Casual and Non-recurring Income
The word ‘Casual’ means ‘subject to or produced by chance, accident, fortuitous, coming at uncertain times; not to be calculated on; unsealed’.
The term ‘non-recurring’ does not mean that the receipt should happen only once and be isolated alone and it should not happen again at all. Rather there is no right for recipient one to expect its recurrence.
Casual Income: These are the incomes about which the assesses remains uncertain before it is received such as, Income from a lottery, crossword competition, betting etc.
Non-recurring Income: These are the incomes which arise at an irregular interval. Such income includes gain on sale of assets, insurance settlement, one-time sale, etc
Generally, voluntary payments, personal testimony, gifts, or regular allowances are some examples of casual and non-recurring income. In general, to be casual and non-recurring income the following characteristics should be there;
(a) It is a sudden receipt and the assessee is uncertain about its appearance,
(b) It is not a capital gain as per section 31,
(c) It is not earned from business or profession as per section 28,
(d) It is not prerequisite in addition to salary.
Examples of Assessment Casual and Non-recurring Income –
(a) Income from Lottery, Cross-word and horse race competition,
(b) Honorarium received as a middleman to settle a dispute,
(c) Reward from the employer for extraordinary effort,
(d) Profit on sale of goods through auction.
Examples of Non-assessment Casual and Non-recurring Income –
(a) Gift received on in Birthday or Marriage anniversary,
(b) Gift against affection or love,
(c) Receipt of money taken from the stress with on claim,
(d) An honorarium of Jury.