Income from Other Sources (UNIT III) || Costing & Taxation || Most Expected Questions for 2026 Semester III H. S. Examination || Sanjay Agarwala || PART-I || WBCHSE ||
A. Multiple Choice Questions (MCQs)
Q. 1. Income which is not taxable under any of the other specific heads of income is generally assessed under
(A) Income from Salary
(B) Income from House Property
(C) Income from Other Sources
(D) Income from Capital Gains
Correct Option: (C)
Q. 2. The charging provision for income taxable under the head "Income from Other Sources" is
(A) Section 45
(B) Section 56
(C) Section 57
(D) Section 58
Correct Option: (B)
Q. 3. Which of the following is specifically covered under Section 56 as income from other sources?
(A) Profit from transfer of a capital asset
(B) Salary received from an employer
(C) Winning from a crossword puzzle
(D) Annual value of a house property
Correct Option: (C)
Q. 4. Income from agricultural land situated in India is ₹ 35,000. The taxable income under the head "Income from Other Sources" will be
(A) Fully taxable income
(B) Tax-exempt income
(C) Taxable income with 1/3rd exemption
(D) Nil
Correct Option: (B)
Q. 5. Interest received from Post Office Joint Savings Bank deposits is exempt from tax up to
(A) ₹ 3,500
(B) ₹ 4,500
(C) ₹ 7,000
(D) ₹ 9,000
Correct Option: (C)
Q. 6. Salary received by a Member of Parliament is taxable under the head
(A) Income from Salary
(B) Income from Capital Gains
(C) Income from Other Sources
(D) Income from House Property
Correct Option: (C)
Q. 7. As per the Indian Income Tax Act, who among the following is not considered a relative?
(A) Husband or wife
(B) Grandfather's brother
(C) Brother or sister of the husband or wife
(D) Father's or mother's brother or sister
Correct Option: (B)
Q. 8. Which of the following expenses cannot be deducted from winnings from lotteries, crossword puzzles, card games or horse races?
(A) Expenses incurred for earning the winning
(B) Brokerage expenses
(C) Cost of the lottery ticket
(D) All of the above
Correct Option: (D)
Q. 9. Interest on securities is taxable under the head "Income from Other Sources" when such interest is not taxable under
(A) Income from Salary
(B) Profits and Gains of Business or Profession
(C) Income from House Property
(D) Income from Capital Gains
Correct Option: (B)
Q. 10. Interest on securities is specifically referred to under which provision of Section 56?
(A) Section 56(2)(i)(a)
(B) Section 56(2)(i)(b)
(C) Section 56(2)(i)(d)
(D) Section 56(2)(ii)
Correct Option: (C)
Q. 11. Which one of the following is an example of income generally taxable under "Income from Other Sources"?
(A) Interest on bank deposits
(B) Basic salary
(C) Rent from an owned house
(D) Profit on sale of land
Correct Option: (A)
Q. 12. Remuneration received by an employee from a person other than his employer for performing examination duties is generally taxable under
(A) Income from Salary
(B) Income from House Property
(C) Income from Other Sources
(D) Income from Capital Gains
Correct Option: (C)
Q. 13. Dividend received from a foreign company by an individual is generally taxable under
(A) Income from Salary
(B) Income from House Property
(C) Income from Other Sources
(D) Income from Capital Gains
Correct Option: (C)
Q. 14. Which of the following incomes would generally fall under the residuary head "Income from Other Sources"?
(A) Income from a profession
(B) Interest on bank deposits
(C) Profit from sale of a capital asset
(D) Salary from an employer
Correct Option: (B)
Q. 15. Which of the following is taxable under the head "Income from Other Sources"?
(A) Income received from rental of house property
(B) Income received from lottery
(C) Income received from salary
(D) Income received from sale of capital assets
Correct Option: (B)
Q. 16. According to which section of the Income Tax Act is income taxable under the head "Income from Other Sources"?
(A) Section 45
(B) Section 54
(C) Section 56
(D) Section 57
Correct Option: (C)
Q. 17. Allowance received by a Member of Parliament is
(A) Completely tax-free
(B) Subject to 50% deduction
(C) Fully taxable
(D) Annually tax-free up to ₹ 45,000
Correct Option: (C)
