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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Income from Other Sources

Under the Income-tax Act, 1961 as applied to an individual resident, which of the following is taxed under the head 'Income from Other Sources' as a residual head only if it is not chargeable under any other head?

Interest on a bank savings account is taxed under Income from Other Sources, because it does not belong to salary, house property, business or capital gains. The other heads are specific and cover salary, business profits and house rent respectively.

  1. ASalary received from an employer
  2. BInterest on a bank savings accountCorrect
  3. CProfits from a proprietorship business
  4. DRent from a house property let out

Explanation

Income from Other Sources is the residual head. Salary, business profits and house property rent each have their own specific heads. Interest on a savings bank account, for an investor not in the business of lending, falls under Other Sources.

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