Income from Other Sources

(b)Ms. Neha, a resident individual, received the following incomes during the financial year 2025-26 :

(i)Cash Gift of ₹ 80,000 from a close family friend on her birthday.

(ii)A wedding gift of gold worth ₹ 1,20,000 from her maternal uncle on her marriage on 20th June, 2025.

(iii)Received a Car gifted from her father on 15th August, 2025 (FMV ₹ 12,00,000).

(iv)Won a gift voucher worth ₹ 1,00,000 from a TV game show on 25th July, 2025.

(v)Received a vacant plot of land (FMV ₹ 3,00,000) without co nsideration from a friend on 30th January, 2026.

(vi)Rent of ₹ 20,000 per month from 1st June 2025 to 31st March 2026, from letting out her plant and machinery. Letting out of plant, machinery is not the primary business of Ms. Neha. During the financial year 2025- 26, Ms. Neha incurred ₹ 77,000 as repair charges on the Plant and machinery.

You are required to compute the income chargeable under the head ‘‘Income from Other Sources’’ for Ms. Neha for the assessment year 2026 -27, considering that she has shifted out of the default tax regime under section 115BAC.

(c)Compute the income chargeable under the head of “Income from other sources” for Karan for the Assessment Year 2025-26.

(ii)Nishit and Nikhil are minor sons of Sunil and Sheetal. For the previous year 2024- 25 business income of Sunil is ₹ 5,40,000 p.a. and Salary Income of Sheetal is ₹ 30,000 per month. Income of Nishit and Nikhil from stage acting is ₹ 60,000 and ₹ 40,000 respectively. Besides interest on company deposits of Nishit and Nikhil (deposit was made out income from acting) are ₹ 30,000 and ₹ 1,000 respectively. Nishit and Nikhil have received the following birthday gifts :

On 20th August, 2024, gift received by Nikhil from his grandfather of ₹ 80,000.

On 14th November, 2024, gift received by Nishit of ₹ 75,000 from Sunil’s friend and ₹ 35,000 from Sheetal’s mother.

Compute the total income of Sunil, Sheetal, Nishit and Nikhil for the Assessment Year 2025-26, assuming that all the above person does not opt for the provisions of section 115BAC.

Mr. V received a gold ring worth ₹ 1,20,000 on the occasion of his daughter’s wedding from his best friend Mr. S. Mr. S also gifted a gold chain to K, daughter of Mr. V, worth ₹ 1,60,000 on the said occasion. Would such gifts be taxable in the hands of Mr. V and Ms. K ?

(A)Yes, the gift of gold ring and gold chain is taxable in the hands of Mr. V and Ms. K. respectively

(B)Such gifts are not taxable in the hands of Mr. V nor in the hands of Ms. K

(C)Value of gold ring is taxable in the hands of Mr. V but value of gold chain is not taxable in the hands of Ms. K

(D)Value of gold chain is taxable in the hands of Ms. K but value of gold ring is not taxable in the hands of Mr. V

Mr. Coco received cash Gift of ₹ 2,00,000 on the occasion of his marriage, out of which ₹ 70,000 received from non-relative also. During the year he got prizes in the lottery for ₹ 3,00,000. Calculate the tax liability (ignoring TDS) :

(A)₹ 93,600

(B)Nil

(C)₹ 30,000

(D)₹ 46,800

(c)Geet and Jeet are two minor sons of Raghav and Riya. Business income of Raghav is ₹ 3,40,000 and Salary income (computed) of Riya is ₹ 2,50,000. Income of Geet and Jeet from stage acting is ₹ 60,000 and ₹ 70,000 respectively. Besides interest on company deposits of Geet and Jeet (deposit was made out income from acting) are ₹ 40,000 and ₹ 1,000 respectively.

