2025 Economy - Taxation

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?

• Both Statement I and Statement II are correct and Statement II explains Statement I
• Both Statement I and Statement II are correct but Statement II does not explain Statement I
• Statement I is correct but Statement II is not correct
• Statement I is not correct but Statement II is correct