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CMA Intermediate · Direct and Indirect Taxation · Basic Concepts, Basis of Charge and Capital and Revenue Receipts

A non-resident's total income in a tax year consists only of dividend on GDRs covered by section 209(1) (Table: Sl. No. 2) and interest on notified bonds, and tax deductible at source under Chapter XIX-B has been deducted from both. Which statement follows from section 209(4)?

He need not furnish a return under section 263(1). Section 209(4) waives the return where the total income consists only of interest on the specified bonds and dividends on the specified GDRs and the tax deductible at source has been deducted from that income.

  1. AHe must file a return under section 263(1) in every case
  2. BHe need not furnish a return under section 263(1)Correct
  3. CHe need not file a return only if his income is below the basic exemption limit
  4. DHe need not file a return only if the income is long-term capital gains

Explanation

Section 209(4) says a return under section 263(1) is not necessary if total income consisted only of the Sl. No. 1 and 2 incomes and tax deductible at source has been deducted. Both conditions are met here. The distractors add conditions (exemption limit, capital gains) that the sub-section does not contain.

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