Mrs. Reshma, 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 Mrs. Reshma for the A.Y. 2026-27 Particulars of income 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 Profit from business carried on in Orissa [Since it accrues or arises in India] 80,000 80,000 3 Profit from business carried on in Paris (income is earned and received in Sydney and business is controlled from Paris) [Since it accrues or arises outside India] Nil Nil 4 Loss from business carried on in Canada (though profits are not received in India, business is controlled from Dehradun) (46,000) Nil 5 Unabsorbed depreciation of business in Canada (16,000) Nil 6 Profit from Indonesia business (business is controlled from Delhi) 70,000 28,000 Gross Total Income 2,38,000 2,58,000 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 and 2 are taxable in the hands of Mrs. Reshma 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 Canada, unabsorbed depreciation of business in Canada and Profit from Indonesia business 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 Indonesia business is taxable in case of non-resident to the extent of such profits received in India.