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

Under the Income-tax Act as applicable to individuals, which of the following receipts is generally taxed under the head 'Income from Other Sources' when it is not earned in the course of a business?

Interest on a bank savings account is taxed under Income from Other Sources, because it does not fit salary, house property, business or capital gains. The other options are taxed under Salaries, business income or Capital Gains respectively.

  1. ASalary received from an employer
  2. BInterest on a bank savings accountCorrect
  3. CRent from a property let out by a person who is the owner and claims it as business income
  4. DProfit on sale of a house property held for 5 years

Explanation

Interest on a bank savings account is not salary, house property income, business income or capital gain, so it falls under Income from Other Sources. Salary is taxed under Salaries and sale profit under Capital Gains. The business-income rent is by the stem's own condition not an other-sources receipt.

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