SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]

Check the appropriate box:
[_] Preliminary proxy statement. [_] Confidential, for use of the
[X] Definitive proxy statement. Commissioner only (as permitted by
[_] Definitive additional materials. Rule 14a-6(e)(2).
[_] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.

Transamerica Income Shares, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction
applies: N/A
(2) Aggregate number of securities to which transaction
applies: N/A
(3) Per unit price or other underlying value of transaction
computed pursuant to Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was
determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: $0

[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A

TRANSAMERICA INCOME SHARES, INC.
1150 SOUTH OLIVE STREET
LOS ANGELES, CA 90015

1-877-717-8861

PROXY STATEMENT AND
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To the Shareholders of Transamerica Income Shares, Inc.:

Notice is hereby given that the Annual Meeting of Shareholders of
Transamerica Income Shares, Inc. (the "Fund") will be held on July 11, 2002, at
1150 South Olive Street, Los Angeles, CA 90015, beginning at 9:00 a.m., Pacific
Time (the "Meeting"). At the Meeting, shareholders of the Fund, unless
otherwise indicated below, will be called upon to consider the following
proposals:

PROPOSAL NO. 1. Election of eight new directors;

PROPOSAL NO. 2. To ratify the Management and Investment Advisory Agreement
between the Fund and AEGON/Transamerica Fund Advisers, Inc.
(the "Agreement"); and

PROPOSAL NO. 3. To ratify Ernst & Young LLP as independent auditors;

as set forth in the Proxy Statement, and to conduct such other business as may
properly come before the Meeting and any related follow-up meetings.

Shareholders of record as of the close of business on April 26, 2002 are
entitled to vote at the Meeting and any adjournments.

By Order of the Board of Directors of
Transamerica Income Shares, Inc.,

May 6, 2002

Your vote is very important regardless of the number of shares that you owned
on the Record Date. Shareholders who do not expect to attend the Meeting are
requested to complete, sign, date and return the accompanying proxy card in the
enclosed envelope, which needs no postage if mailed in the United States, or
follow the enclosed instructions relating to Internet or telephone voting.
Instructions for the proper execution of the proxy card are set forth in the
enclosed materials. It is important that proxies be returned promptly. Whether
or not you plan to attend the Meeting, please complete the enclosed proxy card,
or vote using the Internet or by telephone. If you vote via the Internet or by
telephone, please do not return your proxy card unless you later decide to
change your vote.

TRANSAMERICA INCOME SHARES, INC.

ANNUAL MEETING OF SHAREHOLDERS
July 11, 2002

PROXY STATEMENT DATED MAY 6, 2002

This Proxy Statement ("Proxy Statement") is furnished in connection with the
solicitation of proxies by the Board of Directors of Transamerica Income
Shares, Inc. (the "Fund"), a closed-end mutual fund, for use at the Annual
Meeting of Shareholders of the Fund to be held at 9:00 a.m. on July 11, 2002,
at 1150 South Olive Street, Los Angeles, CA 90015, and any adjournments thereof
(collectively, the "Meeting"). A notice of the Meeting and a proxy card
accompany this Proxy Statement. This Proxy Statement and the accompanying
Notice of Meeting and proxy card(s) are first being mailed to shareholders on
or about May 6, 2002. In addition to solicitations of proxies by mail, proxy
solicitations may also be made by telephone, e-mail or personal interviews
conducted by officers of the Fund; regular employees of AEGON/Transamerica Fund
Advisers, Inc., the Fund's investment adviser (the "Investment Adviser"), other
representatives of the Fund or ADP-Investor Communication Services ("ADP"). The
Fund has retained ADP as its proxy solicitor for the Meeting of shareholders.
The costs of solicitation and the expenses incurred in connection with
preparing this Proxy Statement will be approximately $12,750 and will be borne
by the Fund. The Fund's most recent annual report for the year ended March 31,
2002, will be mailed to Fund shareholders on or about May 15, 2002, and will be
available to you upon request without charge from the Fund's transfer agent,
Mellon Investor Services, Inc., Overpeck Centre, 85 Challenger Road, Ridgefield
Park, NJ 07660; telephone toll free: 1-800-288-9541.

Abstentions and broker nonvotes are counted as shares eligible to vote at
the Meeting in determining whether a quorum is present, but will not be counted
in favor of or against the proposal. Broker "nonvotes" occur when the Fund
receives a proxy from a broker or nominee who does not have discretionary power
to vote on a particular matter and the broker or nominee has not received
instructions from the beneficial owner or other person entitled to vote the
shares represented by the proxy. Each full share is entitled to one vote, and
any fractional share is entitled to a fractional vote.

