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

Mr. Sameer Joshi, a resident and ordinarily resident individual, had the following receipts in tax year 2026-27: (i) Rs 6,00,000 interest from a bank in Mumbai; (ii) Rs 4,00,000 business profit from a shop in Dubai, controlled from Dubai, received in Dubai and deposited there, (iii) Rs 3,00,000 rent from a house in London, received in London, later remitted to India in 2027-28; (iv) Rs 2,00,000 past untaxed profit earned in Dubai in an earlier year and received in India this year. What is his total income taxable in India on these items?

His taxable income on these items is Rs 15,00,000. As a resident and ordinarily resident, global income is taxable: Rs 6 lakh Indian interest, Rs 4 lakh Dubai profit, Rs 3 lakh London rent even though unremitted, and Rs 2 lakh received in India.

  1. ARs 15,00,000Correct
  2. BRs 13,00,000
  3. CRs 9,00,000
  4. DRs 11,00,000

Explanation

A resident and ordinarily resident is taxed on global income. Item (i) Rs 6,00,000 is Indian income; (ii) Rs 4,00,000 and (iii) Rs 3,00,000 are foreign income accruing outside India, taxable in India for an ROR whether or not remitted; (iv) Rs 2,00,000 is received in India, so it is taxable on receipt, assuming it was not taxed earlier (as stated). Total = 6+4+3+2 = Rs 15,00,000. Excluding the unremitted rent gives Rs 12,00,000, and excluding the Dubai profit gives Rs 11,00,000 — both wrong for an ROR.

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