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CA Intermediate · Taxation · Basic Concepts

Sunita Rao, a resident individual, received the following during tax year 2026-27: salary Rs 9,00,000 (taxable); agricultural income from land in Karnataka Rs 2,00,000; dividend from an Indian company Rs 50,000 (taxable); and a gift of Rs 30,000 in cash from a friend on her birthday. Her gross total income, treating the gift as taxable only if it exceeds the threshold, is:

Gross total income is Rs 9,50,000. Salary of Rs 9,00,000 and dividend of Rs 50,000 are taxable. Agricultural income from Indian land is exempt, and the Rs 30,000 gift is below the Rs 50,000 threshold, so neither is included.

  1. ARs 9,50,000Correct
  2. BRs 9,80,000
  3. CRs 11,50,000
  4. DRs 11,80,000

Explanation

Salary 9,00,000 + dividend 50,000 = 9,50,000. Agricultural income from land in India is exempt and excluded. The gift of Rs 30,000 is below the Rs 50,000 aggregate threshold for money received without consideration from non-relatives, so it is not taxable. Adding the agricultural income (option 3 or 4) is the key error.

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