Skip to content

CA Intermediate · Taxation · Basic Concepts

Meera, a resident individual, receives during the tax year 2026-27: salary Rs 9,00,000 (taxable), dividend from an Indian company Rs 40,000, and agricultural income from a farm in Karnataka Rs 3,00,000. For the purpose of computing total income, which statement is correct?

Total income is Rs 9,40,000. Agricultural income from land in India is exempt and not included in total income, while salary and dividend are taxable. Adding the Rs 3,00,000 farm income would be wrong because it is outside the charge to tax.

  1. ATotal income is Rs 9,40,000, as agricultural income is exempt and excludedCorrect
  2. BTotal income is Rs 12,40,000, as agricultural income is included
  3. CTotal income is Rs 9,00,000, as dividend is also exempt
  4. DTotal income is Rs 12,00,000, as dividend is excluded but agricultural income is included

Explanation

Agricultural income from land in India is not income chargeable to tax and is excluded from total income, though it may matter for rate purposes only in certain old-regime cases. Dividend is taxable under Income from Other Sources. So total income = 9,00,000 + 40,000 = Rs 9,40,000. Including agricultural income wrongly adds Rs 3,00,000.

Did you get it right without looking?

One question tells you little. A timed set on Basic Concepts shows your real accuracy, how long you take and where you lose marks.

Practise Basic ConceptsFree diagnostic mock

More Basic Concepts questions