If the enclosed proxy is properly executed and returned in time to be voted
at the Meeting, the shares represented by the proxy will be voted in accordance
with the instructions marked therein. Unless instructions to the contrary are
marked on the proxy, it will be voted FOR the matters listed in the
accompanying Notice of Meeting. Any shareholder who has given a proxy has the
right to revoke it at any time prior to its exercise either by attending the
Meeting and voting his or her shares in person, or by submitting a letter of
revocation or a later-dated proxy to the Fund at the above address prior to the
date of the Meeting. You may instead vote via the Internet or by telephone by
following the enclosed instructions.

A quorum constituting a majority of the Fund's shares outstanding as of the
record date, April 26, 2002, represented in person or by proxy, must be present
for

the transaction of business at the Meeting. If a quorum is not present at the
Meeting, or if a quorum is present but sufficient votes to approve the proposal
are not received, the persons named as proxies on the enclosed proxy card may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. In determining whether to adjourn the Meeting, the following
factors may be considered: the nature of the proposals that are the subject of
the Meeting, the percentage of votes actually cast, the percentage of negative
votes actually cast, the nature of any further solicitation and the information
to be provided to shareholders with respect to the reasons for the
solicitation. Any adjournment will require the affirmative vote of a majority
of those shares represented at the Meeting in person or by proxy. A shareholder
vote may be taken on one or more of the proposals in this Proxy Statement if
sufficient votes have been received for approval.

The Board of Directors has fixed the close of business on April 26, 2002, as
the record date (the "Record Date") for the determination of Fund shareholders
entitled to notice of and to vote at the Meeting. Shareholders of record, as to
any matter on which they are entitled to vote, will be entitled to one vote per
share on all business of the Meeting. There were 6,318,771 shares outstanding
on the Record Date, representing a market value of $164,288,046, of which 92.4%
are owned by shareholders, and 7.6% are owned by affiliates of the Fund.

Appendix 1 sets forth the shareholders entitled to cast 5% or more of the
Fund's votes. To the best of the Fund's knowledge, as of the Record Date, no
shareholder was entitled to cast 5% or more of the Fund's votes, except as
stated in Appendix 1.

As of the Record Date, the officers and the Directors of the Fund as a group
beneficially owned less than 1% of the shares.

Section 30(h) of the Investment Company Act of 1940 (the "1940 Act")
requires the Fund's officers, directors and investment adviser, the
affiliated persons of the investment adviser, and the beneficial owners of more
than 10% of the Fund's shares to file initial reports of ownership and reports
of changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange, and to provide copies of these reports to the Fund. To the
Fund's knowledge, no person owns beneficially more than 10% of its shares, thus
there were no requirements pursuant to Section 30(h) of the 1940 Act during the
fiscal year ended March 31, 2001.

In order that your shares may be represented at the Meeting, you are
requested to:

-- indicate your instructions on the enclosed proxy card;

-- date and sign the proxy card;

-- mail the proxy card promptly in the enclosed envelope, which requires no
postage if mailed in the United States; and

-- allow sufficient time for the proxy card to be received on or before 5:00
p.m., Pacific Time, July 9, 2002.

You may also vote via the Internet or by telephone. Instructions are
enclosed in these materials. If you elect to vote using one of these methods,
do not return your proxy card unless you later elect to change your vote.

The Fund's investment adviser, AEGON/Transamerica Fund Advisers, Inc., is
located at 570 Carillon Parkway, St Petersburg, Florida, 33716. Prior to
February 7, 2002, Transamerica Investment Management, LLC served as investment
adviser to the Fund. State Street Bank and Trust Company, the Fund's custodian,
is located at 225 Franklin Street, Boston, Massachusetts 02110. Mellon Investor
Services, Inc., located at Overpeck Centre, 85 Challenger Road, Ridgefield
Park, NJ 07660, serves as transfer agent to the Fund.

The Fund is required to hold annual meetings of shareholders. Please help
save the cost of follow-up mailings by promptly returning the proxy card.

Proposal 1. Directors. The Board of Directors of the Fund (the "Board")
request at this Meeting that shareholders consider and vote on the election of
new directors to the Board of the Fund. Please read the entire proxy statement
and exhibits attached hereto to determine how this proposal will affect the
Fund before casting your vote.

THE PROPOSAL:

ELECTION OF A NEW BOARD OF DIRECTORS

Shareholders are asked to consider the election of eight new Directors to
the Fund at the Meeting pursuant to the Fund's Bylaws, which permit the
election of Directors at any meeting to be held.

