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CA Intermediate · Taxation · Income from Other Sources

Ramesh, a resident individual, received the following during the tax year 2026-27: (i) interest of Rs 18,000 on a bank fixed deposit, (ii) winnings of Rs 40,000 from a lottery (gross), and (iii) dividend of Rs 12,000 from an Indian company. He incurred Rs 2,000 as collection expenses for the dividend. Ignoring the deduction for interest expenditure, what is his income chargeable under the head Income from Other Sources?

The income is Rs 70,000. Bank interest of Rs 18,000, lottery winnings of Rs 40,000 and dividend of Rs 12,000 are all taxable under Other Sources. No collection expense can be deducted from dividend, and winnings are taxed at gross.

  1. ARs 70,000Correct
  2. BRs 68,000
  3. CRs 58,000
  4. DRs 60,000

Explanation

Bank interest 18,000 and dividend 12,000 are taxable. Lottery winnings 40,000 are taxable at gross with no deduction for expenses. Total = 18,000 + 40,000 + 12,000 = 70,000. Deducting the Rs 2,000 collection expense from dividend (68,000) is wrong, because only interest expenditure is deductible against dividend, up to 20% of the dividend, and the question says to ignore it.

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