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CA Intermediate · Taxation · Residential Status and Scope of Total Income

Kavita, a resident and ordinarily resident individual, earned the following in tax year 2026-27: (a) Rs 6 lakh rent from a house in Pune, received in India; (b) Rs 4 lakh dividend from a Singapore company, received in Singapore and not remitted; (c) Rs 3 lakh profit from a business in Nepal controlled from Nepal, received in Nepal and spent there; (d) Rs 2 lakh pension from a former foreign employer, received in Mumbai. What is the income taxable in India as part of her total income?

The taxable amount is Rs 15 lakh. A resident and ordinarily resident individual is taxed on worldwide income regardless of where it accrues or is received, so Indian rent, the Singapore dividend, the Nepal business profit and the pension are all included.

  1. ARs 15 lakhCorrect
  2. BRs 8 lakh
  3. CRs 11 lakh
  4. DRs 6 lakh

Explanation

A resident and ordinarily resident person is taxed on global income. All four items count: 6 + 4 + 3 + 2 = Rs 15 lakh. Excluding the foreign items gives Rs 8 lakh, a mistake that applies the rules for non-residents. Income earned abroad and received abroad is taxable for a ROR.

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