Skip to content

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

Mr. Rohan Mehta, a resident individual, received a cash gift of Rs 40,000 from a friend (not a relative) in May and another cash gift of Rs 35,000 from a different friend in November of the same previous year. He received no other gifts. What amount is taxable in his hands as income from other sources, assuming the aggregate-limit rule for gifts from non-relatives applies?

The entire Rs 75,000 is taxable. Gifts from non-relatives are aggregated, and when the total in a year exceeds Rs 50,000 the whole amount is taxed as income from other sources, not merely the excess over Rs 50,000.

  1. ARs 75,000Correct
  2. BRs 35,000
  3. CRs 25,000
  4. DNil

Explanation

Gifts in money from non-relatives are taxable in full if the aggregate value received during the year exceeds Rs 50,000. Here the total is 40,000 + 35,000 = Rs 75,000, which exceeds Rs 50,000, so the whole Rs 75,000 is taxable, not just the excess. Taxing only the excess (Rs 25,000) is the common mistake.

Did you get it right without looking?

One question tells you little. A timed set on Income from Other Sources shows your real accuracy, how long you take and where you lose marks.

Practise Income from Other SourcesFree diagnostic mock

More Income from Other Sources questions