Nitin, a resident of India has the following incomes during the previous year 2014-15: Income from textiles business in India ₹ 7,30,000 Income from garment business in Canada (with which India does not have double tax a

Computation of tax liability of Mr. Nitin for the Previous year 2014-15 Particulars ₹ ₹ Indian Income 7,30,000 Foreign Income 2,40,000 Gross Total Income 9,70,000 Less: Deduction U/S 80C (Purchase of NSC) (70,000) Total Income 9,00,000 Tax on first ₹2,50,000 Nil Tax on next ₹2,50,000 @ 10% 25,000 Tax on next ₹4,00,000 @ 20% 80,000 Tax 1,05,000 Add: Education Cess @ 2% 2,100 SHEC @ 1% 1,050 1,08,150 Less: Double taxation relief under section 91: 1) Tax on doubly taxed income = 1,08,150/9,00,000 X 2,40,000 28,840 2) Tax levied in Canada 54,000 (Whichever is less) (28,840) Tax payable 79,310 *Doubly taxed income is the foreign income earned in Canada where there is no double tax avoidance agreement