DIRECT TAXES

CIA I

BY

NULU SRINIVAS (1923027)

PADMANABHUNI MOHIT SURYA (1923029)

SNEHA P (1923068)

SEZOL AGRWAL (1923067)

ARYA ATYASHA MOHAPATRA (1923076)

CHARACTER SKETCH

Dr. Robena Malini is a 41-year-old Neurologist. She is well-known, renowned and one of the
best Neurologists of the country. Under her supervision, many critical and crucial cases were
examined and were successfully treated. She has been a gift to bio-science. She owns a
private research lab based in Mumbai. Discovering and developing new heights for better
treatment and care and She has been to many countries including the United States of
America, Australia and Nigeria attending many conferences regarding health services.
Despite being a divorced woman and a single parent, she was tremendously dedicated to her
profession. She was married for about 20 years later divorced in February 2019. Dr Robena’s
ex-husband, being a navy officer, couldn’t keep the children with him. Thus, both of the
children (Saurav & Ananya) who are 13 & 16 years old had to stay with their mother &
maternal grandparents. After a year of divorce, on 12th August 2020, Robena Malini decided
to work abroad in Australia as she received a high paid job offer in one of the reputed
hospitals in Australia named “The Royal Melbourne Hospital City Campus Melbourne” with
a salary of 10 lakhs per month. But to visit her parents and her children she used to travel
often. She had return back on 4th February 2021 in order to spend some time with her
children and parents.

Dr Robena Malini stay in India over previous years are as follow:

2010- 78 days

2011- 65 days

2012- 102 days

2013- 12 days

2014- 90 days

2015- 98 days

2016- 80 days

2017- 86 days

2018- 18 days
2019- 29 days

Identify the residential status of Dr Robena Malini for the assessment year 2021- 2022.

Solution- Calculation of Dr Robena Malini stay in India for the previous year- 2020-2021-

- From 1st April 2020- 12nd August 2020-

April- 30 days
May- 31 days
June- 30 days
July- 31 days
August- 12 days

Total- 134 days

Since he had to return back on 4th February 2021-

- From 4st February 2021- 31st March 2021-

February- 24 days
March- 31 days

Total- 55 days.

So, her total stay in India for the previous year 2020-2021 = 189 days

Since her stay in India is more than 182 days, this satisfies the first basic condition and hence
can be regarded as an Indian Resident.

Now as per the given information, she is not able to satisfy the first additional condition as he
has not been an Indian resident for the 2 years out of the past 10 years preceding the relevant
previous year by satisfying an of the basic condition under section 6(1).

Also, His total stay in India for the past 7 years immediately preceding the previous year has
been-78+65+102+12+90+98+80+86+18+29=658 days, i.e., less than 730 days, hence she
fails to satisfy the second additional condition too.
So, since she satisfies 1st Basic Condition and none of the Additional Conditions, she can be
regarded as a Not Ordinary Resident.

Incidence of Tax for Dr Robena Malini

Dr Robena Malini has been an ethical person and used to pay her taxes on time. However,
due to clerical error by her accountant, the following Transactions were not accounted for.
Identify whether the following transactions would have been held taxable or not taxable.

1- Dr Robena Malini transferred her monthly salary of June 2016 of Rs. 9,25,000 to her State
Bank of India account in September 2019.

Ans- Not Taxable as income earned and received outside of India in the years preceding the
previous years and remitted to India later is not taxable to not ordinary residents.

2- Dr Robena Malini had received interest of Rs. 18,000 on her Australian bank account in
June 2015.

Ans- Non-Taxable, Income earned and received outside India is non-taxable for not ordinary
residents.

3- Dr Robena Malini received a gift of Rs. 98,000 from her friend living in Australia.

Ans- Taxable, as gifts over the amount of Rs. 50,000 from non-relatives is taxable for the
whole amount

4- On her visit to India in 2016, she received a salary of Rs. 4,00,000 for the month of July in
her Australian Bank Account.

Ans- Non- Taxable, as the income earned and received outside India for a service she
rendered outside India is not taxable for a non-ordinary resident.

5- Dr Robena Malini sent 25,000- part of her salary to her parents for their everyday
expenses.

Ans- Non-Taxable, as remittances as not a part of taxable income.

6- She worked on a project with Apollo, Bengaluru and they transferred her Salary of Rs.
9,00,000 to her Australian Bank Account.

Ans- Taxable, as the income is generated from a business based in/set up in India. Such
income is taxable for a not ordinary Resident

7- She received a bonus of 80,000 Australian dollars in 2014.

Ans- Not Taxable, as the income is generated and received outside India and is not taxable
for a Non-ordinary resident.

8- She received a dividend of Rs. 1250 from his equity shares in ITC.

Ans- Taxable, as dividend income is earned in India, it is taxable for a not-ordinary resident.

9- While at home taking care of his parents and children, Dr Robena Malini started to supply
homemade pickles to the local retail outlets and grocery shops and earned Rs. 90,000.

Ans- Taxable, as the income earned and received in India is taxable for a not ordinary
resident.

10- Received Interest on his deposits in the State Bank Of India account amounting to Rs.
8,500

Ans- Taxable, as income is earned in India from his savings account in India. It is taxable for
a not ordinary resident.

11- She had invested her saving in a Mango agricultural farm in Kolar, Karnataka and she
received Rs. 98,000 as her share from the sale of crops.

Ans- Not Taxable, as agricultural income in India is exempted to be included as a taxable

income.

12- She received the rent of Rs 60,000 for a flat she owns in Bengaluru on 14th October 2013
in her Australian Bank Account.

Ans- Taxable, as the income earned in India is taxable to a not-ordinary resident.

13- She had asked her Boss to make a special provision and transfer his salary of Rs 4,70,000
for the month of August 2017 to her bank account in the Mumbai branch of State of India.

Ans- Taxable, as Income generated in Nigeria is received in India and such income is taxable
for a Non-ordinary Resident.

14- She had opened Open a bank account in the Indian Post Office Savings Account and
received interest of Rs.9400

Ans- Non-Taxable, as Interest from the post office savings account, is exempted from being
considered as taxable income

Ans- Non-Taxable, as remittances as not a part of taxable income.

15- Dr Robena Malini had received his salary of Rs 7,85,000 for his job in Singapore for the
month of November 2015-

Ans- Non-Taxable, as income earned and received outside India is not a taxable income for a
not ordinary resident.