Mr. Ashu, an individual resident in India, aged 25 years furnished the following information for the year ended 31.3.2025: He earned royalty income…

Computation of total income of Mr. Ashu for A.Y.2025-26 Particulars Particulars ₹ Income from House Property Rental income from property in Country Y 1 3,60,000 Less: Municipal taxes paid 12,000 3,48,000 Less: Deduction u/s 24(a) @30% 1,04,400 2,43,600 Profits and gains from business or profession Royalty from Country Y for writing article in journals [only the amount which is received during the previous year is includible, since he maintains cash system of accounting] 13,60,000 Income from Other Sources Dividend from N Ltd. an Indian company 5,50,000 Gross Total Income 21,53,600 Less: Deduction under Chapter VI-A U/s 80E - deduction in respect of interest on educational loan for his son 36,000 U/s 80QQB No deduction is allowable since royalty income is for writing articles in journals and newspapers and not for writing books - 36,000 Total Income 21,17,600 1 In the absence of any information relating to fair rent, municipal value and standard rent, rental income assumed to be gross annual value. 2 Royalty can also be shown under the head “Income from other sources” instead of “Profits and gains from business or profession. Computation of net tax liability of Mr. Ashu for A.Y.2025-26 Particulars ₹ Tax on total income [30% of 11,17,600 +1,12,500] 4,47,780 Add: Health and education cess @4% 17,911 4,65,691 Less: Relief under section 91 - Average rate of tax in India [[i.e., 4,65,691/21,17,600 x 100] 21.991% Average rate of tax in Country Y 15% Doubly Taxed income [Rental income of 2,43,600 + royalty income of 13,60,000] 16,03,600 Deduction under section 91 on 16,03,600 @15%, being lower average Indian tax rate and foreign tax rate. 2,40,540 Net tax liability 2,25,151 Net tax liability (rounded off) 2,25,150