What Is Supplemental Income? How Is It taxed?
Deductions are allowed under a number of Section 57 provisions for determining the income taxable under “income from other sources like other Supplemental Income.” The income tax legislation in India gives you the choice to write off some expenses if you get taxable income under the category of Income from Other Sources. These expenses are included in Section 57 of the I-T Act of 1961 and may be deducted from other income for tax purposes. It is important to comprehend what “income from other sources” means before continuing.
Are you searching for new projects in Byculla?
What does “Income from Other Sources” mean?
According to its source, income is taxed. As a result, income tax is separate into the five main categories:
- Earnings from a salary
- Revenue from a home investment
- Income from company or professional profits and gains
- Gains from capital investments
- Earnings from unrelated sources
The amount that does not fit into one of the other four revenue categories is referred to as income from other sources. Income from other sources, as defined in Section 56, subsection (2) of the Internal Revenue Code, may include winnings from lotteries, casinos, card games, sports prizes, and bank deposits, among other things. These earnings, however, will be taxed under profits & gains from business or profession rather than income from other sources if they are generated as part of your business or profession. Interest from bank savings and investments, fixed deposits, recurring deposits, & dividends from investments made in India are a few examples of income from other sources for individual Indian taxpayers.
Deductions for taxes on other income sources
The deductions that may be use when calculating the income payable under Income from Other Sources are discusses in a number of clauses of Section 57.
| Applicable Section | Nature of income | Deduction allowed |
| 57 (I)* | Dividends or securities interest | Any reasonable commission or payment made to a banker or another individual in order to realise a dividend or interest on securities |
| 57 (IA) | Contributions made by employees to funds established for their wellbeing, including provident funds, retirement plans, ESI funds, and other funds | When an employee’s contribution is credited to their account in the appropriate fund on or before the due date |
| 57 (II) | Rental revenue from renting out equipment, furniture, or buildings | Rent, fees, taxes, insurance, and repairs are just a few examples. |
| 57 (IIA) | Family pension | 1/3 of the family pension is limit to a maximum of Rs. |
| 57 (III) | Additional income | Any additional expense (not a capital expense) incurred solely and completely to generate such income |
| 57 (IV) | Increased compensation or interest on remuneration | 50% of such interest, if certain conditions are met. |
| 58 (4) | Income from the ownership and upkeep of racehorses | Every cost associated with such activity |
Expenses that are not eligible for a Section 58 deduction
Under the heading of income from other sources, the following expenses cannot be claimed as deductions:
- Personal costs
- Interest deducted at source or chargeable to tax payable outside of India but not yet paid
- “Salaries” that are paid outside of India but do not have any taxes withheld from them
- Wealth-tax
- Spending of the kind described in Section 40A
- Costs associated with winnings from lotteries, crosswords, racing, games, gambling, or betting
*As of April 1, 2021, Section 57(I) was changed. Now, interest on loans use to purchase shares can be deducte, up to a maximum of 20% of dividends or revenue related to mutual fund units.
Current update
Rent from a property that is sublet is taxable like income from other sources: ITAT
March 2023: According to the Visakhapatnam Bench of the Income Tax Appellate Tribunal (ITAT), rent from property that is sublet is taxable as income from other sources. The ITAT made its observation in response to an assessee’s appeal of a decision made by the National Faceless Appeal Centre in Delhi’s Commissioner of Income Tax (Appeals).
You’re looking for Projects in Kanjurmarg we have the Best Properties In Mumbai Like Ready to Move:https://navimumbaihouses.com/properties/search/kanjurmarg/
If you want daily property update details please follow us on Facebook Page / YouTube Channel / Twitter
