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

Mr. Sameer Joshi is a resident and ordinarily resident in tax year 2026-27. During the year he earned: salary received in India for services rendered in India Rs 8,00,000; rent from a house in London received in London and not brought to India Rs 2,50,000; interest from a Mumbai bank Rs 60,000; business profit from a Dubai shop controlled from Dubai and received in Dubai Rs 3,00,000; agricultural income from land in Nashik Rs 1,00,000. What is the income chargeable to tax in India, ignoring any exemption other than agricultural income?

The chargeable income is Rs 14,10,000. A resident and ordinarily resident is taxed on worldwide income, so London rent and Dubai business profit count even though received abroad. Adding salary, rent, interest and business profit gives this total, while Indian agricultural income is exempt and excluded.

  1. ARs 11,10,000
  2. BRs 14,10,000Correct
  3. CRs 12,10,000
  4. DRs 15,10,000

Explanation

A resident and ordinarily resident is taxed on global income. Salary 8,00,000 + London rent 2,50,000 + interest 60,000 + Dubai business 3,00,000 = 14,10,000. Agricultural income from land in India is exempt, so Rs 1,00,000 is excluded. Including it gives 15,10,000, and excluding the foreign items wrongly gives 8,60,000 or 11,10,000 for other mistakes.

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