Income Tax - Income from Other Sources

Income from Other Sources: Section 56 and Current Section 92

Income from Other Sources is the residuary head of income. It generally covers taxable income that is not exempt and is not chargeable under the other specified heads of income.

Updated for the Income-tax Act, 2025 as amended by the Finance Act, 2026. Last reviewed: 28 September 2026.

Important law change from 1 April 2026: The Income-tax Act, 2025 came into force on 1 April 2026 and replaced the Income-tax Act, 1961, subject to repeal and saving provisions. The provision corresponding to old section 56 is now principally contained in section 92 of the Income-tax Act, 2025. References to section 56 below explain the legacy provision and remain relevant for earlier years and proceedings governed by the repealed Act.

On this page

Meaning of Income from Other Sources
Current law: section 92 of the Income-tax Act, 2025
Main receipts taxable under this head
Gifts and property received without or for inadequate consideration
Legacy section 56 of the Income-tax Act, 1961
Related deductions and computation
Official resources

What is Income from Other Sources?

The head Income from Other Sources operates as a residual charging head. Under section 92(1) of the Income-tax Act, 2025, income of every kind that is not excluded from total income is chargeable under this head when it is not chargeable under the other heads specified in section 13(a) to (d).

In practical terms, the first question is whether a receipt is exempt or falls under another applicable head such as salary, house property, business or profession, or capital gains. If it does not, section 92 may bring it within Income from Other Sources.

Current law: Section 92 of the Income-tax Act, 2025

Section 92 contains both the general residual rule and a list of receipts that are specifically chargeable under this head. The provision should be read with related provisions on deductions, special tax rates, exclusions, valuation and return reporting.

Current provision	Subject	Practical effect
Section 92(1)	Residual charging rule	Taxes non-exempt income under this head where it is not chargeable under the other specified heads.
Section 92(2)	Specified receipts	Expressly identifies several categories of income taxable as Income from Other Sources.
Section 92(3)	Exceptions for gifts and property	Provides exclusions for specified receipts, including receipts from relatives, on marriage, under a will or inheritance and other listed cases.
Section 92(4)	Property valuation and definitions	Contains rules relevant to stamp duty value and definitions used for gift and property taxation.
Section 93	Deductions	Governs deductions in computing income chargeable under this head, subject to the current statutory restrictions.

Main receipts taxable under Income from Other Sources

Section 92(2) specifically includes, among other items, the following categories:

Dividends.
Winnings from lotteries, crossword puzzles, races including horse races, card games and other games, gambling or betting.
Specified employees' contributions received by an assessee towards provident fund, superannuation fund, ESI or another employee welfare fund when not chargeable as business income.
Keyman insurance receipts, including allocated bonus, where not chargeable as salary or business income.
Interest on securities where it is not chargeable as business income.
Hire income from machinery, plant or furniture where it is not business income.
Composite letting income where machinery, plant or furniture and a building are let inseparably and the income is not business income.
Forfeited advances received during negotiations for transfer of a capital asset where the negotiations do not result in transfer.
Interest on compensation or enhanced compensation covered by the relevant statutory provision.
Compensation connected with termination of employment or modification of employment terms.
Certain specified distributions from a business trust.
Certain taxable life-insurance receipts that are not excluded from total income, subject to the statutory conditions.
Money or property received without consideration or for inadequate consideration where the conditions and thresholds in section 92(2)(m) are satisfied.

Gifts and property: when can a receipt become taxable?

Under section 92(2)(m), the gift and property rules apply to any person, subject to the statutory exceptions. The current provision broadly covers money, immovable property and specified property other than immovable property.

Receipt	Basic statutory trigger
Money without consideration	If the total exceeds ₹50,000, the whole amount may be chargeable, subject to exceptions.
Immovable property without consideration	If stamp duty value exceeds ₹50,000, the stamp duty value may be chargeable, subject to exceptions.
Immovable property for inadequate consideration	The excess of stamp duty value over consideration is relevant where it exceeds the higher of ₹50,000 or 10% of the consideration, subject to the statutory rules.
Specified movable property without consideration	If aggregate fair market value exceeds ₹50,000, the aggregate fair market value may be chargeable, subject to exceptions.
Specified movable property for inadequate consideration	The excess of aggregate fair market value over consideration may be chargeable where the difference exceeds ₹50,000, subject to exceptions.

