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CA Intermediate · Taxation · Income from Other Sources

Sunita, a resident individual, had these receipts in tax year 2026-27: (a) dividend from an Indian company Rs 50,000, with interest of Rs 15,000 paid on a loan taken to buy the shares; (b) interest of Rs 1,80,000 on enhanced compensation received from the government for land acquired, which relates to earlier years; (c) cash gifts of Rs 35,000 and Rs 25,000 from two unrelated friends. What is her income from other sources?

The income is Rs 1,90,000. Dividend is Rs 40,000 after interest limited to Rs 10,000. Interest on enhanced compensation is Rs 90,000 after a 50% deduction. The unrelated friends' gifts total Rs 60,000, above Rs 50,000, so the whole amount is taxable. Together these make Rs 1,90,000.

  1. ARs 1,90,000Correct
  2. BRs 1,85,000
  3. CRs 2,80,000
  4. DRs 1,30,000

Explanation

Dividend: interest deduction is capped at 20% of Rs 50,000 = Rs 10,000, so income is Rs 40,000. Interest on enhanced compensation is taxed in the year of receipt, after a 50% deduction: Rs 1,80,000 - Rs 90,000 = Rs 90,000. Gifts from non-relatives total Rs 60,000, which exceeds Rs 50,000, so all of it is taxable. The total is Rs 40,000 + Rs 90,000 + Rs 60,000 = Rs 1,90,000. Rs 1,85,000 allows the full interest; Rs 2,80,000 ignores the 50% deduction.

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