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Income from residuary sources

11.1 The income under this head will be equal to the gross residuary income minus the specified deductions.

11.2 The gross residuary income will comprise of any income which does not form part of any other head of income.

11.3 Further, the scope of gross residuary income has been broadened to include, inter alia, some forms of income without regard to the fact that they may otherwise relate to, or have any incidental nexus with, some other head of income. These include, inter alia, the following :

(a) Interest other than interest accruing to or received by permitted financial institutions.

(b) Amount received or retained on account of settlement or breach of any contract, if not included under the head "Income from business".

(c) The redemption or withdrawal of the principal amount from any investment that is eligible for deduction in computing the total income. However, withdrawals/redemptions from provident funds and pure life insurance policies will not be included under this head.

(d) Any amount accruing to, or received by, the assessee, whether as advance or security deposit or otherwise, from the long-term leasing or transfer of the whole or part of, or any interest in, any investment asset.

11.4 Any amount exceeding Rs. 20,000 taken or accepted or repaid as loan or deposit otherwise than by account payee cheque or draft shall be deemed to be income, and included under this head and taxed accordingly.

11.5 Any sum received under life insurance policy, including any bonus, shall be exempt from income-tax, provided it is a pure life insurance policy. In order to achieve this objective, the Code provides that deduction will be allowed in respect of any sum received under a life insurance policy, including any bonus, only if the premium payable for any of the years during the term of the policy does not exceed 5 percent of the capital sum assured. Consequently, in all other cases, the sum received under the policy, including any bonus, will be included under this head and taxed accordingly.