Q.The year in which income is earned is known as ______.

Agricultural income in India is fully exempt from income tax, so the answer is (b).

Among the basic concepts under the Income Tax Act, certain incomes are exempt and do not form part of taxable income. Agricultural income earned in India is one such exempt income (under Section 10(1)).

• It is fully exempted, not fully taxable (a).
• It is still recognised as income (though not taxed), so (c) 'not considered for income' is not the precise treatment; the correct legal position is that it is exempt from tax. …

The year in which income is earned is called the previous year; the following year, in which that income is assessed and tax is paid, is the assessment year. So the earning year here is the previous year.

The Income Tax Act separates the year of earning from the year of taxing:

• Previous year — the financial year (1 April to 31 March) in which the income is actually earned. It is the year whose income becomes the base for tax.
• Assessment year — the financial year immediately following the previous year, in which the income of the previous year is assessed to tax and the tax is actually paid. …

The year in which income is earned is known as the previous year, so the correct option is (d).

The direct taxes chapter in the Tamil Nadu HSC Commerce syllabus explains the basic concepts under the Income Tax Act.

• The previous year is the financial year in which income is actually earned. …

The answer is option (d) Fully Exempted.

Under the Indian Income Tax Act, 1961, agricultural income is treated as an exempt income under Section 10(1) and does not form part of total income for the purpose of charging income tax. This is because agriculture is a State subject, and the Centre does not levy income tax on it. (It is only aggregated with other income in certain cases to determine the rate of t …

The correct answer is (a) 1st April to 31st March. Both the previous year and the assessment year run from 1st April to 31st March.

In the Tamil Nadu HSC Commerce syllabus, two basic Income Tax concepts are important:

• Previous Year (PY) — the financial year in which income is actually earned; it runs from 1st April to 31st March.
• Assessment Year (AY) — the financial year immediately following the previous year, in which that income is assessed and taxed. It also runs from 1st April to 31st March. …