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Income From Other Sources

Dividend:
Under Section 10(33), any amount declared or paid by a Indian company by way of dividend is tax-exempt in the hands of shareholders. Therefore, any dividend income received from a company that is not an Indian company will be taxable in the hands of the recipient.

Winnings from lotteries, crossword puzzles, horse races and game shows.

In the case of winnings from lotteries, crossword puzzles, races (including horse races), card games, game shows and other games of any sort, or from gambling or betting of any form or nature whatsoever, Rs 5,000 is exempt from tax. Tax will be deducted at source on the rest of the winnings at the rate of 30 per cent (plus surcharge). This means that if you hit a jackpot of, say, Rs 50,000, TDS will be calculated as under:

Winnings from game shows like Kaun Banega Crorepati will be covered by this clause from 1 June 2001. Winnings before this date will not be subject to TDS; you will have to pay tax yourself.

Interest on securities:
The income from interest on securities is chargeable to tax if the securities are held as an investment, and not as stock-in-trade. If the securities are held as stock-in-trade, the interest income is taxable under the head profits and gains from business or profession. Although interest income is taxed under the head income from other sources, a deduction is available in some cases under section 80L.

Others:

1. The interest on bank deposits and loans (except in the case of assessees in the money-lending business).
2. Income from letting-out machinery, plant, furniture or buildings on hire if they are not chargeable to tax under the head profits and gains from business or profession.
3. Interest received on a tax refund.
4. Ground rent.
5. Royalty.
6. Directors fees from a company.