Ms. Aanchal, an Indian Citizen, is a government employee working for the Indian Government. She submits the following information for the previous…

Computation of gross total Income of Ms. Aanchal for the A.Y. 2025-26 under normal provisions of the Act Particulars Resident but not ordinarily Resident (₹) Non-Resident (₹) 1 Salary income received in Malaysia for services rendered there (Note 1) 2,00,000 2,00,000 Less: Standard deduction under section 16(ia) 50,000 50,000 1,50,000 1,50,000 2 Profits from business carried on in Chennai [Since it accrues or arises in India] 80,000 80,000 3 Loss from business carried on in Vadodara [Since it accrues or arises in India] (20,000) (20,000) 4 Loss from business carried on in USA (business is controlled from Rishikesh) (46,000) Nil 5 Unabsorbed depreciation of business in USA (16,000) Nil 6 Profit from business in Bali (business is controlled from Delhi and only 40% is received in India) 70,000 28,000 7 Rent from property situated in USA and received in USA Nil Nil Gross Total Income 2,18,000 2,38,000 Note 1 - Income from "Salaries" payable by the Government to a citizen of India for services rendered outside India is deemed to accrue or arise in India as per section 9(1)(iii). Standard deduction under section 16(ia) is allowable, irrespective of residential status. Note 2 – In case of a non-resident, only income received or deemed to be received in India and income accruing or arising or deemed to accrue or arise in India is chargeable to tax. However, in case of a resident but not ordinarily resident, income derived from a business controlled in or profession set up in India is also taxable even though it accrues or arises outside India. Therefore, income referred to in S. No. 1, 2 and 3 are taxable in the hands of Ms. Aanchal in both cases if she is a resident but not ordinarily resident or if she is a non-resident. Loss of business carried on in USA, unabsorbed depreciation of business in USA and Profit from business in Bali would be fully chargeable to tax in India if she is a resident but not ordinarily resident as it derived from a business controlled in India. However, Profit from business in Bali is taxable in case of non-resident to the extent of such profits received in India.