Narmada is an individual resident retired from the service of Prasar Bharati aged 61 years, is a well known dramatist deriving income of ₹ 2,20,000 from theatrical works played abroad. Tax of ₹ 11,000 was deducted in the

Computation of Total Income and Tax liability of Narmada for the AY 2021-22 Particulars Amount (₹) Amount (₹) Indian Income 5,60,000 Foreign Income 2,20,000 Gross Total Income 7,80,000 Less: Deductions Deduction u/s. 80C: Deposit in PPF 1,30,000 Deduction U/S 80CCC: Contribution to approved Pension Fund of LIC 45,000 Total of 80C, 80CCC & 80CCD(1) 1,75,000 Deduction u/s 80CCE: The aggregate deduction u/s 80C, 80CCC and 80CCD(1) has to be restricted to ₹ 1,50,000 (1,50,000) Deduction u/s. 80D: Contribution to Central Government Health Scheme (₹ 27,000) (27,000) Medical insurance premium of ₹ 28,000 paid for mother aged 85 years. Since the mother is a non-resident in India, she will not be entitled for the higher deduction of ₹ 50,000 eligible for a senior citizen, who is resident in India. Hence, the deduction will be restricted to a maximum of ₹ 25,000. (25,000) (52,000) Total Income 5,78,000 Tax on Total Income: Income tax (Note 2) 25,600 Add: Health and Education Cess @ 4% 1,024 Total Tax 26,624 Average rate of tax in India (i.e. ₹ 26,624 / ₹ 5,78,000 x 100) 4.606% Average rate of tax in foreign country (i.e. ₹ 11,000/₹ 2,20,000 x 100) 5% Deduction u/s 91 on ₹ 2,20,000 @ 4.606% (lower of average Indian tax rate or average foreign tax rate) (10,133) Tax payable in India (₹ 26,624 - ₹ 10,133) 16,491 Tax Payable (Rounding off) 16,490 Note: Section 80 D allows a higher deduction of up to ₹ 50,000 in respect of the medical premium paid to insure the health of a senior citizen. Therefore, Narmada will be allowed deduction of ₹ 27,000 u/s 80D, since she is a resident Indian of the age of 61 years. Narmada is eligible for the higher basic exemption limit of ₹ 3,00,000, since she is 61 years old. Tax on total income of ₹ 578000 is (500000-300000) x 5% + (78000 x 20%) = ₹ 25600. An assessee shall be allowed deduction u/s 91, provided all the following conditions are fulfilled: The assessee is a resident in India during the relevant previous year. The income accrues or arises to him outside Indian during that previous year. Such income is not deemed to accrue or arise in India during the previous year. The income in question has been subjected to income tax in the foreign country in the hands of the assessee and the assessee has paid tax on such income in the foreign country. There is no agreement u/s.90 for the relief or avoidance of double taxation between India and the other country where the income has accrued or arisen.