Q. 18. Which of the following is not taxable under the head "Income from Other Sources"?
(A) Salary
(B) Ground rent
(C) Business profits
(D) Profit from sale of shares
Correct Option: (A)
Q. 19. Which of the following pairs is correctly matched?
(A) Lottery winning — Income from Salary
(B) Interest on securities — Income from Other Sources
(C) Salary of an employee — Income from Other Sources
(D) Sale of capital asset — Income from Other Sources
Correct Option: (B)
Q. 20. Income which is not taxable under any of the other specific heads of income is generally assessed under
(A) Income from Salary
(B) Income from House Property
(C) Income from Other Sources
(D) Income from Capital Gains
Correct Option: (C)
Q. 21. The charging provision for income taxable under the head "Income from Other Sources" is
(A) Section 45
(B) Section 56
(C) Section 57
(D) Section 58
Correct Option: (B)
Q. 22. Which of the following is specifically covered under Section 56 as income from other sources?
(A) Profit from transfer of a capital asset
(B) Salary received from an employer
(C) Winning from a crossword puzzle
(D) Annual value of a house property
Correct Option: (C)
Q. 23. Which of the following expenses cannot be deducted from winnings from lotteries, crossword puzzles, card games or horse races?
(A) Expenses incurred for earning the winning
(B) Brokerage expenses
(C) Cost of the lottery ticket
(D) All of the above
Correct Option: (D)
Q. 24. Interest on securities is taxable under the head "Income from Other Sources" when such interest is not taxable under
(A) Income from Salary
(B) Profits and Gains of Business or Profession
(C) Income from House Property
(D) Income from Capital Gains
Correct Option: (B)
Q. 25. Interest on securities is specifically referred to under which provision of Section 56?
(A) Section 56(2)(i)(a)
(B) Section 56(2)(i)(b)
(C) Section 56(2)(i)(d)
(D) Section 56(2)(ii)
Correct Option: (C)
Q. 26. Which one of the following is an example of income generally taxable under "Income from Other Sources"?
(A) Interest on bank deposits
(B) Basic salary
(C) Rent from an owned house
(D) Profit on sale of land
Correct Option: (A)
Q. 27. Remuneration received by an employee from a person other than his employer for performing examination duties is generally taxable under
(A) Income from Salary
(B) Income from House Property
(C) Income from Other Sources
(D) Income from Capital Gains
Correct Option: (C)
Q. 28. Dividend received from a foreign company by an individual is generally taxable under
(A) Income from Salary
(B) Income from House Property
(C) Income from Other Sources
(D) Income from Capital Gains
Correct Option: (C)
Q. 29. Which of the following incomes would generally fall under the residuary head "Income from Other Sources"?
(A) Income from a profession
(B) Interest on bank deposits
(C) Profit from sale of a capital asset
(D) Salary from an employer
Correct Option: (B)
Q. 30. Which of the following pairs is correctly matched?
(A) Lottery winning — Income from Salary
(B) Interest on securities — Income from Other Sources
(C) Salary of an employee — Income from Other Sources
(D) Sale of capital asset — Income from Other Sources
Correct Option: (B)
Q. 31. Interest received from debentures is taxable under which head of income?
(A) Income from Other Sources
(B) Income from Capital Gains
(C) Income from Salary
(D) None of these
Correct Option: (A)
Q. 32. Money received from lottery, crossword puzzles, card games, horse racing, etc. is
(A) Fully taxable
(B) Tax-free up to ₹ 15,000
(C) Totally tax-free
(D) Subject to 40% deduction
Correct Option: (A)
Q. 33. Remuneration received by a teacher as an examiner is taxable under which head of income?
(A) Income from Salary
(B) Income from Other Sources
(C) Income from Capital Gains
(D) None of these
Correct Option: (B)
Q. 34. Dividends received from a domestic company are taxable under which head of income?
(A) Income from Salary
(B) Income from Capital Gains
(C) Income from Other Sources
(D) None of these
Correct Option: (C)