At a meeting held on February 7, 2002 (the "Board Meeting"), the current
Directors, Dr. James H. Garrity, Jon C. Strauss, Gary U. Rolle, and Peter J.
Sodini (the "Current Directors"), including the Current Directors who are not
"interested persons" as that term is defined in the Investment Company Act of
1940, as amended (the "Disinterested Directors"), unanimously nominated for
election to the Board: Peter R. Brown, Charles C. Harris, Russell A. Kimball,
Jr., John R. Kenney, Janice B. Case, Leo J. Hill, William W. Short, Jr. and
Daniel Calabria (together, the "Nominees"). Based on the recommendation of Fund
management, the Board determined that it would be in the best interest of the
Fund and its shareholders to consolidate governance of the Funds within the
AEGON Fund complex, and noted that the Nominees currently serve as directors
for other funds in the complex. As part of the consolidation, the Board
(including the Disinterested Directors) unanimously approved the assumption of
the investment advisory agreement between the Fund and Transamerica Investment
Management, LLC ("TIM"), its investment adviser, by AEGON/Transamerica Fund
Advisers, Inc. ("ATFA") at the Board Meeting. ATFA also serves as the
investment adviser to AEGON/Transamerica Series Fund, Inc., Transamerica
Variable Insurance Fund, Inc. and Transamerica Occidental Life Insurance
Company Fund B, all affiliates of the Fund. As part of the assumption by ATFA,
TIM will serve as a sub-adviser to the Fund pursuant to a sub-advisory
agreement with ATFA.

Consequently, subsequent to the election of the Nominees for Director by the
shareholders, each of the Current Directors intends to tender his resignation,
and, thus, will no longer act as a Director to the Fund. Each Director is to be
elected to serve until reaching the designated retirement age or until a
successor is duly elected and qualified. Following the Meeting, the Fund does
not contemplate holding regular meetings of shareholders, except to the extent
required by law, regulation or the listing standards of the New York Stock
Exchange. Each of the Nominees named has agreed to serve as a Director if
elected. However, should any Nominee become unable or unwilling to accept
nomination or election, the proxies will be voted for one or more substitute
nominees designated by the Board.

The following sets forth the names, ages, principal occupations, and other
information relating to the Nominees:

Disinterested Nominees:

Number of
Term of Portfolios In
Office Fund Other
and Principal Complex Directorships
Position(s) Length Occupation Overseen by Held by
Held with of Time During the Nomimee Nominee for
Name, Address and Age Fund(1) Served Past 5 Years for Director Director
--------------------- ----------- ------- ------------ ------------- -------------

Peter R. Brown Nominee, N/A Currently Retired; 93 N/A
11180 6th Street East Director Vice Chairman,
Treasure Island, FL 33708 Trustee, IDEX
(DOB 5/10/28) Mutual Funds
(IDEX) (1986-
present); Vice
Chairman,
Director,
AEGON/
Transamerica
Series Fund, Inc.
(ATSF) (1986-
present);
Chairman of the
Board, Peter
Brown
Construction
Company (1963-
2000); Rear
Admiral (Ret.)
U.S. Navy
Reserve, Civil
Engineer Corps.

Charles C. Harris Nominee, N/A Currently Retired; 93 N/A
2840 West Bay Dr. #215 Director Trustee, IDEX
Belleair Bluffs, FL 33770 (1994-present);
(DOB 7/15/30) Director, ATSF
(1986-present)

Russell A. Kimball, Jr. Nominee, N/A General Manager, 93 N/A
1160 Gulf Boulevard Director Sheraton Sand
Clearwater Beach, FL Key Resort
34630 (1975-present);
(DOB 8/17/44) Trustee, IDEX
(March 2002-
present);
Director, ATSF
(1986-present).

Daniel Calabria Nominee, N/A Currently Retired; 93 N/A
7068 S. Shore Drive S. Director Trustee, IDEX
South Pasadena, FL 33707 (1996-present);
(DOB 3/05/36) Director, ATSF
(2001-present);
President of the
Florida Tax Free
Funds (1993-
1995); President
and Director
(1995) of Sun
Chiropractic
Clinics, Inc.;
Executive Vice
President (1993-
1995) of William
R. Hough & Co.

