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U motivate us in every lecture for our dreams, ur such Jextraordinary person in my life I Lv u sir then last lecture may apka story sunkar asu aya sir your struggles, efforts for earning, vo sab sunane ke bad stich may muye bahut motivation huva. Apka vo tagline hy na sir "padhioo toh hadda kardo varna program raddh kardo" it's such a ywonderfil tagline. Full respect Bhat..Totally ur my motivation, inspiration, strength, Need ur blessings Keep motivate us and Always stay happy and healthy Gurj ‘Hello Sir. My naine is Gouri Sanadhya, CA Inter Nov2t batch) just got done with last lecture of DT. Lecture ki starting m socha tha k ek accha sa pyaara saa voice hote bhejung aaplo prab ending k baad samajh nhi aa rha k kya bolu. M jeanti hu ke anere lecture April m hi khatam ho jane chaiye the. Pr haalat kuch aise the km ab jaa kr khatam ker payi, Abhi aankhein nam h aur neend se bhari hui h aur samajh nhi aa rha k kya bolu pr Sir ts been the best lecture I have EVER watched till date. Your style of teaching; your sense of humor, your jokes and YOU ARE AMAZING SIR, Aaj k lecture m to [gaa k aap pir to biopic bann skti h. live in Ratlam, MP. I don't drink tea but really wish Ic aap Ratlam ago aur m aapko m khud chai b naa kr pilau along with sev jo ki yha ki speciality h. I really look forwerd to meet you and also Pallavi aunty and Swastik in} person whether it bein Ratlam, Pune or anywhere else. Aur haan m koshish krungi k m puri Koshish ku kt Mai aaphi firm rm partner bann jau, Aap bnaoge na S At last, SIR RESPECT ir apna partner? Hisir First of all a big big thank you sir Jo aap lecture ke Tiye itni mehnat krte ho kitna efforts Igaa kr hme pdaate ho salute h sir aapki teaching ko Maine aapka *CA Final DT and international taxation ka course purchase kiys hai Ab tak ka smart decision h jo maine aapse pane ka decide kiya. M Kbhi soch bhi nbi skta ki koi is tarah se bhi pda skt Aap bahut achhe bo ~Sachin Ghasolia From-Sikar Rajasthan I eemeeeeietih itt titi il al i $00 pages k notes aapk abhi Srd module chalra hai maza ara hai sir gajab sir Love you sir words hi nahi h books questionnaire charts dene I baad b sir aap short notes... sel’ reading k liye and sir jo agp likhware ho rmatlb sir bilkul NASHA HAI SIR DT NASHA PAR Y AAPNE HAISIR BY V ki language alag h sir al ASHA CHADAYA SaaS Hlo sir how ru? Just now finished Final module 1 and had a great experience in that speci Search and seizure Clubbing In search chapter my father also listened some of your points and he also shared the survey experience he had before So thanku ly in 2 chapters. Sir [am very big fan of urs... am. ur CMA Final student from Delhi. Nd loved to watch ur DT lectures. The way u speak, teach,stand even the way u dress up nd ur motivation between the lectures I loved all..Thanks for that motivation...being a student in final the level of pressure w know nd the way releases that is next level When I was in inter I was afraid of this subject but now I loved this subject because of ub only ‘Thankew sir for teaching us in super way. No one teaches like wh Hope to meet uh soon. exactly Today's batch was mind blowing & emotional Also I'm from this batch the FAMOUS PERSIAN BATCH ek sach baat bolu sir, ssab sir hi acche padhate hain, lekin aap eke average Students le liye Bhagwan ho Sir, Aap ek tarah bohot acche se concept clear kaarte ho, waise hi kaise ek @ hrs ka lecture elerhythm mein parallelly maintain kaarna chaihye wot bhi student ko enjoy de ke, ye may be aap ko saab se alag kar rahe hain Love You Sir. FULLLL RESPECTS aaj jo routine ‘aap set kar diye wo follow karna start kiya, Hope for the best 2 din pehle main sochi thi, shayad ek backup plan rakhna zaroori tha, agar mein CA nahi ho sakti toh, But literally STR aaj appka pura story sunkar mujhe laga, jo insuan itne difficulties ke wagair bhi khud dedicated ho kaar khudki dream| achieve ksar sakte bain, toh main without any difficulties kyun nahi ho sakti..haaank You A looottett Sirrrn. ‘Thank You a eevee Tot CA CS VISAY SARDA. Looootttt VUJU BHAIYA www.ekatvamacademy.com{ have taken DT classes from Vijay sir for may 22 and believe me it's one of the best decision I had made, Needless to say sir but you are the best. The way u teach concepts is amazing. I have fallen in love with tax and it's all just because of you. "Padhai me bhi masti ho sktih” you proved this statement. Vo 9.5 hrs din ka best samay hota tha sir. I really miss the class sir. Okay Keeping this apart anyone can surely go for him without hesitation. I'm sure u will also start loving tax and him also the service of vlearn team is at its best. The technical team is very much supportive. Books were also delivered on time as promised by sir Thank you so much sir I really had an awesome experience. if 1 would ever suggest a single teacher in my life that would be Vijay sir, personally to me he is God big brother, leverything I aspire to be, the biggest motivator, the role model. Teaching something complicated like Direct Tax is a Jchalienge in itself, but the way he teaches, he makes it easier than subject, To be honest, he is the biggest supporter one| lwill ever have, I will suggest you to every student who is struggling in finding classes for direct tax, value for money. ‘Very best experience. Best CA inter and SM classes throughout India. Vijay sit understanding and clear all doubts and also guide for future plans. Viearn ck and solve problems regarding technical services. Vijay sit is ke a family teaching is too good, excellent es technical team is also supportive ‘Viearn classes is an amazing platform to take CA coaching from. Vijay sir is really good as a teacher and also as a ‘mentor he used to motivate us in the class when we used to feel low and also his teaching is just amazing, I'm very glad that I purchased the lectures from Vijay sir. And their technical team is also very helpful and very quickly the problem is resolved. ‘Viearn classes is an amazing platform to take CA coaching from. Vijay sir is really good as a teacher and also as a mentor he used to motivate us in the class when we used to feel low and also his teaching is just amazing, I'm very glad that I purchased the lectures from Vijay sir And there technical team is also very helpful and very quickly the problem is resolved. ‘My experience was fantastic. Best teacher i have ever seen in my life. He will surely help you in making your ca journey easy & best part is that you don't feel boredom in his classes, i must say fastrack lectures are much better than other teachers regular classes “The best teacher for DT as well as for life lessons. I'm super clear with all my concepts. The teaching style is best as students can easily correlate the things from any topic. I am super happy and satisfied with my decision to choose Vijay sarda sir Best ever teacher for tax. The way he teach no one can. And also modules, colour charts, questioner every thing is awesome. 