Tax implication on SEBI IPO Reallocation Payment

Q. - In April 2010, I received payment through ECS, through TSR Darashaw, as payment for SEBI IPO Reallocation Amount, as SEBI identified me as an unsuccessful applicant in one or more IPOs covered under inquiry.
Pls. advise, what are the tax implications, on this payment?
Is it to be considered along with normal income or LTCG / STCG?
Pls. advise,

Pratik N. shah

Ans. - Dear Pratik, In my view the IPO refund money u r referring to u should be categorize as Income from other sources & should be added to ur income from all sources & should be taxed accordingly.

The reasons -

1. it's not ur salary income]
2. It's not interest income
3. It's not capital Gains, as no shares were alloted to u & no profit booking later on those shares
4. It's not ur income from business

As the money received by u does n't fall in the above categories, the only left option is income from other sources.

I hope this 'll clear ur as well as other's doubt.

Thanks

Ashal