William W. Short, Jr. Nominee, N/A President and 93 N/A
12420 73rd Court North Director majority
Largo, FL 33773-3046 shareholder of
(DOB 2/25/36) Shorts, Inc.;
Trustee, IDEX
(1994-present);
Director, ATSF
(2000-present);
Chairman of
S.A.C. Apparel
Corp., Southern
Apparel Corp.
and S.A.C.
General
Distributors

Number of
Term of Portfolios In
Office Fund Other
and Principal Complex Directorships
Position(s) Length Occupation Overseen by Held by
Held with of Time During the Nomimee Nominee for
Name, Address and Age Fund(1) Served Past 5 Years for Director Director
- --------------------- ----------- ------- ------------ ------------- -------------

Janice B. Case Nominee, N/A Trustee, IDEX 93 N/A
205 Palm Island NW Director (March 2002-
Clearwater, FL 33767 present);
(DOB 9/27/52) Director, ATSF
(2001-present);
Senior Vice
President (1996-
2000), Vice
President (1990-
1996) and
Director of
Customer
Service &
Marketing
(1987-1990),
Florida Power
Corp.

Leo J. Hill Nominee, N/A Dealer Candidate 93 N/A
2101 N. Main St. Director (August 1999-
Gainesville, FL 32609 present),
(DOB 3/27/56) University Ford,
Athens Georgia;
Trustee, IDEX
(March 2002-
present);
Director, ATSF
(2001-present);
Market President
(1997-1998),
NationsBank;
President &
CEO (1994-
1997), Barnett
Bank of the
Treasure Coast,
Florida.

Interested Nominees:

Number of
Term of Portfolios In
Office Fund
and Principal Complex Other
Position(s) Length Occupation Overseen by Directorships
Name, Address and Held with of Time During the Past Nomimee Held by Nominee
Age Fund (1) Served 5 Years for Director for Director
- -------------------- ----------- ------- ------------------ ------------- ---------------

John R. Kenney (2) Nominee, N/A Chairman, Director 93 N/A
P.O. Box 5068 Director (1986-present),
Clearwater, FL 34618 President,
(DOB 2/8/38) (March 1993-
June 2000),
ATSF; Trustee,
Chairman (1996-
present), CEO
(1996-2002),
IDEX; Co-CEO
of Great
Companies,
L.L.C.; Chief
Executive Officer
(April 1982-
present),
President
(December 1978-
December 1999),
Western Reserve
Life Assurance
Co. of Ohio;
President,
AEGON/
Transamerica
Fund Advisers,
Inc. (September,
1997-present);
President,
AEGON/
Transamerica
Fund Services,
Inc. (September
1997-present)

- --------

(1) If elected, each Nominee for Director will hold office for an indefinite
term until the earlier of 1) the next meeting of shareholders at which
Directors are elected and until his or her successor is elected and
qualified, or 2) a Director resigns or his or her term as a Director is
terminated in accordance with the Fund's By-Laws.

(2) Such Nominee is an "interested person" of the Fund as defined in the 1940
Act and an affiliated person of AEGON/Transamerica Fund Advisers Inc., the
Fund's investment adviser; Transamerica Investment Management, LLC, the
Fund's sub-adviser; AEGON/Transamerica Series Fund, Inc.; Transamerica
Variable Insurance Fund, Inc.; and Transamerica Occidental Life Insurance
Company Fund B, all affiliates of the Fund. Such director received no
compensation directly from the Fund.

Nominee Ownership of Equity Securities

As of December 31, 2001, the Nominees did not beneficially own shares of the
Fund, or any of the Funds overseen by a Nominee in the same family of
investment companies, except as set forth in the following table:

Aggregate Dollar
Dollar Range of Equity
Range of Securities in All Funds
Equity Overseen or to be
Securities Overseen by Nominee
in the in Family of
Name of Nominee Fund Investment Companies
--------------- ---------- -----------------------

Peter R. Brown......... N/A $50,000-$100,000
Charles C. Harris...... N/A $0
Russell A. Kimball, Jr. N/A Over $100,000
Daniel Calabria........ N/A $1-$10,000
Janice B. Case......... N/A $0
William W. Short, Jr... N/A Over $100,000
Leo J. Hill............ N/A $10,000-$50,000
John R. Kenney (1)..... N/A Over $100,000

- --------
(1) Such Nominee is an "interested person" of the Fund as defined in the 1940
Act, as discussed above.

