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

Ms. Kavya Nair, a resident and ordinarily resident individual, has total income of Rs 2,00,000 for the tax year, below the maximum amount not chargeable to tax, and has no business or capital loss. She holds a bank account in Singapore on which she has signing authority. Which statement follows from section 263?

She must file a return. A resident other than not ordinarily resident with signing authority in a foreign account falls under section 263(1)(a)(ix), and clause (b) requires filing regardless of income or loss, so income below the exemption limit is irrelevant.

  1. AShe need not file a return because her income is below the exemption limit
  2. BShe must file a return, as clause (b) requires a return regardless of income for such a personCorrect
  3. CShe must file a return only if the Singapore account yields income
  4. DShe may file a return only if she wishes to claim a refund

Explanation

Clause (a)(ix) covers a resident, other than not ordinarily resident, having signing authority in an account located outside India. Clause (b) says such persons must file regardless of income or loss. The low income therefore does not exempt her.

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