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

Mr. Rohit Sharma, a resident and ordinarily resident, earned the following in tax year 2026-27: salary of Rs 12 lakh for services rendered in India but received in Dubai; interest of Rs 3 lakh on a Dubai bank deposit, received and retained in Dubai; and agricultural income of Rs 2 lakh from land in Nepal, received in Nepal. His Gross taxable total income from these items would be:

The total is Rs 17 lakh. A resident and ordinarily resident is taxed on worldwide income, so the Indian-service salary of Rs 12 lakh, the Dubai interest of Rs 3 lakh and the Nepal agricultural income of Rs 2 lakh are all included, because the exemption applies only to Indian agricultural land.

  1. ARs 12 lakh
  2. BRs 15 lakh
  3. CRs 14 lakh
  4. DRs 17 lakhCorrect

Explanation

A resident and ordinarily resident is taxable on global income. Salary for services rendered in India is deemed to accrue in India (Rs 12 lakh). The Dubai interest (Rs 3 lakh) is foreign income and is taxable. Agricultural income from land outside India (Rs 2 lakh) is also taxable, since the agricultural income exemption is only for land in India. Total Rs 12 + 3 + 2 = Rs 17 lakh. Option B omits the Nepal agricultural income.

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