Conflicts of Interest

The following table sets forth information about securities issued by
certain of the Fund's affiliates that are beneficially owned by the
Disinterested Nominees or members of his or her immediate family representing
interests in those affiliates. For this purpose, "immediate family member"
includes the Nominee's spouse, children residing in the household and certain
dependents of the Nominee:

Title
Name of Owners and of Value of Percent
Name of Nominee Relationship to Nominee Company Class Securities(1) of Class
--------------- ------------------------- ------- ----- ---------------- --------

Peter R. Brown Marina D. Brown, spouse IDEX(2) A $10,000-$50,000 0
Charles C. Harris N/A N/A N/A N/A N/A
Russell A. Kimball, Jr. Martha A. Kimball, spouse IDEX(2) A $50,000-$100,000 0
Daniel Calabria N/A IDEX(2) A $1-$10,000 0
Janice B. Case N/A N/A N/A N/A N/A
William W. Short, Jr. Joyce J. Short, spouse IDEX(2) A Over $100,000 0
Leo J. Hill N/A N/A N/A N/A N/A

- --------

(1) As of December 31, 2001.

(2) IDEX Mutual Funds ("IDEX") is an affiliate of the Fund.

The Current Directors of the Fund met 5 times in 2001. Each of the Current
Directors attended at least 75% of such meetings.

Each Disinterested Director currently receives a total annual retainer fee
of $1,500, plus $1,000 and incidental expenses for each regular meeting
attended, and $1,000 for each special meeting attended. Members of the Audit
Committee receive $250 for each meeting of that Committee.

During 2001, the Nominees received no compensation from the Fund. During
2001, the Directors received the following compensation from the Fund.

DIRECTORS' COMPENSATION TABLE

(for the year ended December 31, 2001)

Pension or Total
Retirement Compensation
Benefits Estimated From Fund
Accrued Annual and Fund
Aggregate As Part of Benefits Complex
Compensation Fund Upon Paid To
Name of Person, Position from Fund Expenses Retirement Director(1)
------------------------ ------------ ---------- ---------- ------------

James H. Garrity
Director.......... $6,750 N/A N/A $10,250
Peter J. Sodini
Director.......... $6,750 N/A N/A $10,250
Jon C. Strauss
Director.......... $6,750 N/A N/A $10,250

- --------

(1) A Fund Complex means two or more investment companies that hold themselves
out to investors as related companies for purposes of investment and
investment services, that have a common investment adviser or that have an
investment adviser that is an affiliated person of the investment adviser
of any of the other investment companies.

The Fund's Officers:

The Fund's officers, their ages and principal occupations during the past
five years are set forth below. Unless otherwise indicated, the business
address of each is 1150 South Olive Street, Los Angeles, California 90015. The
Fund does not pay compensations to its officers.

Term of
Office and Principal Occupation(s) or
Position(s) Held Length of Employment During
Name and Age with Fund Time Served Past 5 Years
------------ ---------------- ----------- --------------------------

Gary U. Rolle (60) President 14 Years President, Transamerica
& Investment Management,
Chairman LLC; Director,
Transamerica Investors,
Inc.

Ann Marie Swanson (36) Vice President 1 Year Legal Counsel,
& Secretary Transamerica Investment
Management LLC; Vice
President & Deputy
Counsel, Baring Asset
Mgmt. (prior to 2001);
Vice President & Director
of Compliance, Boston
Company (prior to 2000)
E. Lake Setzler (34).. Treasurer & 1 Year Controller, Transamerica
Assistant Investment Management,
Secretary LLC and Transamerica
Investment Services, Inc.;
Chief Accounting Officer,
Alta Residential Mortgage
Trust (1998-2000);
Controller, Southern
Pacific Bank (1996-1998)

Disinterested Nominees will be permitted to participate in a non-qualified
deferred compensation plan. Under this plan, compensation may be deferred that
would otherwise be payable by the Fund and by certain other entities, including
AEGON/Transamerica Series Fund and IDEX Mutual Funds. Compensation may be
deferred on a current basis for services rendered as a director/trustee.

SHAREHOLDER APPROVAL

The election of each Nominee requires an affirmative vote of a majority of
outstanding voting shares entitled to vote present at the Meeting in person or
by proxy. Fund shareholders will vote together as a single class on the
election of Nominees for the Fund.

The Board of Directors of the Fund Recommends a Vote "For" Each New Director of
the Fund.

The Audit Committee

No Current Director is standing for election to continue in that role.
Assuming shareholder approval of the proposed slate of Nominees for Director,
the Board's Audit Committee will be composed of Messrs. Brown, Kimball, Harris
and Short. The functions performed by the Audit Committee include the
recommendation of the independent public accountants for the Fund to be
selected by the Board, the review of the scope and results of audit services,
the review of the adequacy of internal accounting and financial controls, the
review of material changes in accounting principals and practices and other
matters when requested from time to time by the Board.

