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

Mr. Rohan Mehta, a resident individual, received a gift of Rs 40,000 in cash from his friend in April and a gift of Rs 30,000 by cheque from another non-relative friend in October of the same financial year. He received no other gifts. Under the rules on gifts from non-relatives, how much is taxable as income from other sources for that year?

The full Rs 70,000 is taxable. Gifts from non-relatives are exempt only if their aggregate in the year does not exceed Rs 50,000. Here the total is Rs 70,000, which crosses the limit, so the entire amount, not merely the excess, is taxed as income from other sources.

  1. ARs 70,000Correct
  2. BRs 30,000
  3. CRs 40,000
  4. DNil

Explanation

Gifts from non-relatives are taxable if the aggregate in the year exceeds Rs 50,000. The aggregate is Rs 40,000 + Rs 30,000 = Rs 70,000, which exceeds Rs 50,000, so the whole Rs 70,000 is taxable, not just the excess. Treating each gift separately (Rs 30,000 or Rs 40,000) is wrong because the limit applies to the aggregate.

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