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CA Intermediate · Taxation · Income from Other Sources

Ms. Kavya Reddy, a resident individual, received the following gifts during tax year 2026-27: Rs 30,000 cash from a friend on her birthday; Rs 35,000 cash from her cousin; a gold necklace (stock exchange irrelevant) with fair market value Rs 60,000 from her friend's mother; and Rs 2,00,000 cash from her married brother's wife (sister-in-law, brother's spouse). Assuming no occasion of marriage, what is the amount taxable as income from other sources on account of these gifts?

Rs 1,25,000 is taxable. The Rs 2,00,000 from her brother's wife is exempt because the spouse of a sibling is a relative. The other gifts from non-relatives total Rs 1,25,000, which is above the Rs 50,000 aggregate limit, so the entire amount is taxable.

  1. ARs 1,25,000Correct
  2. BRs 1,25,000 plus Rs 2,00,000
  3. CRs 65,000
  4. DRs 1,25,000 less Rs 50,000

Explanation

Gifts from relatives are exempt; a brother's wife is a relative (spouse of sibling), so Rs 2,00,000 is exempt. The remaining gifts from non-relatives total 30,000 + 35,000 + 60,000 = Rs 1,25,000, which exceeds Rs 50,000, so the whole amount is taxable. Rs 65,000 wrongly excludes the necklace, which is property with FMV and is covered.

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