True or False: Agricultural income is subject to tax under the Income Tax Act, 1961.

False. Agricultural income is exempt from tax under the Income Tax Act, 1961.

What are the four conditions that must be met for income to be classified as agricultural income?

Agricultural income must meet four conditions.

• Income must derive from land.

• Land must be in India.

• Land used for agriculture.

• Income as rent or revenue.

Fill in the blank: Income from the sale of forest trees growing naturally without human intervention cannot be considered ___ income.

Agricultural

True or False: Income derived from the processing of agricultural produce to make it marketable is classified as non-agricultural income.

False. Income derived from processing agricultural produce to make it marketable is classified as agricultural income.

Explain the concept of partially agricultural income with an example.

Partially agricultural income has dual sources.

• Combines farming and business.

• Example: sugar mill operations.

• Harvesting is agricultural; production is not.

What is the maximum exemption limit for non-agricultural income for an individual under the age of 60?

Rs. 2,50,000

Fill in the blank: Casual income includes unexpected or non-recurring income such as winnings from ___ or ___.

Lotteries; betting

What percentage tax is applied to casual income?

30%

True or False: Personal gifts given out of family affection are included in casual income.

False. Personal gifts such as those given by family members are not considered casual income.

How is the nature of a receipt determined according to judicial pronouncements?

The nature of a receipt is complex.

• Depends on transaction context.

• Can signify capital stock sale.

• May also indicate compensation received.

What is the classification of income from the sale of dried tobacco leaves?

Agricultural income, as it is derived from processing of agricultural produce.

True or False: The Income Tax Act, 1961 provides explicit definitions for capital and revenue receipts.

False. The Income Tax Act does not specifically define capital and revenue receipts; rather, it relies on accounting conventions and court decisions.