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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Income from Other Sources

Caselet: Mrs. Kavita Rao, aged 62, inherited a plot from her late father and later received from her son, as a gift, shares of an unlisted company whose fair market value was Rs 4,00,000. She also received Rs 60,000 interest on a bank fixed deposit. A friend gifted her Rs 45,000 cash. What is her taxable income under Income from Other Sources, assuming no other receipts and ignoring any deduction available to senior citizens on interest?

Taxable income is Rs 60,000. The inheritance and the son's gift of shares are exempt because the son is a relative, and the friend's Rs 45,000 is below the Rs 50,000 aggregate limit. Only the fixed deposit interest of Rs 60,000 is taxed under Income from Other Sources.

  1. ARs 1,05,000
  2. BRs 1,50,000
  3. CRs 4,60,000
  4. DRs 60,000Correct

Explanation

Inheritance is not income. A gift from a son is a gift from a relative, so it is exempt irrespective of the amount. The friend's Rs 45,000 is within the Rs 50,000 limit and exempt. Only the Rs 60,000 interest is taxable. Rs 1,05,000 wrongly adds friend's gift and interest, treating the gift as taxable.

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