Geet and Jeet have also received the following birthday gifts during the financial year 2022-23 :

On 20th August, 2022, gift received by Jeet from his grandfather of ₹ 75,000. On 14th November, 2022, gift received by Geet of ₹ 60,000 from Riya's friend and ₹ 80,000 from Riya's sister. Compute the total income of Raghav, Riya, Geet and Jeet for the assessment year 2023-24, assuming that Raghav, Riya, Geet and Jeet does not opt to pay tax under section 115BAC.

On 10th April, 2022, Gokani a practicing Company Secretary gave ₹ 10 lakh as gift to his wife Chandra a homemaker. On 20th August, 2022 Chandra commenced business of beauty parlour by name ‘‘Flair Lady’’. For the year ended 31st March, 2023 her net income from business was ₹ 2, 30,000. How much of the income of Chandra is includible in the hands of Gokani ?

(A)₹ 2, 30,000

(B)₹ 1, 30,0 00

(C)₹ 10, 00,000

(D)Nil

Pankaj received on the occasion of marriage

(i)Cash gift of ₹ 1, 05,000 each from his maternal and paternal uncle; and

(ii)₹ 1, 80,000 by way of gift from office colleagues (none of them are his relatives). He also received a

vacant site (guideline value) ₹ 70,000 from his grandfather on his birthday being 22nd October, 2022. How much of gift is liable to tax as income?

(A)Nil

(B)₹ 4, 60,000

(C)₹ 1, 80,000

(D)₹ 2, 50,000

Which of the following is a capital receipt?

(A)GST collected from taxable supply of goods

(B)Royalty received for use of know-how

(C)Gift received from employer on the occasion of birthday ₹ 60,000

(D)Premature termination of agency contract

Vankatesh has received ₹ 35,000 from each of his two friends on 14th, February 2022 on the occasion of his marriage anniversary. What would be the taxability of the said sum in the hands of Vankatesh for the assessment year 2022-23 ?

(A)Entire ₹ 70,000 is exempt from tax

(B)Entire ₹ 70,000 is chargeable to tax

(C)Only ₹ 35,000 is chargeable to tax

(D)Only ₹ 20,000 is chargeable to tax

At the time of fixation of marriage of Yash on 10th June, 2021, his father Sunder gifted land to his would be daughter in law Rashmi. The marriage was held on 21st January, 2022. The income accruing on land after marriage shall be taxable in the hands of :

(A)Yash

(B)Rashmi

(C)Sunder

(D)Not Taxable in any person

Nishant gifted a house property valued at ₹ 40 lakhs to his wife, Sarita, who in turn has gifted the same to her daughter-in-law Babita. The house was let out at ₹ 30,000 per month throughout the P.Y. 2021-22. In which hand and how much income from house property is chargeable to tax for A.Y 2022- 23 ?

(A)₹ 2,52,000 is taxable in the hands of Nishant

(B)₹ 2,52,000 is taxable in the hands of Babita

(C)₹ 2,52,000 is taxable in the hands of Sarita

(D)₹ 3,60,000 is taxable in the hands of Sarita

Sri transferred his residential property to his wife by way of a gift settlement. During the financial year 2021-22, his wife got a rental income of ₹ 25,000 p.m. She made a fixed deposit in the bank from the rental income and she has earned an interest income of ₹ 32,000. State the income taxable in the hand of Sri and his wife for the Assessment Year 2022-23?

(A)₹ 3,32,000, Nil

(B)Nil, ₹ 3,32,000

(C)₹ 32,000, ₹ 3,00,000

(D)₹ 3,00,000, ₹ 32,000

Mr. Lachwani whose business income was ₹ 4,50,000 received a cash gift of ₹ 70,000 from a charitable trust registered under section 12AA for meeting his medical expenses during the Previous year 2020-21. What is the taxable income under the head ‘‘Income from Other Sources’’ for the Assessment Year 2021- 22?

(A)₹ 20,000

(B)₹ 50,000

(C)₹ 70,000

(D)Not taxable

Suresh received a gift of ₹ 75,000 from a cousin of her mother on 31st December, 2020. How much amount is taxable as income from other sources for the assessment year 2021-22?

