expenditure on transfer are the commission or
brokerage paid by seller, any fees like registration
fees, and cost of stamp papers, travelling
expenses, and litigation expenses.

Note: Expenditure incurred by buyer at the time of

buying the capital assets like brokerage,
commission, registration fees, cost of stamp paper
etc. are to be added in the cost of acquisition
before indexation
 CAPITAL GAIN ON DEPRECIABLE
ASSET
Income Tax Act does not defines the term
depreciation. However depreciation means a
permanent delivery in the original cost of the asset
due to wear and tear, constant use, new
technology etc.
In Income Tax Act depreciation is provided on only
four types of assets:
1. Buildings 2. Furniture 3. Machinery and
plant
4. Intangible Assets

Depreciation = (WDV of the block as on 1st April of

PY + Addition to the block – Selling price of the
assets sold) * Depreciation rate. (If an asset is used
 TAXATION OF LTCG
The LTCG is taxable at a flat rate of 20%, however in
case of individual the taxation is as follows:
•Ifthe other incomes except LTCG is less than Rs. 1,
00,000 (maximum non taxable limit) Then Tax on
LTCG = 20% (LTCG – (1, 00,000 – other income))
•Ifthe other incomes except LTCG is greater than Rs.
1, 00,000 Then Tax on LTCG = 20% LTCG
 EXEMPTION FROM CAPITAL
GAINS
The exemptions are given under section 54, these
exemptions are of various types but here we will
discuss only one of the exemptions relating to the
house property

Exemption Under section 54,

1. Capital gain exempted under section 10
2. Capital gain on transfer of US64
3. Long term capital gain on transfer of BSE-500
Equity share
4. Capital gain on compulsory acquisition of urban
agriculture land
5. Long term capital gain on securities not
chargeable to tax in cases covered by transaction
 EXEMPTION (CAPITAL GAIN)
The income tax act grants total or partial exemption
of capital gain under section
54,
54B,
54D,
54EC,
54F,
54G,
54GA
AND 54H
 Exemption (Capital Gain) under
section 54
A capital gain arises from the transfer of residential
house property (U/s 54)

Conditions for exemption

• Only individuals or HUF can claim
• Exemption available on the transfer of house
property
• It should be long-term assets
• New assets should be purchased or acquire
• Construction of new house
Amount of exemption
Other points
 Exemption (Capital Gain) under
section 54
A capital gain arises from the transfer of residential
house property (U/s 54)
Conditions for exemption
Amount of exemption
•Capital gain or amount invested in purchasing of
constructing a new house
Other points
•If the new house or purchased house transferred
within 3 year
•Scheme of deposit
•Non-utilization of deposit invested in scheme of
deposit
 Exemption (Capital Gain) under
section 54B
•Acapital gain arises from the transfer of
agricultural land (U/s 54B)
Conditions for exemption
•Only individuals can claim
•Exemption available on transfer of agricultural
land
•It should be long/short-term assets
•The taxpayer or his parents used the land for
agricultural purpose
•Purchase of land within 2 year

•Amount of exemption
•Other points
 Exemption (Capital Gain) under
section 54B
•Acapital gain arises from the transfer of agriculture
land (U/s 54B)
Conditions for exemption

•Amount of exemption
•Capital
gain or
•Amount invested in purchasing new agriculture land
WHICHEVER IS LOWER
•Other points
•Transfer
of new agricultural land
•Scheme of capital gain deposit
 Exemption (Capital Gain) under
section 54D
•Acapital gain arises on the compulsory acquisition
of land, buildings, and part of industrial assets (U/s
54B)
•Conditions for exemption
•Any person can claim
•Capital gain arising on compulsory acquisition
belonging to the taxpayer
•It should be long/short-term assets
•The taxpayer used the assets within last three year
•Purchase of land or building or within 3 year
•Newly assets should be used

•Amount of exemption
•Other points
 Exemption (Capital Gain) under
section 54D
•A capital gain arises on the compulsory
acquisition of land, buildings and part of
industrial assets (U/s 54B)
•Conditions for exemption
•Amount of exemption
•Capital
gain or
•Amount invested in purchasing new assets land
WHICHEVER IS LOWER
•AnOther points
•Transfer
of new assets
•Scheme of capital gain deposit
Exemption (A Capital Gain) under
section 54EC
•ACapital gain not to be charged on investment in
certain bonds (U/s 54B)
•Conditions for exemption
•Any person can claim
•Investment in specified assets (Bond issued by
NHAI and RECL-Rural Electrification Corporation
Limited)
•Long term assets

