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

Under the Income-tax Act, 1961 provisions on income from other sources, which of the following receipts in the hands of a resident individual is taxed under the head 'Income from Other Sources' and not under any other head?

Savings bank interest is taxed under Income from Other Sources because it does not belong to any of the other specific heads. Rent from a house, salary and business profit have their own heads: house property, salaries, and profits and gains of business or profession.

  1. AInterest on a savings bank account with a scheduled bankCorrect
  2. BRent from letting out a house property owned by the individual
  3. CSalary received from an employer
  4. DProfit from a proprietary business

Explanation

Interest on a savings bank account is not income from house property, salary, business or capital gains, so it falls under the residuary head, Income from Other Sources. Rent from a house is taxed as house property income, salary under Salaries, and proprietary profit under business or profession.

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