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

Prelims · Economy & social development · 37 questions

Agriculture economy, MSP & food security

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Prelims 2025 · Q5

Medium

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?

Answer & explanation

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

Only 'agricultural income', which must come from land used for agriculture, is exempt. Poultry farming or wool rearing does not involve cultivating land, so its income is taxable like business income. Separately, section 2(14) excludes rural agricultural land from 'capital asset', so gains on selling it escape capital gains tax.

✗ Statement-I Section 2(1A) ties agricultural income to land in India used for agricultural purposes. Audit has treated even milk sales as dairy income, not income from agricultural land, so allied activities are taxable.
✓ Statement-II Section 2(14) excludes agricultural land from 'capital asset', except land within or near municipalities and cantonments of specified population (urban agricultural land).
• Since then Since 1 April 2026 the Income-tax Act, 2025 has replaced the 1961 Act; PIB says the rewrite does not alter the underlying tax policy (PIB, 1 April 2026).

Remember · Exempt agricultural income must arise from land used for agriculture; poultry, dairy, wool are taxable. Rural agricultural land is not a capital asset, so no capital gains tax on it.

Sources

CAG Report No. 9 of 2019 (Direct Taxes), Chapter V: Assessments relating to Agricultural income ↗ “As per section 2(1A) of the Income Tax Act, 1961 (the Act) ‘agricultural income’ means (a) Any rent or revenue derived from land which is situated in India and is used for agricultural purposes … As dry grapes (kismis) is an agro-based industrial product and milk is a dairy product, the income therefrom could not be considered as income derived from the agricultural land.”
Memorandum explaining the provisions in the Finance Bill, 2013 (Direct Taxes) ↗ “define the term “capital asset” as property of any kind held by an assessee, whether or not connected with his business or profession. Certain categories of properties including agricultural land have been excluded from this definition.”
PIB (Ministry of Finance), Income-tax Act, 2025 comes into force from today (1st April, 2026) ↗ “represents a comprehensive effort to simplify and modernise the country’s income-tax law, replacing the six-decade-old Income-tax Act, 1961.”

Question and answer: UPSC's official GS Paper I (2025, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink ·

Prelims 2025 · Q24

Medium

Consider the following statements about turmeric during the year 2022–23:

I.India is the largest producer and exporter of turmeric in the world.
II.More than 30 varieties of turmeric are grown in India.
III.Maharashtra, Telangana, Karnataka and Tamil Nadu are major turmeric producing States in India.

Which of the statements given above are correct?

Answer & explanation

Answer: (d) I, II and III

UPSC's key treats all three statements as correct. The Spices Board and ICAR-IISR describe India as a leading producer and exporter, many varieties and local cultivars are grown (23 improved varieties in the manual's Table 1 alone, plus local cultivars such as Duggirala, Erode local, Salem, Alleppey and Lakdong), and Telangana, Maharashtra and Tamil Nadu are among the top producing States, with Karnataka listed among the other important producers.

✓ I The Spices Board manual calls India a leading producer and exporter of turmeric. UPSC's official key treats the statement as correct; we could not confirm the rest of the statement from an official source, so we do not explain it here.
✓ II The manual's Table 1 lists 23 improved varieties (from ICAR-IISR Kozhikode, TNAU, OUAT, KAU and others), and it names local cultivars such as Duggirala, Tekkurpet, Amalapuram, Erode local, Salem, Alleppey, Moovattupuzha and Lakdong, so more than 30 are grown.
✓ III The manual says Telangana, Maharashtra, Tamil Nadu and Andhra Pradesh together give 63.4% of India's turmeric, and lists Odisha, Karnataka, West Bengal, Gujarat, Meghalaya and Assam as other important producers.

Remember · Turmeric: India is a leading producer and exporter; more than 30 varieties and cultivars; Telangana, Maharashtra, Tamil Nadu and Andhra Pradesh lead, with Karnataka and Odisha among other important producers.

Sources

Spices Board / ICAR-Indian Institute of Spices Research: Turmeric – Good Agricultural Practices (2019) ↗ · reference work “India is a leading producer and exporter of turmeric in the world. The states of Telangana, Maharashtra, Tamil Nadu, and Andhra Pradesh together contributes 63.4% of India’s turmeric production, … A number of cultivars are available in the country and are known mostly by the name of locality where they are cultivated. … Some of the popular cultivars are Duggirala, Tekkur- pet, Sugandham, Amalapuram, Erode local, Salem, Alleppey, Moovattupuzha and Lakdong. … other important turmeric producers are Orissa, Karnataka, West Bengal, Gujarat, Meghalaya, Assam.”

Question and answer: UPSC's official GS Paper I (2025, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 1 Oct 2026 (how we verify). Permalink ·

Prelims 2025 · Q30

Easy

Consider the following statements about the Rashtriya Gokul Mission:

I.It is important for the upliftment of rural poor as majority of low producing indigenous animals are with small and marginal farmers and landless labourers.
II.It was initiated to promote indigenous cattle and buffalo rearing and conservation in a scientific and holistic manner.

Which of the statements given above is/are correct?

Answer & explanation

Answer: (c) Both I and II

The Rashtriya Gokul Mission, run by the Department of Animal Husbandry and Dairying since December 2014, exists to develop and conserve indigenous cattle and buffalo breeds on scientific lines. The Department itself says it matters for the rural poor because more than 80% of low-yielding indigenous animals belong to small and marginal farmers and landless labourers.

✓ I The Department describes the scheme as crucial for the rural poor, since more than 80% of the low-producing indigenous animals are with small and marginal farmers and landless labourers.
✓ II It was launched in December 2014 to develop and conserve indigenous bovine breeds scientifically, alongside genetic upgradation and higher milk productivity.

Remember · Rashtriya Gokul Mission (Dec 2014, Dept of Animal Husbandry and Dairying): conserve and develop indigenous cattle and buffalo breeds; realigned 2021–22 to 2025–26.

Sources

Department of Animal Husbandry and Dairying: Rashtriya Gokul Mission ↗ “The Rashtriya Gokul Mission (RGM) is being implemented since December 2014 for development and conservation of indigenous bovine breeds, genetic upgradation of bovine population, and enhancement of milk productivity and production. … Scheme is crucial for upliftment of rural poor as more than 80% low producing indigenous animals are with small and marginal farmers and landless labourers.”

Question and answer: UPSC's official GS Paper I (2025, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). Permalink ·

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