{"id":80,"date":"2026-02-21T22:32:54","date_gmt":"2026-02-21T17:02:54","guid":{"rendered":"https:\/\/www.khatriclasses.com\/Blog\/?p=80"},"modified":"2026-02-21T22:32:54","modified_gmt":"2026-02-21T17:02:54","slug":"tax-quiz-2","status":"publish","type":"post","link":"https:\/\/www.khatriclasses.com\/Blog\/tax-quiz-2\/","title":{"rendered":"Tax Quiz 2"},"content":{"rendered":"

Tax Quiz Answer<\/h2>\n

The correct answer is B. \u20b99 lakh taxable as salary, \u20b93 lakh capital receipt<\/strong><\/p>\n

Here’s the reasoning under Indian Income Tax law:<\/p>\n

\u20b94 lakh \u2013 Compensation for loss of job<\/strong> Taxable as profits in lieu of salary under Section 17(3) \u2192 taxable as salary<\/strong><\/p>\n

\u20b95 lakh \u2013 Unpaid salary arrears<\/strong> This is clearly salary income \u2192 taxable as salary<\/strong><\/p>\n

So \u20b94L + \u20b95L = \u20b99 lakh taxable as salary<\/strong><\/p>\n

\u20b93 lakh \u2013 Non-compete agreement (not to join competitors for 2 years)<\/strong> This is received for restricting a future right\/activity. Under Indian tax law, non-compete fees received as a one-time capital receipt (not in the course of business) are treated as a capital receipt<\/strong>, and since it doesn’t fall under any specific head of income in this context, it may be treated as a capital receipt not chargeable to tax<\/strong> (or taxable as capital gains depending on facts).<\/p>\n

For exam purposes (CA\/CMA), this is classically treated as a capital receipt<\/strong> \u2192 not taxable as salary<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Tax Quiz Answer The correct answer is B. \u20b99 lakh taxable as salary, \u20b93 lakh capital receipt Here’s the reasoning<\/p>\n","protected":false},"author":1,"featured_media":68,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-80","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-quiz"],"_links":{"self":[{"href":"https:\/\/www.khatriclasses.com\/Blog\/wp-json\/wp\/v2\/posts\/80","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.khatriclasses.com\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.khatriclasses.com\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.khatriclasses.com\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.khatriclasses.com\/Blog\/wp-json\/wp\/v2\/comments?post=80"}],"version-history":[{"count":1,"href":"https:\/\/www.khatriclasses.com\/Blog\/wp-json\/wp\/v2\/posts\/80\/revisions"}],"predecessor-version":[{"id":81,"href":"https:\/\/www.khatriclasses.com\/Blog\/wp-json\/wp\/v2\/posts\/80\/revisions\/81"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.khatriclasses.com\/Blog\/wp-json\/wp\/v2\/media\/68"}],"wp:attachment":[{"href":"https:\/\/www.khatriclasses.com\/Blog\/wp-json\/wp\/v2\/media?parent=80"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.khatriclasses.com\/Blog\/wp-json\/wp\/v2\/categories?post=80"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.khatriclasses.com\/Blog\/wp-json\/wp\/v2\/tags?post=80"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}