Professional Documents
Culture Documents
Inter Questionnare
Inter Questionnare
“VLEARN RECAP”
Income Tax Income-tax is the most significant direct tax. Entry 82 of the Union List
i.e., List I of Seventh Schedule to Article 246 of the Constitution of
India has given the power to Parliament to make laws on taxes on
income other than agricultural income.
Income-tax is a TAX levied on the TOTAL INCOME of the
PREVIOUS YEAR of every PERSON.
Components of Income-tax Act, 1961 – governs the levy of income-tax in India.
Income Tax Income-tax Rules, 1962 – formulated for proper administration of
the Act.
Annual Finance Act – Amendments in the Income-tax Act, 1961
are effected every year through the Annual Finance Act.
Circulars – issued by CBDT to clarify the meaning and scope of
certain provisions of the Act.
Notifications – issued to give effect to the provisions of the Act/
make or amend Rules.
Court decisions – interprets the various provisions of income-tax
law.
Person An Individual
A Hindu Undivided Firm (HUF) ( Dayabhaga or Mitakshra)
A Firm including LLP ( Except for Sec 44AD/ 44ADA)
A Company (Domestic & Foreign)
Association of person/Body of individual (AOP/BOI)
A local Authority
Artificial juridical person
Concept of Previous year is the financial year immediately preceding the
Previous year assessment year i.e., it is the financial year ending on 31st March,
(P.Y.) and in which the income has accrued/received.
Assessment Year In case of a newly set-up business, the previous year would be the
(A.Y.): period beginning with the date of setting up of the business or
profession or, as the case may be, the date on which the source of
income newly came into existence, and ending on 31st March.
Assessment year (A.Y.): Assessment year means the period
of twelve months commencing on the 1st April every year.
Exceptions to Exceptions to the rule that income is charged to income-tax in
Above Case the Assessment Year following the previous year:
The income of an assessee for a previous year is charged to income-
tax in the assessment year following the previous year. However, in
the following cases, this rule does not apply and the income is taxed
in the previous year in which it is earned.
(i) Shipping business of non-resident [Section 172]
(ii) Persons leaving India [Section 174]
(iii) AOP/BOI/Artificial Juridical Person formed for a particular
event or purpose [Section 174A]
(iv) Persons likely to transfer property to avoid tax [Section 175]
Discontinued business [Section 176]
Tax Liability Tax has to be computed by applying the rates of tax
Company (not
opting for the Domestic Company Foreign
provisions of Company
section Total turnover or gross Other
115BAA/115BAB) receipts in the P.Y. 2019 20 ≤ domestic
₹ 400 crore companies
25% 30% 40%
Question 1:
Mr. Raj has a total income of ₹13,00,000 for P.Y. 2022-23, comprising of income
from house property and interest on fixed deposit. Compute his tax liability for
A.Y. 2023-24 assuming his age is -
(a) 37years
(b) 65years
(c) 83years
Assume that Mr. Raj has not opted for the provisions of section 115BAC.
