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CA Intermediate · Taxation · Basic Concepts

Meera, a resident individual, received the following in tax year 2026-27: a gift of Rs 40,000 from a friend, a lottery win of Rs 1,00,000 and interest on bank savings of Rs 20,000. Considering which items are capital or revenue and the concept of income, which statement is correct about the nature of the lottery receipt?

The lottery win is casual income and is included in income because the definition of income expressly covers winnings from lotteries and similar sources. It does not need to be regular or recurring, so the Rs 1,00,000 forms part of Meera's income and is taxable.

  1. AIt is a casual income and forms part of income, being chargeable even though it is not regularCorrect
  2. BIt is a capital receipt and not taxable
  3. CIt is an agricultural income
  4. DIt is not income as it is not recurring

Explanation

Income under the Act is defined inclusively and covers winnings from lotteries, which are casual in nature. Regularity is not required for a receipt to be income. Hence option 1 is correct, and the claim that non-recurring receipts are not income is wrong.

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