Narendra, aged 54 years, is resident and ordinarily resident in India. His income during previous year 2024-25 is ₹ 14,20,000 from a business in India and ₹ 3,55,000 from a business in a foreign country with whom India h

CS Professional · Advanced Tax Laws · PYQS · June 2025
Narendra, aged 54 years, is resident and ordinarily resident in India. His income during previous year 2024-25 is ₹ 14,20,000 from a business in India and ₹ 3,55,000 from a business in a foreign country with whom India has agreement for avoidance of double taxation (DTAA). According to the DTAA, income is taxable in the country in which it is earned and not in other country. However, in the other country, such income to be included for computation of tax rate. According to the tax laws of the foreign country, Narendra has paid ₹ 35,500 as tax in that country. During the previous year, Narendra has paid ₹ 35,000 as tuition fee for his daughter in India and ₹ 20,000 as life insurance premium for his dependent father. Narendra has also received an interest of ₹ 40,000 on Government securities. Calculate the Income tax liability of Narendra for the assessment year 2025-26, assuming assessee has not opted for Section 115BAC of the Income tax Act, 1961.

Answer & Explanation:

Computation of Total Income of Mr. Narendra for the Assessment Year 2025-26 Particulars Amount in Rs. Business income in India 14,20,000 Interest on Government Securities 40,000 Gross Total Income 14,60,000 Less: Deduction u/s 80C (Tuition fee) (35,000) Total Income 14,25,000 Add: Foreign income to be included for rate purpose 3,55,000 Total Income 17,80,000 Tax on above (including 4% cess) 3,60,360 Less: Relief u/s 90 [₹ 3,55,000 x 20.245%] (71,870) Tax Payable (Rounded off) 2,88,490 Note: Average rate of tax = ₹ 3,60,360 / ₹ 17,80,000 × 100 = 20.245% LIC paid for father is not deductible under section 80C.

Topics: Income Tax Act

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