Mr. Deewan, a resident individual in India aged 46 years, received the following incomes during the FY 25-26: Computed Income from house property in…

18. Computation of total income of Mr. Deewan for A.Y.2026-27 under normal provisions of the Income-tax Act Income from House Property Income from House property in Delhi (Computed) 6,20,000 Less: Loss from House Property in Country R (Computed) 1,60,000 4,60,000 Profits and gains of business or profession Royalty from Country X (Taxable in the source state only, hence not taxable in India) - Income from other Sources Interest on securities from Country Y (YSD 12,000 x 80, being the TTBR as on 30.11.2025, being the last day of the month immediately preceding the month in which income is due) 9,60,000 Agricultural income in Country R 2,40,000 12,00,000 Gross Total Income 16,60,000 Computation of Net tax liability Tax on total income (30% of 6,60,000 plus ₹ 1,12,500) 3,10,500 Add: Health and Education Cess @4% 12,420 Tax liability 3,22,920 Less: Deduction u/s 91 with respect to income from Country R with which India has no DTAA (See Working Note 1 Below) 15,560 Working Note 1: Deduction with respect to Country R with which India has no DTAA Indian Average Rate of tax = ₹ 3,22,920/ 16,60,000 x 100 19.45% Average rate of tax in Country R 20% Doubly taxed income pertaining to Country R Agricultural income 2,40,000 Less: Loss from house property 1,60,000 80,000 Deduction u/s 91 on ₹ 80,000 @19.45%, being lower average rate of tax in India (19.45%) and tax rate in Country R (20%) 15,560 Working Note 2: Deduction with respect to Country Y with which India has DTAA shall be lower of Tax paid in India in respect of interest on securities [9,60,000 x 19.45%] 1,86,720 Tax paid in Country Y in respect of royalty [YSD 1,200 x 84, being the TTBR on 31.1.2026] 100,800 Foreign tax credit = Lower of tax paid in India and Country Y 1,00,800