(A)₹ 25,000

(B)₹ 50,000

(C)₹ 75,000

(D)Nil

Mrs. Vinita has reported the following transactions :

(i)Received Cash gifts on the occasion of her marriage on 23.01.2021 of ₹ 2,25,000. It includes gift of ₹ 30,000 received from non-relatives.

(ii)On 02.12.2020, being her birthday, she received gift by account payee cheque of ₹ 81,000 from her mother’s brother.

(iii)On 01.10.2020, she acquired a vacant site from her friend for ₹ 8,15,000. The Stamp Valuation Authority fixed the value of site at ₹ 9,50,000 for stamp duty purposes.

(iv)She bought 1000 equity shares of a listed company from Mona on 05.10.2020 for ₹ 7,00,000. The value of such shares in the stock exchange on the date of purchase was of ₹ 7,65,000.

She asks you to determine and find out the amount chargeable to tax in her hands for A.Y. 2021-22 :

(A)₹ 2,00,000

(B)₹ 2,81,000

(C)₹ 3,11,000

(D)₹ 3,71,000

B Gifted debentures of a company to Miss G on 15.09.2017. Miss. G married B’s son M on 11.04.2018. Interest on debentures for the P.Y. 2020-21 paid by the company is ₹ 4,00,000. Such interest in the A.Y. 2021-22 shall be :

(A)Included in the total income of B u/s 64(1)(vi)

(B)Taxable in the hands of Mrs. M alone

(C)Included in the total income of M u/s 64(1)(vi)

(D)Included in the total income of M or B whose total income is more before including such interest

Chandni (age 14) received ₹ 70,000 as cash gift on her birthday from her parents’ friends. How much of her income would be liable for clubbing in the hands of her parent ?

(A)₹ 70,000

(B)₹ 40,000

(C)₹ 20,000

(D)₹ 1,08,500

Minor Ravi received ₹ 60,000 by way of gift on his birthday from grandparents and ₹ 10,000 from non-relatives. He also received a gold chain from his father’s friend whose fair market value on the date of gift was ₹ 45,000. The amount of income of minor Ravi taxable (after exemption) in the hands of parents would be:

(A)₹ 1,15,000

(B)₹ 1,13,500

(C)₹ 53,500

(D)₹ 52,000

Ram has gifted on 11th May, 2018 an amount of ₹ 10,00,000 to his wife Sita without consideration and also for not to live apart. The gifted amount was invested by his wife in interest bearing security on which she earned interest of ₹ 1,00,000 on 1st January, 2019. The amount of interest of ₹ 1,00,000 was further invested by her in the business from which she earned a profit of ₹ 15,000 for the period ended on 31st March, 2019. Specify the income which is to be included in the hands of Ram in A.Y. 2019-20.

(A)₹ 1,15,000

(B)₹ 1,00,000

(C)₹ 15,000

(D)Nil

Aiyer gifted 100 shares to his wife on 1st August, 2013. She received 200 bonus shares from the company in April, 2017. All the shares were sold to a friend for ₹ 1,50,000 in May, 2018. The 100 shares were originally acquired by Aiyer for ₹ 5,000. The capital gain on sale of shares in the month of May, 2018 shall be chargeable to tax :

(A)fully in the hands of Aiyer

(B)fully in the hands of Mrs. Aiyer

(C)for 100 shares in the hands of Aiyer and balance 200 shares in the hands of Mrs. Aiyer

(D)for 200 shares in the hands of Aiyer and balance 100 shares in the hands of Mrs. Aiyer

An employee director of a company was paid ₹ 5 lakh as a lump sum consideration for resigning from the directorship by XYZ Ltd. The amount so paid shall be treated in the accounts of the company as .............

(A)Deferred Revenue expenses

(B)Revenue expenses

(C)Capital expenses

(D)Gift to employee director

State which out of the following gifts received during the year by Girish from different persons shall be subject to tax in the assessment year 2018-19 :

(i)Wrist watch of ₹ 75,000 given by a non-resident friend.

