Mr. Karan, an individual resident in India aged 52 years, furnishes you the following particulars of income earned in India, Country "X" and Country…

Computation of total income of Mr. Karan for A.Y.2026-27 under normal provisions of the Act Particulars ₹ ₹ Income from House Property [House situated in country Y] Gross Annual Value 1 2,40,000 Less: Municipal taxes 10,000 Net Annual Value 2,30,000 Less: Deduction under section 24 - 30% of NAV 69,000 1,61,000 Profits and Gains of Business or Profession Income from profession carried on in India 7,50,000 Royalty income from a literary book from Country X (after deducting expenses of ₹ 50,000) 5,50,000 13,00,000 Less: Business loss in country Y set-off 2 65,000 12,35,000 Income from Other Sources Agricultural income in country X 50,000 Dividend from a company in country Y 1,50,000 2,00,000 Gross Total Income 15,96,000 Less: Deduction under Chapter VIA Under section 80QQB – Royalty income of a resident from literary work 3 3,00,000 Total Income 12,96,000 Note - Since adjusted total income (i.e., ₹ 15,96,000) does not exceed ₹ 20 lakhs, AMT would not be attracted in this case. 1 Rental Income has been taken as GAV in the absence of other information relating to fair rent, municipal value etc. 2 As per section 70(1), inter-source set-off of income is permitted. 3 It is assumed that the royalty earned outside India has been brought into India in convertible foreign exchange within a period of six months from the end of the previous year. Computation of net tax liability of Mr. Karan for A.Y.2026-27 Particulars ₹ Tax on total income [30% of ₹ 2,96,000 + ₹ 1,12,500] 2,01,300 Add: Health and Education cess @ 4% 8,052 2,09,352 Less: Deduction under section 91 (See Working Note below) 69,739 Net tax liability 1,39,613 Net tax liability (rounded off) 1,39,610 Working Note: Calculation of Rebate under section 91 ₹ ₹ Average rate of tax in India [i.e., ₹2,09,352 / ₹ 12,96,000 x 100] 16.154% Average rate of tax in country X 10% Doubly taxed income pertaining to country X Agricultural Income 50,000 Royalty Income [₹ 6,00,000 – ₹ 50,000 (Expenses) – ₹ 3,00,000 (deduction under section 80QQB)] 4 2,50,000 3,00,000 Deduction under section 91 on ₹ 3,00,000 @10% [being the lower of average Indian tax rate (16.154%) and foreign tax rate (10%)] 30,000 Average rate of tax in country Y 20% Doubly taxed income pertaining to country Y Income from house property 1,61,000 Dividend 1,50,000 3,11,000 Less: Business loss set-off 65,000 2,46,000 Deduction u/s 91 on ₹ 2,46,000 @16.154% [being the lower of average Indian tax rate (16.154%) and foreign tax rate (20%)] 39,739 Total rebate under section 91 (Country X + Country Y) 69,739 4 Doubly taxed income includes only that part of income which is included in the assessee's total income. The amount deducted under Chapter VIA is not doubly taxed and hence, no relief is allowable in respect of such amount – CIT v. Dr. R.N. Jhanji (1990) 185 ITR 586 (Raj.).