3 hrs of DT lecture are the most energetic hours. Thank so much VJ sir for every thing, ‘Classes are excellent especially Vijay Sir his teaching style is simple and relatable, furthermore my experience with Viearn classes have been great! CA CS VIJAY SARDA www.ekatvamacademy.comNo, Chapter Name Page No. 1. |Basics of Income Tax 11-1.15 2. |Residential Status 2.1- 2.10 38. |Exemptions 3.1-3.9 4, |Income From House Property 41-419 5. |Income From Salary 5.1- 5.33 6. |Income from other sources 6.1-6.14 7. |Capital Gains 71-741 8. |Profits & Gains from Business/Profession 8.1 - 8.50 9. | Clubbing Of Income 9.1- 9.10 10, | Set-Off & Carry Forward 10.1 - 10.11 11. | Deduction 11.1 - 11.24 12. | Advance Tax, TDS, TCS J 12.1 - 12.35 13. | Alternate Minimum Tax 13.1 - 13.2 14, |Return of Income 14,1 - 14.10 15. | Computation Of Total Income 15.1 - 15.56 CA CS VIJAY SARDA www.ekatvamacademy.com1, Income tax covered in Entry no 82 Union List 2. Income-tax is a TAX levied on the TOTAL INCOME of the PREVIOUS YEAR of every PERSON. Components of Income Tax + Income-tax Act, 1961 « Income-tax Rules, 1962 + Annual Finance Act + Circulars + Notifications + Court decisions (1) Total Income: Total income has to be computed as per the provisions contained in the Income-tax Act, 1961. The following steps has to be followedfor computing the total income of an assessee: Step 1 — Determination of residential status Step 2 — Classification of income under different heads Step 3 - Computation of income under each head after providing for permissible deductions/ exemptions. In this step, it is necessary to consider whether the individual is paying tax under the default tax regime or exercising the option to shift out of the default tax regime and pay tax under the optional tax regime as per the normal provisionsof the Act. Certain deductions which are allowable under the normal provisionsof the Act are not permissible under the default tax regime. Step 4 — Clubbing of income of spouse, minor child ete. Step 5 - Set-off or carry forward and set-off of losses Step 6 ~ Computation of Gross Total Income Step 7 — Providing Deductions from Gross Total Income Here again, only very select deductions, namely, 80CCD(2), 80CCH(2) and80JJAA, are allowable under the default tax regime under section 115BAC. Step 8 - Computation of Total income Step 9 - Application of the rates of tax on the total income For default tax regime, concessional tax rates are provided under section 115BAC. For optional tax regime as per the normal provisions of the Act, thetax rates are provided in the Annual Finance Act, The special rates u/s 111A, 112, 112A, 115BB, 115BBJ, ete. would apply under both tax regimes. Step 10 — Add Surcharge, if applicable/ Deduct Rebate under section 87A, if applicable Step 11 - Add Health and education cess on income-tax ‘Step 12 - Compute AMT, if applicable, [under the optional tax regime] Step 13 - Examine whether to pay tax under default tax regime w/s 115BAC or pay tax under the regular provisions of the Act, by comparing thetax liability under both regimes. Step 14 — Deduct Advance tax and tax deducted/ collected at: source Step 15 - The resultant figure would be Tax Payable/Tax Refundable Person: A person includes an individual, Hindu Undivided Family (HUF), Association of Persons (AOP), Body of Individuals (BOD), a firm, a company etc. Concept of Previous year (P.Y.) and Assessment Year (A.Y.): Previous year is the financial year immediately preceding the assessment year Incase of a newly set-up business, the previous year will start from date of commencement ‘www.ckatvamacademy.com | CAVMJAYSARDA | 8956051954 12‘Assessment year (A.Y.): Assessment year means the period of twelve months commencing on the 1st April every year. Exceptions to the rule that income is charged to income-tax in the Assessment Year following the previous year: (@ Shipping business of non-resident [Section 172] (i) Persons leaving India [Section 174] (ii) AOP/BOVArtificial Juridical Person formed for a particular event or purpose [Sec 174A] (iv) Persons likely to transfer property to avoid tax [Section 175] (v) Discontinued business [Section 176] Rate of tax for Undisclosed Sources of Income: The following undisclosed incomes are chargeable to tax @78% [i.e.,60% + surcharge @25% plus cess @4%] as specified u/s 115BBE: (Cash Credits [Section 68] Unexplained Investments [Section 69] (iii) Unexplained money etc. [Section 69A] (iv) Amount of investments etc., not fully disclosed in the books of account[Section 69B] (w) Unexplained expenditure [Section 69C] (vi) Amount borrowed or repaid on hundi [Section 69D] Tax Liability: Tax has to be computed by applying the rates of tax mentioned in the Annual Finance Act and the rate specified under the Income- tax Act, 1961, as the case may be. If an Individual/ Hindu Undivided Family (HUF)/ Association of Persons (AOP)/ Body of Individuals (BOD/ Artificial Juridical Person is paying tax under default tax regime, concessional tax rates are prescribed w/s 115BAC. However, if helit exercises the option to shift out of the default tax regime, tax rates prescribed by the Annual Finance Act of that ear would apply. Individual/HUF/ [_ “Total income Ga) Rate of Tax | AOP/BOI Artificial Upto % 3,00,000 Juridical Person (Under | 3,00,001 to @ 6,00,000 default taxregime) 7 6,00,001 to 9,00,000 F [= 12,00,001 to % 15,00,000 Above % 15,00,000 Individual (As per the normal provisions of the Act under the optional tax regime) | @ Upto & 2,50,000 (below 60 years) | Gi) Upto % 3,00,000 (60 years or above but less | than 80 years and resident in India) | Gil) Upto % 5,00,000 (above 80 years and resident | |__in India | % 2,50,001/ % 3,00,001, as the case may be, to% 5% _ 5,00,000 [in cases (i) and (ii) above, respectively] | 25,00,001 to % 10,00,000 20% Above @ 10,00,000 a L 30% HUF/AOP/BOL Artificial JuridicalPerson 2 2,50,000 (As per the normal % 250,001 to & 5,00,000 5%. wwwekatvamacademy.com | CAVLIAYSARDA | 8956051954 az / Basicprovisions of theAct %5,00,001 to & 10,00,000 | 20% under the optional tax Above € 10,00,000 30% regime) Firm/LLP/Local 30% + Surcharge @ 12% (if IT> 1Cx) + HEC @ 4% Authority Co-operative Society (not opting for the provisions of Section 115 BAD or section 115BAE) 2 10,001 to @ 20,000 | Above 8 20,000 Company (not opting for the provisions of section 115BAA/ 115BAB) Other domestic companies ‘Total turnover or gross receipts in the P.Y. 2021 2: Surcharge: @ Where the total income (including dividend income and capital gains chargeable to tax u/s 111A, 112A, & 112) > 2 50 lakh but is & 1 crore but is <& 2 crore (ii) - Where the total income (excluding dividend income and capital 25% gains chargeable to tax ws 111A, 112A, & 112)> & 2 crore but is < % 5 crore | - Rate of surcharge on the income-tax payable on the portion of | Not exceeding | dividend income and capital gains chargeable to tax w/s 111A, 15% |__| 1124, & 112 i fiir Where the total income (including dividend income and capital 15% e @ Where the total income (including dividend income and capital gains chargeable to tax u/s 111A, 112A, & 112) > % 50 lakh but is < = 1 gains chargeable to tax ws 111A, 112A, & 112) > @ 2 crore in cases | not covered in (iii) above crore Gi) Where the total income (including dividend income and capital gains 15% _chargeable to tax ws 111A, 112A, & 112)> 2 1 crore but is <@ 2 crore 4 (ii) - Where the total income (excluding dividend income and capital 25% gains chargeable to tax ws 111A, 112A, & 112)> © 2 crore but is < | 25 crore | ~ Rate of surcharge on the income-tax payable on the portion of | Not exceeding __ dividend income and capital gains chargeable to tax ws 111A, 15% wwwekatvamacademy.com | CAVIJAYSARDA | 8956051954 iad was112A, & 112 a a ee (iv) = Where the total income (excluding