(ii)Cash of ₹ 51,000 given by elder brother.

(iii)Cash of ₹ 21,000 each given by 4 friends on his birthday.

(iv)Painting of ₹ 30,000 given by employer on his birthday.

(A)(iii) and (iv)

(B)(i), (iii) and (iv)

(C)(ii) and (iii)

(D)All the four in (i), (ii), (iii) and (iv)

(d)Vinod Kapoor gifted ₹ 8,00,000 to his wife Sunita Kapoor on 15th May, 2017. The amount of gift of ₹ 8,00,000 was invested by his wife in debentures of a company on 1st June, 2017 earning interest @ 12% p.a. Will the income of interest from the debentures purchased by Mrs. Sunita Kapoor from gifted money be clubbed with the income of Vinod Kapoor ?

Dividend received from domestic companies will be included in the total income of the shareholder and taxable at :

(A)18.5%

(B)5%

(C)Exempt

(D)Normal slab rate as applicable to assessee

Deduction for dividend u/s 80M is allowable to :

(A)All type of tax payer assesses

(B)An Individual and HUF who is resident of India

(C)Domestic Company

(D)Only Individuals

(d)Compute the Income chargeable under the head of Income from Other Sources for G & Co. for the assessment year 2024-25.

( a )Laxmi (age 68) is a resident and retired pensioner of State Government. Her Income details for the financial year 2023-24 are as under :

Compute Total Income of Laxmi for the assessment year 2024-25, on the assumption that she has opted the scheme of section 115 BAC.

Section 2(22)(e) of the Income Tax Act, which deems certain payments as dividend, is applicable to the shareholders of :

(A)A closely-held Company

(B)A private Company

(C)A widely held Company

(D)A Nidhi Company

Preeti employed in a public sector bank parked her savings in listed equity shares of Indian companies besides borrowing for the purpose of investment in those shares. For the year ended 31st March, 2023 she has received dividend of ₹ 4 lakh (gross) and interest payable on borrowing for the same period amounts to ₹ 1,70,000. How much of dividend is to be included in the total income of Preeti ?

(A)₹ 4, 00,000

(B)₹ 2, 30,000

(C)₹ 3, 00,000

(D)₹ 3, 20,000

Surjeet, invested ₹ 22,00,000 in equity oriented mutual fund specified under section 10(23D), during the previous year 2021-22, he earned Dividend Income of ₹ 7,50,000 from above investment. For this Investment Purpose, he has taken loan from Axis bank and paid Interest of ₹ 2,20,000 during the previous year 2021-22. Income from other sources included in the hands of Surjeet for previous year 2021-22 would be :

(A)₹ 7,50,000

(B)₹ 6,00,000

(C)₹ 5,30,000

(D)₹ 4,30,000

M Limited a domestic company received dividend ₹ 12 lakh from a specified foreign company, in which it holds 33% of equity share. The dividend so received by M Limited is :

(A)Taxable @ 10%

(B)Taxable @ l5%

(C)Exempt

(D)Taxable as per regular rates

Section 2(22)(e) of Income Tax Act, 1961, which deems certain payments as dividend, is applicable only to the shareholders of .......................... .

(A)A Private company

(B)A widely held company

(C)A closely held company

(D)Nidhi company

As per section 2(22A) of the Income Tax Act, 1961, Domestic Company means:

(i)An Indian Company or

(ii)any other Company

(iii)which makes the prescribed arrangements for the declaration and payment of dividends in India on which tax is deductible under Section 194 of the Income Tax Act, 1961.

(A)(i) & (iii)

(B)(ii) & (iii)

(C)(i) & (ii)

(D)(i), (ii) & (iii)

The deduction for interest expense under section 57 of the Income tax act from dividend income shall not exceed :

(A)10% of Dividend Income

(B)20% of Dividend Income

(C)30% of Dividend Income

(D)40% of Dividend Income

Mr. Suyash, an individual received dividend of ₹ 15,00,000 as dividend income from listed domestic company for the Assessment Year 2021-22. What is the dividend amount chargeable to tax :

(A)₹ 5,00,000

(B)₹ 10,00,000

(C)₹ 15,00,000

(D)All dividend amount received by assessee is exempt from tax.