Q. 35. Which of the following is taxable under the head "Income from Other Sources"?
(A) Income from house rent
(B) Income from business
(C) Income from subletting
(D) Salary
Correct Option: (C)
Q. 36. Salary received by a Member of Parliament (MP) is
(A) Fully tax-free
(B) Fully taxable
(C) Annually ₹ 1,00,000 tax-free
(D) None of these
Correct Option: (B)
Q. 37. As per the Income Tax Act of India, what is the maximum limit of deduction for family pension?
(A) ₹ 45,000
(B) ₹ 10,000
(C) ₹ 15,000
(D) ₹ 20,000
Correct Option: (C)
Q. 38. Under which section of the Income Tax Act is interest received from securities taxable?
(A) Section 54(2)(id)
(B) Section 55(2)(id)
(C) Section 56(2)(id)
(D) Section 57(2)(id)
Correct Option: (C)
Q. 39. If a gift of ₹ 60,000 is received from a friend, the taxable income is
(A) ₹ 10,000
(B) Nil
(C) ₹ 50,000
(D) ₹ 60,000
Correct Option: (D)
Q. 40. If a gift of ₹ 80,000 is received from a grandfather, the taxable income will be
(A) ₹ 10,000
(B) Nil
(C) ₹ 80,000
(D) ₹ 50,000
Correct Option: (B)
Q. 41. Which of the following is not taxable under the head "Income from Other Sources"?
(A) Income from family pension
(B) Dividend received from foreign companies
(C) Dividend income from domestic companies
(D) None of these
Correct Option: (D)
Q. 42. Dividends received from Indian companies are
(A) Taxable but exempt under Section 57
(B) Fully taxable
(C) Fully tax-free
(D) None of these
Correct Option: (B)
Q. 43. Dividends received from a foreign company are taxable under which head of income?
(A) Income from Other Sources
(B) Income from Capital Gains
(C) Income from Salary
(D) None of these
Correct Option: (A)
Q. 44. Which of the following incomes are taxable under the head "Income from Other Sources"?
(A) Family pension
(B) Pension
(C) Interest from bonds
(D) Both (A) and (C)
Correct Option: (D)
Q. 45. Who is not considered a relative as per the Indian Income Tax Act?
(A) A person's husband or wife
(B) A person's brother or sister
(C) Grandfather's elder brother
(D) None of these
Correct Option: (C)
Q. 46. Income received from subletting is taxable under which head of income?
(A) Income from House Property
(B) Income from Capital Gains
(C) Income from Salary
(D) Income from Other Sources
Correct Option: (D)
Q. 47. While determining income from lottery, crossword puzzles, card games, etc., exemption in respect of expenses incurred to earn such income is
(A) All expenses incurred to earn income
(B) No expenses are deductible
(C) Deduction up to a certain limit
(D) None of these
Correct Option: (B)
Q. 48. An author receives ₹ 18,000 as royalty from a book. Such royalty income is generally taxable under
(A) Income from Salary
(B) Income from Other Sources
(C) Income from House Property
(D) Income from Capital Gains
Correct Option: (B)
Q. 49. A person receives ₹ 1,20,000 as interest on a bank fixed deposit. This interest is generally assessable under
(A) Income from Other Sources
(B) Income from Salary
(C) Income from House Property
(D) Income from Capital Gains
Correct Option: (A)
Q. 50. A tenant receives ₹ 90,000 by sub-letting a portion of a rented house. Such income is generally taxable under
(A) Income from House Property
(B) Income from Salary
(C) Income from Other Sources
(D) Income from Capital Gains
Correct Option: (C)