dividend income and capital 37% gains chargeable to tax u/s 111A, 112A, & 112) <¥ 5 crore - Rate of surcharge on the income-tax payable on the portion of dividend income and capital gains chargeable to tax ws 111A, | Not exceeding | 112A, & 112 ia | 15%, (v) | - Where the total income (including dividend income and capital | 15% gains chargeable to tax ws 111A, 112A, & 112) > @ 2 crore in cases not covered in (iii) and (iv) above | ()__| Where total income > @ 50 lakhs but is <% 1 crore 10% [Gi)_| Where the total income > @ 1 crore 15% Where the total income > 1 crore 12% Total income > @ 1 crore but is < 2 10 crore 1% ‘Total income is > % 10 crore 12% ‘Total income > 1 crore but is < % 10 crore Total income is > 2 10 crore ‘Total income > % 1 crore but is Total income is > @ 10 crore Rebate under section 87A: Under default tax regime (i) Where total income < % 7,00,000 - Rebate of up to % 25,000 forresident individuals | (Where total income > z 7,00,000 and income-tax payable on such total income | exceeds the amount by which the total income is in excess of 7,00,000 - Rebate of tax on total income as reduced by the total income exceeding % 7,00,000 for resident individuals. Under normal provisions of the Act Rebate of up to % 12,500 for resident individuals having total income of up to 5 lakh. “Health and Education cess” on Income-tax: 4% of income-tax and surcharge, if ‘applicable Agricultural income is exempt under section 10(1). However, agricultural income has to be aggregated with non-agricultural income for determining the rate at which non-agricultural income would be subject +o tax, in case of individuals, HUF, AOPs & BOIs etc., where the — + agricultural income exceeds 2 5,000 p.a. and * non-agricultural income exceeds basic exemption limit. ‘The following are the steps to be followed in computation of tax- Step 1: Tax on non-agricultural income plus agricultural income Step 2: Tax on agricultural income plus basic exemption limit Step 3: Tax payable by the assessee = Step 1 — Step 2 Step 4: Add Surcharge/Deduct Rebate w/s 87A, if applicable. Step 5: Add Health and Education Cess @4%. www.ekatvamacademy.com | CAVIJAYSARDA | 8956651954 BasicQuestion 1: Based on Tax liability & Marginal relief Compute the tax liability of Mr. Raja (aged 42 years), having total income of 851.5 lakhs for the AY 2024-25. Assume that his total income comprises of salary income, income from house property and interest from saving bank account. Also, assume that Mr. Raja has not opted for the provisions of section 115BAC. Soluti eu on of tax liabil na of Mr. Raja for the A.Y. 2024-25, A) ‘Tax payable including surcharge on total incomé "| 82,50,000 — % 5,00,000 @5% 12,500 __| %5,00,000 — 10,00,000 @20% _ 1,00,000. ies | ~_|% 10,00,000 — 51,50,00 12,45,000 | |‘Total oF. |_13,57,500 | _ Add: Surcharge @10% ___1,85,750. 114,983,250 - ) Tax Payable on total income of 250 lakhs | 13,12,500 ____| 12,500 plus 21,00,000 plus %12,00,000) | (C) Total Income less 250 lakhs / 1,50,000 (D) Tax payable on total income of 250 lakhs 14,62,500 plus the excess of total income over 250 Se silakhs tC) 2S (E)__|"Tax payable: Lower of (A)and(D) 14,62,500 | Add: Health and education cess @4% 7m 58,500 | | Tax Liability ___15,21,000 (F)__| Marginal Relief (A- D) | 30,750 Question 2: Based on Marginal Relief Compute the tax liability of Mr. Akash (aged 55 years), having total income of & 1,02,00,000 for the AY 2024-25. Assume that his total income comprises of salary income, income from house property and interest from fixed deposit account. Also, Solutioi Se of tax ae of Mr. Akash for the AY 2024-25 (A) Tax payable including surcharge on total income of 21,02,00,000 %2,50,000 — %5,00,000 @ 5% 12,500 %5,00,000 ~ %10,00,000 @20% 1,00,000 |___ 2. 10,00,000 — 21,02,00,000 @30% 27,60,000 ‘otal ar ________ | 28,72,500 |__| Add: Surcharge@ 15% 4,30,875 | 33,03,375 (B) | Tax payable on total income of 1 crore 28,12,500 | (€ 12,500 + 21,00,000 + 227,00,000) a |__| Add: Surcharge @ 10% Z | 2,81,250 | Total a aes 30,93,750 ‘Total income (-) 21 crore _ L | 2,00,000 ‘Tax payable on total income of 21 crore (+) excess of total 32,93,750 __| income over 21 crore (B+C) 5 yable: Lower of (A) and (D) | | 32,93,750_ | lealth and education cess @ 4% | _|_1,31,750 ability - | |34,25,500 (F)__ Marginal relief (A-D) pt | dn gs www.ekatvamacademy.com | CA VIJAYSARDA | 8956051954 is / Basic‘Question 3: Based on Tax liability & Marginal relief Compute the tax liability of Mr. Deepak (aged 57 years), having total income of %2,02,00,000 for the AY 2024-25, Assume that his total income comprises of salary income, income from house property and interest from fixed deposit account. Also, assume that Mr. Deepak has not opted for the provisions of section 115BAC. Solution: Computation of tax liability of Mr. Deepak for the A.Y. 2024-25 | Tax payable including surcharge on total | | income of & 2, 2 2,50,000 — € 5,00,000 @5% %5,00,000 — 2 10,00,000 @20% -2,02,00,000 @30% —_| 2 10,00,000 — __| Total Add: Surcharge @25% (B)__| Tax Payable on total income of crore | | 812,500 plus %1,00,000 plus®57,00,000) 58,12,500 | Add: Surcharge @15% 8,71,875 | Total ee | 66, 84,375 _(C)__| Total Income (-) 22 crore =| (D) | Tax payable on total income of 22 crore | 68,84,375 plus the excess of total income over %2 | erove(BtC) — aI (E) Tax payable: Lower of (A) and(D) 68,84,375 __Add: Health and education cess @4% Tax Liability 71,59,750 __(F) | Marginal Relief (A - D) 4,56,250 | Question 4: Based on Marginal relief of domestic company Compute the marginal relief available to X Ltd., a domestic company, assuming that the total income of X Ltd. is ® 1, 01,00,000 for A.Y.2024-25 and the total income does not include any income in the nature of capital gains. Assume that the company has not exercised option under section 115BAA or 115BAB. [Note - The gross receipts of X Ltd. for the P.Y.2021-22 is 7402 crore] Solution: ‘The tax payable on total income of 1,01,00,000 of X Ltd. computed @32.1% (including surcharge @7%) is %32,42,100. However, the tax cannot exceed %31,00,000 (Le. the tax of %30,00,000 payable on total income of % crore plus 21,00,000, being the amount of total income exceeding @1 crore). Therefore, the tax payable on 21,01,00,000 would be %31,00,000. ‘The marginal relief is @ 1,42,100 (e., 282,42,100 - €31,00,000). (HEC @ 4%) [ Question 5: Who is an “Assessee”? Solution: As per section 2(7), assessee means a person by whom any tax or any other sum of money is payable under the Income-tax Act, 1961 In addition, the term includes — 1. Every person in respect of whom any proceeding under the Act has been taken for the assessment of — * His income; or wwwekstvamacademy.com | CAVIJAYSARDA | 8956651954 1s / amt+ The income of any other person in respect of which he is assessable; or + The loss sustained by him or by such other person; or « The amount of refund due to him or to such other person. 