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CA Final · Direct Tax Laws & International Taxation · Deductions from Gross Total Income

Mr. Sameer Joshi is a non-resident Indian. His gross total income for the tax year is Rs. 9,00,000, comprising Rs. 6,00,000 of investment income and Rs. 3,00,000 of long-term capital gains. He has made eligible investments qualifying for Chapter VIII deductions. Under section 213 of the Income-tax Act, 2025, what is the treatment of Chapter VIII deductions?

No Chapter VIII deduction is allowed. For a non-resident Indian whose gross total income consists only of investment income, long-term capital gains or both, section 213(2)(a) bars deductions. Sameer's entire income falls in these categories, so his investments give no deduction.

  1. AAllowed up to Rs. 3,00,000 against the capital gains only
  2. BNo deduction under Chapter VIII, as gross total income consists only of investment income and long-term capital gainsCorrect
  3. CAllowed in full against the entire gross total income
  4. DAllowed only against the investment income

Explanation

Section 213(2)(a) provides that where an NRI's gross total income consists only of investment income or long-term capital gains or both, no deduction is allowed under Chapter VIII. Here both components are of that type, so nothing remains to claim against.

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