Q. 51. An author receives ₹ 18,000 as royalty from a book. Such royalty income is generally taxable under
(A) Income from Salary
(B) Income from Other Sources
(C) Income from House Property
(D) Income from Capital Gains
Correct Option: (B)
Q. 52. A person receives ₹ 1,20,000 as interest on a bank fixed deposit. This interest is generally assessable under
(A) Income from Other Sources
(B) Income from Salary
(C) Income from House Property
(D) Income from Capital Gains
Correct Option: (A)
Q. 53. A tenant receives ₹ 90,000 by sub-letting a portion of a rented house. Such income is generally taxable under
(A) Income from House Property
(B) Income from Salary
(C) Income from Other Sources
(D) Income from Capital Gains
Correct Option: (C)
Q. 54. If a gift of ₹ 40,000 is received from one's father, the taxable income will be
(A) ₹ 10,000
(B) Zero
(C) ₹ 40,000
(D) ₹ 50,000
Correct Option: (B)
Q. 55. Dividends received from a domestic company and a foreign company are ₹ 45,000 and ₹ 55,000 respectively. The taxable income will be
(A) ₹ 10,000
(B) ₹ 45,000
(C) ₹ 55,000
(D) ₹ 1,00,000
Correct Option: (C)
Q. 56. Interest earned from Post Office Single Savings Bank deposits is exempt from tax up to
(A) ₹ 2,500
(B) ₹ 3,500
(C) ₹ 4,500
(D) ₹ 7,000
Correct Option: (B)
Q. 57. An author received ₹ 9,000 as royalty for writing a book. His typing expenses were ₹ 2,000. The taxable income is
(A) ₹ 2,000
(B) ₹ 7,000
(C) ₹ 9,000
(D) ₹ 11,000
Correct Option: (B)
Q. 58. A person receives ₹ 72,000 as interest on securities held as an investment. If the entire interest is taxable under Other Sources, the amount included in taxable income is
(A) ₹ 36,000
(B) ₹ 50,000
(C) ₹ 72,000
(D) Nil
Correct Option: (C)
Q. 59. A person wins ₹ 25,000 from a card game. The amount taxable under the head "Income from Other Sources" is
(A) ₹ 15,000
(B) ₹ 20,000
(C) ₹ 25,000
(D) Nil
Correct Option: (C)
Q. 60. A person wins ₹ 60,000 in a horse race and incurs ₹ 8,000 as expenses for earning the winning. The taxable winning will be
(A) ₹ 52,000
(B) ₹ 60,000
(C) ₹ 68,000
(D) ₹ 8,000
Correct Option: (B)
Q. 61. A lottery prize is ₹ 50,000 and the winner pays ₹ 2,000 for purchasing the lottery ticket. The taxable lottery income will be
(A) ₹ 48,000
(B) ₹ 50,000
(C) ₹ 52,000
(D) ₹ 2,000
Correct Option: (B)
Q. 62. If the gross lottery prize is ₹ 1,50,000 and tax deducted at source is ₹45,000, the income chargeable under the head "Income from Other Sources" will be
(A) ₹ 1,05,000
(B) ₹ 1,50,000
(C) ₹ 45,000
(D) ₹ 1,95,000
Correct Option: (B)
Q. 63. A person receives ₹ 40,000 from a crossword puzzle and ₹ 30,000 as interest on securities. Assuming both are taxable under Other Sources, the total income under this head will be
(A) ₹ 10,000
(B) ₹ 30,000
(C) ₹ 40,000
(D) ₹ 70,000
Correct Option: (D)
Q. 64. A person receives ₹ 9,000 as interest on a bank deposit after deducting 10% TDS. His taxable interest income will be
(A) ₹ 8,100
(B) ₹ 9,000
(C) ₹ 10,000
(D) ₹ 9,900
Correct Option: (C)
Q. 65. If a person receives family pension of ₹ 90,000, his taxable family pension income will be
(A) ₹ 60,000
(B) ₹ 75,000
(C) ₹ 90,000
(D) Nil
Correct Option: (B)
Q. 66. Income from horse racing is ₹ 45,000 and expenses for horse maintenance are ₹ 5,000. The taxable income will be
(A) ₹ 40,000
(B) ₹ 45,000
(C) ₹ 50,000
(D) Nil
