Skip to content

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

Under the Income-tax Act as taught in NISM X-B, which of the following is the correct head of income for interest received by an individual on a bank savings account, when the individual is not carrying on any business of lending?

Savings account interest received by an individual who is not a moneylender is taxed under Income from Other Sources. It is neither business income, house property income nor capital gains, because it is a return on deposited money that falls under no other specific head.

  1. AIncome from Other SourcesCorrect
  2. BProfits and Gains of Business or Profession
  3. CIncome from House Property
  4. DCapital Gains

Explanation

Interest on savings accounts, fixed deposits and similar deposits received by an individual who is not in the business of lending is taxed under Income from Other Sources. It is not a business receipt, house property income or a capital gain. A deduction for savings account interest may be available under a separate section, but the head remains the same.

Did you get it right without looking?

One question tells you little. A timed set on Income from Other Sources shows your real accuracy, how long you take and where you lose marks.

Practise Income from Other SourcesFree diagnostic mock

More Income from Other Sources questions