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CS Executive · Tax Laws and Practice · Incomes which do not form part of Total Income

Under the Income-tax Act, 2025, income enumerated in Schedules II to VI is excluded from total income under section 11(1) subject to conditions. If the conditions of a Schedule are not satisfied in a tax year for an income enumerated there, what follows?

Under section 11(2), if the conditions specified in the Schedules are not satisfied in a tax year for an income enumerated in them, that income is not excluded and is charged to tax on the total income for that tax year.

  1. AThe income is charged to tax on the total income for that tax yearCorrect
  2. BThe income stays excluded but expenditure is disallowed
  3. CThe income is excluded for that year and taxed in the next year
  4. DThe income is taxed only if it exceeds the basic exemption limit

Explanation

Section 11(2) provides that where the Schedule conditions are not satisfied in a tax year, the income is charged to tax on the total income for that year. Exclusion is conditional, so failing the conditions removes it. Deferral to the next year and the threshold test are not provided.

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