Correct Option: (B)
Q. 67. A person has 10% listed debentures worth ₹ 2,50,000 of a company. The taxable income under the head "Income from Other Sources" will be
(A) ₹ 2,50,000
(B) ₹ 2,75,000
(C) ₹ 50,000
(D) ₹ 25,000
Correct Option: (D)
Q. 68. A person receives agricultural income of ₹ 25,000 from Nepal. The taxable income under the head "Income from Other Sources" would be
(A) Tax-free
(B) ₹ 10,000
(C) ₹ 25,000
(D) Nil
Correct Option: (C)
Q. 69. If the gross lottery prize is ₹ 1,50,000 and tax deducted at source is ₹ 45,000, the income chargeable under the head "Income from Other Sources" will be
(A) ₹ 1,05,000
(B) ₹ 1,50,000
(C) ₹ 45,000
(D) ₹ 1,95,000
Correct Option: (B)
Q. 70. A person receives ₹ 40,000 from a crossword puzzle and ₹ 30,000 as interest on securities. Assuming both are taxable under Other Sources, the total income under this head will be
(A) ₹ 10,000
(B) ₹ 30,000
(C) ₹ 40,000
(D) ₹ 70,000
Correct Option: (D)
Q. 71. A person wins ₹ 25,000 from a card game. The amount taxable under the head "Income from Other Sources" is
(A) ₹ 15,000
(B) ₹ 20,000
(C) ₹ 25,000
(D) Nil
Correct Option: (C)
Q. 72. An Indian citizen earned ₹ 40,000 from horse racing and spent ₹ 4,000 for this income. His taxable income from horse racing will be
(A) ₹ 36,000
(B) ₹ 40,000
(C) ₹ 44,000
(D) Nil
Correct Option: (B)
Q. 73. Income received from lottery is ₹ 5,000, from horse racing is ₹ 10,000, and from selling shares is ₹7,000. The total taxable income under the head "Income from Other Sources" will be
(A) ₹ 12,000
(B) ₹ 15,000
(C) ₹ 17,000
(D) ₹ 22,000
Correct Option: (B)
Q. 74. A person wins ₹ 60,000 in a horse race and incurs ₹ 8,000 as expenses for earning the winning. The taxable winning will be
(A) ₹ 52,000
(B) ₹ 60,000
(C) ₹ 68,000
(D) ₹ 8,000
Correct Option: (B)
Q. 75. A lottery prize is ₹ 50,000 and the winner pays ₹ 2,000 for purchasing the lottery ticket. The taxable lottery income will be
(A) ₹ 48,000
(B) ₹ 50,000
(C) ₹ 52,000
(D) ₹ 2,000
Correct Option: (B)
Q. 76. A person receives ₹ 72,000 as interest on securities held as an investment. If the entire interest is taxable under Other Sources, the amount included in taxable income is
(A) ₹ 36,000
(B) ₹ 50,000
(C) ₹ 72,000
(D) Nil
Correct Option: (C)
Q. 77. If the family pension received is ₹ 30,000, the taxable income will be
(A) ₹ 10,000
(B) ₹ 15,000
(C) ₹ 18,000
(D) ₹ 20,000
Correct Option: (B)
Q. 78. Income from subletting a house is ₹ 80,000, rent paid is ₹ 35,000, and repair expenses are ₹ 15,000. The taxable income from Other Sources will be
(A) ₹ 20,000
(B) ₹ 30,000
(C) ₹ 45,000
(D) ₹ 80,000
Correct Option: (B)
Q. 79. Income received from lottery is ₹ 69,100 net, after tax deducted at source at 30.9%. What will be the taxable income?
(A) ₹ 69,100
(B) ₹ 1,00,000
(C) ₹ 1,20,000
(D) ₹ 1,50,000
Correct Option: (B)
Q. 80. Which of the following receipts is taxable under the head "Income from Other Sources"?
(A) Interest received on a savings bank account
(B) Salary received from an employer
(C) Profit from sale of machinery used in business
(D) Annual rent from an owned residential house
Correct Option: (A)
Q. 81. Income from Other Sources is regarded as the
(A) First head of income
(B) Third head of income
(C) Fourth head of income
(D) Residuary or fifth head of income
Correct Option: (D)