2. Every person who is deemed to be an assessee under any provision of the Act; 3, Every person who is deemed to be an assessee in default under any provision of the Act. Question 6: Based on tax liability Find out the tax liability in the cases given below for the AY 2024-25 [these tax payers do not want to opt for the alternative tax regime w/s 115BAC] Assume that, licable tax rate w/s 112 is 20 per cent X (46 years) 6,00,000 | 3,00,000 = 7,00,000 | 59,00,000 = 75,00,000 resident Solution: Tax liability in case of X — Total income of X (including income taxable u/s 111A, 112 and 112A) exceeds Rs 50 lakh but does not exceed Rs 1 crore. Applicable surcharge in this case is 10% (on the income tax pertaining to income taxable u/s 111A, 112 and 112A as well as other income). Tax liability will be as follows- Income tax 90,000 60,000 60,000 500 | 17,92,500 Surcharge 9,000 6,000 6,000 1,58,250 | -1,79,250 Income tax & | 99,000 66,000 66,000 17,40,750 | 19,71,750 surcharge | | _ HEC @4% 3,960 2,640 | 2,640 69,630 78,870 | _Tax liability __1,02,960 68,640 68,640, 18,10,380 _-20,50,620 Question 7: Based on tax liability ; el Find out the tax liability in the cases given below for the AY 2024-25 [these tax payers do not want to opt for the alternative tax regime u/s 115BAC] Assume that, licable tax rate u/s 112 is 20 per cent Y (62 years) 1,56,00,000 | 1,80,00,000 _resident | 8,00,000 | 2,00,000 | 14,00,000 Solution: Tax liability in case of Y- TI of Y (including income taxable ws 111A, 112 and 112A) exceeds Rs 1 crore but does not exceed Rs 2 crore. Applicable surcharge in this case is 15% (on the income tax pertaining to income taxable u/s 111A, 112 and 112A as well as other income). Tax liability will be as follows- ‘www.ckatvamacademy.com | CAVIJAYSARDA | 8950051954 uj rueIncome tax | — 1,20,000 40,000 1,30,000 | 44,90,000 47,80,000 Surcharge 18,000 | 6,000 | 19,500. | 6,73,500 | 7,17,000 Income tax & 1,38,000 46,000 1,49,500 = 51,63,500 54,97,000 |feereeres | | | HEC @4% | 5,980 2,06,540 2,19,880 ‘Tax liability 1 1,55,480 | 58,70,040 _57,16,880 Question 8: Based on tax liability Find out the tax liability in the cases given below for the or 2024-25 [these tax ayers do not want to opt for the alternative tax regime under section 115BAC| Z (24 years) | 13,00,000 300,000 1,00,000 2,00,000 — 3,34,00,000 3,53,00,000 resident | | Assume that, applicable tax rate under section 112 is 20 per cent Solutio: Tax liability in case of Z- TI of Z (including income taxable u/s 111A, 112 and 112A) exceeds Rs 2 crore but does not exceed Rs 5 crore. Applicable surcharge in this case is 15% on the income tax pertaining to income taxable w/s 111A, 112 and 112A and dividend income and 25% on other incomes. Tax liability will be as follows- idend Income Short term capital gain [sec. 111A] _ 004 Long term capital gain [sec. 112] a an 1,00,000 | Long term capital a 2,00,000 Other Income 7 a _Net Income ‘Tax on net incom: Short term capital gain [sec. 111A](15% of Rs 3,00,000) (Long term capital gain [sec. 112] (20% of Rs 1,00,000) Long term capital gain [sec. 112A] (10% of Rs 1,00,000) Other Income - Normal tax on Rs 3,47,01 00, 000 * Tax on dividend income (Rs 13,00,000 +Rs 3,47,00,000 x Rs 1,02,22, 500) 3 82, 976 *Tax on balance of Rs 98,39,524 | 1,02,22,500) = ee aa | 1,02,97,500 _ ate 57,446 | Surcharge on a eae al gain (15% ‘of Rs 45,000) — __ 6,750_ Surcharge on Long term capital gain (15% of Rs 20,000) a 3,000 Surcharge on Loag term capital gain (15% of Rs 10,000) 7 | 1,500 | Surcharge on balance (25% of Rs 98,39,524) 24,59,881 | Total surcharge _ 25,28,577 Income tax and surcharge ‘wwwekstvanscadeny.com | CAVIJAYSARDA | 8056651964 18| _5,13,043 | (Tax liability (rounded off) —__ 1,33,39,120 Question 9: Based on tax liability Find out the tax liability in the cases given below for the AY 2024-25 [these tax payers do not want to opt for the alternative tax regime under section 115BAC] Assume that, applicable tax rate under section 112 is 20 ‘A (52 years) | 49,00,000 | 1,00, 2,00,000 8,00,00,000 | 6,59,00,000 | 15,11,00,000 resident | { Tax liability in case of A — TI of A (excluding dividend income and income taxable u/s 111A, 112 and 112A) exceed Rs 5 crore. Applicable surcharge in this case is 15% on the income tax pertaining to income taxable u/s 111A, 112 and 112A and dividend income and 37% on other Short term capital gain [sec. 1114] Long term capital gain [sec. 112] Long term capital gain [sec. 112A] 8,00,00,000 Other Income = | 6,59,00,000 _15,11,00,000 ‘Short term capital gain [sec. 111A](15% of Rs 1,00,000) ee 15,000 Long term capital gain [sec. 112] (20% of Rs 2,00,000) i 40,000 |_Long term capital gain [sec. 112A] (10% of Rs 7,99,00,000) =| 79,90,000 _Other Income aor a i ea - Normal tax on Rs 7,08,00,000 - | (2,10,52,500) «Tax on dividend income (Rs 49,00,000 =Rs 7,08,00,000 x Rs 2,10,52,500) ——+14,57,023 *Tax on balance of Rs 3,34,00,000 (Rs 6,59,00,000 = Rs 7,08,00,000 x Rs 1,95,95,477 2,10,52,500) _ = Income tax __ ae <= ___|_-2,90,97,500 Surcharge on dividend income (15% of Rs 14,57,023) Ta 2,18,553 | Surcharge on Short term capital gain (15% of Rs 15,000) 2,250 Surcharge on Long term capital gain (15% of Rs 40,000) 6,000, Surcharge on Long term capital gain (15% of Rs 7,99,00,000)____ _|_11,98,500 _| | Surcharge on balance (37% of Rs 1,95,95,477) _ za 72,50,326 | ‘Total surcharge aoe as 86,75,629 Income tax and surcharge a i 3,77,73,129 ‘Add: Health and education cess @4% = 15,10,925 | ability (rounded off) Sees 38,92,84,050 wwwekatvamacademy.com | CAVIJAYSARDA | 8956651954Question 10: Based on tax liability Find out the tax liability in the cases given below for the AY 2024-25 [these tax payers do not want to opt for the alternative tax regime w/s 115BAC] Assume that, applicable tax rate w/s 112 is 20 per cent Different | Dividend Capital gain under section _‘| Other | Total? taxpayers? 1A 112 112A __ Income & B (41 years) - 1,00,00,000 68,00,000 2,00,000 70,00,000 2,40,00,000 resident Solutio: Tax liability in case of B — TI of B (including income taxable ws 111A, 112 and 112A) exceed Rs 2 crore. His 'TI (excluding income taxable u/s 11A, 112 and 112A) does not exceed Rs 2 crore. Applicable surcharge in this case is 15% on the income tax pertaining to income taxable w/s 111A, 112 and 112A and 15% on other incomes. Tax liability will be as follows-. Particulars | Section | Section 112 | Section | Other Total W1AQT | (rate: | 1124C0T | income? | ! rate: 15%) | 20%) rate: 10% on | / { capital gain \ / j | exceeding { ! Rs 1 lakh) ! i Income tax 15,00,000 | 13,60,000 10,000 19,12,500 | 47,82,500 Surcharge 2,25,000 2,04,000 1,500, 2,86,875, 7,117,375, Income tax& — 17,25,000 | 15,64,000 11,500 21,099,375 —_—54,99,875 surcharge HEC @4% 69,000 62,560 460 87,975 2,19,995 Tax liability 17,94,000 __16,26,560 11,960 287,350 57,19,870 Question 11: Based on tax liability Find out the tax liability in the cases given below for the AY 2024-25 [these tax payers do not want to opt for the alternative tax regime under section 115BAC] Different Dividend | Capital gain under section __ Other —_/ Total taxpayers = L2anAe = ar, 112A Income? __ C (40 years) a 7,00,00,000 1,90,00,000 . 