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CS Executive · Tax Laws and Practice · Incomes which do not form part of Total Income

A person earns an income listed in Schedule III of the Income-tax Act, 2025, but fails to meet a condition specified in that Schedule for the tax year. What is the consequence under section 11?

If a condition specified in the relevant Schedule is not satisfied in a tax year, section 11(2) says the income is charged to tax on the total income for that year. Exemption depends on fulfilment of the conditions, not merely on the income being listed.

  1. AThe income remains exempt because it is listed in the Schedule
  2. BThe income is charged to tax on the total income for that tax yearCorrect
  3. CThe income is exempt but only up to half of the amount
  4. DThe income is taxed only in the next tax year

Explanation

Section 11(2) states that where the conditions in the Schedules are not satisfied in any tax year for an enumerated income, that income is charged to tax on the total income for that tax year. Listing alone does not give exemption; conditions must be met. Partial exemption and deferral are not provided.

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