Skip to content

CA Intermediate · Taxation · Income from Other Sources

Mr. Deepak Joshi, a salaried individual, let out a machine he owned to a local firm for the whole of tax year 2026-27 and received rent of ₹1,20,000. The letting is not his business. He incurred repairs of ₹8,000 and insurance premium of ₹4,000 on the machine, and depreciation allowable under the Act is ₹30,000. What is the income from letting the machine under the head Income from Other Sources?

The income is ₹78,000. When letting of machinery is not business, the rent is taxed under Income from Other Sources after deducting repairs, insurance and allowable depreciation, which total ₹42,000, from the rent of ₹1,20,000.

  1. A₹1,08,000
  2. B₹90,000
  3. C₹1,20,000
  4. D₹78,000Correct

Explanation

Income from letting machinery that is not chargeable as business income falls under Income from Other Sources. Deductions allowed are repairs, insurance and depreciation on the machine. Total deductions = ₹8,000 + ₹4,000 + ₹30,000 = ₹42,000. Income = ₹1,20,000 − ₹42,000 = ₹78,000. Omitting depreciation gives ₹1,08,000, and omitting repairs and insurance gives ₹90,000.

Did you get it right without looking?

One question tells you little. A timed set on Income from Other Sources shows your real accuracy, how long you take and where you lose marks.

Practise Income from Other SourcesFree diagnostic mock

More Income from Other Sources questions