Income from Other Sources — FD Interest, Dividends, Gifts Tax 2026
Updated: 3 June 2026 | Income-tax Act, 2025 | FY 2025-26 | All Slab Rates
"Income from Other Sources" is the residual income head for items not classified as salary, house property, capital gains, or business income. Key items: FD/savings interest (taxed at slab rates), dividends (slab rates, TDS 10% above ₹10,000/year), lottery winnings (flat 30%), gifts from non-relatives above ₹50,000, and family pension (after ₹15K/33.33% deduction). Add all such income to total income and pay tax at slab rates.
₹50,000
Gift threshold: gifts above ₹50,000 from non-relatives fully taxable as income from other sources.
Gifts from relatives (parents, siblings, spouse, children) are fully exempt regardless of amount.
Gifts from relatives (parents, siblings, spouse, children) are fully exempt regardless of amount.
Income from Other Sources — Complete List
| Income Type | Tax Treatment | TDS Rate |
|---|---|---|
| Bank FD interest | Taxable at slab rate | 10% if annual interest > ₹50,000 (₹1L for senior) |
| Savings account interest | Taxable at slab rate (80TTA deduction up to ₹10K) | No TDS |
| Post office interest (MIS, TD, NSC) | Taxable at slab rate | 10% above ₹40,000 |
| Dividends from shares/MF | Taxable at slab rate | 10% if > ₹10,000 per company/fund |
| Lottery / Game show winnings | Flat 30% (no slab benefit) | 30% TDS at source |
| Horse race winnings | Flat 30% | 30% TDS at source |
| Online gaming / Crypto | Flat 30% | 1% TDS on net winnings/year |
| Gifts from non-relatives > ₹50,000 | Full amount taxable at slab rate | No TDS |
| Gifts received on marriage | Exempt (any amount) | No TDS |
| Family pension | Slab rate after ₹15K or 33.33% deduction (whichever lower) | No TDS |
| Agricultural income (outside India) | Taxable at slab rate | No TDS |
| NSC accrued interest | Taxable year by year; deductible as 80C reinvestment | No TDS |
Deductions Under Income from Other Sources
| Section | Deduction | Limit | Regime |
|---|---|---|---|
| 80TTA | Interest from savings account (bank, post office, co-op bank) | Up to ₹10,000 | Old regime only |
| 80TTB | Interest from deposits (FD, savings, etc.) for senior citizens 60+ | Up to ₹50,000 | Old regime only |
| — | 33.33% or ₹15,000 deduction on family pension | Max ₹15,000 | Both regimes |
Frequently Asked Questions
What income falls under "income from other sources"?
Income from other sources (IOS) is the residual head in income tax — it includes income not covered under salary, house property, capital gains, or business/profession. Key items: interest income (bank FD, savings, bonds, NSC), dividends from shares/MF, winnings from lottery/game shows/racing (30% flat), gifts above ₹50,000 from non-relatives, family pension (after ₹15K/33.33% deduction), agricultural income from outside India.
How is FD interest taxed in India?
FD interest is taxed at your income slab rate (not a flat rate). Add total FD interest to your gross income and pay tax accordingly. Banks deduct TDS at 10% if annual interest exceeds ₹50,000 (₹1,00,000 for senior citizens from FY 2025-26). TDS is not final tax — you pay slab-rate tax when filing ITR. Submit Form 15G/15H to avoid TDS if income is below basic exemption limit.
Is dividend income taxable after Budget 2020?
Yes. Since FY 2020-21, dividends are taxable in the hands of investors at their income slab rate. The DDT (Dividend Distribution Tax) paid by companies was abolished. Company/MF deducts TDS at 10% if annual dividend exceeds ₹10,000 (Budget 2025 raised threshold from ₹5,000). Add dividend income to total income and pay tax at applicable slab rate. Senior citizens can claim 80TTB (₹50K deduction) on interest — not on dividends.
Are gifts taxable in India?
Gifts are taxable under income from other sources if: received from non-relatives and value exceeds ₹50,000 in a financial year. Full gift amount (not just excess) becomes taxable as income. Exceptions: Gifts from relatives (parents, siblings, spouse, children, grandparents), gifts on marriage (any amount), gift by will or inheritance, gifts from employers (up to ₹5,000), local authority or trust. Relative definition in tax law is comprehensive — includes up to in-laws.
What is the deduction available on family pension?
Family pension (pension received by legal heir after death of employee) is taxed under income from other sources. Deduction: Lower of ₹15,000 OR 33.33% of family pension. Example: Family pension ₹60,000 → deduction = lower of ₹15,000 (fixed) or ₹20,000 (33.33%) = ₹15,000. Net taxable = ₹45,000. Family pension is different from own retirement pension, which is taxed as salary.
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