Certain income derived and earned by a Sikkimese individual are being exempt as per section 10(26AAA) of the Income Tax Act, 1961. Find which out of the following income, would be exempt in the hands of a Sikkimese individual in A.Y. 2021-22 :

(A)Income from any source in the State of Sikkim

(B)Income by way of dividend

(C)Income from interest on securities

(D)All of the above

Geeta aged, 66 years received dividend of ₹ 15,00,000 from ABC Ltd in P.Y. 2020-21. Share of the company were purchased by her by taking loan of ₹ 50,00,000 from a financial institution. Interest paid on loan so taken for the purpose of making investment in the shares of ABC Ltd for the year was of ₹ 6,00,000. State the income which would be subject to tax under other sources in the hands of Geeta for A.Y. 2021-22 :

(A)₹ 15,00,000

(B)₹ 12,00,000

(C)₹ 9,00,000

(D)₹ 5,00,000

As per section 115BBD where the total income of an Indian company includes any income by way of dividends declared, distributed or paid by a specified foreign company, such income of divided shall be chargeable to tax at the rate of ________ with applicable surcharge and cess.

(A)5%

(B)10%

(C)15%

(D)20%

Identify out of the following income which shall be chargeable to tax as income under the head - Income from Other Sources :

(i)Income of Dividend

(ii)Income from composite hiring of building with machinery

(iii)Income from speculative business

(iv)Income of a Jockey

(A)(i) & (ii)

(B)(iii) & (iv)

(C)(i), (ii), (iii) & (iv)

(D)(i), (iii) & (iv)

DLF Limited, an Indian domestic company received an amount of ₹ 15 lakh as dividend declared and distributed on 18.11.2019 by John Miller Inc of UK in which it holds 30% in nominal value of equity share capital. Indian company has paid interest of ₹ 5 lakh on the amount invested in the shares of John Miller Inc. The tax payable (rounded off in nearby two decimal points) on the amount of dividend received by the Indian company in assessment year 2020-21 shall be ----

(A)₹ 3.12 lakh

(B)₹ 2.50 lakh

(C)₹ 2.34 lakh

(D)₹ 2.68 lakh

Ghosh having 25% of the share capital in Ghosh Mfg. Industries (P) Ltd. took loan of ₹ 3,50,000 on 15-9-2018 from the company. He repaid ₹ 1 lakh on 20-3- 2019. The company has accumulated profit of ₹ 8 lakh as on 1-4-2018. It earned profit in the previous year 2018-19 also. The amount assessable as deemed dividend in the hands of Ghosh would be :

(A)₹ 1,50,000

(B)₹ 2,50,000

(C)₹ 3,50,000

(D)NIL

Total income of XYZ Limited includes the income of dividend of ₹ 10 lakh paid by a U.K. base foreign company in which XYZ Limited holds 30% of the equity share capital. The dividend income so received by the company from the U.K. base foreign company in A.Y. 2019-20 shall be :

(A)Taxable @ 15% of such income

(B)Not taxable being exempt u/s 10(34)

(C)Taxable at the normal rate applicable on domestic company

(D)Taxable @ 10% of such income

When an Indian company holds 30% of the nominal value of equity capital of a foreign company, the amount of dividend received from the foreign company in the hands of Indian company is :

(A)Exempt from Tax

(B)Taxable @ 15%

(C)Taxable @ 10%

(D)Taxable @ 30%

Dividend distribution tax by a domestic company under section 115-O shall be paid within _______ days of declaration of dividend.

