Manan who remained in Country X returned to India permanently in 1st February 2024. He has a house property in Country X from which he earned and…

Manan is a resident but not ordinarily resident for the P.Y.2024-25. He is resident since he has stayed in India for the whole year and hence, he satisfies the condition of stay in India for a period of 182 days or more during the P.Y.2024-25. However, he is not ordinarily resident, since he has stayed in India only for a period of 60 days prior to P.Y.2024-25. Hence, he satisfies the condition of stay in India for a period of 729 days or less in the seven previous years immediately preceding P.Y.2024-25 stipulated under section 6(6) for being treated as a "not ordinarily resident" in India in the P.Y.2024-25. Also, he has been non-resident in all the ten previous years immediately preceding P.Y.2024-25. Hence, he also satisfies the condition in section 6(6) of being non-resident in 9 out of 10 previous years immediately preceding P.Y.2024-25. In this case, he has satisfied both the conditions even though satisfaction of any one condition would suffice for being treated as “not-ordinarily resident”. In case of a resident but not ordinarily resident, income which is received or is deemed to be received in India or income accrues or arises or is deemed to accrues or arises in India would be taxable in India. However, income which accrues or arises outside India would be included in total income, only if it is derived from a business controlled from or profession set up in India. Accordingly, total income and tax liability of Mr. Manan, being resident but not ordinarily resident would be computed in the following manner: Particulars ₹ Income from property earned and received in Country X would not be taxable in his hands in India. - Income from business [deemed to accrue or arise in India and hence taxable in India] 12,50,000 Capital Gains Sale consideration 80,00,000 Less: Cost of Acquisition [since land is transferred on or after 23.7.2024, indexation benefit will be considered while determining the tax liability u/s 112] 30,00,000 Long-term capital gain 50,00,000 Total Income 62,50,000 Computation of Tax Liability Tax on long-term capital gains 6,25,000 Lower of - Tax @12.5% without indexation benefit [₹ 50,00,000 x 12.5%] 6,25,000 - Tax @20% on LTCG of 47,09,970 with indexation [80,00,000 – 32,90,030 (30lakhs x 363/331)] 9,41,994 Tax on total income of 12.5 lakh other than LTCG u/s 115BAC Upto 3,00,000 Nil 3,00,001 - 7,00,000 [i.e.,4,00,000 x 5%] 20,000 7,00,001 - 10,00,000 [i.e.,3,00,000 x 10%] 30,000 10,00,001 - 12,00,000 [i.e.,2,00,000 x 15%] 30,000 12,00,001 - 12,50,000 [i.e.,50,000 x 20%] 10,000 90,000 7,15,000 Add: Surcharge @10% since total income exceeds 50lakhs 71,500 7,86,500 Add: HEC@4% 31,460 Tax liability 8,17,960