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

Kavita is a resident and ordinarily resident in India for tax year 2026-27. During the year she had: (a) salary earned and received in India Rs 9,00,000; (b) rent from a house in London, received in London and kept there, Rs 4,00,000; (c) interest on a Canadian bank deposit, received in Canada and used there, Rs 1,50,000; (d) income from a business in Nepal controlled from Delhi, received in Nepal, Rs 6,00,000; (e) dividend from an Indian company declared and received in India Rs 50,000. What is the amount of income includible in her total income in India?

The total income includible is Rs 21,00,000. A resident and ordinarily resident is taxed on income from all sources, whether it accrues in India or abroad and whether it is received in India or abroad. Adding all five items gives Rs 21,00,000, with no exclusion for foreign income.

  1. ARs 9,50,000
  2. BRs 13,50,000
  3. CRs 21,00,000Correct
  4. DRs 15,50,000

Explanation

A resident and ordinarily resident is taxed on global income. Sum: 9,00,000 + 4,00,000 + 1,50,000 + 6,00,000 + 50,000 = 21,00,000. Option 1 is the Indian-only income, and option 2 omits the Nepal business income, which is taxable since it is controlled from India and in any case worldwide income is taxed.

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