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CMA Final · Direct Tax Laws and International Taxation · Return of Income

Anita Rao, a resident and ordinarily resident individual with total income below the basic exemption limit, held a bank account in Singapore with signing authority during the tax year. Which statement is correct under section 263?

She must file a return by the due date regardless of income or loss. A resident other than not ordinarily resident holding signing authority in a foreign account falls under section 263(1)(a)(ix), and clause (b) removes any income threshold for such persons.

  1. AShe need not file a return because her income is below the maximum amount not chargeable to tax
  2. BShe must file a return on or before the due date regardless of income or lossCorrect
  3. CShe must file a return only if the foreign account earned interest
  4. DShe may file only an updated return, not a normal return

Explanation

Section 263(1)(a)(ix) covers a resident, other than not ordinarily resident, who has signing authority in an account located outside India. Clause (b) says such persons must furnish a return regardless of income or loss. So the income threshold and the earning of interest are irrelevant.

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