Mr. Dhruv, an individual resident in India aged 62 years, furnished you the following particulars of income earned in India, Country "A" and Country…

Computation of total income and net tax liability of Mr. Dhruv for A.Y. 2025-26 as per the optional tax regime Particulars ₹ Income from House Property Let out property in Country B Rent from house property in Country B⁸ 2,10,000 Less: Municipal taxes paid in Country B 10,000 2,00,000 Less: Deduction under section 24(a) @30% 60,000 1,40,000 Profits and Gains of Business or Profession Income from profession carried on in India 8,50,000 Royalty income from a literary book in country A after reducing expenses [₹ 5,00,000 - 55,000] 4,45,000 12,95,000 Less: Set off of business loss in Country B 75,000 12,20,000 Income from Other Sources Agricultural income in Country A 60,000 Dividend from a company incorporated in Country B 1,60,000 Interest on fixed deposits and saving accounts with banks in India 55,000 2,75,000 Gross Total Income 16,35,000 Less: Deduction under Chapter VI-A Under section 80QQB – Royalty income of a resident from a literary book 3,00,000 Under section 80TTB – Interest on fixed deposits and saving account, subject to a maximum of 50,000 50,000 3,50,000 Total Income 12,85,000 Tax liability on 12,85,000 Tax on total income [30% of 2,85,000 +1,10,000] 1,95,500 Add: Health and Education cess@4% 7,820 2,03,320 Less: Deduction u/s 91 (See Working Note below) 56,095 Net tax liability 1,47,225 Net tax liability (Rounded off) 1,47,230 Working Note: Calculation of deduction under section 91 Indian Average Rate of tax = 2,03,320/ 12,85,000 x 100 = 15.82 % Average Rate of tax in Country A is 10% Doubly taxed income pertaining to Country A = Agricultural income of 60,000 + Royalty income of 4,45,000 after deducting expenses – Deduction under section 80QQB of 3,00,000 = 2,05,000 Deduction u/s 91 = (Lower of average rate of tax in Country A and Indian rate of tax) x Doubly taxed income = [10% x 2,05,000] = 20,500 Average Rate of tax in Country B is 20% Doubly taxed income pertaining to Country B = Income from house property of 1,40,000 – Business loss in Country B of 75,000 + Dividend of1,60,000 = 2,25,000. Deduction u/s 91 = (Lower of average rate of tax in Country B and Indian rate of tax) x Doubly taxed income = [15.82% x 2,25,000] = 35,595 Total rebate under section 91 = 56,095