Income from other source (IFOS) includes any income which is not taxed under the following Income heads:
The Income From Other Source includes Bank Interests, Investment Interests, Dividend Income, Family Pension, Gifts, royalties, etc.
Document Checklist for Income From Other Source
PAN
Income Tax Department (ITD) issues Permanent Account Number (PAN). It is an alphanumeric ID of a taxpayer who is liable to pay taxes. PAN enables the department to link all transactions of the “Person” with his “Income”. Hence it is the most essential document while filing ITR.
Aadhaar
Aadhaar (Aadhaar Card) a 12 digit unique identification number issued by the UIDAI (Unique Identification Authority of India). It is mandatory for Resident Individuals to provide details of Aadhaar while filing ITR.
Form 26AS
Form 26AS is a consolidated Tax Credit Statement. It has the following details:
- Details of TDS from the taxpayer’s income.
- Details of TCS from taxpayer’s payments.
- Advance Tax, Self Assessment Tax paid by the taxpayers.
- Details of the Refund received during the year.
- Details of any high-value transactions (for eg. Shares, Mutual Funds, etc.).
It is very important to check Form 26AS before e-filing the ITR. Since it has details of TDS deducted on Interest and Other Income by deductors.
Investment proofs
A taxpayer can claim the deduction of certain Investments and expenses while filing ITR. Investments proofs, Donation Receipts, Fixed Deposit Statement, etc are required to claim Chapter VI-A deductions. These investments reduce the net taxable income of a taxpayer.
Bank Statements
Bank Statement with IFOS transactions is an essential document to prepare ITR. It is important to look at bank statements to derive total income earned in the form of Interest, Dividend, Gift, etc.
FAQs
Income from other sources is a residual income that cannot be taxed under other heads. It includes income from a savings bank account, Fixed deposits, Post office savings, Family pension, etc. It also includes any monetary/non-monetary gifts received by an individual.
Dividend received from an Indian company is exempt from tax. However, Dividend received from a foreign company is taxable as “Income from other sources”. And you need to pay taxes at rates based on the income slab you fall under.
Yes. When any individual receives any kind of lottery or price money it is taxable. It is converted under IFOS.
No. Gifts received on a wedding occasion is exempt from tax. Hence Rs, 1,00,000 will be exempted from tax. However, you should report the same while filing ITR.
Following are the documents required to file ITR:
-PAN
-Aadhaar
-Form 26AS
-Bank Account Details
-Tax Payment Challan
-Original Return (if filed)
Hey @TeamQuicko
Thanks for the blog! Just one quick question - Why do we have to report a quarterly breakdown of Dividend Income under IFOS?
Thank you!
Hey @TanyaChopra
This quarterly breakdown of Dividend Income under IFOS will help to calculate and determine penalty u/s 234C for the delay in payment of Advance Tax.
Hope this helps!
I had received dividend recently but I had noticed that TDS had been deducted. any idea as to why has it happened and is there a way I can claim this TDS?
Hey @HarshitShah
After the introduction of Budget 2020, dividend income is now taxable in the hands of the shareholder; and is also subject to TDS at 10% in excess of INR 5000 u/s 194 & 194K. Foreign Dividend is taxable at slab rates. TDS is not applicable to such dividends. The taxpayer should report such income under the head IFOS in the ITR filed on the Income Tax Website.
Hope this helps!
Hey @HarishMehta
Yes, dividend income is now taxable from FY 2021-22 onwards and it has to be reported under the head of IFOS.
You can read more about it here:
Hi @Maulik_Padh,
You need to pay Income tax on the net taxable income, i.e. after subtracting deductions, expenses, etc.
If the net taxable income is negative i.e. if there is loss, you can carry it forward when filing the ITR
Here are some of the articles which might help
Hi @ameyj
The amount of TDS deducted shall reflect in your Form 26AS only and it will also reflect the name of the deductor.
Using the name of the deductor you can find out on which share you have received the dividend and you can also cross-check the same in your bank statement.
Yes, you are right, TDS is to be deducted when the dividend paid exceeds 5000 INR in a financial year. However, the 5,000 INR limit pertains to all the dividends an individual gets in a year, or the total dividend per shareholder that a company pays out in a year, is left to interpretation, and hence registrars and share transfer agents (RTA) are not taking any chances and are deducting TDS even on small amounts.
Hope this helps
Hi @ameyj
You can submit a grievance on Income Tax Portal mentioning the issue and also attach the 26AS.
The other option is to leave it as it is and clarify it when the tax department sends the notice.
Hi @TeamQuicko
Consider that I have 10 shares each of 10 different Indian companies. Each of the 10 companies are declaring a dividend of INR 100 before the FY ends. Now I will be recieving 1000 as dividend from each company, thereby a total of 10,000.
The 5,000 dividend limit, is it applicable to each company / total dividend recieved by me in a year. If it is applicable to each company, then I would not attract TDS of 10% for dividend.
Also pl clarify, how would the company B know that I have got shares of Company A,C,D,E so on…
@Saad_C @Laxmi_Navlani @Divya_Singhvi @Kaushal_Soni @AkashJhaveri can you help with this?