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

Mr. Rao receives a gift of Rs 80,000 in cash from a friend who is not a relative, and later in the same year receives another gift of Rs 30,000 in cash from a different non-relative friend. Under the general gift-taxation rule for individuals, how much is taxable in his hands as Income from Other Sources (assuming no exempt occasion applies)?

The entire Rs 1,10,000 is taxable. The Rs 50,000 limit is tested on the aggregate of gifts received from non-relatives during the year, and once the aggregate exceeds it, the whole amount, not just the excess, is taxed as Income from Other Sources.

  1. ARs 30,000
  2. BNil
  3. CRs 80,000
  4. DRs 1,10,000Correct

Explanation

The Rs 50,000 threshold applies to the aggregate of all sums received without consideration during the year from non-relatives. Aggregate is Rs 1,10,000, which exceeds Rs 50,000, so the whole amount is taxable. Taxing only the excess over Rs 50,000, or testing each gift separately, would be wrong.

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