Solution:
a) Computation of tax liability of Mr. Raj (age 37years)
Tax liability:
First ₹ 2,50,000 Nil
Next ₹ 2,50,001 – ₹ 5,00,000 @5% of ₹2,50,000 12,500
Next ₹ 5,00,001 – ₹ 10,00,000 @20% of ₹5,00,000 1,00,000
Balance = ₹13,00,000 (-) ₹ 10,00,000 @30% of ₹ 3,00,000 90,000
2,02,500
Add: Health and Education cess@4% 8,100
2,10,600
2,00,000
Add: Health and Education cess@4% 8,000
2,08,000
c) Computation of tax liability of Mr. Raj (age 83years)
First ₹5,00,000 Nil -
Next ₹5,00,001 – ₹10,00,000 @ 20% of ₹5,00,000 1,00,000
Balance i.e., ₹13,00,000 minus₹ 10,00,000 @ 30% of ₹3,00,000 90,000
1,90,000
Add: Health and Education cess@4% 7,600
1,97,600
Question 2:
Compute the tax liability of Mr. Raja (aged 42 years), having total income of ₹51.5
lakhs for the Assessment Year 2023-24. Assume that his total income comprises of
Solution:
Computation of tax liability of Mr. Raja for the A.Y. 2023-24
Particulars ₹
(A) Tax payable including surcharge on total income of
51,50,000
₹2,50,000 – ₹ 5,00,000 @5% 12,500
₹ 5,00,000 – ₹ 10,00,000 @20% 1,00,000
₹ 10,00,000 – ₹ 51,50,000 @30% 12,45,000
Total 13,57,500
Add: Surcharge @10% 1,35,750 14,93,250
(B) Tax Payable on total income of ₹50 13,12,500
lakhs
(₹12,500 plus ₹1,00,000 plus
₹12,00,000)
(C) Total Income less ₹50 lakhs 1,50,000
(D) Tax payable on total income of ₹50 14,62,500
lakhs plus the excess of total income
over ₹50 lakhs (B+C)
(E) Tax payable: Lower of (A) and (D) 14,62,500
Add: Health and education cess @4% 58,500
Tax Liability 15,21,000
(F) Marginal Relief (A – D) 30,750
Question 3:
Compute the tax liability of Mr. Akash (aged 55 years), having total income of ₹
1,02,00,000 for the Assessment Year 2023-24. Assume that his total income comprises
of salary income, income from house property and interest from fixed deposit
account. Also, assume that Mr. Akash has not opted for the provisions of section
115BAC.
Solution:
Computation of tax liability of Mr. Akash for the AY 2023-24
Particulars ₹ ₹
A) Tax payable including surcharge on total income of
₹1,02,00,000 12,500
₹2,50,000 – ₹5,00,000 1,00,000
₹5,00,000 – ₹10,00,000 @20% 27,60,000
₹10,00,000 – ₹1,02,00,000 @30%
Total 28,72,500
Add: Surcharge @ 15% 4,30,875 33,03,375
B) Tax payable on total income of 1 crore 28,12,500
(₹12,500 + ₹1,00,000 + ₹27,00,000)
Add: Surcharge @ 10% 2,81,250
30,93,750
C) Total income (-) ₹1 crore 2,00,000
D) Tax payable on total income of ₹1 crore (+) excess of 32,93,750
total income over ₹1 crore (B+C)
E) Tax payable: Lower of (A) and (D) 32,93,750
Question 4:
Compute the tax liability of Mr. Deepak (aged 57 years), having total income of
₹2,02,00,000 for the Assessment Year 2023-24. Assume that his total income
comprises of salary income, income from house property and interest from fixed
deposit account. Also, assume that Mr. Deepak has not opted for the provisions of
section 115BAC.
Solution:
Computation of tax liability of Mr. Deepak for the A.Y. 2023-24
Particulars ₹ ₹
(A) Tax payable including surcharge on total
income of ₹2,02,00,000
₹ 2,50,000 – ₹ 5,00,000 @5% 12,500
₹ 5,00,000 – ₹ 10,00,000 @20% 1,00,000
₹ 10,00,000 – ₹ 2,02,00,000 @30% 57,60,000
Total 58,72,500
Add: Surcharge @25% 14,68,125 73,40,625
(B) Tax Payable on total income of ₹2 crore
(₹12,500 plus ₹1,00,000 plus₹57,00,000) 58,12,500
Add: Surcharge @15% 8,71,875
66,84,375
(C) Total Income less ₹2 crore 2,00,000
(D) Tax payable on total income of ₹2 crore 68,84,375
plus the excess of total income over ₹2
crore(B+C)
(E) Tax payable: Lower of (A) and (D) 68,84,375
Add: Health and education cess @4% 2,75,375
Tax Liability 71,59,750
(F) Marginal Relief (A – D) 4,56,250
Question 5:
Compute the tax liability of Mr. Rajesh (aged 57 years), having total income of
₹5,02,00,000 for the Assessment Year 2023-24. Assume that his total income
comprises of salary income, income from house property and interest on fixed
deposit account. Assume that Mr. Rajesh has not opted for the provisions of
section 115BAC.