Important exceptions

Section 92(3) excludes specified receipts from the gift rule. These include, subject to the exact statutory language and conditions, money or property received:

from a relative;
on the occasion of the marriage of the individual;
under a will or by inheritance;
in contemplation of death of the payer or donor;
from a specified local authority;
in specified cases involving registered non-profit organisations;
through specified transactions not regarded as transfer;
from an individual to a trust created solely for the benefit of the individual's relative; or
from prescribed classes of persons subject to prescribed conditions.

Who is a relative?

For an individual, the definition in section 92 includes the spouse; brother or sister; brother or sister of the spouse; brother or sister of either parent; lineal ascendants or descendants of the individual; lineal ascendants or descendants of the spouse; and the spouse of specified relatives. For a Hindu undivided family, any member of the HUF is included. Always check the exact statutory definition for the transaction concerned.

What property is covered?

For this purpose, specified property includes land or building or both, shares and securities, jewellery, archaeological collections, drawings, paintings, sculptures, works of art, bullion and virtual digital assets, subject to the wording and definitions in section 92.

Example: If an individual receives ₹75,000 as a genuine gift from a person who falls within the statutory definition of relative, the section 92(2)(m) gift charge does not apply merely because the amount exceeds ₹50,000. The relationship and supporting facts should be properly documented.

Legacy Section 56 of the Income-tax Act, 1961

Before the Income-tax Act, 2025 came into force, section 56 of the Income-tax Act, 1961 governed Income from Other Sources. Section 56(1) contained the residual charging rule, while section 56(2) listed specific receipts. Over time, section 56 was amended repeatedly, which is why older versions of the provision contain clauses that applied only during particular date ranges.

For earlier previous years, pending matters and transitional questions, the applicable version of the Income-tax Act, 1961 and the repeal-and-savings provisions must be checked. A historical clause should not be applied merely because it appears in an older web copy.

Section 56(2)(viib) and the old share-premium provision

The old page reproduced section 56(2)(viib), commonly associated with taxation of certain share premium receipts. That historical text should not be presented as the current charging provision after the transition to the Income-tax Act, 2025. For a transaction in an earlier year, the law applicable to that year must be examined separately.

Deductions and computation of Income from Other Sources

The gross receipt is not always the final taxable amount. Deductions are governed by the current provisions of the Income-tax Act, 2025, particularly section 93, and by the nature of the receipt. Restrictions can apply to particular categories of income.

For example, the Finance Act, 2026 changed the treatment of interest expenditure against dividend income and income from units of mutual funds under the current law. Accordingly, deductions should be checked under the law applicable to the relevant tax year rather than copied from older section 57 summaries.

For returns relating to earlier years under the Income-tax Act, 1961, the corresponding deduction provisions were principally contained in section 57, with disallowances under section 58.

Practical checklist

Identify the tax year and determine whether the Income-tax Act, 2025 or the saved provisions of the Income-tax Act, 1961 govern the issue.
Check whether the receipt is excluded from total income.
Check whether it is properly chargeable under another head of income.
If not, examine section 92 and any specific provision applicable to the receipt.
For gifts or property, verify the threshold, valuation rule, relationship and statutory exceptions.
Apply only those deductions expressly permitted for the relevant category of income.
Report the income in the appropriate schedule of the applicable income-tax return.

Official resources

For the latest statutory text, rules, forms and filing guidance, use official Government sources:

Note: This article is a general legal and tax information resource. Tax treatment can depend on the tax year, nature of receipt, residential status, valuation rules, exemptions, special-rate provisions and transitional provisions. Consult the applicable Act, Rules, notifications and professional advice for a specific transaction.