•Amount of exemption
•A Capital gain or
•Amount invested in purchasing new assets land
WHICHEVER IS LOWER
•Other points
•Transfer of new assets
Exemption (A Capital Gain) under
section 54F
•ACapital gain on the transfer of long term assets
other than House property (U/s 54F)
•Conditions for exemption
•Only individuals and HUF can claim
•A Capital gain arises on compulsory acquisition
belonging to the taxpayer
•It should be long/short-term assets
•Purchase of a new residential house within 2 years
•Construction of new residential house (Old or New)
within 3 year
•Not more than one residential house

•Amount of exemption
•Other points
Exemption (A Capital Gain) under
section 54D
•ACapital gain arises on compulsory acquisition of
land, building and part of industrial assets (U/s
54D)
•Conditions for exemption
•Amount of exemption

•Other points
•Transfer
of new assets
•Scheme of A Capital gain deposit
Exemption (A Capital Gain) under
section 54G
•ACapital gain on the transfer of assets in case of
industrial undertaking (U/s 54G)
•Conditions for exemption
• A Capital assets
•Transfer due to shifting industrial undertaking
•Has to purchase new assets like machinery, and plant
within 3year
•Acquire/ construct the building for industrial
undertaking
•Incurred expenses on another purpose

•Amount of exemption
•Other points
 UNIT 4
INCOME FROM OTHER SOURCE
Presented by
Prof. Mahendra Patel
BASIS OF CHARGE [Sec 56(1)]
• An income shall be chargeable to income tax
under the head INCOME FROM OTHER SOURCES
if:
• Such income is not exempt under the provisions
of income tax act, 1961
• Such income is not chargeable to tax under any
first four head viz., Income from Salaries, Income
from House Property, Profit and Gain of Business
and Profession and Capital Gains.
• INCOME FROM OTHER SOURCES is therefore, a
residuary head of income.
 Specific incomes chargeable under
the head income from other sources
[sec. 56(2)]
As per section 56(2) the following income are always
chargeable under the head income from other sources.
These are :
1. 1. Dividend except dividend received from domestic
companies(even if shares areheld a stock in trade).
2. Winning from lotteries, crossword puzzles, races including
horse races, card games and other games of any sort or
gambling or betting of any form or nature
whatsoever(even if derived as a regular business activity).

3. Any sum received by the assessee from his employees as

contribution to any P.F superannuation fund, or any other
fund for the welfae of the employees( provided it is not
taxable under the head of Profit and Gain of Business and
Profession).
 Specific incomes chargeable under
the head income from other sources
[sec. 56(2)]
4. Income from interest on securities ( provided it is not taxable
under the head Profit and Gain of Business and Profession).
5. Incomefrom letting out of machinery, plant or furniture
(provided it is not taxable under the head Profit and Gain of
Business and Profession).
6. Income from letting out of machinery, plant or furniture
alongwith building and letting of building is inseparable from
letting of machinery, plant or furniture (provided it is not
taxable under the head Profit and Gain of Business and
Profession).
7. Any sum received under a keyman insurance policy including
the sum allocated by way of bonus on such policy(provided it is
not taxable under the head Profit and Gain of Business and
Profession or Salaries).
Receipt of any sum of money( without consideration), receipt of
any immovable property (without consideration), receipt of
any movable property.
 Specific incomes chargeable under
the head income from other sources
[sec. 56(2)]
Receipt of any sum of money( without consideration),
receipt of any immovable property (without
consideration), receipt of any movable property.
Receipt of shares of a company ( without consideration or
for an inadequate consideration) if the recipient is a firm
or a company.
 METHODS OF ACCOUNTING FOR
INCOME FROM OTHER SOURCES
[SEC.145]
According to section 145 income chargeable under the head
INCOME FROM OTHER SOURCES shall be computed in
accordance with the method of accounting regularly
employed by the assessee:
 if Mercantile System is regularly employed by the assessee,
the income is taxable on “accrual” basis.
 if Cash System is regularly employed by the assessee,
income is taxable on “receipt” basis.
 if Assessing Officer is not satisfied about the correctness or
completeness of the accounts of the assessee or where the
method of accounting have not been regularly followed by the
assessee, the A.O may make Best Judgment Assessment after
giving an opportunity of being heard to the assessee.
WINNINGS FROM LOTTERIES, CROSSWORD
PUZZLES, RACES INCLUDING HORCE
RACES, CARD GAMES, GAMBLING OR
BETTING [SEC. 56(2)(iv)]
• Winning from lotteries.
• Winning cross word puzzles.
• Winning from races including horce races
• Winning from card games.
• Winning from gambling and batting.
No expenditure is allowed to be deducted out of
these income.
WINNINGS FROM LOTTERIES, CROSSWORD
PUZZLES, RACES INCLUDING HORCE
RACES, CARD GAMES, GAMBLING OR
BETTING [SEC. 56(2)(iv)]
Tax is deducted at source at prescribed rates
out of following incomes:
• Winning from lotteries : if prize exceeds rupees
10,000
• Winning cross word puzzles: if prize exceeds rupees
10,000
• Winning
from races including horse races if prize
exceeds rupees 5,000
• Winning from card games: if prize exceeds rupees
10,000
Prescribed rates of TDS = 30% (plus SC, if
applicable plus EC @2% & SHEC @1% if
applicable).
INCOME TO INCLUDE TRANSFER OF MONEY
AND OR PROPERTY [SEC. 56(2)(vii)]