60,00,000 —9,50,00,000 resident Assume that, applicable tax rate under section 112 is 20 per cent Solutio Tax liability in case of C — TI of C (including income taxable u/s 111A, 112 and 112A) exceed Rs 5 crore. Surcharge in this case is 15% on the income tax pertaining to income taxable u/s 111A, 112 and 112A and 15% on other incomes. Tax liability will be as follows- Particulars | Section | Section 12 | Section Other | Total® | WIAQT | QTrate: | 12A(T income? | | rate: 15%) 20%) rate: 10% on t | | capital gain i | ‘exceeding | | | Rs 1 lakh) i i Income tax 1,05,00,000 38,00,000 Nil 16,12,500 | 1,59,12,500 Surcharge 15,75,000 5,70,000 Nil 241,875, | 23,86,875 Income tax & | 1,20,75,000 43,70,000 Nil 18,54,375 | 1,82,99,375 surcharge | HEC @4% | 4,83,000 1,74,800 Nil 74,175 I 7,31,975 Tax liability | 1,25,58,000 45,44,800 Nil 19,28,550 1,90,31,350 wwrw.ekatvamacademy.com | CAVIJAYSARDA | 8956651954 aati BasicQuestion 12: Based on tax liability Find out the tax liability in the cases given below for the AY 2024-25 [these tax payers do not want to opt for the alternative tax regime under section 115BAC] ‘Assume that, applicable tax rate under section 112 is 20 per cent Different Dividend | Capital gain under section | Other Total™ taxpayers? |= [PA 12 «112A_| Income = D (82 years) - 80,000 10,000 5,10,000 — 48,00,000 54,00,000 resident a Solution: Tax liability in case of D — Total income of D (including income taxable w/s 111A, 112 and 112A) exceeds Rs 50 lakh but does not exceed Rs 1 crore. Surcharge in this case is 10% on the income tax pertaining to income taxable u/s 111A, 112 and 112A and as well as other incomes. ‘Tax liability will be as follows- lan in el | Particulars | Section | Section 112 | Section Other Total ¢ W1AQT (Prater | 112AQT | income? | rate: 15%) | 20%) | rate: 10% on { | | capital gain | | | exceeding | | ! po __|_ Rs 1 lakh) Income tax 10,000 2,000 41,000 12,52,500 13,07,500 Surcharge 1,200 | 200 4,100 1,25,250 1,830,750, Income tax & 13,200 2,200 45,100 18,77,750 14,38,250 surcharge LL ute HEC @4% 528 | 88 55,110 57,530 Tax liability 13,728 | 2,288 14,32,860 14,95,780 Question 13: Based on tax liability Find out the tax liability in the cases given below for the AY 2024-25 [these tax payers do not want to opt for the alternative tax regime under section 115BAC] Assume that, applicable tax rate under section 112 is 20 per cent | Different Dividend | Capital gain under section __| Other | Total® | [deeper / aA 112 | 112A Income@ | E (64 years) - 4,10,000 — 1,70,000 1,20,000 | 97,00,000 1,04,00,000 non-resident Solutio ‘Tax liability in case of E — Total income of E (including income taxable w/s 111A, 112 and 112A) exceeds Rs 1 lakh but does not exceed Rs 2 crore. Surcharge in this case is 15% on the income tax pertaining to income taxable w/s 111A, 112 and 112A and as well as other incomes. He is non-resident. Tax liability will be as follo | Particulars | Section | Section 112 jection Other Total® | WIAGT | (rate: | 12d 0T income & | | rate: 15%) 20%) | rate: 10% on } | capital gain i exceeding _ (ass Rs 1 lakh) | = GAs Income tax 61,500 34,000 2,000 27,22,500 28,20,000 Surcharge ____ 9,225 5,100. 300 4,08,375, 4,23,000 Income tax & 70,725 39,100 2,300 31,30,875 32,43,000 surcharge ‘www.ekatvamacademy.com | CAVIJAYSARDA | 8956651954 = —HEC @4% 2,829 1,564 92 Tax 1,29,720 bility 73,554 40,664 2,392 32,56,110 33,72,720 Question 14: Based on tax liability | Find out the tax liability in the cases given below for the AY 2024-25 [these tax | payers do not want to opt for the alternative tax regime u/s 115BAC] Assume that, $20 percent = | Dividend Capital gain under section _ Other Total® taxpayers® % 111A 112. | 112A Income F (28 years) - 39,00,000 3,00,000 | 70,000 6,00,000 —48,70,000 resident | Solutio: Tax liability in case of F — TI of F (including income taxable w/s 111A, 112 and 112A) does not exceed Rs 50 lakh. Surcharge is not applicable in this case. Tax liability will be as follows- I Particulars | Section | Section 112 | Section | Other | Total® | | OT rate: 112A OT income % f | -g0%) rate: 10% on exceeding \ | eS i Rstlakh) Income tax 5,85,000 60,000 Nil 32,500 6,77,500 Surcharge Nil Nil Nil Nil Nil Income tax & 000 60,000 Nil 32,500 6,77,500 surcharge HEC @4% 23,400 2,400 Nil 1,300 27,100 Tax liability 6,08,400 62,400 Nil 33,800 7,04,600 Question 15: Based on tax liability Find out the tax liability in the cases given below for the AY 2024-25 [these tax payers do not want to opt for the alternative tax regime u/s 115BAC] Assume that, applicable tax rate under section 112 is 20 per cent Different | Dividen | Capital gain under section [Other | Total) taxpayerst__ dz 1A 112 112A Income | G (59 years) = = = 6,01,00,000 — 9,00,000 6,10,00,000 resident =i Solution: ‘Tax liability in case of F — Total income of F (including income taxable u/s 111A, 112 and 112A) does not exceed Rs 5 crore. Surcharge in this case is 15% (on income-tax pertaining to section 112A as well as other income). Tax liability will be as follows Particulars | Section | Section 112A (IT | Otherincome | Total @ | (1a aT ja otater10% on | z | rate: capitalgain | | 15%) | exceedingRs1 t ea 2 t t lakh) | Income tax | 60,00,000 92,500 60,92,500 Surcharge | 9,00,000. | 13,875 9,138,875, Income tax & surcharge | 69,00,000 1,06,375 70,06,375 | IEC @4% -___|___2,76,000 | 4,955 4,255 [Pax liability - 71,76,000 1,10,630 72,86,630 www.ekatvamacademy.com | CAVIJAYSARDA | 8956651954 Anal faeQuestion 16: Based on tax liability Mr. X has a total income of & 16,00,000 for P.Y.2023-24, comprising of income from house property and interest on fixed deposits. Compute his tax liability for e under section 115BAC. A.Y.2024-25 under the default tax rey Solution: _Tax ae ues of tax ee of Mr. X for AY 2024-25 rst Ee es Nal ~ Next % 3,00,001 — & 6,00,000 @5% of 23,00,000 15,000 Next %6,00,001-%9,00,000 | @10% of %3,00,000 30,000 Next |___ 900,000 - %12,00,000 _ @15% of 83,00,000 45,000 Next % 12,00,000 - & 15,00,000 @20% of €8,00,000 60,000 Balance = %16,00,000 (-) 15,00,000 @30% of € 1,00,000 30,000 ee =? 1,80,000 Add: Health and Education cess@4% 7,200 ‘Total 1,87,200 Question 17: Based on sec 115BAC Compute the tax liability of Mr. B (aged 51) under the default tax regime, having total income of % 1,01,00,000 for AY 2024-25. Assume that his total income comprises of salary income, income from HP ad interest on fixed deposit. Solution: Computation of tax liability of Mr. B for the AY 2024-25 (A) __| IT including surcharge on total income of 2 1,01,00,000 33,00,000 — = 6,00,000 @5% = 15,000 8 6,00,000 — 9,00,000 @10% 30,000 =| 2 9,00,000 —% 12,00,000 @15% z 45,000 ______|212,00,000 - @ 15,00,000 @20% ____ | 60,000 215,00,000 - 2 1,01,00,000 @30% 25,80,000 | Total |_27,30,000 _ |Add: Surcharge @15% | 4,09,500 | 14,93,250 a Tax liability without marginal relief | 31,39,500 (B) | IT computed on total income of % 1 crore @ 27,00,000 1,50,000 + & 25,50,000) | Add: Surcharge @10% | 2,70,000 __| Total = 29,70,000 __© Total Income less 2 1 crore 1,00,000 (D) | IT on total income of % 1 crore plus the excess of 30,70,000 ___| total income over % 1 crore (B+C) ual a tices __)__ Tax liability Lower of (A)and(D) 30,70,000 ____| Add: Health and education cess @4% | 1,22,800 ‘Tax Liability 31, ()__| Marginal Relief (A - D) ‘www.ekatvamacademy.com | CAVIJAYSARDA | 8956651954 13 BasieQuestion 18: Based on tax liability under both tax regime Compute the tax liability of Mr. D (aged 65) in a most beneficial manner total income of % 5,01,00,000 for AY 2024-25. Assume that his total income comprises of salary income, income from HP ad interest on fixed deposit & is same under both tax regime. a : Solution: Computation of tax liability of Mr. D under the default tax regime the default tax regime for AY 2024-25 TT including surcharge on total i 000 — & 6,00,000 @5% % 6,00,000 — = 9,00,000 @10% come of 5,01,00,000 36,82,500 | 1,84,12,500 “Add: lucation cess @4% ae 7,36,500 Tax Liability - 1,91,49,000 Computation of tax liability of Mr. D under the optional tax regime the default tax