During the 2500 B.C people who didn’t have money to pay taxes often had to pay with livestock, food or labor. Government has imposed taxes for thousands of years for the welfare of the country. The sixth head of income classification under the Income Tax Act is Income from Other Sources. Other sources of income are a residual category. As a result, this category is used to categorize income that is not taxed under any other heading. The taxpayer must calculate income from other sources using the mercantile system that he or she uses, i.e. cash basis or accrual basis. Other Sources of Income are Income From: Lottery, Gambling, Batting, Horse Race, Cross Ward, Puzzle, Any other casual income, Interest other than interest on securities, Interest on Securities, Commission (If it is not a part of one’s main Business or Profession), Family Pension, Royalty, Director’s Fee, Subletting of House, Dividend, Tuition Income. If under-reporting is due to income misreporting, 50% of the tax is due.If the assessed or re-assessed income exceeds the income decleared by the assessee, or if a return has not been completed and the income exceeds the basic exemption limit, a penalty of 50% of the tax payable on the under-reported income will be imposed.

Saranya R Kurup

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