Solution:
Computation of tax liability of Mr. Rajesh for the A.Y. 2023-24
Particulars ₹ ₹
(A) Tax payable including surcharge on total
income of
₹ 2,50,000 – ₹ 5,00,000 @5% 12,500
₹ 5,00,000 – ₹ 10,00,000 @20% 1,00,000
₹ 10,00,000 – ₹ 5,02,00,000 @30% 1,47,60,000
Total 1,48,72,500
Question 6:
Compute the marginal relief available to X Ltd., a domestic company, assuming
that the total income of X Ltd. is ₹ 1, 01,00,000 for A.Y.2023-24 and the total
income does not include any income in the nature of capital gains. Assume that
the company has not exercised option under section 115BAA or 115BAB.
[Note - The gross receipts of X Ltd. for the P.Y.2019-20 is ₹402 crore]
Solution:
The tax payable on total income of ₹1,01,00,000 of X Ltd. computed @32.1% (including
surcharge @7%) is ₹32,42,100. However, the tax cannot exceed ₹31,00,000 (i.e.,the tax of
₹ 30,00,000 payable on total income of ₹ 1crore plus ₹1,00,000, being the amount of total
income exceeding ₹1 crore). Therefore, the tax payable on ₹1,01,00,000 would be
₹31,00,000.The marginal relief is₹1,42,100 (i.e., ₹32,42,100 - ₹31,00,000).
( HEC @ 4%)
Question 7:
Compute the marginal relief available to Y Ltd., a domestic company, assuming
that the total income of Y Ltd. for A.Y.2023-24 is ₹10,01,00,000 and the total
income does not include any income in the nature of capital gains. Assume that
the company has not exercised option under section 115BAA or 115BAB.
[Note - The gross receipts of Y Ltd. for the P.Y.2019-20 is ₹410 crore]
Solution:
The tax payable on total income of ₹10,01,00,000 of Y Ltd. computed@ 33.6% (including
surcharge @ 12%) is ₹ 3,36,33,600. However, the tax cannot exceed ₹ 3,22,00,000 [i.e., the tax
of ₹3,21,00,000 (32.1% of ₹10 crore) payable on total income of ₹10 crore plus ₹1,00,000,
being the amount of total income exceeding₹10 crore]. Therefore, the tax payable on
₹10,01,00,000 would be ₹3,22,00,000. The marginal relief is ₹14,33,600 (i.e.,₹3,36,33,600-
₹3,22,00,000).
( HEC @ 4%)
Question 8:
Mr. Sanjay aged 30 years, has a total income of ₹4,50,000, comprising his salary
income and interest on bank fixed deposit. Compute his tax liability for A.Y.2023-
24.
Solution:
As per section 2(7), assessee means a person by whom any tax or any other sum of money is
payable under the Income-tax Act, 1961.
In addition, the term includes –
1. Every person in respect of whom any proceeding under the Act has been taken for the
assessment of –
his income; or
the income of any other person in respect of which he is assessable; or
the loss sustained by him or by such other person; or
the amount of refund due to him or to such other person.
2. Every person who is deemed to be an assessee under any provision of the Act;
3. Every person who is deemed to be an assessee in default under any provision of the
Act.
Question 10:
Mr. Agarwal aged 40 years and a resident in India, has a total income o f ₹
4,50,00,000, comprising long term capital gain taxable under section 112A of ₹
55,00,000, short term capital gain taxable under section 111A of ₹65,00,000 and
other income of ₹3,30,00,000. Compute his tax liability for A.Y.2023-24. Assume that
Mr. Kashyap has not opted for the provisions of section 115BAC.
Solution:
Particulars ₹
Tax on total income of ₹4,50,00,000
Tax on 54L @10% 5,40,000
Tax on 65L @15% 9,75,000
Tax on other Income of 3,30,00,000 97,12,500
Total Income 1,12,27,500
surcharge @15% on (15,15,000) 2,27,250
surcharge @25% on 97,12,500 24,28,125
Total 1,38,82,875
HEC@4% 5,55,315
Total tax Payable 1,44,38,190
“VLEARN RECAP”
Section 6 [Residence in India]
A) INDIVIDUAL The residential status of an individual is determined on
Sec.6 the basis of the period of his stay in India.
