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CA Intermediate · Taxation · Basic Concepts

Ms. Meera, a resident individual, received during tax year 2026-27: (i) salary of Rs 9,00,000 (taxable); (ii) agricultural income from a farm in Punjab of Rs 2,00,000; (iii) gift of Rs 30,000 from a friend on her birthday. Which statement about her gross total income for the purpose of the Act is correct, assuming no other income?

Her gross total income is Rs 9,00,000. Agricultural income from land in India is exempt, and the gift of Rs 30,000 from a non-relative does not exceed the Rs 50,000 aggregate limit, so only the salary is taxable.

  1. ARs 9,00,000, as agricultural income is exempt and the gift below Rs 50,000 is not taxableCorrect
  2. BRs 11,00,000, as agricultural income is included
  3. CRs 9,30,000, as the gift is taxable but agricultural income is exempt
  4. DRs 11,30,000, as all receipts are taxable

Explanation

Agricultural income from land in India is not taxed as income. A gift from a non-relative is taxable only if the aggregate in the year exceeds Rs 50,000, and here it is Rs 30,000. So only salary is included: Rs 9,00,000. Including agricultural income wrongly treats it as taxable.

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