NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Concepts in Taxation
Which of the following is a correct statement about the residential status of an individual under the Income-tax Act for determining the scope of taxable income?
A resident and ordinarily resident individual is taxed in India on global income. Non-residents are taxed only on Indian-sourced income, RNORs get limited coverage of foreign income, and residential status depends on the days of stay in India, not on citizenship.
- AA resident and ordinarily resident is taxed in India on global incomeCorrect
- BA non-resident is taxed on global income
- CA resident but not ordinarily resident is taxed on all income earned anywhere in the world
- DResidential status depends on the citizenship of the individual alone
Explanation
A resident and ordinarily resident individual is taxed on income from all sources, in India and abroad. A non-resident is taxed only on income received or accruing in India, and an RNOR is taxed on Indian income and on foreign income only if it is from a business controlled in or a profession set up in India. Residential status is decided by days of stay, not citizenship.
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