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CMA Intermediate · Direct and Indirect Taxation · Income from Other Sources

Rohan, a salaried individual, received Rs. 30,000 in cash from a friend on his birthday and Rs. 15,000 by cheque from a business acquaintance on another date in the same tax year. Neither giver is a relative. What amount is chargeable under section 92(2)(m) as income from other sources?

Nothing is chargeable. Section 92(2)(m)(i) looks at the total of money received without consideration during the tax year, and Rs. 45,000 does not exceed Rs. 50,000, so the exemption threshold is not crossed and no amount is taxed.

  1. ANil, as each gift is below Rs. 50,000
  2. BRs. 45,000Correct
  3. CRs. 15,000, being the excess over Rs. 30,000
  4. DRs. 30,000, being the first gift only

Explanation

Section 92(2)(m)(i) tests the total of sums received without consideration in the tax year from any person or persons. Total = 30,000 + 15,000 = Rs. 45,000, which does not exceed Rs. 50,000. So nothing is chargeable and the correct answer is Nil. The Rs. 45,000 option wrongly assumes tax applies when the total is below the limit.

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