Answer to Question #260026 in Accounting for Ritu

Question

From the following information, furnished by Ms. Anucampa pertaining to the financial

year ended as on 31st march 2021,

• Short term capital gains on sale of shares in an Indian company received in Japan - 10000
• Dividend from a Chinese company received in China - 3000
• Agricultural income from land in Madhya Pradesh - 5000
• Dividend from PJV Ltd an Indian Company- 4745
• Gross Rent from a residential property located at Singapore, later on remitted to the saving account in Bank of Maharashtra, Mumbai using the approved channels - 600000

 

Compute the total income and give reason for considering/ not considering these specific

items for the relevant assessment year 2021-22, if she is

a. Resident and ordinary resident

b. Non resident

Answer 1

Solution:

a.). Resident and ordinary resident: An individual qualifying as ‘ROR’ is taxable on his worldwide income in India and is required to report all foreign assets in the India Income tax return (ITR). Also, the income earned from such foreign assets during the relevant year along with the nature of income and head of income under which such income has been offered to tax in the India ITR needs to be reported in relation to each foreign asset.

Taxable income:

Short term capital gains                                               = 10,000

Dividend from a Chinese Company received in China = 3,000

Agricultural income from land in Madhya Pradesh       = 5,000

Dividend from PJV Ltd an Indian Company =                4,745

Gross rent from residential property located in

Singapore =                                                                  600,000

Taxable income =                                                         622,745

 

 

b.). Resident and ordinary resident: An individual qualifying as NR or NOR is taxable on the following incomes:

·        Income accruing or arising in India;

·        Income deemed to accrue or arise in India;

·        Income received or deemed to be received in India.

 

Taxable income:

Short term capital gains                                                = 10,000

Agricultural income from land in Madhya Pradesh       = 5,000

Dividend from PJV Ltd an Indian Company =                 4,745

Taxable income =                                                            19,745