Basic conditions:
1.He must be present in India for a period of 182
days or more during the previous year
2.(He must be present in India for a period of 60
days or more during the previous year and 365
days or more during the 4 years immediately
preceding the previous year.
Question 1:
Mr. Anand is an Indian citizen & a member of the crew of a
Singapore bound Indian Ship engaged in carriage of passengers in
International traffic departing from Chennai port on 6th June 2022.
From the following details for the PY 22-23, determine the residential
status of Mr. Anand for AY 23-24, assuming that his stay in India in
the last 4 Previous Years (Preceeding PY 22-23) is 400 days
Particulars Date
Date entered into the Continuous Discharge 6 June 2022
th
Solution:
In this case, since Mr. Anand is an Indian Citizen & leaving India during PY
22-23 as a crew member of the Indian Ship, he would be resident in India if
he stayed in India for 182 days or more. The voyage is undertaken by Indian
Ship engaged in the carriage of passengers in international traffic,
originating from a port in India (i.e Chennai Port) & having its destination at
a port outside India (i.e Singapore Port). Hence, the voyage is an eligible
voyage for the purpose of Sec 6(1). Therefore, the period beginning from 06th
June 2022 & ending on 9th December, 2022 being the date entered into the
Continuous Discharge Certificate in respect of joining the ship & signing off
Question 2:
J, a citizen of India, employed in the Indian Embassy at Tokyo,
Japan. He received salary and allowances at Tokyo from the
Government of India for the year ended 31.3.2023 for services
rendered by him in Tokyo. Besides, he was allowed perquisites by
the Government. He is a non- resident for the assessment year 2023-
24. Examine the taxability of salary, allowances and perquisites in
the hands of J for the assessment year 2023-24.
Solution:
As per section 9(1)(iii), salaries payable by the Government to a citizen of
India for services rendered outside India shall be deemed to accrue or arise in
India. As such, salary received by J is chargeable to tax, even though he was
a non-resident for A.Y. 2023-24.
As per section 10(7), all allowances or perquisites paid or allowed as such
outside India by the Government to a citizen of India for rendering services
outside India is exempt from tax. Therefore, the allowances and perquisites
received by J are exempt as per section 10(7).
Question 3:
Examine with reasons whether the following transactions attract
income-tax in India, in the hands of recipients under section 9 of
Income-tax Act, 1961:
1. A non-resident German company, which did not have a
permanent establishment in India, entered into an agreement for
execution of electrical work in India. Separate payments were
made towards drawings & designs, which were described as
"Engineering Fee". The assessee contended that such business
profits should be taxable in Germany as there is no business
connection within the meaning of section 9(1)(i) of the Income-tax
Act, 1961.
2. A firm of solicitors in Mumbai engaged a barrister in UK for
arguing a case before Supreme Court of India. A payment of 5000
pounds was made as per terms of professional engagement.
3. Amount paid by Government of India for use of a patent
developed by Mr. A, who is a non- resident.
4. Sai Engineering, a non-resident foreign company entered into a
collaboration agreement on 25/6/2022, with an Indian Company
and was in receipt of interest on 8% debentures for Rs.20 lakhs,
issued by Indian Company, in consideration of providing
technical know-how utilised in its business in Mumbai during
Solution:
(i) Fees for technical services is taxable under section 9(1)(vii). In this
case, the separate payments made towards drawings and designs
(described as “engineering fee”) are in the nature of fee for technical
services and, therefore, it is taxable in India by virtue of section
9(1)(vii), since the services are utilized for execution of electrical
work in India.
As per Explanation below section 9(2), where income is deemed to
accrue or arise in India under section 9(1)(vii), such income shall be
included in the total income of the non-resident German company,
regardless of whether it has a residence or place of business or
business connection in India.
(ii) As per section 9(1)(i), all income accruing or arising, whether
directly or indirectly, through or from any business connection in
India is deemed to accrue or arise in India.
