Forfeiture of advance money is taxed as income from other sources when a capital asset transfer fails to materialise. Forfeiture of advance money received during negotiations for transfer of a capital asset is taxed as Income from Other Sources when the amount is forfeited and the transfer does not materialise. The tax arises in the year of forfeiture, and the amount is not reduced from the cost of acquisition on later sale. If the transfer is completed, the advance forms part of the sale consideration and is taxed under Capital Gains.