(A)30 days

(B)15 days

(C)10 days

(D)14 days

DJPA, LLP, resident in India has received dividend of ₹ 15 lakh from R Ltd., an Indian company, on which the company R Ltd. had paid Dividend Distribution Tax (DDT) under section 115-O of the Income-Tax Act, 1961. The amount of tax payable by DJPA, LLP in respect of such dividend income for A.Y. 2018-19 shall be :

(A)₹ 5 lakh

(B)₹ 10 lakh

(C)₹ 51,500

(D)₹ 77,250

The provisions of ‘‘deemed dividend’’ under section 2(22)(e) of the Income Tax Act, 1961, in respect of advances or loans to shareholders, or any payment on behalf of shareholders or any payment for the individual benefit of a shareholder are applicable to :

(A)A Public Limited Listed Company

(B)A Public Limited Unlisted Company

(C)A Closely held Company

(D)None of the above

( a )Vikram, a resident individual aged 45 years, received the following incomes during the previous year 2024-25 :

Compute the Income chargeable under the head “Income from Other Sources” for Vikram for the Assessment Year 2025-26 considering that he has opted the benefit of default tax regime under section 115BAC.

A person won a third prize in lottery for ₹ 10,000 during the Financial Year 2024-25. How much amount of TDS will be deducted in this case ?

(A)₹ 3,120

(B)₹ 520

(C)₹ 1,040

(D)NIL

Mr. J, an employee of X Ltd, attained 60 years of age on 15.05.2023. He is resident in India during F.Y. 2023-24 and earned salary income of ₹ 5 lakhs (computed). During the year, he earned ₹ 7 lakhs from winning of lotteries. What shall be his advance tax liability for A.Y. 2024-25, if all tax deductible at source has been duly deducted and remitted to the credit of Central Government on time ? Assume that he does not opt to pay tax under section 115BAC.

(A)₹ 2,20,000 + Cess ₹ 8,800 = ₹ 2,28,800, being the tax payable on total income of ₹ 12 lakhs

(B)₹ 2,10,000 + Cess ₹ 8,400 = ₹ 2,18,400, being the tax payable on lottery income of ₹ 7 lakhs

(C)₹ 10,000 + Cess ₹ 8,800 = ₹ 18,800, being the net tax payable on salary income, since tax would have been deducted at source from lottery income

(D)NIL

( c )Particulars of income received by Anuradha for the year ended 31st March, 2024 are as follows :

From the above information, compute income from other sources of Anuradha for the assessment year 2024-25, assuming that she has opted to pay tax under section 115BAC.

During the Financial Year 2023-24 Mr. K won a lottery for ₹ 5,00,000, from this lottery income he deposited ₹ 1,50,000 in PPF. He does not have any other Income. How much tax is to be paid during the assessment year 2024-25 ?

(A)₹ 1,56,000

(B)₹ 1,50,000

(C)₹ 1,00,000

(D)₹ Nil

The effective rate of tax on winning from lotteries under Section 115BB is :

(A)31.2%

(B)41.6%

(C)20.8%

(D)15%

Deepika won ₹ 8,500 from Rajasthan Patrika Crossword Puzzle. Determine the amount of Tax to be deducted as per section 194B of Income Tax Act, 1961.

(A)₹ 2,550 + cess

(B)₹ 850 + cess

(C)₹ 1,700 + cess

(D)Nil

Total income of Mr. K is ₹ 5,80,000 for the financial year 2020-21 (Including ₹ 80,000 for salary after standard deduction and ₹ 5,00,000 for lottery winninggross). what will be tax liability for the Assessment Year 2021-22 ?

(A)₹ 29,640

(B)₹ 1,02,960

(C)₹ 1,56,000

(D)None of the above

Compute the gross total income (GTI) of Prashant, Resident of Mumbai for the A.Y. 2021-22, from the information given below by taking that Prashant has not opted to pay tax on his income as per section 115 BAC of the Act :

Particulars Amount ( ₹ )

Share of profit from a partnership firm

(Prashant is a sleeping partner in the firm and share of profit includes amount of ₹ 2,00,000 of long-term Capital

(A)₹ 11,10,000

(B)₹ 8,00,000

(C)₹ 7,50,000

(D)₹ 4,50,000

Shivsagar (age 64) is a retired pensioner with pension of 3,20,000 received during the previous year 2020-21. He has lottery winning of 6 lakhs on 23.03.2021. Compute his income tax liability for the assessment year 2021-22.

