INCOME TAX

UNIT II
1. How many types of residents?
Ans. On the basis of residence the assessees are divided into
three categories, viz:
a) Persons who are resident in India, popularly known as ordinarily resident
(b) Persons who are not ordinarily resident in India.
(c) Persons who are non-resident.
2. Write the different kinds of Assessees
Ans. The different kinds of assessee are individuals, Hindu undivided families, firms,
an association of persons, companies, local authorities and artificial juridical persons.
3. What are the basic conditions for determining residential status of an individual?
Ans. The basic conditions for determining residential status of an individual are as
follows:
(a) He has been in India in the previous year for a period or periods amounting in all
to182 days or more.
(b) He has been in India for at least 365 days within the four years preceding the
previous year and has been in India for at least 60 days (182 days in some special
circumstances) during the previous years
4. Describe the additional conditions of ordinary resident in India.
Ans. The additional conditions of ordinary resident in India are as follows:
(a) He has been resident in India in at least 2 out of 10 previous years immediately
preceding the relevant previous year and,
(b) He has been in India for at least 730 days or more during 7 previous years
preceding the relevant previous year.
5. What is non-resident?
Ans. An individual who does not fulfil any one of the basic conditions, he is treated as
non-resident, though he may fulfil both or any one of the additional conditions.

6. Give any four incomes not to be included in total income of any persons.
Ans. Four incomes not to be included in total income of any persons are as follows:
a. Agricultural Income Sec. 10 (1)] : Agricultural income is totally exempt,
provided it falls within the definition of agricultural income given under Sec.2
(1A).
b. Sum received by a member from HUF :- Any sum received by an individual as a
member of Hindu undivided family, shall be exempt in the hands of the
members.
c. Share of Profit of a Partner from a firm : In case of a person being a partner
of a firm (which includes limited liability partnership) his share in the total
income of the firm shall be exempt from tax.
d. Interest on Non-resident (External) Account: In the case of an individual
assessee any income by way of interest on nkaney standing to his credit in a
non-resident (external).
7. Residential Status of an Individual
(a) Ordinarily Resident:
• Satisfies anyone of the two basic conditions.
• Satisfies one or more of the two additional conditions. w
(b) Not ordinarily Resident:
• Satisfies anyone of the two basic conditions.
• Satisfies one or none of the two additional conditions.]
(c) Non-Resident:
• Does not satisfy any of the two basic conditions.
8. Following are the particulars of income of Ms. Siddhi Agarwal for the previous
year 2019-20:
1. Profit from business in England received in India. 12,000
2. Income from house property in Pakistan received in India. 2,000
3. Income from house property in Bangladesh deposited in a bank there. 4,000
4. Profit from business in Indonesia deposited in a bank there, this business is
controlled from India. 5,000
5. Income accrued in Bhopal but received in Singapore. 6,000
6. Profit from business in India 15,000
7. Past untaxed foreign income brought in India during the previous year 20,000
From the above particular, compute the total income of Ms. Siddhi Agarwal for the
assessment year 2014-15, if he is (a) Resident, (b) not ordinarily resident and (c) non-
resident
9. The following are the taxable income of Shri Mahavir P. Agarwal for the previous
year 2019-20:
1. Income from salary received in India for services rendered in London 8,000.
2. Income from house property in Iran received in India 1,000.
3. Dividend from an Indian Company 2,000.
4. Income earned and received in Bangladesh from bank deposits there?6,000.
5 Profits of business established in Pakistan deposited in a bank there, this business is
controlled from India (out of 20,000 a sum10,000 is remitted to India) 20,000.
6. Income accrued in Bhopal but received in Singapore 6,000
7. Income from agriculture in England, it is all spent on the education of children in
London 5,000.
Compute the gross total income for the assessment year 2019-20 if he is: (a)resident,
(b) not ordinarily resident, and (c) non-resident.