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

Salary Income comprises wages and bonuses linked to employment. Income from House Property derives from rental earnings. Capital Gains involve profits from disposing of property or investments. Profits and Gains from Business and Profession encompass the revenue from business activities.

The fifth category, Income from Other Sources, includes diverse income streams not previously categorized, each having specific tax implications.

Interest Income from Savings Accounts

Interest earned from savings bank accounts falls under Income from Other Sources on your tax return. Notably, Tax Deducted at Source (TDS) is not imposed on this interest type, contrary to fixed and recurring deposits. Interest from savings accounts is eligible for deductions.

Section 80TTA Deductions

Under Section 80TTA, individuals below 60 and Hindu Undivided Families (HUFs) can claim deductions up to Rs. 10,000 annually for interest from:

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

Senior citizens are not eligible for Section 80TTA deductions.

Fixed Deposit Taxation

Interest from fixed deposits (FDs) is included in your total income and taxed according to your tax bracket. TDS is annually deducted on accrued, not paid, interest. Since April 1, 2018, senior citizens enjoy a Rs. 50,000 tax exemption on interest from savings accounts, FDs, and recurring deposits under Section 80TTB.

Preventing TDS on Fixed Deposits

Banks impose TDS if total interest income across branches surpasses Rs. 40,000 annually. The TDS rate is 10% with a PAN, otherwise, it's 20%. TDS details appear on Form 26AS. Submit Form 15G (below 60 years) or Form 15H (seniors) yearly to prevent TDS deductions. If forgotten, claim a refund when filing taxes.

Recording Fixed and Recurring Deposits

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

Family Pension

Pension received on behalf of a deceased individual is classified under Income from Other Sources. A standard deduction of Rs. 15,000 or one-third of the family pension (whichever is less) is permitted.

Winnings from Lotteries, Shows, and Games

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

Dividend Income

Dividends from stocks, categorized under Income from Other Sources, need inclusion in total income and are taxed according to your slab rate following the elimination of the Dividend Distribution Tax. A 20% interest deduction is permitted, with TDS applicable on dividends over Rs. 5,000 at a 10% rate.

Agricultural Income

According to Indian tax law, the following are considered agricultural income:

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

Virtual Digital Assets (VDAs)

Cryptocurrencies and NFTs incur a 30% tax on gains. Losses cannot offset other income categories.

Income from Gifts

According to Section 56(2)(vi), gifts exceeding Rs. 50,000 per financial year, whether in cash or kind at market value, are taxed according to your slab.

Interest on Income Tax Refunds

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

Exempt Income

Certain incomes are tax-exempt, such as withdrawals from the Public Provident Fund (PPF) and Employees' Provident Fund (EPF) after five years of service.

Deductible Expenses

Deductible expenses from other sources can include repairs, insurance for rental properties, and one-third of the family pension or Rs. 15,000 (whichever is lower). For compensated interest, 50% of the amount is deductible. Section 57(iii) addresses non-capital expenses incurred solely for income generation.

For comprehensive advice, consult a tax advisor or professional tax software to ensure accurate filings.