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

Ms. Kavita Rao, a resident and ordinarily resident individual, has only salary income well below the maximum amount not chargeable to tax. During the tax year she held signing authority in a bank account located outside India. Which statement is correct as per section 263?

She must furnish a return by the due date regardless of income or loss. A resident other than not ordinarily resident with signing authority in an overseas account is covered by section 263(1)(a)(ix), and section 263(1)(b) removes any income threshold for that category.

  1. AShe need not file a return because her total income is below the exemption limit
  2. BShe must file a return only if the foreign account earned income during the year
  3. CShe must file a return on or before the due date regardless of income or lossCorrect
  4. DShe may file a return only after the Board prescribes a threshold for foreign accounts

Explanation

Section 263(1)(a)(ix) covers a resident, other than not ordinarily resident, who has signing authority in an account located outside India. Section 263(1)(b) says such persons must file by the due date regardless of income or loss. Option 1 ignores this obligation, and option 2 wrongly adds an income condition.

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