regime for AY 2024-25 IT including surcharge on total income of & 5,01,00,000 ___%3,00,000. % 5,00,000— 10,00,000 @20% % 10,00,000 - %5,01,00,000 @30% = “Total ae I (B) IT computed on total income of % 5 crore (& | 10,000 + % 1,00,000 + & 1,47,00,000) | Add: Surcharge @25% 37,02,500 I “Total : a — 1,85,12,500 | (C)___ Total Income less & 5 crore 1,00,000 (D) IT on total income of 5 crore plus the excess _____ of total income over @ 5 crore (B+C) |) __| Tax liability Lower of (A) and (D) _ | __| 1,86,12,500 | Add: Health and education cess @4% | ine 7,44,500 Tax Liability " a 1,93,57,000 @)_| Marginal Relief (A - D) if |17,18,300 Question 19: Based on tax liability w/s 115BAC Mr. Pawan aged 35 years and a resident in India, has a total income of % 7,15,000, comprising his salary income and interest on bank fixed deposit. Compute his tax liabi for A.Y.2024-25 under default tax regime under section 115BAC. wwwekatvamacademy.com | CAVIJAYSARDA | 8956651954 iu J ry / /Solution: __ Computation of tax liability of Mr. Pawan for A.Y 2024-25 Step 1: Total Income of @ 7,15,000 - & 7,00,000 Step 2: Tax on total income of @ 7,15,000 ‘Tax@10%of € 115,000 +% 15,000 26,000 ‘Step 3: Since B>A, rebate w/s 87A would be B-A [ 2 26,500 - 2 15,000 11,500 is al __ 15000 ‘Add: Health and education cess @4% im) ‘Tax Liability Sie 15,600 www.ekatvamacademy.com | CAVIJAYSARDA | 8956651954 us f a(i) ane | (2) (3) (4) (5) (6) |__ Section 6(1) | 6(1) __ 6(1) 6(1A) Main All | Indian Indian Deemed conditions _ individuals citizen or | citizenor | resident- [Other than PIO PIO Indian (8), (4) and residing residing —_—_ citizen © relevant | outside outside whose [Bither (a) PY. for India total or (b) employment visiting income | should be or as India (excl. satisfied for | member of during the Income being a crew of relevant from resident] | Indianship | P.Y. and foreign having sources) > total %15 lakh, income who is not | (excl. liable to Income tax in any from other | | foreign country sources) <% 15 lakh (a) 2182 days v v v x in the relevant (oR) PY. | (b) = 60 days 2120 x in the days in relevant P.Y. | the +> 365 days v x x ‘relevant vind | PY. | immediately |+ | preceding | > 865 days PYs in4 immediately | preceding | 3 | Additional Section 6(6) Section 6(6) | Section 6(6) conditions _|_ I /@=> 730 If both (i) and (ii) are satisfied, ROR. “By default | By default days inin7 | Otherwise RNOR RNOR, _ if) RNOR immediately | j.e., if either (i) or (ii) are satisfied or neither individual _precedingPYs | (j) nor (ii) aresatisfied, RNOR. becomes: (ii) Resident | “resident due for > 2 “to the years out of fulfillment of | the 10 | ar | modified www.ekatvamacademy.com | CAVIJAYSARDA | 8956651954 aa / Residential Status ——Immediately second preceding PYs condition above Notes - (1) Section 6(LA) would not apply in case of an individual who is said to be resident in India in the previous year under section 6(1). (2) A person is said to be of Indian origin if he or either of his parents or eitherof his | grandparents was born in undivided India | (@) “Income from foreign sources” means income which accrues or arises outside India (except income derived from a business controlled in or a profession set up in India) and which is not deemed to accrue or arise in India. 510i] @) | HUF [ROR/RNOR/non-resident] A HUF would be resident in India if the control and management ofits affairs is situated wholly or partly in India. If the control and management of the affairs is situated wholly outside India, it would become a non-resident. If the HUF is resident, then the satisfaction or otherwise of additionalconditions by Karta would determine whether the HUF is ROR or RNOR. If Karta satisfies both the additional conditions [(j) & (ii)] in () above,then, the HUF would be ROR. Otherwise, the HUF would be RNOR. (IID) | Firms, AOPs and BOIs [Resident/Non-resident] (@ A firm, AOP or BOI would be resident in India, if the control and management of its affairs is situated wholly or partly in India. (ii) If the control and management of the affairs is situated whollyoutside India, they would become a non-resident. (IV) | Companies [Resident/Non-resident] (i) Accompany would be resident in India in any previous year, if it isan Indian company or its place of effective management (POEM) in that year, is in India. (ii) If the company is not an Indian Company and its POEM is alsonot in India in that year, it would become a non-resident for that year. Income received) Income which is received) | Income received/deemed to deemed to be received/ deemed to be received) | bereceived/accrued or accrued or arisen/deemed to | accrued or arisen/ deemed to | @tisen/deemed to accrue or accrue or arise in or outside _| accrue or arise in India; arisein India. India. AND Income which accrues or In short, the global income is | arises outside India being taxable. derived froma business controlled in or profession set, up in India. www.ekatvamacademy.com | CAVIJAYSARDA | 8956651954 22 Residential StatusQuestion 1: Based on ship crew member Mr. Anand is an Indian citizen & a member of the crew of a Singapore bound Indian Ship engaged in carriage of passengers in International traffic departing from Chennai port on 6% June 2023. From the following details for the PY 2023-24, determine the residential status of Mr. Anand for AY 2024-25, assuming that his stay in India in the last 4 PYs (Preceed| 400 days Date entered into the Continuous Discharge Certificate in | 6 June 2023 respect of joining the ship by Mr. Anand Date entered into the continuous Discharge Certificate in 9tk December respect of signing off the ship by Mr. Anand. 2028 Solution: In this case, since Mr. Anand is an Indian Citizen & leaving India during PY 2023-24 as a crew member of the Indian Ship, he would be resident in India if he stayed in India for 182 days or more. The voyage is undertaken by Indian Ship engaged in the carriage of passengers in international traffic, originating from a port in India (i.e Chennai Port) & having its destination at a port outside India (i.e Singapore Port). Hence, the voyage is an eligible voyage for the purpose of See 6(1). Therefore, the period beginning from 06‘ June 2023 & ending on 9% December, 2023 being the date entered into the Continuous Discharge Certificate in respect of joining the ship & signing off from the ship by Mr. Anand, an Indian Citizen who is a member of the crew of the ship, has to be excluded for computing the period of stay in India. Accordingly, 187 days (25+31+31+30+31+30+9) have to be excluded from the period of stay in India. Consequently, Mr Anand’s period of stay in India during the PY 2023-24 would be 179 days (366 days — 187 days). Since his period of stay in India during the PY 2023-24 is less than 182 days, he is a non-resident for AY 2024-25. ‘Question 2: Based on services render outside India & salary received by GOT J, a citizen of India, employed in the Indian Embassy at Tokyo, Japan. He received salary and allowances at Tokyo from the Government of India for the year ended 31.8.2024 for services rendered by him in Tokyo. Besides, he was allowed perquisites by the Government. He is a non- resident for the AY 2024-25. Examine the taxability of salary, allowances and perquisites for the AY 2024-25. Solution: As per sec 9(1)(iii), salaries payable by the Government to a citizen of India for services rendered outside India shall be deemed to accrue or arise in India. As such, salary received by Jis chargeable to tax, even though he was a non-resident for A.Y, 2024-25. As per section 10(7), all allowances or perquisites paid or allowed as such outside India by the Government to a citizen of India for rendering services outside India is exempt from tax. ‘Therefore, the allowances and perquisites received by J are exempt as per section 10(7).. Question 3: Based on sec 9 Examine with reasons whether the following transactions attract income-tax in India, in the hands of recipients ws 9 of IT Act, 1961: 1. A NR German company, which did not have a permanent establishment in India, entered into an agreement for execution of electrical work in India. Separate payments were made towards drawings & designs, which were described as "Engineering Fee". The assessee contended that such business profits should be taxable in Germany as there is no business connection within the meaning of sec 9(1)(i) of the IT Act, 1961. 