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UPSC Prelims 2025 Paper-I 📅 25 May, 2025

Consider the following statements:
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?

A
Both Statement I and Statement II are correct and Statement II explains Statement I
B
Both Statement I and Statement II are correct but Statement II does not explain Statement I
C
Statement I is correct but Statement II is not correct
D
Statement I is not correct but Statement II is correct
Result Summary
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UPSC Prelims
2025 • 25 May, 2025 • Paper-I
Consider the following statements:
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?
Correct Answer
Statement I is not correct but Statement II is correct
Statement I is incorrect because income from allied activities like poultry is not treated as tax-exempt agricultural income under Section 10(1) of the Income T......
Ref/Book : UPSC Prelims 2025
Ref. Subject Economy
Chapter -
Ref. Topic Taxation
Pg. No -
💡 Analysis & Explanation
Introduction ▼
Statement I is incorrect because income from allied activities like poultry is not treated as tax-exempt agricultural income under Section 10(1) of the Income Tax Act. Statement II is correct; rural agricultural land is explicitly excluded from the definition of a capital asset under Section 2(14).
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