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Interest on Securities under "Income from Other Sources"

  Interest on Securities under "Income from Other Sources " 1. Introduction Income tax is the fifth head of income under the Income Tax. It is a Residuary Income which means in come not falling under the head of 1) Salary,2) House property income,3) Business Income or Professional Income and 4) Capital Gain will fall under Income From Other Sources. Under the Income Tax Act, "Interest on Securities" is taxable under the head  Income from Other Sources , provided that the securities are held as  investments  and not as stock-in-trade. If an individual or entity deals in securities as a business, the interest would instead be taxed under "Profits and Gains of Business or Profession" (PGBP). 2. Meaning of Securities     Securities include bonds,pro-note , debentures issued the government. It also includes debentures or securities issued by company, a statutory corporation and local authority. 3. Classification of Securities For tax purposes, securities are br...
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Family Pension –Tax Treatment

  Family Pension –Tax Treatment                                             Rs. Family pension Received XXX Less: Deduction 1.Rs.15,000 (or) 2.1/3 of pension Whichever is less     XXX Taxabl e Pension XXX   Problem : From the following calculate Income from other sources.                            Rs. a)Dividend from an Indian Company 10,000 b)University Remuneration 8,000 c)Royalty for writing books(He Claims to have spent Rs.20,000 for writing the book) 80,000 d)Dividend from foreign company 12,000 e) Interim dividend 6,000 f)Family Pe...
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IFOS-TAX TREATMENT

 Rules for calculating Income from Other Sources S.No Types Tax treatment 1 Dividend Fully Taxable 2. Casual Income l.Lotteries a) Upto Rs.10,000 b) Above Rs.10,000     No TDS 30 % TDS   2. Horse Race Winnings a) Upto Rs.10,000 b) Above Rs.10,000     No TDS 30 % TDS   3) Winning from others Races, Gambling or Betting No TDS 3 Interest on Bank Deposits Post Office Deposits a)Upto Rs.10,0000     No TDS 4. Interest on Post Office Deposits Upto Rs.3,500 exempt 5. Income from sub letting of P/M,F/F Fully Taxable 6. Interest on Compensation or on Enhanced Compensation 50%  is taxable 7. ...
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DIVIDEND AND TAX TREATMENT

  Dividend Income 1. Meaning of Dividend A dividend is a share of the  after-tax profits  of a company which is distributed to its shareholders. Legal Basis:  It is usually proposed by the Board of Directors and approved by the shareholders in the Annual General Meeting (AGM). Source:  It is paid out of the accumulated profits of the company. Form:  It is generally paid in cash, but can also be issued as additional shares (Bonus shares). 2. Types of Dividend Dividends can be categorized based on timing and the nature of the distribution: A. Based on Timing Interim Dividend:  Declared and paid by the Board of Directors  during  the financial year, before the final accounts are prepared. Final Dividend:  Declared at the  Annual General Meeting (AGM)  after the close of the financial year and the finalization of accounts. B. Based on Share Type...
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