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

Ravi Menon, a non-resident, has the following items in tax year 2026-27: (i) interest of Rs 80,000 on a fixed deposit with an Indian bank, received in Singapore; (ii) Rs 2,00,000 rent from a house property in Pune, received in Singapore; (iii) Rs 3,00,000 dividend from a Singapore company, received in Singapore, where the company's profits were earned from Singapore operations; (iv) Rs 1,50,000 profit from a business in Malaysia controlled from Singapore. What is the income taxable in India?

The taxable income is Rs 2,80,000. A non-resident is taxed only on income accruing or arising in India or received in India. The Indian bank interest and Pune rent qualify even though received abroad, while the Singapore dividend and Malaysian business profit are foreign income received outside India.

  1. ARs 2,80,000Correct
  2. BRs 7,30,000
  3. CRs 5,80,000
  4. DRs 2,00,000

Explanation

A non-resident is taxed only on income that accrues or arises in India or is received in India. The bank interest (Rs 80,000) and Pune rent (Rs 2,00,000) have Indian sources, so they are taxable even though received abroad. The Singapore dividend and the Malaysian business profit are foreign income received abroad and are not taxable. Total = 80,000 + 2,00,000 = Rs 2,80,000.

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