If an individual or a HUF receives, on or after 1st day

of October 2009, in any previous year from any
person or persons, a sum money or property which
falls under any of the 4 categories mentioned below,
it is chargeable to income-tax under the head
“INCOME FROM OTHER SOURCES”
INCOME TO INCLUDE TRANSFER OF MONEY
AND OR PROPERTY [SEC. 56(2)(vii)]
Nature of gift Condition for Whether single or Value chargeable
taxability all receipt are to tax
considered for
limit of Rs. 50,000

Any sum of money If aggregate value All receipts Whole of such

exceeds Rs.50,000 aggregate value
Any immovable If stamp duty Single receipt Stamp duty value
property without value exceeds
consideration Rs.50,000

Any movable If FMV exceeds All receipts Whole of such

property without Rs.50,000 aggregate FMV
consideration

Any movable If FMV exceeds All receipts Whole of such

property for Rs.50,000 aggregate FMV
consideration Less consideration
which is less than
FMV
 MEANING OF PROPERTY AND RELATIVES

Property means the following capital asset of

the assessee namely:
1. Immovable property being land or building or
both
2. Shares an securities
3. Jewellery
4. Drawings
5. Paintings
6. Sculptures
7. Any work of art
8. Bullion( including w.e.f. 1st june, 2010)
 MEANING OF PROPERTY AND RELATIVES

Relative means:
a) Spouse of the individual
b) Brother or sister of the individual
c) Brother or sister of spouse of the individual
d) Brother or sister of either of parents of the
individual
e) Any lineal ascendant or descendant of the
individual
f) Any lineal ascendant or descendant of spouse
of the individual
g) Spouse of the person referred to in clauses (ii)
to (vi)
 QUESTION :
Following are the particulars of the income of R. Compute her
income under the head Income from Other Sources for the
assessment year 2011-2012:
1. Dividend received from an indian company Rs. 11,000
2. Winnings from lottery Rs. 70,000
3. Winning from card games(gross) Rs. 25,000
4. Interest received on Govt. Securities held as investments
Rs.14,000
5. Family pension received Rs.42,600
R incurred the following expenses:
6. Interest paid on amount borrowed for purchasing shares
Rs.7,000
7. Collection charges in respect of interest on govt. Securities
@2 ½% on amount received.
8. Purchased lottery tickets of Rs. 500.
 COMPUTATION OF INCOME UNDER THE
HEAD “OTHER SOURCES”

Rs. Rs.
1. Dividend exempt
2. Interest on Govt. Securities 14,000
less: collection charges 350 13,650
3. Winning from lottery(70,000 x 100/70) 1,00,000
cost of tickets not deductible
4. Winnings from card games 25,000
5. Family pension 24,600
less: standard deduction 1/3 of 24,600
or Rs. 15000 whichever is less 8,200 16,400

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Income from other sources 1,55,050

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