Skip to content

CS Professional · Advanced Direct Tax Laws and Practice · Income Tax Implication on Specified Transactions

Under section 533(3) of the Income-tax Act, 2025, which statement about rules for income derived partly from agriculture and partly from business is correct?

Rules may specify the taxable proportion only where the income cannot be definitely ascertained, or only with unreasonable trouble and expense. An assessment based on that estimate or proportion is then deemed duly made under the Act, not treated as provisional.

  1. AWhere income cannot be definitely ascertained, or only with unreasonable trouble and expense, rules may specify the proportion of income deemed to be taxable, and an assessment on that basis is deemed duly madeCorrect
  2. BRules may fix the proportion of taxable income in every such case, even where the income can be easily ascertained
  3. CRules may only prescribe estimation methods and cannot specify any proportion
  4. DAn assessment based on the prescribed proportion must be treated as provisional until the Assessing Officer verifies actual income

Explanation

Section 533(3) applies only where income cannot be definitely ascertained, or can be ascertained only with unreasonable trouble and expense. In such cases the rules may prescribe estimation methods and, for agriculture-cum-business income, specify the proportion deemed taxable. The assessment on that estimate or proportion is deemed duly made. The second option ignores the precondition.

Did you get it right without looking?

One question tells you little. A timed set on Income Tax Implication on Specified Transactions shows your real accuracy, how long you take and where you lose marks.

Practise Income Tax Implication on Specified TransactionsFree diagnostic mock

More Income Tax Implication on Specified Transactions questions