NextMockSearch exams, e.g. SSC CGL, UPPSC, Lekhpal
हिंदी
UPSC PYQPrelims 2025

Civil Services Examination · Question 35

Statement I: In India, income from allied agricultural activities like poultry farming and wool rearing in rural areas is exempted from any tax. Statement II: In India, rural agricultural land is not considered a capital asset under the provisions of the Income-tax Act, 1961. Which one of the following is correct in respect of the above statements?

  1. Both Statement I and Statement II are correct and Statement II explains Statement I
  2. Both Statement I and Statement II are correct but Statement II does not explain Statement I
  3. Statement I is correct but Statement II is not correct
  4. Statement I is not correct but Statement II is correct
Show answer & explanation

Answer: (D) Statement I is not correct but Statement II is correct

Explanation

Poultry/wool-rearing income is treated as business income (taxable), so Statement I is wrong; rural agricultural land is indeed excluded from the definition of capital asset.