In this case, there was a professional connection between the firm of
solicitors in Mumbai and the barrister in UK. The expression
“business” includes not only trade and manufacture; it includes,
within its scope, “profession” as well. Therefore, the existence of
professional connection amounts to existence of “business
connection” under section 9(1)(i). Hence, the amount of 5,000
pounds paid to the barrister in UK as per the terms of the
professional engagement constitutes income which is deemed to
accrue or arise in India under section 9(1)(i). Hence, it is taxable in
India.
(iii) As per section 9(1)(vi), income by way of royalty payable by the
Government of India is deemed to accrue or arise in India. “Royalty”
means consideration for, inter alia, use of patent. Therefore, the
amount paid by Government of India for use of patent developed by
Mr. A, a non-resident, is deemed to accrue or arise in India. Hence,
it is taxable in India in the hands of Mr. A.
(iv) ₹20 lakhs, being the value of debentures issued by an Indian
company in consideration of providing technical know-how for use
in its business in India, is in the nature of fee for technical services,
deemed to accrue or arise in India to Sai Engineering, a non-
resident foreign company, under section 9(1)(vii). Hence, it is
taxable in India.
Further, as per section 9(1)(v), income by way of interest payable by
a person who is a resident of India is deemed to accrue or arise in
India. Therefore, interest income from debentures of an Indian
company is deemed to accrue or arise in India in the hands of Sai
Engineering by virtue of section 9(1)(v). Hence, it is taxable in
India.
Question 4:
The business of an HUF is transferred from Australia & all the policy
Solution:
During the PY, Mr E has stayed in India for 245 days (i.e.
30+31+30+31+31+30+31+30+1 days). Therefore, he is a resident. However,
since he has come to India after 15 years, he does not satisfy the condition for
being ordinarily resident. Therefore, the residential status of Mr. E for the PY
22-23 is resident but not ordinarily resident. Since the business of the HUF is
transacted from Australia & policy decisions are taken there, it is assumed
that the control & management is in Australia i.e the control & management
is in Australia i.e the control & management is wholly outside India.
Therefore, the HUF is a non-resident for the PY 22-23.
Question 5:
Mr. X earns the following income during the previous year ended
31st March, 2023. Determine the income liable to tax for the
assessment year 2023-24 if Mr. X is
(a) resident and ordinarily resident in India,
(b) resident and not ordinarily resident in India, and (c) non-resident
in India during the previous year ended 31st March, 2023.
1. Profits on sale of a building in India but received in Holland –
Rs. 20,000
2. Pension from former employer in India received in Holland –
Rs. 14,000
3. Interest on U.K. Development Bonds (1/4 being received in
India) – Rs. 20,000
4. Income from property in Australia and received in U.S.A. – Rs.
15,000
5. Income earned from a business in Abyssinia which is
controlled from Zambia (Rs. 30,000 received in India) – Rs.
70,000
6. Dividend on shares of an Indian company but received in
Holland – Rs. 10,000
7. Profits not taxed previously brought into India – Rs. 40,000
8. Profits from a business in Nagpur which is controlled from
Holland – Rs. 27,000.
Solution:
Particulars ROR RNOR NR
Profits on sale of a building in India 20,000 20,000 20,000
but received in Holland (accrued in
India received outside India)
Pension from former employer in 14,000 14,000 14,000
India received in Holland (accrued in
India, received out of India)
Interest on U.K. Development Bonds 5,000 5,000 5,000
Question 6:
A had the following income during the previous year ended 31st
March, 2023:
1. Salary Received in India for three Months - Rs. 9,000
2. Income from house property in India - Rs. 13,470
3. Interest on Saving Bank Deposit in State Bank of India - Rs.
1,000
4. Amount brought into India out of the past untaxed profits
earned in Germany - Rs. 20,000
5. Income from agriculture in Indonesia being invested there - Rs.
12,350
6. Income from business in Bangladesh, being controlled from
India - Rs. 10,150
7. Dividends received in Belgium from French companies, out of
which Rs. 2,500 were remitted to India- Rs. 23,000
You are required to compute his total income for the assessment
year 2023-24 if he is : (i) a resident; (ii) a not ordinarily resident, and
(iii) a Non-resident.
