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CA Final · Direct Tax Laws & International Taxation · Income from Other Sources

Rohit Menon, a resident individual, received Rs. 40,000 in cash from a friend (not a relative) in May and Rs. 20,000 by cheque from another friend in November, both without consideration, during the same tax year. He also received a gift of Rs. 1,00,000 from his father's brother (a relative). What amount is chargeable under the head Income from other sources by virtue of section 92(2)(m) for the tax year?

Rs. 60,000 is taxable. Gifts of money without consideration from non-relatives are aggregated and, since 40,000 plus 20,000 exceeds Rs. 50,000, the whole amount is charged. The Rs. 1,00,000 from the father's brother is from a relative and is outside the charge.

  1. ARs. 60,000Correct
  2. BRs. 1,60,000
  3. CNil
  4. DRs. 1,00,000

Explanation

Section 92(2)(m)(i) applies where the total of sums received without consideration from any person or persons exceeds Rs. 50,000; the whole sum is then taxable. Friends' gifts total 40,000 + 20,000 = 60,000, which exceeds 50,000, so all 60,000 is taxable. The uncle's gift is from a relative (brother of a parent) and is excluded under section 92(3)(a). Choosing Nil wrongly tests each gift separately.

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