The Board has adopted a written charter for the Fund's Audit Committee,
which appears as Appendix B to this proxy statement. The Fund's current Audit
Committee is composed of Peter Sodini, John Strauss, James Garrity, and the
Fund's Treasurer, Lake Setzler. Each of Messrs. Sodini, Strauss and Garrity is
a Disinterested Director, and is an "independent" director for purposes of
Section 303.01 of the New York Stock Exchange Listing Standards. The Audit
Committee met once in 2001. The Audit Committee has reviewed and discussed with
the Fund's management the audited financial statements of the Fund for the year
ended March 31, 2001. Ernst & Young LLP, the Fund's independent public
accountants, has discussed with the Audit Committee all matters required to be
discussed by the Statement on Auditing Standards No. 61. Ernst & Young LLP
provided the Audit Committee the written disclosures and the letter from Ernst
& Young LLP required by Independence Standards Board Standard No. 1, and has
discussed its independence with the Board.

Based on the review and discussions noted above, and consistent with the
roles and responsibilities referred to above and in the Committee's Charter,
the Audit Committee recommended to the Board that the audited financial
statements be included in the Fund's Annual Report for the year ended March 31,
2001 for filing with the Securities and Exchange Commission.

The Corporate Responsibility Committee/Nominating Committee

The current Corporate Responsibility Committee is composed of Messrs.
Sodini, Strauss, Garrity and Rolle, and met 1 time during the Period. The
functions performed by the Corporate Responsibility Committee include
nominating independent directors and committee memberships. Assuming
shareholder approval of the proposed slate of Nominees for Director, the newly
elected Board will form a Nominating Committee that will consist of Peter R.
Brown, Charles C. Harris and Russell A. Kimball, Jr. The Nominating Committee
will act in the same or similar capacity as the Corporate Responsibility
Committee and will consider nominees recommended by shareholders.
Recommendations should be submitted to the Committee in care of the Fund's
Secretary and must be received by December 31, 2002.

Proposal 2. Management And Investment Advisory Agreement. The Board
recommmends that at this Meeting shareholders ratify the continuance of the
Management and Investment Advisory Agreement between the Fund and
AEGON/Transamerica Fund Advisers, Inc. (the "Agreement") as approved at the
Board Meeting held on February 7, 2002. Please read the entire proxy statement
and exhibits attached hereto to determine how this proposal will affect the
Fund before casting your vote.

THE PROPOSAL:

TO RATIFY THE MANAGEMENT AND INVESTMENT ADVISORY AGREEMENT

AEGON/Transamerica Fund Advisers, Inc. (the "Adviser") is a wholly owned
subsidiary of First AUSA Life Insurance Company ("First AUSA"). The Adviser
provides management, investment advisory and research services to the Fund for
an annual fee of 1/2 of 1% of the Fund's average net assets (accrued weekly and
payable monthly), and pays for office space, facilities, equipment and salaries
of the Fund's officers. The Adviser may purchase without additional cost to the
Fund statistical information and other services from other sources, including
Transamerica Investment Management, LLC ("TIM") and other affiliates. The Fund
pays all other expenses, including taxes, brokerage, transfer agent fees,
custodial fees, stock exchange listing costs, shareholder reports, postage,
auditing and legal fees. The Adviser guarantees that the Fund's expenses
(exclusive of interest, taxes and brokerage commissions) shall not exceed 11/2%
of the first $30 million of average net assets and 1% over $30 million. If that
limit is exceeded, the Adviser will pay the excess to the Fund. The Agreement
must be renewed annually by a) the Directors or a by majority of the Fund's
outstanding shares; and b) by a majority vote of the Directors who are not
"interested persons" of any such party to the Agreement cast in person at a
special meeting called for such purposes. The terms of the Agreement, including
the fees, are identical to the Agreement between the Fund and TIM, which served
as the Fund's adviser prior to February 7, 2002, and now serves as the Fund's
sub-adviser. The original Agreement was entered into in 1972, and was last
ratified by shareholders at the annual meeting of shareholders held on July 26,
2001.

