Casual Income

Shreya Srivastava | Symbiosis Law School, Hyderabad | 1st July 2020

Any salary, benefits, or increases includible in the all-out pay of an assessee, which can’t be incorporated under any of the former heads of pay, is chargeable under the head ‘Pay from different Sources’. In this way, this head is the residuary head of salary and brings inside its extension all the available pay, benefits, or gains of an assessee which fall outside the extent of some other head. In this way, when any pay, benefit or addition doesn’t fall correctly under any of the other explicit heads however is chargeable under the arrangements of the Act, it would be charged under this head. 

Casual Income 

Easygoing pay implies pay in the idea of winning from lotteries, crossword puzzles, races including horse races, games and different rounds of any kind, betting, wagering, and so on. Such rewards are chargeable to charge at a level pace of 30% under area 115BB. 

Conditions: 

1. No consumption or recompense can be permitted from such pay. 
2. Conclusion under Chapter VI-An isn’t admissible from such pay. 
3. Modification of unexhausted essential exclusion limit is additionally not allowed against such payments. 

Any aggregate of cash or estimation of property got without thought or for deficient thought to be liable to burden in the possession of the beneficiary [Section 56(2)(x)] 

To forestall the act of accepting the whole of cash or the property without thought or for lacking thought, area 56(2)(x) brings to burden any entirety of cash or the estimation of any property got by any individual without thought or the estimation of any property got for deficient thought. 

The entirety of Money: If any total of cash is gotten without thought, and the total estimation of which surpasses ₹ 50,000, the entire of the total estimation of such total is chargeable to burden. 

Steadfast property: 

I. On the off chance that an unfaltering property is gotten 

A. Without thought, the stamp obligation estimation of such property would be burdened as the pay of the beneficiary if it surpasses ₹ 50,000. 

B. For a thought, which is not exactly the stamp obligation estimation of the property by a sum surpassing ₹ 50,000, the contrast between the stamp obligation esteem and the thought will be chargeable to burden in the possession of the assessee as “Salary from different sources”. 

II. Estimation of property to be viewed as where the date of understanding is unique concerning date of enlistment: Taking into thought the conceivable delay between the date of understanding and the date of enrollment, the stamp obligation worth might be taken as on the date of understanding rather than the date of enrollment, if the date of the understanding fixing the measure of thought for the exchange of the enduring property and the date of enlistment is not the equivalent, gave entire or part of the thought has been paid by method of a record payee check or a record payee bank draft or by utilization of electronic clearing framework (ECS) through a ledger at the very latest the date of understanding. 

III. On the off chance that the stamp obligation estimation of unflinching property is contested by the assessee, the Assessing Officer may allude the valuation of such property to a Valuation Officer. In such a case, the arrangements of area 50C and segment 155(15) will, similarly as might be, apply for deciding the estimation of such property. 

According to area 50C, if such worth is not exactly the stamp obligation esteem, the equivalent would be taken for deciding the estimation of such property, for calculation of salary under this head in the possession of the purchaser. 

Portable Property: 

If the versatile property is gotten 

1. Without thought, the total honest evaluation of such property on the date of receipt would be burdened as the pay of the beneficiary, on the off chance that it surpasses ₹ 50,000. 

2. For a thought which is not exactly the honest evaluation of the property by a sum surpassing ₹ 50,000, and the contrast between the total honest assessment and such thought surpasses ₹ 50,000, such distinction would be burdened as the salary of the beneficiary. 

The relevance of segment 56(2)(x): 

The arrangements of segment 56(2)(x) would apply just to property which is the idea of a capital resource of the beneficiary and not stock-in-exchange, crude material or consumable stores of any business of the beneficiary. 

Non-appropriateness of area 56(2)(x): 

Be that as it may, any aggregate of cash or estimation of property got in the accompanying conditions would be outside the ambit of area 56(2)(x) – 

1. From any family member; or 
2. On the event of marriage; or 
3. Under a will or by the method of legacy; or 
4. In consideration of the death of the payer or benefactor, by and large; or 
5. From any neighbourhood authority as characterised in the Explanation to area 10(20); or 
6. From any store or establishment or college or other instructive organisation or emergency clinic, and so on alluded to in area 10(23C); or 
7. From any trust or organisation enlisted under area 12AA; or 
8. By any store or trust or establishment or any college or other instructive foundation or any emergency clinic, and so forth alluded to in Section 10(23C)(iv)/(v)/(vi)/(employing). 
9. By the method of the exchange not viewed as an exchange under segment 47. 
10. From a person by a trust made or set up exclusively to help a relative of the person. 

Relative incorporates: 

a. If there should be an occurrence of an individual –

1. companion of the person; 
2. sibling or sister of the person; 
3. sibling or sister of the companion of the person;
4. sibling or sister of both of the guardians of the person; 
5. any lineal ascendant or relative of the person; 
6. any lineal ascendant or relative of the companion of the person; 
7. life partner of any of the people alluded to above. 

The thought got in an abundance of FMV of offers gave by a firmly held organization to be treated as the salary of such organization, where offers are given at an exceptional [Section 56(2)(viib)] 

Area 56(2)(viib) brings to burden the thought got from an inhabitant individual by a Closely-held organization, which is in an abundance of the honest evaluation (FMV) of offers. Such abundance is to be treated as the pay available under area 56(2) under the head “Salary from Other Sources”, in situations where the thought got for the issue of offers surpasses the assumed worth of offers for example where offers are given including some built-in costs.