(A)₹ 1,88,240

(B)₹ 1,87,200

(C)₹ 87,360

(D)₹ 97,760

Padmaja has following income/loss for the previous year ended 31.03.2021 : (i) income from lottery winning of ₹ 7,00,000; (ii) loss from non-speculation business of ₹ 3,00,000; and (iii) dividend from Indian companies of ₹ 50,000. What is her total income chargeable to tax for the assessment year 2021-22 ?

(A)₹ 7,00,000

(B)₹ 4,00,000

(C)₹ 4,50,000

(D)₹ 7,50,000

Ratan Lal, aged 55 years, resident in India having during the previous year 2019-20 income of winnings from races : ₹ 20,000 (expenditure incurred : ₹ 200), Short Term Capital Gain : ₹ 1,75,000 (applicable STT paid) Interest on Bank Fixed Deposits : ₹ 2,31,000 and had made contribution in public provident fund: ₹ 1,14,000. Total income of Ratan Lal for assessment year 2020-21 shall be __________

(A)₹ 4,26,000

(B)₹ 3,12,000

(C)₹ 3,02,000

(D)₹ 2,62,000

State whether tax is required to be collected at source (TCS) under the provision of section 206C of Income Act, 1961 by a person making .............

(A)Payment of dividend

(B)Winning from horse races

(C)Sale of motor vehicle of the value exceeding ₹ 10 lakh by a dealer to the customer

(D)Payment to non-resident

(i)On 10th January 2026, Amit (a bank employee) received ₹ 6,00,000 towards interest on enhanced compensation from State Government in respect of compulsory acquisition of his land effected during the financial year 2021-22.

Out of this interest, ₹ 2,50,000 relates to the financial year 2022 - 23; ₹ 1,85,000 to the financial year 2023- 24; and ₹ 1,65,000 to the financial year 2024- 25. He incurred ₹ 50,000 on 25th October, 2025 by way of legal expenses to receive the interest on such enhanced compensation.

Explain how much of interest on enhanced compensation would be chargeable to income tax for the assessment year 2026-27, with legal provision as per Income Tax Act, 1961 ?

(i)On 9th January, 2025, Amit (a bank employee) received ₹ 6,00,000 towards interest on enhanced compensation from State Government in respect of compulsory acquisition of his land effected during the financial year 2016-17.

Out of this interest,

-₹ 2,50,000 relates to the financial year 2017-18;

-₹ 1,65,000 to the financial year 2018-19; and

-₹ 1,85,000 to the financial year 2019-20.

He incurred ₹ 50,000 by way of legal expenses to receive the interest on such enhanced compensation. Explain with relevant provisions of Income Tax Act, 1961 how much of interest on enhanced compensation would be chargeable to tax for the assessment year 2025-26 ?

Interest on securities shall be taxable under Income from other sources :

(A)On Due basis

(B)On Receipt basis

(C)As per the direction of the Assessing Officer

(D)On the basis of method of accounting regularly employed by the assessee

In case of issue of shares at premium by listed companies, Share Premium is :

(A)Considered as an Income under the Head Capital Gain

(B)Considered as an Income under the Head Income from Other Sources

(C)Considered as an Income Under the Head Profits and Gains from Business/ Profession

(D)Not considered as Income at all

Raj sold a vacant land for ₹ 8 lakh to Mukesh on 5th December, 2022. The guideline value of the land was ₹ 9, 60,000. Raj and Mukesh are no t relatives. What is the tax implication of the transaction in the case of Raj and Mukesh under the Income Tax Act, 1961?

