{"id":2853,"date":"2026-04-22T20:01:08","date_gmt":"2026-04-22T14:31:08","guid":{"rendered":"https:\/\/lotusarise.com\/qna\/?p=2853"},"modified":"2026-04-22T20:01:10","modified_gmt":"2026-04-22T14:31:10","slug":"consider-the-following-statements-12","status":"publish","type":"post","link":"https:\/\/lotusarise.com\/qna\/upsc\/prelims\/consider-the-following-statements-12","title":{"rendered":"Consider the following statements:"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Statement I:<\/strong>&nbsp;In India, income from&nbsp;<strong>allied<\/strong>&nbsp;agricultural activities like poultry farming and wool rearing in rural areas is&nbsp;<strong>exempted<\/strong>&nbsp;from any tax.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Statement II:<\/strong>&nbsp;In India, rural agricultural land is not considered a capital asset under the provisions of the Income-tax Act, 1961.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Which one of the following is correct in respect of the above statements?&nbsp;&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list mcq\">\n<li>Both Statement I and Statement II are correct and Statement II explains Statement I\u00a0\u00a0\u00a0<\/li>\n\n\n\n<li>Both Statement I and Statement II are correct but Statement II does not explain Statement I\u00a0<\/li>\n\n\n\n<li>Statement I is correct Statement II is not correct but\u00a0\u00a0\u00a0<\/li>\n\n\n\n<li>Statement I is not correct but Statement II is correct\u00a0<strong>\u00a0<\/strong><\/li>\n<\/ul>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Answer: (d) Statement I is not correct but Statement II is correct&nbsp;<\/strong><\/p>\n<\/blockquote>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Under Section 10(1) of the Income Tax Act, 1961, agricultural income is exempt from tax.<\/strong>\u00a0This includes income from cultivating and selling agricultural produce, the sale of agricultural land, and compensation received from the government for the acquisition of agricultural land.<\/li>\n\n\n\n<li>However,\u00a0<strong>income from allied agricultural activities \u2014 such as dairy farming, poultry, or fisheries\u2014is not treated as agricultural income under the Act and is subject to tax by the central government.<\/strong><\/li>\n\n\n\n<li><strong>According to Section 2(1A) of the Income Tax Act, rural agricultural land is not classified as a capital asset.\u00a0<\/strong>As a result, any rental income from such land or income earned from growing and selling produce on it is not taxable.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Statement I:&nbsp;In India, income from&nbsp;allied&nbsp;agricultural activities like poultry farming and wool rearing in rural areas is&nbsp;exempted&nbsp;from any tax.&nbsp;&nbsp;&nbsp; Statement II:&nbsp;In India, rural agricultural land is not considered a capital asset under the provisions of the Income-tax Act, 1961.&nbsp;&nbsp;&nbsp; Which one of the following is correct in respect of the above statements?&nbsp;&nbsp; Answer: (d) Statement I&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[3,1],"tags":[38],"years":[63],"class_list":["post-2853","post","type-post","status-publish","format-standard","hentry","category-prelims","category-upsc","tag-indian-economy","years-63"],"acf":[],"taxonomy_info":{"category":[{"value":3,"label":"Prelims"},{"value":1,"label":"UPSC"}],"post_tag":[{"value":38,"label":"Indian Economy"}],"years":[{"value":63,"label":"2025"}]},"featured_image_src_large":false,"author_info":{"display_name":"LotusArise","author_link":"https:\/\/lotusarise.com\/qna\/author\/team-lotusarise"},"comment_info":0,"category_info":[{"term_id":3,"name":"Prelims","slug":"prelims","term_group":0,"term_taxonomy_id":3,"taxonomy":"category","description":"","parent":1,"count":1251,"filter":"raw","cat_ID":3,"category_count":1251,"category_description":"","cat_name":"Prelims","category_nicename":"prelims","category_parent":1},{"term_id":1,"name":"UPSC","slug":"upsc","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":1269,"filter":"raw","cat_ID":1,"category_count":1269,"category_description":"","cat_name":"UPSC","category_nicename":"upsc","category_parent":0}],"tag_info":[{"term_id":38,"name":"Indian Economy","slug":"indian-economy","term_group":0,"term_taxonomy_id":38,"taxonomy":"post_tag","description":"","parent":0,"count":225,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/2853","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/comments?post=2853"}],"version-history":[{"count":0,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/2853\/revisions"}],"wp:attachment":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/media?parent=2853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/categories?post=2853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/tags?post=2853"},{"taxonomy":"years","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/years?post=2853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}