The Directors of the Fund, including those Directors who are not "interested
persons" of parties to the Agreement approved the assumption of such Agreement
by the Adviser on February 7, 2002, and recommend that shareholders ratify the
continuance of such Agreement. In connection with its recommendation that
shareholders ratify continuance of the Agreement, the Board evaluated such
factors as the Adviser's experience in providing various financial services and
investment advice to the Fund, as well as its reputation, integrity, financial
responsibilty and stability. Based upon its review, the Board concluded that
the terms of the Agreement and the fees are fair and reasonable, in light of
the usual and customary terms and charges made by others for comparable
services, and that it is in the best interest of the Fund and its shareholders
to continue the Agreement. Shareholder approval is by a vote of the lesser of
a) majority of outstanding shares, or b) 67% of the shares voted, so long as
more than 50% of the shares actually vote.

At the end of the fiscal year, March 31, 2002, the Fund had net assets of
$146,496,118 and paid fees of $760,599 for advisory services. Advisory fees in
the fiscal years ended 2001 and 2000 were $740,290 and $760,862, respectively.

The Board of Directors of the Adviser with ages indicated are: Larry N.
Norman (49), Brian C. Scott (58) and Douglas C. Kolsrud (46). President and CEO

of the Adviser: Brian C. Scott (58); Executive Vice President: Thomas R.
Moriarty (51); Vice President, General Counsel, Compliance Officer and
Secretary: John K. Carter (41); and Vice President and Treasurer: Allan J.
Hamilton (46). In addition, Heidi Y. Hu (39), Vice President of TIM, the Fund's
sub-adviser, is Portfolio Manager of the Fund.

Proposal 3. Auditors. The Board requests at this Meeting that shareholders
ratify the selection of Ernst & Young LLP as independent auditors of the Fund.
Please read the entire proxy statement and exhibits attached hereto to
determine how this proposal will affect the Fund before casting your vote.

THE PROPOSAL:

TO RATIFY ERNST & YOUNG LLP AS INDEPENDENT AUDITORS

On May 10, 2001, the Audit Committee and the Board, including a majority of
those Directors who are not "interested persons", selected Ernst & Young LLP to
audit the accounts of the Fund for the year ended March 31, 2002. Ernst & Young
LLP has advised the Fund that neither the firm nor any of its members or
associates has any direct or indirect financial interest in the Fund or any of
its affiliates other than as auditors. Services provided included examination
of the annual financial statements, meeting with the Fund's Audit Committee,
and review of Federal income tax returns. Ratification is by a majority of the
shares represented at the annual meeting. Representatives of Ernst & Young LLP
are not expected to be present at the Meeting.

Audit Fees

Ernst & Young LLP billed the Fund aggregate fees of $32,000 for the audit of
the Fund's annual financial statements for the fiscal year ended March 31,
2002. These fees also included tax consultation and return review.

Financial Information Systems Design and Implementation Fees

Ernst & Young LLP did not render any financial information systems design
and implementation services to the Company or the Adviser, during the fiscal
year ended March 31, 2002.

All Other Fees

Ernst & Young LLP billed the Adviser $9,600 in fees for tax services
during the 2001 calendar year. The Audit Committee has considered whether
the provision of these other services is compatible with maintaining Ernst &
Young LLP's independence.

SHAREHOLDER PROPOSALS

Shareholders wishing to submit proposals for inclusion in a proxy statement
for a subsequent shareholders' meeting should send their written proposals by
December 31, 2002 to the Secretary of the Fund at 570 Carillon Parkway,
St. Petersburg, Florida 33716.

OTHER MATTERS

Management knows of no business to be presented to the Meeting other than
the matters set forth in this Proxy Statement, but should any other matter
requiring a vote of shareholders arise, the proxies will vote thereon according
to their best judgment in the interests of the Fund.

ANNUAL REPORT

A copy of the Fund's Annual Report may be obtained without charge by writing
to the Fund's transfer agent, Mellon Investor Services, Inc., Overpeck
Centre, 85 Challenger Road, Ridgefield Park, NJ 07660; or calling toll free:
1-800-288-9541.

By Order of the Board of Directors,
Transamerica Income Shares, Inc.
Los Angeles, CA

APPENDIX 1

SHAREHOLDERS ENTITLED TO CAST 5% OR MORE OF FUND VOTES

Name and Address of Shareholder Number of Shares % of Fund
- ------------------------------- ---------------- ---------

Wilmington Trust Company.... 479,575 8.9%
1100 N. Market Street
Wilmington, DE 19801

APPENDIX B

AUDIT COMMITTEE CHARTER

The responsibilities of the Audit Committee of Transamerica Income Shares, Inc.
("Company") include:

. Recommending to the Board of Directors of the Company the selection,
retention or termination, as appropriate, of the independent public
accountants for the Company.

. Reviewing the independent public accountants' compensation, the proposed
terms of their engagement, and their independence.

