Skip to content

NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Concepts in Taxation

Which of the following receipts of a resident individual is classified as agricultural income and is exempt from income tax, subject to the conditions of the Act?

Rent received from agricultural land situated in India is agricultural income and is exempt. The income arises from land used for agriculture, whereas poultry income, salary from a mill and trading profits do not derive from agricultural operations on land.

  1. ARent received from agricultural land situated in IndiaCorrect
  2. BIncome from a poultry farm run on purchased feed
  3. CIncome from the sale of timber from a forest owned by a trader in a city
  4. DSalary received by a farmer from a sugar mill

Explanation

Rent or revenue derived from land situated in India and used for agricultural purposes is agricultural income and is exempt. Poultry farming, a salary and trading in timber are not income derived from land through agricultural operations, so they are taxable under their respective heads.

Did you get it right without looking?

One question tells you little. A timed set on Concepts in Taxation shows your real accuracy, how long you take and where you lose marks.

Practise Concepts in TaxationFree diagnostic mock

More Concepts in Taxation questions