IMPORTANT
Question 7:
Mr. Guddu Pandit is an Indian citizen staying in Canada from past
10 years. He comes to visit in India during the PY on 16th June 2022 &
earned the income from India amounting to ₹19,20,000 after all
deductions. What will be his Residential Status for the AY 23-24.
Solution:
As per Sec 6(1), an Indian Citizen who comes to visit in India or a person of
Indian origin who visit India & earn more than 15lakhs would be treated as
resident if any of the following conditions are satisfied:
1) They stay in India for 182 days in PY or
2) Stay in India for 120 days or more in PY & 365 days or more in 4
Previous Preceding years
Since, Mr. Guddu Pandit stays for more than 182 days in PY, he would be
regarded as Resident. Further, he will be treated as ROR if he satisfies both
the conditions of Sec 6(6), otherwise he will be treated as RNOR.
Question 8:
Mr. Munna Bhaiya is an Indian citizen staying in Canada but not
liable to tax either in Canada or any other country. He visited India
Solution:
As per Sec 6(1A), An Individual who is an Indian Citizen, having total income
exceeding 15lakhs other than from Foreign Sources, shall deemed to be
resident in India if he is not liable to tax in any other country by reason of his
Domicile or residence or any other criteria of similar nature. Further as per
Sec 6(6), he will be treated as RNOR.
Hence, Munna Bhaiya will be treated as RNOR in India.
Question 9:
Mr. David, an Indian citizen aged 40 years, a Government employee
serving in the Ministry of External Affairs, left India for the first time
on 31.03.2023 due to his transfer to High Commission of Canada. He did
not visit India any time during the previous year 2022-23. He has
received the following income for the Financial Year 2022-23:
Sr.no Particulars ₹
(i) Salary (Computed) 5,00,000
(ii) Foreign Allowance 4,00,000
(iii) Interest on fixed deposit from bank in India 1,00,000
(iv) Income from agriculture in Nepal 2,00,000
(v) Income from house property in Nepal 2,50,000
Compute his Gross Total Income for Assessment year 2023-24.
Solution:
As per section 6(1), Mr. David is a non-resident for the A.Y. 2023-24, since he
was not present in India at any time during the previous year 2022-23 .As per
section 5(2), a non-resident is chargeable to tax in India only in respect of
following incomes:
(i) Income received or deemed to be received in India; and
(ii) Income accruing or arising or deemed to accrue or arise in India.
In view of the above provisions, income from agriculture in Nepal and income
from house property in Nepal would not be chargeable to tax in the hands of
David, assuming that the same were received in Nepal. Income from
‘Salaries’ payable by the Government to a citizen of India for services
rendered outside India is deemed to accrue or arise in India as per section
9(1)(iii). Hence, such income is taxable in the hands of Mr. David, even
though he is a non-resident.
However, allowances or perquisites paid or allowed as such outside India by
the Government to a citizen of India for rendering service outside India is
exempt under section 10(7). Hence, foreign allowance of ₹4,00,000 is exempt
under section 10(7) in the hands of Mr. David.
Question 10:
X Is an Indian Citizen (or he is a person of Indian origin). He wants
to know his residential status in India for the previous year 2022-23
in the following different possible situations-
a. If he visits India during the PY.2022-23 for less than 120 days;
or
b. If he visits India during the PY.2022-23 for 150 Days; or
c. If he visits India during the PY.2022-23 for 180 Days or more.
Solution:
The table given below highlights the impact of amendment made by the
Finance Act, 2020 in the case of an Indian citizen or person of Indian origin
who visits India during the relevant PY.
Question 11:
Mr. Dhruv, a person of Indian origin and citizen of Country X, got
married to Ms. Deepa, an Indian citizen residing in Country X, on 4th
February, 2022 and came to India for the first time on 20-02-2022. He
left for Country X on 12th August, 2022. He returned to India again on
20-01-2023. with his wife to spend some time with his parents-in law
for 30 days and thereafter returned to Country X on 18.02.2023.