. Recommending to the Board of Directors of the Company, when the Committee
deems it advisable, that the independent public accountants engage in
specific studies and reports regarding auditing matters, accounting
procedures, and tax and other matters.

. Reviewing the arrangements for and scope of the audit of annual financial
statements.

. Reviewing annual financial statements and unaudited semi-annual financial
statements, including any adjustments to those statements recommended by
the independent public accountants, and any significant issues that arose
in connection with the preparation of those financial statements.

. Reviewing, as appropriate and in consultation with the independent public
accountants, accounting policies and procedures applicable to the Company
as well as any management responses to comments relating to those policies
and procedures.

. Reviewing independent public accountants' opinions.

. Considering, in consultation with the independent public accountants, the
adequacy of internal controls to help provide reasonable assurance that
publicly reported financial statements are presented fairly and in
conformity with generally accepted accounting principles.

. Investigating, when the Committee deems it necessary, potential
improprieties or improprieties in Company operations.

. Reviewing changes in accounting policies or practices that had or are
expected to have a significant impact on the preparation of financial
statements.

. Meeting at least annually with the independent public accountants (outside
the presence of management) to discuss any issues arising from the
Committee's responsibilities.

. Meeting at least annually with management (outside the presence of the
independent public accountants) to discuss management's evaluation of the
work performed by the independent public accountants and the
appropriateness of their fees.

. Generally acting as a liaison between the independent public accountants
and the Board of Directors.

. Annually reviewing and, as appropriate, implementing changes to its
Charter.

. Providing, when requested, information to the Board of Directors which may
assist its determinations and findings regarding Audit Committee members
that:

1. All members have no relations or conflicts that may interfere with
the exercise of their independence from management and the Company,

2. All members are financially literate, as reasonably interpreted in
the Board's business judgment, and

3. One or more members possess accounting or related financial
management expertise, as reasonably interpreted in the Board's
business judgment.

TRANSAMERICA INCOME SHARES, INC.
1150 SOUTH OLIVE STREET
LOS ANGELES, CA 90015
TRANSAMERICAN INCOME SHARES, INC. (THE "FUND")

The undersigned hereby instructs Ann Marie Swanson and E.
Lake Setzler to vote, as deisgnated below, all shares of the
above Fund, that the undersigned is entitled to provide
instructions for at the Annual Meeting of Shareholders to be
held July 11, 2002 at 9:00 a.m., at 1150 South Olive Street,
Los Angeles, CA 90015, and at any and all adjournments
thereof, with respect to the matters set forth below and
described in the Notice of Meeting and Proxy Statement dated
May 6, 2002, receipt of which is hereby acknowledged.

Sign, Date and Return the Proxy Card Promptly Using the
Enclosed Envelope.

To vote by Telephone
1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the proxy card and follow
the simple instructions.

To vote by Internet
1) Read the Proxy Statement and have the proxy card below at hand.
2) Go to Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the proxy card and follow
the simple instructions.

To vote by Mail
1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS TRNSA1 KEEP THIS PORTION FOR YOUR RECORD
- ------------------------------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
====================================================================================================================================
TRANSAMERICA INCOME SHARES, INC.

1. To elect new members of the Board
of Directors of the Fund as follows: For Against Abstain For Against Abstain
2. To ratify the Management and
John R. Keney [ ] [ ] [ ] Investment Advisory Agreement [ ] [ ] [ ]
between the Fund and AEGON/
Peter R. Brown [ ] [ ] [ ] Transamerica Fund Advisers, Inc.

Charles C. Harris [ ] [ ] [ ] 3. To ratify Ernst & Young LLP as
independent auditors [ ] [ ] [ ]
Russell A. Kimball, Jr. [ ] [ ] [ ]

William W. Short, Jr. [ ] [ ] [ ] In their discretion, Ann Marie Swanson and E. Lake Setzler, on
behalf of the Fund, may transact such other business as may
Daniel Calabria [ ] [ ] [ ] properly come before the meeting and any adjournment(s) thereof.

Janice B. Case [ ] [ ] [ ] THIS PROXY IS SOLICITED BY THE FUND'S BOARD OF DIRECTORS AND
WILL BE VOTED FOR THE ABOVE PROPOSALS UNLESS OTHERWISE INDICATED.
Leo J. Hill [ ] [ ] [ ]
Signature(s) should be exactly as name or names appearing on this
proxy. If shares are held jointly, each holder should sign. If
signing is by attorney, executor, administrator, trustee or
guardian, please give full title.

- -------------------------------- ---------- -------------------------------- --------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
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