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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 the following gifts during the year: Rs 30,000 in cash from a friend on his birthday, and Rs 40,000 by cheque from another friend on his housewarming. Neither donor is a relative. Applying the aggregate rule for gifts from non-relatives, what amount is taxable in his hands as Income from Other Sources?

Rs 70,000 is taxable. The aggregate of gifts from non-relatives is Rs 70,000, which exceeds the Rs 50,000 threshold, so the whole amount is taxed under Income from Other Sources. Only the excess is not taxed; once the limit is crossed, the full aggregate is chargeable.

  1. ARs 70,000Correct
  2. BRs 40,000
  3. CNil
  4. DRs 20,000

Explanation

Gifts from non-relatives are taxable if the aggregate value in the year exceeds Rs 50,000. Here the aggregate is 30,000 + 40,000 = Rs 70,000, which exceeds the limit, so the entire Rs 70,000 is taxable, not just the excess of Rs 20,000.

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