He received the following gifts from his relatives and friends of her
wife during 01-04-2022 to 31-03-2023 in India:
- From parents of wife ₹ 1,01,000
- From married sister of wife ₹ 11,000
- From very close friends of his wife ₹ 2,82,000
(a) Determine his residential status and compute the total income
chargeable to tax along with the amount of tax payable on such
income for the Assessment year 2023-24.
(b) Will your answer change if he has received ₹ 16,00,000 instead of ₹
2,82,000 from very close friends of his wife during the previous year
2022-23 and he stayed in India for 400 days during the 4 years
preceding the previous year 2022-23?
Solution:
(a) Determination of residential status and computation of total income and
tax payable of Mr. Dhruv
Under section 6(1), an individual, being a person of Indian origin and who
comes on a visit to India during the previous year and his total income other
than the income from foreign source exceeds ₹ 15,00,000, is said to be
resident in India, if he stayed in India for a total period of 120 days or more
during that previous year and for 365 days or more during the 4 years
immediately preceding the relevant previous year.
However, in case, the total income other than the income from foreign source
does not exceed ₹ 15,00,000, the said individual is said to be resident in India,
only if he stayed in India for a total period of 182 days or more during that
previous year.
Since in the present case, total income other than from foreign source, of Mr.
Dhruv, a person of Indian origin does not exceed ₹ 15,00,000, he would be
said to be resident in India, only if he stayed in India for 182 days or more
during the previous year 2022-23 relevant to A.Y. 2023-24.
His stay in India during the previous year 2022-23 is as under:
P.Y. 2022-23
01.04.2022 to 12.08.2022 - 134 days
20.01.2023 to 18.02.2023 - 30 days
Total 164 days
Since Mr. Dhruv has stayed in India during the previous year for less than
182 days, he is said to be non-resident. Accordingly, his total income and tax
payable would be computed in the following manner:
Question 12:
Mr. Dhanush, an Indian citizen aged 35 years, worked in ABC Ltd. in
Mumbai. He got a job offer from XYZ Inc., USA on 01.06.2021. He left
India for the first time on 31.07.2021 and joined XYZ Inc. on 08.08.2021.
During the P.Y. 2022-23, Mr. Dhanush visited India from 25.05.2022 to
22.09.2022. He has received the following income for the previous year
2022-23
Particulars ₹
Salary from XYZ Inc., USA received in USA 7,00,000
Dividend from Indian companies 5,50,000
Agricultural income from land situated in Punjab 55,000
Solution:
As per section 6(1), an Indian citizen or a person of Indian origin who, being
outside India, comes on a visit to India would be resident in India if he or
she stays in India for a period of 182 days or more during the relevant
previous year in case such person has total income, other than the income
from foreign sources, not exceeding ` 15 lakhs. However, if such person has
total income, other than the income from foreign sources, exceeding ` 15
lakhs, he would also be a resident if he has been in India for at least 120
days during the relevant previous year and has been in India during the 4
years immediately preceding the previous year for a total period of 365
days or more. In such a case, he would be resident but not ordinarily
resident in India.
Income from foreign sources means income which accrues or arises outside
India (except income derived from a business controlled in or a profession set
up in India) and which is not deemed to accrue or arise in India.
In this case, total income, other than the income from foreign sources, of Mr.
Dhanush for P.Y. 2022-23 would be
Particulars Amount
(₹)
Salary from XYZ Inc., USA received in USA (Not included in -
total income, since it is income from foreign source)
Dividend from Indian companies (Included in total income, 5,50,000
since deemed to accrue or arise in India)
Agricultural income from land situated in Punjab [Exempt u/s -
10(1)]
Rent received/receivable from house property in 4,00,000
Lucknow (Included in total income, since deemed to
accrue or arise in India)
Less: 30% of ` 4 lakhs 1,20,000 2,80,000
Profits from a profession in USA, which was set up in India, 6,00,000
received there
Total income, other than the income from foreign 14,30,000
sources