2._A firm of solicitors in Mumbai engaged a barrister in UK for arguing a case www.ekatvamacademy.com | CAVIJAYSARDA | 8956651954 23 Residential Statusbefore Supreme Court of India. A payment of 5000 pounds was made as per terms of professional engagement. 3. Amount paid by Government of India for use of a patent developed by Mr. A, who is a non-resident. 4. Sai Engineering, a NR foreign company entered into a collaboration agreement on 25/6/2023, with an Indian Co. and was in receipt of interest on 8% debentures for Rs.20 lakhs, issued by Indian Co., in consideration of providing technical know-how utilised in its business in Mumbai during PY 2023-24. Solution: 1. Fees for technical services is taxable w/s 9(1)(vii). In this case, the separate payments made towards drawings and designs (described as “engineering fee”) are in the nature of fee for technical services and, therefore, it is taxable in India by virtue of section 9(1)(vii), since the services are utilized for execution of electrical work in India. As per Explanation below section 9(2), where income is deemed to accrue or arise in India w/s 9(1)(vii), such income shall be included in the total income of the NR German company, regardless of whether it has a residence or place of business or business connection in India. 2, As per section 9(1)(i), all income accruing or arising, whether directly or indirectly, through or from any business connection in India is deemed to accrue or arise in India. In this case, there was a professional connection between the firm of solicitors in Mumbai and the barrister in UK. The expression “business” includes not only trade and manufacture; it includes, within its scope, “profession” as well. Therefore, the existence of professional connection amounts to existence of “business connection” under section 9(4)(i). Hence, the amount of 5,000 pounds paid to the barrister in UK as per the terms of the professional engagement constitutes income which is deemed to accrue or arise in India u/s 9(1)(). Hence, it is taxable in India. 3. As per section 9(1)(vi), income by way of royalty payable by the Government of India is deemed to accrue or arise in India. “Royalty” means consideration for, inter alia, use of patent. Therefore, the amount paid by Government of India for use of patent developed by Mr. A, a non-resident, is deemed to accrue or arise in India. Hence, it is taxable in India in the hands of Mr. A. 4, % 20 lakhs, being the value of debentures issued by an Indian company in consideration of providing technical know-how for use in its business in India, is in the nature of fee for technical services, deemed to accrue or arise in India to Sai Engineering, a non-resident foreign company, u/s 9(1)(vii). Hence, it is taxable in India. Further, as per section 9(1)(v), income by way of interest payable by a person who is a resident of India is deemed to acerue or arise in India. Therefore, interest income from debentures of an Indian company is deemed to accrue or arise in India in the hands of Sai Engineering by virtue of section 9(1)(v). Hence, it is taxable in India. Question 4: Based on Residential status of HUF The business of an HUF is transferred from Australia & all the policy decisions are taken there. Mr E, the Karta of the HUF, who was born in Kolkata, visits India during the PY after 15 years. He comes to India on 01.04.2023 & leaves for Australia on 01.12.2023. Determine the residential status of Mr. E & HUF for the AY. Solution: During the PY, Mr E has stayed in India for 245 days (ie. 30+31+30+31+31+30+31+30+1 days). Therefore, he is a resident. However, since he has come to India after 15 years, he does not satisfy the condition for being ordinarily resident. Therefore, the residential status of Mr. E for the PY 23-24 is RNOR. Since the business of the HUF is transacted from Australia & wwwekatvamacademy.com | CAVIJAYSARDA | 8956651954 24 Residential Statuspolicy decisions are taken there, it is assumed that the control & management is in Australia ie the control & management is wholly outside India. Therefore, the HUF is a non-resident for the PY 2023-24. Question 5: Based on ROR, RNOR, NR Mr. X earns the following income during the PY ended 31st March, 2024. Determine the income liable to tax for the AY 2024-25 if Mr. X is (a) ROR, (b) RNOR, and (c) NR during the PY ended 31st Mar., 2024. 1. Profits on sale of a building in India but received in Holland - Rs. 20,000 2. Pension from former employer in India received in Holland — Rs. 14,000 3. Interest on U.K. Development Bonds (1/4 being received in India) - Rs. 20,000 4, Income from property in Australia and received in U.S.A. - Rs. 15,000 5. Income earned from a business in Abyssinia which is controlled from Zambia (Rs. 30,000 received in India) - Rs. 70,000 6. Dividend on shares of an Indian company but received in Holland - Rs. 10,000 7. Profits not taxed previously brought into India - Rs. 40,000 8. Profits from a business in Nagpur which is controlled from Holland — Rs. 27,000. Solutios | Profits on sale of a building in India but) 20,000 20,000 20,000 | | received in Holland (accrued in India | received outside India) ma” .ohuce ple | Pension from former employer in India| 14,000 14,000 14,000 received in Holland (accrued in India, | received out of India) | | Interest. on U.K. Development Bonds) 5,000 5,000 5,000 (Accrued out of India, 1/4th received in| India) a ei i | | Interest. on U.K. Development Bonds) 15,000 | (Accrued out of India, 3/4th received out of | India) __| Income from property in Australia and| 15,000 NIL | received in U.S.A. (Accrued and received out | of India) atu! a al = mi | Income earned from a business in Abyssinia | 70,000 30,000 30,000 | which is controlled from Zambia (Business controlled outside India) : | Dividend on shares of an Indian company 10,000 10,000 10,000 but received in Holland (Accrued in India) | | Profits not taxed previously brought into) Nil Nil Nil | India (Not an income so not taxable) Profits from a business in Nagpur which is 27,000 | 27,000. | -—27,000 controlled from Holland (Accrued in India) Total i 1,76,000 __1,06,000 _|_1,06,000 NIL | Question 6: Based on ROR, RNOR, NR Ahad the following income during the previous year ended 31st March, 2024: 1. Salary Received in India for three Months - Rs. 9,000 (Computed) |2. Income from house property in India - Rs. 