In India, the Income Tax Department organizes income into five main categories for taxation and documentation: Salary Income, Income from House Property, Capital Gains/Losses, Profits and Gains from Business and Profession, and Income from Other Sources.

Salary Income includes wages, bonuses, and other employment compensations. Income from House Property refers to earnings from renting out property. Capital Gains encompass profits from selling property or investments. Profits and Gains from Business and Profession refer to funds generated through business operations or professional practices.

The fifth category, Income from Other Sources, includes varied income types not covered by the preceding categories, each with particular tax implications.

Interest Income from Savings Accounts

Interest from savings bank accounts is reported under Income from Other Sources in your tax return. Notably, banks do not deduct Tax Deducted at Source (TDS) from this interest type, unlike fixed deposits and recurring deposits, where interest is taxable. Interest from savings accounts qualifies for deductions.

Section 80TTA Deductions

Under Section 80TTA, individuals under 60 and HUFs can claim deductions up to Rs. 10,000 annually on interest from:

• Savings accounts in banks
• Savings accounts in cooperative societies
• Savings accounts in post offices

Senior citizens aren’t eligible for Section 80TTA deductions.

Fixed Deposit Taxation

Interest from fixed deposits (FDs) is added to your total income and taxed per your tax slab. TDS is deducted annually on accrued interest, not on payment. Senior citizens have a Rs. 50,000 tax exemption on interest from savings accounts, FDs, and recurring deposits under Section 80TTB since April 1, 2018.

Preventing TDS on Fixed Deposits

Banks deduct TDS if the total interest income from all branches exceeds Rs. 40,000 in a financial year. The TDS rate is 10% with a PAN, otherwise, it’s 20%. Form 26AS contains TDS details. Submit Form 15G (below 60 years) or Form 15H (for seniors) to avoid TDS deductions, valid annually. If missed, claim a refund when filing taxes.

Recording Fixed and Recurring Deposits

Report total FD interest under 'Other interest income' in tax returns. If recurring deposit interest exceeds Rs. 40,000 (Rs. 50,000 for seniors), a 10% TDS is deducted and reported under Income from Other Sources.

Family Pension

Pension received on behalf of a deceased person falls under Income from Other Sources. A standard deduction of Rs. 15,000 or one-third of the family pension (lower amount) is allowed.

Winnings from Lotteries, Shows, and Games

Income from lotteries, game shows, gambling, etc., is taxed at a flat 30% (plus cess). This is listed under Income from Other Sources.

Dividend Income

Dividends from stocks, taxed under Income from Other Sources, must be included in total income and taxed per your slab rate post the removal of Dividend Distribution Tax. A 20% interest deduction is allowed, and TDS is deducted on dividends over Rs. 5,000 at a 10% rate.

Agricultural Income

Indian tax law categorizes the following as agricultural income:

• Revenue from agricultural land in India
• Income from cultivation and operations like pruning and harvesting
• Income from farm buildings for agricultural use

Virtual Digital Assets (VDAs)

Cryptocurrencies and NFTs attract a 30% tax on profits. Any loss cannot offset other income sources.

Income from Gifts

Under Section 56(2)(vi), gifts over Rs. 50,000 per financial year, whether in cash or kind at market value, are taxable based on your slab.

Interest on Income Tax Refunds

Excess tax paid through Advance Tax, TDS, or Self-Assessment Tax is refundable post filing your return. The refund attracts interest.

Exempt Income

Certain incomes are tax-exempt: withdrawals from the PPF and EPF post-five years of service availability.

Deductible Expenses

Deductible expenses from other sources include repairs, insurance for rental assets, and a third of the family pension or Rs. 15,000 (whichever is lower). For compensated interest, 50% of the amount is deductible. Section 57(iii) caters to non-capital expenses incurred wholly for earning income.

For detailed guidance, consider consulting a tax advisor or using professional tax software for precise tax filing.