Income from Other Sources Tax
Calculate tax on interest income, dividends, freelance income, gifts and other sources. Includes TDS already deducted by banks, companies and balance payable via ITR.
Income from Other Sources Tax
FD interest · Dividends · Gifts · Freelance income
Interest earned on all fixed/recurring deposits
Rs 10,000 exempt u/s 80TTA (old regime). Balance taxable.
Total dividends received from stocks / mutual funds (annual)
Consultancy, part-time, gig income (before 44ADA presumptive)
Declare all income from other sources in ITR Schedule OS. Failure to declare attracts interest u/s 234A and penalty u/s 271.
Savings account interest up to Rs 10,000 is deductible u/s 80TTA (old regime). Dividends above Rs 5,000 from a single company attract 10% TDS — but are fully taxable at your slab rate in ITR. If you receive large dividends in the 30% bracket, you owe additional 20% tax not deducted at source.
Income from Other Sources — What It Includes
"Income from Other Sources" is the residual income head under the Income Tax Act — it covers everything that doesn't fall under salary, house property, business/profession, or capital gains. Key items: interest on FDs and savings accounts, dividends from shares and mutual funds, freelance and consulting income (unless declared as business), gifts received above Rs 50,000 from non-relatives, lottery and game show winnings, and interest on income tax refunds.
Savings account interest — the 80TTA deduction
Under the old tax regime, Section 80TTA allows a deduction of up to Rs 10,000 on interest earned from savings accounts in banks, co-operative societies, and post offices. Senior citizens get the more generous Section 80TTB — up to Rs 50,000 on interest from all bank deposits (savings + FD + RD). Banks do not deduct TDS on savings account interest; you must declare it in your ITR.
Dividend taxation post-2020
Since FY 2020-21, dividends are taxable in the hands of shareholders at their slab rate (classical dividend taxation). Companies deduct 10% TDS on dividends above Rs 5,000 per shareholder per year. If you receive Rs 1 lakh in dividends and are in the 30% slab, you owe Rs 30,000 in tax — but only Rs 10,000 has been deducted as TDS. The remaining Rs 20,000 must be paid via advance tax or ITR payment.
Gift taxation rules
Cash gifts, property gifts, or gifts of shares/securities above Rs 50,000 received from non-relatives in a single year are taxable as income from other sources. The entire gift amount (not just the excess over Rs 50,000) is taxable. Gifts from specified relatives (spouse, siblings, parents, children, grandchildren, in-laws) are fully exempt regardless of amount. Gifts received on marriage, via inheritance, or from local authorities are also exempt.