(A)₹ 9,60,000 will be taken as deemed sale consideration in the hands of Raj and ₹ 1,60,000 is taxable under section 56(2) of the Income Tax Act, 1961 in the hands of Mukesh

(B)₹ 9, 60,000 will be taken as deemed sale consideration in the hands of Raj. ₹ 1, 10,000 is taxable under section 56(2) of the Income Tax Act, 1961 in the hands of Mukesh

(C)No amount will be taken as deemed sale consideration in the hands of Raj but ₹ 1,60,000 is taxable under section 56(2) of the Income Tax Act, 1961 in the hands of Mukesh

(D)No tax implication in the hands of both Raj and Mukesh

Mr. A, an individual derived income of ₹ 1,00,000 from illegal activities related to the business during the financial year 2020-21. He has incurred expenses of ₹ 50,000 to earn above income. What is the tax treatment of the above transaction for the assessment year 2021-22?

(A)₹ 50,000 chargeable to tax in income from other sources

(B)₹ 50,000 chargeable to tax in income from business and profession

(C)₹ 1,00,000 chargeable to tax in income from business and profession

(D)It is not chargeable to tax as the person who carried on the illegal activities is punishable under the appropriate law

As per section 56(2)(viii) Income by way of Interest received on compensation referred to in clause (1) of section 145B shall be chargeable to tax under.

(A)Income from Salary

(B)Income from Business and Profession

(C)Capital gain

(D)Income from Other Sources

Which of the following income is not chargeable under the head ‘‘income from other sources’’ ?

(A)Income from undisclosed sources

(B)Directors’ sitting fees received from company

(C)Working partner salary received from partnership firm

(D)Agricultural income from land situated outside India in the case of resident of India

A flat in Jaipur was booked by Aditi for ₹ 30 lakh with UDB Builders on 01.09.2017 and an amount of ₹ 10 lakh was paid by account payee cheque. The possession of flat was given by the builder on 13.01.2020. The Stamp Valuation Authority have determined the value of the flat on the date of booking at ₹ 35,00,000 and on the date of possession given by the builder after execution of conveyance deed at ₹ 45,00,000. Find out the amount if any, chargeable to tax in respect of this flat in the hands of Aditi in the A.Y. 2020-21 under the head ‘Income from other sources’.

(A)₹ 15,00,000

(B)NIL

(C)₹ 5,00,000

(D)₹ 10,00,000

Priti (age 61) a Chartered Accountant retired from SCG & Co. (a partnership firm) on 31-3-2018. As per the deed of retirement, she is eligible for a sum of ₹ 20,000 every month in consideration for not practicing the profession of chartered accountancy for the next 5 years. The receipts is :

(A)Taxable under the heat ‘other sources’

(B)Taxable under the head ‘profits and gains of business or profession’

(C)Not taxable receipt

(D)Taxable as capital gain

(b)State how the following incomes will be chargeable to tax and if taxable, also the head of income :

(i)Mr. Balu, employed in a private company, let out a vacant land to X & Co. LLP for a monthly rent of ₹ 30,000.

(ii)A professor in an engineering college, earning income by way of examinership fee for valuation of answer-books.

(iii)Salary received by a Member of Parliament.

(iv)Salary received by a person as working partner in a partnership firm.

Laxmi received 30,000 per month by way of family pension (consequent to demise of her husband, who died in April, 2019). She has opted for section 115BAC of the Income Tax Act, 1961 for the assessment year 2023-24. How much of her family pension is includible in her total income?

(A)₹ 3, 60,000

(B)₹ 3, 10,000

(C)₹ 3, 25,000

(D)₹ 3, 45,000

The legal heir of the deceased who receives family pension is entitled to take deduction from such family pension (where option u/s 115BAC is not exercised) received to the extent of :

(A)Allowed a standard deduction of 1/3rd of such pension subject to maximum of ₹ 20,000

(B)Allowed a standard deduction of 1/3rd of such pension or 15,000 whichever is less

(C)Allowed a standard deduction of 1/3rd of such pension or ₹ 12,000 whichever is less

(D)No deduction is allowed