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In Business / High School | 2025-07-08

(a) Income earned in Pakistan but received in India (b) Share of profit from a firm in India (c) Past untaxed foreign income Compute Gross Total Income. Hint: Share of profit from firm and past untaxed profit are exempt.

Asked by Contrerastd8935

Answer (1)

To compute the Gross Total Income based on the given information, we need to identify which components are part of the taxable income and which are exempt.

Income earned in Pakistan but received in India :

This is considered income earned abroad and received in India, and it is generally taxable. According to tax regulations, income received in India from abroad is part of the Gross Total Income.


Share of profit from a firm in India :

The share of profit from a partnership firm in India is typically exempt from tax, as it is already taxed at the firm level. Therefore, this does not contribute to the Gross Total Income.


Past untaxed foreign income :

Past untaxed foreign income is mentioned as exempt. This means it will not be included in the Gross Total Income calculation.



Gross Total Income Calculation :

Gross Total Income = Income earned in Pakistan (received in India)

Since the share of profit from the firm in India and the past untaxed foreign income are exempt, they are not included in the computation of the Gross Total Income. Therefore, the only component that contributes to the Gross Total Income is the income earned in Pakistan and received in India.
If the amount of income earned in Pakistan and received in India was given, it would be the only amount included in the Gross Total Income for tax purposes.

Answered by OliviaMariThompson | 2025-07-21

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