INCOME FROM OTHER SOURCES
Section 39 of the Income Tax Ordinance, 2001, deals with the fifth and last head of income of a person, ie ‘income from other sources’ and any income received from other sources is chargeable to tax under this head, other than income which is exempt from tax.
Explanation
Under section 39, tax is payable by a person in respect of income of every kind which may be included in his taxable income and which do not fall under any of the other four heads, ie. salaries, income from property, income from business, capital gains, it is chargeable to income tax under the head ‘income from other sources’ provided it is not exempt from tax.
The following are the examples of income from other sources:
1. Dividend.
2. Royalty.
3. Profit on debt.
4. Additional payment on delayed refund under any tax law.
5. Ground rent.
6. Rent from the sub-lease land or a building.
Income from the lease of any building together with plant or machinery.
8. Income from provision of amenities, utilities or any other services connected with renting of building.
9. Any annuity or pension.
10. Any prize bond or winnings from a raffle, lottery, prize on winning a quiz, prize offered by companies for promotion of sales, or cross word puzzle.
11. Any consideration received for the provision, use or exploitation of property.
12. Fair market value of any benefit received in connection with the provision, use or exploitation of property.
13. Any amount received by a person as consideration for vacating the possession of a building or part thereof, reduced by any amount paid by the person to acquire possession of such building or part thereof. The excess amount shall be charged to tax in the tax year in which it was received, following nine tax years in equal proportion
14. Any amount received as a loan, advance, deposit for issuance of shares or gift by a person in a tax year from another person other than banking company and financial institution other than a crossed cheque drawn on a bank or through a banking channel from a person holding a National Tax Number.
15. (a) Where any profit on debt derived from investment in National Savings Deposit Certificates including Defence Savings Certificate paid to a person in arrears or the amount received includes profit chargeable to tax in the tax year or years preceding the tax year in which it is received; and
(b) Where as a result the person is chargeable at higher rate of tax than would have been applicable if the profit had been paid to the person in the tax year to which it relates,
the person may, by notice in writing to the Commissioner, elect for the profit to be taxed at the rate of tax that would have been applicable if the profit had been paid to the person in the tax year to which it relates.
16. An election under sub-section (4A) shall Dfa Ho be made by the due date for furnishing the person’s return of income for the tax year in which the amount was received or by such later date as the Commissioner may allow by an order in writing.
Note:
The above shall not apply to an advance payment for the sale of goods or supply of services.