13,470 (Computed) 3, Interest on Saving Bank Deposit in State Bank of India - Rs. 1,000 4, Amount brought into India out of the past untaxed profits earned in Germany - 25 f Residential Status /Rs, 20,000 5. Income from agriculture in Indonesia being invested there - Rs. 12,350 6. Income from business in Bangladesh, being controlled from India - 10,150 7. Dividends received in Belgium from French companies, out of which Rs. 2,500 were remitted to India- Rs. 23,000 You are required to compute his total income for the AY 2024-25 if he is: (i) a resident; (ii) a not ordinarily resident, and (iii) a Non-resident. Solution: Salary Received in India for three Months (Indian received in India) aferees| | Income from house property in India (Income | 13,470 13,470 13,470 accrue or arise in India) as Interest on Saving Bank Deposit in State) 1,000 1,000 1,000 Bank of India (Income accrue or arise in| India) rior Peds A collars Vs Se iat ze FEL | era Amount brought into India out of the past untaxed profits earned in Germany (not an Nil Nil Nil income, hence not taxable) Income from agriculture in Indonesia being) 12,350 Nil Nil invested there (Income accrue or arise in outside India) r Income from business in Bangladesh, being controlled from India (it is supposed that the | money is not received in India) (Income accrued outside India from a business. | controlled from India) Dividends received in Belgium from French | 23,000 Nil Nil companies (Income accrue outside India remittance is irrelevant) Total 23,470 | Question 7: Based on Sec, 6(1) Mr. Guddu Pandit is an Indian citizen staying in Canada from past 10 years. He comes to visit in India during the PY on 16‘ June 2023 & earned the income from India amounting to %19,20,000 after all deductions. What will be his Residential Status for the AY 2024-25. Solution: As per Sec 6(1), an Indian Citizen who comes to visit in India or a person of Indian origin who visit India & earn more than 15 lakhs would be treated as resident if any of the following conditions are satisfied: 1) They stay in India for 182 days in PY or 2) Stay in India for 120 days or more in PY & 365 days or more in 4 Preceding PY Since, Mr. Guddu Pandit stays for more than 182 days in PY, he would be regarded as Resident. Further, he will be treated as ROR if he satisfies both the conditions of Sec 6(6), otherwise he will be treated as RNOR. wwviekatvamacademy.com | CAVIJAYSARDA | 8956651954 a6 / Residential StatusQuestion 8: Based on Sec 6(1A) Mr. Munna Bhaiya is an Indian citizen staying in Canada but not liable to tax either in Canada or any other country. He visited India on 04* July 2023. His earning from India amounts to %35,15,000 after all deductions. What will be his Residential Status for the AY 24.25 Solution: ‘As per Sec 6(1A), An Individual who is an Indian Citizen, having total income exceeding 15 lakhs other than from Foreign Sources, shall deemed to be resident in India if he is not liable to tax in any other country by reason of his Domicile or residence or any other criteria of similar nature. Further as per Sec 6(6), he will be treated as RNOR. Hence, Munna Bhaiya will be treated as RNOR in India. Question 9: Based on GTI of Govt. employee Mr. David, an Indian citizen aged 40 years, a Government employee serving in the Ministry of External Affairs, left India for the first time on 31.03.2023 due to his transfer to High Commission of Canada. He did not visit India any time during the PY 2023-24, He has received the following income for the FY 2023-24: | Salary (Computed) oot ____5,00,000 le __ Foreign Allowance ue ea 4,00,000 Interest on fixed deposit from bank in India_ ___1,00,000 Income from agriculture in Nepal 2,00,000 | _o Income from house property in Nepal 2,50,000 | Compute his Gross Total Income for AY 2024-25. Solution: As per section 6(1), Mr. David is a NR for the A-Y. 2024-25, since he was not present in India at any time during the PY 2023-24. As per section 5(2), a NR is chargeable to tax in India only in respect of following incomes: (i) Income received or deemed to be received in India; and (ii) Income accruing or arising or deemed to accrue or arise in India. In view of the above provisions, income from agriculture in Nepal and income from house property in Nepal would not be chargeable to tax in the hands of David, assuming that the same were received in Nepal. Income from ‘Salaries’ payable by the Government to a citizen of India for services rendered outside India is deemed to accrue or arise in India as per sec9(1)(iii). Hence, such income is taxable in the hands of Mr. David, even though he is a NR. However, allowances or perquisites paid or allowed as such outside India by the Government. to a citizen of India for rendering service outside India is exempt u/s 10(7). Hence, foreign allowance of %4,00,000 is exempt u/s 10(7) in the hands of Mr. David. Gross Total Income of Mr. David for A.Y. 2024-25 Salaries (computed) _ 5,00,000 | Income from other sources (Interest on fixed deposit in India) 1,00,000 Gross Total Income 6,00,000 ‘wow.ckatvamacademy.com | CAVIJAYSARDA | 8956651954 27 Residential StatusQuestion 10: Based on Sec 6(1) X is an Indian Citizen (or he is a person of Indian origin). He wants to know his residential status in India for the PY 2023-24 in the following different possible situations- a.If he visits India during the PY.2023-24 for less than 120 days; or b.If he visits India during the PY.2023-24for 150 Days; or c.If he visits India during the PY.2023-24 for 180 Days or more. Solution: The table given below highlights the impact of amendment made by the Finance Act, 2020 in the case of an Indian citizen or person of Indian origin who visits India during the relevant PY. Less than 120 Days 120 days or more but not more than | 182 days or more | 181 days | Non-resident in In Non-resident in India | If he satisfies both of the following |% If he satisfies both of the | conditions, he will be RNOR — | following conditions, he (i) During preceding 4 years, he was| will be ROR in India for 865 Days or more; and | (i) He has been resident in (ii) His taxable income (other than) India in at least 2 out or the income from foreign sources)) 10 PY. — Immediately exceeds Rs.15,00,000 During the | Preceding the relevant PY; | relevant PY, and | (ii) He has been in India for a | | period of 730 days or more | during 7 years | immediately preceding the | |__ relevant previous year. | If he satisfies one or none of the | If he satisfies one or none | above two conditions, he will be| of the above two Non-resident of India. conditions, he will be RNOR Question 11: Based on RS & total income Mr. Dhanush, an Indian citizen aged 35 years, worked in ABC Ltd. in Mumbai. He got a job offer from XYZ Inc., USA on 01.06.2022. He left India for the first time on 31.07.2022 and joined XYZ Ine. on 08.08.2022. During the P.Y. 2023-24, Mr. Dhanush visited India from 25.05.2023 to 22.09.2023. He has received the following income for the PY 2023-24: : Agricultural income from land situated ii 5B, Rent received/receivable from house property in Lucknow |-4,00,000 Profits from a profession in USA, which was set up in India, 6,00,000 | received there i a a ante lh aeeecoerl Determine the residential status of Mr. Dhanush and compute his total income for [the AY, 2023-24 wwwekstvamacademy.com | CAVIJAYSARDA | 8956651954 28 Residential Status