Name: _____________________ Programme ____________ Roll No.

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AHMEDABAD UNIVERSITY
AMRUT MODY SCHOOL OF MANAGEMENT
2020 MONSOON SEMESTER
FAC121 DIRECT TAXES
EVALUATION TYPE: ASSIGNMENT – 1
TOPIC- RESIDENTIAL STATUS
Total Marks: 25
Note: Each question carries equal marks Course Owner: Poonam Dugar
Course Coordinator: Mona Vora

Instructions:
1. You are required to read and analyse the given situations and apply the provisions of the
Income Tax Act, as studied under the concept of Residential Status to answer the issues
mentioned in each of them
2. The assignment should be hand written in a separate document.
3. Failure to submit on the specified due date will attract penalty in the form of loss of marks

Case Studies

1. Examine whether the following transactions are taxable in India in the hands of the recipients
by validating your answer through the provisions of the Income Tax Act:
a. Salary paid by Central Government to Mr. John , a citizen of India ₹7,00,000 for the
services rendered outside India.
b. Interest on money borrowed from outside India ₹5,00,000 by Mr Roy, a non-resident,
for the purpose of business within India.
c. Royalty paid by a resident of India to a non-resident Mr Shyam in respect of a business
carried on by Shyam outside India.
d. Legal charges of ₹ 5,00,000 paid to a lawyer of United Kingdom who visited India to
represent a case at the Delhi High Court.

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2. Mrs Sita and Mrs Gita are sisters and they earned the following income during the financial
year 2019-20. Mrs Sita is settled in Malaysia since 1996 and visits India for a month every
year. Mrs Gita is settled in Indore since her marriage in 1994.
Identify the residential status and compute the total income taxable in India of Mrs Sita and Mrs
Gita for the assessment year 2020-21:
No Particulars Mrs Sita (₹) Mrs Gita (₹)
1. David,
3. Mr. Income from profession
a Government in Malaysia
employee serving received 15000
in the Ministry of - left India for the
External Affairs,
there
2. Profit from business in Delhi , but managed from 40000 -
Malaysia
3. Rent from property in Malaysia deposited in a 120000 -
bank at Malaysia, later on remitted to India
through approved banking channels.
4. Dividend from PQR Ltd , an Indian company 5000 9000
5. Dividend from a Malaysian company received in 15000 8000
Malaysia
7. Past foreign untaxed income brought to India 5000 -
8. Fees for technical services rendered in India, 25000 -
received in Malaysia
9. Income from a business in Pune (Mrs. Sita 12000 15000
receives 50% of the income in India )
10. Interest on debentures in an Indian company (Mrs. 18500 14000
Sita received the same in Malaysia )
11. Short-term capital gain on sale of shares of an 15000 25500
Indian company
12. Interest on saving account with SBI 12000 8000
first time on 31.03.2019 due to his transfer in high commission of Canada. He did not visit India
any time during the previous year 2019-20. He has received the following income for the
financial year 2019-20 :
Particulars ₹
(a) Salary for services rendered in Canada 500000
(b) Interest on fixed deposit from a bank in India 100000
(c) Income from agriculture in Pakistan 200000
(d) Income from house property in Pakistan 250000
Compute his Total Income taxable in India for the assessment year 2020-21.

4. Vinit, a citizen of India, is employed in the Indian Embassy at Tokyo, Japan. He receives salary
at Tokyo from the Government of India for the year ended 31.3.2020 for services rendered by
him in Tokyo. He is a non-resident for A.Y. 2020-21.
Examine the taxability of salary , for Vinit for A.Y. 2020-21.

4. Mr Pavan returned to India on 12th June, 2019 for permanently residing in India after a stay of 20
years in U.K. provides the sources of his income and seeks your opinion to know about his liability
to Income Tax in India for A.Y. 2020-21.

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a) Income from rent of a flat in London deposited in a bank there. The flat was given on
rent by him after his return to India since July, 2019.
b) Dividends on the shares of 3 German companies which are being collected in a bank
account in London. He proposes to keep the dividend in the bank account in London
with the permission of RBI.
c) He has got 2 sons, one is 21 years and the other is 19 years. Both his sons are staying in
London and are not returning to India with him. Each of his sons is having an income of
Rs.75,000 not received in India and of Rs.20,000 which is received in India.