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

Meera, a resident and ordinarily resident individual, earns only salary of Rs 6,00,000 in India. Her total income is below the threshold for tax liability under the rules, but during the tax year she held signing authority over a bank account located in Singapore. Which statement is correct under section 263?

Meera must file a return. A resident other than not ordinarily resident who holds signing authority in an account outside India must furnish a return irrespective of income or loss. The obligation does not depend on whether the foreign account generated any income.

  1. AShe need not file a return because her income is within the exemption limit
  2. BShe must file a return, since a resident other than not ordinarily resident with signing authority in a foreign account must file regardless of income or lossCorrect
  3. CShe must file a return only if the foreign account earned income during the year
  4. DShe may file only if she wishes to claim a refund

Explanation

Section 263(1)(a)(ix) covers a resident, other than not ordinarily resident, who has signing authority in any account located outside India. Clause (b) states such persons must furnish the return regardless of income or loss. The option tying the duty to foreign income is wrong as no such condition exists.

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