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

Sunita, a resident and ordinarily resident individual, in tax year 2026-27 has: salary earned in India ₹6,00,000 received in Pune; dividend from a US company ₹90,000 received in the US and later remitted to India in March 2027 in the same tax year; agricultural income from land in Kerala ₹1,20,000; and income from a Nepal business ₹2,00,000 received and spent in Nepal. How much is included in her total income, treating agricultural income as exempt and disregarding the partly integrated tax computation?

The total income is ₹8,90,000. A resident and ordinarily resident is taxed on worldwide income, so salary of ₹6,00,000, US dividend of ₹90,000 and Nepal business income of ₹2,00,000 are included, while the ₹1,20,000 agricultural income is exempt.

  1. A₹8,90,000Correct
  2. B₹6,90,000
  3. C₹8,00,000
  4. D₹10,00,000

Explanation

A resident and ordinarily resident is taxed on global income. Salary ₹6,00,000 + US dividend ₹90,000 (foreign-source income is taxable irrespective of where it is received) + Nepal business ₹2,00,000 = ₹8,90,000. Agricultural income of ₹1,20,000 is exempt. Remittance to India does not change taxability. Option ₹6,90,000 wrongly excludes the Nepal business income.

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