Q. 82. Which of the following is generally taxable under the head "Income from Other Sources"?
(A) Director's fees
(B) Agricultural income
(C) Salary from employer
(D) Profit from business
Correct Option: (A)
Q. 83. Fees received by a director for attending meetings of a company are generally taxable under
(A) Income from Salary
(B) Income from Other Sources
(C) Income from House Property
(D) Income from Capital Gains
Correct Option: (B)
Q. 84. Income earned from fishery, when it does not constitute business income, is generally taxable under
(A) Income from Other Sources
(B) Income from Salary
(C) Income from House Property
(D) Income from Capital Gains
Correct Option: (A)
Q. 85. Income from betting is generally chargeable to tax under
(A) Income from Salary
(B) Income from House Property
(C) Income from Other Sources
(D) Income from Capital Gains
Correct Option: (C)
Q. 86. Income received from letting out machinery, plant or furniture, when it is not taxable as business income, is generally assessed under
(A) Income from Salary
(B) Income from Other Sources
(C) Income from House Property
(D) Income from Capital Gains
Correct Option: (B)
Q. 87. Interest received on compensation or enhanced compensation is generally taxable under
(A) Income from Salary
(B) Income from Other Sources
(C) Income from House Property
(D) Income from Capital Gains
Correct Option: (B)
Q. 88. Which of the following receipts is most appropriately classified under the residuary head when it is not taxable under any other specific head?
(A) Interest income
(B) Salary income
(C) Rental income from owned house
(D) Business profit
Correct Option: (A)
Q. 89. If income from letting machinery, plant and furniture is inseparable from letting a building, the combined income is generally considered under
(A) Income from Salary
(B) Income from Other Sources
(C) Income from Capital Gains
(D) Agricultural Income
Correct Option: (B)
Q. 90. Which one of the following is not ordinarily treated as income from Other Sources merely because it is a receipt?
(A) Business profit
(B) Interest income
(C) Director's fees
(D) Betting income
Correct Option: (A)
Q. 91. Under Section 56, income is taxable under "Income from Other Sources" when it is
(A) Specifically taxable under Salary
(B) Specifically taxable under House Property
(C) Not chargeable under any other specified head
(D) Always exempt from tax
Correct Option: (C)
Q. 92. Which of the following combinations contains only incomes that may fall under "Income from Other Sources"?
(A) Director's fees and interest income
(B) Salary and business profit
(C) House rent and salary
(D) Capital gain and salary
Correct Option: (A)
Q. 93. A person receives ₹ 24,000 as director's fees and ₹ 16,000 as interest on a bank deposit. If both are taxable under Other Sources, the gross income under this head will be
(A) ₹ 8,000
(B) ₹ 16,000
(C) ₹ 24,000
(D) ₹ 40,000
Correct Option: (D)
Q. 94. A person earns ₹ 35,000 from fishery as a non-business activity and ₹ 15,000 as interest on securities. The total income taxable under Other Sources, assuming both are taxable, is
(A) ₹ 15,000
(B) ₹ 35,000
(C) ₹ 40,000
(D) ₹ 50,000
Correct Option: (D)
Q. 95. Which of the following is correctly matched?
(A) Director's fees — Income from House Property
(B) Interest on securities — Income from Other Sources
(C) Business profit — Income from Other Sources in every case
(D) Salary — Income from Other Sources
Correct Option: (B)
Q. 96. The provisions relating to deductions from income taxable under the head "Income from Other Sources" are primarily contained in
(A) Section 45
(B) Section 54
(C) Section 57
(D) Section 80C
Correct Option: (C)
Q. 97. Which section deals mainly with deductions allowable in computing income chargeable under the head "Income from Other Sources"?
(A) Section 56
(B) Section 57
(C) Section 58
(D) Section 60
Correct Option: (B)
Q. 98. Which of the following would generally be assessed under Other Sources if it is not connected with the assessee's business or profession?
(A) Fees received for acting as a company director
(B) Profit from manufacturing goods
(C) Professional fees of a practising lawyer
(D) Salary from an employer
Correct Option: (A)
Q. 99. A person receives ₹ 28,000 as director's fees, ₹ 22,000 as interest income and ₹ 10,000 as betting income. Assuming all three receipts are taxable under Other Sources, the total income under this head will be
(A) ₹ 40,000
(B) ₹ 50,000
(C) ₹ 60,000
(D) ₹ 70,000
Correct Option: (C)
Q. 100. Which statement best describes the basic principle of the head "Income from Other Sources"?
(A) It covers only interest income
(B) It covers only casual income
(C) It covers income that is taxable but does not fall under the other specified heads
(D) It covers only income from lotteries
Correct Option: (C)
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