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

Vikram Shah, a resident individual, had the following receipts during the tax year: (i) Rs. 5,00,000 received from a non-relative as advance during negotiations for sale of his capital asset (a plot); the buyer backed out and Vikram forfeited the advance; (ii) Rs. 3,00,000 as compensation on termination of his employment with Zenith Ltd.; (iii) Rs. 80,000 winnings from a television game show; (iv) Rs. 1,00,000 received as a gift from his wife. Assuming no exemptions apply to the above, what amount is chargeable under Income from other sources under section 92?

Rs. 8,80,000. The forfeited advance, the employment termination compensation and the game show winnings are all specifically chargeable under Income from other sources, totalling Rs. 8,80,000. The gift from his wife is excluded from the gift provision because a spouse is a relative.

  1. ARs. 8,80,000Correct
  2. BRs. 9,80,000
  3. CRs. 5,80,000
  4. DRs. 3,80,000

Explanation

Forfeited advance of Rs. 5,00,000 where negotiations failed is covered by clause (h). Termination compensation of Rs. 3,00,000 is covered by clause (j). Game show winnings of Rs. 80,000 fall under clause (b), since card game and other game includes game shows. The gift from spouse (a relative) is outside clause (m). Total = 5,00,000 + 3,00,000 + 80,000 = Rs. 8,80,000. Including the gift gives Rs. 9,80,000, which is wrong.

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