08/03/2019
Basis of charge [Sec. 56(1)] :-
This is the last and residual head of charge of income. A source of income which does not specifically fall under any one of the other four heads of income (viz, “Salaries", “Income from house property”, “Profits and gains of business or profession” or “Capital gains") is to be computed and brought to charge under section 56 under the head “Income from other sources”. In other words, it can be said that the residuary head of income can be resorted to only if none of the specific heads is applicable to the income in question, and that it comes into operation only if the preceding heads are excluded.
Some incomes taxable under section 56(1) under the head “Income from other sources" are :
Income from subletting, interest on bank deposits and loans, income from royalty, director’s fees, ground rent, agricultural income from outside India, director's commission for standing as a guarantor to bankers, director’s commission for underwriting shares of a new company, examination fees received by a teacher, rent of a plot of land, insurance commission, mining rent and royalties, interest on foreign Government securities, casual income, annuity payable under a will, and salaries payable to a Member of Parliament.
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