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CA Final · Direct Tax Laws & International Taxation · Income from Other Sources

Mr. Arvind Rao, a resident individual, received Rs. 40,000 in cash from a friend (not a relative) in June and Rs. 30,000 by cheque from another friend (not a relative) in December, both without consideration, in the same tax year. He received no other sums. Under section 92(2)(m) of the Income-tax Act, 2025, what is the amount chargeable to tax under 'Income from other sources' on account of these receipts?

The taxable amount is Rs. 70,000. Section 92(2)(m)(i) aggregates all sums of money received without consideration in the tax year, and because the total exceeds Rs. 50,000, the entire sum is taxed, not merely the excess over the threshold.

  1. ANil
  2. BRs. 30,000
  3. CRs. 70,000Correct
  4. DRs. 20,000

Explanation

Section 92(2)(m)(i) looks at the total of sums received without consideration from any person or persons in the tax year. The total is 40,000 + 30,000 = Rs. 70,000, which exceeds Rs. 50,000, so the whole Rs. 70,000 is taxable. Treating each receipt separately against the limit (Nil) is wrong because the limit applies to the aggregate. Taxing only the excess over Rs. 50,000 (Rs. 20,000) is also wrong because the whole sum is charged.

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