Mr. Joseph, a non-resident and a person of Indian origin (aged 49 years), furnished following information for the previous year ended 31st March,…

CA Final · Direct Tax Laws and International Taxation · PYQS · May 2025
Mr. Joseph, a non-resident and a person of Indian origin (aged 49 years), furnished following information for the previous year ended 31st March, 2025: Particulars Amount in ₹ Sale proceeds of listed equity shares in A Limited, an Indian company on 31.05.2024 6,00,000 Cost of acquisition (in convertible foreign exchange) of equity shares of A Limited acquired on 01.06.2020 1,10,000 Expenditure wholly and exclusively incurred in connection with transfer of listed equity shares of A Limited 50,000 Interest on Government Securities (net of TDS) (Acquired in convertible foreign exchange) 81,000 Interest on deposits with pubic limited companies (Gross) (Acquired in convertible foreign exchange) 3,25,000 Expenditure incurred in earning such income - 7,500 Interest on deposits held with Private limited companies (Gross) (These deposits were made when Mr. Joseph was resident in India out of his taxable income in India during F.Y. 2014-15) 5,55,000 Fresh Investment in shares of Indian public limited companies on 11.11.2024 2,20,000 You are required to compute the total income of Mr. Joseph and Gross amount of tax payable for assessment year 2025-26 in accordance with special provisions prescribed under chapter XII-A applicable to non-residents and other provisions of the Act. Mr. Joseph has opted to shift out of default tax regime provided under section 115BAC(1A). He has no other income. The applicable tax was deducted at source from interest income. Ignore interest calculations u/s 234A, 234B and 234C and the effect of first proviso to section 48. (Cost Inflation Index F.Y. 2020-21: 301, F.Y. 2024-25: 363)

Suggested Answer and Working Notes:

Computation of total income and gross tax payable by Mr. Joseph for A.Y. 2025-26 as per Chapter XII-A and other provisions of the Income-tax Act, 1961 Particulars Amount (₹) Amount (₹) Capital Gains Long term capital gain on sale of listed equity shares of A Ltd. Full value of consideration 6,00,000 Less: Expenditure on Transfer 50,000 Net consideration 5,50,000 Less: Cost of Acquisition [Indexation benefit is not available] 1,10,000 4,40,000 Less: Exemption under section 115F [₹ 4,40,000 x 2,20,000/5,50,000] 1,76,000 2,64,000 Income from Other Sources Interest on Government Securities [₹ 81,000/79.20% x 100%] 1,02,273 Interest on deposits with public limited companies 3,25,000 Less: Expenses incurred [Not allowed under section 115D] NIL 3,25,000 Interest on deposits with private limited companies 5,55,000 9,82,273 Gross total income/ Total income 12,46,273 Total income (Rounded off) 12,46,270 Computation of gross tax payable Tax on LTCG of 2,64,000 @10% 26,400 Tax on investment income of 4,27,273 @20% [₹ 1,02,273 +3,25,000] 85,455 Tax on other income of 5,55,000 at slab rate 23,500 1,35,355 Add: Health and education cess@4% 5,414 Gross tax payable 1,40,769 Gross tax payable (Rounded off) 1,40,770

Topics: Non-Resident Taxation

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