Scope of Total Income

Incidence of Tax

1. DIRECT TAX UNIT –I TAXATION
Mr. K. GANESHA MOORTHY, ANJA COLLEGE, SIVAKASI 1
Mr. K. GANESHA MOORTHY
Assistant Professor,
Department of Commerce (Corporate Secretaryship),
Ayya Nadar Janaki Ammal College, Sivakasi.
Incidence of Tax –
Scope of Total Income

2. DIRECT TAX UNIT –I TAXATION
Mr. K. GANESHA MOORTHY, ANJA COLLEGE, SIVAKASI 2
SCOPEOFTOTALINCOME(Sec.5)
Totalincomeofanassesseecannotbe
computedunlessweknowhisresidentialstatusin
Indiaduringthepreviousyear.Accordingtothe
residentialstatus,theassesseecaneitherbe:
•ResidentinIndia;or
•Non-residentinIndia.
However,individualandHUFcannotbesimply
calledresidentinIndia.Ifindividualisaresidentin
Indiahewillbeeither:
•ResidentandOrdinarilyresidentinIndia;or
•ResidentbutnotOrdinarilyresidentinIndia.
DIRECT TAX UNIT –I TAXATION
Mr. K. GANESHA MOORTHY, ANJA COLLEGE, SIVAKASI 2

3. DIRECT TAX UNIT –I TAXATION
Mr. K. GANESHA MOORTHY, ANJA COLLEGE, SIVAKASI 3
Particulars of Income Whether Taxable
Resident and
Ordinarily
Resident
Not-
Ordinarily
Resident
Non-
Resident
1. Income received or deemed to be received in India,
irrespective of the income being accrued or earned in India
or outside India.
Yes Yes Yes
2. Income accrued or earned or is deemed to accrue or
earned in India,irrespective of the income being received
in India or outside India
Yes Yes Yes
3. Income received or accrued or earned outsideIndia from
business controlled from or profession setup in India,
irrespective of income remitted to India
Yes Yes No
4. Income received or accrued or earned outsideIndia from
business controlled or profession setup outside India
Yes No No
5. Income receivedor accrued or earned outside India from
any other source. Salary, House Property, capital gains or
income from other sources.
Yes No No

4. ProblemNo:1
ThefollowingaretheparticularsoftaxableincomeofHariNarayananAroraforthe
previousyearended31
st
March2020.
i.RoyaltyreceivedformGovt.ofIndiaRs.24,000
ii.IncomefrombusinessearnedfromAfganisthanRs.25,000ofwhichRs.15,000
werereceivedinIndia.BusinesscontrolledfromIndia.
iii.InterestreceivedfromAdithyaKumar,anon-residentagainstaloanprovided
tohimtorunabusinessinIndiaRs.5,000
iv.RoyaltyreceivedformoutsideIndiafromAlaguKumararesidentfortechnical
servicesprovidedtorunabusinessoutsideIndiaRs.20,000.
v.IncomefrombusinessinJaipurRs.40,000.Thebusinessiscontrolledfrom
France.Rs.20,000wereremittedtoFrance.
a)ResidentofIndia
b)NotordinarilyresidentofIndiaand
c)NonresidentofIndiainthepreviousyear.
DIRECT TAX UNIT –I TAXATION
Mr. K. GANESHA MOORTHY, ANJA COLLEGE, SIVAKASI 4

5. Computation of Total Income of Hari Narayanan Arora for the Previous year 2019 -20
Mr. K. GANESHA MOORTHY, ANJA COLLEGE, SIVAKASI 5
Particulars Resident and
Ordinarily Resident
Residentbut Not
Ordinarily Resident
Non–Resident
1. Royalty received form Govt. of India 24,000 24,000 24,000
2. Income from business earned from Afganisthan
Rs.25,000.
Rs.15,000 were received in India. Business controlled from
India.
25,000
-
25,000
-
-
15,000
3. Interest received from AdithyaKumar, a non-resident
against a loan provided to him to run a business in India
5,000 5,000 5,000
4. Royalty received form outside India from AlaguKumar a
resident for technical services provided to run a business
outside India
20,000 - -
5. Income from business in Jaipur 40,000 40,000 40,000
Total Income of Hari Narayanan Arora 1,14,000 94,000 84,000

6. ProblemNo:2
Rhadthefollowingincomeduringthepreviousyear31.03.2020
i.SalaryreceivedinIndiaforthreemonthsRs.9,000
ii.IncomefromHousePropertyinIndiaRs.13,470
iii.InterestonsavingsbankaccountinSBIRs.1,000
iv.AmountbroughtintoIndiaoutofthepastuntaxedprofitsearnedinGermany
Rs.20,000
v.IncomefromAgricultureinIndonesiabeinginvestedinIndiaRs.12,350
vi.IncomefrombusinessinBangladesh,beingcontrolledfromIndiaRs.10,150
vii.DividendsreceivedinBelgiumformFrenchcompaniesRs.23,000
Yiarerequiredtocomputehistotalincomefortheassessmentyear2020-
21,ifheis
a)Resident;b)Notordinarilyresidentand;c)Nonresident
DIRECT TAX UNIT –I TAXATION
Mr. K. GANESHA MOORTHY, ANJA COLLEGE, SIVAKASI 6

7. Computation of Total Income of ‘R’ for the Assessment year 2020 -21
Mr. K. GANESHA MOORTHY, ANJA COLLEGE, SIVAKASI 7
Particulars Resident and
Ordinarily Resident
Residentbut Not
Ordinarily Resident
Non–Resident
1. Salary received in India for three months 9,000 9,000 9,000
2. Income from House Property in India 13,470 13,470 13,470
3. Interest on savings bank account in SBI 1,000 1,000 1,000
4. Amount brought into India out of the past untaxed profits
earned in Germany
- - -
5. Income from Agriculture in Indonesia being invested in
India
12,350 - -
6. Income from business in Bangladesh, being controlled
from India
10,150 10,150 -
7. Dividends received in Belgium form French companies 23,000 - -
Total Income of Hari Narayanan Arora 68,970 33,620 23,470

8. Thank You
DIRECT TAX UNIT –I TAXATION
Mr. K. GANESHA MOORTHY, ANJA COLLEGE, SIVAKASI 8